Economic slowdown, what?

JOIN OUR LIVE SESSIONS! Our LIVE session starts when the big institutions and elite traders do before the opening bell. We'll look at real-time dark pool data as the market movers position themselves for the trading day in secret off-market exchanges. [JOIN OUR LIVE TRADING SESSION @ 6am PT / 9am ET]( [Shadow] Hello investor, Economic slowdown, what? ServiceNow smashed the earnings reports and raised its sales guidance for the year to about 23% revenue growth. That was a bullish signal for the tech sector. Profits also smashed expectations with adjusted EPS of $2.37 versus analysts’ estimate of $2.05. The company also reiterated its commitment to cut no jobs in 2023, with CEO Bill McDermott calling it a “solemn oath.” This adds optimism to the tech sector. Meta’s stock skyrocketed by as much as 12% in after-market trading after the company reported upbeat results. The company returned to growth after three straight quarters of declines. The growth will accelerate in the next quarter to $32 billion from the recent quarter of $28.6 billion. However, net income plunged by 23% from the year earlier. Net income was $5.7 billion last quarter while its operating losses in Reality Labs was $3.99 billion – or about 42% of total income. This continues the same theme with other companies where they did well in sales but struggled with profit margins. Regardless, Tony Welch of SignatureFD expects tech earnings to continue posting upbeat results over the next few days. - “We always have to think about what the market has priced relative to expectations,” he said. - “Throughout the first quarter of the year, the market was starting to price in, ‘Okay, things aren’t as bad for big tech as what we thought they were. They’re going to be able to preserve profit margins better than we thought they were.’ I suspect you’re going to see a decent beat rate among those names.” Tony Welch of SignatureFD (Photo: SignatureFD) The slide continued for First Republic Bank. It’s like the market is daring the bank to fail. The regional bank’s stock plummeted 30% in another session of bloodbath. Why? The bank said it faces potential curbs on borrowing from the Federal Reserve. This leads to newfound speculations that the Fed Reserve could start to feel concerned about the systematic risk to the banking sector if First Republic Bank fails. If it unfolds before the Fed Reserve’s May 2-3, Fed officials may opt to skip hiking rates for now and revisit again in June. - “Up to this point Fed officials have taken substantial comfort from indications that acute [bank] stress was contained and there was no immediate sudden stop to bank credit,” Krishna Guha, Evercore ISI’s head of central bank strategy, wrote. - “That is a bit less firmly locked now, and we cannot rule out the possibility developments around First Republic could unfold in a manner that would lead the FOMC to skip [raising rates in] May while signaling a hike in June.” Krishna Guha, Evercore ISI’s head of central bank strategy (Photo: CNBC) You Can’t Afford To Sleep On This Silicon Valley Giant Today’s Stock Pick: Adobe Inc. ([ADBE]( Did you know that Steve Jobs tried to buy Adobe for $5 million during its first year of being in business? The founders, John Warnock and Charles Geschke, refused the offer but agreed to sell him shares worth 19 percent of the company. And these two founders eventually built Adobe into one of the most admirable companies in the world. Adobe’s innovation DNA has led to some iconic products like Photoshop and PDF. In fact, it owns a whopping total of 8,204 patents globally -- with 6,703 patents active. The company still dominates its field to this day. The stock fell 46% from its all-time high, making it a wonderful time to buy while it is cheap. Subscription-based business: The best thing about Adobe is that about 92% of its revenue came from subscription products. What does this mean? Compounded growth. Believe it or not, Adobe grew its YoY quarterly revenue by 20%+ for many quarters from 2015 to 2020. (Source: MacroTrends) Adobe is divided into three main business units – Adobe Creative Cloud, Document Cloud, and Experience Cloud. Creative Cloud holds some of the insanely popular applications like Photoshop, Illustrator, After Effects, and many more. Users just need to pay a subscription fee to get access to these apps. And of course, Photoshop overwhelmingly dominates its category. It has become a “verb.” Adobe said, "90% of the world's creative professionals use Adobe Photoshop." This segment has a massive Total Addressable Market of ~$41 billion in 2023, and still growing. Adobe projects a 53% growth in TAM to ~$63 billion in 2024. (Source: Adobe) Document Cloud, the second business unit, offers a bunch of services in electronic documents. Adobe invented PDF but made it free for the public to use. But its services make it easy for people to convert different files to PDFs. Plus, it offers e-signature services that will continue to become a vital part of almost any business operation. Adobe also believes that this industry’s TAM will grow by 52% from 2023 to 2024. (Source: Adobe) Experience Cloud has tremendous potential for Adobe. It offers marketing software that makes it possible for hyper-personalized messaging, where certain customer segments will receive special messages at the right time. Adobe’s platform uses data analytics to track a buyer’s journey from the beginning to the end. Plus, its Marketo software allows marketers to create email automation, journey campaigns, and ongoing campaigns. Notably, it pioneered the concept of “Dynamic Content” which allows marketers to send personalized email content based on a customer’s industry. Adobe estimates its TAM to be at ~$85 billion and could grow to ~$110 billion in 2024. (Source: Adobe) The Figma acquisition: Of course, we cannot talk about Adobe without mentioning its huge acquisition of Figma. The stock plunged (-25%) when it was announced. Listen, Figma offers collaborative software for developers and creators, and it spreaded like wildfire. Adobe had no choice but to overpay to acquire before letting the startup get too big to disrupt Adobe’s lucrative business. The purchase price was $20 billion for a company with $190 million revenue in 2022. It looks very high but it’s all about distribution. For example, look at how fast Microsoft Teams grew its daily active users versus Slack: (Source: Chart) Is Teams a better app than Slack? Well, we are not a tech review site. But there’s no doubt about it – the growth exploded because of Microsoft’s superior distribution. Its user base is so massive that within a click of a button, it can grow an app’s adoption exponentially. Reid Hoffman, the co-founder of LinkedIn, wrote in his book Blitzscaling: - “The cold and unromantic fact is that a good product with great distribution will almost always beat a great product with poor distribution.” That’s what you have here with Adobe. It may overpay for Figma based on the current numbers, but it can quickly change once Adobe leverages its distribution to grow its user base. Bottom line: Adobe is one of the best compounding stocks in the world. With its subscription-based products, you get a very stable revenue stream. Adding to its stability is how critical Adobe’s products are for many professions. For example, virtually any designer uses Photoshop. Product stickiness makes it tough for professionals to leave the Adobe ecosystem. With the stock being 46% off its all-time high, now is the rare time to buy this company at a discount. FREE LIVE TRADING SESSIONS & TRAINING USING THE MOST COMPREHENSIVE DARK POOL MONITOR AVAILABLE TO THE RETAIL INVESTOR Join our LIVE Trading Sessions throughout the day where we will focus on how you can learn to master the markets through the use of advanced algorithms and AI to trade like the institutions. BEFORE THE BELL Starts 6am PT / 9am ET Our newest LIVE session starts when the big institutions and elite traders do, well before the market opens. We'll look at realtime dark pool data as the market movers position themselves for the tra ding day in the secret off market exchanges. LIVE TRADING SESSION Starts 8am PT / 11am ET Take advantage of Trade Algo's proprietary advanced algorithms for anticipating big market swings in our daily LIVE trading session. Trade Algo's Senior Analyst Luke Russell will walk you through the key tools and strategies that the institutional investors and top traders use to profit from high volatility in the market. THE FINAL HOUR Starts Noon PT / 3pm ET According to Wall Street Journal approximately 20% of the trading volume happens at the last 30 minutes of the day. Institutions make the majority of these trades in private dark pool exchanges -- away from the public’s eyes. The timing happens for two reasons: 1) Index funds make their trades to mimic the closing price of a stock. 2) Billionaires trade near the end of the day because they anticipate major news that will be released during after-hours. Because they trade in dark pools, the public doesn’t know about these trades until one day later. We’ve consistently spotted the correlation between a spike in dark pool volume at the end of the day and the next day’s price movement. In the Golden Hour we will identify and analyze these movements so you can trade with confidence. CATCH THE SPARK Starts 4pm PT / 7pm ET Catch The Spark is led by trading expert Luke Russell, starting at 4pm PT / 7pm ET. Open to all this session is a recap of the day and a prep for the next trading day with an emphasis on identifying and examining "spark" orders, those large institutional trades taking place behind closed doors in off-market exchanges, that drive stock movement. 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