Will this make or break the rally?

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Wall Street pushed Nvidia up by 2.5% just before its huge earnings report due to be released today. The AI chipmaker will help investors determine whether they feel certain about corporate earnings. The recent inflation reading indicated disinflation, so that’s a bullish catalyst. Corporate earnings will be key to keep the rally going. Jay Woods at Freedom Capital Markets believes that Nvidia will play an enormous role in Wall Street’s sentiment. - “For the market to keep momentum this week, it may come down to just one stock - Nvidia,” said Jay Woods at Freedom Capital Markets. - “Well, that’s not exactly true, but it sure feels like the hype for this earnings event will be the talk of trading desks and financial media all week.” Jay Woods at Freedom Capital Markets (Photo: CNBC) After all, this week will be light with economic data. Investors need every scrap of data to anticipate the next move, so Nvidia may take the spotlight. - “Traders seemed to like the trend of last week’s economic numbers, which were solidly in ‘Goldilocks’ zone,” said said Chris Larkin at E*Trade. - “With a relatively light economic calendar this week, earnings are poised to drive the market discussion, with Nvidia headlining a solid list of tech and retail names.” After all, Nvidia was responsible for a whopping 1/4 of the gains in the S&P 500. - “Not since the likes of Cisco in the late ‘90s can we remember a single stock having such an enormous influence on the outlook for the market as a whole,” said Jason Trennert at Strategas Securities. - “Nvidia’s earnings announcement last May made even the most-skeptical investors on the future of AI take notice.” However, RBC strategists led by Lori Calvasina wrote that valuations are “stretched” which may give the rally a limited room to run. - “With equity valuations already stretched, there may be less room for the rally to run,” said Saira Malik at Nuveen. - “We suggest making incremental portfolio allocations to areas that have lagged the broader market due to their cyclicality and interest rate sensitivity.” JPMorgan Chase CEO Jamie Dimon said the bank is not going to buy back much shares at the current price, indicating that he believes JPM’s stock price is overvalued. So, we will see if Nvidia can still keep the enthusiasm going on Wall Street. Don’t Sleep On This 134-Year-Old Company Today’s Stock Pick: Carpenter Technology (CRS) This is my favorite kind of trade. Why? Carpenter Technology does nothing exciting. It is a 134-year old company that makes stainless steels and corrosion-resistant alloys. But this is not a stock that you should sleep on. I will tell you why in a minute. First, it makes 500+ alloys in various products forms: (Source: Carpenter Technology) But there’s an unique thing about this company. It products difficult-to-replicate system of product and process capabilities. And building out capacity is also difficult. More importantly, it produces highly-technical materials that requires enormously-high quality. Why? They provide materials to critical industries like aerospace and medical. One loose piece can cost human lives. So, any manufacturer must be qualified to produce these materials. It is not easy to enter the business. It is not like TV manufacturers where virtually anybody can enter the industry. About 50% of its revenue was from aerospace and defense. Medical had 13% of the revenue while industrial & consumer accounted for 18% of the total revenue. Almost every segment has strong demand trends. For example, let’s look at aerospace. About 40% of the revenue was for engines. You can see other parts that Carpenter manufactures for the aerospace segment: Now, look at the annual production rates for airplanes. It is going to grow over the next few years. 2013 was about 1,200 airplanes. Carpenter said the number could jump to about 1,800 in 2027. That’s an important growth driver since the segment (along with defense) accounts for 50% of its total revenue. As for medical, it produces many essentials that made medical miracles possible — dental implants, spine, joint reconstruction, surgical instrumentation, MRI, X-ray, and so on. The company expects aerospace & defense to grow by 23% year over year in the second quarter. Medical is poised to do well with a 16% growth. Now, here’s the kicker: Remember that I promised you something so good about this company? The company expects operating income to grow by 40% CAGR from FY23 to FY27. Moreover, the company expects the accomplishment to be front-loaded. About 50% of the opportunity is expected to accomplish in FY24. Meaning? The company is prepared to post phenomenal results this year, which can be marvelous for its stock price. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](