Tag: STOCKS

Semiconductor companies, such as NVIDIA Corporation (NVDA), are struggling amid the market downturn, export restrictions, and slowing demand. However, the broader technology market is expected to endure short-term uncertainties and keep growing due to continued digitization. Hence, we think quality technology stocks Cisco (CSCO) and Hackett Group (HCKT) are better investments than NVDA. Keep reading….

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NVIDIA Corporation (NVDA) provides graphics, computation, and networking solutions globally. On October 7, new restrictions were imposed on chipmakers, including NVDA, to prevent technology from advancing China’s military power. The companies must now obtain a license from the Commerce Department to export advanced chips and chip-making equipment.

The above restrictions have closely followed last month’s announcement in which the White House blocked NVDA from exporting high-end graphics chips to China due to similar concerns. The company said the ban impacted $400 million in potential sales to China.

For the fiscal 2022 second quarter, NVDA’s non-GAAP net income and EPS declined 50.7% and 51% year-over-year to $1.29 billion and $0.51, respectively. Also, analysts expect its EPS and revenue for the fiscal 2023 third quarter (ending October 2022) to come in at $0.71 and $5.85 billion, indicating a 39.3% and 17.6% year-over-year decline, respectively. The stock has plummeted 59.9% year-to-date.

The recently released jobs data for September seems to have paved the way for another significant interest rate increase by the Federal Reserve during its meeting next month. This indicates another headwind for tech companies.

Despite the current headwinds, demand for ubiquitous tech goods and services is expected to keep growing amid the increasing adoption of cloud computing, artificial intelligence (AI), virtual reality (VR), the internet of things (IoT), and increasing automation of business processes.

The global technology market is expected to grow at a CAGR of 25.7% over the next five years to reach $3.17 billion by 2027, with the United States expected to strengthen its leadership in this space.

Hence, we suggest investing in fundamentally strong technology stocks Cisco Systems, Inc. (CSCO) and Hackett Group Inc. (HCKT) instead of NVDA for better risk-adjusted returns.

Cisco Systems, Inc. (CSCO)

CSCO designs, manufactures, and sells internet protocol-based networking and other products across networking, security, collaboration, applications, and the cloud. The company operates through three geographic segments: the Americas; Europe, the Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC). 

On October 5, CSCO announced an expansion of its existing SD-WAN partnership with Microsoft (MSFT) to allow customers to sidestep the public internet and MPLS to send their Cisco SD-WAN traffic over the latter’s Azure cloud backbone. This is expected to add value by providing speed and cost benefits.

For the fiscal year 2022 ended July 31, CSCO’s revenue increased 3.6% year-over-year to $51.6 billion, while its operating income increased 8.9% year-over-year to $13.97 billion. The company’s non-GAAP net income increased 3.7% year-over-year to $14.10 billion, which translates to an EPS of $3.36, up 4.3% year-over-year.

Analysts expect CSCO’s revenue and EPS for the fiscal year 2023 to increase 5% and 5.1% year-over-year to $54.11 billion and $3.53, respectively. The company has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters.

Over the past month, CSCO’s stock slumped 9.6% to close the last trading session at $40.27.

CSCO’s overall B rating equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Quality. Within the Technology – Communication/Networking industry, it is ranked #5 out of 49 stocks.

Click here to see the additional POWR Ratings for Growth, Momentum, Stability, Sentiment, and Value for CSCO.

Hackett Group Inc. (HCKT)

HCKT operates as a business and technology consulting firm. The company offers benchmarking, executive advisory, business transformation, and cloud enterprise application implementation.

On September 22, HCKT announced the launch of a new Market Intelligence Service for software and service providers and users. The service will measure software and service providers’ ability to deliver business value and their unique capabilities to help companies achieve Digital World Class performance.

HCKT believes the new service will be a powerful and attractive value proposition for all C-level executives and their respective teams.

HCKT’s total revenue increased 3.7% year-over-year to $75.93 million for the second quarter of 2022. The company’s total assets stood at $217.89 million as of July 1, 2022, compared to $207.54 million as of December 31, 2021.

Analysts expect HCKT’s revenue and EPS for the fiscal year 2022 to increase 6.6% and 10.4% year-over-year to $297.20 million and $1.45, respectively. Also, the company has surpassed the consensus EPS estimates in each of the trailing four quarters.

HCKT’s stock has slumped 2.4% over the past month to close the last trading session at $19.05.

HCKT’s promising outlook is reflected in its overall POWR Rating of A, which translates to a Strong Buy in our proprietary rating system. It also has a grade of A for Sentiment and Quality and a B for Value and Stability.

HCKT tops the list of 10 stocks in the A-rated Outsourcing – Tech Services industry.

Click here for an additional rating of HCKT (Growth and Momentum).

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NVDA shares were trading at $116.70 per share on Monday afternoon, down $4.06 (-3.36%). Year-to-date, NVDA has declined -60.29%, versus a -23.32% rise in the benchmark S&P 500 index during the same period.

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About the Author: Santanu Roy

Having been fascinated by the traditional and evolving factors that affect investment decisions, Santanu decided to pursue a career as an investment analyst. Prior to his switch to investment research, he was a process associate at Cognizant.

With a master’s degree in business administration and a fundamental approach to analyzing businesses, he aims to help retail investors identify the best long-term investment opportunities.

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The post 2 Tech Stocks to Consider Buying Over NVIDIA appeared first on StockNews.com

Interest rates are nearing new highs which has pushed stocks to new lows. Now oil is looking higher as well. Time to take a technical take on the markets.

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So many markets are at critical areas on the charts. A quick walk through of each of these should help shed some insight into what price points to watch for bearish break-downs or bullish break-outs over the coming weeks. Interest rates will likely hold the key until after the next Fed meeting in early November.

The 10-year Treasury yield is fast approaching recent highs once again near the 4% level. An upside break-out would likely send stocks to new lows while a re-test of the 3.5% area would be bullish for equities.

The 2-year Treasury yield is at a similar inflection point, albeit with a higher yield. A move past 4.5% would not be a welcome sight for stock traders. Note that the 2-10 is still deeply inverted, which is normally a recessionary sign.

 

The NASDAQ 100 (QQQ) is hovering right at major support near $270. Not yet oversold yet but definitely getting closer.

S&P 500 and Russell 2000 displaying identical patterns. Whether stocks hang on and bounce or breakdown and fall further remains to be seen.

Gold and oil are also at major inflection points on the charts, although oil getting a little overbought short-term.

Implied volatility in stocks (VXN and VIX) is nearing the recent highs once again, although not quite there yet. Nervousness abounds as stocks fall towards recent lows.

How this ultimately plays out is anyone’s guess. I prefer to stay hedged and nimble, which is the approach that has been working well recently in the POWR Options portfolio. The recent semiconductor pairs trade -bearish lower rated WOLF and bullish higher rated AVGO- was closed in one day for a 19% profit.

POWR Options

What To Do Next?

If you’re looking for the best options trades for today’s market, you should check out our latest presentation How to Trade Options with the POWR Ratings. Here we show you how to consistently find the top options trades, while minimizing risk.

If that appeals to you, and you want to learn more about this powerful new options strategy, then click below to get access to this timely investment presentation now:

How to Trade Options with the POWR Ratings

All the Best!

Tim Biggam

Editor, POWR Options Newsletter

 

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SPY shares closed at $362.79 on Friday, down $-10.41 (-2.79%). Year-to-date, SPY has declined -22.73%, versus a % rise in the benchmark S&P 500 index during the same period.

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About the Author: Tim Biggam

Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Lead Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He makes regular appearances on Bloomberg TV and is a weekly contributor to the TD Ameritrade Network “Morning Trade Live”. His overriding passion is to make the complex world of options more understandable and therefore more useful to the everyday trader.

Tim is the editor of the POWR Options newsletter. Learn more about Tim’s background, along with links to his most recent articles.

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The post So Many Charts Are At Key Junctures That Patience Pays appeared first on StockNews.com

In last week’s commentary, we discussed the importance of the mid-June lows for the S&P 500 (SPY) and the possibility of an undercut and then a rebound. In many ways, this is exactly what markets do -> frustrate the maximum amount of bulls and bears. Certainly, the bears were ebullient about this breakdown with many adding to shorts and puts, while many bulls probably capitulated. Now, we are more than 5% above these lows. Next on the docket is the September jobs report tomorrow and a CPI report next week. These will play a large role in determining the path and nature of this bear market rally. In today’s commentary, I want to discuss some lessons from the past 2 bear market rallies and how we are going to apply them to our portfolio. Read on below to find out more….

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(Please enjoy this updated version of my weekly commentary originally published October 6^th, 2022 in the POWR Stocks Under $10 newsletter).

Over the last week, the S&P 500 (SPY) is up by 4.4%, although it was up more than 6% at some point, before some profit-taking into the September jobs report.

It’s been a broad-based rally with strength across the board. Not surprisingly, we are seeing the biggest moves in the most oversold sectors like metals, energy, and tech.

Why is the Market Rallying?

From a technical perspective, we have a double bottom, especially with the drop below support and quick recovery. As long as this double bottom is intact, we have to respect the bull case.

To be clear, this is a bounce. But given the strong technical setup and bearish sentiment, my gut tells me this is likely to turn into a bear market rally that lasts for weeks and tests important resistance levels on the upside.

And if the fundamentals evolve in a supportive manner, then the bear market rally can even turn into something more meaningful. Every bull market started as a bear market rally, but not every (or most) bear market rally turn into bull markets.

Again, I think we are at the same precipice. If this is a normal, cyclical recession, then buying at these levels is likely to be rewarded in six to twelve months’ time.

If this is more in the vein of 2002 or 2008, then stocks are probably in the middle innings of their descent. In that case, the S&P 500 is likely to break 3,000 and we could see the retracement of the entire rally that began in March 2020.

Earnings and Rates

So far, all of the market weakness can be attributed to inflation and higher rates pushing down multiples for the S&P 500 (SPY).That’s because earnings growth has managed to remain positive despite the numerous headwinds faced by the economy and increasing concerns of an imminent recession.

So, the Q3 earnings season is just beginning and will play a major role in determining whether the bounce can turn into a rally, or whether it will quickly roll over. Just to set the stage, analysts are forecasting 2.9% earnings growth for Q3.

This is a drastic cut from expectations of nearly 10% earnings growth in Q3 a couple of months ago. It’s largely a result of companies’ warnings and guidance lower given the numerous headwinds.

Objectively, it’s not bad. But, it’s an indication that markets are expecting some pain which creates the potential for an upside surprise. And, this is exactly what happened in Q2 and was one of the factors behind the 18% rally for the S&P 500 between mid-June and early August.

On the rate front, there are some subtle developments that are conflicting with the last CPI report which sent short-term and long-term rates, shooting up to new highs.

In essence, we are seeing real estate prices decline, used car prices decline, and freight prices drop, in addition to the relief from lower energy prices.

Just like the cyclical vs secular recession debate has major implications, the inflation debate is equally compelling and interesting. There is one camp that sees inflation as an onion.

Just because the outside is fine, doesn’t mean that the core isn’t rotten. Essentially that core inflation is its own beast with only a mild connection to more volatile, cyclical factors.

The other camp sees core inflation as simply lagging behind more real-time indicators like those mentioned above. This camp believes that inflation has already peaked and that core CPI is simply a lagging indicator.

Last 2 Bear Market Rallies

Going back and studying the last 2 bear market rallies in 2022 is quite instructive.

Both saw double-digit gains in a short period of time and massive gains in the most oversold stocks and sectors. Certain sectors and stocks even were able to make new highs.

Basically, we have to take advantage of these rallies while being mindful of the endgame, especially if the fundamentals are deteriorating.

These bear market rallies can help us identify which stocks and sectors are benefitting from secular trends vs cyclical trends. And that can really help fuel outperformance during the next bull market.

For instance, I’m noticing incredible strength and accumulation in energy, lithium, and alternative energy stocks. On the other hand, oversold stocks can be bought for trade and just trade as these are liable to roll over and make new lows.

 What To Do Next?

If you’d like to see more top stocks under $10, then you should check out our free special report:

3 Stocks to DOUBLE This Year

What gives these stocks the right stuff to become big winners, even in the brutal 2022 stock market?

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But even more important, is that they are all top Buy rated stocks according to our coveted POWR Ratings system and they excel in key areas of growth, sentiment and momentum.

Click below now to see these 3 exciting stocks which could double or more in the year ahead.

3 Stocks to DOUBLE This Year

All the Best!

Jaimini Desai
Chief Growth Strategist, StockNews
Editor, POWR Stocks Under $10 Newsletter

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SPY shares closed at $362.79 on Friday, down $-10.41 (-2.79%). Year-to-date, SPY has declined -22.73%, versus a % rise in the benchmark S&P 500 index during the same period.

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About the Author: Jaimini Desai

Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist for StockNews.com and the editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Jaimini’s background, along with links to his most recent articles.

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The post Why Q3 Earnings Season Will Majorly Impact Where the Market Heads Next… appeared first on StockNews.com

Lets talk about the #1 mistake made by investors during a bear market. Better yet, let’s solve this problem by explaining how easy it is to actually make trading profits during a bear market. Remember the definition of insanity is doing the same thing expecting a different result. So lets try something new to get you on the right side of the stock market (SPY) action. Read on below for more.

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I just read another email from a StockNews customer who says this bearish market has pushed them to the sidelines. And they will “Wait and See” to determine what to do next.

Sorry friends…this is just investing suicide.

There is no other way to say it. And yet, this is the most common response by investors when times get tough like it has in 2022.

I want to point out the insanity of this approach in the hopes to get people on a more successful investing path.

The Danger of “Wait and See”

On the surface, this seems so logical. To appreciate that the current market conditions are rough.  And thus you will wait and see what happens next to then plot your course forward.

Now the reality check…

“There is ALWAYS a bull market somewhere”

This not just an amusing expression…but a statement of fact.

There is always something going up even in the darkest of times. And thus there is NEVER a good reason to be out of the market.

The key is aligning your portfolio with the prevailing trends. And since we are in the midst of a long term bear market, then what is going up are investments that profit as the market goes down like inverse ETFs and put options.

Inverse ETFs are just one of the tools I have used in my Reitmeister Total Return service to produce a +4.65% gain as the S&P 500 (SPY) dove over 15% to new lows (8/15/22 to 9/30/22).

Then you have Tim Biggam taking advantage of a string of winning put trades in his POWR Options service. Customers of this service have enjoyed a stunning +65.44% gain since the service opened in November 2021.

By the way you can start a 30 day trial to the above services to enjoy these winning trades. We will discuss that in a minute, but first I need to share one more key point which is…

Inflation is Destroying Your Cash Accounts

Right now cash is trash.

The math is abundantly clear. Inflation is raging at 8% and yet your bank is paying you a small fraction of that which means that every minute your money is in cash…you are losing out to inflation.

So the “Wait and See” approach to move to cash is insuring you a hefty loss as inflation is such a silent killer of wealth. Thus, cash it is not as safe as you imagined.

This alone should have you curious to see if there is a better way in which to invest. Like the approaches discussed in the previous section in the Reitmeister Total Return and POWR Options service.

What to Do Next?

Start your 30 day trial to POWR Platinum…this is the bundle of all of our active trading services.

Not only does it include access to the winning trades in my Reitmeister Total Return service, or Tim Biggam’s POWR Options…but also these additional popular services:

• POWR Growth– Jaimini Desai harnesses the Top 10 Growth Stocks strategy and its +49.10% average annual return. 

• POWR Trends– In depth commentaries and top picks from the most exciting growth trends from EVs to Space Exploration to Internet of Things to Genomics and more.

• POWR Value– Steve Reitmeister hand picks the best value stocks by utilizing the Top 10 Value Stocks strategy with +37.67% average annual returns.

• POWR Ratings Premium – Giving full access to our coveted POWR Ratings for over 5,300 stocks and 2,000 ETFs. 

• POWR Stocks Under $10 – Based on our most powerful stock picking strategy, with market shattering +59.43% average annual returns. And shockingly good results during bear markets too!

AND coming soon….

In just 2 weeks we’re adding a brand new service called POWR Breakouts, that utilizes chart patterns in combination with the fundamental strength of our POWR Ratings to find the stocks most likely to breakout in any market. Truly a best of both worlds approach to find the most timely stocks.

There really is something here for every investor and EVERY market condition. Without doubt, this is the best way to discover which of our services is right for you, so after your trial you can just keep what suits you most.

And the cost?

Just $1 for the next 30 days.

During your all access trial you’ll get all the current picks, every new trade—including 2 exciting picks coming Monday morning—plus in-depth analysis & market commentary from our experts to put you on the right side of the market action.

I’m supremely confident that with all these market beating services at your disposal you’ll achieve significant outperformance in 2022 and want to remain a member for a long long time.

But if I’m wrong you can cancel at any time and be fully protected by our industry-leading performance guarantee. That means we’ll gladly refund every penny you paid for your subscription if we fail to help you beat the market.

So don’t delay, click the link below to get started now:

About POWR Platinum & 30 Day Trial >>

Wishing you a world of investment success!

Steve Reitmeister

…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return

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SPY shares fell $0.18 (-0.05%) in after-hours trading Friday. Year-to-date, SPY has declined -22.73%, versus a % rise in the benchmark S&P 500 index during the same period.

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About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

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The post Investors: STOP the INSANITY! appeared first on StockNews.com

Bounces will pop up here and there as they did this past week…but don’t think for a second that this bear market is over because the Fed is not yet done with their mission to tamp down the flames of recession. When all is said and done we will have a recession and the S&P 500 (SPY) will be much lower. This leads to the key question: Where is bottom? Investing veteran Steve Reitmeister shares his views in his updated market outlook below.

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September was downright brutal ending with a crescendo of selling that sent stocks to the lowest levels of this bear market. Not surprisingly this created ripe conditions for a 6% relief rally for the S&P 500 (SPY) to kick off October…how quickly that party ended.

Thursday investors took a modest step back. But then after hours we received word of a terrible earnings report from Advanced Micro Devices (AMD).

These are not just AMD problems. Unfortunately it speaks to a wide spread slow down in computer products along with supply chain issues that will no doubt harm many in the sector.

Couple the above with a Friday jobs report that was just a tad too good which investors know will embolden the Fed to keep raising rates aggressively. This increases the odds of a hard landing for the economy down the road pushing more investors to hit the sell button.

Long story short…welcome back to the bear market. Get the rest of the investment story and trading plan in the fresh commentary below…

Market Commentary

Right now investors are in a can’t win situation as good news sparks stock sell off as readily as bad news. Yes, that is quite odd but it aligns with the general premise of…

Don’t Fight the Fed!

When the Fed was lowering rates, as they did for nearly 12 years straight, we all used this saying as a battle cry to stay bullish. That is because lower rates are a catalyst for economic growth, which is great fuel for stock prices.

Now we have the opposite.

A Fed that is dead set on extinguishing the flames of inflation with the most aggressive rate hiking policy in history. Meaning the pace at which they are raising rates is unprecedented.

The reason for this fast pace is not just the high rate of inflation. Sadly, the Fed was asleep at the wheel calling early inflation “transitory” and thus not something to be burdened with.

When the Fed finally woke up to the stickiness of this inflation, then their only recourse was to aggressively raise rates. The goal is to slow down the economy, which by extension will tame inflation.

Or let me put it another way. Recession by its very nature leads to less demand. Everyone who ever took Econ 101 knows this will lower prices thus reigning in inflation.

Putting these pieces together means the Fed is actively trying to create a recession. And yes, recessions and bear markets go together like peanut butter and jelly.

This explains why “Don’t Fight the Fed!” now translates as “watch out below!” for stock prices.

And this also explains why even good news on the economic front is greeted with selling. The most recent instance of that was the October Employment Report on Friday showing robust job gains that only gives the Fed a green light to continue to aggressively raise rates.

The only real questions are how deep of a recession will we have and thus how far down stock prices should go?

Those betting on a soft landing would be right to think the recent lows at 3,585 for the S&P 500 (SPY) would seem like a fair bottom for stocks as it represents a nearly 26% decline from the all time highs.

Unfortunately I have yet to talk to anyone calling for a soft bottom. That’s because with the Fed slow to react to inflation, that they have to be more aggressive in the steps taken. Not just the pace they are raising rates, but also the unwinding of Quantitative Easing. (aka Quantitative Tightening).

Most investors forgot about this one.

Now they are unwinding that massive balance sheet $90 billion dollars a month. Here again, lets go back to our Econ 101.

If the Fed sells these bonds, then it increases the supply of bonds. If demand is the same as the past, then it will naturally lead to higher rates to attractive investors to buy the bonds. This is yet another form of putting the brakes on the economy.

Back to the point…where is all of this heading?

Unfortunately the smart money is on much higher rates and a much weaker economy and thus much lower stock prices.

Let’s not forget that the average bear market endures a 34% decline in stock prices. That would equate to 3,180 this time around.

But also the average bear market comes hand in hand with a Fed that was LOWERING rates to help the economy recover. Now you have the exact opposite. So it likely points to a weaker economy and lower lows.

Second, when you have low rates on bonds, it makes the stock market look like a more attractive investment by comparison. That is NOT true when rates are going higher.

Imagine Treasury yields of 5-7%. That will be the safe money investment choice. Likely corporate bonds paying 2-3% above that.

It will be very tempting to take that safer route to investment returns. Especially if you believe that rates will come down in the future only padding the return on these bond investments.

This is another way of saying that demand for stocks will not be as strong at the bottom of this cycle as the typical recession and bear market. And thus it is not crazy to contemplate that stocks will need to fall further to get more investors off the sidelines.

That is why you need to contemplate that 40% drop is not out of the question. That translates to 2,891 for the S&P 500 (SPY).

No one rings a bell at the top or the bottom. So timing this perfectly is not in the cards.

However, it does say that right now the wise choice is to bet on stocks going lower…much lower.

What To Do Next?

Discover my special portfolio with 9 simple trades to help you generate gains as the market descends further into bear market territory.

This plan has been working wonders since it went into place mid August generating a +4.65% gain as the S&P 500 (SPY) tanked over 15%.

If you have been successfully navigating the investment waters in 2022, then please feel free to ignore.

However, if the bearish argument shared above does make you curious as to what happens next…then do consider getting my updated “Bear Market Game Plan” that includes specifics on the 9 unique positions in my timely and profitable portfolio.

Click Here to Learn More >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return

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SPY shares fell $0.17 (-0.05%) in after-hours trading Friday. Year-to-date, SPY has declined -22.73%, versus a % rise in the benchmark S&P 500 index during the same period.

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About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

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The post Where is the Bottom for this Bear Market? appeared first on StockNews.com