Author: Editor

Morning Brief – March 29, 2022

By Editor•

The Fed recently raised rates by a quarter point.

Along with the hike, the central bank is penciling in another six rate hikes this year. For 2023, we could see another three hikes, with no hikes in 2024.

So, with higher interest rates on the way, where should we invest?

Bank of America (BAC)

When rates climb, margins expand, which is good for banks, and brokerage firms. 

“Analysts are bullish on shares because among the big banks Bank of America is one of the most sensitive to interest-rate hikes. With it widely expected that the Fed will raise interest rates at least three times this year, Bank of America would be poised to benefit more than peers,” as noted by Barron’s.

In addition, Wells Fargo just raised its earnings estimates on Bank of America, believing rate hikes will boost its profits. 

Or, look at an ETF, like the SDY.

SPDR S&P 500 Dividend ETF (SDY)

One of the best ways to diversify at less cost is with an ETF, such as the SPDR S&P 500 Dividend ETF (SDY) – which, since inception, has returned about 9% average gains per year. 

Even better, the ETF invests in companies that have consistently increased their dividends each year for the better part of the last 20 years.  That includes AT&T, AbbVie Inc., Exxon Mobil Corporation, Chevron Corporation, National Retail Properties, IBM, and Cardinal Health to name a few of the top ones.  Plus, the ETF carries a dividend yield of 2.68%.

Markets

  • The Dow is up 268 points to 35,121
  • The S&P 500 is up 10 points to 4,546.50
  • The NASDAQ is up about 175 points to 15,160.75
  • Gold prices are down 29.05 to $1,895.12
  • Bitcoin is up another 1.3% to $47,816.43
  • Oil prices are down $5.41 to $100.60
  • The VIX is down slightly to 18.88

 

Trading Tips

The metaverse could be a multi-trillion-dollar opportunity.

In fact, according to Matthew Ball, CEO of Venture Capital firm Epyllion, the metaverse could be a $10 trillion to $30 trillion market.

Forced into the spotlight by Mark Zuckerberg, the metaverse “is a sci-fi concept whereby humans put on some sort of headset or smart glasses that allows them to live, work and play in a virtual world much like the one depicted in the ‘Ready Player One’ movie,” says CNBC.

Helping, major industries want in.

Nike just filed for several new trademarks to design and sell virtual Nike sneakers and apparel in the metaverse. CVS Corp. filed for a trademark to sell virtual goods, NFTs, and could even provide healthcare services, including prescription drugs and personal care products.

Read more here.

Insider Buying – Ford Motor (F)

 

Since the start of the year, shares of Ford (F) fell from a high of about $26 to $16.67.

That’s thanks to inflation, rising interest rates, and parts shortages.  However, investors may want to use weakness as opportunity here.  For one, Ford is oversold at strong support dating back to October 2021.  And two, insiders are buying.  In fact, Executive Chair Bill Ford just paid $4.5 million on March 24 for 267,697 shares at an average price of $16.81.

Top Ways to Trade a Potential $30 Trillion Metaverse

By Editor•

The metaverse could be a multi-trillion-dollar opportunity.

In fact, according to Matthew Ball, CEO of Venture Capital firm Epyllion, the metaverse could be a $10 trillion to $30 trillion market.

Forced into the spotlight by Mark Zuckerberg, the metaverse “is a sci-fi concept whereby humans put on some sort of headset or smart glasses that allows them to live, work and play in a virtual world much like the one depicted in the ‘Ready Player One’ movie,” says CNBC.

Helping, major industries want in.

Nike just filed for several new trademarks to design and sell virtual Nike sneakers and apparel in the metaverse. CVS Corp. filed for a trademark to sell virtual goods, NFTs, and could even provide healthcare services, including prescription drugs and personal care products.

Even Adobe is telling companies to get “metaverse ready.”

“That involves creating 3D, immersive content that’s useful on platforms that exist today, with part of the idea being that doing so should provide a head start once the true metaverse starts to come into focus,” reports Fast Company.

While investors can always buy Meta Platforms, Microsoft, Unity Software, NVIDIA Corp., and Roblox Corporation to take advantage of potential metaverse growth, they can also buy into related ETFs. After all, an ETF would offer great diversification and less cost.

Look at The Metaverse ETF (METV), for example.

With an expense ratio of 0.59%, some of its top holdings include NVIDIA Corp., Roblox Corp., Meta Platforms, Unity Software, Snap Inc., Sea Ltd., and Apple to name a few.

Or take a look at the ProShares Metaverse ETF (VERS).

With an expense ratio of 0.58%, some of its top holdings include Apple, NVIDIA, Meta Platforms, Amazon.com, and Microsoft. According to ProShares.com, “ProShares Metaverse ETF seeks investment results, before fees and expenses, that track the performance of the Solactive Metaverse Theme Index.”

Morning Brief – March 28, 2022

By Editor•

Cannabis stocks went up in smoke in 2021.

But many could see higher highs this week.

That’s because Congress just scheduled a vote to federally legalize the drug, as noted by Marijuana Moment.  

In fact, “The U.S. House of Representatives will vote next week on the Marijuana Opportunity, Reinvestment and Expungement act, a bill that would remove cannabis from the list of federally controlled substances. If passed, the bill would be sent to the Senate for approval before heading to President Joe Biden’s desk for his signature.”

While there’s still uncertainty President Biden will sign it into law, stocks are still move higher, including Canopy Growth (CGC), Tilray (TLRY), Sundial Growers (SNDL), Aurora Cannabis (ACB), and related ETFs, like Global X Cannabis ETF (POTX).

Here are some other top ways to trade a potentially big rally.

Markets

  • The Dow is up 63 points to 34,822
  • The S&P 500 is up 10 points to 4,546.50
  • The NASDAQ is up about 37 points to 14,791.50
  • Gold prices are down $27.61 to $1,929.77
  • Bitcoin is up 6% to $47,219.74
  • Oil prices are down $6.65 to $107.30
  • The VIX is down slightly to 21.53

 

Trading Tips

The war has created a big opportunity for commodity stocks.

Look at Cleveland-Cliffs (CLF), for example.

JPMorgan analyst Michael Glick noted that, “’Russia’s invasion a month ago nearly instantly set off a butterfly effect across the steel markets,’ with the impact only beginning to be felt in North America. When the invasion began, steel exports from Russia and Ukraine almost immediately stopped, while demand in North America is set to grow.  That could push steel prices up to $1,500 a ton for 2022,” as noted by Barron’s.

Read more here.

Insider Buying

GameStop (GME) is on the move again, as insiders pick up shares.  Just last week, Chairman Ryan Cohen paid $10.2 million for 100,000 shares on March 22.  Director Larry Cheng also paid $383,355 on March 21 for 4,000 shares for an average price of about $95.84.  

If you buy GME, be cautious.   The last time GME had an “unstoppable” rally, the stock plummeted, leaving a good deal of people holding the bag.  

Three Solid Ways to Trade the Steel Boom

By Editor•

The war has created a big opportunity for commodity stocks.

Look at Cleveland-Cliffs (CLF), for example.

JPMorgan analyst Michael Glick noted that, “’Russia’s invasion a month ago nearly instantly set off a butterfly effect across the steel markets,’ with the impact only beginning to be felt in North America. When the invasion began, steel exports from Russia and Ukraine almost immediately stopped, while demand in North America is set to grow.  That could push steel prices up to $1,500 a ton for 2022,” as noted by Barron’s.

Helping, CLF insiders are buying.

In February, for example, Director Janet Miller bought 1,255 shares for $24,949.  In December, Director Robert Fisher Jr. bought 5,000 shares. CEO and Chairman Lourenco Goncalves bought 50,000 shares in December, as well.

Or look at US Steel (X).   Over the last few weeks, the stock popped from a low of about $22 to $38.50, and could see higher highs from the war.  As noted by TheFly.com, “JPMorgan analyst Michael Glick raised the firm’s price target on U.S. Steel to $33 from $30 and keeps an Underweight rating on the shares. The analyst raised his steel price forecasts to an average of $1,500/t for the remainder of the year and to $1,300/t for 2023.”

Steel ETFs, like the VanEck Vectors Steel ETF (SLX) jumped from $54 to about $70.

Until the war ends, steel stocks, and other commodities could ramp up even more.

Cannabis Stocks Could See Higher Highs Next Week

By Editor•

Cannabis stocks went up in smoke in 2021.

But many could see higher highs by next week.

That’s because Congress just scheduled a vote to federally legalize the drug, as noted by Marijuana Moment.  

In fact, “The U.S. House of Representatives will vote next week on the Marijuana Opportunity, Reinvestment and Expungement act, a bill that would remove cannabis from the list of federally controlled substances. If passed, the bill would be sent to the Senate for approval before heading to President Joe Biden’s desk for his signature.”

While there’s still uncertainty President Biden will sign it into law, stocks are still move higher, including Canopy Growth (CGC), Tilray (TLRY), Sundial Growers (SNDL), Aurora Cannabis (ACB), and related ETFs, like Global X Cannabis ETF (POTX).

According to Marijuana Moment, the Rules Committee will officially take up the measure in a Monday afternoon meeting to prepare it for floor action, which includes determining which amendments will be allowed to advance for consideration. The bill has already cleared the Judiciary Committee and was sponsored by Congressman Jerrold Nadler.

Should it pass, cannabis stocks could see explosive higher highs.

While you can always invest in individual cannabis stocks, ETFs offer better diversification at less cost.  Some of the top ones include:

 ETFMG Alternative Harvest ETF (MJ)

The ETFMG Alternative Harvest ETF (MJ) offers investors access to the Canadian and global marijuana sector. The fund tracks an index of stocks across the globe that are engaged in the legal cultivation, production, marketing or distribution of cannabis products for either medical or nonmedical purposes.   

MJ also holds stocks of companies that trade or produce tobacco or tobacco products, or fertilizers, plant foods, pesticides or growing equipment for cannabis or tobacco. In addition, the fund can hold pharmaceutical companies that produce, market or distribute drug products that use cannabinoids. 

 The Cannabis ETF (THCX)

According to the ETFs site, “To put the opportunity into perspective, the global cannabis market is estimated to reach $630 billion by 2040 up from $12 billion today. THCX was constructed to make investing in cannabis easier by helping investors get exposure to a pure-play basket of stocks that are expected to benefit from the burgeoning hemp and legal marijuana industries.”Some of its top holdings include Canopy Growth, Grow Generation, Cronos Group, GW Pharmaceuticals, Neptune Wellness, and dozens more.

 Global X Cannabis ETF (POTX)

Another ETF to keep an eye on is POTX.  At $5.75, it’s also pushing higher in anticipation of potential legalization.  Some of its top holdings include Aphria Inc., Canopy Growth, Cronos Group, Tilray Inc., GW Pharmaceuticals, and HEXO Corp.

“The Global X Cannabis ETF seeks to invest in companies across the cannabis industry. This includes companies involved in the legal production, growth and distribution of cannabis and industrial hemp, as well as those involved in providing financial services to the cannabis industry, pharmaceutical applications of cannabis, cannabidiol (i.e., CBD), or other related uses including but not limited to extracts, derivatives or synthetic versions,” as noted by Global X.

Morning Brief – March 25, 2022

By Editor•

Semiconductor stocks are on the move.

Advanced Micro Devices, Intel, Micron, Marvell, NVIDIA…

All moved higher yesterday, and could push even higher.

That’s happening for three reasons.  One, Intel CEO Pat Gelsinger compared semiconductors to oil, suggesting that computer chips will play a central role in international relations in the decades ahead, said CNBC.

Two, the CEOs of Micron Technology and Lam Research are urging the U.S. government to allocate as much as $52 billion for American chipmaking.  China “is investing more than $100 billion supporting their semiconductor industry,” Micron CEO Sanjay Mehrotra said, as quoted by Nikkei Asia. “And hence, it is extremely important that the U.S. does play catch-up with the CHIPS Act, with investment tax credits.”

Three, the shortage issue isn’t ending any time soon.

“The demand for semiconductor chips continues to grow globally, outpacing supply constraints in a global market that has been hit hard by pandemic-driven supply chain woes. Now, ASML, the keystone producer of the lithography machines used to make advanced semiconductor chips, has said that it anticipates a two-year shortage for the industry due to shortages of necessary parts for its machines,” says the Financial Times.

So, if you’re looking for an opportunity this morning, check out the chip stocks.

Markets

  • The Dow is up 89 points to 34,693
  • The S&P 500 is up 15 points to 4,527.50
  • The NASDAQ is up 52 points to 14,816
  • Gold prices are down $3.44 to $1,956.18
  • Bitcoin is up 4.66% to $44,822.12
  • Oil prices are down $2.71 to $109.60
  • The VIX is up slightly to 21.68

 

Trading Tips

The EV boom is accelerating.

By 2030, it’s expected we’ll see up to 125 million electric vehicles on the road.

Fueling the market even more, major automakers are starting to abandon internal combustion engines for EVs. In addition, according to ChargePoint Holdings, “EVs are projected to be 9.9% of new vehicles sold in 2025 and 29.2% 2030 in the U.S. and Europe (compared to 2.6% in 2019).”

Plus, according to a new study by Ernst & Young, electric vehicles could outpace combustion engines in the next 12 years in the U.S., Europe, and China, according to The Street. “By 2045, non-EV sales were seen plummeting to less than 1% of the global car market.”

That’s driving substantial investment opportunities around the world.

Read more here.

With Billions on the Line, the Fight for EV Supremacy Heats Up

By Editor•

The EV boom is accelerating.

By 2030, it’s expected we’ll see up to 125 million electric vehicles on the road.

Fueling the market even more, major automakers are starting to abandon internal combustion engines for EVs. In addition, according to ChargePoint Holdings, “EVs projected to be 9.9% of new vehicles sold in 2025 and 29.2% 2030 in the U.S. and Europe (compared to 2.6% in 2019).”

Plus, according to a new study by Ernst & Young, electric vehicles could outpace combustion engines in the next 12 years in the U.S., Europe, and China, according to The Street. “By 2045, non-EV sales were seen plummeting to less than 1% of the global car market.”

That’s driving substantial investment opportunities around the world.

And in a fight for dominance, VW and Tesla are spending billions.

Tesla just launched production at its new “Gigafactory” in Berlin, where it hopes to produce as many as 500,000 cars and 50GWh of battery capacity annually, according to The Verge. “Creating a European manufacturing hub will be an important logistical victory for Tesla, which currently imports European cars from its factories elsewhere in the world.”

Not to be outdone, VW just announced plans to invest $7.1 billion in North America, where it set to add new production capacity.

Also, “Volkswagen has committed more money to going electric than any other car company, upping the figure to more than $100 billion by 2030. That will fund the shift away from internal combustion engines — which are powered by old-fashioned gasoline — for 14 different brands,” added NBC News.

Who will be the dominant EV maker?

No one knows just yet, but we do know it’s fueling quite an EV market boom.

Morning Brief – March 24, 2022

By Editor•

Let’s take a break from the gloom for today…

Yes, the war is still raging.  But we’ve beaten that story to death.  And sure, oil is still gushing.  

But let’s take a break from those stories for today.

Investors are paying millions for metaverse real estate.

According to a report from Brand Essence Market Research, the metaverse real estate market could grow at a compound annual rate of 31% through 2028.

Even more exciting, “Prices have gone up 400% to 500% in the last few months,” says Andrew Kiguel, CEO of Tokens.com, as quoted by CNBC. In fact, someone just paid about $450,000 to be a neighbor to Snoop Dogg, who is reportedly building a virtual mansion.

So, how can the average investor trade the news?  

Defiance Digital Revolution ETF (NFTZ)

One of the best ways to diversify in a growing market, at less cost, is with an ETF, such as the Defiance Digital Revolution ETF (NFTZ).

While its chart isn’t anything to write home about just yet, give it time.  With an expense ratio of 0.46%, investors can own some of the top crypto and NFT companies on market with this ETF, including eBay Inc., DraftKings Inc., Coinbase Global, Hut 8 Mining Corp., Canaan Inc, Cloudflare Inc., HIVE Blockchain Technologies, Block Inc., and Funko Inc.

Matterport Inc. (MTTR)

MTTR is another great way to trade the market.

Multi-billion-dollar companies are racing for a piece of the virtual world. Celebrities are even buying metaverse real estate, including Paris Hilton and Snoop Dogg.  Nike just filed for new trademarks to design and sell virtual sneakers in the metaverse. CVS Corp. wants to sell virtual goods. Walmart just filed for new trademarks to sell virtual goods in the metaverse, too. 

Better, analysts at Emergen Research say the metaverse could be worth about $829 billion by 2028.  That could be substantial news for companies, like Matterport Inc., which digitizes parts of the real world to create “digital twins,” which can be used in the metaverse.

Markets

  • The Dow is up 164 points to 34,414
  • The S&P 500 is up about 28 points to 4,475.50
  • The NASDAQ is up about 112 points to 14,559
  • Gold prices are up $1.34 to $1,947.40
  • Bitcoin is up 2.3% to $43,013.63
  • Oil prices are down slightly to $114.80
  • The VIX is up slightly to 23.23

 

Trading Tips

Oil just hit $115 a barrel.

All thanks to tighter global supply, with Russian output impacted by sanctions.

Plus, as noted by CNBC, “Ukrainian President Volodymyr Zelenskyy called for more pressure on Russia from other countries as the conflict appears to be entering a stalemate.” And, the American Petroleum Institute just said crude stocks fell by 4.3 million barrels for the week ended March 18, according to Reuters.

But wait, it gets worse.

Crude oil exports from Kazakhstan’s CPC terminal were shut down after damage caused by a major storm, added CNBC. That pipeline accounts for about 1.2% of global demand, and could be completely stopped for up to two months.

Here’s how we’d trade it.

No-Brainer Stocks to Own as Oil Prices Gush Higher

By Editor•

For the love of… Oil just hit $115 a barrel.

All thanks to tighter global supply, with Russian output impacted by sanctions.

Plus, as noted by CNBC, “Ukrainian President Volodymyr Zelenskyy called for more pressure on Russia from other countries as the conflict appears to be entering a stalemate.” And, the American Petroleum Institute just said crude stocks fell by 4.3 million barrels for the week ended March 18, according to Reuters.

But wait, it gets worse.

Crude oil exports from Kazakhstan’s CPC terminal were shut down after damage caused by a major storm, added CNBC. That pipeline accounts for about 1.2% of global demand, and could be completely stopped for up to two months.

Then there’s summer driving season, which is just around the corner. With all of that, oil prices could head even higher, near-term. So, how do we trade the news?

One way is to trade dividend-paying oil stocks, like Exxon Mobil (XOM).

At the moment, XOM carries a dividend yield of 4.3%. Also, after pulling back from about $90 to $77.71, the stock has started to pivot higher again. Should oil prices continue to gush higher, we’d like to see XOM test $90 again shortly.

Another way to trade higher oil prices is with an ETF, such as the SPDR Energy Select Sector ETF (XLE), which provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR.

Morning Brief – March 23, 2022

By Editor•

Here we go again…

Days after oil dropped from a high of $130.50, prices are rebounding.  

Last checked, oil was up another $3 a barrel to $112.10.  All thanks to tighter global supply, with Russian output impacted by sanctions.  Plus, the American Petroleum Institute just said crude stocks fell by 4.3 million barrels for the week ended March 18, according to Reuters.

Unfortunately, oil prices could head even higher, near-term.  “We’ve got summer vacation. The travel industry is anticipating that airline activity will be higher because there’s a lot of pent-up demand from the pandemic. And this is when gas prices typically are higher anyway,” said Regina Mayor, global head of energy at KPMG, as quoted by Yahoo Finance.

So, how do we trade the ramp up in oil prices?

One way is to trade dividend-paying oil stocks, like Exxon Mobil (XOM).  

At the moment, XOM carries a dividend yield of 4.3%.  Also, after pulling back from about $90 to $77.71, the stock has started to pivot higher again. Should oil prices continue to gush higher, we’d like to see XOM test $90 again shortly.

Another way to trade higher oil prices is with an ETF, such as the SPDR Energy Select Sector ETF (XLE), which provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less.

Markets

  • The Dow is down 117 points to 34,592
  • The S&P 500 is down about 20 points to 4,485.50
  • The NASDAQ is down 101 points to 14,553
  • Gold prices are up about $10 to $1,929.54
  • Bitcoin is down about 2% to $42,002.73
  • Oil prices are up $2.55 to $111.80
  • The VIX is up slightly to 23.86

 

Trading Tips

Lithium prices aren’t slowing – at least, not any time soon.

As OilPrice.com reported, “Lithium prices have nearly doubled in 2022 amid [an] insane commodity rally.” And that’s after those same lithium prices nearly quadrupled in 2021,” adding that, “lithium producers have been caught flat-footed again, ill-prepared to meet the current even stronger demand surge fueled by the global energy transition and EV revolution.”

If you think lithium prices are coming down soon, don’t count on it.

That’s why lithium stocks have been as explosive as they’ve been.

Here’s how to trade the news.