Issues
Stocks are turning distinctly more bearish in the near term as slower growth in China hits a market that was already teetering in anticipation of a more aggressive Fed.
But the selloff in the indexes doesn’t reflect all stocks. Some stocks have more downside left. Others will likely hold their own even if the market keeps falling. And still other stocks have already been oversold. These stocks should have less downside from here than the overall market, and recover much more quickly when the selling abates.
In this issue, I identify two oversold stocks in the portfolio. These are stocks that have already been crushed and sell at vastly reduced prices despite continuing strong earnings growth. While these stocks may fall further in the weeks ahead if the market gets uglier, I believe they both sell at deep discounts compared to where their prices are likely to be later in the year.
But the selloff in the indexes doesn’t reflect all stocks. Some stocks have more downside left. Others will likely hold their own even if the market keeps falling. And still other stocks have already been oversold. These stocks should have less downside from here than the overall market, and recover much more quickly when the selling abates.
In this issue, I identify two oversold stocks in the portfolio. These are stocks that have already been crushed and sell at vastly reduced prices despite continuing strong earnings growth. While these stocks may fall further in the weeks ahead if the market gets uglier, I believe they both sell at deep discounts compared to where their prices are likely to be later in the year.
Sure, the rally in the overall market may not last, but this unusual environment is still creating great opportunities in certain pockets if you know where to look. One such opportunity exists in the new and rapidly growing marijuana industry.
The growth in marijuana is undeniable.
While most companies have struggled to make a profit in the young industry, one company has been making money like crazy. It’s a marijuana farm REIT with a superior business plan that has managed to grow profits 600% over the last four years. The stock has been a phenomenal performer. But it sold off recently and appears to have just begun moving higher.
This month I also highlight a call on Global Ship Leasing (GSL), a stock that has bucked the trend and returned 28% YTD.
There are three portfolio stocks that have been upgraded to a BUY this week: U.S. Bancorp (USB), Visa Inc. (V) and One Liberty Properties (OLP). All the stocks have some momentum and strong reasons why the rally may continue.
The growth in marijuana is undeniable.
While most companies have struggled to make a profit in the young industry, one company has been making money like crazy. It’s a marijuana farm REIT with a superior business plan that has managed to grow profits 600% over the last four years. The stock has been a phenomenal performer. But it sold off recently and appears to have just begun moving higher.
This month I also highlight a call on Global Ship Leasing (GSL), a stock that has bucked the trend and returned 28% YTD.
There are three portfolio stocks that have been upgraded to a BUY this week: U.S. Bancorp (USB), Visa Inc. (V) and One Liberty Properties (OLP). All the stocks have some momentum and strong reasons why the rally may continue.
The overall market may have a challenging year as it grapples with inflation and uncertainty about the Fed tightening.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.
In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.
In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.
The S&P 500 is on the cusp of a correction, down 10%. The technology- laden NASDAQ is already well beyond a correction. Energy is the only S&P 500 sector in positive territory YTD.
The problem is inflation and the Fed raising rates to combat it. There is a realization that inflation can’t be handled seamlessly. That means we could face continued high inflation, or much slower economic growth induced by a hyperactive Fed making up for lost time. Neither scenario is good for stocks.
While the year might be difficult for the overall market, the energy and financial sectors should shine. These sectors actually like inflation and rising interest rates. While portfolio positions in those sectors have been dragged lower by the recent indiscriminate selling, I expect them to regain momentum when this selloff ends.
Two fantastic portfolio positions in energy and finance are highlighted to buy in this issue. They had momentum going into the selloff and should pick up where they left off when the selling abates.
The problem is inflation and the Fed raising rates to combat it. There is a realization that inflation can’t be handled seamlessly. That means we could face continued high inflation, or much slower economic growth induced by a hyperactive Fed making up for lost time. Neither scenario is good for stocks.
While the year might be difficult for the overall market, the energy and financial sectors should shine. These sectors actually like inflation and rising interest rates. While portfolio positions in those sectors have been dragged lower by the recent indiscriminate selling, I expect them to regain momentum when this selloff ends.
Two fantastic portfolio positions in energy and finance are highlighted to buy in this issue. They had momentum going into the selloff and should pick up where they left off when the selling abates.
Cyclical stocks have been getting clobbered over the past month amidst virus concerns. But I think the recent action is creating an opportunity.
The inflation and Fed contraction issues, which are good for energy and financial stocks, will outlast this latest virus strain. The virus will fade away before too long, but the other problems are much stickier. Certain stocks are being knocked back temporarily ahead of a very promising new year.
In this issue I highlight one of the very best financial stocks on the market. It’s has pulled back recently and is about 15% below the 52-week high, yet the company is poised for a fantastic 2022.
The inflation and Fed contraction issues, which are good for energy and financial stocks, will outlast this latest virus strain. The virus will fade away before too long, but the other problems are much stickier. Certain stocks are being knocked back temporarily ahead of a very promising new year.
In this issue I highlight one of the very best financial stocks on the market. It’s has pulled back recently and is about 15% below the 52-week high, yet the company is poised for a fantastic 2022.
This is a great time to sell covered calls.
The recent upward movement in the market increases upside speculation, and call premiums have risen. It’s a great time to take advantage of the recent surge in certain stocks to secure a high-income return. Even if the stock gets called, you are taking profits in a very high market ahead of what is likely a choppier environment.
In this issue, I highlight a covered call on the recently red-hot Qualcomm (QCOM). The stock soared 50% in a little over a month but has leveled off in recent days. It’s a great time to secure a huge call premium and lock in a huge income to go along with recent appreciation.
The recent upward movement in the market increases upside speculation, and call premiums have risen. It’s a great time to take advantage of the recent surge in certain stocks to secure a high-income return. Even if the stock gets called, you are taking profits in a very high market ahead of what is likely a choppier environment.
In this issue, I highlight a covered call on the recently red-hot Qualcomm (QCOM). The stock soared 50% in a little over a month but has leveled off in recent days. It’s a great time to secure a huge call premium and lock in a huge income to go along with recent appreciation.
You can still find sky-high yields.
Despite the recovery in the overall market, there are still lingering pockets of high yields. It reminds me of the years following the financial crisis. You could still find good stocks that paid a sky-high income relatively easily. But the situation didn’t last. Those high yields on quality stocks evaporated as investors realized the opportunity.
Some of the current high yields probably won’t last long either.
At the same time, it’s a great time for cyclical stocks. The economy is still booming. Plus, we are likely at the point in the economic cycle where such stocks tend to do best. We are likely still in the early stages of a bull market and recovery.
In this issue, I found a stock that benefits from both opportunities. It has a stratospheric 11.5% yield that likely won’t last. At the same time, the yield should be safe and growing as the company is highly cyclical.
Despite the recovery in the overall market, there are still lingering pockets of high yields. It reminds me of the years following the financial crisis. You could still find good stocks that paid a sky-high income relatively easily. But the situation didn’t last. Those high yields on quality stocks evaporated as investors realized the opportunity.
Some of the current high yields probably won’t last long either.
At the same time, it’s a great time for cyclical stocks. The economy is still booming. Plus, we are likely at the point in the economic cycle where such stocks tend to do best. We are likely still in the early stages of a bull market and recovery.
In this issue, I found a stock that benefits from both opportunities. It has a stratospheric 11.5% yield that likely won’t last. At the same time, the yield should be safe and growing as the company is highly cyclical.
Despite the recent dicey market, there are two great opportunities created by a weird interest rate move that is likely to correct itself in the months ahead.
The yield curve, defined as the difference between short- and long-term interest rates, has flattened as the benchmark 10-year Treasury rate has fallen. The rate has fallen from 1.75% in February to the current 1.31%, despite the stronger economy and persistent inflation.
I believe rates have moved far too low. Interest rates are still well below what has been defined as normal for the last decade. The 10-year rate is still well below the pre-pandemic level. Plus, the benchmark rate averaged between 2% and 3% during both the Obama and Trump Administrations.
Interest rates have fallen too far and are likely to trend higher in the months ahead. Two portfolio stocks benefit from the difference between short and long rates and have been held back by the falling rates. These stocks are likely to move higher as the situation reverses
The yield curve, defined as the difference between short- and long-term interest rates, has flattened as the benchmark 10-year Treasury rate has fallen. The rate has fallen from 1.75% in February to the current 1.31%, despite the stronger economy and persistent inflation.
I believe rates have moved far too low. Interest rates are still well below what has been defined as normal for the last decade. The 10-year rate is still well below the pre-pandemic level. Plus, the benchmark rate averaged between 2% and 3% during both the Obama and Trump Administrations.
Interest rates have fallen too far and are likely to trend higher in the months ahead. Two portfolio stocks benefit from the difference between short and long rates and have been held back by the falling rates. These stocks are likely to move higher as the situation reverses
The S&P 500 and the Nasdaq just made new all-time highs. Strong earnings and a booming economy are outweighing concerns about the delta variant, the Chinese slowdown, inflation and a Fed tapering of bond purchases.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
It’s difficult to say what narrative will be dominant after the summer. The cyclical slump could gain traction or turn around. Much will depend on the headlines, which are unpredictable. While I like the way the current portfolio is positioned, it needs more stocks with momentum that generate high call premiums.
In this issue I highlight for purchase one of the very best financial stocks on the market. Prospects are dazzling over the rest of this year. But the stock is also moving right now. It should offer a quick opportunity to ring the income register with a covered call.
It’s been a sideways summer market. Perhaps earnings will change that. But summer markets have a tendency to do whatever they were doing before investors stopped paying attention in the dog days of August.
In this issue I highlight a high-paying REIT that has been bucking the trend and moving higher in this market. It presents a timely buying opportunity that can create a call writing opportunity in a short amount of time.
Few income stocks have had consistent upward momentum in this market, but those that do generally fetch higher call premiums. The target buy is a fantastic REIT that pays a high dividend and continues to move higher. It should provide a great income opportunity in an otherwise lackluster summer market.
In this issue I highlight a high-paying REIT that has been bucking the trend and moving higher in this market. It presents a timely buying opportunity that can create a call writing opportunity in a short amount of time.
Few income stocks have had consistent upward momentum in this market, but those that do generally fetch higher call premiums. The target buy is a fantastic REIT that pays a high dividend and continues to move higher. It should provide a great income opportunity in an otherwise lackluster summer market.
Despite last week’s overreaction to the Fed, the market will likely continue sideways for a while for two reasons. One, the market indexes had to take a breather after a massive 90% move higher from the pandemic lows. Two, investors look ahead and can’t decide what will drive the market six months from now after the economy slows and comparisons get tough.
In a sideways market, income is at a premium. Income is the only game in town when stock prices aren’t rising. Dividends roll in regardless of near-term market gyrations. Covered calls greatly enhance that income.
In times like this, a portfolio geared towards high income can provide strong returns while the overall market languishes. In this issue, I highlight two new covered call opportunities that will enable you to ring the register while the market wallows.
In a sideways market, income is at a premium. Income is the only game in town when stock prices aren’t rising. Dividends roll in regardless of near-term market gyrations. Covered calls greatly enhance that income.
In times like this, a portfolio geared towards high income can provide strong returns while the overall market languishes. In this issue, I highlight two new covered call opportunities that will enable you to ring the register while the market wallows.
It looks like this relentless bull market is finally stalling out. The market isn’t correcting, or really selling off in any substantial way. It has just stopped moving higher, for now. Given the returns in the past year and recent months, the market had to take a break. That pace couldn’t last.
Stock prices may be stuck in mud for the time being, but there are some fantastic income opportunities out there. Many high-dividend stocks are still well below pre-pandemic prices and offer some of the highest yields in a decade. In this month’s issue I highlight a phenomenal stock with a sky-high yield and a price that’s trending higher.
Stock prices may be stuck in mud for the time being, but there are some fantastic income opportunities out there. Many high-dividend stocks are still well below pre-pandemic prices and offer some of the highest yields in a decade. In this month’s issue I highlight a phenomenal stock with a sky-high yield and a price that’s trending higher.
Updates
The market is starting this week higher on optimism about a “soft landing.” But the CPI inflation number for August that comes out on Wednesday could derail or support the rally.
Things seem upbeat Monday morning. Treasury Secretary Janet Yellen said on Sunday that she is “feeling very good” about avoiding a recession while still reining in prices. Of course, she called inflation “transitory” in early 2021. There were also some encouraging numbers about the Chinese economy. Also, the Fed is widely expected not to raise the Fed Funds rate later this month.
Things seem upbeat Monday morning. Treasury Secretary Janet Yellen said on Sunday that she is “feeling very good” about avoiding a recession while still reining in prices. Of course, she called inflation “transitory” in early 2021. There were also some encouraging numbers about the Chinese economy. Also, the Fed is widely expected not to raise the Fed Funds rate later this month.
Summer is over. The post Labor Day market begins this week. What can we expect?
The market has been nearly impossible to predict over the past several years. There was the pandemic crash, the recovery that began shortly after the lockdowns began, the 2022 bear market, and the surprising return to a bull market this year.
The market has been nearly impossible to predict over the past several years. There was the pandemic crash, the recovery that began shortly after the lockdowns began, the 2022 bear market, and the surprising return to a bull market this year.
The market tends to be lackluster in the late summer. But that goes double for the last week of the summer.
Unless there is a riveting headline, the overall market is likely in a holding pattern until the rubber hits the road next week after Labor Day. Sobered up investors back from vacation will take a fresh look at things after they wrap up the summer and come back from vacation. What will they see?
Unless there is a riveting headline, the overall market is likely in a holding pattern until the rubber hits the road next week after Labor Day. Sobered up investors back from vacation will take a fresh look at things after they wrap up the summer and come back from vacation. What will they see?
Earnings season is about over. And the end of the summer is upon us.
This is a weird time of year for the market. Investors tend to pay less attention because many of them are focused on trying to squeeze in the last bit of summer fun and laxness before it slips away. The market tends to do whatever it was doing before people stopped paying attention.
It was going sideways, and that is what it will likely continue to do for the next several weeks. Of course, a major headline could certainly change that. But most often these waning days of summer tend to be less eventful.
This is a weird time of year for the market. Investors tend to pay less attention because many of them are focused on trying to squeeze in the last bit of summer fun and laxness before it slips away. The market tends to do whatever it was doing before people stopped paying attention.
It was going sideways, and that is what it will likely continue to do for the next several weeks. Of course, a major headline could certainly change that. But most often these waning days of summer tend to be less eventful.
Stocks are starting the week back in business after last week’s dip over the credit downgrade. The credit downgrade doesn’t appear to be having much effect on the market at this point. Unless that changes, the market appears poised to continue to forge higher, at least for the time being.
Meanwhile, it’s still earnings season and the past couple of weeks have been busy for the portfolio. Earnings had been very kind to the portfolio two weeks ago with Digital Realty (DLR), AbbVie (ABBV), and Intel (INTC) all getting sizable boosts with better-than-expected results. But the season soured on the portfolio last week as both Qualcomm (QCOM) and Star Bulk Carriers (SBLK) laid eggs.
Meanwhile, it’s still earnings season and the past couple of weeks have been busy for the portfolio. Earnings had been very kind to the portfolio two weeks ago with Digital Realty (DLR), AbbVie (ABBV), and Intel (INTC) all getting sizable boosts with better-than-expected results. But the season soured on the portfolio last week as both Qualcomm (QCOM) and Star Bulk Carriers (SBLK) laid eggs.
The good times are here again. The S&P 500 is up over 19% YTD and is now within just 4% of the all-time high. Stocks are in a strong uptrend that began in the beginning of May and appear likely to move still higher.
Inflation is crashing. The Fed is about out of bullets. And there is no recession in sight. Things could always discombobulate down the road. But there doesn’t appear at this point to be anything ahead in the next month or so that will change the current positive narrative.
Inflation is crashing. The Fed is about out of bullets. And there is no recession in sight. Things could always discombobulate down the road. But there doesn’t appear at this point to be anything ahead in the next month or so that will change the current positive narrative.
These are confusing times in the market. It looks like a soft landing for the economy is more likely. But that’s no guarantee. We could still have a recession next year. The bull market could rage on or pull back. Instead of betting on the economic cycle, it’s a time to focus on individual stocks.
Artificial Intelligence (AI) exploded onto the market scene in a huge way in May when semiconductor company Nvidia (NVDA) blew away earnings expectations citing much higher demand for AI chips than anyone expected. It added another leg to the bull market as AI-related stocks soared.
Artificial Intelligence (AI) exploded onto the market scene in a huge way in May when semiconductor company Nvidia (NVDA) blew away earnings expectations citing much higher demand for AI chips than anyone expected. It added another leg to the bull market as AI-related stocks soared.
It’s anybody’s guess what the second half will have in store for the market. The first half surprised almost everyone with a stellar 16% gain in the S&P.
Investors are sensing a soft-landing, whereby we get past this Fed rate hiking cycle without a recession and minimal economic pain. Recent economic numbers reflect a greater likelihood of that scenario.
Anything is possible. The market could be off to the races, or it could sober up and pull back. Inflation is falling while the Fed is still making hawkish noises. It’s reasonable to assume that even if the economy isn’t slowing down yet, the Fed will continue to raise rates until it does.
Investors are sensing a soft-landing, whereby we get past this Fed rate hiking cycle without a recession and minimal economic pain. Recent economic numbers reflect a greater likelihood of that scenario.
Anything is possible. The market could be off to the races, or it could sober up and pull back. Inflation is falling while the Fed is still making hawkish noises. It’s reasonable to assume that even if the economy isn’t slowing down yet, the Fed will continue to raise rates until it does.
It has been a fabulous rally that has proven naysayers wrong. The S&P 500 is up about 15% YTD just before the midpoint. Stocks have also rallied more than 20% from the October low into a new bull market.
How much gas is left in the tank?
Inflation is falling and the Fed is almost done hiking rates. It is also looking less likely that there will be a recession this year. Investors are optimistic that we can get to the other side of this hiking cycle without too much pain.
How much gas is left in the tank?
Inflation is falling and the Fed is almost done hiking rates. It is also looking less likely that there will be a recession this year. Investors are optimistic that we can get to the other side of this hiking cycle without too much pain.
It has been a fabulous rally that has proven naysayers wrong. The S&P 500 is up about 15% YTD just before the midpoint. Stocks have also rallied more than 20% from the October low into a new bull market.
How much gas is left in the tank?
Inflation is falling and the Fed is almost done hiking rates. It is also looking less likely that there will be a recession this year. Investors are optimistic that we can get to the other side of this hiking cycle without too much pain.
How much gas is left in the tank?
Inflation is falling and the Fed is almost done hiking rates. It is also looking less likely that there will be a recession this year. Investors are optimistic that we can get to the other side of this hiking cycle without too much pain.
It’s a new bull market! The S&P 500 has rallied over 20% from the low, the technical definition of a bull market. The index is also up about 12% YTD. Are stocks topping out or are we off to the races? Despite inflation, the Fed, and increasing forecasts of recession, stocks have defied conventional wisdom and rallied strongly. That’s impressive. But this rally is incredibly thin. Ten primarily large technology company stocks are responsible for all of the index gains YTD. The other 490 stocks have collectively gone nowhere.
The economy is showing some mixed signals. But it certainly does not appear to be near a recession now. That could change. But it keeps not coming.
At the same time, the Fed is near the end of the rate hiking cycle. Sure, there’s speculation about another rate hike in the June meeting or the next one. But it is still close to the end of the hiking cycle. Inflation appears to be moderating (for now). Unless there is a big surprise with that number, the market can soon stop worrying about the Fed.
At the same time, the Fed is near the end of the rate hiking cycle. Sure, there’s speculation about another rate hike in the June meeting or the next one. But it is still close to the end of the hiking cycle. Inflation appears to be moderating (for now). Unless there is a big surprise with that number, the market can soon stop worrying about the Fed.
Alerts
The idea is to sell a covered call, meaning you already own or you just purchased V on the buy recommendation.
The first issue of Cabot Income Advisor just came out yesterday. The idea is to sell a covered call, meaning you already own or you just purchased IIPR on the buy recommendation.