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December 5, 2023

 

Welcome to today's edition of Traders on Trend, where the sky isn't just the limit - it seems to be the destination of choice! In a twist that might raise a few eyebrows, private jet demand is soaring, quite literally, despite the growing buzz about climate concerns.

It seems like while some are measuring their carbon footprints, others are more interested in the size of their jet's cabin. Talk about flying high in more ways than one!

 

Before we jet off into today's insights, a special shoutout to our sponsor, Charles Payne, for fueling our financial flight today. Let's fly through this high-altitude market trend together.


Now let's get on to today's actionable market updates and the latest Market Moving News (see below).

 

Today's Market Mood: EXTREMELY BULLISH!

 

Daily Market Roundup and Strategy

 

Recap: 

 

Stocks Take a Breather: After a star-studded performance last week, stocks took a modest step back. With real estate taking the lead and tech and communication sectors trailing, it seems like the market's taking a quick coffee break. Small-cap stocks, however, decided to keep the party going, showing an impressive uptick.

 

Eye on the Labor Market: This week, it's all about jobs, jobs, jobs! The October JOLTS report is up next, and all eyes are on whether job openings continue their downward trend. Despite the recent dips, job openings are still flexing their muscles, well above the long-term average. The rest of the week promises more labor-market fireworks with the ADP report and nonfarm payrolls.

 

November's Rally Roundup: November was not just a month, it was a movement! The S&P 500 soared nearly 20% year-to-date, with small-caps and bonds joining the celebration. This broad-based rally was like a financial symphony, perfectly orchestrated by declining yields. As we look towards 2024, diversification might just be the word of the year.

 

Strategy:

 

Today's market movement seems more like strategic positioning than a sign of concern. With the tech sector taking a breather, it might just be a case of investors cashing in on recent gains.

 

The labor market continues to be the economy's backbone, and this week's data could provide clues on whether this strength will persist into the new year.

 

November's rally suggests a shift in market dynamics. With a wider range of assets performing well, it might be time to think about spreading those investment eggs across different baskets.

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Chart of the Day

NVDA: From Erections Come Corrections

 

NVIDIA's recent trajectory looks like it's been sipping a bit too much of the investor optimism cocktail. As we look at the chart, it's hard not to notice the twin peaks formed — a classic case of what goes up when fueled by the exuberance of Fear Of Missing Out (FOMO) must take a breather eventually. Consider this a gentle nudge for the bulls out there to perhaps pocket some of those gains before the market sobers up.

 

Remember, sometimes the market rewards the bold, but it's no place for playing a game of financial chicken. With NVIDIA's P/E ratio sitting at a lofty 241.87 and an Earnings Yield that would make a penny look like a fortune, one might want to tread with a bit of caution.

 

After all, in the dance of digits and decimals, it's better to leave the party with your wallet full rather than your head spinning from the market's dizzying moves.

 

Market Mischief

 
In Market Mischief today: Why did the stock market investor break up with his calculator? Because he felt he was just being used to solve problems!
 
Meanwhile, in reality, investors are tapping away on their calculators, as unpredictable markets make for some serious number-crunching sessions. 🧮💔📊
 
 

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Market Moving News

 

The S&P 500 took a moment to catch its breath, dipping by 0.5%, sparking whispers on whether it can keep up its energy as we march toward the year's end.

 

Airline Industry Shakeup: Alaska Air Group (ALK) took a 14% dive, revealing plans to acquire Hawaiian Airlines (HA) for $1.9 billion. Alaska Air is ready to shell out $18 per share, along with tackling a hefty $900 million debt. Meanwhile, Hawaiian Air's parent, Hawaiian Holdings, skyrocketed by 193% on this news.

 

Carvana's Comeback: Carvana (CVNA) saw a 14% uplift after JPMorgan shifted its view from "underweight" to "neutral." The online car retailer's recent strides in cost-cutting and productivity improvements caught the eye of analysts.

 

GM in the Fast Lane: General Motors (GM) enjoyed a 2.2% increase. Thanks to Mizuho analyst Vijay Rakesh's upgrade from "neutral" to "buy," citing various positive factors, including the resolution of the United Auto Workers strike.

 

Lululemon's Slight Stumble: Lululemon Athletica (LULU) dipped by 1.3%. Wells Fargo suggested easing up on Lululemon investments, downgrading the stock from "overweight" to "equal weight" following its robust performance this year.

 

Spotify's Strategic Shift: Spotify Technology (SPOT) surged 7.5% after announcing a 17% workforce reduction, hinting at significant internal restructuring.

 

Uber Joins the Elite: Uber Technologies (UBER) rose 2.2% as it gears up to join the prestigious S&P 500, alongside Builders FirstSource (BLDR) and Jabil (JBL).

 

United Rentals Faces Headwinds: United Rentals (URI) dropped 2.3% after KeyBanc's downgrade from "overweight" to "sector weight," casting doubt on future nonresidential construction trends.

 

Virgin Galactic's Rocky Orbit: Virgin Galactic Holdings (SPCE) plummeted nearly 18% following reports of British billionaire Richard Branson's decision to halt further investment in the space travel venture.

 

Earnings Watch: Keep an eye on Toll Brothers (TOL), Broadcom (AVGO), Dollar General Corp. (DG), Lululemon, and Darden Restaurants (DRI) for their upcoming earnings reports this week.

 

Jobs Data - The Market Compass: This week's job numbers are crucial. Following a series of mild inflation reports, the market is leaning towards a potential Fed rate cut in early 2024. Yet, strong jobs data could upend this, driving bond yields up and reshaping Fed rate expectations. The JOLTS data release on Tuesday is also pivotal, especially the "quit" rate, which offers insight into workforce confidence.

 

Fed Rate Decisions on the Horizon: Futures traders are almost certain the FOMC will maintain the benchmark funds rate in its upcoming December meeting, with a 53% chance of a rate cut by March, as per the CME FedWatch Tool.

 

 

Random Musings and the Time Machine

 

Did you know?

 

In a striking contrast, the lush green hue of bofedales boldly stands out against their yellow surroundings.

 

Football seems to be a family affair for Anthony Bennett, whose father, uncle, cousin, and brother all played the game professionally.

 

Che Guevara narrowly escaped a grim fate in the Democratic Republic of the Congo during Operation South.

 

Lore Maria Peschel-Gutzeit once made waves with her advocacy for a "right to vote from birth."

 

Defying the norm, a train at Miami International Airport takes an elevated route along the roof!

 

Ding Xuesong distinguished herself as the first female ambassador of the People's Republic of China.

 

Louise Franklin unexpectedly stepped into a starring role in 1945's Pillow to Post, replacing Dorothy Dandridge due to an injury from a car accident.

 

History sniffing, believe it or not, has been a tactic to monitor Papa John's customers.

 

On this day in history, December 5:

 

1757: The Seven Years' War witnessed a notable victory by Prussian troops under Frederick the Great over the Austrians at the Battle of Leuthen.

 

1807: During the Napoleonic Wars, British ships initiated a raid on Griessie following a Dutch captain's refusal to surrender.

 

1918: Zagreb became a battleground as National Guards and Sokol volunteers clashed with regiments of the Home Guard and former Common Army.

 

1933: The U.S. bid adieu to Prohibition as the Twenty-first Amendment was ratified, repealing the Eighteenth Amendment and reinstating the legal enjoyment of alcoholic beverages.

 

1958: The UK celebrated the opening of its first motorway, the Preston By-pass, paving the way for modern transportation.

 

 

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