Here’s what caught my eye yesterday, April 18. For a big change from recent losses, the chip group of stocks was all in the green. And not just by a pinch either. Yesterday Nvidia (NVDA) was up 2.47%: NXP Semiconductors (NXPI) was up 1.91%; Synaptics (SYNA) was up 4.49%; and Qualcomm (QCOM) was up 1.76%. Is something going on in the sector?
I think these financial market curves will let you map out the longer stories of Federal Reserve interest rate increases and a potential recession–and then chart the shorter stories of war in the Ukraine, global oil and natural gas crunches, summer Pandemic relief, global food crisis, computer chip shortages (and whatever else you think might be important) under those longer curves. That will let you decide when to buy and sell (and what) in order to profit from short-term stories while preparing your portfolio for the longer arcs.
Right now investors and traders are getting a crash course in how vulnerable global supply chains are to disruption–especially when they become really extended. And how a supply chain disruption can ripple out in unexpected directions thanks to the complexity of many key products.
First, the Pandemic took a hammer to the complicated logistical systems required to get Commodity A to Sub-assembler B in order to make Consumer good C that would show up for sale around the world. Just in time inventory, it turned out, didn’t work very well when nothing arrived on time. Second, the Russian invasion of Ukraine has–or at least it should have–reminded us that global supply chains can resemble Whack-A-Mole.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My one-hundredth-and second YouTube video “Strong hands vs. hot hands” went up today. Today I’m looking at a few stocks that exemplify what most experienced traders know: some hands are steady, and some are not. So when Nvidia announced this week that it expected to see supply chain issues (despite beating earnings and raising guidance), the stock fell. Similar things happened to chip-making equipment supplier Applied Materials and Albemarle, the lithium maker. I’m taking this opportunity to add some of these stocks into my portfolios. What about you?
After the close today, Nvidia (NVDA) reported fourth quarter earnings of $1.32 a share (versus analyst projections of $1.22) and revenue of $7.6 billion (versus expectations for $7.42 billion). As of 4:45 the stock has trading down $1.09 in the after-hours market. In my opinion that’s likely a result of a big run up in the stock before earnings. The stock gained 11% from February 11 through the close today, February 16. From January 27, a low in the recent downturn in Nvidia shares, to today’s close the shares are up 21%.
Yesterday I owned the wrong stocks. Ford Motor (F) fell another 0.51%. Lithium producer Albemarle (ALB) dropped 1.39%. Deere (DE) gave up 1.38%. Today I owned the right stocks. Ford was up 3.55%. Albemarle gained 6.02%. Deere picked up 1.59%.
To get to my 10 picks for my Special Report: A New Core Portfolio for a New Market, let me start with the second half of that title, the new market part. Why do I think we’re headed into a new market–and what kind of stock is this new market likely to reward with gains? And then onto my 10 picks for a New Core Portfolio.
Traders and investors look to be anticipating a big earnings beat from Nvidia after competitor Advanced Micro Devices delivered good news in its earnings report. The Wall Street consensus is that Nvidia will report $1.01 a share for the quarter, up from 64 cents a share in the year earlier period. But the course of the stock after earnings is likely to have more to do with news, if any, on a chip that Nvidia announced at the January 2022 Consumer Electronics Show.
If you worry about what worries me right now, I know what you want to know. When will the selling stop? When will it be a good time to buy “bargains”? And What stocks should you buy when you begin to buy? Those are the three questions that I’ll answer in this Special Report. Along with listing my first three buys on this selling.
As I noted in my latest YouTube video, selling has been concentrated in the highest PE stocks in the market. The top 10% of the stocks in the Russell 1000 index when ranked by Price to Earnings Ratio were down 7.8% for 2022 as of January 6, according to Goldman Sachs. Not that the rest of the stock market has been sending rose petals our way so far in 2022, but the Standard & Poor’s 500 Index was down just 1.8% for 2022 as of January 7. The NASDAQ 100 is down 4.8% for 2022 as of January 7–which speaks to the same point.So far, the selling is really a blip for most of the market. But it is serious for technology shares and especially high PE technology shares. So now the question is “Will the selling spread?”
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My eighty-fourth YouTube video “3 Picks for When the Tech Selling Stops” went up today.
Judging from the close of Monday’s trading session, there looks to be enough fuel for a Santa Claus rally to end 2021. The Standard & Poor’s 500 closed up 1.38% and the Dow Jones Industrial Average gained 0.98%. The NASDAQ Composite was ahead by 1.39% and the small cap Russell 2000 was higher by 0.89%.
