January 10, 2025
What You Need to Know Today:
Here comes Santa Claus?
Trading was thin for Christmas weeK. So time for Santa to put in an appearance on Wall Street? The Standard & Poor’s 500 finished near session highs, up O.79% to 5974. And Nvidia (NVDA), up 3.69%, and Meta Platforms (META), up 2.49%, helped drive an index of the “Magnificent Seven” megacaps up almost 1.5%.
I just added this to my Special Report: “3 Strategies and 10 Picks for Juicy Returns in a Yield Drought”:Why the 3-month Treasury bill is a great investment now
Let’s start with the 4.54% yield. And then note that, if you hold a bill to maturity, it is essentially risk free. Compare that combination to gold which has a comparable degree of risk but pays a yield of 0%. Or to a 3-month CD where the average U.S. yield is 1.52% or to a 6-month CD where the average U.S. yield is 1.68%.
Higher mortgage rates for longer?
Three days after the U.S. election, Redfin, the technology-driven real estate brokerage that does business in 100 markets, raised its projection for the average mortgage rate in 2025 to 6.8%. That’s roughly where the current average 30-year fixed mortgage rate stands now. Other real estate analysts, including Moody Analytics and Capital Economics, expect rates near 7% next year. This is bad news for two reasons.
Palo Alto Networks beats on earnings, but it’s not enough
Shares ofPalo Alto Networks (PANW) fell 5.32% in after-hours trading today, November 20. The company reported earnings for its first fiscal quarter after the market close. Non-GAAP earnings per share of $1.56 beat analyst estimates by $0.08. Revenue of $2.14 billion, an increase of 13.8% year-over-year, beat by $20 million. But it wasn’t enough for a stock that trades at 54 times trailing 12-month earnings per share.
Dr. Oz appointment news drives up Medicare Advantage stocks today
Health insurers traded higher today, November 20, after President-elect Donald Trump picked TV personality Dr. Mehmet Oz to head the U.S. Centers for Medicare and Medicaid Services, the agency responsible for overseeing healthcare coverage for millions of Americans.
Special Report: “3 Strategies and 10 Picks for Juicy Returns in a Yield Drought”–first 6 picks
If you’re an investor looking for income, you’re facing what I’d call a Yield Drought. And this is no temporary dry spell. Things on the income investing front look they’ll get worse before they get better. Unless a financial crisis intervenes in 2025 to make everything else much worse and the yield story much better. Because, you see, there are two parts to the current Yield Drought.
Special Report: The 5 Next Big Things–The first Next Big Thing, AI Phase 2 first 6 picks
This special report is about the history of the future. And how to score big returns by investing in the future. By studying the past histories of the future, we can understand what kind of bets on the future pay off with outsized gains. Think about it this way.
Live Market Report (20 minute delay)
China needs more stimulus as housing slump drag on economy continues
Data Monday, June 17, show that China’s economy needs more stimulus to overcome the persistent drag from China’s housing slump. The most recent bit of bad news is that industrial output—-which has made up for slow consumer spending lately-—fell short of forecasts.
Is this the best the most bullish can do? A 3% upside for the S&P 500 by the end of the year?
On Friday, June 14, Goldman Sachs upped its year-end target for the Standard & Poor’s 500 to 5,600 points from 5,200. The idea closed at 5473 on Monday, June 17, for the 30th record high of 2024. Goldman’s forecast puts the investment company at the same expected price level as UBS Investment Bank and BMO Capital Markets. They’r talking about a roughly 3% gain from here through the end of the year. Three points to consider about the forecast.
Saw that coming, yes? China launches probe on EU pork imports
China has launched an anti-dumping probe on pork imports from the European Union. The move sure looks to me like retaliation for investigations launched by the EU into Chinese subsidies across a range of industries and will impose tariffs on electric car imports from July. The move isn’t small trotters. China is the EU’s biggest overseas market for pork. The trade was valued at $1.83 billion last yea
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
I expect questions about animal spirits and their effect on the financial markets to step forward as the Federal Reserve stays on the sidelines and as election anxiety ratchets higher.
Buy the dollar! After Italy’s triumph leading this week’s G7, the country will cause another euro crisis
This is Giorgia Meloni’s time in the sun. I hope she enjoys it. The pasta is about to hit the fan. Which will lead the dollar to rally against the euro. Some more. And which gives me Step #6 in my Special Report: 7 Steps to Take Now to Protect Your Portfolio While You Still Reap Market Gains Step #6 in my strategy for protection and profit for the rest of 2024 is Buy the Invesco DB US Dollar Bullish ETF (UUP).
There’s drama in Fed’s decision not to change interest rates after all
To no one’s surprise, the Federal Reserve left its benchmark interest rate unchanged today, June 12, at a two-decade-high of 5.25% to 5.5%. But that doesn’t mean there wasn’t drama as a result of todays decision.
One more round in the tech trade war before the election
Look for one more round of technology restrictions from the Biden administration before the November elections. The new measures, Bloomberg reports, would target a coming generation of chips expected to power a new wave of innovation in artificial intelligence. The measures being discussed would limit China’s ability to use a cutting-edge chip architecture known as gate all-around, or GAA, sources told Bloomberg. GAA, which promises to make semiconductors more powerful, is just being introduced by chipmakers.
Fed’s newest Dot Plot: Just one rate cut in 2024
While a slight dip in CPI inflation kept hopes alive for an interest rate cut in 2024, the Federal Reserve”s newest Dot Plot economic projections, released today, showed the central bank forecasting just one rate cut in 2024.
CPI inflation slows slightly keeping alive hopes for rate cut in 2024
However, as all dedicated inflation watchers know, the Federal Reserve watches the core inflation rate and not the all-items rate. That index, which excludes more volatile food and energy prices, rose 0.2% month over month in May, after rising 0.3% month over month in April. The core index rose at a 3.4% rate over the last 12 months. While the dip in core inflation is surely encouraging to the Federal Reserve as it fights to get stubborn inflation down to the central bank’s target 2% rate, today’s data show a continued problem the housing prices. The shelter index–the stand-n for housing prices in this index–increased at a 5.4% annual rate in May. That accounted for over two-thirds of the total 12-month increase in inflation.
Moderna finally proves it has a post-Covid vaccine life
Can you say rollercoaster? In 2022, the biotech company generated sales of nearly $18.9 billion, all of it from sales of its Covid-19 vaccine but it expects revenue of only $4 billion this year. On February 14, 2023, shares sold for $175.62. On $86.04 on February 14, 2024 they traded at $86.04. Today, June 11, they closed at 148.39. I added them to my Volatility Portfolio at $157.10 on April 14,2023. That position was still down 5.54% as of the close on June 11. But I think the rally is still in its early stages. Why the turnaround now?
A big difference of opinion on Apple today–and I’d sell
Traders and investors reacted to Apple’s (AAPO) AI announcements during the first days of the company’s World Wide Developers Conference with enthusiasm today sending the stock up 7.26% in June 11 trading. That’s a new all-time high for the stock. Technology analysts were at best mixed. Their more tepid response set the tone yesterday when the stock dropped 1.9%. Typical was this from KeyBanc Capital Markets analyst Brandon Nispel in a client note: Apple’s AI enhancements aren’t compelling enough for the average consumer to purchase a new device. I’m with the tech folks on this and today I made Apple a sell in my Special Report: Trade Wars! Trade Wars!
Hold India ETF Through Election Volatility
Over promising and undelivering is never a good recipe. In India’s recently concluded election Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) bragged that it would win more than 400 seats, enough to give the party outright control of parliament. When the...
Replace IVV with RSP in Perfect 5 ETF Portfolio
I’m trying to walk a fine line here. I don’t want to eliminate my exposure to the U.S. stock market, the world’s best performer recently, but I would like to take some profits and reduce my exposure to the highest priced stocks in the U.S. market.Switching from the iShares S&P 500 Core ETF (IVV) to the Invesco S&P 500 Equal Weight ETF will have that effect.
Saturday Night Quarterback says, For the week ahead watch out for…
When I was small, one of my favorite songs was The Teddy Bears’ Picnic with its warning refrain, “Don’t go out in the woods today, you’ve in for a big surprise. Not exactly designed as investment guidance, but pretty good investment advice all the same. This week will see two potentially big market moving surprises. Potentially.
Odds weaken on a Fed interest rate cut in September
After today’s surprisingly strong May jobs report, the odds for an initial interest rate cut from the Fed at its September 18 meeting weakened considerably
So much for that job market slowdown in May
Employers added 272,000 jobs in May, the Bureau of Labor Statistics reported this morning. That number was well above the 185,000n projected by economists and even higher above the 175,000 in the April report. The financial markets were disappointed with the news since it pushed out the schedule for an initial interest rate cut from the Federal Reserve.A cut a the July 31 Fed meting has now been priced out by the market. The Standard & Poor’s 500 fell 0.14% today and the NASDAQ Composite dropped 0.23%
Imagine that! In two days of speculative fever a lot of people lost a lot of money on GameStop–and a few made out like bandits.
GameStop (GME) stock fell as much as 17% in early trading Friday, June 7, after the video game retailer reported quarterly results that missed analyst estimates and announced a stock sale. The came just hours before a highly anticipated livestream from “Roaring Kitty,” an alias used in the past by bullish retail investor Keith Gill. Yesterday GameStock shares had soared 47% on Thursday after “Roaring Kitty” scheduled a YouTube livestream for noon ET on Friday.
And now they tell us: A day before the jobs report the BLS tells us that the employment numbers have been wrong
The Federal Reserve has been telling us over and over again that it’d decision on cutting interest rates depends on the data. Among other things, the Fed wants to see a steady slowdown in the employment market reflected in the data before it cuts interest rates. But what if the data have been wrong? For months? Today in its regular Quarterly Cent of Employment and Wages the Bureau of Labor Statistics raised just that possibility.
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
Slump in factory ISM raises question of how slow is too slow
Be careful what you wish for. Financial markets have been hoping to see signs of a slowing U.S. economy that would let the Federal Reserve begin to cut interest rates. But after the Institute for Supply Management’s (ISM) manufacturing gauge fell 0.5 point to 48.7 in May, the weakest in three months, in data released on Monday, investors have begun to worry if this much of a slowdown is a good thing.
Jim’s Stock Alerts
Download Jim’s eBook for Free
