BTC Fear & Greed Index Targets the Fear Zone Despite a Bearish BTC

Key Insights:

  • On Tuesday, bitcoin (BTC) ended a mini two-day winning streak, falling by 1.13% to $19,334.
  • Better-than-expected US economic indicators left BTC in the red, while upbeat corporate earnings supported another bullish session for the NASDAQ 100.
  • The Bitcoin Fear & Greed Index rose from 22/100 to 23/100, reflecting investor resilience.

On Tuesday, bitcoin (BTC) fell by 1.13%. Partially reversing a 1.49% gain from Monday, BTC ended the day at $19,334. Notably, BTC fell short of $20,000 for the eleventh consecutive session while avoiding a return to sub-$19,000 for a Third session.

A bullish start to the day saw BTC rise to a mid-morning high of $19,709. Coming up short of the First Major Resistance Level (R1) at $19,770, BTC slid to a late low of $19,100. BTC fell through the First Major Support Level (S1) at $19,252 before a partial recovery to end the day at $19,334.

US economic indicators weighed on BTC and the broader crypto market. Industrial production increased by 0.4% in September, reversing a 0.1% decline from August. Economists forecast a 0.1% rise. After an initial increase upon release of the numbers, the market reaction was evident in the chart below.

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US corporate earnings failed to support a rebound, despite better-than-forecast results from Goldman Sachs (GS), Johnson & Johnson (JNJ), and Lockheed Martin (LMT).

While failing to provide crypto market support, upbeat earnings and positive US stats delivered another bullish session for the NASDAQ 100. On Tuesday, the NASDAQ rose by 0.90%.

Today, US economic indicators should have a muted impact on Fed monetary policy and the crypto market. Housing sector numbers should leave the Fed in focus. This morning, the NASDAQ Mini was up 152 points.

NASDAQ correlation.
NASDAQ – BTCUSD 191022 5 Minute Chart

The Fear & Greed Index Inches Higher Again Despite BTC Loss

Today, the Fear & Greed Index rose from 22/100 to 23/100. The increase was modest, with BTC falling short of $20,000 for an eleventh consecutive session. Notably, the Index increased while BTC ended the day in the red.

Neither the Index nor BTC have managed to break free of recent ranges, with Fed fear continuing to deliver economic uncertainty.

For the bulls, the Index will need to continue avoiding sub-20/100 to support a shift in sentiment. However, a fall to sub-20/100 would signal a BTC slide to sub-$18,000.

Fear & Greed Index lacks direction.
Fear & Greed 191022

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.16% to $19,303. A mixed start to the day saw BTC rise to an early high of $19,361 before falling to a low of $19,293.

BTC under early pressure.
BTCUSD 191022 Daily Chart

Technical Indicators

BTC needs to move through the $19,381 pivot to target the First Major Resistance Level (R1) at $19,662 and the Tuesday high of $19,709. A BTC move through the Tuesday high of $19,709 would signal a bullish session. However, FOMC member chatter needs to be crypto-friendly to support a breakout.

In the case of an extended rally, the Second Major Resistance Level (R2) at $19,990 and $20,000 would likely come into play. The Third Major Resistance Level (R3) sits at $20,599.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,053 in play. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,772 should limit the downside.

The Third Major Support Level (S3) sits at $18,163.

BTC support levels in play below the pivot.
BTCUSD 191022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,346.

The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA to deliver bearish signals.

BTC needs to move through the 50-day EMA and the 100-day EMA ($19,399) to target the 200-day EMA ($19,618) and R1 ($19,662). However, failure to move through the 50-day EMA ($19,346) would leave the S1 ($19,053) in view.

EMAs bearish.
BTCUSD 191022 4 Hourly Chart

Q3 Results Bring Hope to Wall Street

Bulls believe Q3 results that have mostly topped analyst estimates are an encouraging sign that companies and consumers alike are holding up well under the current inflationary headwinds.

Bulls’ Case

Bulls are also pointing to executive comments on earnings calls that are painting a rosier picture of the economy than financial headlines may indicate. Bank of America yesterday was the latest big bank to say they see no immediate signs that US consumers are under significant financial stress. BofA noted that even its less affluent customers had savings rates still five times higher than pre-pandemic levels while loan delinquencies are at their second-lowest level of all time.

To be clear, many bank executives are still predicting the economy will slip into recession by next year but have also said strong consumer and business balance sheets should help limit any damage.

There seem to be few on Wall Street that believe the US can escape inflation without at least a moderate downturn. The big worry is that recession sets in and inflation still remains high into 2023 in spite of the Fed’s tightening program. Many inflation hawks argue that interest rates have to move above the rate of inflation in order to cool things off, which would mean a Fed fund’s rate of near 9% at current levels.

Investors will start to glean insights into a wider mix of businesses this week with nearly every sector represented. Some are worried that disappointing results from Netflix today could cast another dark cloud over the tech sector. Investors are expecting the streaming giant to add 1 million new subscribers after reporting two consecutive quarters of declining users.

Data to Watch

Albertsons, Hasbro, Interactive Brokers, JB Hunt, Johnson & Johnson, Lockheed Martin, and United Airlines also report today.

The only US data today is the NAHB Housing Market Index. It’s worth noting that China has “indefinitely” delayed the release of key economic data, including GDP, retail sales, property sales, and home prices that had previously been scheduled for release today and tomorrow. China also delayed trade data last week without any explanation.

The delays come as China is in the middle of its twice-a-decade Communist Party Congress where President Xi Jinping is expected to be given a historic third term in office. There is a lot of speculation about the data delay, including a technical glitch, worse-than-expected data, or even that Chinese leaders want to keep the focus on the party’s key messages during the Congress.

Chinese leaders have maintained an official GDP target for this year of around 5.5%, though growth during the first half was less than half that. From my perspective, bears could backpedal the next couple of weeks as there are very few macro economic headlines in the mix.

Most of the nearby talk could circulate around slightly better-than-expected US corporate earnings, more talk and chatter of some type of Treasury bond buyback program, talk of a cap being placed on EU natural gas prices, China releasing more optimistic headlines following this week’s Congressional conference, the UK taking a more dovish approach, and the US dollar perhaps weakening a bit.

S&P 500 (SPY) Moves Towards 3900 As Chip Stocks Retreat

Key Insights

  • The strong Manufacturing PMI report raised chances for an aggressive rate hike at the next Fed meeting. 
  • NVIDIA and AMD retreated as U.S. banned exports of some advanced chips to China. 
  • Traders have started buying stocks from defensive sectors. 

U.S. Export Ban On Advanced Chips Pushed Stocks To New Lows

S&P 500 declined towards the 3900 level amid worries about aggressive rate hikes from the Fed and an export ban on advanced chips to China.

The strong ISM Manufacturing PMI report pushed the U.S. dollar to new highs. Treasury yields have also moved higher. The FedWatch Tool indicates that there is a 76% probability of a 75 bps rate hike at the next meeting, which is bearish for stocks.

S&P 500

Interestingly, RSI remains in the moderate territory despite the strong pullback, so there is enough room to gain additional downside momentum in the upcoming trading sessions.

If S&P 500 manages to settle below the support at 3915, it will head towards the next support level at 3875. A move below this level will push S&P 500 towards the support at 3830.

On the upside, the previous support at 3950 will serve as the first resistance level for S&P 500. If S&P 500 manages to settle back above this level, it will head towards the resistance at 3980.

Traders Show Some Interest In Defensive Sectors

NVIDIA stock is down by about 12% amid worries that U.S. export ban will deal a material blow to the company’s revenue. AMD is down by 7%. The ban targets sophisticated and expensive chips that are used in AI work.

The market is worried that the ban marks the beginning of a multi-year assault on China’s capabilities in the high-tech segment, and that additional restrictions will be announced in the future.

As the relations between U.S. and China continue to deteriorate, Chinese stocks like Alibaba and NIO have also found themselves under material pressure.

Leading tech stocks, like Apple, Microsoft, and Alphabet, are also moving lower today.

Meanwhile, investors are trying to find safe-haven assets after the strong pullback, as stocks like Johson & Johnson, Walmart, and Philip Morris are moving higher.

Traders should keep an eye on the trading dynamics of such stocks as their rebound may signal that buyers’ interest is growing after the sell-off in S&P 500.

For a look at all of today’s economic events, check out our economic calendar.

Best ETFs to Buy in a Recession for August 2022

So, how is Big Money reacting? After lots of big selling, buying is picking up again in small volumes. Let me explain.

Markets and Big Money in the Last Six Months

My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. We follow Big Money because our research shows Big Money moves markets.

We created the Big Money Index (BMI), which is a 25-day moving average of large-scale investor buy and sell activity. Over time it has shown itself to be a leading indicator of where markets may go. The BMI went oversold in late May, which is a hugely bullish long-term signal. It rallied for a bit then hit oversold again on July 14. And like last time, it bounced up again:

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There was monster Big Money selling in stocks, up until recently – notice the red lines drying up:

The story is similar with ETFs, though the buy action is much smaller than it is with stocks:

This month’s ETF picks have long-term value appreciation in mind, even if times get tougher. They center on energy and technology, which should see growth over time and can pay some nice dividends. The best ETFs to buy in a recession for August 2022 are: MLPX, IYH, XOP, and QMOM.

Long-term investors should look for ETFs (and their stocks), with great setups. Remember, ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.

Now, let’s get to the best ETFs to buy in a recession for August 2022.

Global X MLP & Energy Infrastructure ETF (MLPX) Analysis

This ETF can help weather recession storms due to its hefty current dividend yield of nearly 6.1%. MLPX holds excellent stocks, and their quality may prove durable during downturns. While markets overall have lost value, MLPX is up 17.4% on the year so far:

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MLPX holds many solid energy stocks. One example focusing on liquified natural gas is Cheniere Energy, Inc. (LNG). It has three-year sales growth of 35.7% and minimal debt. Here is the one-year Big Money action for LNG:

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iShares U.S. Healthcare ETF (IYH) Analysis

As a low-liquidity ETF, IYH can be volatile. That said, its holdings include tremendous U.S. health care firms and it pays a current dividend of more than 1.1%. IYH has been choppy for much of the last year, but is up more than 1.3% in the last month:

One great stock IYH holds is Johnson & Johnson (JNJ). This health care giant has seen one-year sales growth of 13.5% and sports a profit margin of 22.3%. Earnings have been strong too, growing 13.3% over three years. In the last year, Big Money bought JNJ 12 times:

SPDR S&P Oil & Gas Exploration & Production ETF (XOP) Analysis

Moving to the energy sector, XOP holds many great companies focused on exploration and production within oil and gas markets. This ETF is huge, so there should be no liquidity issues, and it pays a more than 0.9% current dividend. XOP has seen Big Money action throughout the past year and is up 57.3% in that time:

A fantastic stock within XOP is Coterra Energy Inc. (CTRA), an independent energy firm focused primarily in Pennsylvania. CTRA has growing sales (one-year sales growth of 161.2%) and three-year EPS growth of 106.0%. In the last year, CTRA has attracted lots of Big Money. Each blue bar below shows when it was a Top 20 Big Money buy:

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Alpha Architect U.S. Quantitative Momentum (QMOM) Analysis

This ETF focuses on market momentum or outperformance, using a rules-based methodology to identify up to 100 equities with high relative momentum. QMOM is another low-liquidity ETF, so it experiences some choppiness. But it’s up more than 4.2% over the past month, offers a more than 1.2% current dividend, and is loaded with great stocks:

One rock-solid stock within this ETF is Cal-Maine Foods, Inc. (CALM), a U.S. egg producer. Inflation and demand have helped CALM a lot, as has Big Money. CALM has one-year sales growth of 31.7%, three-year EPS growth of 2,061.6%, and a profit margin of 7.5%. Plus, it jumped 47.0% over a year’s time:

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Here’s a Big Money recap:

  • When Big Money buying heats up, stocks and ETFs tend to rise
  • Deep selling on great quality can be a phenomenal opportunity
  • Repeated buying usually means outsized gains

Bottom Line and Explanatory Video

MLPX, IYH, XOP, and QMOM are my best ETFs to buy in a recession for August 2022. These picks can climb higher, in my opinion, largely because they each hold great stocks. With markets rocky and possible recession ahead, these ETFs show great long-term potential and durability.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in MLPX, IYH, XOP, QMOM, LNG, JNJ, CTRA, or CALM at the time of publication.

Contact:

https://mapsignals.com/contact/

Best Stocks to Battle Inflation Fears for May 2022

As such, we’ve seen big selling over the past six months by Big Money investors like institutions and pension funds. Inflation and equity downturns can be a nasty combo punch for investors, and we’re seeing it now.

Markets and Big Money in the Last Six Months

My research firm, MAPsignals, tracks the Big Money because we believe that’s what tends to move markets. Right now, there’s huge selling (red bars) and an almost complete lack of buying (blue bars):

But there have been some sectors doing well despite the mass market downfall. Three are energy, materials, and utilities. They’re rising because of inflation and the current geopolitical situation’s effect on supply chains.

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But that doesn’t mean the only winners are there, just that those sectors are generally benefiting from current market conditions. See, when it comes to inflation, investors need stocks that can handle storms. Those tend to be strong, big companies with healthy balance sheets as well as pricing power that enables paying dividends. Here are five stocks that can go a long way to help battle inflation: ADM, MOS, CTVA, EOG, and JNJ.

Archer-Daniels-Midland Company (ADM) Analysis

Up first is Archer-Daniels-Midland, the agricultural commodities giant.

Companies with pricing power can do well in inflationary environments. With ADM focused on food staples and suffering from supply chain issues, it is experiencing elevated prices and strong demand at the same time. It’s weathered the storm well and pays a nearly 1.9% current dividend. Stocks like ADM are worthy of attention, especially on pullbacks. Check out Archer-Daniels-Midland:

  • 1-month performance (-10.8%)
  • Year-to-date performance (+25.0%)
  • Recent Big Money buy signals

To show you what our Big Money signals look like on a stock, have a look at all the buys in ADM over the past year:

Looking more broadly, Archer-Daniels-Midland has been a high-quality stock for years. The blue bars in the chart below show when ADM was a high-ranking stock likely being bought by a Big Money player, according to MAPsignals. When you see a lot of blue, like ADM has recently, it can be very bullish:

Source: www.MAPsignals.com

Those blue signals indicate Big Money buying and solid fundamentals. As you can see, Archer-Daniels-Midland’s sales and earnings growth have been strong, making it worthy of attention:

  • 1-year sales growth rate (+32.4%)
  • 3-year EPS growth rate (+19.1%)

The Mosaic Company (MOS) Analysis

Next up is Mosaic, a fertilizer and feed company that pays a nearly 0.8% current dividend.

Check out these technicals for MOS:

  • Year-to-date performance (+51.0%)
  • 1-month performance (-19.6%)
  • Recent Big Money buy signals

As markets have turned from growth to value and geopolitical tensions have risen, stocks in certain sectors, like materials, have benefitted. MOS is definitely one of those, as you can see the Big Money buying that’s been prevalent the last year:

Now let’s look long-term. Below are the top buy signals for Mosaic since 2009. The Big Money has been on it in waves:

Source: www.MAPsignals.com

Now let’s look under the hood. As you can see, Mosaic has had strong recent sales growth and owns a healthy profit margin:

  • 1-year sales growth (+42.3%)
  • Profit margin (+13.2%)

Corteva Inc. (CTVA) Analysis

Another inflation-beating name is Corteva, an agricultural firm focused on solving the world’s biggest food challenges. It currently pays a 1.0% dividend.

Strong inflation-beating stocks almost always have Big Money buying support. Corteva has had that in the past year, and its recent dip may provide an attractive buy opportunity.

  • Year-to-date performance (+13.0%)
  • 1-month performance (-10.3%)
  • Historical Big Money signals

Below are the blue Top 20 Big Money buy signals CTVA has made in the last year. Look at how Big Money drives up prices. That’s the JUICE!

Source: www.MAPsignals.com

Let’s look deeper. Earnings growth for Corteva has been impressive. I expect more of the same in the coming years. Its minimal debt is also encouraging for the future.

  • 3-year EPS growth rate (+121.9%)
  • Debt/equity ratio (+6.2%)

EOG Resources, Inc. (EOG) Analysis

Number four on the list is EOG Resources, which is a low-cost oil and natural gas company. It currently pays a dividend of slightly more than 2.5%.

Here are the technicals important to me:

  • 1-month performance (-2.6%)
  • Year-to-date performance (+36.5%)
  • Historical Big Money signals

With the energy sector on a rise for a while, EOG has seen a lot of Big Money buying:

Given that, it’s not surprising EOG Resources is a Big Money favorite recently. But it’s been like that for some time. Below are the Big Money Top 20 buy signals for EOG since 2004:

Source: www.MAPsignals.com

Let’s look under the hood. EOG Resources sales have jumped quite a bit and its profit margin keeps investors happy:

  • 1-year sales growth rate (+99.1%)
  • Profit margin (+23.6%)

Johnson & Johnson (JNJ) Analysis

Our last inflation beater is Johnson & Johnson, the health care giant. It’s involved in many aspects of health care and pays a nearly 2.6% dividend currently. JNJ has been strong since markets got rocky last fall:

Check out these technicals:

  • 1-month performance (-2.1%)
  • Year-to-date performance (+3.0%)
  • Historical Big Money signals

JNJ is a high-quality stock. It’s made the MAPsignals Top 20 buy report 113 times since 1990. As you can see below, it’s been a Big Money favorite:

Source: www.MAPsignals.com

Now let’s look below the surface a bit. JNJ sales have been growing, it’s highly profitable, and the stock is not too expensive right now:

  • 1-year sales growth rate (+13.5%)
  • Profit margin (+22.3%)
  • Forward price-to-earnings ratio (+17.2x)

Bottom Line

ADM, MOS, CTVA, EOG, and JNJ represent the best stocks to battle inflation for May 2022. This group has been able to handle volatile markets well. They’re strong, fundamentally-sound stocks that pay dividends and are set up for success in inflationary environments.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in EOG in personal and managed accounts.

Contact

https://mapsignals.com/contact/

Best Defensive ETFs to Buy Now for May 2022

One way investors handle these conditions is by getting defensive – sometimes the best offense is a good defense. So, today I want to highlight defensive ETF opportunities. The focus will be on great companies that sell what’s in demand, regardless of economic conditions. Typically, that means bigger firms with solid balance sheets and cash on hand to pay dividends.

Markets and Big Money in the Last Six Months

My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. Our research shows Big Money moves markets. In fact, we created the Big Money Index (BMI), which measures large-scale investor activity and is a gauge of the market’s past and future (the BMI tends to lead markets). It’s nosedived recently:

That’s due to heavy selling and an absence of buying:

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These conditions are making investors play defense. As such, we’ve identified some defensive ETFs we think have good current prospects as well as solid long-term potential: MLPA, XYLD, VDE, SCHD, and HDV. Blended together at equal weight, a portfolio of these ETFs would pay a dividend yield of 5.3%.

Long-term investors should look for ETFs (and their stocks), with great setups. Remember, ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.

Let’s get to the five best defensive ETF opportunities for May 2022.

Global X MLP ETF (MLPA) Analysis

This ETF focuses on master limited partnerships or MLPs. It offers the benefits of investing in MLPs (like favorable tax treatment) along with the ease and liquidity of an exchange-traded product. MLPA offers a current 7.3% dividend yield, which is enticing, and is full of solid energy companies.

MLPA holds several powerhouse stocks. One example is Energy Transfer LP (ET), which is up 37% this year, grew sales in a year by 73.1%, and has a profit margin of 8.1%. Here are Big Money signals for ET:

Global X S&P 500 Covered Call ETF (XYLD) Analysis

What makes XYLD special is it uses a “covered call” strategy. A simple way to think of it is earning dividends on dividends. This ETF holds a nice mix of growth names for tomorrow and household names of today, plus it pays a nearly 9.6% dividend yield.

One great stock XYLD holds is Tesla Inc. (TSLA). It’s a long-time Big Money favorite with fantastic fundamentals, including a 10.3% profit margin, 3-year EPS growth of 336.2%, and 3-year sales growth of 37.8%. As the multi-year chart below shows, it’s been a growing giant for a while:

Vanguard Energy Index Fund (VDE) Analysis

The energy sector has been red hot for a while now. But just as geopolitical situations can move markets up, they can also move them down, and that’s happened in energy recently. We can see that in VDE below. Still, there are tailwinds like inflation and global energy needs, so there’s still a bullish outlook. Don’t forget the dividends either – VDE pays a 3.2% current dividend.

This ETF holds the big energy producers we’ve come to know, including Exxon Mobil Corporation (XOM), which is a dividend cash cow that’s been on a tear recently. The company has a one-year sales growth rate of 57.4% with a profit margin of 8.2%. It’s also been a Top 20 Big Money buy for years:

Schwab U.S. Dividend Equity ETF (SCHD) Analysis

If the best offense is a good defense, then SCHD is a stalwart because it’s long on defensive positions, especially great dividend stocks. It pays a current 2.9% dividend yield, saw big buying in early 2022, and could see more as people flock to defensive investments:

A great dividend stock within this ETF is Pfizer Inc. (PFE), a profitable healthcare company (27.6% profit margin) with growing sales (3-year sales growth rate of 23.8%) that’s been a Big Money magnet. The multiyear chart below shows lots of Big Money buying:

iShares Core High Dividend ETF (HDV) Analysis

This is another strong dividend play as this ETF has been trucking along this year, despite headwinds and uncertainty. HDV holds household names with strong balance sheets and attractive dividend payments. It also pays a current 3.2% dividend, which is a likely reason it’s attracting Big Money buys:

A fantastic stock in HDV is Johnson & Johnson (JNJ), the healthcare giant. It’s a steady large-cap stock that has paid dividends for years. The fundamentals look good too as it’s profitable (22.3% profit margin), grew sales recently (1-year sales growth of 13.5%), and has rising earnings (3-year EPS growth of 13.3%). That’s probably why Big Money has been all over it for years:

Here’s a Big Money recap:

  • When Big Money buying pours in, stocks tend to go up
  • Red selling on great quality can be a great opportunity
  • Repeated buying usually means outsized gains

Bottom Line and Explanatory Video

 

MLPA, XYLD, VDE, SCHD, and HDV are my top defensive ETFs for May 2022. I believe these funds can rise higher in rough environments primarily because they hold great defensive stocks. These ETFs feature solid balance sheets and attractive dividend yields, so they’re high quality and battle tested.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in MLPA, XYLD, VDE, SCHD, HDV, ET, TSLA, XOM, PFE, or JNJ in managed or personal accounts at the time of publication.

Contact:

https://mapsignals.com/contact/

Best Healthcare Stocks To Buy Now

Key Insights

  • Some healthcare stocks have outperformed S&P 500 this year amid rising demand for safe-haven assets. 
  • Johnson & Johnson has recently tested all-time highs and remains reasonably valued. 
  • While some healthcare stocks look rather expensive, Pfizer could be bought at less than 10 forward P/E. 

Recent trading sessions have been volatile, and investors continue to search for safe-haven assets. Healthcare stocks have often served in this role, so let’s take a look at the leaders in this market segment.

Johnson & Johnson

A traditional “widow-and-orphan” stock, Johnson & Johnson is trading near all-time highs despite the recent pullback of S&P 500.

The stock is trading at roughly 17 forward P/E, which is not cheap for an established company. However, the current valuation reflects the high demand for Johnson & Johnson stock and its safe dividend.

It should be noted that analyst estimates have started to move lower in recent weeks, but these changes failed to put any pressure on Johnson & Johnson.

Eli Lilly

Eli Lilly is more expensive than Johnson & Johnson. The stock has pulled back from recent highs, but it is still trading at an expensive 31 forward P/E.

The market is ready to pay a premium for Eli Lilly stock as earnings estimates are increasing at a robust pace. The potential increase of demand for safe-haven assets could provide more support to Eli Lilly shares.

Pfizer

Pfizer stock has lost momentum in recent months as traders focused on the weaker-than-expected demand for the company’s antiviral drug Paxlovid. In addition, all vaccine stocks have found themselves under pressure as traders believed that the acute phase of the coronavirus pandemic was coming to an end.

However, Pfizer is not a one trick pony, and its revenue base is stable. Currently, analysts expect that Pfizer will report earnings of $5.58 per share in the next year, so the stock is trading at less than 9 forward P/E. Such valuation levels could attract value-oriented investors.

For a look at all of today’s economic events, check out our economic calendar.

Best Dividend Stocks to Buy Now for May 2022

See, dividend payers are typically big, stable companies with rock-solid balance sheets. They not only can rise in value, but also provide stable cash flows. They’re holding their own right now, helping buoy markets overall. Let me show you what I mean.

Markets and Big Money in the Last Six Months

My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. Our research shows Big Money moves markets.

In fact, we created the Big Money Index (BMI), which is a 25-day moving average of Big Money buy and sell activity. It tends to be a leading indicator of market movement. Here is the BMI over the last six months laid over SPY:

The BMI is trending up lately because there are sections of strength within the market. Today, I want to focus on four of them – energy, staples, real estate, and health care. Unsurprisingly, they also happen to be big dividend-paying sectors.

Energy stocks have been on fire due to the geopolitical situation right now. Investors have often leaned on them in uncertain times because they pay dividends.

Staples too have been seeing inflows. Recession fears are setting in and investors want the certainty of companies selling what people need.

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The real estate sector saw three HUGE buying days recently as people rush to holding tangible assets with strong cash flows.

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Lastly, health care companies pay big, growing dividends, which is music to investors’ ears right now. Historically, it’s been a defensive area for investors, and it’s performing well now.

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Not only do these sectors pay dividends, but the cream-of-the-crop dividend payers in these sectors increase their dividends regularly. That means investors get a raise, which is always welcome. So, those four strong sectors are featured in the top five dividend-paying stocks we like: XOM (energy), MO (staples), EXR (real estate), JNJ (health care), and ABBV (health care).

Exxon Mobil Corporation (XOM) Analysis

Up first is Exxon Mobil, which is an oil and gas producing giant that has consistently paid a big dividend (currently it’s at 4.0%).

Even though great stocks can be volatile, like Exxon Mobil the last few years, these companies are worthy of attention. Check out XOM:

  • 1-month performance (11.8%)
  • Historical Big Money signals

Just to show you what our Big Money signals look like, have a look at the buy signals XOM has made the last year in the chart below. Green bars show it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, as XOM has this year, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, XOM’s sales are strong, and its debt is manageable:

  • 1-year sales growth rate (+57.4%)
  • Debt/equity ratio (+31.5%)

Altria Group, Inc. (MO) Analysis

Next up is Altria Group, which is a tobacco company that has paid dividends for decades. Its current dividend yield is 6.5%.

Check out these technicals for MO:

  • 1-month performance (+7.1%)
  • Recent Big Money signals

Let’s look long-term. These are the top buy signals for Altria Group since 1990. The Big Money has bought time and again:

Source: www.MAPsignals.com

Let’s dive deeper. As you can see, Altria Group has been a stabile giant:

  • 1-year sales growth rate (+1.3%)
  • 3-year sales growth rate (+2.5%)
  • Profit margin (+11.7%)
  • Forward price-to-earnings ratio of 11.4x earnings

Extra Space Storage Inc. (EXR) Analysis

Another dividend-paying name we like is Extra Space Storage, which owns and operates self-storage facilities throughout the U.S. and Puerto Rico. It pays a nearly 2.3% dividend right now.

Strong dividend payers usually have Big Money buying the shares, and EXR has that. It’s also jumped in price recently:

  • 1-month performance (+13.1%)
  • Historical Big Money signals

Below are the top Big Money signals EXR has made since 2010. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. Extra Space Storage’s sales growth and profits are impressive. I expect more in the coming years:

  • 1-year sales growth rate (+12.0%)
  • Profit margin (+50.5%)

Johnson & Johnson (JNJ) Analysis

Number four on the list is Johnson & Johnson, which is a health care behemoth and one of the biggest companies in the world. It just posted great earnings and raised its dividend by 6% (it currently yields almost 2.5%).

Here are the technicals important to me:

  • Year-to-date performance (+7.0%)
  • Historical Big Money signals

Below are the top Big Money signals for JNJ since 2006:

Source: www.MAPsignals.com

Let’s examine a bit more. Johnson & Johnson has been growing nicely and it should continue:

  • 1-year sales growth rate (+13.5%)
  • 2-year vs. 1-year EPS growth estimate (+5.5%)

AbbVie, Inc. (ABBV) Analysis

Our last dividend payer is AbbVie, which is a pharmaceutical company with many different focus areas. It makes a lot of money, which means it can pay big dividends (currently it yields more than 3.6%).

Check out these technicals:

  • Year-to-date performance (+15.0%)
  • Historical Big Money signals

ABBV is a high-quality stock with a high-quality dividend. That’s why it’s made the Top 20 report 14 times since 2012:

Source: www.MAPsignals.com

Now look under the hood. The company has had solid sales and earnings growth:

  • 3-year sales growth rate (+20.6%)
  • 3-year EPS growth rate (+44.3%)

Bottom Line and Explanatory Video

 

XOM, MO, EXR, JNJ, & ABBV represent top dividend-paying stocks to buy now for May 2022. Strong fundamentals, big and growing dividends, and historical Big Money buy signals make these stocks worthy of extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in MO, EXR, & ABBV in personal and managed accounts, and no positions in XOM or JNJ.

Contact:

https://mapsignals.com/contact/

 

A Volatile Week Ahead for Financial Markets?

European markets opened lower this morning due to the deepening crisis in Ukraine, with the caution likely to find its way back to US markets this afternoon. In the currency space, the mighty dollar rose to a fresh two-year high during early trade, supported by rising treasury yields and Fed hike bets. Gold slipped after almost kissing $2000 in the previous session, while oil benchmarks steadied after jumping on Monday.

Despite the public holiday in most of Europe yesterday, this is shaping up to be another volatile and eventful week for global markets. The latest comments from the World Bank have added to the cocktail of caution that will most likely influence sentiment over the next few sessions.

The bank cut its global growth forecast for 2022 by nearly a full percentage point to 3.2% from its previous estimate of 4.1%, thanks to the war in Ukraine, soaring inflation, and the lingering effects of Covid-19. Later today, the International Monetary Fund (IMF) will release its updated global economic outlook with markets expecting a downgrade for growth this year. Such a development may hit investor confidence, sweetening appetite for safe-haven assets.

On the earnings front, Johnson & Johnson and insurance company, Travelers will report their latest results before the opening bell. Streaming giant Netflix will release its earnings after the market close. Traders will also focus on speeches from financial heavyweights Fed Chair Jerome Powell and ECB President Christine Lagarde later this week.

Dollar Flexes Muscles Across the FX space

The dollar tightened its grip on its throne this morning by rising to a fresh two-year high as investors braced for more aggressive U.S rate hikes. Markets have fully priced in a 50bp rate hike at the Fed’s May meeting, with the odds of another half-point rate hike in June very high. Given how the dollar has appreciated against every single G10 currency this month, bulls are certainly in a position of power to drive prices higher.

When considering how the week ahead will be filled with more speeches from Fed officials, this could fuel upside gains if they all sing a hawkish tune. Indeed, we heard from arch-hawk Bullard overnight who signaled an openness to a 75bp hike. The dollar index (DXY) has the potential to challenge 103.00 if a solid daily close above 101.00 is secured.

Commodity Spotlight: Gold

After rallying within a hair’s length of $2000 in the previous session, gold is trading back around $1974 as of writing. With numerous competing themes likely to influence market sentiment this week, gold may find itself pulled and tugged by conflicting forces. Heightened geopolitical risks and global growth concerns could trigger risk aversion, sending investors rushing towards gold’s safe embrace. However, an appreciating dollar, rising Treasury yields, and Fed hike expectations may create multiple obstacles down the road.

Looking at the technical picture, gold has the potential to trend higher, but prices seem to be forming another range. Support can be found at around $1960 and resistance at $2000. A move back below $1960 could trigger a selloff towards $1920. Alternatively, a solid breakout above $2000 may open the doors towards $2009, $2015, and $2050, respectively.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Best ETFs to Buy Now for April 2022

They include energy:

Materials:

And real estate (notice the yellow arrow on the right – that is HUGE buying on March 29, 2022):

Markets and Big Money in the Last 6 Months

My research firm, MAPsignals, measures Big Money investor activity. That includes institutions, pension funds, big individual investors, and so on. Our research shows Big Money moves markets. And right now, Big Money flows into stocks have been positive over the last month:

That’s driving up major indices as well as the Big Money Index (BMI), which measures large-scale investor activity. It’s spiked recently, though may be cresting:

So, things are looking up somewhat, but the general direction of markets going forward is no certainty. Opportunistic investors can take advantage of volatile markets, especially when there’s deep selling. Those times have proven to be when stocks and ETFs are on sale.

Given these conditions, we’ve identified some ETFs we think have long-term potential, one of which is priced nicely right now: VDE, SCHG, SCHH, HDV, and IJJ.

Long-term investors should look for ETFs (and their stocks), with great setups. Remember, ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.

Let’s get to the five best ETF opportunities for April 2022.

Vanguard Energy ETF (VDE) Analysis

The current geopolitical situation has changed the global energy market in big ways. The ripple effect brought oil and gas back in the spotlight while driving up prices for energy. As you can see, Big Money has been buying VDE in chunks over the past year, with heavy buying starting in October 2021:

VDE holds several powerhouse stocks. One example is ConocoPhillips (COP), which is up 35% this year and has a profit margin of 17.5%. Here are Big Money signals for COP:

Schwab U.S. Large-Cap Growth ETF (SCHG) Analysis

True, the near-term chart on SCHG doesn’t look great. But the broad view shows its huge upward trend, and it holds a basket of stocks with excellent fundamentals, many of which are household names.

One great stock SCHG holds is Tesla Inc. (TSLA). It’s a long-time Big Money favorite with fantastic fundamentals, including a 10.3% profit margin, 3-year EPS growth of 336.2%, and 3-year sales growth of 37.8%. As the multi-year chart below shows, it’s been a growing giant for a while:

Schwab U.S. REIT ETF (SCHH) Analysis

Remember the huge spike in real estate stock buying? Well, that’s reflected in SCHH too. While there have been a couple dips in the past year, the trend on this one overall is undeniably upward:

SCHH is a REIT ETF, but it contains some stocks you wouldn’t expect. A good example is Mastercard Incorporated (MA). It’s fallen recently, but it’s an outlier stock with a profit margin of 46%. It’s also been a Top 20 Big Money buy for years:

iShares Core High Dividend ETF (HDV) Analysis

When markets get uncertain, many investors flock to defensive positions, especially great dividend stocks. As various headwinds like inflation and geopolitical tensions picked up late last year, fundamentally strong stocks with dividends captured investors’ attention. For instance, HDV was chopping along until December 2021, when Big Money began its ramping up:

One longstanding dividend stock within this ETF is Johnson & Johnson (JNJ), a giant, profitable healthcare company (22.3% profit margin) that’s been a recent Big Money magnet. The multi-year chart below shows lots of Big Money buying, and its current 2.39% dividend is part of the reason:

iShares S&P Mid-Cap 400 Value ETF (IJJ) Analysis

This is a “bargain bin” pick, but that’s because this ETF is getting battered around recently (unfairly in my opinion). IJJ holds smaller companies and has seen some Big Money buying in the past. It’s been choppy over the last year, but the longer-term performance proves it can hold a valuable place in a diversified portfolio:

One great stock in IJJ is Knight-Swift Transportation Holdings Inc. (KNX). It’s fundamentally strong – it has 3-year EPS growth of 31.9% and a 12.4% profit margin. But it’s down 25% this year so far. However, it wouldn’t surprise to see this one rise high again (it’s had 23 Top 20 Big Money buy signals since 2005):

Here’s a Big Money recap:

  • When Big Money buying pours in, stocks tend to go up
  • Red selling on great quality can be a great opportunity
  • Repeated buying usually means outsized gains

Bottom Line and Explanatory Video

VDE, SCHG, SCHH, HDV, and IJJ are my top ETFs for April 2022. VDE, SCHG, SCHH, and HDV rank high, while IJJ ranks lower due to weaker technicals. These picks can rise higher, in my opinion, largely because they each hold great stocks. One of them is discounted right now because of selling pressures. But as we know, deep red days often prove to be big opportunities over time.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in VDE, SCHG, SCHH, HDV, IJJ, COP, TSLA, MA, JNJ, or KNX in managed or personal accounts at the time of publication.

Contact:

https://mapsignals.com/contact/

 

Best Stocks to Buy in a Recession

Given all that’s happened recently, some people are talking about a recession. What’s that? It’s technically when there are two consecutive quarters (or more) of negative gross domestic product growth. Basically, it’s when the economic engine slows down.

Since 1980, we’ve had six recessions. We aren’t there yet. But if we do get there, don’t fret too much. In five of the last six recessions, the S&P 500 was up a year later.

Plus, it’s possible to succeed in almost all market conditions. I don’t mean there are ways where it’s impossible to lose. Rather, there are some stocks that seem to do quite well in recessions. These kinds of stocks are “durable” – they’re well-established names and tend to pay dividends. Let me show you what I mean.

Focusing on quality is paramount when markets are under pressure. Using my firm MAPsignals’ database, I’ve filtered for various quality metrics and a history of Big Money investment to identify five stocks that tend to do well in harder economic times: WMT, ABT, JNJ, GIS, & HSY.

Walmart Inc.

Up first is Walmart Inc. (WMT), the discount retail giant.

Even though great stocks can be choppy, like WMT over the past year, these companies are worthy of attention, especially when they have a tech-oriented growth strategy and huge hiring plans. Check out WMT:

  • 1-month performance (+8.5%)
  • Historical Big Money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals WMT has made over the years in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, WMT’s sales and earnings growth rates have held strong, and its earnings growth estimate is appealing:

  • 3-year sales growth rate (+3.7%)
  • 3-year EPS growth rate (+41.0%)
  • 2-year vs. 1-year EPS growth rate estimate (+7.6%)

What about WMT in a downturn? Over the last six recessions, its average return is an astounding (+34.4%).

Abbott Laboratories

Next up is Abbott Laboratories (ABT), the enormous health care company.

Check out these technicals for ABT:

  • 1-month performance (-3.4%)
  • Historical Big Money signals

Let’s look long-term. These are the top buy signals Abbott has made since 1990. The Big Money love is clear:

Source: www.MAPsignals.com

Now let’s dive deeper. As you can see, Abbott has had rock-solid sales and earnings growth:

  • 1-year sales growth rate (+24.5%)
  • 3-year EPS growth rate (+44.6%)

In the past six recessions, Abbott averaged a (+9.8%) gain. Even better, a year later, its average return was (+13.6%). This stock has handled downturns well in the past.

Johnson & Johnson

The third growth stock idea is Johnson & Johnson (JNJ), another enormous health care company.

Strong stocks usually have Big Money buying the shares. J&J has that. While JNJ has been choppy, it hasn’t fluctuated a lot over the past year. And it’s nice to see the stock has risen recently:

  • 1-month performance (+4.4%)
  • Historical Big Money signals

Below are the Big Money signals J&J has made since 1990. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. J&J’s sales and earnings growth is impressive. Its profitability is strong too and so is its current 2.4% dividend, which help in a recession:

  • 1-year sales growth rate (+13.5%)
  • 3-year EPS growth rate (+13.3%)
  • Profit margin (+22.3%)

In the last six recessions, J&J stock rose fives times. Its average return over those recessions is (+12.3%), so it’s a downturn winner for sure.

General Mills, Inc.

Number four on the list is General Mills, Inc. (GIS), which is a huge food and beverage company with several well-known brand names.

Here are the technicals important to me:

  • 1-month performance (-6.2%)
  • Historical Big Money signals

Below are the Big Money signals for GIS since 1990. While it’s waned a bit recently, the Big Money has liked General Mills for a long time:

Source: www.MAPsignals.com

Let’s examine a bit more. General Mills has been growing sales well, is poised to grow earnings, and owns a nice profit margin:

  • 3-year sales growth rate (+4.8%)
  • 2-year vs. 1-year EPS growth estimate (+4.3%)
  • Profit margin (+12.9%)

Regardless of the economy, people need food. That has certainly helped GIS in the past six recessions, when it gained in five of them. Its average return over that span is (+15.3%), and it grew more one year and two years later (+14.5% and +28.7%, respectively).

The Hershey Company

Our last recession stock is an easy one to understand, it’s The Hershey Company (HSY), which makes candy and snacks seemingly everybody loves.

Check out these technicals:

  • 1-month performance (+1.5%)
  • Historical Big Money signals

Hershey has made the MAPsignals Top 20 report many times since 1990:

Source: www.MAPsignals.com

Now let’s look under the hood. Hershey has been growing sales and earnings, and its profit margin is strong:

  • 1-year sales growth rate (+10.1%)
  • 3-year EPS growth rate (+8.7%)
  • Profit margin (+16.5%)

Does candy melt in a recession? No. In the last six recessions, Hershey has gained four times, with an overall average return of (+8.7%).

The Bottom Line

WMT, ABT, JNJ, GIS, & HSY represent top stocks to buy in a recession. Strong fundamentals and historical Big Money buy signals make these stocks worthy of extra attention in tough economic times.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in WMT in personal accounts.

Contact

https://mapsignals.com/contact/

 

Are Biotech Stocks Still Worth Buying in 2022?

Even as most countries started seeing rapid vaccination campaigns being rolled out, major pharmaceutical companies including Moderna, Johnson & Johnson, and Pfizer saw their stocks slide as the year drew to a close.

Volatile Markets and Underperforming Stocks

At close on Tuesday, 8 February, vaccine makers, including Novavax (NVAX) and Moderna (MNRA) fell by 11.97% and 4.43%, respectively. Novavax is down more than 60% since its peak in November, with Pfizer (PFE) slipping 8.07% over the month, and still declining well into February.

On the other hand, J&J (JNJ) stocks fell by almost 1%, at 0.91% on average over one month between January and February 2022. The newest data showed that new pharmaceutical research, tools, and other medical devices helped give the company a boost in the fourth quarter.

The S&P 500 has been bearish in recent days, rallying red with day-to-day losses at the opening bell.

Over the last year, biotech stocks on the iShares Biotechnology ETF were down by 12.8%, below the Russell 1000’s return of 21%. Even as the new year closed in, major biotech stocks would slip below their peaks.

Now as the S&P is slipping out of control, biotech stocks look to regain their reputation on the market. Investors are reconsidering whether these stocks are still worth the high risk for the year ahead?

Approval Rates are Dropping

But it’s not just a volatile market that has kept biotech stocks from reclaiming their position among investors. Tightening of approval from drug and pharmaceutical regulators such as the Food and Drug Administration (FDA) has left the lucrative sentiment for biotech stocks erratic.

Approval rates from not just governments, but the general public have also been decreasing, as evidence reveals that some vaccines aren’t as effective as initially proclaimed. When vaccines were first designed to boost immunity against alpha and beta variants, researchers found that newer and more contagious variants have decreased vaccine efficacy.

Although vaccines can perhaps still provide the needed immunity against the novel coronavirus, some are speculating that newer and more infectious variants of the virus will lower the trajectory of not just public support, but also how biotech stocks perform on the market.

J&J Shares a Different Outlook

Vaccine maker, J&J claimed that their vaccine sales will help boost annual revenue by more than 46% in a media release published by The Economic Times on 25 January. Vaccine sales in 2021 brought in more than $1.62 billion at the start of the fourth quarter. Once the company approved booster shots for its initial single-shot dose, sales jumped nearly double, ending the quarter with $2.48 billion in vaccine sales for the year.

Earnings for 2021 were around $2.13 per share, with sales topping more than $42.8 billion for the fourth quarter. The company reported that the coming year will see share earnings reach between $10.40 and $10.60.

While J&J is mostly riding on the success of their vaccines and booster shots which have been proven to still offer around 85% immunity against the Omicron variant, the company is still diversifying their research and product development – focussing on other niche product lines.

But it’s not just companies such as J&J that are looking to improve vaccine efficacy as the ongoing pandemic strains healthcare systems across the world. Some companies are struggling to keep up with demand, and manufacturing has been slowing as the U.S. experiences supply and labor shortages.

Biotech Stocks you should be looking at

Investors are still feeling somewhat reluctant to invest in biotech and biopharma stocks in the coming year. While share returns may have decreased over the last few months, and the market remains volatile, some under-the-radar companies are proving to provide more benefits and guaranteed returns for investors.

Seagen Inc. (SGEN)

Seagen develops therapies and pharmaceuticals that help treat oncology patients. The company has undergone major scrutiny in recent months following its approval of Tvidak in September 2021. Seagen Inc provides a more diversified outlook on the market, with experts citing that stock prices will jump between $40 and $50 in the next few months.

Gritstone Bio (GRTS)

Researchers at Gritstone Bio have been working to develop an almost “second generation” mRNA vaccine, similar to that offered by Pfizer. Over time, investors, and analysts have been keeping a close eye on Gritstone, with the company not only working to develop more highly effective vaccines but also for its research and innovation in the field of oncology.

Seres Therapeutics Inc. (MCRB)

The microbiome therapeutics giant helps develop drugs that work to restore and repair dysbiotic microbiomes. In the third quarter, the company reported revenues of more than $60 million, with year-over-year returns jumping above $120 million. In 2021, Seres underwent a collaboration with Nestle Health Science to boost efforts for ongoing research in therapeutic drug development.

Ascendis Pharma (ASND)

The Danish-based company, Ascendis Pharma has gained a reputation for Skytrofa, a treatment for pediatric growth hormone deficiency. The company has an exciting year lined up, as Ascendis is in to receive increased support and licensing collaboration from leading global biotech brands. Stocks are targeted to reach around $180, with prices currently hovering close to $110.84 per stock as of 25 January

Edgewise Therapeutics Inc. (EWTX)

Investors who are willing to bet less, Edgewise is a biopharma company focussing on treating rare muscle disorders. While some Wall Street analysts have claimed that Edgewise may still be a high-risk stock in its infancy, with stock prices below $15.00 as of January 2021, some expect stock prices to reach more than $30 closer to the fourth quarter.

Takeaway

While opinions over whether biotech and biopharma stocks are double-sided, some still feel that the year ahead will have leading vaccine and pharmaceutical manufacturers stocks slip below their highs of 2021.

Market volatility has raised concern over whether running the high risk with biotech stocks is worth it or not. There’s still a chance that 2022 will see some smaller names in the pharmaceutical industry surpass current predictions.

Investors will still need to consider the risk factor that trails biotech stocks in a volatile market. As the world, and investors hold their breath for the coming year, the development of more effective vaccines and better pharmaceutical research will help not only companies see more support from their regulators, but also help investors see the potential these companies can have for the biotech industry.

Monstrous Earnings Ahead: IBM, Microsoft, Intel, Tesla, Apple, Visa in Focus, Along With The Fed

Investors will focus on Q4 earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could also hit the stock market hard next week, making the big tech earnings that much more critical. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant in order to see how it impacts earnings in 2022. The following is a list of earnings slated for release January 24-28, along with a few previews.

Earnings Calendar For The Week Of January 24

Monday (January 24)

IN THE SPOTLIGHT: IBM

The Armonk, New York-based technology company, International Business Machines, is expected to report its fourth-quarter earnings of $3.39 per share, which represents year-over-year growth of over 60% from $2.07 per share seen in the same period a year ago.

The world’s largest computer firm’s revenue would decline over 21% to $1.96 billion from $20.37 billion a year earlier. It is worth noting that the technology company has beaten earnings in most of the quarters in the last two years, at least.

International Business Machines (IBM) 4Q earnings will be focused on standalone model mechanics and whether Software revenue can re-accelerate while Consulting demand sustains. However, we believe the setup becomes more attractive in 2H21. We update our estimates to reflect IBM standalone post-KD spin,” noted Katy Huberty, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 24

TICKER COMPANY EPS FORECAST
BRO Brown & Brown $0.38
BOH Bank of Hawaii $1.39
BMRC Bank of Marin Bancorp $0.57
CR Crane $1.12
HAL Halliburton $0.34
HMST HomeStreet $1.3
IBM International Business Machines $3.39
PETS PetMed Express $0.3
SMBK SmartFinancial $0.48
STLD Steel Dynamics $5.66
TRST Trustco Bank $0.74
ZION Zions Bancorp $1.33

 

Tuesday (January 25)

IN THE SPOTLIGHT: MICROSOFT

The Redmond, Washington-based global technology giant, Microsoft, is expected to post its fiscal second-quarter earnings of $2.28 per share, which represents year-over-year growth of over 12% from $2.03 per share seen in the same period a year ago.

The world’s largest software maker would post revenue growth of nearly 17% to around $50.3 billion. It is worth noting that with a track record of always beating earnings per share estimates in the last five years, Microsoft is one of the best FAANG stocks in terms of earnings surprises.

“We model Azure growth of 45% cc & see 2-3% of upside, translating to steady growth vs. 48% last qtr. We see potential for strong M365 demand ahead of price hikes, as well as continued execution from LNKD, PowerApps & Dynamics ERP. Although tougher PC/Server dynamics, we expect strengthening trends for C22. Expect Mar Q guide slightly above Street,” noted Derrick Wood, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 25

TICKER COMPANY EPS FORECAST
MMM 3M $2.07
AGYS Agilysys $0.13
AXP American Express $1.75
ADM Archer Daniels Midland $1.19
BXP Boston Properties $1.51
CNI Canadian National Railway $1.25
COF Capital One Financial $5.15
FFIV F5 $1.97
GE General Electric $0.84
JNJ Johnson & Johnson $2.12
LMT Lockheed Martin $8.04
LOGI Logitech International $1.23
NAVI Navient $0.81
NEE NextEra Energy $0.41
VZ Verizon Communications $1.28
WSBC WesBanco $0.67

 

Wednesday (January 26)

IN THE SPOTLIGHT: FOMC MEETING CONCLUDES, INTEL, TESLA

Tuesday and Wednesday will mark the first meeting of the Fed’s policymaking arm in 2022. At around 7:30 pm GMT on Wednesday, Jerome Powell will conduct a press conference. This is expected to be the biggest market event since investors expect more details about the central bank’s plan to raise interest rates.

INTEL: The California-based multinational corporation and technology company is expected to report its fourth-quarter earnings of $0.9 per share, which represents a year-over-year decline of about 40% from $1.52 per share seen in the same period a year ago. The company’s revenue would fall nearly 8% to $18.39 billion.

Intel remains controversial. Long-term skepticism remains and share losses will continue until products ramp on the Intel 4 node (old 7nm), but with a new CFO, improving PC and server market outlooks, cash inflows from the US Govt, Mobileye on the horizon, and a February analyst day now reconfirmed, we are cautiously optimistic sentiment can continue to gradually improve. Still LOTS to prove,” noted Matthew D. Ramsay, equity analyst at Cowen.

TESLA: The California-based electric vehicle and clean energy company is expected to report its fourth-quarter earnings of $2.31 per share, which represents year-over-year growth of 180% from $0.80 per share seen in the same period a year ago.

“Q4 results on 26 Jan are critical to validate (or not) the Q3 profit dynamics that could see Tesla 1) carve out meaningful share from legacy OEMs busy protecting their own share by ramping up BEVs and 2) claim a disproportionate share of the industry profit pool. We raise 2021-23 EBIT and FCF 10%, mostly on higher volume,” noted Philippe Houchois, equity analyst at Jefferies.

The high-performance electric vehicle manufacturer would post revenue growth of over 50% to $16.65 billion. The electric vehicle producer has beaten earnings estimates only twice in the last four quarters.

Tesla 4Q deliveries were 20% above our forecast, annualizing to over 1.2mm units, which is already above our prior FY22 forecast. We raise our forecasts and target to $1,300 on this ‘opening act’ and look for more in FY22,” noted Adam Jonas, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 26

TICKER COMPANY EPS FORECAST
ABT Abbott Laboratories $1.16
ANTM Anthem $5.11
AZPN Aspen Technology $1.41
T AT&T $0.76
KMB Kimberly-Clark $1.29
LRCX Lam Research $8.46
RJF Raymond James Financial $1.77
STX Seagate Technology $2.21
NOW ServiceNow $0.22
SIMO Silicon Motion Technology $1.56
SLG SL Green Realty $1.56
URI United Rentals $6.97
VRTX Vertex Pharmaceuticals $2.92
WHR Whirlpool $5.84

 

Thursday (January 27)

IN THE SPOTLIGHT: APPLE, VISA

APPLE: The consumer electronics giant would post its fiscal first-quarter earnings of $1.88 per share, which represents year-over-year growth of nearly 12% from $1.68 per share seen in the same period a year ago.

The iPhone manufacturer would post revenue growth of 6% to $118.13 billion. It is worth noting that with a track record of always beating earnings per share estimates in the recent five years, Apple is the best FAANG stock in terms of earnings surprises.

Apple is expected to report 1QFY22 earnings after market on Thursday, January 27th and host a call with investors at 5:00 PM ET. In our view, the recent strength in shares is a reflection of investors’ willingness to reward Apple for entering new markets, including electronic vehicles (EV) and the metaverse (with an augmented reality/virtual reality product). Now, we look for comments from management on its future product roadmap to justify the increase in share price,” noted Tom Forte, Senior Research Analyst at D.A. DAVIDSON.

“We are reiterating our BUY rating for Apple (AAPL) and putting our price target of $175 under review ahead of the company reporting 1QFY22 earnings.”

VISA: The world’s largest card payment company is expected to report its fiscal firth-quarter earnings of $1.70 per share, which represents a year-over-year decline of about 20% from $1.42 per share seen in the same period a year ago.

The global technology payment company would post revenue growth of nearly 19% to $6.8 billion. It is worth noting that the company has beaten earnings in most of the quarters in the last two years, at least.

Visa (V) is one of our preferred stocks, as it is a key beneficiary of resilient global consumer spend growth, the ongoing shift from cash to electronic payments, and broadening merchant acceptance. Global Personal Consumption Expenditure and secular growth drivers should support low double-digit revenue growth in the near-to-medium term,” noted James Faucette, equity analyst at Morgan Stanley.

“While Covid-19 headwinds are likely to persist, we see upside opportunity from the faster-than-expected recovery of travel. Continued investment in longer-term initiatives (faster payments, P2P, B2B) and partnerships continue to increase its TAM and offer an opportunity for compounding double-digit earnings growth for the foreseeable future.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 27

TICKER COMPANY EPS FORECAST
AOS A.O. Smith $0.77
ALK Alaska Air Group $0.21
BX Blackstone $1.3
CNX CNX Resources $0.5
CMCSA Comcast $0.73
DOW Dow $2.16
EMN Eastman Chemical $1.88
HCA HCA Healthcare $4.57
IP International Paper $1.02
JBLU JetBlue Airways $-0.39
MA Mastercard $2.2
MCD McDonald’s $2.32
LUV Southwest Airlines $-0.39
X U.S. Steel $5.12
V Visa $1.7

 

Friday (January 28)

TICKER COMPANY EPS FORECAST
ALV Autoliv $1.18
BAH Booz Allen Hamilton $0.97
CAT Caterpillar $2.23
CHD Church & Dwight $0.59
CL Colgate-Palmolive $0.79
RDY Dr. Reddy’s Laboratories $0.64
GNTX Gentex $0.33

 

XLV: Confidence in Medical Science at Containing Covid Is Highly Beneficial

The year 2020 was so hard for most of us as the pandemic struck bringing an unprecedented level of disruption to our lives. It’s now more than two years that the world is affected by the deadly and invisible virus with millions being infected and millions more have lost their jobs as the economies of many countries were devastated and governments were challenged into putting into place tough social distancing measures.

However, while infection rates have reached a new peak with the Omicron strain (as per the chart below in blue), the number of people who have actually lost the battle against the invisible enemy continues to fall as depicted by the death rate in the grey chart below trending lower.

https://static.seekingalpha.com/uploads/2022/1/3/49663886-16411948064843268.png

Source: Google

There are many reasons for the decrease in death rate with the most important ones being the rise in vaccination among populations worldwide as well as the provision of better hospital-level care to patients infected with Covid. This has been made possible by new antibodies treatments. For this purpose, the Health Care Select Sector SPDR Fund (XLV) includes key plays like Johnson and Johnson (JNJ) with its Janssen vaccine as well as Pfizer (PFE) with its Covid pill, as longer-term solutions to countering Covid.

Apparently trivial, but equally important, there is the important role played by diagnostics companies in early detection of the coronavirus so that infected people can be isolated. This separation act has been critical in order to contain the infection, in turn reducing hospitalization rates. Here, companies like Thermo Fisher (TMO) and Abbott (ABT) who were quick to develop relatively cheap Covid tests come to mind. In this respect, for those wondering about the role of these medical devices and tool plays in the future where Covid becomes more analogous to “normal” seasonal flu, there is the stark reality of the coronavirus mutating rapidly into Alpha, Delta, and Omicron strains. Thus, the market for Covid testing should become a constant in the new normal.

https://static.seekingalpha.com/uploads/2022/1/3/49663886-16411948065317018.png

Source: ssga.com

Moreover, XLV is not just about Covid as seen with health insurance plays like United Healthcare (UNH). The company makes the system work better for everyone by simplifying the health care experience through the use of advanced data and technologies, breakthrough treatments, and consumer choice. Talking diversification, with normalization in health care, there are a number of sectors including ophthalmology and dentistry as well as clinical trials activities in areas like biotech research which should prove beneficial for XLV’s holdings.

The market seems to already have realized this, rewarding XLV with 7.36% during the last month against only 2.69% for the S&P 500.

Source: Trading View

I believe that this outperformance should continue in 2022, as the role of medical science, especially through sequencers in rapidly understanding the DNA of the coronavirus as well as its mutants has been established. There may be periods of doubt as for example when investors’ high expectations of Merck’s Covid pills were dashed when some clinical trial data suggested that Molnupiravir was less effective than originally thought. This resulted in volatility in the State Street fund around December 13. Subsequently, XLV rapidly overcome this “volatility episode” and is now at the $140-141 range.

Looking at the sector, XLV comes with an expense ratio of just 0.12% and a dividend yield of 1.32%. Another peer, the Vanguard Health Care ETF (XHT) does offer lower fees of just 0.10%, but, it is the State Street fund that has outperformed both on a one-year and one-month basis, by 600 and 110 basis points respectively.

Finally, in line with its five-year performance, XLV should continue with its uptrend and reach the $150-155 level by the middle of 2022.

 

SPDR MSCI USA StrategicFactors ETF (QUS) Remains Strong Despite Recent Dip

The SPDR MSCI USA StrategicFactors ETF (QUS) has performed excellently so far this year and remains strong despite the recent tip,

QUS Remains a Strong ETF

The SPDR MSCI USA StrategicFactors ETF (QUS) is a smart beta fund designed to offer investors broad exposure to the Style Box – Large Cap Blend category of the US stock market. The ETF has been around since 2015 and is managed by State Street Global Advisors.

QUS currently has more than $1 billion in assets under management and is designed to match the performance of the MSCI USA Factor Mix A-Series Index prior to the fees and expenses. The index measures the stock market performance of large and medium cap companies across the US equity market. QUS aims to represent the performance of three factors, including low volatility, quality and value.

The ETF has performed excellently since the start of the year, adding more than 23% to its value. However, QUS is down by less than 1% over the past 24 hours and is currently trading above the $127 level.

QUS Could Rally Towards $140

Despite its recent performance, QUS remains one of the top ETFs in its category. It has the heaviest allocation in the information technology sector, followed by healthcare and financial services.

QUS ETF chart. Source: FXEMPIRE

QUS has an operating expense of 0.15%, making it one of the least expensive funds in the space. Its 12-month trailing dividend yield is 1.39%. The ETF could rally higher over the coming weeks and could reach the $140 mark before the end of the year.

The fund has its highest individual holdings as Microsoft Corporation (MSFT), with Apple Inc. (AAPL) and Johnson & Johnson (JNJ) concluding the top three. With these companies as its biggest holdings, QUS’s value could surge higher over the coming weeks and months.

Since the start of the year, QUS has added 23% to its value, while its 52-week performance sees the fund rally by nearly 29%.

Johnson & Johnson Plans to Split Into Two Companies

Healthcare conglomerate Johnson & Johnson has set plans in motion to split into two publicly-traded companies.

J&J to Split Into Two Companies

Johnson & Johnson, one of the world’s largest healthcare conglomerates, has announced earlier today that it plans to separate its consumer products business from its pharmaceutical and medical device operations. Thus, creating two publicly-listed companies in the process.

According to the announcement, the company’s household products unit, Listerine, Aveeno and Neutrogena skincare products, and maker of Band-Aid bandages will operate under one company. Meanwhile, the second company will handle the riskier but faster-growing division that manufactures and sells prescription drugs and medical devices.

Johnson & Johnson’s outgoing CEO Alex Gorsky stated that “Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world.”

Johnson & Johnson said it intends to complete the splitting process over the next 18 to 24 months. Per the announcement, the pharmaceutical and medical device division will continue to use the name Johnson & Johnson and also gets to keep the incoming CEO, Joaquin Duato, as the head. However, they are yet to come up with a name for the publicly traded consumer business.

J&J Rally Following Splitting Announcement

Investors have taken kindly to the news of Johnson & Johnson splitting into two companies, with the stock price rallying by more than 1.2% since the market opened. At press time, JNJ is trading at $165.08, up by 1.24% over the past few hours.

JNJ stock chart. Source: FXEMPIRE

JNJ could rally higher over the coming days and weeks as the company begins to provide more details into the splitting process. Year-to-date, J&J is up by only 6.8% as the company currently faces lawsuits that could cost it billions of dollars.

Why Johnson & Johnson Stock Is Up By 3% Today

Johnson & Johnson Stock Rallies After Strong Q3 Report

Shares of Johnson & Johnson gained strong upside momentum after the company released its third-quarter results. Johnson & Johnson reported revenue of $23.34 billion and adjusted earnings of $2.60 per share, missing analyst estimates on revenue and beating them on earnings.

The company noted that timing of coronavirus vaccine shipments led to a revenue miss and added that missed sales will be carried into future quarters.

Johnson & Johnson adjusted its 2021 reported sales guidance from $93.8 billion – $94.6 billion to $94.1 billion – $94.6 billion. Adjusted EPS guidance was also increased from $9.50 – $9.60 to $9.77 – $9.82. The market reacted favorably to the new guidance, and the stock managed to get further away from recent lows.

It should be noted that Jonhson & Johnson’s coronavirus vaccine booster shot was recently recommended for emergency use authorization by U.S. FDA Advisory Committee, so it will likely be approved soon, which may create an additional positive catalyst for the stock.

What’s Next For Johnson & Johnson Stock?

Currently, analysts expect that Johnson & Johnson will report earnings of $9.66 per share in 2021, so the company’s new guidance exceeds analyst forecasts, which is bullish for the stock.

In 2022, Johnson & Johnson is expected to report earnings of $10.42 per share, so the stock is trading at 16 forward P/E, which looks reasonably cheap in the current market environment as S&P 500 is moving to historic highs.

The stock made an attempt to settle above the $180 level back in August but lost momentum and declined towards the $160 level. It has received material support near this level before the release of the third-quarter earnings report, so traders looked ready to buy Johnson & Johnson shares after a more than 10% pullback.

The solid quarterly report and the new guidance will provide another incentive to buy Johnson & Johnson shares at a discount to August price levels, so the stock has good chances to develop additional upside momentum in the upcoming trading sessions.

For a look at all of today’s economic events, check out our economic calendar.

Johnson & Johnson Covid Vaccine Sales In Q3 Surpasses $500 Million

Pharmaceutical companies have made huge profits since the Coronavirus pandemic started as they manufacture and sell billions of the vaccines to governments all over the world.

J&J Sells Over $500 Million Worth Of Covid Vaccine

Johnson & Johnson has reported that it sold $502 million of its Covid-19 vaccine in the last quarter. The company said this while reporting its third-quarter earnings, which surpassed Wall Street’s profit expectations.

The company’s adjusted earnings per share for Q3 was $2.60, surpassing the $2.35 estimated by market analysts. The revenue of $23.34 billion in the previous quarter fell short of the $23.72 billion Wall Street analysts had expected.

Following the excellent performance in the third quarter, the pharmaceutical company increased its full-year earnings guidance to between $9.77 per share and $9.82 per share. These are higher than the previous estimates of $9.60 to $9.70 per share. Johnson & Johnson also expects its 2021 total sales to range from $94.1 billion to $94.6 billion, higher than the $93.8 billion it previously estimated.

After selling more than $500 million worth of Covid vaccines in Q3, Johnson & Johnson maintained its total sales outlook for the year at $2.5 billion. The better-than-expected profit was due to the company’s increased sales in other areas such as medical devices, pharmaceuticals and consumer health.

Its pharmaceutical unit, which developed the single-shot Covid vaccine, raked in nearly $13 billion in revenue, a 13.8% increase from the same period last year.

jnj
JNJ stock chart. Source: FXEMPIRE

JNJ Rally Following Superb Q3 Earnings Report

The shares of Johnson & Johnson have been rallying since the company announced its third-quarter earnings result. JNJ is up 2.58% over the past 24 hours and is currently trading at $164 per share.

Year-to-date, JNJ has performed decently, adding 6.3% to its value within that period. It is one of the best-performing pharmaceutical companies in the market at the moment.

Marketmind: Fast and Furious

A look at the day ahead from Sujata Rao

Besides Britain, some are placing bets on a September 2022 Fed rate hike; a month ago, no move was predicted before 2023. Earlier on Tuesday, Australia’s central bank was at pains — again — to stress it did not plan interest rate rises before 2024, yet that hasn’t budge money markets from pricing a late-2022 move.

So, is it justified? Growth is clearly wobbling, especially in China where Q3 GDP slowed to 4.9% while Monday data showed U.S. industrial production shrank 1.3% month-on-month in September.

Inflation is less transitory than anticipated, yet raising rates probably won’t fix the supply-side glitches that are driving up prices and curbing output.

Perhaps that’s why bonds have not built on the recent moves, with yields lower today and the dollar slipping to three-week lows. That’s cheered markets, especially on top of robust earnings so far in the Q3 season and equity futures are implying firmer New York and European sessions, following gains across Asia.

Another piece of good news — Chinese developers Sunac and Kaisa made coupon payments, while Evergrande may also meet an onshore bond coupon due on Tuesday.

What’s ahead today? A raft of Fed and ECB policymakers, another airing for Bank of England governor Andrew Bailey and of course a slew of earnings, including from a FAANG — Netflix.

Key developments that should provide more direction to markets on Tuesday:

-Morrisons investors set to rubber stamp $10 bln CD&R takeover

-UK global investment summit, looking at green finance, technology, life sciences

– Bitcoin a whisker off April 2021 record high

– ECB speakers: Chief economist Philip Lane, board members Fabio Panetta and Frank Elderson

-Fed speakers: San Francisco Fed President Mary Daly; Atlanta Fed President Raphael Bostic; Philadelphia Fed President Patrick Harker

-Bank of England Governor Andrew Bailey

-Emerging markets: Indonesia seen holding rates, Hungary to hike 15 bps

-European earnings: Unilever, Deutsche Boerse

-U.S. earnings: BNY Mellon, Halliburton, Proctor & Gamble, Johnson& Johnson, Netflix

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao; editing by Saikat Chatterjee)

Are Stock Bulls Back On A Track?

Earnings beats have actually been coming in at a wider margin than average, contrary to lingering fears that supply chain disruptions, material shortages, and climbing costs would lead to disappointing Q3 results.

Q3 Earnings

The big beats now have S&P 500 companies on track to post +30% earnings growth for Q3. Most Wall Street insiders are now expecting Q4 earnings to show right around +20% earnings growth.

Today’s earnings highlights include Albertsons and State Street. Some of the big names reporting later this week include Netflix, Haliburton, Johnson & Johnson, United Airlines, and Procter & Gamble on Tuesday; and Biogen, IBM, Verizon, and Tesla on Wednesday; American Airlines, AT&T, Chipotle, Intel, Snapchat, and Southwest Airlines on Thursday.

The following week is even more highly anticipated as many of the biggest names in the stock market will be reporting.

Economic data

In economic data today, Industrial Production for September is expected to dip due to a combination of Hurricane Ida and supply chain constraints. Supply chain challenges also likely lowered builder sentiment in the October NAHB Housing Market Index due today as well. The supply-side shortages of both materials and labor continue to weigh on economic growth outlooks for the last part of 2021.

However, most bullish analysts have adjusted their 2022 growth projections higher, believing lost growth this year will be made up next year. The labor market is expected to get a boost thanks partially to the dramatic decline in Covid cases, which are down nearly -50% since early-September.

The extreme worker shortage in some sectors has already led to rapid wage growth with hourly earnings in September up +4.6%, led by an increase of nearly +11% in leisure and hospitality. That is what’s considered “sticky” inflation, meaning that it is not likely going to be reversed.

Likewise for consumer goods’ prices that have been creeping higher as manufacturers try to offset higher costs. If wage growth can mostly keep pace with inflation, bulls will likely remain less concerned that rising prices will crush economic growth. In fact, Retail Sales released Friday showed no signs of consumer spending slowing down with sales climbing +15% in September, despite obviously higher costs for many goods. The thought of the economy heating back up quickly is both good and somewhat bad.

There now seems to be more talk on Wall Street about the likelihood of two rates hikes next year rather than just one. There’s actually even some talk of perhaps three rate hikes being possible in 2022, especially if the supply-chain complications continue to create higher prices and fuel higher inflation.

The biggest wildcard right now appears to be the global energy shortage which is already pushing up costs for both consumers and manufacturers and threatens to accelerate headline inflation far beyond wage growth.

Any energy “crisis” will likely only be temporary but it still potentially translates to several quarters of slower growth than many Wall Street bulls have been penciling. If it leads to a massive surge higher in inflation in the months ahead, it also could also pressure the Federal Reserve to pull forward its timeline to begin hiking interest rates.

Technical analysis

ES ##-## (Daily) 2021_10_18 (3_38_51 PM)

SP500 futures are testing daily MA50. With the strong accumulation in this market, I will not be surprised to see a base-building above moving average. If that happens, investors will gain more confidence. Thus, we can see money flowing aggressively into the stock market again. The weakness of the USD gives additional strength for indexes. In that case, bulls will target at least 4600 (important Gann level on a daily chart).

Breaking below 4250 is a game-changer. However, in the absence of bearish macroeconomic factors, we have more chances to see a bullish scenario.