“I think that technology is the best thing that ever happened to mankind.” – Said CEO of JP Morgan Jamie Dimon
(THE U.S. CONSUMER IS IN THE SPOTLIGHT THIS WEEK)
January 17, 2024
Hello everyone,
In the U.S. January 15 is a federal holiday – Martin Luther King Jr. Day. The market is closed.
Week ahead calendar – All times ET
Monday Jan. 15, 2024
Martin Luther King Jr. Day (U.S.)
Australia Consumer Confidence Chg.
Previous: 2.7%
Time: 6:30 p.m. ET
Tuesday, Jan 16, 2024
8:30 a.m. Empire State Manufacturing Survey (January)
Earnings: Morgan Stanley, Goldman Sachs
Canada Inflation Rate
Previous: 3.1%
Time: 8:30 a.m. ET
Wednesday, Jan 17, 2024
8:30 a.m. Export Price Index (December)
8:30 a.m. Import Price Index (December)
8:30 a.m. Retail Sales (December)
10 a.m. Business Inventories (November)
10 a.m. NAHB Housing Market Index (January)
2 p.m. FED Beige Book
3 p.m. New York Federal Reserve Bank President and CEO John Williams delivers an opening remark in an event “An economy that works for all: Measurement Matters”, New York Fed
Earnings: Discover Financial Services, U.S. Bancorp, Citizens Financial Group, Charles Schwab
UK Inflation Rate
Previous: 3.9%
Time: 2:00 a.m. ET
Thursday, Jan. 18, 2024
8 a.m. Building Permits preliminary (December)
8:30 a.m. Housing Starts (December)
8:30 a.m. Initial Claims (week ended Jan. 13)
8:30 a.m. Philadelphia Fed Index (January)
Earnings: J.B. Hunt Transport Services, PPG Industries, Fastenal, KeyCorp, M&T Bank, Northern Trust, Truist Financial
Japan Inflation Rate
Previous: 2.8%
Time: 6:30 p.m. ET
Friday Jan. 19, 2024
10 a.m. Existing Home Sales (December)
10 a.m. Michigan Sentiment NSA preliminary (January)
Earnings: State Street, SLB, Fifth Third Bancorp, Regions Financial, Huntington Bancshares, Comerica
U.S. Consumer Sentiment
Previous: 69.7
Time: 10:00 a.m. ET
The holiday-shortened week will focus on the U.S. consumer, with retail sales and bank earnings to be reported. Stocks continue to digest the hot inflation data as they skirt near record highs.
Retail sales data for December – due for release Wednesday. Some economists expect an increase of 0.2% for the month, slightly less than November at 0.3%.
So far, the U.S. consumer has been resilient, but when savings deplete, we may see a significant slowing in the economic data.
Some analysts are seeing the U.S. tip into recession this year and the S&P500 tumbling below 4,000 in 2024. Others, however, see the market churning on to new highs for the year.
December housing starts and building permits data will also be released on Thursday, giving insight into whether activity in the sector has increased as mortgage rates declined.
More bank earnings are also on deck, which could give insight into how consumers are spending, and whether there are elevated delinquencies. Big banks, Goldman Sachs and Morgan Stanley will report Monday, as well as several regional banks such as Citizens Financial and M&T Bank.
Another government shutdown deadline greets us this week on January 19. Let’s hope an agreement can be reached on a funding decision. Failure to reach a deal could spark a major risk-off move for markets, however, a shutdown is unlikely, as the major players in the government appear to always reach agreement at one minute to midnight. The market tends to give this government shutdown possibility a sideways glance as it has more important data to monitor. Treasury yields come to mind here.
Last week’s inflation data was hotter than expected, but stocks appear to be shrugging off concerns about higher rates. The market is still expecting that the Fed will eventually cut rates later this year. Some investors are questioning whether the data will eventually nudge the Fed into action the market is not expecting.
In other news:
Microsoft tops Apple as the world’s most valuable public company.
Bitcoin ETF approved. Chart analysts agree that new highs are ahead, even though the crypto may decline initially.
Middle East crisis – U.S. & U.K. strike Houthis. The U.S. and Britain carried out dozens of air strikes on Houthi military targets last week, widening a wave of regional conflict, ignited by Israel’s war in Gaza.
Big tech layoffs are taking place.
Stocks to scale into for the long term:
Netflix (NFLX): 23 million users, up from 15 million in November and 5 million in May 2023. Several analysts have raised their price targets on Netflix to $600 from $475, which means shares could rally 21.8% from last week’s close. Shares have surged 48% during the last 12 months. Analysts argue that over the medium term, the pace of acceleration will show growth in 2024.
Dell (DELL): best positioned in the hardware sector - to benefit from investment in Gen-AI technologies; the company will also benefit from an acceleration in storage demand in the hardware space, which should further benefit Dell. Morgan Stanley has an overweight rating on shares. The stock has nearly doubled over the last 12 months and was up 1.8% last Friday during premarket trading.
Boeing (BA) is in oversold territory with an RSI of around 34 as investors ditched the stock after a door plug blowout during an Alaska Airlines flight over a week ago raised broader industry alarm. Shares were battered last week finishing more than 12% lower, which is the stock’s worst performance since May 2022. The Federal Aviation Administration ordered the temporary grounding of more than 170 Boeing 737 Max 9 aircraft for inspections over a week ago. Boeing stock has dropped more than 16% over the first two weeks of 2024. However, most analysts see a turnaround ahead, with an overweight rating and price target implying shares can rally nearly 25%. Boeing is one of the largest aerospace companies globally, and this is a compelling factor driving growth. Its history, technological expertise, as well as its market presence, give the company an important competitive edge. Price target = $280-$300.
Microsoft (MSFT) Just keep scaling into this stock on all pullbacks. A must-have in your kit.
I hope some of you took my advice and bought into Spotify, BlackRock, and T-Mobile. They rallied well last week and will be great holds for the long term.
Our Trip to Eungella.
We drove up to Eungella last weekend. It is a World Heritage National Park. Quite stunning. Many international visitors stop at the Pinnacle Pie shop on the way to Eungella – a now famous landmark. We bypassed the Pie shop as we wanted to spend the time enjoying the National Park.
We enjoyed an early dinner and coffee here after our day out at Eungella.
Looking towards Mackay and the Pacific Ocean in the background. Eungella is about an hour’s drive from Mackay.
Eungella National Park information board
We spotted a platypus in the water – the first time I have seen one in the wild.
Hikes in Eungella.
Walking along Eungella tracks.
Sculptural features in the National Park.
Cheers,
Jacquie
Global Market Comments
January 17, 2024
Fiat Lux
Featured Trade:
(WHY YOUR OTHER INVESTMENT NEWSLETTER IS SO DANGEROUS)
Not a day goes by without me hearing from a reader about the competition.
They previously subscribed to a newsletter that promised a top-drawer education, insider’s insights, and spectacular returns, sometimes 100% or more a month.
“Doubled in a day” is a frequently heard term.
The entry-level costs are only a few bucks, but they are ever teased onward by the “trade of the century”, a certain 100X winner that they will reveal to you only after another upgrade to their service.
Customers eventually spend outrageous amounts of money, $5,000, $10,000, or even $100,000 a year for the service.
They then lose their shirts.
I hear from readers who have gone through as many as ten of these scams before they find me. Some have lost millions of dollars. Others have been wiped out.
The sob stories are legion.
Then, they find the Diary of a Mad Hedge Fund Trader.
This is the source of all those effusive testimonials you find on my website (click here). Believe me, they come in every day. I don’t make this stuff up.
Here is the problem. I work in an industry where 99% of the participants are frauds. They are giant Internet marketing firms with hundreds or thousands of employees.
They spend millions to buy your email address. They then spend millions more on copywriters and programmers to pen and distribute top-rate invitations to you to get rich.
Some of these pitches are so compelling, that even I take a look from time to time. These guys are slick, really slick.
None of these people have ever worked on Wall Street. They have never been employed as traders. They have not even traded for their account.
They would know which end of stock to hold upward if you handed one to them.
For the most part, they are twenty-something kids who got an “A” in creative writing, if they ever went to school. Many haven’t.
So by putting your faith and your wealth in these newsletters and “trade-mentoring” services, you are placing them in the hands of kids without any experience whatsoever.
Hence, the disastrous results. You’d have a better outcome tossing a coin or throwing darts at a dartboard.
Some of the larger service hires washed out have been investment professionals who become the “face” of the company and lend it some bogus credibility.
They know the lingo, can quote you statistics all day long, and may even boast of proprietary models and hidden indicators. But chances are they have never made a trading dollar in their life.
Without exception, they are lightweights, has-beens, and wannabees who failed in the big show. None have ever traded for a living. If they did, they would be broke.
Better to sell the shovels to the gold miners than to try it themselves.
They include the oil newsletter that never saw the crash coming, the fixed income service that is always predicting the return of hyperinflation and a crash, and the perennial prediction that the Dow Average is about to plunge to 3,000.
And because these guys are lousy at their jobs, they always tell you to do THE EXACT OPPOSITE of the right thing to do at market extremes.
Just saw a flash crash? Sell everything! The next crash is here! Just hit a new all-time high? Load the boat! The market is about to double! For them, markets are always about to zero, or to infinity.
Here’s another problem. Negativity outsells a positive outlook hugely, sometimes by 10:1. It makes people look smarter. That’s the source of all of these Armageddon scenarios. They make a ton of money for their purveyors.
It’s not about being right, or dispensing sage advice and proper guidance. It’s only about making a dollar, nothing else. There is no guilt or responsibility involved whatsoever.
All of this is done at your expense. I get emails from victims who sold their houses at the market bottom and want to know what to do now that the house has doubled in value and rents are rising.
There are a lot of people out there who drank the Master Limited Partnership Kool-Aid and put all of their assets there to get double-digit yields. If they are lucky, they are down only 90%.
The precious metal area is a favorite of Internet marketers. Readers who bought this sector on margin, as they were urged to do with great urgency, lost everything.
I know this all sounds like sour grapes coming from me. The sad reality is that out of hundreds of competing investment and trading newsletters in the industry, I can count on one hand those run by true professionals, and I know most of them.
The rest are all crooks.
Yes, I know who these people are. But I am not going to name any names. No time to sling mud here. I can hear the collective sighs of relief already.
This is why I strive to provide the opposite of the con men. To me, it is more important to be right than to be rich. I will give you my unvarnished, undiluted views, even if it is bad for my business, which it often is.
This is why we publish our model trading performance on a daily basis, warts and all.
Notice that no other newsletter does this. If they did, they would only show huge losses, which don’t sell well. It’s all about making tons of incredible claims without a shred of documentation.
So please continue trolling the web for new investment insights and trading opportunities. After all, that’s how you found me all those years ago. But I will give you a piece of advice:
Caveat emptor!
Buyer beware!
I Think I'll Recommend This One
When John identifies a strategic exit point, he will send you an alert with specific trade information on what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Biotech and Healthcare Letter
January 16, 2024
Fiat Lux
Featured Trade:
(PHARMA GIANTS HUNTING FOR THE NEXT BIG THING)
(IMCR), (SNDX), (BPMC), (MRK), (JNJ), (HARP), (AMAM), (MDGL), (VKTX)
Alright, let's dive back into the biotech pool – and no, it's not the kind where you just dip your toes. We're talking about a full-blown belly flop into the deep end of the stock market.
Since October 2023, biotech stocks have been playing a game of limbo, asking themselves, "How low can you go?" But just when they hit two-thirds below their Covid pandemic peak, Big Pharma came to the rescue like knights in shining armor (or should I say, lab coats?).
In an earlier letter, I talked about J.P. Morgan’s annual healthcare conference, essentially the Super Bowl for healthcare geeks. The buzz? Merck (MRK) grabs Harpoon Therapeutics (HARP) for $680 million – a move as sharp as, well, a harpoon.
Not to be outdone, Johnson & Johnson (JNJ) scoops up Ambrx Biopharma (AMAM) for a cool $2 billion. Talk about shopping sprees!
But wait, there’s more. Looking into the rest of the biotech companies in the market today, I can spot a few potential biotech Cinderellas, waiting for their Big Pharma prince. And no, I don't have a crystal ball, but I do have some educated guesses.
First up, let’s chat about Immunocore Holdings (IMCR). These British wizards have been turning heads since Kimmtrak, their first drug for a rare eye cancer, got the green light in 2022.
This biotech is a $1.9 billion David amidst the Goliaths, with a therapy that’s like whispering secret orders to the patient's immune system – "Psst, go beat up that tumor, will you?" And guess what? It listens. This approach isn’t just for show; it’s bumping up survival rates, and that’s a big deal.
Impressively, Immunocore isn't just a one-hit wonder. Kimmtrak, their star player, is not your average Joe of the T-cell receptor (TCR) immunotherapy world. It's more like the valedictorian – first of its kind to get the thumbs up in a who’s who of countries, including the United States, Canada, the E.U., the U.K., and Australia.
For a small-cap player, that’s like winning the World Cup in its rookie year. And with no rivals for Kimmtrak’s indication, it’s like they’ve got the whole playground to themselves.
Next, let’s take a trip to Boston’s backyard – Syndax Pharmaceuticals (SNDX). They’re nearly doubling their value faster than you can say “biotech boom,” thanks to some promising drugs for leukemia and transplant complications.
With a market cap near $1.7 billion and potential FDA nods on the horizon, they're like the biotech version of a sleeper hit.
Checking out the long-term plans of Syndax, they've got a lineup of compounds that are like a biotech fan's dream team, eyeing not one, but two FDA green lights in 2024. They're buddying up with Incyte (INCY) on these compounds, and let me tell you, the scientific world is giving them the thumbs up. And to keep the lights on and the science humming, they've tucked away a cool $200 million from a recent capital raise.
But that’s not all. Since the market hit rock bottom in late October, Syndax's stock has been shooting up like a rocket, a whopping 75% jump. It’s like they've been hitting the gym hard. Bank of America's bullish call on the stock? That was the protein shake.
Now, I'm all for a good success story, but let’s not get ahead of ourselves. I'm keeping an eagle eye on this one, waiting for the perfect moment when the shares might take a little breather, maybe dip into the mid-teens. That's when I’ll swoop in, snagging a slice of SNDX, especially with those FDA approvals on the horizon. After all, these deals are all about timing.
And who could ignore Blueprint Medicines (BPMC)? Straight out of Cambridge, Massachusetts, these folks have a drug targeting certain white blood cell cancers.
These folks aren't your average biopharma company; they're more like the MIT of medicine, crafting precision treatments that home in on the genetic bad guys causing cancer and blood disorders. Their lineup? A dynamic duo of Ayvakit for systemic mastocytosis and Gavreto for those tricky RET-cancers, plus four more contenders in clinical trials, all ready to rumble in the biotech arena.
Blueprint's story started in 2011. They then hit the public scene in 2015, where they raised a whopping $154.8 million at their IPO - talk about making an entrance.
Fast forward to today, and their stock is hovering around $85.00 a pop, boasting a market cap of $5.4 billion – that's billion with a “B.”
What’s their secret sauce, you ask? These geniuses have a discovery platform that's like a GPS for kinases, the sneaky culprits behind many diseases. Their method? Create compounds that are like guided missiles, targeting these kinases with precision. The result? Two FDA approvals, and probably a few high fives in the lab.
But hey, it’s not all about cancer. The weight-loss drug arena is heating up, too. Madrigal Pharmaceuticals (MDGL) and Viking Therapeutics (VKTX) are the names to drop here. Madrigal’s eyeing FDA approval for a liver treatment, while Viking’s showing some early promise in the weight-loss game.
So, there you have it – the biotech scene is sizzling, and these companies are the ones turning up the heat. My two cents? Keep these companies under your watchful eye. You never know, one of them might just be the golden ticket in this dazzling biotech arena.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information on what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Global Market Comments
January 16, 2024
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or WHAT WILL KILL THIS MARKET)
(MSFT), (BA), (AMZN), (DAL), (V), (PANW), (CCJ), (TLT), (NVDA), (META), (TSLA), (GOOGL)