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☕Two stocks I’m watching closely this week and why

Apr 08, 2024

Good morning! 👋

It’s Monday and we’re finally headed into another earnings season.

Hooyah - I hope you’re as ready as I am!

There’s a good case to be made that:

The numbers are going to be a lot stronger than people think (again); and,
The best companies will pull even farther ahead.

Doubt will continue to be your worst enemy but, as is often the case, earnings will be your best friend.

Keep it simple.

Invest in the best, ignore the rest!

Here’s my playbook

1 – Two stocks poised for great numbers

The super-savvy Stuart Varney wanted to know which two companies I’m watching most closely this week and why. I think both could be primed for nice moves, albeit for entirely different reasons.

(Watch)

2 – The US economy doesn't need the Fed to cut rates

Fed Reserve Governor Michelle Bowman said Friday that the Fed, “may need to increase the policy rate further should progress on inflation stall or even reverse.” (Read)

Puuuuleeeease!

Let’s call it like we see it.

The Fed continues to back track and, I submit, do everything but take a look in the mirror and acknowledge that its policies are as desperately flawed as its models.

History is very clear.

The US economy doesn’t need the Fed to cut rates.

World-class companies grow through thick and thin, so it makes sense to own ‘em.

Heresy, I know... but think about it as you turn off the news fawning over remarks from various officials, most of whom have never had to make payroll, never owned a business, and have no idea how real money works.

Trade Idea: Volatility is still exceptionally low; Wall Street knows individual investors are on edge. A few speculative ATM puts – a bet that a stock or index will go down – could generate some quick profits you can use to buy more shares of whatever floats your boat at discounted prices.

Longer term the path is still (plenty) higher.

3 – Newsflash Janet, China doesn’t give a rip

Yellen says US will not accept Chinese imports devasting US industries and holds out her remarks as a warning. (Read)

What China hears.

Wah, blah, bippity, blah, wah, wah.

China will increase its global economic footprint whether we like it or not and regardless of what Yellen believes she knows about how to run the place.

Here’s a chart I shared with the OBA Family in the most recent April issue along with a recommendation to capitalize on the situation.

MyPOV: The Dragon is coming to dinner – the only decision you’ve got to make as an investor is whether you want to be at the table or on the menu. Simple.

4 – KeyCorp sees Nvidia +35% to $1,200

Better late than never, I suppose. 🤦‍♂️

35% upside implied.

Also via Marketbeat.com:

Deutsche Bank Aktiengesellschaft upped their target price on shares of NVIDIA from $720.00 to $850.00 and gave the stock a "hold" rating in a report on Wednesday, March 20th.
Wedbush reiterated an "outperform" rating and set a $1,000.00 price objective on shares of NVIDIA in a research report on Tuesday, March 19th.
Mizuho upped their target price on NVIDIA from $850.00 to $1,000.00 and gave the company a "buy" rating in a report on Thursday, March 7th.
Susquehanna reiterated a "positive" rating and set a $1,050.00 price target on shares of NVIDIA in a report on Thursday.
Craig Hallum upped their price objective on shares of NVIDIA from $700.00 to $850.00 and gave the company a "buy" rating in a report on Thursday, February 22nd.
Four research analysts have rated the stock with a hold rating, thirty-seven have given a buy rating and one has issued a strong buy rating to the company's stock.
Based on data from MarketBeat.com, NVIDIA presently has an average rating of "Moderate Buy" and a consensus target price of $911.18.

Keith’s Investing Tip: Sell side analysts tend to move in packs, and usually late at that. So, forget about the price targets themselves and concentrate on what the herd is telling you... money wants in.

5 – Dimon on AI: 400+ use cases

JPMorgan CEO Jamie Dimon’s newest shareholder letter makes the case for AI very much as I have for several years now... it is on par with the invention of electricity, the steam engine and more. (Read)

While he stopped short of calling it the greatest investing theme in recorded human history like I have, Dimon outlines 400+ use cases for AI within the bank alone.

400+!

I think JPM could take out previous highs fairly quickly if the Fed doesn’t throw a spanner in things.