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
(CONSUMER BEHAVIOUR AMID RECESSIONS: WHERE DOES THE MONEY GO?)
August 14, 2024
Hello everyone.
Which would you most likely give up if a recession descended upon us?
If it was me, and I had to choose one, apart from d) it would be fast food. But then, that would be easy for me, because I don’t eat it in the first place. So, I’m cheating a little in that sense. So, my second pick would be my coffee fix. Again, easy, as I am a tea drinker and prefer to make a pot of tea in the morning or (grab a teabag if I’m in a hurry).
If we are not going to eat out, and are not getting our coffee fixes, then where would our discretionary dollars be going?
Many will find comfort in media options. And Netflix comes to mind here.
How many people have not spent a lazy day binge-watching their favourite series or rewatching old movies?
Netflix may turn out to be a stalwart stock against a backdrop of recessionary dark clouds building up on the horizon. Analysts at J.P. Morgan believe the service provides good value, even with their latest price increases. Capex is expected to come in around $ 17 billion this year, and JPM has an overweight rating on the stock. Their price target of $750 indicates around 18.5% upside potential from Monday’s close. From the beginning of this year, the stock is almost 32% higher.
Following its second-quarter earnings announcement on July 18, Netflix shares are trading only around 2% lower, compared with the S&P 500 which is down around 4% over the same period. Of note, in the second quarter, Netflix reported a 34% yearly increase in its ad-supported memberships, and total memberships topped analysts’ forecasts. JPM analysts regard subscription services like NFLX and SPOT as “being more resilient during periods of macro pressure.”
Netflix is positioned well as it targets 500M+ global (connected TV) households.
Spotify has also been a strong performer this year, with shares up 80% year to date.
Netflix (NFLX) Daily chart
I recommended Netflix (NFLX) on January 17, 2024, when it was $480.
Spotify (SPOT) Daily chart
I recommended Spotify (SPOT) on January 7, 2024, when it was $193.52
I am not suggesting you buy at this time or add weight.
SOMETHING TO THINK ABOUT…
In a recent talk the Private Wealth Group of Wells Fargo Advisors offered comments on investing. Here are a few takeaways.
“What we can learn from history is that people don’t learn from history.”
“All this creates a lot of short-term thinking in the markets. They become focused on what is in the news, and money drives toward these companies and industries, it’s during this time that investment principles are forgotten.”
Their thoughts on the media are interesting. (In the 1980’s, I don’t recall any financial media channels. CNBC was founded on April 17, 1989, two years after the 1987 crash. It was originally the Consumer News and Business Channel, a joint venture between NBC and Cablevision).
Getting back to their ideas…
Tuning out the headlines to stay focused on the long term.
“People get caught up in what’s going on in the news and what the media is talking about. A lot of people are working from home. They have got the TV on. If you watch any of the financial news networks, there’s not that much news every day. They just keep talking about the same thing over and over and over again. And people hear that, and they stick with it and then it becomes real to them, and all their investing principles and history is gone by the wayside.”
QI CORNER
Cheers
Jacquie
Global Market Comments
August 14, 2024
Fiat Lux
Featured Trade:
(A REFRESHER COURSE AT SHORT SELLING SCHOOL),
(SH), (SDS), (PSQ), (DOG), (RWM), (SPXU), (AAPL), (TSLA),
(VIX), (VXX), (IPO), (MTUM), (SPHB), (HDGE)
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
Mad Hedge Biotech and Healthcare Letter
August 13, 2024
Fiat Lux
Featured Trade:
(THE RISE OF THE STEADY EDDIES)
(CNC), (UNH), (PFE), (JNJ), (ABBV), (LLY), (BIO), (UHS), (WAT), (AMGN), (REGN), (VRTX), (CRSP), (MRNA)
Think of the market as a body fighting off an infection. Tech stocks might be the flashy antibodies, but healthcare is the steady, reliable immune system, keeping things stable when the going gets tough. And right now, that immune system is looking stronger than ever.
Skeptical? I get it. We've heard the hype about healthcare before. But this time, it's different.
The Healthcare Select Sector SPDR ETF (XLV) has been on a tear, up 9.3% this year as of Thursday's close. That's nearly keeping pace with the broader S&P 500's 12% gain - a remarkable feat in a market that's been anything but stable.
But what's even more impressive is the turnaround. Back in mid-July, XLV was lagging behind like a three-legged horse in the Kentucky Derby, up only 8.3% while the S&P 500 was showing off with an 18% gain.
In fact, out of the 63 healthcare stocks in the S&P 500, only a dozen have been slacking off since July. The rest? They've been outperforming like it's going out of style.
So what changed?
Well, it wasn't so much that healthcare stocks suddenly discovered the fountain of youth. No, my friends, it was more like the rest of the market decided to take a swan dive off the high board.
You see, while tech stocks were busy doing their best Icarus impression – flying too close to the sun and then plummeting back to earth – healthcare stocks were steady as she goes. It's like the old tortoise and hare story, except in this version, the hare got distracted by shiny objects and ran off a cliff.
Now, let's shine the spotlight on some of the key players driving this healthcare rally.
Remember those health insurers everyone was worried about back in spring? The ones that had investors biting their nails over the future of Medicare Advantage? Well, they've made a comeback.
The S&P 500 Managed Health Care index was down 12% in mid-April, looking about as healthy as a chain smoker with a Big Mac habit. But now? It's up 4.5% since the start of the year.
Companies like Centene (CNC) and UnitedHealth Group (UNH) have bounced back faster than a rubber band on steroids.
And it's not just the insurers. Big Pharma's been flexing, too.
Pfizer (PFE), the company that became a household name faster than you can say "vaccine," is holding steady. Johnson & Johnson (JNJ) is up 2.2%, probably thanks to all that baby powder they're not selling anymore.
Meanwhile, AbbVie’s (ABBV) up 11% since July. These guys are like the Energizer Bunny of the pharma world – they just keep going and going.
But the real showstopper? Eli Lilly (LLY). This biopharma has been on a tear since the beginning of 2024. Up 45% on the year at one point, they've been climbing faster than a squirrel up a tree with a dog in hot pursuit.
Then, there are companies like Bio-Rad Laboratories (BIO), up 20% since July. Universal Health Services (UHS)? Up 18% since July. Waters (WAT), the life sciences tools folks? Up 15%.
Even the biotechs are out to impress.
Amgen (AMGN), the granddaddy of biotech, is up 10% year-to-date. They're selling drugs like Prolia and Enbrel faster than hotcakes at a lumberjack convention.
And Amgen’s pipeline? It’s packed with potential blockbusters, setting the stage for further expansion in the future.
Gilead Sciences (GILD)? Up 15% year-to-date. Turns out, their COVID-19 treatment, Remdesivir, is back in vogue like bell-bottom jeans. And their HIV and hepatitis C drugs? They're still growing stronger.
But the real rock star of biotech? That'd be Regeneron Pharmaceuticals (REGN). These guys are up over 30% year-to-date. They're treating everything from eye diseases to cancer to inflammation.
Vertex Pharmaceuticals (VRTX) is another one to watch. Up 12% this year, they've got the cystic fibrosis market cornered. And they're not stopping there – they're expanding faster thanks to their collaboration with the likes of Crispr Therapeutics (CRSP).
Now that I’ve mentioned gene therapy, I know you're wondering about Moderna (MRNA). After all, weren’t they the darlings of the COVID era? Well, yes and no.
Their stock's down about 35% year-to-date, but don't count them out just yet. Their mRNA technology is hotter than a jalapeño popper fresh out of the fryer. They might be down, but they're definitely not out.
So, what's the takeaway here? I suggest you keep your eyes peeled on the biotechnology and healthcare sectors. After all, in this market, the best offense might just be a good defense – and what's more defensive than betting on the sector that keeps us all alive and kicking?
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 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
Global Market Comments
August 13, 2024
Fiat Lux
Featured Trade:
(AUGUST 15 LONDON ENGLAND STRATEGY LUNCHEON)
(THE MAD HEDGE DICTIONARY OF TRADING SLANG)
Come join me for lunch for the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in London at 12:00 PM on Thursday, August 15, 2024. A three-course lunch is included.
I’ll be giving you my up-to-date view on stocks, bonds, currencies commodities, precious metals, and real estate.
And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $298.
I’ll be arriving early and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.
The lunch will be held at an exclusive restaurant on the north side of Hyde Park, the details of which will be emailed to you with your purchase confirmation.
I look forward to meeting you, and thank you for supporting my research.
To purchase tickets for this luncheon, please click here.
