Thursday, March 3, 2022

💡This “Tax” Increase May Cause the Next Recession💡

Good morning. History doesn't repeat itself, but it does sometimes rhyme. That's why the oil...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. History doesn't repeat itself, but it does sometimes rhyme. That's why the oil market is a key one to watch now. While headlines note that oil is back over $100 per barrel again for the first time since 2014, the energy commodity didn't first hit that level until early 2008.

High oil prices act as a tax, and one that is particularly regressive for lower-income earners. The higher prices go and the longer they stay there, the less capital is available for consumption in other areas. While high oil prices didn't lead to the housing bubble bursting in 2008, it certainly did add some fuel to the fire, and that part of history may rhyme this year.

Traders should remain cautious on any energy-intensive sector, and continue to back commodity trades right now. And on any sign of a recession in part from high oil prices, it may be time to stick to defensive trades and avoid leveraged trades.

Now here's the rest of the news:

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MARKETS
DOW 33,891.35 +1.79%
S&P 4,386.54 +1.86%
NASDAQ 13,752.02 +1.62%
*As of market close
Stocks rallied on Wednesday, reversing Tuesday's drop.
Oil rallied another 7.7 percent, closing at $111.35 per barrel.
Gold dropped 0.8 percent, going for $1,929 per ounce.
Cryptocurrencies dipped, with Bitcoin at $43,795 at the market close.

Today's TOP TIPS
For the Best Profits Today, Follow the Bargain Shoppers
Economic uncertainty is high. That's causing consumers of all income levels to cut back and take a wait-and-see attitude on spending, which is now growing more slowly than the rate of inflation. During periods of uncertainty, companies that offer the best bargain prices tend to gain market share—and their stocks perform well.

That appears to be the case today with a number of companies across a few different industries.

» FULL STORY

Insider Trading Report: Universal Insurance Holdings (UVE)
Stephen Donaghy, CEO at Universal Insurance Holdings (UVE), recently added 10,000 shares to his holdings. The buy increased his stake by 0.04 percent, and came to a total cost of $311,000.

This marks the first insider buy at the company since November 2020. A few insider sales occurred in the last year, and going back to 2019 and 2020, company insiders were exclusively buyers of shares, even at far higher prices than today.

» FULL STORY

Unusual Options Activity: Kinross Gold Corp (KGC)
Shares of gold mining operator Kinross Gold Corp (KGC) are near a 52-week low even as gold prices have started to heat up. One trader sees the potential for a big move higher in the coming months.

That's based on the July $6 calls. With 133 days until expiration, 5,825 contracts traded compared to a prior open interest of 146, for a 40-fold jump in volume on the trade. The buyer of the calls paid $0.34 to make the trade.

» FULL STORY

IN OTHER NEWS
Powell Hints at Quarter Point Rate Hike This Month

Federal Reserve Chairman Jerome Powell stated that the Fed was moving towards a quarter point increase in interest rates starting this month. Many had expected a larger increase to kick off a rate hike cycle, citing inflation at 42-year highs, although those expectations have moderated since Russia invaded Ukraine.
Job Data Shows Big Beat for February

Based on the latest ADP employment report, American businesses added 475,000 jobs in February. That's about 90,000 higher than expected, and a big reversal following January's surprisingly large drop in jobs. Prior months are also starting to be revised higher, indicating that the labor market is still tight.
Oil Continues Higher as OPEC Holds Production Steady

Russia's invasion of Ukraine and a tighter-than-expected inventory levels have helped crude oil prices continue higher. OPEC is holding steady on its current production levels as well, adding to higher prices, as many expected the cartel to accelerate its plans to gradually expand production.
Netflix Makes Acquisition in Gaming Market

Streaming service Netflix (NFLX) is expanding into the video game market. The company has announced the acquisition of Finland-based Next Games for $72 million. The game publisher already produces content for a number of intellectual properties, including The Walking Dead and Stranger Things.
Ford to Split EV Division from Traditional Automobiles

Ford Motors (F) has announced that it is reorganizing its business, allowing its electric vehicle (EV) division to act independently from the legacy gas-engine business. Both divisions will remain in-house, but have separate leadership and names, as well as separate financials.

S&P 500 MOVERS
TOP
EPAM 17.551%
LVS  10.422%
PARA 10.369%
HPE 9.961%
WYNN 9.187%
BOTTOM
ENPH 3.96%
CHTR 3.941%
SEDG 3.228%
XRAY 3.035%
TWTR 1.969%

Quote of the Day
This dramatic dislocation is due to a flight to safety where U.S. production is viewed as more reliable than other global sources. However, it is unlikely to persist after the Ukraine situation stabilizes.
- Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, on the reason why oil spiked to over $100 per barrel in the US this week, a level last seen more than seven years ago, and why the price will likely trend down when geopolitical tensions end.

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