Ever since I read Ayn Rand's "The Fountainhead," I've developed a profound appreciation for physical labor and the sense of accomplishment it brings. There's something incredibly rewarding about getting your hands dirty and seeing a project through to completion. I tip my cap to all those hard-working individuals who earn their living through physical labor.
In "The Fountainhead," we witness a billionaire leaving behind his grand projects to work in a coal mine, finding fulfillment in the simplicity of manual labor. While I might not be ready to venture into the world of coal mining, I do have a massive brick pavement driveway that constantly demands my attention. Maintaining it has become a labor of love over the years.
Every summer, I embark on a mission to fix my driveway, section by section, under the scorching sun. While my friends relax by the pool, they often tease me for my dedication to this project. Yet, despite their jests, the feeling of accomplishment and pride in my work, along with a nod of approval from my wife, make it all worthwhile.
What brings even greater joy is involving my 8-year-old son in the process. Despite his fondness for video games and TikTok, he reluctantly agrees to lend a hand. As we toil together, he gradually discovers the satisfaction that comes from fixing something with his own hands.
Now, you may wonder how this tale of bricklaying relates to the world of finance and trading stocks and options. Well, there's a striking parallel to be drawn here. Just as self-awareness and a balanced mental state are crucial when working on physical projects, they are equally important when navigating the unpredictable waters of the financial markets.
We've all experienced moments of agitation and emotional turmoil when things don't go as planned in the stock market. During such times, I've found that taking a break and engaging in a small physical project at home can work wonders. It clears the mind, centers your thoughts, and often leads to improved performance as a trader.
So, my friends, as you delve into the world of finance and seek to master the art of trading, remember the lessons learned from everyday endeavors. Embrace the sense of accomplishment from hands-on work and nurture the right mindset for success. Just like fixing bricks under the sun, trading can be equally rewarding when approached with patience, dedication, and a steady hand.
In the coming editions of this newsletter, we'll explore more intriguing connections between the tangible and intangible aspects of life, where finance and the human experience intersect in fascinating ways. Until then, may your trades be profitable, and your efforts be a source of pride and joy.
Recent Trade Review
In this edition of our Recent Trade Review, we're excited to highlight a recent profitable trade from our Profit Accelerator Trader (PAT) services. Our PAT model works tirelessly to identify opportunities in the market, and this time, it led us to an impressive trade with UnitedHealth Group Incorporated (UNH).
If you joined us in our live trading room on Tuesday, you may have witnessed the excitement as we unveiled UNH as a potential trade opportunity. For those who couldn't make it to the live session, don't worry! You can catch up with the recording at the following link: Link to Tuesday's Live Trading Room Recording.
Our proprietary PAT model diligently scanned the market and detected a promising setup with UNH. The model's analysis pointed to an opportunity with significant profit potential, and we promptly alerted our PAT members via SMS messages, providing them with timely entry and exit signals.
One of the major distinctions between our paid PAT services and free alternatives is the real-time support and personalized attention you receive. With PAT, you gain access to critical SMS alerts that keep you well-informed of optimal entry and exit points. This level of service ensures that you can take action swiftly and make the most of every profitable opportunity.
We are thrilled to report that the trade with UnitedHealth Group Incorporated (UNH) turned out to be a resounding success. The well-timed entry and exit points allowed our PAT members to capitalize on the trade, resulting in a rewarding outcome.
If you're interested in exploring our Profit Accelerator Trader services and gaining access to exclusive trade insights, be sure to check out our live trading room recordings at Link to Live Trading Room Recordings. Witness firsthand how our proprietary model identifies opportunities and helps traders like you achieve their financial goals.
Stay tuned for more trade reviews and market insights as we continue to unravel profitable opportunities in the financial world. As always, we remain committed to empowering our members with the tools and knowledge they need to succeed in the dynamic landscape of trading.
CURRENT TRADING LANDSCAPE
As we conclude another week of earnings reports, the current trading landscape in the U.S. presents a mixed picture of the wider economy ahead of the Federal Reserve's upcoming rate decision. While the market has already priced in a quarter-point hike for the monetary policy meeting, the central bank's future path remains uncertain, with questions surrounding Chairman Jerome Powell's guidance of two rate rises this quarter. Against this backdrop, investors are closely evaluating corporate performances and keeping a keen eye on recent economic indicators, including retail sales data and updates on the U.S. housing market.
As of Friday, U.S. stock markets were poised to open positively, with the Dow looking to continue its streak of gains and the tech-heavy Nasdaq stabilizing after a recent selloff, albeit still in the red. The S&P also added another positive day, finishing in the green. With a light day for earnings and data on Friday, market attention will be primarily focused on the upcoming Fed policy meeting next week.
After carefully analyzing the economic data, it appears that the likelihood of a recession is low, prompting me to shift to the market-neutral camp. Additionally, I've observed a significant pullback in the $DXY. Despite this change in outlook, my belief in the SPY rally remains cautious, with my view that it will likely be capped at the $450-470 levels. On the other hand, I see short support in the range of 400-430 for the next few months. See $SPY Seasonal Chart:
Earlier in the week, the stock market experienced a robust start, bolstered by technology stocks, while bond yields continued to decline, indicating market optimism regarding the possibility of the Federal Reserve concluding its interest rate hikes.
Tuesday saw a rally in stocks as corporations reported their earnings. Bank of America reaped the benefits of higher rates, while Morgan Stanley exceeded expectations despite a slowdown in deal-making. Charles Schwab also impressed with second-quarter earnings that surpassed estimates, resulting in a notable 13% surge in the company's stock. Citigroup, in line with other banks, rose 1.7%.
Among regional banks, Bank of New York Mellon posted better-than-expected second-quarter earnings, driven by an impressive 33% increase in net interest revenue. Despite falling short of Wall Street's revenue forecast, PNC Financial's stock still managed to rise by 2.6%.
In the technology sector, Microsoft reached an all-time high, thanks to its latest artificial intelligence capabilities and announcement. The company's stock surged 4% after unveiling an aggressive pricing plan for its latest AI products, resulting in an impressive $102.3 billion increase in market capitalization, one of the largest one-day gains for a U.S. firm. With analysts raising earnings estimates and inflation declining, investors expect the Federal Reserve to pause interest rate hikes, boding well for Microsoft's future profits and anticipated growth.
Meanwhile, the latest economic report on Tuesday showed that June retail sales fell short of expectations, with a year-over-year increase of 1.49%, lower than estimates and May's gain of 1.96%. Despite the resilience in consumer spending, experts remain puzzled as the Federal Reserve continues its efforts to control inflation by curbing demand for goods and services.
Wednesday saw the stock market open higher, with the Dow Jones Industrial Average heading for its eighth consecutive day of gains. This optimism stems from declining inflation trends, signaling the potential for the Federal Reserve to wind down its interest rate hikes and stabilize economic growth, fostering corporate earnings growth.
On Thursday, the Dow Jones Industrial Average continued its ascent, heading for its ninth consecutive day of gains, supported by positive earnings from IBM and Johnson & Johnson. However, the S&P 500 and Nasdaq faced declines due to disappointing reports from Netflix and Tesla. Additionally, weekly jobless claims came in lower than expected, signaling ongoing strength in the U.S. labor market.
Tesla's second-quarter earnings surpassed analysts' expectations, but the electric-vehicle maker's gross profit margins fell slightly below Wall Street's projections. As a result, Tesla shares experienced an 8.8% decline. Similarly, Netflix's stock fell by 8.7% after reporting a surprise increase in subscribers but missing revenue forecasts and offering disappointing guidance for the third quarter.
Conversely, Johnson & Johnson's stock surged due to positive earnings and increased financial guidance, despite ongoing concerns about talc litigation. The company's adjusted earnings and revenue both exceeded analysts' expectations.
Internationally, the UK's inflation rate declined more than anticipated, reaching a 15-month low of 7.9% in June. The London FTSE 100 stock index surged by 1.6%, while the pound fell against the dollar. Markets reacted positively to the decline in inflation, and UK housebuilder shares rose, as lower expectations for interest rates were factored in.
As we move forward, investors should anticipate more volatility during the second half of the year. Better-than-expected earnings data has fueled optimism, and market focus remains on the Federal Reserve and European Central Bank decisions in the coming week. The stock market rally is being closely monitored, with attention on key sectors such as technology, regional banks, small caps, and cyclicals, as well as potential market and currency trends.
Next week, we'll witness crucial central bank decisions, the latest Federal Open Market Committee meeting and policy update, key U.S. PCE data, and significant earnings reports from major companies like Alphabet Inc., Microsoft, AT&T, Amazon, and Visa. These events will likely shape the market's direction in the weeks to come.
As investors navigate this dynamic landscape, staying informed and vigilant will be paramount in making well-informed decisions and seizing opportunities amid shifting market conditions.
With this Income Calendar — and my guidance — you’ll know exactly when you can place your trades weeks ahead of time to maximize your trading for explosive trading performance.
In today's ever-evolving landscape, one sector continues to capture the attention of investors due to its potential for growth and innovation. With leading companies that are at the forefront of shaping the digital world, this sector offers an opportunity to gain exposure to a diverse range of industries driving technological advancements. As we look ahead, the current environment seems ripe for potential gains, making it an intriguing time for investors to consider this specific sector. With a focus on dynamic and fast-paced developments, this sector promises to be a compelling option for those seeking to seize opportunities in the market.
The S&P Technology Select SPDR Index (XLK) is an exchange-traded fund that tracks the performance of the Technology Select Sector Index. The fund is managed by State Street Global Advisors and focuses on providing investors with exposure to companies in the technology sector of the U.S. equity market.
The Technology Select Sector Index comprises leading technology-related companies, including giants like Apple, Microsoft, Amazon, and Facebook, among others. These companies are at the forefront of innovation and play a crucial role in shaping the digital landscape and global technological advancements.
$XLK's diversified portfolio allows investors to gain exposure to a wide range of technology-related industries, such as hardware, software, internet services, and semiconductor manufacturing. The fund's performance is closely tied to the growth and success of these industry leaders, making it an attractive option for those seeking to invest in the dynamic and fast-paced technology sector.
With the ever-increasing importance of technology in our daily lives and the rapid pace of technological advancements, $XLK presents an opportunity for investors to potentially benefit from the ongoing growth and innovation within the technology industry. And our A.I. data agrees! See XLK 10-Day Predicted Data:
If tech should continue its rally, then it will be wise to select a symbol within, one that has garnered a lot of attention recently and one I've profited from before!
TRADE OF THE WEEK - Trade-Up: $MSFT & $META Team-UP!
Microsoft Corporation ($MSFT) is a global technology giant known for its leading software products and services - a dominant player in the tech industry, with a wide range of products that cater to consumers, businesses, and enterprise clients alike. Microsoft's portfolio includes the popular operating system Windows, cloud-based services through Azure, productivity software such as Office 365, and its successful gaming division, Xbox. Recently, MSFT has been in the news with its latest A.I. offering
Just this week, Microsoft's stock surged to achieve a record high following the company's exciting announcement about its pricing strategy for integrating generative artificial intelligence capabilities into its flagship Microsoft 365 software suite. This suite encompasses popular applications like Word, PowerPoint, Excel, Outlook, and Teams. The company revealed that its new Microsoft 365 Copilot software will be made available to business customers at a competitive rate of $30 per user per month. In addition to this, Microsoft will also introduce a stand-alone chatbot app called Bing Chat Enterprise, offered to business customers at just $5 per user per month. With these strategic moves, Microsoft is positioning itself as a key player in the AI industry, with a clear focus on driving revenue growth effortlessly.
Likewise, as the competition in the AI sector intensifies, Meta Platforms and Microsoft are teaming up to launch an open-source artificial intelligence model. This strategic move signals the growing rivalry among tech giants and could potentially impact their share of AI revenue. With this collaboration, Meta Platforms aims to offer companies access to AI models, empowering them to create their own innovative software solutions.
Meta's latest AI language model, named Llama 2, is making its debut as free open-source software, allowing users to freely use, modify, and share it. The model will be accessible to companies through Microsoft's cloud-computing platform, as well as other providers like Amazon.com's Web Services. Microsoft announced the availability of Meta's language software during its Inspire conference on Tuesday. Notably, Meta clarified that it is not primarily focused on monetizing Llama 2 and that businesses would need to pay Microsoft for the enterprise hosting capabilities.
For Microsoft, this collaboration signifies the company's willingness to support an AI language model from a source other than OpenAI, showcasing its commitment to fostering a diverse and competitive AI landscape.
Adding to my confidence, my A.I. models are seeing strong and positive signals for MSFT. With some room to the upside, MSFT is currently priced below its 52-week high and looks to rally with strong earnings next week.
As for why it could be a good time to buy $MSFT, several factors make it an attractive investment opportunity. Firstly, Microsoft's robust financial performance has demonstrated consistent growth over the years, with steady revenue streams from both its software and cloud divisions. The company's ability to adapt and innovate has allowed it to stay competitive in a rapidly changing tech landscape.
Additionally, Microsoft's strong presence in the cloud computing industry positions it to capitalize on the ongoing digital transformation trends, such as A.I., across various sectors. As more businesses and organizations embrace cloud services, Microsoft is well-positioned to capture a significant portion of this expanding market.
Considering the company's consistent track record, its strong position in the emerging A.I. market, and its ongoing commitment to innovation, $MSFT presents an enticing opportunity for investors looking for a stable and growth-oriented investment in the technology sector. See MSFT’s 10-Day Predicted Data: