The New Playbook for a Changing Market

It's a new environment for stocks... The new playbook for a changing market... The biggest winners are boring... The dollar's ride down stops... Some free advice... William D. Cohan on the fall of General Electric... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] It's a new environment for stocks... The new playbook for a changing market... The biggest winners are boring... The dollar's ride down stops... Some free advice... William D. Cohan on the fall of General Electric... --------------------------------------------------------------- It's time to throw out the old playbook... That's what our Ten Stock Trader editor Greg Diamond says. In [his Weekly Market Outlook to subscribers yesterday]( Greg gave his latest take on the markets and advised folks to pay attention to changing trends in stocks... Whether you realize it or not, we're in a new market environment. That means you shouldn't trade using the old playbook. In that playbook, most stocks and sectors followed uptrends together and followed downtrends together. However, the Federal Reserve's monetary policies, along with persistent inflation, have rewritten the old playbook in 2022. Specifically, some major sectors are rising while others – ones that are more sensitive to higher interest rates, inflation, and recession risk – are falling. Some individual stocks are down 80% or 90% over the past year, while others have seen relatively smaller pullbacks. And a small number, like [our good friend Hershey (HSY)]( have actually risen. As Greg said... The message is clear... Some stocks are doing great while others are losing most of their value. This is the new playbook for investors. This concept should sound familiar if you read [our Digest last Thursday]( or our [recap on Tuesday]( of what our friend and Chaikin Analytics founder Marc Chaikin recently predicted about what could be in store for stocks in 2023. Marc suggested folks prepare for a bullish "personality shift" in the markets, but he also said it's wise to be extremely picky about which shares you buy. Best of all, he has a strategy for trading them. You can hear his full message – for free – [right here](. Such is life coming out of a bear market, if we've seen "the bottom." I (Corey McLaughlin) will add that the same line of thinking could apply to sideways market in the months or years ahead. There will be winners. You just have to find them. Let me just give you a quick 30,000-foot view for an example... Let's look at the major S&P 500 Index sectors since the start of this quarter, just before the U.S. benchmark's most recent low on October 13... Over the past seven weeks, there have been a lot of winners, some much more than others. "Real economy" sectors, like energy, industrials, and materials businesses are up 30%, 21%, and 20%, respectively, since the start of October. If this is the start of a new bullish personality for the markets, boring old names could be the leaders moving forward... Conversely, the consumer discretionary sector is down almost 2%, while consumer staples –led by conservative names like Procter & Gamble (PG), PepsiCo (PEP), and Coca-Cola (KO) – are up 13% over the same time period. Plus, utilities – which had been a market leader for a lot of this year – are lagging, up only 6%. Aside from the strength of energy stocks, this is different from what we've seen for most of 2022. You might remember that during the bear market rallies, the tech darlings of the past decade were among the big winners, and it didn't quite make a lot of sense to us... Now, it looks like Mr. Market is telling us to expect a new environment ahead... The leading consumer staples stocks – as measured by the Consumer Staples Select Sector SPDR Fund (XLP) – are outperforming their discretionary-sector leading peers like Nike (NKE) and McDonald's (MCD)... In other words, the market winds are shifting, and it would be wise to pay attention. In his short-term trading service, Greg says the environment might call for bullish bets on some sectors while at the same time making bearish calls on others. Meanwhile, the dollar's ride down has hit a pause... Since [our report last week]( on the U.S. dollar's recent elevator ride down in the currency exchange market, the downward trend has paused and, if anything, is showing signs of restarting an upward move. The U.S. Dollar Index ("DXY") – which measures the value of the greenback against other major currencies – is up 1% since our report on Wednesday. On that day, the dollar was off 6% in the preceding two weeks, which makes this a huge move in the currency market. We also noted that stocks had been rallying over the same time, continuing an uncorrelated trend we've been tracking all year. The relationship has continued... There's been light volume in the U.S. stock markets this week, presumably due to the Thanksgiving holiday ahead, and the major indexes have not moved all that much for several days in a row for the first time in what seems like forever... As our Stansberry NewsWire editor C. Scott Garliss [reported yesterday]( the dollar pausing its free-fall and rallying a bit likely stems from the European Central Bank ("ECB") Chief Economist Philip Lane's public comments. He suggested the ECB could ease its course of interest-rate hikes, just like we expect from the U.S. Federal Reserve in the months ahead. This would mean the euro could maintain its relatively low value to the dollar rather than getting stronger. Until recently, that was the consensus expectation, given the higher inflation rates in Europe and the idea that the ECB would need to raise rates higher than the Fed. Because everything is relative in the currency markets, a potentially weaker euro has a big influence on the dollar's value. As Scott shared yesterday... The euro makes up about 55% of the Intercontinental Exchange's U.S. Dollar Index. And if the euro goes up or down, the dollar tends to move in the opposite direction... Tomorrow, we could see some more notable moves in the currency markets, bonds, and stocks. We'll get some more key information later in the trading day. The latest Fed meeting minutes from its get-together earlier this month will come out at 2 p.m. Eastern time tomorrow. All year long, these releases have resulted in at least some volatility in the markets, with Wall Street traders and other interested folks parsing the tea leaves of PDFs from the Fed's account of its own meetings. For this meeting, I expect folks to seek some information and color on what the other members of the policy-setting Federal Open Market Committee were thinking in their meeting earlier this month, especially compared with what Fed Chair Jerome Powell said in his press conference after the two-day policy meetings concluded on November 2. As you might remember, [the messaging that day]( between the two parties was discordant. Lastly, some free advice for the next generation... It comes from Scott Galloway, who spoke at our annual Stansberry Conference in Boston last month. Galloway, a New York University professor of marketing, was recently asked what advice he would give to people entering their 30s about "how to operate in life." Our friend and Empire Financial Research founder Whitney Tilson shared a link to Scott's answer in his free daily e-letter today. As Whitney wrote... I think [this eight-minute interview]( with him should be required watching for every young person (I sent it to my three daughters): If the topic of how the heck to make a living in today's world comes up at the Thanksgiving dinner table later this week and there are some younger people in the crowd, this video could be a good conversation starter. (There are a few expletives, though. Be warned.) Galloway said every person's situation is different, but he offered up a few best practices for people in or entering their 30s. He told interviewer Chris Williamson... The first is very primal. I think every person in their 20s and 30s should lift heavy weights and run long distances, in their brain and in the gym. Push yourself really hard. When you're in your 20s and 30s, in 20 years you're going to look back on how strong you were and just marvel at it and wish that you pushed yourself harder. Just when you think you can't take any more, that's about you're about a third of a way to your limits. Learning that as a young man or woman is a blessing because what it means is you have the confidence that when things are hard – physically, emotionally, and mentally – you can take so much more and still be fine. Galloway also suggested ways to get comfortable with rejection and with building relationships. If you bring this up on Thanksgiving, though, we're not responsible for where the conversation goes. We know how it can get when family gets together... at least in my family. Also, if you want to hear more from Scott – as well as all the presentations from the dozens of speakers at our conference last month in Boston – you still can get access to our conference replay through the end of the year. [Click here for more information](. Performing a 'Corporate Autopsy' On this week's episode of the Stansberry Investor Hour, Dan and I talk more about the FTX story. Plus, Dan interviews best-selling author William D. Cohan, who has a new book out that covers a "corporate autopsy" on the fall of General Electric... [Click here]( to listen to this episode right now. And to catch all of the podcasts and videos from the Stansberry Research team, be sure to [visit our Stansberry Investor platform]( anytime. --------------------------------------------------------------- Recommended Links: [Until Midnight Tonight, Claim Six FREE Months of Marc Chaikin's NEWEST Release]( This offer includes access to Marc's newest release, one free year of his Power Gauge system... and FREE access to his new Portfolio Boost ($2,499 value). See where cash is going – BEFORE it gets there – for the chance to double your money over and over again. [By midnight, click here for the full details from a Wall Street legend](. --------------------------------------------------------------- ['A Gold Wave Is Coming']( Some of the richest men in the world are jumping in right now... because evidence suggests we could see MUCH HIGHER gold prices before the end of this year. But if you're not taking advantage of a little-known way to invest for less than $10, you're missing out. [Click here for the full details](. --------------------------------------------------------------- New 52-week highs (as of 11/21/22): Comfort Systems USA (FIX), Gilead Sciences (GILD), General Mills (GIS), O'Reilly Automotive (ORLY), Ryder System (R), RenaissanceRe (RNR), and Valmont Industries (VMI). In today's mailbag, feedback on [yesterday's Digest]( about the latest shortage in America... and another note about the lack of workers in the country... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Great article Corey, I agree totally. We've been exporting industry starting with textiles since the early 20th century. This doesn't get reversed overnight. Our workforce in the U.S. isn't ready for what we outsourced which will increase reliance on robotics which is a sad fact... "Deglobalization is actually an alarming trend which will not be good for the cooperative relationships on the planet. Seems mankind will never forget or change its path from being barbaric over resources. Our cities are literally in decay from loss of our industrial base over the past century. Tech does not provide for widespread revitalization and big box retailers have forever changed the cityscape and social fabric of U.S. society. "It's very similar in many ways to the end and fall of the Roman Empire. Rome is burning, in case you haven't noticed. Hope is such a powerful motivator but our government and industrial leaders are not providing hope for Americans..." – Paid-up subscriber Rodger G. "You may remember a few years ago, some manufacturer said that that they could have a new plant up and running in two years in certain parts of the world, maybe most parts of the world, but in the U.S., they would still be in the permitting process. "Given the pricing pressures that come in the generic drug markets including the insurance companies, (most of my long term prescriptions come from Spain, and Israel, due to cost I presume) will USAntibiotics be able to avoid a second closure?" – Paid-up subscriber Heinrich E. "Everyone is surprised with the low unemployment rate but I hear few people commenting on the low participation rate. I saw an article last week, I think in the WSJ, that a lot of the young employees (25-35, I think) haven't returned to work since the pandemic. "I don't know how they are living but if they had returned the unemployment rate would be much higher. Maybe their subsidy check money is running out too and they will soon return or apply for unemployment, but that is one of the things that's holding the unemployment rate down." – Paid-up subscriber Allan S. Corey McLaughlin comment: I agree. We've been tracking the labor force participation rate closely ever since it crashed to a 50-year low (to around 60%) in the depths of the pandemic lockdowns... It has come back up a bit to 62%, but that's still below pre-pandemic levels. As I wrote [earlier this month](... That's about 1.5% less than before the pandemic. The U.S. has added about five million people to the measured work-eligible population since February 2020. But the same number of people are working today as back then (roughly 165 million). The participation rate had been climbing in the second half of 2021 through March of this year, but it has plateaued. I wasn't able to find the article you were referring to about the gap being attributed to younger people not working, but according to Fed data, the most evident trend is that women have not come back to the workforce at the same pace as men. Maybe that's a childcare-related trend. Or maybe it can be chalked up to the school-at-home trend that became a new reality amid the pandemic lockdowns. But your point about what could come next is a good one... The sweeping pandemic stimulus policies are well in the past and inflation is still high. Will more people – men or women – be compelled to take on new jobs? For now, it doesn't seem like it. Many businesses are still having trouble finding workers. According to a recent survey from the National Federation of Independent Business, among business owners who were hiring, 90% reported few or no qualified applicants for the positions. Zero! That means there are still a lot of jobs that nobody is even applying for. If anyone is worried about a recession and has been thinking about going back to work or getting a new job, now might be a good time to pull the trigger before the risks of layoffs like we're seeing in the tech world hit other sectors of the economy. All the best, Corey McLaughlin Baltimore, Maryland November 22, 2022 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst ADP Automatic Data 10/09/08 905.2% Extreme Value Ferris MSFT Microsoft 11/11/10 867.8% Retirement Millionaire Doc MSFT Microsoft 02/10/12 744.6% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 555.9% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 453.2% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 451.8% Retirement Millionaire Doc WRB W.R. Berkley 03/16/12 419.4% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 418.3% Stansberry Innovations Report Wade ALS-T Altius Minerals 02/16/09 303.2% Extreme Value Ferris FSMEX Fidelity Sel Med 09/03/08 294.1% Retirement Millionaire Doc Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 4 Stansberry's Investment Advisory Porter 3 Retirement Millionaire Doc 2 Extreme Value Ferris 1 Stansberry Innovations Report Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst ONE-USD Harmony 12/16/19 1,086.8% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,065.5% Crypto Capital Wade ETH/USD Ethereum 12/07/18 1,032.8% Crypto Capital Wade MATIC/USD Polygon 02/25/21 839.2% Crypto Capital Wade TONE/USD TE-FOOD 12/17/19 397.9% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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