Well folks, the 5-week bull run ended last week on Friday and the carnage has only continued to today with the S&P 500 receding 3.8% since hitting 4300 points 7 days ago - that said, our picks have continued to yield with our new short strategy returning big profits most notably on $BBBY (+40%) last week and $VIOT (+6%) yesterday. Read on for your daily dose of financial inspiration.
“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”
- Warren Buffet
Since the start of the pullback from the market’s long-term, 200-day moving average it’s been retracing downwards with momentum - resultantly, volatility has jumped 17% as key resource commodities such as oil are still finding a price level to settle at. Crude is currently trading just below $92/barrel and is slated for more price depreciation. While futures are unchanged in the premarket, the long-term trend will be determined by the next jobs report, inflation print and interest rate announcements - as such, September is looking like the next month for big market moves.
Long: Nvidia Corporation (NVDA-NASDAQ) | Timeline: 3 days
While some may believe that Nvidia (NVDA) is just a chip manufacturer, the truth is that the company has a highly diversified product offering. This includes a data centre that creates advanced software + hardware for multiple industries, gaming both consumer + industrial, professional visualizations, and a fast-growing automotive and robotics sector. Earnings are set to be released on Thursday after the bell, with bearish estimates already established by the street. Revenue expectations are $6.7B, a modest drop from the previous quarter’s $8.29B, while EPS expectations rest at $0.50, a stark decline from the previous quarter’s $1.36. In May of this year, the company predicted revenues of $8.1B (+-2%) for this quarter's report, signalling that the street may be far too bearish in their analysis. From a technical perspective, the company has bounced off of its 50-day MA 3 times in the past month, signalling support. The risk potential on this trade comes from the threat of the company, like many others already have, slashing guidance for the remainder of the year and 2023 due to macro headwinds.
Long: The J. M. Smucker Company (SJM-NYSE) | Timeline: 2 days
The J. M. Smucker Company (SJM), which manufactures and markets branded food and beverage products worldwide has reported better than expected earnings this morning as they’ve beaten earnings and revenue by 31.25% and 0.07%, respectively. Although headwinds from cost inflation, industry-wide supply chain challenges and the Jif® peanut butter recall, CEO Marker Smucker is very proud of his team as their earnings “reflect a strong start to the fiscal year, demonstrating [their] operational excellence and strength of strategy” (Source). Turning to the chart, the last three consecutive earnings calls for Smuckers have resulted in quite the jump over the next 2-3 trading days, and today looks to be no different. Already up 1.8% in the pre-market, bulls are ready to take charge of this stock as the MACD is well positioned and the price continues to oscillate towards key resistance in the mid $140s.
Chart of the Day - Dividend Yield by S&P 500 Sector
Energy stocks are paying more dividends than any other sector in the S&P 500 today.