Author: Editor

Biotech stocks have been a disaster so far.

Since the year began, the iShares NASDAQ Biotech ETF (IBB) fell from $155 to $129.  The ProShares Ultra NASDAQ Biotech (BIB) fell from about $80 to $54.  The SPDR Biotech ETF (XBI) fell from $116 to $80.  However, it appears the bottom may be in.

Even pharmaceutical stocks are on the move again.

“There are more and more pharmaceutical charts breaking out to new highs in a tape that saw plenty of bear market moves from individual names,” said KM Partners’ chief market technician, JC O’Hara, as noted by MarketWatch. 

We also have to consider that millions of retiring baby boomers are not only exploring new ways to stave off signs of aging, they are looking to postpone health-related decline and even death.

In addition, we’re seeing countless mergers and acquisitions.  

In fact, analysts expect to see a rebound in M&A activity in coming months.  

According to The Healthcare Technology Report:

“Notable players such as Pfizer, Novartis, and Merck & Co. seem to have their sights set on high-profile acquisitions. Merck has expressed a desire to buy out Mirati Therapeutics, while Pfizer might leverage its $175 billion purse for late-stage assets in a far-sighted quest to lift 2030 revenue by $25 billion. Novartis hopes to string along a grouping of smaller biotechs with a portion of the $154 billion in its coffers. Johnson & Johnson, with a new CEO at its helm, is doing away with its consumer health unit and plotting a ‘more aggressive’ 2022.”

In short, investors may want to buy the weakness here.

Markets

• The Dow is up 156 points to 34,592
• The S&P 500 is up 12 points to 4,464.12
• The NASDAQ is up 16 points at 14,386.75
• Gold prices are down $7.60 at $1,928
• Bitcoin is up about 4% to $42,932.70
• Oil prices are down about 51 cents to $111.60
• The VIX is down slightly to 23.25

Trading Tips

Higher inflation has been rough on us all.

And unfortunately, it could get worse.

With surging costs for gas, food, and housing, consumer inflation soared 7.9% year over year.

That’s the biggest spike we’ve seen in 40 years.

While the Federal Reserve once referred to inflation as transitory, they’re quickly realizing just how wrong they were. Even Allianz Chief Economic Advisor Mohamed El-Erian has said, “The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy mistake.”

Nowadays, the Fed realizes it has to be far more aggressive against inflation.

So, how do we profit from that?  Read more here. 

Insider Buying – Desktop Metal (DM)

Keep an eye on Desktop Metal (DM). 

After dropping from a recent high of $9 to a low of $3.42, the stock is trying to push higher.  Helping, CEO Ric Fulop recently bought 128,850 shares for about $526,000.  

Earlier this month, as noted by TheFly.com, DM noted, “With record total revenue, organic revenue, and gross margins, the fourth quarter was an exceptional finish to a revolutionary year for Desktop Metal. We also recently commenced shipments of our flagship Production System P-50, a major milestone for Desktop Metal and the additive manufacturing industry.”

The pandemic is getting worse – again.

While COVID tensions cooled in the U.S. that may not be the case for much longer.

In fact, experts are warning the U.S. could see another spike in cases, with some wastewater samples showing an increase in infections.

According to the U.S. CDC, as noted by People, “The U.S. is also starting to see an increase of COVID-19 in wastewater samples, a strong early predictor of when the virus is about to spike. Between Feb. 24 and March 10, the presence of COVID-19 increased by 100% or more in 37% of U.S. wastewater sites, according to the Centers for Disease Control’s tracking system.”

Worse, New Jersey just reported two COVID deaths, and another 504 cases.  Plus, as of March 16, according to Global News, “New infections jumped by eight per cent globally compared to the previous week, with 11 million new cases and just over 43,000 new deaths reported from March 7-13. It is the first rise since the end of January.”

The best way to profit from the chaos… Read more here.

Markets

• On Friday, the Dow closed up 274.17 points at 34,754.93
• The S&P 500 closed up 51.45 points at 4,463.12
• The NASDAQ closed up 279.06 points at 13,893.84
• Gold prices are down $22.70 at $1,921.49
• Bitcoin is up down about 2% to $41,122.79
• Oil prices are up $1.72 at $104.70
• The VIX was down 1.80 points at 23.87, as of Friday

Trading Tips

Inflation is a tad out of control.

With the cost of gas, food, and housing, consumer inflation rocketed 7.9% year over year – the worst spike we’ve seen since 1982.

And, according to MarketWatch.com: “The numbers are eye-watering, and there is more to come,” said Eric Winograd, senior economist at asset management firm AllianceBernstein. “The peak in inflation will be much higher than previously thought and will arrive later than previously expected.”

Unfortunately, the White House expects to see “substantially” higher inflation moving forward.  According to the Washington Examiner: “The White House Council of Economic Advisers noted that ‘there has been substantial run-up in energy prices since February resulting from the Russian invasion of Ukraine’ and that “energy and commodities prices will likely contribute substantially to inflation in the coming months.”

Insider Buying – SoFi Technologies (SOFI)

After dropping to less than $9 a share, SOFI CEO Anthony Noto bought 115,969 shares for $1.1 million.  He paid an average price of $9.06 for shares.

As reported by Barron’s: “SoFi’s fourth-quarter report, issued on March 1, was actually good, according to BofA Global Research analyst Mihir Bhatia. He wrote that the quarter was solid, and that guidance was better than expected. But Bhatia downgraded SoFi stock to Neutral from Buy because shares only had 6% potential upside to his $14 price objective.”

Within weeks, we could run into one of the worst oil supply shocks in history.

Right now, Russia could be forced to curtail about 30% of its crude oil production.  And unless Saudi Arabia and other major oil exporters step up to help, oil could gush higher.

In fact, according to CNN, “The world’s second-largest crude oil exporter could be forced to limit output by 3 million barrels per day in April, the International Energy Agency warned on Wednesday, as major oil companies, trading houses and shipping companies shun its exports and demand in Russia slumps.”

Unfortunately, unless things drastically change, $200 oil isn’t out of the question.

That’s according to hedge-fund manager Pierre Andurand, as noted by OilPrice.com.

“I don’t think that suddenly they stop fighting, the oil comes back. It’s not going to be the case. The oil’s going to be gone for good,” Andurand said.  “We’ll have to live with higher prices to keep demand down, for it to be treated a bit more as a luxury product and also to accelerate the energy transition.”

To profit from the potential oil shock, investors can always push into oil stocks, such as Exxon Mobil and Chevron.  Another way to potentially profit is with an ETF, such as:

SPDR Energy Select Sector ETF (XLE)

The XLE ETF 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.

Invesco DB Oil Fund (DBO)

This ETF seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the Fund’s holdings of primarily US Treasury securities and money market income less the Fund’s expenses. It trades WTI crude futures.

iShares Global Energy ETF (IXC)

The iShares Global Energy ETF seeks to track the investment results of an index composed of global equities in the energy sector. Some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.

Markets

• The Dow is down 167 points to 34,193
• The S&P 500 is down about 25 points to 4,377.50
• The NASDAQ is down 76 points to 14,033.50
• Gold prices are down about $10 to $1,934.22
• Bitcoin is down slightly to $40,573.83
• Oil prices are up $1.17 to $104.20
• The VIX down slightly to 26.44

Trading Tips

Russian stocks are worthless.

Thanks to crippling sanctions, no one in their right mind would touch these stocks.

But we have to remember what Sir John Templeton and Baron Rothschild taught us.

In 1939, Europe was just about decimated. So, Templeton bought every European stock trading below $1.00 a share and made a fortune. In fact, he bought shares in 104 companies for about $10,400. He would make a fortune. He taught us to buy excessive pessimism.

Baron Rothschild once told investors, “The time to buy is when there’s blood in the streets, even if the blood is your own.” He knew that very well, considering he made a small fortune buying the panic that followed the Battle of Waterloo against Napoleon.

Read more here. 

The Fed just raised rates by a quarter point.

Along with the hike, the central bank is penciling in another six rate hikes this year, bringing us to about 1.75% to 2%. For 2023, we could see another three hikes, with no hikes in 2024.

“In a statement following its two-day meeting, the Fed hinted at rising concern about inflationary pressures. It said inflation has been high due to ‘broader price pressures’ and added that the war in Ukraine and ‘related events are likely to create additional upward pressure on inflation,’” as quoted by The Wall Street Journal.

With rates on the rise, where should we invest?

One of the top sectors to keep an eye on are financials.

That’s because the sector is among the most sensitive to changes in interest rates. When rates climb, margins expand, which is good for banks, brokerage firms, and money managers.

Read more here.

Markets

• The Dow is down 90 points to 33,864
• The S&P 500 is down about 11 points to 4,338.75
• The NASDAQ is down 41 points to 13,909.75
• Gold prices are up $14.14 to $1,941.51
• Bitcoin is up about 1% to $40,924.41
• Oil prices are up $5.67 to $100.70
• The VIX down 3.02 points to 26.81

Trading Tips

The pandemic is getting worse – again.

While COVID tensions cooled in the U.S. that may not be the case for much longer.

In fact, experts are warning the U.S. could see another spike in cases, with some wastewater samples showing an increase in infections.

According to the U.S. CDC, as noted by People, “The U.S. is also starting to see an increase of COVID-19 in wastewater samples, a strong early predictor of when the virus is about to spike. Between Feb. 24 and March 10, the presence of COVID-19 increased by 100% or more in 37% of U.S. wastewater sites, according to the Centers for Disease Control’s tracking system.”

Read more here.

Insider Buying – Procore Technologies (PCOR)

Procore Technologies, Inc. provides a cloud-based construction management platform and related software products in the United States and internationally. The company’s platform enables owners, general and specialty contractors, architects, and engineers to collaborate on construction projects. 

After plummeting from a high of about $105 to $57.55, Director William Griffith bought 512,238 shares at $52.11 for $26.69 million on March 15.  On March 14, he bought 661,720 shares of PCOR for $33.04 million at an average price of $49.93.  From those prices, he’s already doing well with the PCOR stock up 8% on Wednesday.

Inflation could get worse before it gets better.

In fact, the last time we paid this much for food and energy, it was 1981. 

Nowadays, most of us are struggling with the Consumer Price Index jumping 7.9% in February – its biggest jump since January 1982, according to the U.S. Labor Department.  Also, according to Moody’s Analytics, the average household is paying an additional $296 a month.

The Producer Price Index was up 10% year over year.

To help cool that off, the Federal Reserve is expected to hike rates a quarter point this week.

That’s pretty much a given.

What we’re concerned about is what comes next.  We need some indication as to how quickly the Fed will raise interest rates.  Sure, we need higher rates to combat sky-high inflation.  But at the same time, the Fed doesn’t want to tip the economy into recession.

We also have to consider that inflation could get worse before it gets better.

For one, it’ll take some time for Fed action to curb inflation.  Two, there’s uncertainty regarding the war in Ukraine, which has had a big impact on oil and gas prices.

Three, “When the Fed does lift rates, it’s also likely that people will see the downsides of those increases before any improvement on inflation,” said Tara Sinclair, a senior fellow at the Indeed Hiring Lab, as quoted by CNBC.

“Basically, that means consumers may have to pay more to borrow money and still see higher prices at the gas pump and grocery store. That scenario is particularly tough on low-income workers, who have seen wages rise but not keep pace with inflation,” added CNBC.

So, how do we protect ourselves from further inflation?

One way is to invest in high-yielding stocks that are insulated, like Kinder Morgan (KMI).

After all, Kinder Morgan is one of the largest infrastructure companies in North America.  It owns and controls oil and gas pipelines and terminals.  With a dividend yield of 6.24%, the company recently said “it was budgeting a 3% dividend boost this year,” according to Barron’s.

The company also continues to be one of the most stable, with enough cash cover its dividend.

Markets

• The Dow is up 374 points to 33,801
• The S&P 500 is up about 54 points to 4,307
• The NASDAQ is up 247 points to 13,696.50
• Gold prices are up $8.20 to $1,926.23
• Bitcoin is up about 5% to $40,537.41
• Oil prices are up slightly to $96.49
• The VIX is down 3.23 points to 28.52

Trading Tips

The pandemic is getting worse – again.

While COVID tensions cooled in the U.S. that may not be the case for much longer.

In fact, experts are warning the U.S. could see another spike in cases, with some wastewater samples showing an increase in infections.

According to the U.S. CDC, as noted by People, “The U.S. is also starting to see an increase of COVID-19 in wastewater samples, a strong early predictor of when the virus is about to spike. Between Feb. 24 and March 10, the presence of COVID-19 increased by 100% or more in 37% of U.S. wastewater sites, according to the Centers for Disease Control’s tracking system.”

Read more here. 

Insider Buying – Workhorse Group (WKHS)

After plummeting from $18 to about $2.50, shares of WKHS are showing some signs of life.  An insider has also been buying.  In fact, between March 11 and 14, the VP of Business Development, Stanley March bought a total of 50,000 shares at an average price of $3.31.