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Get ready, Trendsters! The market is throwing us a major plot twist – and it's not what you expect. Forget the flashy tech giants; the real action is happening in the industrial sector.
Analysts predict this unsung hero will outpace the S&P 500 in both sales and earnings growth through 2026. We're diving deep into what's driving this surprising shift, revealing 14 stocks with serious profit potential.
Plus, our Chart of the Day suggests META might be making a comeback – a possible double bottom could mean massive gains are on the horizon. Don't miss our expert analysis! We've also got your daily dose of Market Moving News, to keep you ahead of the game, and a few random tidbits of knowledge to make your trading day a little more fun. |
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The Magnificent Seven Stumble as Industrials Steal the Spotlight |
Last week's market performance was a tale of two stories. While the overall market enjoyed a broad-based rally on Friday, thanks to robust earnings and easing inflation fears, the "Magnificent Seven" tech giants lost some of their luster. These mega-cap stocks, which have largely propelled market gains in recent times, faced a reality check as investors sought opportunities in other sectors, particularly small-caps. The mixed earnings from Alphabet and Tesla further fueled this rotation, contributing to a midweek dip that saw the Nasdaq experience its sharpest decline since October. However, the market showed resilience, bouncing back by Friday to end the week on a positive note. This rebound, particularly strong among industrial stocks like 3M, could be a sign that investors are seeking value and growth potential beyond the tech giants.
Notably, the Personal Consumption Expenditures (PCE) index – a key inflation gauge closely watched by the Federal Reserve – remained relatively tame, reinforcing expectations of an interest rate cut in the near future. Key Numbers: S&P 500: Up 1.1% to 5,459.10 Dow Jones Industrial Average: Up 1.6% to 40,589.34 Nasdaq Composite: Up 1.0% to 17,357.88 10-Year Treasury Yield: Down to 4.197% Cboe Volatility Index (VIX): Down 10% to 16.56 Looking Ahead:
Next week will be a crucial test for the market, with the Fed meeting and July payrolls data set to release. The market's reaction to these events could provide further clues about the trajectory of interest rates and the overall economic outlook. Strategies to Consider: -
Diversify: Consider broadening your portfolio beyond the Magnificent Seven to include stocks in other sectors, such as industrials, which are showing strong growth potential.
- Monitor Volatility: Be prepared for potential volatility as the market digests economic data and Fed announcements.
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Focus on Fundamentals: Look for companies with solid earnings, strong balance sheets, and promising growth prospects.
The changing dynamics of the market present both challenges and opportunities. By staying informed and adjusting your strategies accordingly, you can position yourself for success in this evolving landscape. |
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When the Magnificent Seven Stumble, the Little Guys Dance |
Looks like the "Magnificent Seven" tech giants might need to invest in some better dancing shoes! Their recent earnings stumbles had investors doing the jitterbug, but guess who was busting out the smooth moves? Small-cap stocks! 💃🕺
While the big guys were tripping over their own feet, the nimble small caps were showing off their fancy footwork, outperforming the market and reminding us that diversity is key on the dance floor of Wall Street.
So, who's leading this small-cap conga line? We're seeing a lot of hip shaking from sectors like industrials and materials, with a few surprise guests from energy and financials joining the fun.
This just goes to show, Trendsters, that even when the headliners miss a step, the underdogs can steal the show. Keep your eyes peeled for those lesser-known companies with the potential to pirouette their way to the top of the charts. And remember, a well-diversified portfolio is like a well-choreographed dance routine – it's all about balance and rhythm. |
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META: Déjà Vu All Over Again |
History has a funny way of repeating itself, especially in the stock market. Meta Platforms (META) is currently showcasing a classic double bottom pattern that could be signaling a substantial rise. If you missed the November 4, 2022 market bottom, take note: yesterday's low mirrors the double bottom from October 26, 2023.
That previous low triggered the second bullish leg of an upward channel, which peaked on April 8, 2024, with a remarkable +95.14% increase. This impressive rise is identical to the earlier bullish leg from February 24, 2023, to July 28, 2023.
What does this mean for investors? This pattern suggests that META might be gearing up for another significant rally. With a technical target of $800.00, reflecting the previous 95.14% gains, this could be an optimal buy opportunity on a long-term basis. As the market often repeats its past moves, keeping an eye on META's performance could be highly rewarding. Bottom line: If you believe in patterns and historical data, META's current setup looks promising for a potential bullish breakout. |
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Industrials Flex Their Muscles: The Unassuming Sector Poised for a Power Play |
As the Magnificent Seven show signs of fatigue, a new contender is stepping into the spotlight. The industrial sector, often overshadowed by flashy tech giants, is poised to become a market leader, with analysts projecting impressive growth in sales and earnings through 2026.
This unexpected twist comes as investors re-evaluate their portfolios amidst tech's recent stumble. The industrial sector, known for its resilience and diverse offerings, is suddenly looking rather attractive. What's Behind the Industrial Surge?
Several key factors are driving this resurgence: Fed's Policy Pivot: The anticipated easing of interest rates by the Federal Reserve is set to revitalize the industrial sector. Lower borrowing costs will incentivize investment in infrastructure, construction, and manufacturing, providing a powerful catalyst for growth. Post-Pandemic Rebound: The world is finally emerging from the pandemic's shadow, and pent-up demand is fueling a surge in orders for industrial goods and services. This, coupled with increased government spending on infrastructure, is creating a perfect storm for growth.
The AI Revolution: As artificial intelligence continues to transform industries, the demand for specialized industrial equipment and technology is skyrocketing. This presents a significant opportunity for companies that can adapt and cater to this growing market. Expert Opinions: It's Not Just Hype Seasoned money managers are also bullish on the industrial sector's prospects: Spenser Lerner (Harbor Capital Advisors): Points to the positive impact of lower interest rates, the housing boom, and the increasing demand for AI-related equipment. Bill Hench (First Eagle Investments): Highlights the crucial role of housing-related activity, the resurgence of the aviation industry, and heightened defense spending. Stocks in the Spotlight:
The industrial sector is vast, offering a wide range of investment opportunities. Here are four companies to watch closely: Kratos Defense & Security Solutions Inc. (KTOS) Carpenter Technology Corp. (CRS)
Modine Manufacturing Co. (MOD) AAR Corp. (AIR) The Bottom Line:
Don't be fooled by the glitz and glamour of tech stocks. The industrial sector is flexing its muscles, showcasing its potential for sustained growth and solid returns. As the market landscape shifts, savvy investors are recognizing the value of diversification and exploring new opportunities. The industrial sector, with its strong fundamentals and promising outlook, could be the key to unlocking your portfolio's potential in the years to come. |
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3M Soars, Dexcom Dives, and the Fed's Next Move |
This week's market saw a mix of winners and losers, with earnings reports and anticipation of Fed decisions driving stock movements. 3M Co. (MMM) skyrocketed nearly 24% after exceeding quarterly expectations and raising its full-year earnings forecast. This rebound comes after a challenging period for the industrial giant, marked by legal settlements related to "forever chemicals" and military earplugs.
Aon (AON) and Bristol-Myers Squibb (BMY) also enjoyed significant gains, fueled by better-than-expected quarterly results and raised forecasts. Meanwhile, Coinbase Global (COIN) rode the wave of a 3% rise in Bitcoin, and Colgate-Palmolive (CL) saw a 3% boost after exceeding expectations and raising its annual projections.
On the flip side, Dexcom (DXCM) tumbled 41% due to missed revenue estimates and a lowered full-year forecast. Looking Ahead: Fed Meeting and Jobs Report
Next week's economic calendar is packed with key events. The Federal Reserve's rate-setting committee meeting will be closely watched, with investors anticipating no change in rates but a potential cut in September. Additionally, the July jobs report will provide crucial insights into the labor market's health and its potential impact on the Fed's decision-making.
The recent PCE report, meeting analysts' expectations and falling below the Fed's year-end projection, further strengthens the case for a September rate cut. However, a robust jobs report next week could give the Fed pause. The market remains on edge, balancing the optimism of potential rate cuts with the uncertainty of upcoming economic data.
As always, Trendsters, stay tuned for further updates and analysis as we continue to monitor the ever-changing market landscape. |
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MARKET MUSINGS & TIME CAPSULE |
Random Musings
The Magnificent Seven might be losing their shine, but remember, even the brightest stars have their off nights. The market's spotlight is shifting to the industrial sector, a reminder that it's always wise to diversify your portfolio and not put all your eggs in one basket.
Could the Fed be playing a game of chicken with inflation? The recent PCE report suggests they might be winning, but the upcoming jobs report could change the game. Keep a close eye on those numbers, Trendsters!
Remember, even the most "boring" sectors can surprise you. Who knew industrials would be the breakout stars of 2026? It just goes to show that sometimes, the most unassuming players have the most potential.
Investing is like a good chess match – it requires strategy, patience, and a willingness to adapt to changing conditions. As the market shifts, so should your approach. Stay informed, be flexible, and always be willing to learn.
META's potential double bottom is a reminder that even tech giants can have their ups and downs. Sometimes, a stumble can be an opportunity in disguise. Could this be your chance to buy the dip? On this day in history, July 29 July 29, 1775: The U.S. Postal Service is established, proving that even in the age of instant messaging, there's still a place for good old-fashioned mail.
July 29, 1868: The 14th Amendment to the U.S. Constitution is ratified, granting citizenship to all persons born or naturalized in the United States. A reminder that diversity and inclusion are essential for a thriving society and economy.
July 29, 1958: NASA is established, launching a new era of space exploration. Just as NASA pushed the boundaries of what's possible, so too are industrial companies innovating and shaping the future of our economy.
July 29, 1981: Prince Charles and Lady Diana Spencer are married in a lavish ceremony watched by millions around the world. A reminder that even in the face of economic uncertainty, there's always time for a little royal fanfare.
July 29, 2015: Windows 10 is released, marking a major milestone in the history of personal computing. As technology continues to evolve at a rapid pace, it's important for investors to stay informed and adapt to the changing landscape. |
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In the words of the legendary stock trader Jesse Livermore, "Don't look back, you're not going that way." This perfectly encapsulates the spirit of today's market. While tech giants may be experiencing a temporary setback, the industrial sector is charging forward, fueled by innovation and changing economic winds.
Remember, the stock market is a forward-looking beast. It's less about where we've been and more about where we're headed. As Trendsters, we're always looking for the next big opportunity, and this week's industrial surge could be just that.
So, let's not dwell on the past but focus on the promising future ahead. After all, as another wise investor once said, "The stock market is a device for transferring money from the impatient to the patient." |
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