Videos
January 23, 2023 | Daily JAM, Videos |
Today I posted my two-hundred-and-twenty-seventh YouTube video: Trend of the Week Speculation and Investing This week’s Trend of the Week: Speculation and Investing. Prior to the bank earnings and guidance numbers being released a week ago, the market was on the upswing on speculation that the Federal Reserve would indicate it would be winding down the interest rate hikes. Then, as the disappointing bank guidance numbers were released, there was a brief period of selling, not huge selling that morning, but enough to make a dent in the indexes. However, by that same afternoon, the market had returned to its prior upward trend on speculation on the Fed’s shift in rate increases was a better bet than the bank’s suggestion that there may be a recession. In other words, investors and traders decided to buy the speculative trend rather than worry about earnings numbers and guidance. This is a trend I’ll be following as stocks like Microsoft (NASDAQ: MSFT) start to set the tone for 2023. Will investors be concerned with decreased year-over-year earnings, or will they lean into the speculation that the Fed will slow interest rates and therefore move the market upward?
January 19, 2023 | Daily JAM, Perfect Five-ETFs, Videos, Volatility |
Today I posted my two-hundred-and-twenty-sixth YouTube video: Quick Pick Sell UUP. This week’s Quick Pick: Sell UUP–the dollar ETF. I had the Invesco DB US Dollar Index Bullish Fund (NYSEARCA: UUP) in my portfolio through 2022 while the dollar was doing well but the dollar has recently taken a turn South and I’m now saying: Sell. UUP was going up while expectations were that the Fed was going to continue to raise interest rates, but now that the market believes (rightly or wrongly) that the Fed will be slowing their rate hikes, we’ve seen it move down by about 1.22% for 2023. This will likely continue to be the case as other countries maintain steady interest rates or even raise them to fight inflation (Watch the European Union) and as we edge closer to the debt ceiling cliff. U.S. Secretary of the Treasury, Janet Yellen thinks the government can shift things to cover us through June, but after that, if the debt ceiling isn’t raised by Congress, the United States will not be able to borrow enough money to meet all of its obligations. I think we’ll walk right up to that cliff, but I sincerely hope we don’t go over it. For now, I’m selling UUP and I’ll be looking for a gold ETF to replace it. More on that to come!
January 16, 2023 | Daily JAM, Videos |
This week’s Trend of the Week: Beyond 5%. On Monday, January 9, it looked like the market was going up until Raphael Bostic (head of the Atlanta Fed) and Mary Daly, (head of the San Francisco Fed) came out saying that Fed rates may have to be raised to above 5%. Unsurprisingly, this stopped the rally in its tracks. On Tuesday, January 10, the theme of “beyond 5%” continued with Jamie Dimon, CEO of JP Morgan Chase, reiterating the idea of a 50% chance of rate increases that took the peak up to 6%. The market consensus has comfortably settled on a 5% peak, but the idea of a possible rise to 6% is starting to percolate through the market. I’m still looking for a bottom in this market in mid to late 2023. Turmoil in Congress over the debt ceiling could push that out a bit further.
January 11, 2023 | AAPL, Daily JAM, Top 50 Stocks, Videos |
Today I posted my two-hundred-and-twenty-second YouTube video: Caution! Technology Margin Shake-Up Ahead!
This starts off as an Apple (NASDAQ: AAPL) story. Apple recently announced that it would be moving away from using Broadcom (AVGO) chips for Wifi and Bluetooth in its iPhones, and begin using its own chips in 2023. This will of course make for better margins for Apple and speed up the company’s ability to implement new technology. This is a big blow for Broadcom which relies on Apple for 20% of its revenue. Apple also announced it’ll be moving away from QUALCOMM as they project it will have Apple chips to replace the QUALCOMM modem chips by late 2024-2025. (We’ve heard this before. And Apple had to call off the switch because of technology glitches.) You can expect more technology (and other) companies to shake up their own product designs and supply chains as they look at inflation and costs. Corporate profits have been at historic highs protecting profit margins at current levels won’t be easy.
January 9, 2023 | Daily JAM, Videos |
This week’s Trend of the Week: Watch Credit Card Debt After Christmas. Christmas is a huge anomaly when it comes to the stock market and consumer spending. Jobs numbers and data predictions that come out in December are massively adjusted for the season–and the published numbers are almost always wrong. This December, you can look at consumers, already stretched by inflation, taking on more credit card debt because “It’s Christmas” and they want to make sure there are presents under the tree. The thinking may be, “I’ll blow up my credit cards at Christmas, and then start to cut back in January.” The time to look at the default and bad debt rating numbers from banks is in January and February. This will give us a better picture of where the economy and consumers are for 2023 than the skewed December numbers might. Another good indicator of the consumer market is Wal-Mart (NYSE- WMT). As we come out of the holiday spending season, keep an eye on Wal-Mart to get a better idea of how the economy is doing. If Wal-Mart can stay steady, I think other consumer stocks will follow. (Alth9ugh today’s (January 9) rocky numbers from Macy’s, Chico’s, and Lululemon aren’t good signs.)
January 6, 2023 | Daily JAM, TSLA, Videos |
Today I posted my two-hundred-and-twenty-first YouTube video: Quick Pick Watch Tesla This week’s Quick Pick isn’t a “buy,” it’s a “watch.” Tesla (NASDAQ: TSLA) saw its stock down 37% in December–not for the year, but in ONE MONTH. The stock is down 65% for the year. If you want to look for some support for the current low of 107, you’d have to look years back. Throughout the year there has been steady support and resistance at 206-217 but around November, the stock took a major dive and doesn’t look to be recovering any time soon. Monday, Tesla announced its delivery news for the fourth quarter of 2022. While it delivered a record 405,278 cars that was below the consensus. One of Elon Musk’s problems is he continues to over-promise and under-deliver. So while Musk promised a delivery growth of 50%, the actual 40% growth-although extremely impressive-is diminished since it missed company-generated expectations. On top of this, Tesla has announced it’s coming out with a $7500 discount in China, where sales are slumping, and the company also said it would reduce production in China. Tesla also has to figure out how to handle the lower-priced end bottom of the market where companies like GM have moved in. The Inflation Reduction Act offered subsidies, credits, and incentives to buy electric cars, but only one Tesla model made the list due to their high prices and battery packs that didn’t meet made-in-American standards. I’m not shorting Tesla after this tumble. It’s a good car company with impressive technology. But the valuation problem remains. I’ll be keeping my eye on Tesla’s share price, and you should too.
January 5, 2023 | Daily JAM, Videos |
(Almost) everybody hates 2023. We’re just four days into 2023 and we’ve already had some negative reporting come from the IMF, (International Monetary Fund) stating that a third of the world will likely be in recession in 2023. The US may escape the recession, but just barely, with the Fed projecting a .5% GDP growth rate for 2023. All this bad news is actually good news because it means we may finally see a bottom. Once we can remove the “almost” and definitively say EVERYONE hates 2023, that’s when we can get back to investing. I think we’re about six months away from that. The S&P was at 3816 on January 3, inching closer to the October low of 3583 and the June low of 3674. If we get back down to those lows, or lower, I’d say it’s time to start putting your money back to work.
December 23, 2022 | Daily JAM, Morning Briefing, Videos, VIX, Volatility |
Today I posted my two-hundred-and-nineteenth YouTube video: Fear Is Still on a Holiday Today’s topic: Fear is Still on a Holiday. This is a peculiar market for many reasons. Stocks are sinking, but volatility fear doesn’t seem to be rising. On December 20, for example, the S&P 500 fighting a 5-day losing streak. Havens of safety were getting smaller. Pharmaceuticals and airlines, which have been strong recently, sold off on December 19. Searching for glimpses of green, like Coke (up just .14%) in a sea of red is getting harder and harder. What’s curious though, is the VIX, the CBOE Volatility Index, better known as the “Fear Index” remains on the average to low end of its recent and historic range. their recent range. The VIX tracks prices for options and futures on the S&P, so as people, in fear of a downturn, hedge by buying “insurance” against a market drop, the VIX rises. But right now we’re seeing a market that truly stinks–that’s a technical term, I know, but you can Google it–while the VIX remains low, showing little sign of fear. My explanation is that at the end of the year, investors aren’t looking to hedge against a market they still hope will turn around. The VIX is an interesting short-term play here. Buying a Call option with a 60-day out as the market returns to fear, or rationality, in 2023 could be the way to go. I’m going to check on the up-to-the-minute price action and see if the Call option is attractive here. Look to my paid JubakAM.com and my free JubakPicks.Com sites on Friday for a buy or not.
December 19, 2022 | COST, Daily JAM, Jubak Picks, Videos, WMT |
This week’s Trend of the Week: Christmas? Bah Humbug! Harris recently did a poll for Bloomberg that showed 60% of the people polled said they would be buying fewer gifts for fewer people this year due to inflation. That same poll said that 60% of respondents said they’d be cutting back on holiday travel, and 33% said they were skipping gift-giving completely. We’ll skip the discussion about the spirit of Christmas, and look at how this is going to affect retail and airline earnings in January. Retailers like Costco, Wal-Mart, and Kohl’s have already warned Wall Street that sales will not be great for Christmas, but even with that warning, retailers could surprise investors with lower-than-expected numbers. Costco announced its fiscal first-quarter earnings on December 10 with sales going up 6%. Although they were warned that margins were going to be soft, Wall Street was expecting 6.9% same-store growth and punished the shares accordingly with a huge drop in the stock. Costco is a great retailer for this moment, with affordable pricing on a wide range of goods and gas sales bringing in traffic. If Costco’s trending this way, I think we can expect the same from companies like Walmart and Kohl’s. It’s likely the airlines will take a hit as well, with the drop in holiday travel. For now, drink your wassail and try not to think about impending January earnings!
December 12, 2022 | Daily JAM, Videos |
Today I posted my two-hundred-and-fifteenth YouTube video: Trend of the Week Nattering Nabobs of Negativity. This week’s Trend of the Week: Nattering Nabobs of Negativity. Spiro Agnew’s alliterative expression comes to mind as I listen to institutional Wall Street and big banks discussing the idea that we have not yet seen the bottom of this market and we could hit another big downturn in the first half of 2023. In the long term–February that is=–I agree. But I think we’re currently in a very short-term period where investors decide to ignore the long-term warnings and look to window dress portfolios (and maybe pick up some gains) before the end of the year. This short window of time will likely begin after the December 14 Fed meeting and run to the end of the year. As January and the new year rolls around, investors may finally come to grips with the warnings from banks and I’d bet that, true to form, they’ll try to beat the crowd to an exit. Pay attention very carefully to how you’re positioned over the next month.
December 8, 2022 | Daily JAM, Millennial, Videos |
Today I posted my two-hundred-and-fifteenth YouTube video: Quick Pick Pilbara Minerals. Pilbara is an Australian hard rock lithium producer. Hard rock lithium comes from mining spodumene deposits as opposed to getting lithium from brine. Turning lithium from brine into the Form of lithium that can be used in a battery requires more processing steps. That can make spodumene a lower-cost source if the deposit is rich enough. Currently, just about all lithium has to be processed in China before going to battery makers. American companies like Tesla hope to open processing plants of their own, and Pilbara has plans to build a test processing facility in Australia. The company will decide in early 2023 if it will go ahead with that plan. The stock is up about 26% for 2022. Pilbara recently released its fiscal first quarter 2023 results with gross sales reaching $1.04 billion, a number that’s nearly equivalent to the total revenue for all of the 2022 fiscal year. Clearly, the company is in the early stages of a growth ramp. I’m adding this stock to my Special Report: “Buy the Future for Pennies with These 10 Penny Stock Picks” on my subscription JubakAM.com investing site (as the # 9 Pick.) I’ll also be adding it to my Millennial Portfolio on that site on Friday, December 10.
December 7, 2022 | Daily JAM, Videos |
Today I posted my two-hundred-and-fourteenth YouTube video: Waiting for the Fed. We are about a week out from the Fed’s December 14 meeting, where another 50 basis point increase is expected. We’re now in the Fed’s quiet period, but last week Fed presidents were adamantly setting expectations for 50 basis points. A 50 basis point increase would be a step down from the previous 75 basis points, and many would see that as a sign that the Fed is tapering. However, the main thing to look at on December 14 is the Dot Plot of projections from the Fed itself. That will tell investors and traders how much longer the Fed now expects these raises to continue, and how where the peak might be in rates for this cycle. Wall Street is currently predicting a peak 5% benchmark rate. (We’re currently at 3.75-4%.) But I think the top is likely closer to 6%. If the Fed settles into a projection of 5%, the market will likely relax and head into an end-of-year rally that might end in the beginning to mid-January. If the Fed gives any impression that it’s looking looks at something closer to 5.5 to 6%, that would be enough to scare the market and lead Wall Street to lower projections of market gains for 2023. Right now the S&P 500 continues to teeter on the edge of resistance near the 4,000 ceiling set by previous highs of 4110 in September and 4080 at the end of November. If the Fed doesn’t come out with jarring news on the 14th, I think we can look for the index to break through 4000 until it heads back down in January 2023.
