Week 31, 2024: Huge Changes and Announcements. Last Chance to Lock in Your Price. [The Fortress of Solitude is Com...

This is the most comprehensive online weekly report with 9 deep dives on stock picks spanning over 10,000 words. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more --------------------------------------------------------------- [Week 31, 2024: Huge Changes and Announcements. Last Chance to Lock in Your Price. [The Fortress of Solitude is Coming]]( This is the most comprehensive online weekly report with 9 deep dives on stock picks spanning over 10,000 words. [Jack from The Daily Moat](stockinsider) Aug 4 ∙ Preview stockinsider   [READ IN APP](   Hello friends, We’re back with new unbiased data for this week of the US stock market. If my writing is helpful, please consider liking, and restacking this post! Big changes and announcements: - The next 100 subscribers are getting locked in at monthly price of $20, annual $200, or $350 lifetime. These will sell you fast and then the price is going up to $25/$250/$400. - If you become a paying subscriber until the end of August, you will be included in the Tesla raffle. (over $40k value). The raffle will be livestreamed in September and anyone who is a paying subscriber on August the 31st will be included. I bought a simple lotto machine for the purpose of the raffle. Lifetime subscribers are, of course, included as well. - From now on, I will include a deep analysis of past week’s events. Only in today’s report it will be available for free. Next week it will be in the premium section only. - I was getting a lot of feedback from subscribers and from now on instead of 3 stock picks in each category, I will do 1 pick in each category every Sunday. But I will include technical and fundamental analysis with the pick. I will also start tracking my picks. 9 picks instead of 27, but deeper dives on each. - ASAP I be running and tracking 3 indexes that I will build entirely with my own money: - 1. The Super-Safe ETF index. Idea is to be 100% hands off and just try to get a bit better results and be more diversified than the S&P500. 5, maybe 6 ETFs held forever. - 2. The Fortress of Solitude index. In this one I will be buying companies that, in my opinion, are future proof, and have very solid income. Companies that will probably be around in 25 years. Think Nestle and Caterpillar, not Tesla and Nvidia. The aim is to get significantly better results than the S&P500 without doing many trades. There will be no “signals” here. Only a deeply researched list of companies that I hold “forever.” - 3. The Stock Insider index. This is the one we talked about before, aiming at 30-50% annual returns and the Telegram channel. - Index #1 and #2 will start this month, but right now I’m keeping most of my money in bonds, gold ETFs, and cash, since I believe a strong correction is coming. - Index #3 will start after a significant market correction. I started a free daily newsletter where I ramble on productivity, happiness, habits, and mindfulness called [Mindprint.]( 🙏✨📣 Lifetime Founding Member subscription is here! --------------------------------------------------------------- Last time to get lifetime access to everything we ever do here for $350. Sign up as a Founding Member and you will never be charged again! Tesla raffle included. [Upgrade to paid]( --------------------------------------------------------------- This graph was generated by our friends at TradingView. [Did you know you can get 60% off the Premium plan forever even though it's not Black Friday?]( S&P500 Heatmap over the last week This graph was generated by our friends at TradingView. [Did you know you can get 60% off the Premium plan forever even though it's not Black Friday?]( [Heatmap explained]( [Excel data]( Last Week’s Summary (free this week only) 🔑 Key Takeaways - 📉 Major indices retreat: S&P 500 (-2.5%), Nasdaq (-3.4%), Dow (-2.1%), Russell 2000 (-6.7%) - 💼 Labor market shows signs of cooling, raising recession concerns - 🏭 Manufacturing sector contraction deepens, adding to economic worries - 🎢 Volatility spikes as investors grapple with mixed economic signals and earnings reports - 🔮 Fed's next move: September rate cut expectations surge dramatically - 💰 Treasury yields plummet as economic outlook darkens --------------------------------------------------------------- 🔍 Comprehensive Market Overview: A Week of Reckoning The first week of August delivered a stark reality check to Wall Street, as a potent mixture of economic data, earnings reports, and shifting monetary policy expectations sent stocks on a tumultuous journey. By week's end, the major indices had surrendered a significant portion of their recent gains, leaving investors to ponder whether the market's resilience has finally met its match. 📊 By the Numbers - S&P 500: -2.5% (closing at 5,346.56) - Nasdaq Composite: -3.4% (settling at 16,776.16) - Dow Jones Industrial Average: -2.1% (ending at 39,737.26) - Russell 2000: -6.7% (finishing at 2,109.31) The week's losses were broad-based, with all 11 S&P 500 sectors finishing in the red. The dramatic reversal in small-cap fortunes, as evidenced by the Russell 2000's sharp decline, raised particular concern about the market's underlying health and the sustainability of the year's rally. --------------------------------------------------------------- 📅 Day-by-Day Market Analysis 🌅 Monday: Calm Before the Storm The week began on a deceptively quiet note, with the major indices barely budging as investors adopted a wait-and-see approach ahead of a packed week of earnings and economic data. - S&P 500: +0.1% - Nasdaq Composite: +0.1% - Dow Jones Industrial Average: -0.1% - Russell 2000: -1.1% Key Events: - McDonald's (MCD) shares rose despite disappointing quarterly results, highlighting the market's selective optimism. - The absence of major economic data allowed earnings anticipation to dominate sentiment. Market Mood: Cautious optimism with a hint of anxiety. 🌤️ Tuesday: Mixed Signals Tuesday brought a divergence in market performance, with large-cap indices and growth stocks faltering while the Dow and small-caps showed resilience. - S&P 500: -0.5% - Nasdaq Composite: -1.3% - Dow Jones Industrial Average: +0.5% - Russell 2000: +0.6% Key Events: - Consumer Confidence for July surprised to the upside (100.3 vs. 99.8 expected), suggesting resilient consumer sentiment. - Earnings disappointments from Dow components Merck (MRK) and Procter & Gamble (PG) weighed on market sentiment. Market Mood: Conflicted, with investors struggling to reconcile strong consumer data with earnings misses. ☀️ Wednesday: Fed-Fueled Rally The Federal Reserve's decision to hold rates steady, coupled with Chair Jerome Powell's press conference, initially sparked a robust rally across the board. - S&P 500: +1.6% - Nasdaq Composite: +2.6% - Dow Jones Industrial Average: +0.2% - Russell 2000: +0.5% Key Events: - FOMC kept the target range for the fed funds rate unchanged at 5.25-5.50%. - Semiconductor stocks surged on strong earnings from AMD and Microsoft's robust capex budget. - Boeing (BA) shares took flight after reporting better-than-expected earnings. Market Mood: Euphoric, with investors interpreting the Fed's stance as dovish. 🌥️ Thursday: Reality Check The market's optimism was short-lived as disappointing economic data triggered a sharp sell-off, particularly in growth and small-cap stocks. - S&P 500: -1.4% - Nasdaq Composite: -2.3% - Dow Jones Industrial Average: -1.2% - Russell 2000: -3.0% Key Events: - Weekly jobless claims rose to 249,000, well above the expected 233,000. - The ISM Manufacturing Index fell further into contraction territory at 46.8%, worse than the anticipated 48.5%. - Treasury yields plummeted, with the 10-year yield falling 13 basis points to 3.98%. Market Mood: Anxious, as recession fears began to overshadow rate cut hopes. 🌧️ Friday: Storm Clouds Gather The week ended on a decidedly negative note as a disappointing jobs report amplified concerns about economic health and the Fed's path forward. - S&P 500: -0.5% - Nasdaq Composite: -1.9% - Dow Jones Industrial Average: -0.4% - Russell 2000: -2.5% Key Events: - Nonfarm payrolls increased by only 114,000, far below the expected 170,000. - The unemployment rate jumped to 4.3% from 4.1%. - Amazon shares tumbled 8.5% on concerns about rising capital expenditures. Market Mood: Pessimistic, with recession fears taking center stage. --------------------------------------------------------------- 💡 Deep Dive: What's Really Driving the Markets? 1. 📊 Labor Market Cooling: A Paradigm Shift Friday's jobs report wasn't just a miss—it was a potential inflection point for the U.S. economy. The addition of only 114,000 nonfarm payrolls in July, coupled with a jump in the unemployment rate to 4.3%, suggests that the Fed's aggressive rate hikes are finally biting into the labor market. Implications: - Consumer Spending: A weaker job market could lead to reduced consumer spending, the backbone of the U.S. economy. - Wage Growth: Average hourly earnings growth slowed to 3.6% year-over-year, potentially easing inflationary pressures. - Fed Policy: This data significantly increases the odds of a rate cut in September, with markets now pricing in a 71.5% chance of a 50 basis point reduction. The labor market's resilience has been a double-edged sword for the Fed. Its cooling may open the door for rate cuts, but it also raises the specter of a harder landing than anticipated. 2. 🏭 Manufacturing Malaise: Canary in the Coal Mine? The ISM Manufacturing Index's further descent into contraction territory (46.8 in July) marks nine consecutive months of decline. This persistent weakness in a key economic sector is ringing alarm bells across Wall Street. Key Concerns: - Global Demand: The contraction suggests weakening global demand for U.S. goods. - Supply Chains: While improved from pandemic lows, ongoing disruptions continue to plague manufacturers. - Forward-Looking Indicator: Manufacturing often leads broader economic trends, potentially foreshadowing wider economic weakness. 3. 🎭 The Fed's Tightrope Walk While the Federal Reserve held rates steady, Chair Jerome Powell's comments left ample room for interpretation. The market's dramatic repricing of rate cut expectations underscores the delicate balance the Fed must strike. Critical Factors: - Inflation: While cooling, it remains above the Fed's 2% target. - Economic Growth: Signs of slowing growth could force the Fed's hand sooner than expected. - Financial Stability: The regional banking crisis earlier this year remains fresh in memory. 4. 💻 Tech Sector: A House Divided Earnings reports from tech giants painted a complex picture of the sector's health and future prospects. Winners and Losers: - Meta Platforms (+4.8%): Strong ad revenue and user growth impressed investors. - Apple (+0.9%): Resilient iPhone sales offset concerns about other product lines. - Microsoft (-4.0%): Cloud growth deceleration worried investors despite strong overall results. - Amazon (-8.0%): Massive capital expenditure plans for AI initiatives raised eyebrows. Broader Implications: The divergence in performance highlights the increasing importance of company-specific factors in a market that has been largely driven by macro concerns. --------------------------------------------------------------- 📈 Sector Spotlight: Winners and Losers in a Tumultuous Week 🛡️ Defensive Sectors Show Their Mettle - Utilities (+3.1% for the week): The sector's steady dividends and regulated returns attracted risk-averse investors. - Consumer Staples (-1.0%): While still down, the sector outperformed the broader market as investors sought safety in companies with inelastic demand. 💊 Healthcare: A Bright Spot in a Dim Market - UnitedHealth Group (UNH) hit a 52-week high, bucking the broader market trend. - The sector's defensive characteristics and relative insulation from economic cycles provided support. 🔋 Energy Sector Feels the Heat - Oil prices retreated on global growth concerns, with WTI crude falling 4.6% for the week. - Major oil companies reported mixed earnings, with some missing expectations due to lower commodity prices. 🏦 Financials: Caught in the Crossfire - Banks faced pressure as yield curves flattened, potentially squeezing net interest margins. - However, some regional banks saw relief as fears of a systemic crisis continued to fade. 🏗️ Real Estate: A Surprising Resilience - The sector showed unexpected strength, finishing the week up 1.2%. - Lower long-term interest rates and the potential for Fed rate cuts provided support. --------------------------------------------------------------- 🔮 Looking Ahead 1. Earnings Season's Home Stretch With about 35% of S&P 500 companies still to report, earnings surprises could still move markets. Key companies to watch include: - Uber Technologies (UBER) - Tuesday - Walt Disney Company (DIS) - Wednesday - Alibaba Group (BABA) - Thursday 2. Economic Data on the Horizon - Tuesday: International Trade in Goods and Services - Wednesday: EIA Petroleum Status Report - Thursday: Weekly Jobless Claims, EIA Natural Gas Report 3. Fed Speak in Focus With no scheduled FOMC meetings until September, investors will parse every word from Fed officials for clues about future policy moves. 4. Geopolitical Landscape - Ongoing tensions in the Middle East and their potential impact on oil prices - U.S.-China relations and their effects on global trade and technology sectors 5. Technical Levels to Watch - S&P 500: 5,300 serves as a key support level; a break below could trigger further selling. - VIX: The "fear index" closed at 16.87; a move above 20 could signal increased market stress. --------------------------------------------------------------- 💭 Strategic Insights The cooling labor market and manufacturing weakness point to a potential economic slowdown, yet they also increase the likelihood of the Fed easing its monetary policy. This delicate balance creates both risks and opportunities. Investment Strategies to Consider - Defensive Positioning: Overweight sectors like utilities, healthcare, and consumer staples that tend to outperform in uncertain economic environments. - Quality Over Quantity: Focus on companies with strong balance sheets, consistent cash flows, and sustainable competitive advantages. - Fixed Income Opportunities: With yields potentially peaking, high-quality bonds may offer both income and potential capital appreciation. - Volatility Management: Consider implementing option strategies or increasing cash holdings to manage portfolio volatility. - Long-Term Perspective: Remember that market storms, like all storms, eventually pass. Use market weakness as an opportunity to accumulate high-quality assets at discounted prices. "The market is a device for transferring money from the impatient to the patient." - Warren Buffett Potential Catalysts to Monitor - Inflation Data: Any significant deviation from the expected cooling trend could dramatically shift Fed expectations. - Consumer Behavior: Watch retail sales and consumer sentiment figures for signs of a spending slowdown. - Corporate Guidance: Forward-looking statements from S&P 500 companies could provide valuable insights into the economic outlook. - Yield Curve Dynamics: Further inversion or a rapid steepening could have significant implications for both equity and fixed-income markets. --------------------------------------------------------------- 🎬 Embracing Uncertainty As we close the books on a tumultuous week, it's clear that the market narrative is shifting. The unbridled optimism that characterized much of 2023 is giving way to a more cautious outlook. Remember, in the words of the legendary investor Peter Lynch, "The key to making money in stocks is not to get scared out of them." Stay vigilant, stay informed, and above all, stay invested in your long-term financial goals. Please send feedback and ideas using comments, PMs, or email. I answer all emails and PMs personally. No personal assistant BS here. And, as always — stay informed — and do your own due diligence, Jack from the Daily Moat Below is the section only for premium members. 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