The Next Shoe To Drop?

[] The Federal Reserve has driven the performance of this market over the last six months with threats of rate hikes and quantitative tightening. Now, forward guidance stands as a possible catalyst for broad repricing in this market. [View in browser]( . The Federal Reserve has driven the performance of this market over the last six months with threats of rate hikes and quantitative tightening. Now, forward guidance stands as a possible catalyst for broad repricing in this market. [View in browser]( . . [] [Havens Investment Letter] [] [Havens Investment Letter] [] [] [] Top Crypto Trader Warns: “STOP Buying Altcoins!” Altcoins are one of the most popular digital currency investments in the world. Their low cost and explosive potential makes traders' mouths water. But buying them can be a massive mistake, as crypto genius Jeffry Turnmire will explain in a special FREE workshop. [Click here to watch now]( [] --------------------------------------------------------------- [] Top Crypto Trader Warns: “STOP Buying Altcoins!” Altcoins are one of the most popular digital currency investments in the world. Their low cost and explosive potential makes traders' mouths water. But buying them can be a massive mistake, as crypto genius Jeffry Turnmire will explain in a special FREE workshop. [Click here to watch now]( [] --------------------------------------------------------------- [] [] The Next Shoe To Drop? [Garrett Pic] Dear Investor, Market momentum is Red. Today, the S&P 500 continued its effort to break resistance above the 3,920 level. It has pulled back after multiple efforts to move higher. The next catalyst that will drive momentum “Green” or push the markets lower again (thus proving another dead cat bounce) will be the PCE inflation data on Thursday. This is a quiet week with low volumes. Don’t trade just to trade. This is historically a quiet week for the markets. Despite Nike’s (NKE) earnings report this afternoon, most traders and investors are looking forward to the earnings calendar in mid-July. This week’s only significant data point is the PCE Inflation reading that is central to the Fed’s policy plans. If the reading exceeds expectations on Thursday, we are facing yet another leg down for the markets. If it’s lower than estimates, we might see a push for the S&P 500 above its next support level at 4,026. I stand among the rest of the traders looking out a few weeks to the starting point of the earnings season. Over the weekend, I saw an essential chart that warrants your attention. It speaks to how critical the upcoming earnings season will be for your money well into 2023. Have A Look I spend every weekend writing about the markets and digging into research from investment firms. This weekend, I stumbled upon a great report by Edward Jones about the state of this market. I’ve mentioned “Valuation Compression” in the pages of the [Haven Investment Letter]( a few times. I’m talking about the phenomenon where stock prices decline because investors are not willing to pay higher price-to-earnings levels or price-to-revenue levels than the previous owner. When a stock trades at 20 times earnings, the investor must justify the ability to wait 20 years to recoup all their money through profit payments back to shareholders. If profits aren’t increasing, the only way the stock can go higher is if someone is willing to pay a higher premium, perhaps 21x earnings, 22x earnings, or even higher. But at some point, investors and traders recognize that these valuations may be irrational. Someone is no longer willing to pay 20x earnings… Other investors think… Why should I pay 19x times earnings? The stock drops to fall in line with more muted expectations. This is “valuation compression.” The chart below shows that earnings expectations have increased, but the stocks are falling because of declining valuations. Edward Jones suggests that nearly all of the losers in 2022 are tied to this phenomenon. [Valuation Pressures]( And that makes sense. Since the Federal Reserve announced plans to raise interest rates in October 2022, the markets have reacted with a steady pattern of compression on price-to-earnings multiples. Yet - forward earnings are moving higher. So, what’s the real issue now? For the last few months, the Federal Reserve and its monetary policy have been the driving factor behind the performance of the market. I regularly argue that in terms of driving markets up or down, the largest factors go in this order. 1. The Federal Reserve 89 MILES OF DIRT 2. Earnings Reports 3. Insider Buying/Selling and Activist Investors Well, the second factor is about to come into play. With the heavy focus today on the state of the U.S. economy, most investors are fretting about the possibility of a recession. But, how much of a recessionary threat is priced into the market? Not all of it - companies will need to set their forward guidance for investors during this upcoming earnings season. In addition to the focus on top-line and bottom-line performance during the second quarter - when the economy was slowing, and consumer and business spending remained unpredictable - a stock repricing may come if companies start to slash their guidance. As a result, the earnings season could be far more volatile than in April. Remember, it’s very dangerous and challenging to speculate with options around earnings season. Instead, you’re better off looking for companies that have improved their balance sheet, boosted dividends, and deployed capital in a responsible manner. We are still returning to a market driven by fundamentals, not HYPE. My focus this week - in preparation - is to trade around the upcoming inflation report and look for specific targets for stocks that I want to own in the months ahead. We’ll talk about the sectors that look positive heading into earnings season this week. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets [] --------------------------------------------------------------- [] [] The Next Shoe To Drop? [Garrett Pic] Dear Investor, Market momentum is Red. Today, the S&P 500 continued its effort to break resistance above the 3,920 level. It has pulled back after multiple efforts to move higher. The next catalyst that will drive momentum “Green” or push the markets lower again (thus proving another dead cat bounce) will be the PCE inflation data on Thursday. This is a quiet week with low volumes. Don’t trade just to trade. This is historically a quiet week for the markets. Despite Nike’s (NKE) earnings report this afternoon, most traders and investors are looking forward to the earnings calendar in mid-July. This week’s only significant data point is the PCE Inflation reading that is central to the Fed’s policy plans. If the reading exceeds expectations on Thursday, we are facing yet another leg down for the markets. If it’s lower than estimates, we might see a push for the S&P 500 above its next support level at 4,026. I stand among the rest of the traders looking out a few weeks to the starting point of the earnings season. Over the weekend, I saw an essential chart that warrants your attention. It speaks to how critical the upcoming earnings season will be for your money well into 2023. Have A Look I spend every weekend writing about the markets and digging into research from investment firms. This weekend, I stumbled upon a great report by Edward Jones about the state of this market. I’ve mentioned “Valuation Compression” in the pages of the [Haven Investment Letter]( a few times. I’m talking about the phenomenon where stock prices decline because investors are not willing to pay higher price-to-earnings levels or price-to-revenue levels than the previous owner. When a stock trades at 20 times earnings, the investor must justify the ability to wait 20 years to recoup all their money through profit payments back to shareholders. If profits aren’t increasing, the only way the stock can go higher is if someone is willing to pay a higher premium, perhaps 21x earnings, 22x earnings, or even higher. But at some point, investors and traders recognize that these valuations may be irrational. Someone is no longer willing to pay 20x earnings… Other investors think… Why should I pay 19x times earnings? The stock drops to fall in line with more muted expectations. This is “valuation compression.” The chart below shows that earnings expectations have increased, but the stocks are falling because of declining valuations. Edward Jones suggests that nearly all of the losers in 2022 are tied to this phenomenon. [Valuation Pressures]( And that makes sense. Since the Federal Reserve announced plans to raise interest rates in October 2022, the markets have reacted with a steady pattern of compression on price-to-earnings multiples. Yet - forward earnings are moving higher. So, what’s the real issue now? For the last few months, the Federal Reserve and its monetary policy have been the driving factor behind the performance of the market. I regularly argue that in terms of driving markets up or down, the largest factors go in this order. 1. The Federal Reserve 89 MILES OF DIRT 2. Earnings Reports 3. Insider Buying/Selling and Activist Investors Well, the second factor is about to come into play. With the heavy focus today on the state of the U.S. economy, most investors are fretting about the possibility of a recession. But, how much of a recessionary threat is priced into the market? Not all of it - companies will need to set their forward guidance for investors during this upcoming earnings season. In addition to the focus on top-line and bottom-line performance during the second quarter - when the economy was slowing, and consumer and business spending remained unpredictable - a stock repricing may come if companies start to slash their guidance. As a result, the earnings season could be far more volatile than in April. Remember, it’s very dangerous and challenging to speculate with options around earnings season. Instead, you’re better off looking for companies that have improved their balance sheet, boosted dividends, and deployed capital in a responsible manner. We are still returning to a market driven by fundamentals, not HYPE. My focus this week - in preparation - is to trade around the upcoming inflation report and look for specific targets for stocks that I want to own in the months ahead. We’ll talk about the sectors that look positive heading into earnings season this week. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets --------------------------------------------------------------- [] Reclusive California Tech Wiz Reveals... the Perfect AAPL Trade [Apple products]( [See the reveal of this remarkable system]( --------------------------------------------------------------- [] [] Reclusive California Tech Wiz Reveals... the Perfect AAPL Trade [Apple products]( [See the reveal of this remarkable system]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] Article Recap - [The Next Shoe To Drop?](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] Article Recap - [The Next Shoe To Drop?](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States