Mark Zuckerberg Doesn't Wait for the Octagon

Mark Zuckerberg doesn't wait for the Octagon... The jury is out on Twitter's new rival... An 'everything is down' day... The realization of 'higher for longer' – again... It's not all bad for stocks... There's probably time before it gets worse... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Mark Zuckerberg doesn't wait for the Octagon... The jury is out on Twitter's new rival... An 'everything is down' day... The realization of 'higher for longer' – again... It's not all bad for stocks... There's probably time before it gets worse... --------------------------------------------------------------- Forget the Octagon or the Roman Colosseum... You may remember that our Dan Ferris [wrote a couple weeks ago]( about Elon Musk's proposed throwdown with fellow attention-seeking billionaire Mark Zuckerberg, which the Meta Platforms co-founder and CEO accepted... Musk then suggested a venue: the UFC Octagon in Las Vegas. Sounded fun, like a real-life celebrity death match. A few days later, the news got better. We even saw reports that the Italian government was offering up the iconic, ancient Roman Colosseum (though others have contradicted this claim). Well, Zuckerberg apparently has other ideas for now. He's sticking to battling over the Internet, or the digital real estate he would probably like to prefer calling the metaverse. Last night, Zuckerberg's Meta Platforms (META) launched a "text-based conversation app" called Threads, created to be a direct competitor to Musk's Twitter. And less than a day later, it already has more than 30 million users... I (Corey McLaughlin) am one of them, having signed up to try out the platform mainly to gauge if it's worth using... The jury is out... Threads is essentially a clone of Twitter, but without paid advertising (for now) or direct messaging. Posts are served up by an algorithm, not necessarily in any chronological order. And there's no desktop version that you can use from your computer. As someone who is trying to spend less time on his phone, Threads probably is not for me. (Nor is it likely to be for the youngest of phone users, who are more likely to spend screen time on video-based social media apps like TikTok or Snapchat.) It remains to be seen if Threads will have staying power in the digital world, but you can bet Meta Platforms will try its best to make sure it does. The Twitter-like app allows for easy input of friends and contacts from Meta's Instagram and Facebook platforms. If enough Twitter users migrate over and start using the thing, Musk's $44 billion purchase of the social media platform could really be up in flames, as our Stansberry Venture Technology editor Dave Lashmet said [was already happening back in January](. It also comes at a good time for Meta Platforms, whose shares – as we mentioned yesterday – are up nearly 140% since the start of the year. At the same time, Threads could go the way of Meta Platforms' short-form video offering Facebook Reels. It was intended to be a competitor of TikTok and used the same strategy to pull users from Meta's existing Instagram and Facebook platforms, but users never embraced it. Stay tuned. We certainly will... You can find Stansberry Research on Threads already, as well as the previously existing (before yesterday) social media platforms such as [Facebook]( [Instagram]( [Twitter]( [YouTube]( and [LinkedIn](. To find us on Threads, download the app onto your phone or tablet and search for Stansberry Research. Moving on, there are still enough nonbelievers in the crowd... By that, I mean enough people with enough money in the stock market have still been betting against the Federal Reserve and ignoring the words coming out of Chair Jerome Powell's mouth... A widely followed strong jobs report from payment-processing company ADP published this morning showed a gain of 497,000 private-sector jobs in June – nearly double the consensus estimate from Wall Street analysts. In response, stocks were down, bonds were down, everything was down... The idea, today at least, is that the economy is now too strong to bring inflation down substantially. The jobs market, conventional thinking goes, should be getting weaker if inflation is going to keep slowing. But the opposite might be happening instead. So the Fed is likely to keep raising rates beyond where they are today. Today's market action suggested this realization is hitting more people... For instance, traders in the bond market are now more certain another rate hike will come at the Fed's next meeting. According to the handy FedWatch Tool from the CME Group, market odds on a rate hike at this month's meeting rose to 94% today, compared with just under 90% a week ago... and roughly 50% odds a month ago... Looking further out, many of these same traders are now coming around to the idea of two more rate hikes before 2023 is finished. This is what Powell and the Fed [have indicated will probably happen]( but there are still plenty of doubters out there. To be precise, traders are giving nearly a 50% chance of a single 25-basis-point increase from the current fed-funds rate (to a range of 5.25% to 5.5%) by New Year's Eve. And they see a nearly 35% probability of two rate hikes that would raise rates to between 5.5% and 5.75%. So, there's some potential "repricing" of expectations still ahead... This all matters because when borrowing gets more expensive, it's a tougher environment for businesses to make profits. Stock prices generally fell today... And bond yields, which trade inversely to prices, shot up. The 10-year Treasury yield was up 11 basis points to above 4% and the 2-year yield was up 5 basis points to just below 5%, meaning the yield curve just keeps on inverting to lower levels... while stock prices were falling, too. What the heck?... Didn't we just [get done yesterday]( saying longer-term trends for stocks are bullish and [last week]( saying to rethink the concerns about the ongoing yield-curve inversion (for now, at least)? Yes, and that's still the case, even with a roughly 1% drop in the major U.S. indexes today. It's tough to say – or maybe believe – what I'm about to say on an "everything is down" day... But nothing about the action in stocks today suggests a major breakdown in the trends of 2023 yet. That's not to say it can't. But when we look at indicators of market breadth, for example, they're just about the same as they were yesterday. As our Ten Stock Trader editor Greg Diamond [wrote this morning]( of the setup as it relates to his trading... All this is doing is setting up for an opportunity to buy. Greg said he's waiting, though, to see what happens when another key jobs number comes out tomorrow... That's the "official" June payrolls report from the U.S. government. Wall Street's expecting that number to be substantially lower than it was in May. The way I see it, if this jobs report shows as expected – fewer folks being added to America's payrolls than the previous month – it could temper the fear that returned to the market today. Lower job numbers mean we might not need a bigger shot of "Fed pain" to slow the economy and inflation. If those numbers come in higher than expectations, though, the pullback of today could continue tomorrow... and again in the months ahead... What today showed is that the markets still have so many nonbelievers that interest rates will keep rising. If the Fed keeps adjusting its expectations for rates higher – as it has for as long as this inflation story has been playing out – the markets will have more room to "price in" this likelihood. And that would mean lower stock prices. Here's the interesting thing, though... It's not all bad news for stocks yet... Yields could keep rising, with spreads continuing to deepen into negative territory. As we've recently suggested, though, that could also happen for longer than most people expect. As we wrote [in the June 28 Digest]( citing the work of Stansberry NewsWire editor Kevin Sanford... The only two periods in which 10-year Treasury yields were lower than two-year yields for a similar extended amount of time were from August 1978 to May 1980 and September 1980 to October 1981. Those were inflationary times, like today. If the current yield-curve inversion lasts a bit longer like most economists are predicting – a recent Bloomberg survey shows 80% expecting an inversion to last through at least the first half of 2024 – it will mark the longest inversion in history. And that might be "normal," given the circumstances. In fact, you can already say it's normal... As we mentioned earlier, recessions usually hit between six and 24 months after yield inversions begin. We're not even halfway through that range. In the meantime, a higher-rate environment doesn't mean stock prices can't keep rising. So far this year, while inflation has come down from its 2022 peak and the cost of borrowing money has gotten more expensive... the earnings picture for S&P 500 companies, at least, has been better than expected on balance. So long as that keeps happening, I don't foresee a substantial pullback from either stocks in general or from specific names that are particularly performing better than expected... When things keep getting "less bad" or "not as bad," stock prices tend to go up rather than down. But it doesn't mean things won't eventually get worse, either... Second-quarter earnings season is just getting started, and Wall Street expectations are for an earnings decline of 6.8% for the S&P 500. If that occurs, it would be the biggest earnings decline since the second quarter of 2020 when the world shut down. Plus, when dollars are too expensive and sicken the economy, the talked-about crises of a recession and/or a credit crisis are real risks. In fact, as our Stansberry's Credit Opportunities editor Mike DiBiase wrote to you [in Saturday's Masters Series]( the next credit crisis is actually kicking off already, though it hasn't caught wide mainstream notice yet... In mid-May, seven companies went belly-up over the course of just one weekend. That's the most bankruptcies in any two-day period since at least 2008, according to Bloomberg Law. The list includes medical group Envision Healthcare and private-equity-backed Vice Media. We saw another 54 corporate bankruptcies in April, according to Standard & Poor's. Beaten-down retailers Bed Bath & Beyond and David's Bridal were two of the most prominent names. Mike told you that credit conditions have continued to tighten across the board, including loans to big and small businesses and consumer credit-card offerings. When credit tightens at these levels, it always leads to recession, as Mike wrote... Things are about to get much worse for our economy. Investors have been slow to wake up to this reality. Fear has not gripped the credit market yet, Mike said, but you will want to prepare for when it finally does. This time of panic will, perhaps counterintuitively, mark [a tremendous buying opportunity for safe corporate bonds]( that fall in value simply because panic has become the prevailing sentiment. The same goes for great stocks that fall amid a market panic. Inflation still stinks. Rates are probably going to keep going higher, but Fed officials, including Chair Jerome Powell, have said they don't want to crash the economy, either. In my opinion, the Fed might be taking it too slow with rate hikes, if anything, because it's scared of what could happen to an economy built on 15 years of near-zero rates and little inflation. The trade-off now might be longer-lasting higher inflation, but that's a problem for another day... (They tell us with actions, without saying the words out loud.) Right now, unless the major trends for stocks that we talked about yesterday show sustained signs of breaking down... this jolt of volatility could prove to be, as Greg said, a short-term buying opportunity more than anything else. Why Tesla Is a National-Security Threat "What if China says to Elon Musk, 'If you don't make sure that your algorithms on Twitter perform better and treat news about China in a better light, we are going to shut you down in China?'" asks Gareth Soloway, president and chief financial officer of InTheMoneyStocks.com... [Click here]( to watch this video right now. For more free video content, [subscribe to our Stansberry Research YouTube channel](... and don't forget to follow us on [Facebook]( [Instagram]( [LinkedIn]( and [Twitter](. (And find us on Threads if you want.) --------------------------------------------------------------- Recommended Links: [The Man Who Cost Stansberry Research $10 Million (and Counting!)]( It was a stunning discovery... One subscriber has cost Stansberry Research more than $10 million over the past four years. He legally "redirected" money from our potential coffers to yours. When we found out, we invited him to our Baltimore office to explain. Find out what happened... and how it affects YOU [right here](. --------------------------------------------------------------- [Beginning This July, FedNow Could Make You 3,050% on the U.S. Dollar's Biggest Innovation in 51 Years]( This month, Executive Order 14067 will roll out the first phase of a government-backed crypto that will open a historic investment opportunity. [Click here for the full details (including a free recommendation)](. --------------------------------------------------------------- New 52-week highs (as of 7/5/23): Booz Allen Hamilton (BAH), iShares Convertible Bond Fund (ICVT), Iron Mountain (IRM), Meta Platforms (META), Palo Alto Networks (PANW), Rollins (ROL), Spotify Technology (SPOT), and Visa (V). In today's mailbag, Crypto Capital editor Eric Wade answers a question about [the launch of FedNow]( and what it may mean for crypto "stablecoins" whose values are pegged to the U.S. dollar... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "With FedNow, what do you think will happen to the stablecoins like USDT and USDC? I'm personally not a fan of FedNow or the [central bank digital currency] incoming, due to privacy concerns. But from all I've read, it's inevitable. Assuming the U.S. FedCoin is in use, I don't really see a purpose for stablecoins, do you?" – Subscriber Kevin M. Eric Wade comment: I agree/disagree with you. A fast digital dollar could diminish some of the role of stablecoins... On the other hand, a decentralized stablecoin (not necessarily USDT or USDC) can resist censorship better and is much more global. Just like the 1960s U.S. government likely never imagined how the Internet would be used, there may be some amazing private-sector developments coming for digital dollars, too. All the best, Corey McLaughlin Baltimore, Maryland July 6, 2023 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,229.6% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,061.4% Stansberry's Investment Advisory Porter ADP Automatic Data 10/09/08 793.4% Extreme Value Ferris wstETH Wrapped Staked Ethereum 02/21/20 634.1% Stansberry Innovations Report Wade HSY Hershey 12/07/07 602.1% Stansberry's Investment Advisory Porter WRB W.R. Berkley 03/16/12 525.6% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 505.6% Retirement Millionaire Doc AFG American Financial 10/12/12 402.1% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 323.7% Stansberry Innovations Report Engel FSMEX Fidelity Sel Med 09/03/08 317.5% 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 Stansberry Innovations Report Engel/Wade 1 Extreme Value Ferris --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 1,500.1% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,079.6% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,027.7% Crypto Capital Wade MATIC/USD Polygon 02/25/21 800.9% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 712.2% 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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