And just like that, the summer rally fizzled out… I had anticipated that late August would give way to a super volatile fall, with August seeing $95 billion a month in tightening.
The Nasdaq closed down 2% on Friday, and as I write this premarket, it's down another 1.5%. Why? With Inflation having shown possible signs of peaking and some slow down, rates are still going higher with the two-year Treasuries near 3.25%, and the 10-year near 3%.
Wall Street Look Ahead: The Week’s Economic Numbers That Matter
Gross domestic product second-quarter estimate: Thursday, Aug. 25 — The spin doctors in government and banking want us to believe we’re not in a recession, and they’re desperate to maintain that point into the midterm elections. On some level, they might be right as it’s still not terrible in every facet of the economy — YET!
But the most classic definition of recession is two consecutive quarters of declining GDP. We already have that… are we going to have a third?
But I’m proudly NOT an economist, nor do I play one on TV... I’ll leave the useless semantics debate to people who love to live in the gray zone. My zone is black and white… or green and red, I should say!
So how do we make money?
Here’s my lean… “Expert economists” anticipate a -0.9% GDP number. I always start by asking myself what would be the big surprise? A surprise here would be a decent number, so not as negative to maybe even flat, or zero growth. That would be a huge rally point for economic growth cases, specifically commodities. Any selling in oil stocks early in the week should be bought into that number for that specific case.
Some Earnings we need to pay attention to
Dollar Tree Inc. (Nasdaq: DLTR) earnings on Aug. 25 — Dollar Tree is a stock I like in a slowing economy. They have a business model that works well as consumers hunt for bargains.
I like this stock to go higher, and here’s why…
Most retail has been hurt by margin pressures, inventory write-offs and transportation cost increases vis-a-vis gas prices. The market knows this and has priced it in.
What the market doesn’t yet know is revenue (the top line), they’re looking for $6.65 to $6.79 billion, and a beat there should see the stock ramp.
The implied one-day move is 8.69%, but last quarter the stock rose by 23.45% the day after!
Remember to visit JOT on Friday for a recap of the week to see how it all played out!
Joy of the Trade
Downgrade a Stock… to Go LONG?
Have you ever noticed after a stock has been down for 30 days… 60 days… shoot, even 90 days…
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