Welcome to a new month… and perhaps a new market environment.
July was a good month for traders and even a second negative quarter wasn’t enough to drive investors away.
While everyone’s arguing about whether we are in a recession or not, investors clearly still see the major opportunities.
President Joe Biden’s unexpected victories on Capitol Hill, as Senator Joe Manchin finally came back to the table, are also helping the semiconductor industry get a huge boost.
But that doesn’t mean there aren’t some worrying long-term trends…
First, we’ve got a geopolitical showdown in the Pacific between China and the United States. It’s extremely likely that China may respond to Speaker of the House Nancy Pelosi’s proposed visit to Taiwan by providing more assistance to Russia. That will keep the conflict going… and intensify the strain on supply chains, food supplies, and energy infrastructure.
Second, there’s mixed data as to whether consumers are still spending. The data show many are cutting out luxury goods so they can keep buying food and fuel. In other words, though there were some cheery reports that spending was up, spending was driven by inflation. Not a good sign.
Finally, the Fed’s last increase in interest rates may hit middle-class Americans from two directions. Not only could it slow investments in growth stocks, but the collapsing housing market could deal a body blow to the means by which most people build wealth.
Does that mean it’s time to pull out now? Of course not. With the government opening the spigots to help assist semiconductor production, we might see Big Tech get a second wind…
And with EV producers getting a tax credit, Ford (F) and other traditional car companies moving into electric may be just getting started.
Plenty of opportunities coming up this week. I can’t overemphasize this… we’re going to be acting fast. So…
Keep Moving,
Any strategy that makes you money consistently is worthwhile.
Though many new traders believe that trading is primarily about indicators and tools, Chris maintains that it is at least 95% about emotional control.
This is especially relevant in this bearish, choppy market which has made the trading world extremely difficult.
Learn some pro tips to come back from your losses and stay in the game.
WORD ON THE STREET
Biden COVID Redux, JetBlue Takes Spirit, SOMEONE wins Mega Millions
- POTUS Positive For COVID-19 Again – After several days of testing negative for COVID-19, President Joe Biden is back under “strict isolation procedures” after he once again tested positive for COVID-19. He is reportedly suffering no symptoms. President Biden was treated with Pfizer’s Paxlovid, which has been unable to prevent “rebound” infections (or at least positive tests) in some cases.
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JetBlue Triumphs Over Frontier For Spirit – After a lengthy battle, JetBlue acquired Spirit Airlines for $3.8 billion. The company broke off negotiations with Frontier Airlines after shareholders rejected its own takeover attempt. JetBlue and Spirit will still operate separately until the deal is approved by regulators.
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Someone In Suburban Chicago Is Loaded – The numbers were 13-36-45-57-67, and Mega Ball 14. The prize was $1.34 billion – and even the store gets a $500,000 bonus for selling the winning ticket. If the unknown winner in suburban Chicago decides to claim the cash straight-up, that would be about $747.2 million.
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Google’s “Simplicity Sprint” – While tech companies are trying to put the best possible face on economic circumstances, quite a few are quietly saying that they are preparing for hard times. Google is the latest, with CEO Sundar Pichai telling employees that “it’s clear we are facing a challenging macro environment with more uncertainty ahead.” The CEO unveiled a program called “Simplicity Sprint,” which will be a crowdsourced attempt to have employees generate ideas to drive more productivity and efficiency while eliminating waste. One wonders if some Machiavellian employee will say something like “fire the other guys in this department and give me more money.”
HOT SPOTS: What’s Going on in Geopolitics
- “Navy Day” Threat: Putin Says US Main Danger – President Vladimir Putin, speaking on Russia’s “Navy Day,” identified the United States as the main danger to his country and vowed to build Russia as a “great maritime power.” Putin said “the strategic policy of the USA [is] to dominate the world’s oceans” and called for a system of alliances to counter it.
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China Holds Military Drills To Protest Pelosi Visit – Speaker Nancy Pelosi is touring America’s Asian allies, but pointedly left off Taiwan on her official itinerary. It’s unclear whether she will actually go to the island. In response, China is holding military drills, with a state-aligned newspaper printing that Chinese officials have said “don’t say we didn’t warn you.”
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Germany Dims Monuments In Power Crunch – The optics of this are powerful – the Berlin Cathedral, the State Opera, the Charlottenburg Palace, and other German monuments are all dimming their lights as Germany struggles to conserve power. Russia has slashed natural gas shipments to the country, the economic powerhouse of the EU. “In the face of the war against Ukraine and Russia’s energy threats, it is vital that we handle our energy as carefully as possible,” said Bettina Jarasch, Berlin’s senator for the environment.
CUTTING EDGE: What‘s Happening In Tech
- COVID-19 Costs As Many As 5% Their Sense Of Smell – A new study from TheBMJ, a medical journal published by the British Medical Association, found that about 5% of people “report smell and taste dysfunction six months after covid-19.” That may not sound like many, but with about 550 million cases worldwide, that’s at least 27.5 million people. The journal warns this new long-term condition will pose a unique challenge as patients embark on a quest to regain their lost senses.
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Gamers Rise Up – The war on gamers never ends. Indonesia has banned access to Steam and Epic Games after they shrugged at the government’s new moderation requirements. Critics argue that the new regulations would allow the government to collect a staggering amount of data on individual users. It’s not just gaming companies though – Yahoo and PayPal are also gone. Companies now must make the choice between bending to the state or losing access to a market of almost 274 million people.
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TikTok Coming For Apple, Spotify – When you say you want to search for something, you say you will Google it. But the number one website in the world – the place where a plurality of people begin their quest – is TikTok. And now TikTok is moving into new territory. ByteDance, TikTok’s parent company, has filed a patent for “TikTok Music.” A lot of tech companies are hearing footsteps right now…”
FOR YOUR CONSIDERATION
I’ve got to admit, it was strange how dead the volume was at the beginning of last week; that is, until Big Tech started reporting earnings…
And the Street apparently liked what’s been hitting the tape.
We’ve got a momentum play that might be a great way to start the week. Corey breaks down the buy signals here… and tells you what to look for….
Depending on how premarket trading shakes out, we could start this week with a bang.
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