January 10, 2025
What You Need to Know Today:
Buon Natale from Venice
Do you know how to tell it’s Christmas here in Venice?
25% tariffs for Mexico, China, and Canada: This won’t be the last time Trump talks tariffs
Yesterday in social media posts President-elect Donald Trump said that he would impose tariffs on his first day back in office, targeting the United States’ three largest trading partners, of 25% on all goods from Canada and Mexico until drugs and migrants stopped coming over the borders, and an additional 10% tariff on all products from China, saying that the country was shipping illegal drugs to the United States. (The Biden Administration had already imposed its own higher tariffs on China and, in additional, it had kept tariffs on China from the first Trump Administration in effect.)
Biden proposes/Trump disposes: Will GLP-1 diabetes/obesity drugs become free under Medicare and Medicaid?
The Biden administration has proposed making GLP-1 weight loss drugs free for low-income people and retirees who qualify as obese. Expensive drugs such as Ozempic, Wegovy and Zepbound, which cost $1,000 a month, would be covered for the 40% of the U.S. population who qualify as obese. Currently, the federal plans only cover the drugs when patients have other conditions caused by obesity, such as diabetes, heart disease. The leading drugs are made by Eli Lilly (LLY) and Novo Nordisk (NVO). Shares of Eli Lilly were up 4.55% today while Novo Nordisk rose 1.50%. The incoming Trump Administration will have to decide whether to move ahead with the plan. You can either think of this as a smart piece of health care policy or an effort to jam up an incoming administration that already faces challenges in devising coherent policy on healthcare. I go with the “jam ‘em up” theory myself.
Today I made Copa my 5th pick in my Special Report “10 picks for a Yield Draught”
Today I added Copa Holdings (CPA), an airline stock paying 6.9% to my Special Report. Here’s what I wrote
Today I added my first picks for losers after Trump’s election victory
These picks for Trump election losers shouldn’t come as a surprise: The President-elect has made it clear that he hates wind power. Here’s what I wrote in my update to my Special Report: “11 Trump election winners and 5 Trump/Harris losers.”
Saturday Night Quarterback says, For the week ahead expect…
I expect more temporizing this week on when to sell a market that everyone agrees is too expensive. It’s especially worthwhile checking on potential tax loss sells as we come out of a great 2024 and head into a much less predictable 2025.
Special Report: Trade War! Trade War!! What stocks to sell; what positions to trim (first 4 sells including AAPL)
This Special Report; Trade War! Trade War! gives you my recommendations for what to sell, where to take profits, and where to trim as seen through the lens of a likely global trade war. Here are my choices with my first 3 sells
Live Market Report (20 minute delay)
Has the Fed waited too long to lower rates?
With the first Federal Reserve interest rate cut likely at the central bank’s September 18 meeting, some current economic data raise the possibility that the economy is slowing more than the Fed–and Wall Street–would desire.
Another day of small-cap outperformance–here’s the best ETF for this trend
The small-cap Russell 2000 index gained 1.90% yesterday, July 15. That beat the 0.28% gain for the Standard & Poor’s 500. And the 0.53% gain for the Dow Jones Industrial Average. And a 0.27% gain for the NASDAQ 100 index.And today, as of noon, New York time, the Russell 2000 is up another 2.25% versus a gain of just 0.30% for the S&P 500 and 1.21 for the Dow Industrials.The NASDAQ 100 is off o.20% All his continues the outperformance trend of last week that I wrote about in yesterday’s Saturday Night Quarterback post.
Saturday Night Quarterback says (on a Sunday), For the week ahead watch…
.Watch to see if we finally get that long-awaited, long-predicted, and never quite arriving rotation out of technology stocks (and especially those BIG tech stocks) and into smaller capitalization stocks, or consumer stocks or value stocks.
More good inflation news in June CPI
The all-items Consumer Price Index (CPI) declined 0.1% In June from May on a seasonally adjusted basis, the Bureau of Labor Statistics reported this morning. The month-to-month CPI inflation rate was unchanged in May.
Over the last 12 months, the all items index increased 3.0% before seasonal adjustment. Economists surveyed by Bloomberg had projected a 3.1% rate. The all-items index rose at a 3.3% annual rate in May. The core index rose at a 3.3% annual rate in June. That was the smallest 12-month increase in that index since April 2021.
Rockwell Automation: Pick #6 for the next phase in AI
Today I’m making Rockwell Automation my sixth pick in my Special Report 5 Next Big Things. This pick just about completes the picks for my first of those 5 Nect Big Things, the Next Phase in the AI boom.
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
I expect data showing a slowing economy to increasingly point to an interest rate cut by the Federal Reserve at its September 18 meeting. Right now, in the short-run, financial markets look likely to see a slowing economy as a positive and to rally on the increasingly likelihood of an interest rate cut at the September 18 meeting–and maybe even a second cut at the December 18 meeting. But I’m keeping an eye out for any shift in sentiment.
It’s getting to look a lot like September–for the Fed’s first interest rate cut
The U.S. economy added 206,000 jobs in June, the Bureau of Labor Statistics reported today, July 5. That was above the median forecast of 190,000 new jobs in a Bloomberg survey of economists. But even though the June number came in above expectations, the overall message in the data was that the labor market is slowing. The Bureau of Labor Statistics revised job growth in the prior two months down by 111,000. Average monthly job growth over the last three months slowed to the lowest rate since the start of 2021. And the unemployment rate rose to 4.1%
Hold onto Nvidia for Blackwell chip launch–it’s a big deal even for the AI rocket
I can’t give you a definitive call on the top for this stock and this rally, but I cam sure of one thing, I don’t want to sell Nvidia before the company’s new Blackwell chip architecture has hit full launch speed in late 2024 and 2025. My read is that this is the “perfect” AI chip for this moment in the AI boom.
Saturday Night Quarterback (on a Monday) says, For the week ahead expect..
There won’t be any stock market reaction to the June jobs report due on Friday That’s because the market closes early on July 3 and stays closed for Friday’s Fourth of July holiday. And not because the report isn’t important as the Federal Reserve continues its search for evidence that the labor market is cooling enough to send inflammation down to the bank’s 2% target. The June report is expected to show that the economy added 188,000 jobs in June.
Watch the long-end of the Treasury market–interest rates could be headed up no matter what the Fed does
Wall Street strategists at influential investment giants are starting to recommend buying inflation hedges for 2025.
That means, at the moment, buying at the short-term end of the Treasury market–like 3-month to 12-month bills–and selling at the long-end–like 10-year notes.
BYD sells a record number of EVs in the second quarter as EU tariffs loom
BYD (BYDDF) sold a record number of electric and hybrid cars in the second quarter, according to sales data compiled by Bloomberg. The record sales were driven by price cuts and new technology that extended vehicle range. The record sales come as European Union...
Another reason to worry about U.S. economic growth
The pandemic savings cushions that helped Americans weather high prices in recent years are gone, according to calculations by the San Francisco Federal Reserve. The result is likely to be less spending and more debt pressure on consumers in the lower half of the income spread. Consumers at higher income levels will see any impact outweighed by gains from a booming stock market.
MU drop shows one market problem at these levels is beating guidance expectations
Micron Technology (MU) shares shares are down another 7.12% today, Thursday, June 27, as of the close in New York time. That’s after the stock fell 6.5% in after hours trading yesterday. The problem wasn’t the company’s third-quarter earnings report after the market close yesterday. For the period ended May 30, Micron earned an adjusted 62 cents a share. Analysts had expected the company to earn 53 cent a share. Revenue was up 82% year-over-year to $6.81 billion. Wall Street was looking for $6.67 billon in revenue. But the very solid beat for the quarter turned out not to matter as far as market reaction was concerned. The problem was guidance.
Adding ServiceNow to Picks and AI Phase 2 Special Report
I will be adding shares of ServiceNow to my 12-18 month Jubak’s Picks Portfolio tomorrow June 27.
Damn, I was hoping NVDA holders would panic so I could buy more cheaply–but there still might be a chance
I think there are reasons to worry about Nvidia’s valuation and its ability to continue to generate revenue and earnings growth at a pace that would support a forward price to earnings ratio above 40, but I think those re worries for 2025. In 2024, I don’t see anything that disrupts the AI boom story. Over the next six months or so I’d like to be buyer, especially id I can get the shares on a temporary drop. So yesterday’s drop to $118 was a promising development. There was technical support at the 50-day moving average near $100 so there was a chance the stock would move lower. Today, Tuesday, June 25, though, shares of Nvidia rallied, closing ups 6.76% at $126.09. This doesn’t mean the drop is over or the opportunity is lost,
Today I added Salesforce from my 5 Next Big Things Special Report to my Jubak’s Picks portfolio
At this point in the AI cycle I’d like to own shares of companies providing AI solutions in relatively “easy” data universes. (Nothing as complex as voice recognition for an interface with a diverse customer universe under uncontrolled environmental conditions. Like a family in a car at a McDonald’s drive-through.) And I’d like to focus on shares of companies with products that provide clear enhancements to customers bottom lines. Like my Pick #4 Salesforce (CRM). in my 5 Next Big Things Special Report.
Saturday Night Quarterback (on Sunday) says, For the week ahead expect…
Expect a make or break inflation report on Friday. Make or break that is for the possibility of an initial interest rate cut at the Federal Reserve’s September 18 meeting.
Now there’s officially an AI washing scam to watch out for
Since March, the U.S. Securities and Exchange Commission has accused three companies of misrepresenting how they use machine learning and other tools in what is being dubbed, by analogy with green washing, exaggerated environmental claims–AI washing.
Yesterday I made Broadcom Pick #3 in my Special Report on the 5 Next Big Things
I’d buy Broadcom even at this price as one of my three core AI stocks from the current generation of leaders. I’m adding it today to my long-term 50 Stocks Portfolio.
$51 trillion by 2034; the Federal debt is starting to sound like real money
Yesterday, Tuesday, June 18, the Congressional Budget Office projected that the federal debt would hit $50.7 trillion by 2034. That’s only 10 years from now. That year the federal debt will equal 122% of the United States’ annual economic output (GDP). That would far surpass the high set in the aftermath of World War II.
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