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Carl Delfeld

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These 3 solid-state EV battery stocks aren’t all pure plays, but they’re all investing heavily on next-generation battery technology that could change the game.
The performance of Rolls Royce (RYCEY) stock has been phenomenal this year, but an ongoing development in their New Markets segment could offer more room to run.
As part of our ongoing “Core & Explore” approach, today I present three new ETFs for your consideration. These three funds should help you weather the market’s many ups and downs these days. They are designed to remain both in the market and keep flexible to take advantage of new growth opportunities without going overboard.
China’s economy is struggling due to lackluster growth, falling property prices, high local debt, poor demographic trends, and lack of consumer confidence. In some ways, my thought is – join the club. The U.S. may be facing 2% GDP growth and has its own challenges such as excessive federal spending and national debt. My point is that we should remain skeptical but not discount China coming back strong with the right policies. In my view, China is both strong and brittle. And today, we add a high-profile stock that’s a play on China’s strength.
Tesla dominates the U.S. EV markets but China’s BYD has them beat in numbers sold. Let’s look closer at the battle of BYD vs. Tesla.
Warren Buffett became the world’s most famous investor in part by investing in companies with strong economic “moats.” Today, we add a well-known company that fits that description. We also say goodbye to two stocks to make room for more reliable opportunities as the market teeters.
In this week’s Cabot Explorer issue, Novo Nordisk (NVO) stock surges on the back of positive data on its best-selling weight loss drug Wegovy, U.S.-China tensions rise again, and we add one of the signature growth stocks on the market to our portfolio. Enjoy!
The Federal Reserve resumed lifting interest rates Wednesday with a quarter-percentage-point increase that brings interest rates to a 22-year high. The decision was unanimous.

The benchmark federal funds rate will go to a range between 5.25% and 5.5% as the Fed continues its fight against inflation. This is the 11th increase since March 2022, when rates were near zero.

Inflation has already retreated from a four-decade high last summer and the consumer-price index was up 3% in June year over year which is much lower than the June 2022 peak of 9.1%.
Inflation cooled last month to its slowest pace in more than two years, buoying markets even though the Fed may raise interest rates later this month.

While the Nasdaq composite is a basket of more than 3,000 stocks listed on the Nasdaq exchange, the Nasdaq 100 is the basis for the QQQ – the second-most heavily traded ETF in America, after the SPY ETF which tracks the S&P 500.
Fed Chairman Jerome Powell’s continued warnings of future rate hikes weighed on markets as did the Biden Administration’s suggestion that there should be new restrictions on selling advanced chips to China. Despite this, chip stocks such as Nvidia (NDVA) and the PHLX Semiconductor index were down by less than 1%.

Artificial intelligence (AI) calculations largely take place in data centers full of servers with graphics processing units (GPU)s from Nvidia and its competitors. It is estimated that 20% to 25% of the company’s revenue from Nvidia’s AI chips have been coming from China. To avoid further upsetting Beijing, no action is expected until after Treasury Secretary Janet Yellen’s visit to China in July. Washington is also preparing legislation to screen China-bound investments by U.S. companies. AI, quantum computing, biotechnology and large-capacity batteries are at the top of the list.
Yesterday’s Federal Reserve meeting and Tuesday’s consumer price index data showed inflation and interest rate hikes are pausing but remains well above what markets would like.

Overall inflation is cooling in large part because energy prices have fallen sharply — a huge relief for consumers. But the core gauge, which excludes energy and food prices, shows inflation is still too high.

Nevertheless, investors welcomed the news as it spurred markets and confidence that the market performance might advance beyond big tech and the artificial intelligence (AI) story.
It was another good week for Explorer recommendations led by ChargePoint (CHPT), up 17%, and Butterfly (BFLY), up another 8%.

Some of you will remember when George Gilder’s Wealth and Poverty hit the market in 1981 like a thunderclap. It was intellectual capital and political firepower for both the Reagan Revolution and a big bull market.

Mr. Gilder has been active ever since and has a new book out that I highly recommend, Life After Capitalism.
The arrival of AI looks primed to accelerate automation trends, and this Japanese robot stock is already at the forefront of automating manufacturing.
Explorer stocks were steady or slightly down this week but don’t get discouraged. It is likely that Fed interest rate hikes have ended and, combined with a debt ceiling deal, could ignite a rally. Next week I will give an update on our three Explorer ETF positions.

The unemployment rate for Chinese people ages 16 to 24 rose to a record of 20.4% last month. The rate of youth unemployment in China has consistently been two or three times higher than the general population. Not a good sign.
The Arctic Circle is heating up as China, Russia and the U.S. all jockey for supremacy in the region while offering a unique opportunity for investors.
The Federal Reserve yesterday raised the target for its benchmark interest rate by 0.25% to a new range of 5%-5.25%, the highest since September 2007. This will impact the value and stability of the U.S. dollar and stock markets in several ways.

During the only stable dollar eras of the last century, annual GDP growth averaged 4.9% from 1922-29, 4% from 1948-71, and 3.7% from 1983-2000.

In comparison, over the last two decades, a more volatile dollar saw average growth of only 1.9%. Had the dollar remained stable since 2000, with a steady 3.7% growth, the economy would be nearly 50% greater than it is today, and we probably would have avoided all these financial crises along the way.
Intel’s expansion of chip production in the U.S. is expected to be subsidized by the American taxpayer; we should demand Intel stock in exchange.
The next generation of electric vehicles will live or die on their battery tech, and these three stocks have the potential to revolutionize energy storage.
Foreign automakers, including electric vehicle (EV) makers, are losing market share in China as the country doubles down on the EV supply chain.

China makes almost all of EV electric motors and refines most of the chemicals used for lithium batteries. China even leads in developing what could be the next generation of technology, sodium batteries.
More than $15 trillion in assets are linked to the performance of the S&P 500 index in some way, according to S&P Dow Jones.

Apple, at about $2.4 trillion, and Microsoft, at $2.1 trillion, are so large that, taken together, the two companies would be the third-largest sector of the index, behind tech and health care. This share is trending lower as other companies rise.
In the fast-growing world of electric vehicles (EVs), Tesla garners all the headlines in the U.S., but China’s top EV company is making waves and already moves more units.
I think the 0.25% raise by the Fed yesterday will be followed by a pause. Won’t it be nice when stocks fluctuate primarily around company performance rather than actions by the Fed? Elsewhere, Xi and Putin meet in Moscow in a sign of solidarity and challenge to the U.S. and the West. Novo Nordisk (NVO) is up 10 points this week while today we have a new emerging market recommendation from a country with one of the strongest currencies of 2023.
Lower manufacturing costs south of the border could cut U.S. reliance on China and set the stage for growth in Mexican stocks and the economy.
Market struggles resumed as Fed Chairman Jerome Powell continues to warn of interest rate hikes as inflation concerns linger. MP Materials (MP) was downgraded to sell last week as Elon Musk’s Investor Day comments raised questions about future demand for MP’s rare earths. Most Explorer stocks were steady as Polestar (PSNY) posted strong revenue growth and an ambitious sales target for 2023. This week’s recommendation is a smart way to play China’s emerging market rebound.
MP Materials (MP), a rare earths mine and processor, is down about 11% this morning.
Although it may not be evident in the negative headlines, America (and its stock market) runs on optimism. That, plus a little patience, is key for portfolio outperformance.
America’s economy has been resilient in the face of rising interest rates, pushing the 10-year Treasury to the cusp of 4%. Earnings have been pretty good but ironically, the threat of too strong an economy, or a recession, seems to be weighing on markets. Our Exscienta (EXAI) was stopped out while Centrus Energy (LEU) was up 14% yesterday after positive earnings.
Exscientia (EXAI) is down about 10% this morning.
Rare earths are critical inputs to next-generation technology, and sourcing them domestically (or at least from an ally) is a U.S. priority. These rare earth stocks stand to benefit.
Exscientia (EXAI) pulled back yesterday but is recovering this morning.