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A key theme of the Explorer is that there is always a bull market somewhere in the world. Today we offer a quick update on two – nuclear energy and electric vehicles.

All in all, the track record of nuclear energy is very good, especially when compared with the effects from comparable forms of energy.

Last week’s recommendation, Virgin Galactic (SPCE), took off like a rocket and this week we go underground to recommend a premier global company that provides the backbone for future-oriented technologies such as green energy and electric vehicles.

Looking at the big picture impacting global stocks, U.S.-China haggling continues but the NAFTA redo looks like a done deal as we head into the end-of-year rush. As a result, our Emerging Markets Timer (EEM) moved into a stronger bullish position, putting some distance between its 25- and 50-day averages as it moves back towards 44.

JPMorgan (JPM) is due to report results Friday, kicking off bank earnings season. Lately, the market seems to be more focused on earnings than Fed interest rates, and this is a good thing.

As markets move towards the “Great Rebalance”, looking to diversify portfolios with different asset classes and international stocks, the Explorer and I are headed to Europe, Asia, and Latin America during the next year. But today, stick to the U.S. and add a very familiar face to the portfolio.

The independence of Fed Chair Jerome Powell’s position is important, and uncertainty over his role is impacting market sentiment. Dynamism and stability is America’s golden goose. Stay a bit on the defensive and conservative and keep adding some international stocks through the summer.

Data showed consumer inflation keeping pressure on the 30-year bond’s yield which touched 5% for the first time since early June. And in Japan, the trend is the same, with rising government bond interest rates raising the costs of paying interest on its debt equal to 250% of its GDP.

Small caps traded slightly lower the first two sessions of this holiday-shortened week while the S&P 500 and Nasdaq wobbled a bit but enjoyed a bigger pop than small caps today.

Nothing high level that’s a huge priority at the moment, other than that today we saw a significant “risk on” rally as Nvidia’s (NVDA) monster quarter restoked the AI enthusiasm flame that was beginning to dim earlier in the week.

Given all the earnings reports, and another due up early tomorrow (DCBO) I’m jumping right into our stocks for short and sweet updates.

We are all trying to digest the substance of “Liberation Day” and better understand what lasting impact it will have on global trade, the market, stocks that we own and those we are considering buying.

Market volatility remains high, and the good news is that since the bottom three weeks ago, most of the volatility has been to the upside. But don’t get complacent; conditions remain ripe for a substantial pullback as the market works to raise the fear level among investors.
In the meantime, the action of the best growth stocks remains impressive, and one of the leaders, with a great story about internet security, is today’s recommendation.


As for the rest of the portfolio, it’s acting well (with a couple of very strong stocks in the mix), and thus I have no changes today.



Full details in the issue.

With growth stocks suffering, value and income are at a premium as we head into 2022. This emerging markets ETF provides both.

It was another good week for small caps, and the S&P 600 Small Cap Index keeps grinding higher. The 1% gain over the past week has the index well above its moving average lines and just slightly behind large caps in terms of year-to-date performance.

The market rebound continues as the Nasdaq 100 (QQQ) is now in positive territory for 2020 and the S&P 500 is up 32% from its March 23 lows. The Fed continues to insist it will accommodate any liquidity concerns and is now even investing in corporate debt. Japan’s central bank is going so far as to purchase Japan equity ETFs. Today, we follow up last week’s focus on big tech and big data with a cybersecurity theme and two new investment ideas.

On the surface, the economic numbers still look pretty good. Although unemployment edged up to 4.2% from 4.1% last month, the number is still low. Jobless claims are down; jobs added, up. Manufacturing looks good, but housing continues to be weak, due to sticky prices and high interest rates.

But the good economic news is on pause, due to tariffs. Already, we’ve seen the 30-year mortgage rate rise to 6.85%, and economists are back to predicting a recession, based on rising business and consumer costs related to the tariffs—which are not yet reflected in the economic stats.

Europe’s stock market has underperformed the U.S. by the most in almost three decades.

While the S&P 500 index is up about 25% so far this year to record highs, Europe’s benchmark Stoxx 600 is only up 5%. That underperformance in returns is the biggest since 1995, according to Bloomberg. The other side of the coin is that the S&P 500 is now trading at 22.5 times forward earnings and is at a record high 70% premium to the Stoxx 600. The European Union (EU) bloc is the world’s third-largest economy, with a market of 450 million consumers, and controls the world’s second-most-used currency, the euro.

So today, we go to Europe (literally!) to add a new stock to the Explorer portfolio that looks poised to outperform.

China’s benchmark CSI 300 index has surged 25% in the five days following Beijing’s stimulus measures to unleash its economy and financial markets. This has led to some catch-up growth for Explorer stock and fund recommendations.

The action was not limited to just Chinese stocks but also stocks looking to China for growth. I mentioned commodities last week, but another winner was the luxury business.

U.S. stocks have stabilized over the last few days as investors keep confidence in markets despite the Omicron variant, concern over inflation, and mixed economic data. Today we have two upgrades and a new recommendation from a country with an emerging and vibrant fintech culture supported by its government. The standout stock this week in the Explorer recommendations is Marvell Technology Group (MRVL), which jumped from 71 to 91 after the company recently reported that adjusted earnings soared 72% on a 61% increase in sales.

Markets remain on edge after Monday’s big selloff, Tuesday’s recovery, and yesterday’s down day. Some disruptive Explorer stocks were hit rather hard leading to Nio (NIO) being removed from the recommended list today while Super Micro (SMCI) is upgraded to a buy.

On Monday, trading in 401(k)s was more than eight times the daily average, the highest since 2020. My guess is that most of this activity was selling rather than buying.

This week we review earnings from one of our recommended companies and provide updates on three other recommended companies. We share some thoughts on why what produced the remarkable bull market over the past decade and longer may not lead to investing success over the next 5-8 years.

Enovix (ENVX) Up On Q1 Results and Development Agreement, Weave Communications (WEAV) Dips After Q1 Report

“You must dare to be independent. Contrarian impulses are usually better. They are always better in major bubbles and busts.” -Jeremy Grantham

To begin, please note that since it is down about 20% over the last month, I’m moving Grayscale Bitcoin Trust (GBTC) to Sell. This could bounce back but the selling pressure is steady.

The story remains mostly the same in the market as it has for the past few weeks: The intermediate-term trend for nearly all major indexes and the vast majority of individual stocks is pointed down. That said, there also are a decent number of stocks holding up fairly well—and with earnings season starting in a major way this week, the potential is there for some leadership to develop if we see some strong upside gaps following reports. We’re all for it happening, but overall it’s best to remain cautious as the market attempts to turn the corner. Once again, we’ll leave our Market Monitor at a level 5.

This week’s list has a wide array of good-looking names, though for our Top Pick we’re going with a liquid leader that, while not in the first inning of its run, acts like it wants to go higher.