Rally Cools As Tech Earnings Disappoint

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Rally Cools As Tech Earnings Disappoint Tech stocks enjoyed a historical rally, but their earnings have disappointed with Netflix posting a lower-than-expected forecast and Tesla’s profitability shrinking in the second quarter. Weekly initial jobless claims dropped unexpectedly, which paints a picture of a strong labor market. Meaning? The Fed Reserve may feel comfortable with hiking rates beyond its July meeting. Sure enough, the 10-year Treasury yield rose 10 basis points. And of course, Russia is threatening to consider any ships coming to Ukraine as military vessels. The pact to allow Ukraine export wheat expired, and Russia refuses to renew. Wheat prices jumped as a result. So, investors are wondering if the recent rally can sustain with the current environment. - “In the last 24 hours alone there has been talk of a worsening of the conflict in Ukraine, a further slowdown in China and major US banks facing significant real estate losses,” Lewis Grant, senior portfolio manager at Federated Hermes, wrote in a note. - “Each of these threats, along with uncountable unknowns, has the potential to halt the sentiment rebound in its tracks.” Lewis Grant, senior portfolio manager at Federated Hermes Cameron McCrimmon of Aegon Asset Management warned that the recent rally was largely by a few mega-cap tech stocks with exposure to AI. Can they justify the higher valuation with their upcoming earnings reports? - “The breadth of returns on the S&P 500 has become increasingly narrow, driven by a few mega-cap tech stocks on AI optimism, which is a classic sign of an ageing bull,” said Aegon Asset Management strategist Cameron McCrimmon. Louise Goudy Willmering, a partner at Crewe Advisors, also shares the sentiment. - “To be just driven simply by a few names in technology is not great,” Goudy Willmering said by phone. “Earnings will definitely determine where we go from here as we look into the third and fourth quarters.” However, other sectors have posted solid earnings results. Airlines expect record level of demand. Johnson & Johnson hiked its full-year guidance. Travelers also beat analyst estimates for the quarter. At the same time, tech companies have been disappointing in their reports. Of the S&P 500 companies that have reported earnings thus far, 74% have beaten expectations. - “Although the number of bear market prognosticators has certainly thinned out given the market’s impressive run, there remains a diehard contingent that have viewed recent trends as nothing more than a bear market rally,” BMO Capital Markets analyst Brian Belski said in a note from the firm. - “Unfortunately for this crowd, history does not appear to be on their side.”  The Safest Compounding Stock You Can Find Right Now Today’s Stock Pick: Humana ([HUM]() I am going to give you a number – 10,000. Why is that number special? That number could make you a lot of money. About 10,000 represents the number of senior citizens enrolling in a Medicare Advantage plan every single day. Listen, Medicare Advantage is a new thing. The government runs the Original Medicare, but it doesn’t cover everything, such as prescriptions, vision, dental, and etc. Plus, it often covers up to 80% of the medical costs. Enter Medicare Advantage. It is run by private companies, and it covers everything that Original Medicare – plus more. The coverage is 100%. And it adds dental, vision, and hearing care. It’s nearly a no-brainer to choose Medicare Advantage, and the growth exploded to 48 percent of the total Medicare-eligible population. You can see its fantastic growth since 2007 in the graph below: (Source: KFF) Humana is a private insurance company that offers Medicare Advantage, and its growth cannot be ignored -- especially when it is in the insurance business. One day, I was chatting with an insurance marketing guru. His business was helping insurance agencies to acquire and retain customers. He’s been in this for 30+ years, selling over $50 million in products. And he said to me, “Let me tell you something. The insurance business is America’s best-kept secret.” The reason is simple – an insurance company gets recurring revenue from monthly premiums with a retention rate as high as 90% for decades. Think about this. Once you get insurance, you pay and forget it. Insurance companies get to invest in these premiums and generate returns for many decades. Humana is a stable business because of the necessity of getting insurance. Every day, senior citizens must get health insurance. You can’t avoid it. And Medicare Advantage is perhaps the best option for most Americans. Plus, Humana is somewhat insulated against inflation by raising insurance premiums. (Photo: Christopher Fryer) Humana is the second-largest Medicare Advantage plan provider supporting over 5 million beneficiaries with high-quality coverage. The quality of Humana’s product offering is right at the top of the pack, with over 97% of Medicare Advantage members in plan with a four-star rating or higher As a result, Humana grew faster than the market, taking market share along the way. Its annualized enrollment growth was 10.4% since 2017 – well above the industry’s growth. And it expects a 17% growth in 2023: (Source: Humana) Listen, you will not get a software-type growth with Humana. But you get the security. You can expect Humana to post 10% EPS annual growth in the next five years, not counting its dividends. The company just raised its 2023 guidance which shows the bright future ahead. Humana also repurchased about $1 billion of its shares in 2022, which shrank its market cap by 1.6% in 2022, and the program is certain to continue. The CFO expects to repurchase another $1 billion this year. Bottom line: With the market filled with uncertainty, Humana is one of the safest stocks you can buy. Its products are a necessity, and people have no reason to stop doing business with Humana unless switching to another competitor. And you’d get growth far above blue-chip stocks. You can expect 10% EPS growth in the next five years. So, add this stock to your portfolio to insulate your cash against inflation and any potential recession. [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](       © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.