Jacque's Post Archives

November 10, 2023

(THE OPIOID CRISIS AND ITS EFFECT ON THE ECONOMY)

November 10, 2023

Hello everyone,

While the market is dancing along nicely to year-end, I’m going to focus on an issue that can affect anyone at any time in their life.

Drugs.

Am I worried about my son, Alex, ever taking drugs? No. He crosses the road when he sees a person walking toward him, who is smoking a cigarette because he can’t stand the smell of the smoke.

Alex’s first semester at college has been unremarkable. He has done the work, received good grades, and has joined the Chess Club. He sometimes even tells me he is bored. But I never think that is a bad thing. After all, boredom can stimulate and inspire us to get lost in new ventures and hobbies that might otherwise have never been explored.

I had an interesting conversation with him the other day. His major is tech, while his roommate’s major is business. Alex is quiet and conservative, while his roommate is a party boy and often stays out until 4 a.m. Furthermore, sometimes, he just never comes back to the room at all over the weekend. But that is not surprising behaviour for a young adult teenager. What is a bit concerning is his roommate’s pill-popping, which Alex tells me has an impact on the way he behaves.

Alex did not tell me what he was taking, only that they were illegal.

The opioid crisis is a scourge on our society. Is life so confronting that some people have to get a buzz from a pill to make it to the end of the day?

The statistics are alarming!

Worldwide, about 296 million people (or 5.8% of the global population aged 15-64 years) used drugs at least once in 2021. Among them, about 60 million people used opioids. About 39.5 million people lived with drug use disorders in 2021. Most people dependent on opioids use illicitly cultivated and manufactured heroin, but the proportion of those using prescription opioids is growing.

More than 100 people die every day from opioid overdoses.

Overall life expectancy in the U.S. has declined for three years in a row due in large part to the opioid epidemic, reversing a half-century trend.

Overdoses kill more Americans than car crashes or gun violence.

Addiction contributes to incarceration. In 2010, 85% of the U.S. population was incarcerated for substance-related reasons, with over half of all inmates diagnosed with substance use disorder.

In economic costs

Reduced labor force participation

Decreased employment

Productively loss.

Extra health costs.

Permanent injury & chronic health conditions.

Reported opioid overdose deaths:

2010 – 21,089

2017 – 47,600

2020 – 68, 630

2021 – 80, 411

Opioids have analgesic and sedative effects, and such medicines as morphine, codeine, and fentanyl are commonly used for the management of pain. Opioid medicines methadone and buprenorphine are used for maintenance treatment of opioid dependence. After intake, opioids can cause euphoria, which is one of the main reasons why they are taken for non-medical reasons. Opioids include heroin, morphine, codeine, fentanyl, methadone, tramadol, and other similar substances. Due to their pharmacological effects, they can cause difficulties with breathing, and opioid overdose can lead to death.

In the 1980s and 1990s, I worked in the Drug and Alcohol Unit and the Psychiatric Unit of the Toowoomba Hospital. I was the Administration Manager for those units. I learned a lot about the effects of drugs and alcohol on individuals, and the impact on families and the wider community. White-collar workers, blue-collar workers, male and female, young and old – all are at risk of being a statistic in the opioid epidemic. Those people who took drugs for non-medical reasons were in emotional pain, except the panacea turned into an additional crisis which exacerbated the person’s despair and feelings of hopelessness. A truly sad situation.

We can point to the pharmaceutical industry and its aggressive promotion of prescription drugs as one of the main elements contributing to the opioid epidemic in the U.S. Advertising of drugs is at saturation point on free-to-air T.V. in the U.S. Conversely, in Australia, promotion of drugs in television or print media is at a minimum. There are restrictions on the direct advertising of pharmaceuticals to patients, as well as regulatory and professional actions, which have resulted in different patterns of prescribing and outcomes in Australia.

Nonetheless, opioid prescribing has increased gradually in Australia over the last three decades. Each time a new opioid formulation becomes available, it is enthusiastically prescribed. That brings us to look at the relationship between the drug representative and the G.P. The payoffs for the G.P. when s/he promotes the drug are usually quite attractive. Surely, lack of remuneration would lessen the likelihood of G.P.’s being so eager to prescribe these drugs, knowing the tendency for some patients with non-medical conditions to abuse these drugs.

Take care.

Cheers,

Jacquie

November 8, 2023

Jacque's Post

(IT’S A GREEN LIGHT FOR THE MARKET ACCORDING TO THIS INDICATOR)

November 8, 2023

Hello everyone,

A reliable and rare market indicator is flashing green meaning we may well see good times on Wall Street for the next 12 months.

This market indicator is called the Zweig Breadth Thrust.

It flashed a buy signal last Friday for only the 18^th time since 1945.

When this happens the S&P 500 averages a 23.3% gain over the following 12 months and is up 100% of the time, history shows.

The gauge – a ratio developed by famous investor Marty Zweig – is used to determine market momentum, particularly the start of a potential move higher. This signal is triggered when the ZBT rises from less than 0.4 to more than 0.615 within 10 days.

The thrust is calculated by:

Determining the ratio of advancing New York Stock Exchange listed names to the total number of rising and declining issues

Then find the 10-day exponential moving average of that ratio.

Put simply, it’s when you go from very oversold to very overbought in less than two weeks.

This by signal came as the S&P 500 wrapped up its biggest weekly gain of the year. The index rallied 5.9% last week, marking its largest one-week surge since November 2022. That move followed the Fed hinting it may be done raising rates.

The idea that the Fed may be done (we don’t know that for sure)

The idea that the economy is rebalancing normally (and not going straight into a recession)

Both are significant.

The technical signal mostly suggests that there is a lot more buying pressure coming in. In other words, an end-of-year rally is still quite likely.

Some analysts believe the S&P 500 can end 2023 between 4,600 and 4,700. This implies an upside of 5.5% to 7.8% from Friday’s close. The index would then close out the year up 19.8% or 22.4%.

Remember that the Zweig Breadth Thrust is just one indicator. The market could be impacted by numerous factors before the end of the year.

Have you heard of Digital Ocean?

It’s a Cloud Computing platform that is at an attractive entry point right now, according to Goldman Sachs.

Analysts have a price target of $33.00 which implies the stock could jump 38.4% over the next 12 months.

Analyst, Gabriela Borges, cited the stock’s significant underperformance as an opportunity for investors. The stock is up 6% this year, while the Nasdaq Composite has gained 30%.

Borges believes the business is now approaching a cyclical trough. Furthermore, she goes on to say that the structural improvements that DO has made to its mix and cost structure will become more obvious, driving better revenue growth, and continued (free cash flow) and margin expansion.

According to Borges, the underperformance has likely been due to a cyclical normalization in cloud optimization spending. She argues that this trend has been particularly acute in areas where DO has outsized exposure, such as video games, streaming, and web agencies. Borges estimated that Digital Ocean’s organic revenue growth rate, excluding M&A and pricing, has slowed from 36% in the first quarter of 2022 to low single digits in the third quarter of this year.

The analyst points out there are positive catalysts ahead for the business, including Digital Ocean’s better-than-expected revenue and earnings for the third quarter and the company’s contributions from its newer initiatives. These initiatives include DigitalOcean’s July acquisition of Paperspace, which should expand the company’s artificial intelligence and machine-learning capabilities, and its ongoing ramping of Cloudways, a cloud hosting and SaaS provider for small-to-medium-size businesses acquired last year.

A new CEO is yet to be announced, and until that happens, analysts do not see a material shift in DigitalOcean’s strategy.

Second Quarter 2023 Financial Highlights:

Revenue was $170 million, an increase of 27% year-over-year. Annual Run-Rate Revenue (ARR) ended the quarter at $682 million, representing 25% year-over-year growth. Gross profit of $102 million or 60% of revenue.

Digital Ocean (DOCN) Trade Idea

Stock Price $26.38.

January 19 (DOCN) $25/$27.50 vertical call spread at a cost of $1.30 (do not pay more than $1.40)

For those who want to be more aggressive, you can look at doing

January 19 (DOCN) $27.50/$30.00 vertical call spread at 0.88cents (do not pay more than 0.95cents)

McDonalds (MCD)

If you took advantage of the McDonald’s trade, I outlined two to three weeks ago, then don’t forget to look at taking profits.

I gave the option of a 250/260 DEC call option spread or a 250/270 DEC call option spread.

MCD is sitting at $268.96 as I am writing this newsletter.

Cheers,

Jacquie

November 6, 2023

Jacque's Post

(CAN WE NOW TURN THE PAGE ON THE FED’S INTEREST-RAISING CYCLE?)

November 6, 2023

Hello everyone,

The year has dashed by.

Only about eight weeks until Christmas.

The question on everyone’s lips is: Will the market rally continue into year-end?

In crystal ball gazing, it is entirely possible. As long as we don’t keep getting battered by events out of left field. But you know what the market is like. It can climb a wall of worry very well as it is forward-looking.

It has been a mixed bag with earnings results. Some good, some not so good, and didn’t the market let those companies know when they missed the mark. An overreaction in some cases.

Earnings season is winding down. However, there are still some important reports out this week.

Nov. 6, 2023, Monday

Australia Interest Rate Decision

Previous: 4.1%

Time: 10:30 pm ET

Nov. 7, 2023, Tuesday

8:30 a.m. D.R. Horton

Switzerland Unemployment Rate

Previous: 2%

Time: 1:45am ET

Nov. 8, 2023, Wednesday

8:00 a.m. Biogen

8:00 a.m. Warner Bros.

4:30 p.m. Disney

5:00 p.m. MGM Resorts

China Inflation Rate

Previous: 0%

Time: 8:30 pm ET

Nov. 9, 2023, Thursday

US Initial Jobless Claims

Previous: 210K

Time: 8:30am ET

Nov. 10, 2023, Friday

US Consumer Sentiment

Previous: 63.8

Time: 10:00am ET

The market is working against a backdrop of conflict in different parts of the world. It seems the world is never entirely free of conflict at any one time. Religion, race, and land are at the basis of many wars/conflicts, but these explanations simplify complex underlying issues, and we mostly have to delve into history to highlight important points to gain a thorough understanding of where we are today. Though I do not have the luxury of time or space here to give a history lesson, I will draw your attention to two giants of Wall Street, who believe the world is at its “most precarious since 1938.” Jamie Dimon (JPMorgan) and Larry Fink (BlackRock) are both expressing concern about the nature of the world we live in. “Scary and unpredictable” – this is the language these giants of Wall Street are using to describe our times. At stake is the future of our world as we know it: freedom, democracy, food, energy, and immigration.

The Middle East accounts for 48% of global energy reserves and produced 33% of the world’s oil last year.

Geopolitical risk is arguably shaping all our lives. Rising fear impacts consumers. It can create a withdrawal from consumption, or it can sometimes see consumers spend more. In the long term, fear is a drag on the consumer and can ultimately lead to recessions.

Last week the Fed left rates on hold for the second time in a row after 11 hikes since March last year. Powell was unsure whether the Fed had done enough to bring inflation down to its 2% target but highlighted that it would proceed carefully. The knock-on effect of the Fed’s language was enough to bring the yield down on the 10-year U.S. Treasury bills down to less than 4.7%.

Both Dimon and Fink believe there may be long-term forces that are still inflationary at play and are conscious of the fact that rates could possibly go up from these levels. Dimon points out that there is interest rate exposure in a lot of things. And these current rates are stressing certain assets, which the market, up until now, has mostly taken in its stride. But if rates go up another 100 basis points, it will stress a wider variety of things including real estate and even some banks. Both Fink and Dimon aren’t ruling out 6% or 7% rates.

The U.S. government’s ability to finance itself in the medium term is also causing concern. After the financial crisis in 2008, the market for government debt was underpinned by huge waves of quantitative easing (QE) as the Federal Reserve bought assets including Treasuries to boost the economy. The programme was revisited during Covid but came to an end in March 2022. The withdrawal of QE together with a flat appetite for Treasuries among US banks and international investors such as China, could force the government to pay higher prices at a time of near-record borrowing. The US has issued $1.8 trillion of debt this year, the second-highest amount ever other than in the early stages of Covid. Stanley Druckenmiller and Ray Dalio have also sounded the alarm recently over the deficit. Going forward, there may be considerable headwinds the US government may have to face.

The US economy has been showing strong growth, but recent data – jobs report & manufacturing data - may now suggest that the economy is finally slowing. The Biden administration has been pumping stimulus into the system via big pieces of legislation – Inflation Reduction Act, the Chips Act, and the Infrastructure Act – which are about $970 billion of stimulus. These are designed to accelerate America’s adoption of renewables, rebuild its semiconductor industry, and increase its spending on roads, bridges, and broadband. Fink and Dimon argue that this stimulus coupled with unions negotiating 25% labour increases are inflationary. High growth, government stimulus and two wars, which are threatening to become a broader crisis – all are inflationary. So, Fink and Dimon caution us not to turn the page on the rate-rising cycle just yet – it may prove premature.

Inflation, interest rates, and the economy

Cheers,

Jacquie

November 3, 2023

Jacque's Post

(SUMMARY OF JOHN’S NOVEMBER 1, 2023 WEBINAR)

November 3, 2023

Hello everyone,

Webinar Title: The Seasonals are Kicking In

Markets are starting to pick up.

Performance:

2023 year to date: +66.17%

Average Annualized Return: +47.82%

Since inception for 15 years: 663.36%

Trailing one-year return: 74.44%

Positions:

Risk On

NVDA 11/370-380 call spread 10%

TLT 11/76-79 call spread 10%

BRK/B 11/300-310 call spread 10%

Method to My Madness

The seasonals are kicking in, putting a floor under all asset classes.

Year-end rally is a natural tendency, but this keeps getting knocked down by events such as government shutdown and Middle Eastern War.

Bonds appear to be bottoming and are attracting long-term money.

Oil prices are selling off, losing the boost from the Gaza war.

AI stocks still attracting investors.

Wait to buy on pullbacks.

Global Economy – Red Hot U.S.

The Fed kept rates steady on Wednesday.

ADP rises by 113,000 for private sector payrolls.

U.S. Core PCE jumps 0.3%, in September, the most in four months.

Red Hot U.S. economy at 4.9% growth rate – highest in two years.

Car payment delinquencies hit record rate, with repossessions rising.

Retail sales rise 0.7% in September, much more than expected. Consumers are still paying up for the price increases.

Stocks – Bottom Fishing

All the elements of a year-end rally are setting up. Hedge Fund shorts at all-time highs.

Earnings coming in better than expected in big tech and financials.

Caterpillar dives on shrinking demand.

Amazon profits jump on the strength of its overwhelming cloud business.

JP Morgan CEO sells $1.38 million worth of stock or 1 million shares in the company.

Government shutdown on November 17 will continue to cap prices and risk-taking.

Ukraine War has become a big generator of U.S. Defence Companies, such as Lockheed Martin (LMT) and General Dynamics (GD).

Meta blows out Earnings with earnings at a breathtaking $34 billion, up 23% YOY.

If you are a long-term investor scale into Tesla. It is close to LEAPS buying territory.

Snowflake – buy on dips.

Google – buy on dips.

AMD - buy on dips.

BA – close to major buy.

CAT – a lifetime stock – multiple exposures to a recovery in the global economy.

BAC, JPM, IB, BRK/B – buy at these levels.

Netflix – two-year LEAPS possible even going 6 months out.

Bonds – Turning Hot

U.S. debt is turning hot, with institutions scaling in at present prices – perceived to be a long-term bottom.

10-year Bonds have repeatedly tried but failed to break the 5.00% yield.

U.S. Treasury to borrow $776 billion by yearend. It follows this up with an $816 billion draw on the markets from January to June. If bonds (TLT) can hold up against this onslaught of borrowing they are a “BUY”.

U.S. Government ends 2023 with a $1.7 trillion deficit, up 23%.

Fear of excessive government borrowing is given as the reason, but real borrowing is actually declining.

The whole falling interest rate and rising bond price trade have been delayed for six months on hotter than expected economic growth at 2.40% for Q2 and more Fed rate rises.

Junk bond ETFs (JNK) and (HYG) are holding up extremely well with an 8.74% yield.

Start scaling into long bond positions. On a six-month view, we could hit 110 TLT.

Worst case scenario in yields – we hit 5.20% and then fall.

Foreign Currencies – The Dollar is trying to top out

Bank of Japan eases grip on bond yields, ending its unlimited buying operation to keep interest rates down. Japan is the last country to allow rates to rise. Looking for a final capitulation in the yen and then we enter a decade-long buy. Expect the Japanese yen to take off like a rocket.

U.K. Interest rates hit 25-year high, at 5.16% for 30-year gilts. Inflation at 6.7% is the driver with no end in sight.

“Higher for Longer” gives an adrenaline shot for the U.S. dollar taking it to new 2023 highs.

The dollar is also catching a flight to safety bid from the imminent government shutdown. It should be topping soon.

Collapse of the dollar is now a 2024 story.

Buy (FXE), (FXB), (FXA), (FXY)

Energy & Commodities – End of the Party

Middle East crisis sees oil rally despite no supply disruptions whatsoever.

Saudi Arabia continues the Oil supply squeeze into Q4.

The U.S. eases Venezuela sanctions to boost American oil supplies and cap prices.

$100 a barrel and much higher possible if we get a cold winter, which may start to kick in shortly.

Duke Energy goes all in on Hydrogen in Florida, devoting 74.5 MwH solar plant in Debarry towards the electrolysis of water.

Hedge Funds buy into Uranium as the nuclear renaissance gains steam. If you are in CCJ hold it and add to it on dips.

FCX – strong LEAPS candidate.

Precious Metals – Flight to Safety

Middle East delivers a bid for precious metals.

The yellow metal is up 45% over five years.

Gold headed for $3000 by 2025.

Falling interest rates will be the driver.

Russia and China are stockpiling gold to sidestep international sanctions.

Real Estate – Mixed

Supplies are at 40-year lows.

95% of homeowners with mortgages date back to the 3.0% era.

Homebuyers are pouring into ARMs (Adjustable-Rate Mortgages), avoiding 30-year fixed rates at a mind-numbing 8.0%.

ARMs could be had at 6.77% last week. Overall, mortgage applications are down 22% YOY.

Housing starts jump in September, up 3.2% to 963,000 units.

Single family homes are the overwhelming leaders.

Apartment buildings were up an amazing 17.1%.

CCI – buy at these levels.

ITB – home builder – buy.

Cheers,

Jacquie

November 1, 2023

Jacque's Post

(THIS AI STOCK IS GAINING ATTENTION)

November 1, 2023

Hello everyone,

Welcome to November.

Wall Street is upbeat about an AI stock called Arista.

On Monday, the company earnings exceeded Wall Street expectations on both the top and bottom lines.

Earnings: $1.83/share

Revenue: $1.51

Analysts forecast:

Earnings: $1.58/share

Revenue: $1.48 billion

Arista also issued high-than-expected forward guidance, calling for fourth-quarter revenue in the range of $1.5 billion to $1.55 billion.

Arista’s focus is low-latency networks between clients and the cloud for large-scale data centres, exposing the company to growing investor interest in AI.

The stock is up 63% in 2023.

Analysts believe the company could be the top player in the Ethernet application of AI. Morgan Stanley and Wells Fargo, among others applauded the company report and highlighted the company’s potential AI catalyst for growth heading into 2024.

Morgan Stanley’s Meta Marshall believes growth will accelerate from the adoption of 800G Ethernet transceivers for data centres. Marshall upgraded Arista to overweight and gave the stock a price target of $220 which is more than 25% upside from Monday’s $175.72 close.

Market Update

U.S. 10-year Yields

We have been consolidating since reaching 5.0210% on October 23^rd. But we may have another leg up before exhaustion.

Possible targets: 5.25/5.33%

Support lies in the low/mid 4.80%’s.

Happy Wednesday to you all.

Cheers

Jacquie

October 30, 2023

Jacque's Post

(THE MARKET IS LOOKING FOR CLARITY)

October 30, 2023

Hello everyone,

Welcome to the triple treat week.

Halloween, the Fed Policy statement, & non-farm payrolls.

Could be hair-raising or it could all be a big yawn.

So, let’s get to the detail of what’s on our plate this week.

Monday, October 30, 2023

10:30 a.m. Dallas Fed Index (October)

Earnings: Public Storage, Simon Property Group, On Semiconductor, Western Digital, McDonald’s

Tuesday, October 31, 2023

8:30 a.m. ECI Civilian Workers (Q3)

8:30 a.m. FHFA Home Price Index (August)

9:00 a.m. S&P/Case Shiller com. 20 HPI (August)

9:45 a.m. Chicago PMI (October)

10:00 a.m. Consumer Confidence (October)

Earnings: First Solar, Advanced Micro Devices, Caesars Entertainment, Pfizer, GE Healthcare Technologies, Caterpillar

Wednesday, November 1, 2023

8:15 a.m. ADP Employment Survey (October)

9:45 a.m. Markit PMI Manufacturing (October)

10:00 a.m. Construction Spending (September)

10:00 a.m. ISM Manufacturing (October)

10:00 a.m. JOLTS Job Openings (September)

2:00 p.m. FOMO Meeting

2:00 p.m. Fed Funds Target Upper Bound

Earnings: Marathon Oil, Clorox, Costco Wholesale, Qualcomm, Norwegian Cruise Line Holdings, Yum! Brands, Airbnb.

Thursday, November 2, 2023

8:30 a.m. Continuing Jobless Claims (10/21)

8:30 a.m. Initial Claims (10/28)

8:30 a.m. Unit Labor Costs preliminary (Q3)

8:30 a.m. Productivity preliminary (Q3)

Earnings: Apple, News Corp, Booking Holdings, Eli Lilly, Starbucks, Paramount Global, Moderna.

Friday, November 3, 2023

8:30 a.m. Jobs Report (October)

9:45 a.m. PMI Composite Final (October)

9:45 a.m. Markit PMI Services final (October)

10:00 ISM Services PMI (October)

It’s been an interesting month, to say the least. Political instability, conflict in the Middle East, yields on a tear, a weakening consumer against data showing a resilient economy, and the market throwing in the towel and adding to the chaos.

Most expect the Fed to hold rates steady when it announces its decision on Wednesday. But what will be more significant will be the Fed speech during the press conference. What Chair Jerome Powell says will be just as important as what he doesn’t say.

If the stance is hawkish, investor sentiment may be undermined, and this outlook could exacerbate fears of a recession when markets are already stressed. Stocks are headed for their third straight month of losses as Treasury yields rise to multiyear highs. Both the S&P 500 and the Nasdaq Composite slid into correction territory last week after the market reacted savagely to some mega cap tech reports. And the choppiness could continue until markets gain clarity.

On the other hand, the forecast is for the rate of economic growth to slow and inflation to moderate, which could mean the Fed’s commentary may be more accommodative. By the middle of 2024, it is possible that we will see the impact of higher rates rippling throughout the economy, initiating a recession & a couple of quarters of perhaps negative GDP growth. Stocks will react, as will the Fed.

The 10-year Treasury yield continues to hover around 5%. To take the pressure off equities, bond yields will need to fall. Will Powell address the growing fiscal deficit in his commentary? I’m certain his language will be thoughtful and measured.

On Friday, investors will get some insight into the labor market. It is expected to show that the U.S. economy added 175,000 jobs in October, according to consensus estimates from FactSet. It seems investors may only begin to breathe a sigh of relief from the Fed’s hawkish outlook when a real slowdown in growth happens.

Thursday will be Apple’s turn for earnings. Up around 30% this year – will the data be positive? Even if it is, how will the market react? If there is a slight miss, the market may punish it.

Uncertainty is weighing on the market. Geopolitical risks, a possible government shutdown in November among other concerns could weigh on the market until year-end. Alternatively, we know the lead up to Christmas is historically a positive time for the market, so equities could rally in time as they price in the effects of a slowing economy.

If world events are causing you a bit of angst now, and you seek to understand how to calm your mind/body, then maybe we should delve into some thoughts from Deepak Chopra. He cites inflammation as the scourge of our modern age. “Stress, inflammation, depression, anxiety, and chronic disease go together,” Chopra says. “Inflammation is the culprit in all these diseases.”

Constant stress can lead to a state of chronic inflammation, which increases the risk for mental health problems like anxiety and depression along with heart disease and Alzheimer’s, according to the Cleveland Clinic.

What’s often behind this constant state of stress?

Trauma.

Chopra explains that the rise in mental health problems and chronic stress is related to the body’s response to trauma – which can stem from generational trauma, isolation, or the constant bombardment of the news cycle & its continuous spouting of negative scripts.

Although we can’t control everything, there is a circuit breaker if we look inward. Understanding the biology of inflammation and how it can be aggravated by lifestyle habits is a good place to start, according to Chopra.

Here are his suggestions for reducing inflammation:

Plenty of Sleep.

Seven to nine hours is recommended.

Sleep reduces the risk of heart disease, stroke, and many chronic health problems.

Practice a wind-down regime – minimize screen time and keep sleep & wake time consistent.

De-stress.

Take 15–20-minute time-outs and lose yourself in an activity that brings you joy, whether that be a hobby, exercise, meditation, gardening, yoga, or spending time with your pets.

Maintain emotional connection with others.

Isolation and loneliness are harmful to our health.

Stay in contact with friends & family.

Stay connected with others through volunteering and community groups.

Recognize moments of joy.

This can be as simple as listening to a favourite song/piece of music, listening to birdsong, observing the change of seasons through your plants/trees in your garden, or enjoying the perfume of a rose flower, or the smell of your favourite treat.

Eat an anti-inflammatory diet.

Eat plant-based, whole foods.

Chopra indicates the Mediterranean diet is ideal, as it emphasizes fruits, vegetables, olive oil, and lean meats.

Wishing you all a wonderful week.

Cheers,

Jacquie

October 27, 2023

Jacque's Post

(AN AUSTRALIAN VET MAKES A DIFFERENCE IN UKRAINE)

October 27, 2023

Hello everyone,

There is something that nearly always gets left behind during hard times or in wartime.

Animals.

Thousands of animals have been brought back to Animal Shelters in Australia because owners can no longer afford to keep them. Most people don’t seem to think about the long-term costs of keeping an animal, and just assume it will all work out in the end. The animal seemed like a good idea during the pandemic, but now is an expense that many Australians can no longer carry.

In wartime, animals are thought of last or not at all. That’s why in war-torn areas, like Ukraine, animals have been abandoned and are now just roaming the streets or are left chained to a post. Some have terrible injuries: gunshot wounds, broken bones, and are malnourished.

One Australian vet is now making a difference to those animals’ lives.

Dr. Lachlan Campbell, a Sunshine Coast vet has flown to Ukraine on two occasions to assist the animals there. Early in October, on his second visit, he travelled to Kramatorsk – less than an hour drive from Bakhmut. Whilst there, he has treated animals and built shelters for pets displaced by the war in preparation for winter.

He teamed up with the British animal charity, Nowzad, and worked with a team of four (from dawn to dusk) to build animal shelters. He commented that the “shelters we built are enough to house 80 dogs in warmth and more comfort – and off chains – which some have been on for up to four years”. He and his team provided quality food, parasite preventatives, and toys for the animals. Dr. Campbell pointed out the building materials for the shelters were transported all the way from the UK by semi-trailer.

He reported that air raid sirens sounded as frequently as six to eight times a day. He said he also wore body armour and helmets if they were required. He had some near misses with a missile hitting within metres of the shelter Dr Campbell had been building.

During his most recent trip, Dr Campbell vaccinated, microchipped, and treated around 100 cats and dogs for diseases.

In Australia, Dr. Campbell works as a veterinarian at Vets Central on the Sunshine Coast in Queensland.

Nowzad opened its first animal clinic in Kabul, Afghanistan, in 2007, and have since opened an additional donkey/horse sanctuary in Afghanistan.

Market Update

We are in correction mode.

If we get a very good break of 4100 on the S&P, we could fall to 3800.

There is still a chance we could rally in November/December.

In other news

The Australian Prime Minister, Anthony Albanese, is in the U.S. on a State visit to the White House. Australia’s relationship with China was one of the talking points. Albanese’s State visit is intended to deepen an alliance that’s increasingly viewed as a critical counterweight to China’s influence in the Pacific. It’s the ninth and most high-profile meeting between the two leaders, which is intended to facilitate closer ties on climate change, technology, and national security. The United States also plans to provide nuclear-powered submarines to Australia in the coming years, part of a collaboration with the United Kingdom.

The Australian government is sending military aircraft and defence personnel to the Middle East to be on standby in the event the situation “gets worse”.

Australian fighter jets and defense personnel arrive in The Middle East.

Happy weekend to you all.

Cheers,

Jacquie

October 25, 2023

Jacque's Post

(FINDING DEFENSIVE AND STABLE STOCKS AMONGST CHANGING GLOBAL FORCES)

October 25, 2023

Hello everyone,

There are many events taking place right now that will inevitably reshape the world in the near future.

Political instability, Climate change, advances in technology, government debt, and wars that may shift power dynamics amongst world powers are all playing out concurrently.

In five years, we could see a radically different world.

So, how do you cope with all these changes in relation to your stock market holdings?

You play defensive and lock in stable stocks. Let’s look at the three stocks here.

Johnson and Johnson (JNJ)

1/ It’s undervalued. 13% decline this year.

2/ 3% dividend. 60+ years of dividend growth.

3/ Extensive portfolio of medicines & medical devices.

4/ Analysts predict JNJ stock price could reach $168 by October 2024 & $187 in 2028.

5/ For the 21^st year in a row, Fortune has named Johnson & Johnson as a Top 50 All-Star on its list of the World’s Most Admired Companies.

What could go wrong?

JNJ is facing legal action on its talc powder, opioid drugs, and surgical mesh products that could cost the company a lot of money, and impact sentiment on the company.

Earnings results:

Topped quarterly earnings and revenue estimates.

EPS: $2.66 vs $2.52 expected

Revenue: $21.35 billion vs. $21.04 billion expected.

Lifts full-year guidance as MedTech and pharmaceutical sales jump.

Johnson and Johnson stock forecast & price prediction for 2023 & 2024 & beyond.

Visa (V)

1/ Dominant force in digital payments. Strong financial position. Healthy balance sheet.

2/ Proactively involved with fintechs.

3/ 0.76% dividend.

4/ 61% share of the credit card market.

5/ Visa is less volatile than 75% of U.S. stocks over the last three months.

6/ EPS have increased by around 20% a year over the last 5 to 10 years.

7/ Visa works with businesses in new and evolving industries, including fintech platforms, crypto projects, and content creators. These programs may help it find traction in new areas of growth.

8/ Credit and debit card penetration in emerging markets is still low, but disposable incomes are increasing. A possible growth opportunity for Visa.

7/ Analysts predict Visa stock price could rise to $250 by the end of 2024 and $300 by the end of 2025 and be at $500 in 2030.

What could go wrong?

A severe recession resulting in lower payment volumes.
Competing technologies taking market share from Visa.
Growth opportunities missed due to regional networks/alternative payment systems.
Regulators ending the Visa/Mastercard duopoly impacting fees.

Earnings Results:

Posted better than expected fiscal Q4 earnings and revenue as payments volume, cross-border volume, and payment transactions stayed resilient.

Visa boosted its dividend by 16%.

The company announced a $25 billion stock buyback.

Net revenue for the quarter climbed to $8.61B, topping the $8.55B consensus estimate.

Alphabet (GOOGL)

1/ Google has a monopoly on Search. At 93% worldwide market share, the company is well-positioned to profit from the search industry’s expansion in the coming years.

2/ The company has huge profit margins.

3/ Digital ad sales are set to rise. (Analysts argue that the digital ad market will grow by nearly 50% to $910 billion by 2027).

4/ Google Cloud will soon become a profitable vehicle. Google Cloud is the third largest provider of cloud infrastructure services, behind only Amazon Web Services and Microsoft’s Azure. Its highly regarded data analytics capabilities will advance Google Cloud’s growth. The cloud computing market is expected to exceed $1.5 trillion by 2030, according to Grand View Research, so Google Cloud is well positioned to be Alphabet’s next major profit driver.

4/ Stock buyback initiative.

5/ Analysts predict that the stock price could rise to around $490 by 2030.

What could go wrong?

a) Google faces headline risks over anti-trust lawsuits.

b) Regulatory challenges.

c) The company loses the AI war against rival Microsoft.

d) Google’s overreliance on advertising business (may soften during a recession)

Earnings Results:

11% revenue growth in the third quarter.

Shares dropped around 7% in extended trading – the cloud business missed analysts’ expectations. Cloud revenue came in below estimates at $8.41 billion, missing the mark by more than $20 million. Once Google Cloud becomes profitable it will propel the shares much higher.

Stock price forecasts for Google in 2023, 2024 and beyond.

Happy Wednesday to you all.

Cheers

Jacquie

October 23, 2023

Jacque's Post

(THE BATTLE BETWEEN THE BULLS AND THE BEARS WILL BE COMING TO A STAGE NEAR YOU IN THE 4^TH QUARTER)

October 23, 2023

Hello everyone,

Welcome to the final full week in October. We have Halloween, Thanksgiving, and Christmas/New Year ahead of us.

And we have a packed economic calendar and earnings. Here’s what’s on our plate this week.

Monday, Oct. 23

8:30 a.m. Chicago Fed National Activity Index (September)

10:00 a.m. ET Euro Area Consumer Confidence Flash

Previous: -17.8

Tuesday, Oct, 24

9:45 a.m S&P Global PMI Composite preliminary (October)

9:45a.m S&P Global PMI Manufacturing (October)

9:45a.m S&P Global PMI Services (October)

10 a.m. Richmond Fed Index (October)

8:30 p.m. ET Australia Inflation Rate

Previous: 6%

Earnings: Alphabet, Microsoft, F5, Visa, Texas Instruments, General Electric, NextEra Energy, Raytheon Technologies, Sherwin-Williams, Dow. Inc, General Motors, 3M, PulteGroup, Halliburton, Coca Cola, Kimberly-Clark, Corning.

Wednesday Oct, 25

8 a.m. Building permits final (September)

10 a.m. New Home sales (September)

10:00 a.m. ET Canada Interest Rate decision

Previous: 5.0%

Earnings: Hilton Worldwide, General Dynamics, Old Dominion Freightline, T-Mobile US, Boeing, Hess, Meta Platforms, Raymond James Financial, Align Technology, Whirlpool, International Business Machines, O’Reilly Automotive.

Thursday Oct, 26

8:30 am Durable goods orders (September)

8:30 am GDP (Q3)

8:30 am Initial claims (week ended Oct. 21)

8:30 am Wholesale inventories preliminary

8:15 am ET ECB Interest Rate Decision

Previous: 4.5%

Earnings: Honeywell International, Keurig Dr Pepper, Northrop Grumman, PG&E, Mastercard, Amazon, Royal Caribbean Group, Tractor Supply, United Parcel Service, Willis Towers Watson, Hasbro, Southwest Airlines, Comcast, Hershey, Intel, L3Harris Technologies, Ford Motor, Dexcom, Capital One, Chipotle Mexican Grill, Emphase Energy.

Friday, Oct, 27

8:30 am Personal consumption expenditure (September)

8:30 am Personal income (September)

8:30 am ET US Core PCE Price Index

Previous: 3.9%

Earnings: Phillips 66, Chevron, AbbVie, Stanley Black & Decker, Exxon Mobile, Colgate-Palmolive, T. Rowe Price Group.

We have all seen how Bonds have been shoving stocks down the hillside. They are down but not out and could possibly rally well in the Q4. Stocks are a great hedge against inflation. Many portfolio managers and analysts are arguing that the high for the year is not in and that we could see a 4-6% gain by the end of the year.

Analysts are starting to see green shoots. Some argue that banks are bottoming just as they did in March of 2020, which ended in a year-end rally that commenced in Q4. Furthermore, they see expanding breadth for stocks. In other words, we should see more stocks rising than falling. And analysts argue that is a buy signal for the Russell 2000, retail via the SPDR S&P Retail ETF XRT and regional banks via the SPDR S&P Regional Banking KRE. Portfolio managers are also expressing interest in transports as they are deeply oversold. Included here are airlines and railroads. (That doesn’t mean you go out and buy all these stocks straight away. The bulls and bears will likely be squabbling for a while yet, so just be patient.)

On the other side of the coin are those that see the stock market moving lower. Several analysts see investor emotions taking over when they see the stock market falling and then realize something is very wrong. As this realisation becomes apparent a washout becomes inevitable as many investors decide to get out, either because they can’t take it anymore or because they expect a terrible event is close at hand – a climatic stock market drop and/or an economic depression. Cash is the best protection here. Cash reserves soften the performance drawdown, and you are well-positioned when the selling gets heated.

The high in Bond Yields is expected to peak around 5.25%. And we may not even get to that number.

The Middle Eastern conflict has created another layer of uncertainty over the market. The threat of the war escalating and drawing in allies and other neutral countries should be recognized and taken seriously. All countries need to work together to de-escalate the Middle Eastern conflict.

S&P 500

From a technical standpoint the S&P has broken weekly trendline support, so we could see more downside to around the mid 4,100’s. If you look at the S&P through an Elliott Wave lens, particularly over the last couple of years, since peaking at 4,819 in January 2022, you could interpret that it is undergoing a very complex correction structure, which is still developing and risks testing the 3,800 level over coming weeks/months.

Earnings and economic data will certainly have a strong influence over the markets this week.

Gold

The uptrend in Gold should continue and extend onto the next key chart resistance at $2,072. The next key target after that is $2,244. Support should hold around mid $1,900, but a push lower to $1900/$1880 cannot be ruled out.

Brent Crude Oil

Brent Crude displays a developing 14-month Inverse Head and Shoulders reversal formation with a potential upside target of around $126.50. A sustained break above neckline resistance at $97.85 will confirm this reversal target.

In other news:

Aid trucks have entered Gaza from Egypt, but the real challenge will be in distributing this aid where it is needed.

Israeli attacks on Gaza have increased.

The U.S. has pledged to provide Israel and Ukraine with billions of dollars in aid.

Still no Speaker in the House.

David Attenborough, 97, is back at work.

He will present the third series of the BBC’s award-winning natural history programme, Planet Earth. It will air later this year on BBC One.

My son, Alex, grew up watching Attenborough’s natural history documentaries. When Alex was aged three I started buying him Attenborough documentary DVDs and books. These included Our Planet, The Blue Planet, Life, The Life of Birds, The Life of Mammals, Life in the Undergrowth, Tiny Creatures, Life in the Freezer, Plants behaving Badly, The Private Life of Plants, and Planet Earth. It gave him a wonderful appreciation of the wonders of nature – something that he still holds today. Thomas the Tank Engine and Bob the Builder were quickly cast aside when David Attenborough became an alternative.

Global warming and the Aedes Aegypti mosquito

Around half the world’s population could be at risk from dengue due to global warming.

Where once this disease was confined to the small pockets of Asia, researchers now confirm that dengue can be found across several continents. In fact, the incidence of dengue has increased by at least 30-fold over the past 50 years.

Half a million cases were reported to the WHO in 2000, rising to 5.2 million in 2019, with the true number of annual infections now estimated to be up to 96 million.

The disease is now considered endemic in more than 100 countries globally. Global warming is driving increasingly hotter and wetter climates in which mosquitos, the main transmitter of dengue, can survive, breed, and further spread.

Dengue is already on the rise in Europe. Its spread has increased across France over the past 12 years; it was identified in more than 70 regions in 2022, compared to just six in 2010.

Analysis from Airfinity, a science data analyst company, showed that locally acquired infections in France could reach 3,000 annually by 2030. Cases of the virus have also been reported in Spain and Italy in recent years, and British experts believe it’s only a matter of time before it takes off in the UK.

It seems that the mosquito that carries dengue, the Aedes albopictus, is often transported into Europe via shipping containers or people’s cars.

In response, funding is being invested into mosquito trapping and monitoring systems at UK ports that aim to detect the insects.

Many dengue infections are asymptomatic, but the virus can occasionally cause fever, body aches, and a rash. Although most cases recover in one to two weeks, some can require hospital care and result in death. In total, 36,000 people die from the infection every year.

The mosquito that transports the dengue virus can be found in Central and Far North Queensland, so if you are ever thinking of travelling to that area of Australia taking precautions is crucial. Wear long sleeves and use insect repellent regularly. There is currently no vaccine to prevent dengue fever in Australia. (There are four different variations of the virus that cause dengue fever, which essentially means that dengue fever behaves like four different viruses, and is why scientists and researchers have struggled to make progress on dengue prevention and treatment methods.)

Wishing you all a wonderful week.

Cheers

Jacquie

October 20, 2023

Jacque's Post

(SUMMARY OF JOHN’S OCTOBER 18, 2023 MARKET UPDATE WEBINAR)

October 20, 2023

Hello everyone,

WEBINAR TITLE: Going into Combat

LUNCHES

October 20 – London, U.K.

October 30 – Sarasota, Florida

October 31 – Miami, Florida

PERFORMANCE

Year to Date: 63.3%

Trailing one year return: 72.98%

Average Annualized return: 47.71%

POSITIONS

TSLA 10 $200/$210 call spread

NVDA 10 $370/$380 call spread – profits taken & trade expired.

NVDA 11 $370/$380 call spread

TLT 11 $76/79 call spread

METHOD TO MY MADNESS

So far, the damage of the Middle Eastern crisis on Wall Street has been limited. It is anybody’s guess whether this escalates.

The markets are trapped in a narrow range, as the market seems to be dealt a savage hit almost every week. This keeps it swinging back and forth in a narrow range.

From a technical standpoint, a year-end rally is possible, but the market will have to sidestep multiple crisis situations to accomplish this. We all know that the market can climb a wall of worry.

Bonds are getting trashed.

Oil prices and precious metals have risen sharply because of the Middle Eastern war.

John argues that the tech sell-off will be brief, as too many people are trying to get into accelerating long term earnings driven by AI.

Let the market come to you. Be patient.

THE GLOBAL ECONOMY – JITTERS

September nonfarm payroll report rises to 336,000. Still a very resilient economy.

CPI explodes to 3.7%.

The Producer Price Index jumps 0.5%

The International Monetary Fund has raised its U.S. growth projection for this year by 0.3% points compared with its July update, to 2.1%.

Retail sales rise 0.7% in September – greater than expectations. Price increases are not stopping the consumer spending.

Car Strike expands – United Auto Workers closed Ford’s biggest plant.

China Trade drags as both imports and exports decline.

STOCKS – UNCERTAINTY

Earnings come in better than expected in big tech and financials.

JP Morgan sets new record. Buy on any dip.

Threat of a government shutdown on November 17 will continue to cap prices and risk taking.

Middle Eastern war is adding to uncertainty.

Keep positions small until some of the uncertainty is dealt with.

BONDS – CRISIS

Big swings in the U.S. Treasury prices highlight the uncertainty in this market.

10-year Treasury yields hit new 16-year highs at 4.80%. Now heading toward 5.00%

Fear of excessive borrowing is given as the reason, but real borrowing is actually declining.

The real reason according to John is that too many institutions are loading the boat with bonds at the 0.32% yield lows.

The whole falling interest rate, rising bond price trade has been delayed for six months due to hotter-than-expected economic growth at 2.40% for Q2 and the prospect of more Fed rate rises.

Keep buying 90-day T-bills, now pushing a 5.50% risk-free yield.

Junk bond ETFs (JNK) and (HYG) are holding up extremely well with a 8.74% yield.

Stand aside from (TLT) until we find the new floor.

FOREIGN CURRENCIES

USD$ soars on Middle Eastern crisis – flight to safety bid. Top approaching soon.

At new 2023 highs with the Fed’s catchcry “higher for longer” powering the greenback.

Also fuelling the U.S.$ is the approaching government shutdown.

Collapse of $ is a 2024 story.

Aussie $ collapse prompted by slowing Chinese economy not buying their energy or commodities.

Buy (FXE), (FXB), (FXA), (FXY).

ENERGY AND COMMODITIES

Oil surges because of the Middle Eastern crisis.

Saudi Arabia continues Oil supply squeeze into Q4. Price manipulation is moving prices up.

$100 a barrel is possible and higher if we get a cold winter.

The big theme of the century will be electrification. Multiple projects are already underway.

PRECIOUS METALS – FLIGHT TO SAFETY

Precious metals rocket on the back of the Middle Eastern crisis.

Gold has risen 45% over five years.

Gold is headed for $3000 by 2025.

Silver is the better play with a higher beta.

Russia and China are also stockpiling gold to sidestep international sanctions.

REAL ESTATE

New US home mortgage rates hit 17 year- high and have virtually ground to a halt.

Sales volume down to 2008 lows.

S&P Case Shiller rises to new all-time high, for sixth consecutive month as inventory shortages drive up competition.

The median home price for existing homes rose to 1.9% to $406,700 according to the National Association of Realtors (NAR)

The robust housing market suggests that while some buyers have pulled back due to high borrowing costs, demand continues to outweigh supply.

Wishing you all a wonderful weekend.

Cheers

Jacquie