Wealthpress |
- The Biggest Trends in Each Major Index
- The Death of Keystone XL and the Myth of US Energy Independence
- Stock Market Recap: Tuesday, Jan. 19, 2021
- A New White House: Stocks to Trade for the Biden Administration
- A Defensive Post-Inauguration Stock Play
| The Biggest Trends in Each Major Index Posted: 20 Jan 2021 08:42 AM PST Folks, today is the day that President Joe Biden officially takes office in the White House. So what does that mean for the stock market this morning? The futures market was up quite a bit and surprisingly so was the Nasdaq 100, which was up more than 120 points. And then, to keep this good momentum rolling in the stock market, we've got some major earnings reports coming out in the next few days, starting mostly with bank stocks. By the end of this week we'll have a clearer picture of where investors stand with the financial sector. Investment banks like Goldman Sachs Group Inc. (NYSE: GS), Discover Financial Services (NYSE: DFS) and Morgan Stanley (NYSE: MS) should be doing better than expected, while banks focused more on savings/loans and don't have an institutional trading division are projected to do worse than expected. If you want to avoid those stocks, you can get their names here. In today's video, I'll also explain the biggest opportunity for the stock market… the biggest threat to financial stocks… the strongest sectors in the S&P 500… the strongest sectors in the Nasdaq 100… and the strongest sectors in the Russell 2000. P.S. What I'm about to tell you is top secret… so please, don't share it with anyone else. Most people don't know this, but there's a secret calendar that reveals the exact dates certain stocks on Wall Street are going to go up every single year. I'm serious. This mysterious calendar has spotted a new stock every single week that, once triggered, pops like clockwork. It's so accurate, you could set your clock to it and watch your trades shoot to the moon — regardless of what's going on in the rest of the stock market. And right now, we're giving you access to this calendar… and the man behind it… absolutely free.
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| The Death of Keystone XL and the Myth of US Energy Independence Posted: 19 Jan 2021 02:12 PM PST Sometime tomorrow after Joseph R. Biden, Jr. takes the Presidential Oath of Office, one of his first actions will be to issue an executive order cancelling the Keystone XL pipeline permit. The highly anticipated move will be lauded by liberals, praised by progressives, and applauded by environmentalists. It will also be wrong. Now, before anyone jumps up on a soapbox to shake fists in my general direction, allow me to explain why. Because I guarantee you the reason is not what you think. In general, I have been in favor of this project because human beings are responsible for being good stewards of the environment. I get the fact that statement runs counterintuitive to most narratives. But if you really want to understand why that is — and if you're an environmentalist, you should — you must understand how supply chains work. In this case, that means you must first understand that "oil" comes in a wide array of qualities that are blended at refineries. Next, you must understand the refining process itself — plant design, material flow, and product distribution. Given that those products are consumed by people and industries, you must understand both consumer demand and the industrial business cycle, which in turn requires some detailed knowledge of those industries as well. And finally, you must understand logistics, so that you have a feel for not just how those products come to market, but also how safely they can come to market. That's a tall order for Greenpeace marketing consultants and 19-year-old political science majors to digest. And I get it. It's way easier to focus on how we feel and what we want right now… because the alternative is much harder. The alternative in this case, involves putting in the time to understand how energy markets are structured right now. And then, one must put in the hard work necessary to figure out how to achieve those long-term goals. So, although this project may be dead in the water — and believe me, it is now deceased — I still think there's some value in discussing it. First, because the issues that necessitated Keystone's inception in the first place have not gone away, nor are they capable of being solved quickly. But second — and perhaps most importantly — because understanding these issues uncovers the truth behind one of the biggest false narratives ever perpetrated by the oil and gas industry. It shows that American energy independence is a big, fat myth. MythbustingFirst thing's first — there isn't just one type of "oil". Much like milk comes in several versions — full fat, 2%, 1%, et cetera — crude oil has several quality types as well. Primarily, it varies according to overall viscosity and total sulfur content. Thicker, more viscous oil is called "heavy," whereas thinner, watery oils are called "light." Similarly, crudes with higher sulfur content are called "sour" and those with lower sulfur content are called "sweet." If we chart them according to those properties as EIA has done here, we can see that most US varieties are toward the bottom right (lighter, sweet), whereas production from Mexico and Middle Eastern countries are typically toward the top left (heavier, sour).  Source: EIA But what is often not understood is that US refineries — particularly those on the Gulf Coast — cannot solely consume the light, sweet crude produced domestically. Those facilities — largely designed at a point in time where heavy crude from Mexico and the Middle East was cheap — were built specifically to handle that inexpensive, viscous production. For instance, the weighted average API Gravity for Texas refineries has never consistently held above 35, roughly the thinness of North Sea or Nigerian production.  Source: EIA So, while domestic consumption has increased to some extent, US refiners are essentially maxed out the amount of West Texas Intermediate crude they can consume. And although the US does produce some heavier crude from offshore Gulf of Mexico rigs (roughly 2M barrels per day at peak), in Alaska (~0.5Mb/d) and California (~0.4Mb/d)…  Source: EIA, Bloomberg, Seawolf Research It's not enough to satisfy the roughly 10-12 million barrels per day of US demand for heavy crude.  Source: EIA The rest must be imported. And so, despite what politicians, oil and gas producers, industry advocacy groups, and your conservative uncle may have been telling you all these years… America has never been — nor will we likely ever be — "energy independent." Keep Your Friends Close…In the past, we typically relied on a combination of Saudi Arabia, Venezuela, Iraq, Mexico and Canada to meet this gap in heavy crude demand… called the Mayan Spread in oil trader parlance. But in recent years, there has been a clear bipartisan preference to rely more on our neighbors than on socioeconomically unstable governments like Venezuela and Iran, or on regimes with whom we have other geopolitical conflicts like Saudi Arabia. And as a result, crude imports from Canada have doubled over the past decade.  Source: EIA And that's really what the Keystone XL pipeline was designed to do… to bring in a product we need from a country we trust in the safest and most environmentally friendly way possible (believe it or not). Instead, the political will of the people has demanded that we find a workaround, and in this case, the result has been to rely on transport by rail and truck. Ironically, this mode of transportation causes roughly twice the level of air pollution and greenhouse gas (GHG) emissions as pipelines. Not to mention accidents can be just as destructive in terms of environmental damage, and far worse in terms of directly affecting both human and animal life. So, while I never really loved the idea of building a pipeline itself, the pros (safer, lower emissions, reduces reliance on OPEC, creates jobs in rural areas) always outweighed the cons (it's a frickin' pipeline). Because no matter how much we might want it, the United States is simply not going to sell their gas-powered cars tomorrow and go buy Teslas… There's no developed market yet, there's no charging network, and our century-old power grid is ill-prepared to handle either storing the energy or delivering the load. Instead, the transition will be gradual — perhaps taking as long as two decades or more. And even if it were possible to transition the entire vehicle fleet tomorrow, transportation only comprises 28% of total US carbon emissions.  Source: EPA How we decarbonize the power and industrial supply chains is a whole other ball of wax. So, whether we like it or not, crude markets are here to stay for a long time, and our friends in Canada — particularly major producer Suncor Energy Inc. (NYSE: SU) — are likely to be some of the biggest benefactors over time. Shares have reinflated since last March's price shock but are still sitting at extremely low levels compared to the past few years.  Source: Bloomberg Crude markets have slowed down a little since the huge run over the past two months, so this isn't a price level I'm interested in at the moment. However, when year-on-year economic data begins to show cracks toward the middle of the year, there's a chance we could see a huge pullback in commodities. And whenever that happens, I would consider nibbling here in the $12-14/share range. In the meantime, though, I'll be pouring one out for ol' Keystone XL, and instead taking a much closer look at Canadian railroad stocks. Who knows…maybe I'll find another myth worth busting? All the best, Matt Warder The post The Death of Keystone XL and the Myth of US Energy Independence appeared first on Wealthpress. |
| Stock Market Recap: Tuesday, Jan. 19, 2021 Posted: 19 Jan 2021 01:41 PM PST Wall Street started the week on a bullish note amid expectations of further stimulus that could be issued by the incoming Biden administration — and more in Tuesday's stock market recap. Comments from Treasury Secretary nominee Janet Yellen, the Federal Reserve Chair under President Barack Obama, also lifted sentiment after she stressed the need to go “big” on stimulus. She also indicated the U.S. needs to be prepared to take on China’s abusive policies. Stock Market RecapThe Nasdaq gained 1.5% after testing an intraday high of 13,206.  The Russell 2000 jumped 1.3% with the afternoon peak reaching 2,152.  The S&P 500 was up 0.8% following the second-half push to 3,804.  The Dow added 0.4% with the opening high tapping 31,086.  Energy and Communications led sector strength after soaring 2% and 1.8%, respectively. Real Estate and Consumer Staples were the weakest sectors after giving back 0.7% and 0.4%. Stock Market MoversGeneral Motors Co. (NYSE: GM) rallied nearly 10% after the company entered a long-term strategic relationship with Microsoft Corp. (Nasdaq: MSFT) to accelerate the commercialization of self-driving vehicles. As part of the relationship, Microsoft will join General Motors, Honda Motor Co. (NYSE: HMC) and institutional investors in a combined equity investment of more than $2 billion in GM's Cruise vehicles, bringing the post-money valuation to $30 billion.  Stock Market OutlookNetflix Inc. (Nasdaq: NFLX) will announce quarterly results after today's closing bell. The company is expected to earn a profit of $1.39 a share on revenue of $6.33 billion. The high estimate is at $1.70 a share with the low forecast at $1.26, equating to a 31-cent beat or an 13-cent miss. The company has missed forecasts the past three quarters by -40 cents, -22 cents and eight cents with a beat of 77 cents in the year-ago period. There are 40 analysts that cover the stock with nine Strong Buy ratings, 15 Buys, 14 Holds, one Underperform and one Sell rating. For the quarter, Wall Street is expecting 6.1 million paid-subscriber additions versus 8.8 million in the prior year quarter.  Global EconomyThe global stock market recap showed European markets closed lower across the board as possible extensions of German lockdowns weighed on sentiment. Specifically, German Chancellor Angela Merkel appears set to agree with regional leaders to extend a lockdown for most businesses and schools until mid-February, The Belgium20 dropped 0.9% and France's CAC 40 was lower by 0.3%. Germany’s DAX 30 and the Stoxx 600 dipped 0.2% while the UK's FTSE 100 slipped 0.1%. Asian markets settled mostly higher following news China’s economy increased by nearly 2% in 2020. Hong Kong’s Hang Seng soared 2.7% and South Korea's Kospi surged 2.6%. Japan's Nikkei rallied 1.4% and Australia's S&P/ASX 200 advanced 1.2%. China’s Shanghai fell 0.8%. U.S. EconomyNo major economic news. Stock Market SentimentThe iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the second straight session after closing on the day’s high of $152.36. Current and lower resistance at $152-$152.50 was cleared and held. A close above the latter would signal a retest towards $153.50-$154. Support is at $151.50-$151 followed by $150.50-$150.  Volatility IndexThe iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the first time in three sessions following the intraday fade to 22.53. Near-term and upper support at 23-22.50 and the 50-day moving average were breached but held. A move below the latter would signal another retest towards 21.50-21. Lowered resistance is 23.50-24 followed by 25.50-26.  Stock Market AnalysisThe Invesco QQQ Trust (Nasdaq: QQQ) snapped a two-session slide with the intraday high reaching $316.93. Prior and lower resistance at $316.50-$317 was breached but held. A close above the latter would indicate momentum towards $318.50-$319 with the recent all-time peak at $319.39. Support is at $315.50-$315 followed by $313.50-$313. RSI (relative strength indicator) is back in an uptrend with key resistance at 60 getting challenged but holding. Continued closes above this level would signal additional strength towards 65-70 with the latter representing the December top. Support is at 55-50.  SectorThe Consumer Discretionary Select SPDR (NYSE: XLY) snapped a three-session losing streak with the high reaching $167.48. Current and lower resistance is at $167-$167.50 was cleared but held. A close above the latter would likely indicate additional strength towards $168.50-$169 with last week's all-time high at $169.17. Support is at $166-$165.50 followed by $164.50-$164. RSI is trying to curl higher with lower resistance at 65-70 holding. A move above the latter would suggest a retest towards 75-80 and levels from earlier this month. Support is at 60-55.  Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap. The post Stock Market Recap: Tuesday, Jan. 19, 2021 appeared first on Wealthpress. |
| A New White House: Stocks to Trade for the Biden Administration Posted: 19 Jan 2021 12:41 PM PST The big day is almost upon us: inauguration day. The election and all of its drama will finally be over as the White House changes hands — which means we need to look at stocks to trade under Biden. On Jan. 20, President-elect Joe Biden will become the 46th president of the United States. The stock market is already showing some nervousness as the Democrats get ready to take over. That's why I sat down with trading experts Roger Scott, James West, Adam Sarhan and Jeff Yastine to talk about what we expect from 2021 and our recommendation for stocks to trade under Biden. Right now, the country seems to believe there will be a post-inauguration honeymoon, expecting a lot of this chaos to go away. But we know that's not how this works. The name to look out for, however, is former Federal Reserve Chair and soon-to-be Secretary of the Treasury Janet Yellen. She's more of a "big swinger," for lack of a better term, and it will be interesting to see what she has to say and what she will sign off on. What We Recommend: Stocks to Trade Under BidenWe know that Democrats tend to favor more regulations, and that is what has the stock market on edge. Right now, there's something else that's weighing on things even more than a new administration. We likely won't see the true impact of Biden's presidency for a few months as we see how this pandemic progresses and get through this honeymoon phase. However, with all this uncertainty in a geopolitical sense, we do agree on something: It's a fool's game trying to guess what is going to happen in the macro. Luckily, there is one sector that is trading outside of those politics. So sit down with us as we reveal some stocks to trade under Biden and talk about our expectations for the pandemic and the rest of this year. Please send me your trading questions at jeff@joyofthetrade.com and subscribe to my YouTube channel for my latest. P.S. Ever wonder why Wall Street always seems to be one step ahead of the average Joe? It's because they have a ton of top-secret trading strategies that give them an edge over everyone else! And while their methods are usually kept under lock and key… former hedge fund insider Lance Ippolito has decided to pull back the curtain on Wall Street's best-kept market strategy. Lance is getting ready to reveal how tracking something called a "Shadow Blitz" can help you predict which stocks are ready to explode… Handing you huge cash windfalls in as little as 24 hours! Here's how to use Lance's trading discovery for yourself. The post A New White House: Stocks to Trade for the Biden Administration appeared first on Wealthpress. |
| A Defensive Post-Inauguration Stock Play Posted: 19 Jan 2021 11:24 AM PST So Wednesday is the big day… the swearing in of Joe Biden as the 46th president of the United States. It's not only an important day for our country, as it is every four years, but also an important inflection point for an overlooked part of the stock market: post-inauguration defense stocks. And the play I like to kick off the Biden era is an overlooked and undervalued stock that could rise 50% or so over the next two years. That's not a rocket shot by any means, but this post-inauguration defense stock also won't crash if we see a bigger stock market correction somewhere in the not-too-distant future — which is likely. That's important to keep in mind as our market melt-up continues and our risks rise accordingly. A Post-Inauguration Defense StockWhen traders sit around and talk about the stock market, it becomes a story-telling contest. This often takes the place of real logic and analysis. It's just human nature. And when it comes to defense stocks, there are three narratives that have made the rounds in the past couple of years:
As a result, many defense stocks haven't moved up much if at all. The iShares U.S. Aerospace & Defense ETF (BATS: ITA), a defense sector ETF, shows this underperformance. As a group, it's down 18% from a year ago, compared to nice gains from the Nasdaq and S&P 500 indexes. I think that may be about to change as the Biden administration is sworn in and gets to work, relieving the uncertainty hanging over the sector. Check out my short video and I'll reveal my post-inauguration defense stock pick. Then share your thoughts below. Are there any plays on a Biden presidency you're looking at? And as always, send your investing questions to jeff@yastine.com. Be sure to subscribe to my new YouTube channel. You can also follow me on Twitter and Facebook. P.S. Time Is Running Out to Learn This Strategy If you've been around the trading block… you've probably heard of iceberg trades… Big hedge funds have been orchestrating sneaky moves causing stock spikes after an initial dip in value. WealthPress Head Trader Roger Scott likes to call it a "V-Bounce." If you're able to spot the start of this "V," it's likely an iceberg trade has been moving the needle beneath the surface. When used correctly, it can identify big wins. Roger's system scanned a "V" beginning to form that resulted in 104.26% gain on NVO! And another one could be forming soon… The post A Defensive Post-Inauguration Stock Play appeared first on Wealthpress. |
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