Capitol Hill’s most hated stock could make you rich if you buy it
Aug 10, 2021Good morning!
Futures were mixed this morning when I took to the air for an early appearance with the savvy Maria Bartiromo on Fox Business Network for the “Word on Wall Street.” Then, fell slightly after the ADP report. This is normal behaviour any time the markets are flirting with new highs, but especially now with Delta-variant fears rising and complicated geopolitics.
Here’s my playbook.
1 – Jamie Dimon doesn’t want to buy 10-year bonds unless he’s forced to
JPMorgan CEO Jamie Dimon doesn’t want to buy bonds any more than I do at the moment according to remarks he made during an interview with Maria Bartiromo.
Rates are so low and the Fed is so involved that it’ll be a one way trip right into the dust bin for anybody who buys bonds at these levels. This is because bond prices fall as rates rise and we all know that’s coming when the Fed ultimately makes a move.
Normally rates would be a lot higher in a growing economy. The fact that they’re not points out a major disconnect between the real economy and the financially engineered one.
Maria asked me for my take on Dimon’s remarks earlier today.
2 – The real risk in the upcoming jobs reports isn’t the numbers
Wall Street is waiting with bated breath for this Friday’s jobs report. Analysts are fighting over this number or that. Thing is … the numbers do NOT matter.
Perception does.
It’s a classic “Keynesian Beauty Contest.”
There could be a short, sharp selloff if traders think the number is strong enough to make the Fed move earlier. A bad number, conversely, means more Fed Follies that will, in turn, keep the rally on track.
I’m leaning towards the latter based on this mornings ADP numbers which came in at 330,000 versus 653,000 expected because they are frequently a preview of the national BLS numbers due Friday.
Having a few put options on hand or a small slice of your money in an inverse fund makes sense. Stay away from the leveraged stuff unless you have the requisite risk management skills.
Having ‘em will help you stay in the fight!
3 – Amazon “under attack” and here’s what you should do about it
The super savvy Stuart Varney doesn’t hold back and that’s one of the things I love about him. You will know exactly what he’s thinking and, importantly, why. Yesterday he noted that Amazon was “under attack” by socialists like AOC and Elizabeth Warren who are trying to take down the tech giant.
I agree.
What the left and anti-business proponents fail to grasp though is that any breakup will unlock even more value for shareholders. Having at least a few shares tucked away somewhere makes tremendous sense to me. Even just one will do it.
Shares are well below 52-week highs.
Brokerage fees are near zero now and there are fractional shares available which makes it easier than ever to buy “expensive” stocks you couldn’t otherwise touch.
4 –J&J vaccine recipients can get supplemental Pfizer or Moderna dose in SFO
I said “gimme two of everything” in reference to which vaccine I wanted a year ago and suggested that mixing and matching may be required as Covid-19 mutates. Physicians are apparently now increasingly in agreement which is why the San Francisco Department of Public Health and Zuckerberg San Francisco General Hospital recently said they’re allowing patients who received the J&J vaccine to receive a supplemental dose of mRNA based vaccines from Pfizer and Moderna.
My money’s still on Pfizer.
5 – GM skids despite blowout earnings – here’s why
General Motors reported a beat on profits this morning and raised full year guidance to a midpoint of $12.5 billion. Problem is that Wall Street thinks the company is good for $14 billion. No surprise shares fell in overnight markets, then bounced back.
I’d rather own Ford and have a few speculative call options in play.
Bottom Line
The real danger facing most investors is one they don’t see coming.
Contrary to what many think, there’s no shortage of profit potential, only a shortage of people thinking big enough.
Grab your share or somebody else will.
You got this – I promise!
Make it a GREAT day,
Keith
P.s. It's issue week, and you know what that means! I'm super excited to share the August issue of One Bar Ahead™ with subscribers this Friday. This month, we've got two stellar stocks that can protect profits even with accelerating inflation, a deep dive into a new trillion-dollar industry we're calling "DaaS" (Diagnosis as a Service), and more!
