What if the “temporary” market shocks are going to last forever?
Stay with me here…
Over the last few chaotic years, we’ve had crisis after crisis… but each time, we’ve been assured that doing one little thing will make everything go back to normal.
It’s like those stupid online ads that promise you the world with just “one weird trick.”
During COVID-19, we were told that if everyone was vaccinated, everything would go back to normal. It turned out that the vaccines didn’t totally prevent the spread of the disease. Instead, it looks like various forms of COVID-19 are going to be with us forever.
Different states and countries are going to be dealing with this disease in different ways. The most spectacular example is China, where the government regularly shuts down entire cities because of its “zero COVID” policy, something that is wreaking havoc with its economic production.
Next we had the “supply chain disruptions,” first supposedly caused by COVID-19 and then by the conflict between Russia and Ukraine. That, we were told, is just going to go away with time.
Except it is not. The American government has limited sales of critical technology to the Chinese government, which in turn is having to develop its own sources of things like advanced computer chips. This could potentially have a major impact on companies like Apple and Tesla that are heavily based in both countries.
Finally, we have the war between Russia and Ukraine. Russia obviously thought it was going to take most of the country in one lightning advance, and then Ukraine used Western weaponry to push the Russians back to their own borders in some areas.
But neither side has any reason to quit anytime soon. In fact, this war is likely to rage into 2023 and perhaps longer.
Some seem to be hoping the Russian government itself collapses… but that would hardly lead to more market stability.
The point is that there is no “normal” to return to.
It’s just going to be continued market shocks. During this period, there are certain raw materials and advanced products that are going to suffer from shortages… even basic things like oil and gas needed for energy.
(That electricity for the vaunted electric vehicles has to come from somewhere.)
And this is a good thing. It means that with an approach combining technical and fundamental analysis, you can identify the companies that can meet these dire needs… and the stocks that can bring in big returns.
That’s what we are here for.
Let’s get at it this week.
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
Mortgage Rate Hits High, Inflation Momentum, FedEx Food Prices Surging, BBBY Shutters Stores, Interest Rates Increase
- Federal Reserve Will Hike Interest Rates This Week – It’s dangerous to make predictions, but this one is virtually certain – the Federal Reserve is going to hike interest rates this week. The only question is by how much. Experts are predicting a 0.75% increase, but that won’t be the last one. According to a survey of economists from the Financial Times, the Fed will keep its benchmark policy rate above 4% beyond 2023.
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Bed Bath & Beyond Releases Map Of Store Closings – The meme stock BBBY may still bring in returns for some people, but the company itself is struggling. The company, which will be closing about 150 locations and laying off staff, has released a map showing dozens of the first “lower producing locations” that will fall under the ax. Several are concentrated in the northeast, especially around New York City and northern New Jersey.
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Dollar Menu No More – Food prices rose in August, up 13.5% year-over-year. It’s the highest rate of increase since March 1979. The cost of eating out was up 8% year-over-year. Eggs specifically cost an astounding 39.8% more than they did a year ago.
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Modi Backs Away From Putin – India to Russia – you’re on your own. Indian Prime Minister Narendra Modi directly criticized Russian president Vladimir Putin for his invasion of Ukraine. In comments at the Shanghai Cooperation Organization, Modi said, “I know that today’s era is not an era of war, and I have spoken to you on the phone about this.” “We will do everything to stop this as soon as possible,” President Putin responded.
HOT SPOTS: What’s Going on in Geopolitics
- Earthquake Hits Taiwan – An earthquake with a 6.8 magnitude on the Richter scale hit southeastern Taiwan, causing the collapse of a building. Train carriages were derailed and hundreds of people were stranded. Hundreds remain trapped and there is at least one reported death. Taiwan Semiconductor Manufacturing also reported that there would not be an impact on production.
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EU Wants To Cut Funds To Hungary – The EU’s European Commission blasted the conservative government of Hungary, claiming it had identified “breaches of the principles of the rule of law in Hungary.” It proposed cutting an estimated 7.5 billion euros in aid.
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Turkey Seeks Membership In Shanghai Cooperation Organization – NATO member Turkey is trying to have it both ways; Turkish President Recep Tayyip Erdogan announced that his country would be seeking membership in the Shanghai Cooperation Organization, widely seen as a diplomatic and political base for China. “Our relationship with these countries [in the SCO] will be moved to a much different position with this step,” he said. The same might be true about his relationship with NATO.
CUTTING EDGE: What‘s Happening In Tech
- Devastating Uber Hack Leads To Sweeping Investigation – Uber has confirmed that a hacker breached its internal network and forced the company to take some of its systems offline while it investigates. The hacker was reportedly one 18-year-old. The attack was enabled by the hacker using Slack to obtain a password from an employee, which then allowed the hacker to penetrate the entire company.
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Adobe Purchasing Figma – In a $20 billion deal, Adobe is reportedly purchasing Figma, consolidating its control over the digital design market. However, investors weren’t happy – ADBE stock fell by more than 3.1%.
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Tech Workers Having Their Legs Broken To Become Taller – Talk about a Napoleon complex. (And yes, I know that for his time The Emperor was not short). GQ reports that workers from tech companies like Amazon and Meta are getting cosmetic surgery in which they have their legs broken so tiny magnetic nails can be inserted. Over time, these nails allow the bones to slowly lengthen, adding between 3 to 6 inches to a person’s height. We can’t cure cancer, but at least we’ve got this covered.
FOR YOUR CONSIDERATION
“How do you know which tickers to trade?”
This is a knife that investors should be extremely cautious about trying to catch. Yes, it is historically cheap. But there are plenty of reasons to think we haven’t hit bottom.
It may look like a bargain. It may look like a historic opportunity. But there are larger factors at work… and sometimes discretion is the better part of valor.
Mr. X breaks down why you should be cautious about snapping up this stock despite its low price… and says what you should consider instead.
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