Today = volatile trading?

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Economic slowdown? Two words are beginning to dominate Wall Street: “Economic slowdown.” April’s job openings fell to the lowest level in three years, according to yesterday’s data release. Available positions declined to 8.06 million from 8.36 million in the prior month, according to JOLTS. While JOLTS isn’t considered too reliable due to low survey responses, the slowdown matches the narrative of the recent economic data. More importantly, the number of vacancies per unemployed worker fell to the lowest level since June 2021, with the ratio of 1.2. Bloomberg economist Stuart Paul expects the ratio to fall to the 2019 levels later this summer. It would build confidence for the Federal Reserve to start cutting interest rates since the labor market would start to be back in balance. - “The ratio is now roughly in line with the level that prevailed pre-Covid. Given how quickly job openings are declining, we expect to reach 2019 vacancy levels late this summer,” said Bloomberg economist Stuart Paul. (Source: Bloomberg) As a result, Wall Street now prices in a first cut in November. - “The evidence is accumulating that the Fed should begin easing,” said Ronald Temple, chief market strategist at Lazard. A few weeks ago, the higher odds of interest rate cuts would lead to a rally in stocks. But not this time. The reaction has been muted. It hinted that Wall Street is worried about an economic slowdown — with a potential of a recession. - “There is nothing to imply that the real economy is on the precipice of a recession, however, rather that a no-landing for the labor market appears less likely than it did during the first quarter,” wrote said Ian Lyngen and Vail Hartman at BMO Capital Markets. - “Goldilocks is edging toward the door, but has yet to leave the building.” Could the correction be coming? Maybe, maybe not. The concerns about earnings growth (due to an economic slowdown) could push down stock prices in the next few weeks. - “Thus, stocks have not responded in the usual way of cheering on weaker-than-expected data,” said Fawad Razaqzada at City Index and [Forex.com](. - “The questions, are we finally headed for a long overdue correction now? The S&P 500 outlook is not bearish yet from a technical viewpoint, but the potential is there for that to change in the coming days.” Notably, Bank of America said its clients were net sellers of US stocks for the 5th straight week. $5.7 billion were withdrawn from stocks in the five-day period ended last Friday. That was the fourth-largest outflow in bank’s data history. A Turnaround Stock To Buy Right Now Today’s Stock Pick: Embraer SA (ERJ) This is a company that’s relatively unknown on Wall Street. Embraer SA has been in business for decades since 1969. It is the world-leading manufacturer of jets up to 150-seats. Its customer base included executive jets and 170+ airline companies in more than 90 countries. It also manufactures military planes for 60+ armed forces. (Source: Embraer) Recently, it is manufacturing eVOTLs which offer a new market opportunity. It also has a Services & Support segment where it offers replacement parts for existing aircrafts (which offer insanely high margins). (Source: Embraer) In the graphic below, you can see that Services & Support offers a 15% EBIT margin, while executive aviation is at 10%. For the other two segments (Defense & Security and Commercial Aviation), it had 5% margins. (Source: Embraer) The company calls this year a “harvest season.” Why? The company went through a turnaround phase where it fixed multiple businesses to boost EBITDA. The turnaround has completed. Now the company is ready to “harvest” its profits. Its adjusted EBITDA margin skyrocketed from 2% in 2019 to 10.5% in 1Q24 LTM. (Source: Embraer) Its return on invested capital also climbed from -0.2% in 2019 to 8.8% in 2023. (Source: Embraer) Embraer has found its sweet spot in the aircraft industry. It doesn’t compete with Boeing and Airbus in medium narrowbody aircrafts (160+ seats). Instead, it focuses on regional and small narrowbody aircrafts. There is little competition in regional aircrafts (80-100 seats). The U.S. is expected to expand in this segment because of the rise of ultra low fare flights. (Source: Embraer) In fact, the company has 29% market share in up to 150-seat aircrafts since 2004. As for 70-90 seat jets in North America, it owns 88% of the market: (Source: Embraer) What’s more, the company is swimming in backlog orders. Its executive aviation slots are sold out until 2Q26: (Source: Embraer) Bottom line: The business is booming for Embraer. It has carved out a niche in the aircraft business where barrier of entry is extremely high. Analysts expect a whopping 46% EPS growth from 2024 to 2025. The stock is currently trading at a 20 P/E. It is a good value when we consider its strong projected earnings growth. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](