April 21, 2025
(WANT A HIGHLY RESILIENT STOCK DURING A RECESSION – THEN LOOK AT NETFLIX)
April 21, 2025
Hello everyone
WEEK AHEAD CALENDAR
Monday, April 21
10:00 a.m. Leading Indicators (March)
Earnings: W.R. Berkley
Tuesday, April 22
8:30 a.m. Canada PPI MoM
Previous: 0.4%
Forecast: 0.5%
9:30 a.m. Philadelphia Reserve Bank President Harker speaks on Economic Mobility in Regional Economics, Philadelphia
10:00 a.m. Richmond Fed Index (April)
Earnings: Baker Hughes, Intuitive Surgical, Enphase Energy, Capital One Financial, Tesla, Stell Dynamics, Lockheed Martin, Verizon Communications, Kimberly-Clark, Genuine Parts, MSCI, Quest Diagnostics, PulteGroup, 3M, Equifax, Synchrony Financial, Elevance Health, Danaher, RTX, Northern Trust, Northrop Grumman, GE Aerospace.
Wednesday, April 23
8:00 a.m. Building Permits final (March)
9:45 a.m. PMI Composite preliminary (April)
Previous: 53.5
Forecast: 51
9:45 a.m. S&P PMI Services preliminary (April)
10:00 a.m. New Home Sales (April)
2:00 p.m. Fed Beige Book
Earnings: ServiceNow, Chipotle Mexican Grill, Lam Research, Texas Instruments, Tyler Technologies, O’Reilly Automotive, International Business Machines, FirstEnergy, Discover Financial Services, NextEra Energy, Old Dominion Freight Line, General Dynamics, CME Group, Boston Scientific, Thermo Fisher Scientific, AT&T, Otis Worldwide, Norfolk Southern, GE Vernova, Boeing, Raymond James Financial, Philip Morris International.
Thursday, April 24
8:30 a.m. Chicago Fed National Activity Index (March)
8:30 a.m. Continuing Jobless Claims (March)
8:30 a.m. Durable Orders preliminary (March)
Previous: 0.9%
Forecast: 1.8%
8:30 a.m. Initial Claims (04/19)
10:00 a.m. Existing Home Sales (March)
11:00 a.m. Kansas City Fed Manufacturing Index (April)
Earnings: Hartford Insurance Group, Eastman Chemical, T-Mobile US, Gilead Sciences, Alphabet, Intel, Comcast, Freeport-McMoRan, Union Pacific, Keurig Dr Pepper, Bristol Myers Squibb, Tractor Supply, Procter & Gamble, CBRE Group, Southwest Airlines, Valero Energy, Hasbro, PepsiCo, PG&E, L3 Harris Technologies, Ameriprise Financial.
Friday, April 25
2:00 a.m. UK Retail Sales
Previous: 1.0%
Forecast: -0.3%
10:00 a.m. Michigan Sentiment final (April)
Earnings: Schlumberger, Phillips 66, Charter Communications, Colgate-Palmolive, Centene, AbbVie, Abbott Laboratories.
A Bunker Worthy Stock
One company that we might be able to hide away from all the angst in the world now is Netflix (NFLX). Its business is booming and appears well-protected from any economic headwinds.
It has a goal of reaching $1 trillion in market capitalization by 2030, and that seems reasonable. It looks like the streaming giant is poised to benefit whether the U.S. goes into recession.
Netflix’s earnings were better than expected. It has a market cap of $416.2 billion, based on FactSet.
The company expects to double its advertising revenue growth in 2025 after it launched its advertising-backed service in the U.S. on April 1. The second quarter will see an international build-up.
Even with the price increases in the U.S., Netflix has not reported any downgrades or defections, and that is certainly a sign of strength and resilience.
Many analysts, including Oppenheimer and Pivotal Research, have price targets of $1,200 or even $1,450.
Netflix (NFLX) $973.03 – April 17, 2025
In the chart above, you can see a clear flag pattern has formed. Additionally, you can also notice there is a clear divergence as shown on the MACD. Plus, we see that the stock has come down to test the 200-day MA, (not quite reaching it) and bounced strongly.
The Jumpy Bond Market
I don’t care what side of the political fence you sit on, a bond market under pressure commands attention.
Trump wants Powell to lower interest rates, but Powell has made it clear that the Fed would put US interest rates on hold until the impact of Trump’s trade policies became clearer. When that happens, Powell might be forced to choose between prioritising fighting higher inflation or rising unemployment in a slowing economy.
Trump is under the belief that he can oust the Fed Governor. But any attempt to sack Powell would surely set off a backlash from financial markets because it would damage the Fed’s credibility as an independent, non-political central bank.
Were the White House to exert influence over the Fed, the implications would most probably be that US monetary policies would become more stimulative and inflationary, and the US economic cycle more volatile.
And then think about what would happen to the US bond market and the dollar. The US dollar, as the world’s reserve currency, and the haven of the US bond market, could both be at risk from Trump’s attacks on Powell and his trade war on everyone.
Trump’s policymaking is erratic and has induced enormous day-to-day volatility within financial markets. The markets are, on any day, at risk of another downward spiral in response to an unexpected Trump social media post.
Dollar weakness shows a wave of funds leaving the US to what are believed to be more stable jurisdictions such as Japan, Germany, and Switzerland.
If that dollar depreciation and capital flight were sustained, they would have implications for the US government’s massive refinancing tasks this year.
MARKET UPDATE
S&P500
The index is showing a choppy pattern behaviour. Volatility will be with us for a while. In the short term there is scope for more weakness back toward the base = part of larger period of ranging.
Resistance: 5345/5485/5525
Support: 5210/5150/4800/35 area
GOLD
Gold just keeps making new highs, reaching $3358 on April 17th. Market is overbought, but still no evidence in the patterns that a top is forming yet. Bias is therefore to the upside.
Resistance: $3357/$3396/$3420
Support: $3281/$3242/$3165
BITCOIN
We will be beset with more ranging behaviour over the near term as part of the larger bottoming, and with eventual gains above that Jan. peak at 109~ thereafter.
As I have already suggested, there is still some scope for a retest or even a slight break of the April 7th low at 74.4k, before the larger upside is seen. (My research is saying we could go as low as 67k).
Resistance: 85.8/86.3/92/93k (If we can close & hold above 86, we may have seen the low).
Support: ~80.5
HISTORY CORNER
On April 21
QI CORNER
SOMETHING TO THINK ABOUT
Cheers
Jacquie
