Tuesday, May 9, 2023

🥇Why Last Year’s Winning Asset May Continue to Win This Year…

Good morning. While most assets have largely moved higher since the start of the year, they're s...
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. While most assets have largely moved higher since the start of the year, they're still well off the market's all-time highs set in early 2022. One exception is gold. The metal last hit all-time highs in U.S. dollars in mid-2020, amid fears that all the money printing during the pandemic would lead to inflation.

While that proved true, gold lost some of its luster. Today, it's moving higher again, and has already hit all-time highs in other currencies. One reason may be robust central bank demand. The first quarter of 2023 saw central banks buy 228 tons of gold, a 176 percent increase compared to last year.

As part of a move away from the dollar, gold may see further moves higher in the months ahead. That may make now an opportune time to go long on gold mining stocks, which tend to move higher than the metal on the way up. But beware – if gold drops, mining stocks tend to perform worse than the metal itself.

Now here's the rest of the news:

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MARKETS
DOW 33,618.69 -0.17%
S&P 4,138.12 +0.05%
NASDAQ 12,256.92 +0.18%
*As of market close
Stocks traded mixed on Monday, largely unchanged after Friday's big rally.
Oil rose 2.1 percent, closing at $72.82 per barrel.
Gold rose 0.2 percent, ending the day at $2,028 per ounce.
Cryptocurrencies dropped, with Bitcoin at $27,418 at the stock market close.

Today's TOP TIPS
Slow and Steady Companies Can Deliver Great Long-Term Results
While traders are often looking for a quick trade, many so-called investors are often looking for a stock that can move higher quickly. By focusing instead on companies that can deliver steady, long-term growth, however, they may fare better than getting on the wrong side of a growth story that goes bad.

These long-term plays can often by found by being household names, which may indicate a strong brand. Or they may be dividend payers. Often, they're both.

» FULL STORY

Insider Trading Report: Keurig Dr Pepper (KDP)
A cluster of insiders picked up shares of Keurig Dr Pepper (KDP) last week. That includes the company's CFO, who bought 5,074 shares at a cost of $165,511.

And the firm's Chief Supply Chain Officer bought 12,000 shares, paying just under $394,000. The company's R&D Officer bought 8,561 shares at a cost of $276,948. And finally, the company's General Council topped them all with a 13,957 share buy costing $458,612.

» FULL STORY

Unusual Options Activity: StoneCo (STNE)
Financial technology software company StoneCo (STNE) is up about 50 percent over the past year. However, one trader sees the potential for a big selloff by the end of the year.

That's based on the January 2024 $8 puts. With 255 days until expiration, 10,027 contracts traded compared to a prior open interest of 101, for a 99-fold jump in volume on the trade. The buyer of the puts paid $0.58 to make the bearish bet.

» FULL STORY

IN OTHER NEWS
Treasury Officials Continue to Warn on Debt Ceiling

Treasury officials have continued to warn the Biden Administration and Congress about the upcoming debt ceiling faced by the federal government. Failure to act could lead to economic chaos such as soaring interest rates and increased uncertainty for business investments, and could occur as early as June.
Backlash Rises Against Green Energy Spending

Although the U.S. government has dedicated as much as $3 trillion for spending on green energy products over the next decade, businesses and landowners are increasingly against the spending projects. That's due to rising costs involved, and the impact from these projects in increasingly populated areas.
PacWest Cuts Dividend

Regional banks soared on Monday, as PacWest (PACW) cut its dividend to just a penny per share from 25 cents quarterly, citing a need to raise capital amid the current banking crisis. The bank notes that despite the cut, it remains fundamentally sound. Shares jumped higher on the news, continuing a rally from Friday.
Qualcomm to Acquire Autotalks

Wireless communications chip company Qualcomm (QCOM) is making a long-term bet on the growth of smarter cars. The company has announced that it's acquiring Autotalks, an automotive safety chip startup company, in a deal valued between $350 and $400 million. Autotalks was founded in 2009 and has raised $110 million in funding so far.
Bitcoin Drops After Binance Pauses Withdrawals

Bitcoin prices tumbled over the weekend, as high volume on the network led to a number of slowdowns. Crypto exchange Binance even paused withdrawals on the platform twice due to the large volume of pending transactions. One Bitcoin block even had higher transaction fees than the reward payout, a situation that last occurred in 2017.

S&P 500 MOVERS
TOP
VTRS  6.977%
AMD  5.822%
CCL 5.245%
WBD 4.112%
PGR 4.053%
BOTTOM
CTLT 25.77%
TSN 17.253%
AES 4.588%
MRNA 4.003%
EPAM 3.86%

Quote of the Day
When the whole news cycle started, it was sort-of explained away … as a unique circumstance for certain institutions. The reality is that liquidity is a universal challenge. The issue originally was that deposit flight was occurring. … But now that the pressure is no longer necessarily deposit flight. It's this mark to market of the securities on all their books. So I don't think that this news cycle isn't necessarily over. … I also don't think it dies of natural causes in the sense [that] it heats up and then just kind of cools down with no effect.
- Liz Young, head of investment strategy at SoFi, on last week's market selloff on banking fears, which reversed on Friday as banking stocks soared higher… and why this trend may occur again in the coming weeks.

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