[Lemons to Lemonade] Is Now the Right Time to Buy April's Stock Market Lemons?

With the inflation data coming up, will softer data push stocks even higher? Find out inside! Picks from the Editor SPONSORED (Newsletter Continues Below) Sponsored [The Electricity Revolution Is Here — Don't Be Left Behind!]( A largely unknown energy resource is about to be unlocked on a global scale, thanks to a tiny Silicon Valley firm. With the help of AI, this company has discovered how to exploit an incredible trillion-dollar source of power that could make all other forms — from gas and coal through oil, to wind, hydropower and solar fusion — look small in comparison! Just one year's worth alone would generate 5X as much fuel than Earth’s largest existing oil field — making its potential hard to ignore. [Watch the full presentation here.]( [Privacy Policy/Disclosures]( Turning Lemons Into Lemonade: Buying the Market's April Losers  Hi Traders,  The Dow Jones Industrial Average managed to score a 2.5% gain last month, but guess what? Not all 30 of its components decided to hop on the profit train. In fact, a few of them lost some ground in April. But hey, as experienced investors know, sometimes the best time to snag a good long-term stock is right after a short-term setback. With that in mind, let's take a closer look at the Dow's biggest April losers and see if they're looking more attractive now that they've had a bit of a tumble. Spoiler alert: Only one of them is really a must-have for most investors at the moment. In the Dow's hall of shame for April, we've got Caterpillar (NYSE: CAT), Intel (NASDAQ: INTC), and Cisco Systems (NASDAQ: CSCO), with declines of 4.4%, 4.9%, and 9.6%, respectively. Each of these stocks has its own little tragedy. For Caterpillar, the main drama unfolded in early April, when people started worrying that a recession might slam the heavy equipment business. The stock tried to make a comeback mid-month, but even a stellar Q1 earnings report couldn't calm fears about an economic slowdown. Caterpillar's CEO, Jim Umpleby, even thinks the company's recent surge in pricing power has peaked, which isn't music to investors' ears. Now, Intel's shares began April with a case of the blues, all thanks to the same economic weakness concerns. The stock did make an effort to rekindle March's rally by the end of the month, but it just couldn't quite find its mojo. You can point the finger at Q1's earnings for Intel's struggles. Sure, the record-breaking first-quarter loss of $0.04 per share wasn't as bad as the predicted $0.15-per-share loss, and CEO Pat Gelsinger sees some "green shoots" for better margins in the second half of the year. However, investors can't shake off the 36% year-over-year plunge in revenue.  As for Cisco, it's also caught up in the broader economic turmoil. Unlike Caterpillar and Intel, though, earnings didn't pull the rug out from under the stock later in the month. It's just stuck in the worst possible sector (technology) at the worst possible time. So, the million-dollar question: to buy or not to buy? We all know the best time to buy quality stocks is when they're discounted. But are any of these companies worth picking up right now? The answer, my friends, depends on your time frame. Of the three Dow stocks in question, Intel can be crossed off the shopping list for now. Despite its long-standing role in the computer processor industry, it's having a tough time keeping rivals like Nvidia and even Advanced Micro Devices at bay. Not to mention the manufacturing challenges it just can't seem to shake off. We want top-notch stocks, and Intel's just not cutting it at the moment. Caterpillar, however, might deserve a second look. Yes, we should heed Umpleby's pricing power warning, but remember that it's just a cyclical headwind. Caterpillar is still the king of the heavy equipment jungle, and eventually, the uncertainty will pass. The company will be much more appealing then. As for Cisco, the market hasn't exactly been kind to tech stocks lately, but don't toss this baby out with the bathwater. Cisco is holding its own in the face of economic uncertainty, and analysts predict revenue growth in the coming years. Plus, the stock is trading at a discount, making it one of the Dow's most undervalued constituents. But the real gem in all of this is the subtle lesson hiding in the background. When it comes to buying and selling decisions, it's all about the specific company and the economic context. Surprisingly, the least important factor in these three instances is their poor performance last month. Sure, bargains are great, but don't shy away from paying for quality. And remember, a cheaper stock isn't automatically a better pick just because it's had a recent pullback. Keep the bigger picture in mind when trading. While the Dow may have enjoyed a decent month overall, some of its components didn't exactly join the party. But, as the old saying goes, every cloud has a silver lining, and this might just be the perfect time to find a great deal on a quality stock.  Keep on keeping up!  John @ Traders on Trend  (In the next article: Why JPMorgan and Goldman Sachs are feeling good if we have soft inflation data later. Find out below! 👇) Sponsored [This Has Won 99.1% Of Trades Over 3 Years]( This new video is causing quite a stir. It exposes a unique trade based on the 4 characters “310F”. These 4 characters hold the secret to the most powerful trade you’ve NEVER heard of. It’s released every Tuesday and could DOUBLE your money by Friday. Over the past 3 years, we’ve won 321 out of 324 of these trades (that’s a 99.1% success rate), with the majority of the trades making 100% or more every 3-10 days. Discover how a simple 10-minute trade on Tuesday could double your money by Friday.[Watch The Full Video Here]( [Privacy Policy/Disclosures]( Check the Free Presentation Today ☝ SPONSORED Can Soft Inflation Data Reignite a Stock Market Rally? Goldman and JPMorgan Say Yes In a market that's more divided than a family on vacation destination choices, there's one thing that two major Wall Street trading desks can actually agree on: US stocks are going to rally if we see some soft inflation numbers this Wednesday, which could convince the Federal Reserve to hit the pause button on tightening. So, let's talk about the potential outcomes, shall we? If the consumer-price index (CPI) dances around or below the 5% consensus, John Flood from Goldman Sachs Group Inc. says we could witness the S&P 500 rise at least 0.5%. However, if inflation decides to flex its muscles and we get a strong reading, stocks could go tumbling down like a Jenga tower. Flood suggests the benchmark index could drop at least 2% if the reading climbs above 5.9%. In a nutshell, Flood believes that "the cooler the data, the better for stocks right now." The team at JPMorgan Chase & Co., led by Andrew Tyler, echoes this sentiment. Their analysis shows that if the CPI falls between 5% and 5.2%, the S&P 500 could add somewhere between 0.5% and 0.75%. But if inflation decides to show off and surpasses 5.5%, we could see stocks take a nosedive of more than 3%. Both trading desks are also daydreaming about a stock rally of at least 2.5% if inflation decides to chill below 4.5%. The last time CPI flirted with those levels was back in April 2021, and JPMorgan thinks there's only a 1% chance of that happening again. But hey, a little optimism never hurt anyone, right? The S&P 500 has been bouncing within a 150-point range since the end of March, hesitant to break through the 4,200 barrier.   (article continues below) Sponsored [How He Bagged One Of The Top Trading Records…]( A reclusive millionaire has been quietly racking up winning trade after winning trade. Despite avoiding most headlines, he’s become one of the most successful traders around - over the last 8 years, he’s banked a 97% win rate. How does he do it? He sat down for a rare interview where he revealed it all. [Click HERE to see how he’s done it…]( [Privacy Policy/Disclosures]( SPONSORED  🔼 Pay attention, this is worth your time! ☝  (article continues)  Traders are caught in a tug-of-war, trying to balance the potential for Fed rate cuts against various threats, like banking stress, government debt ceiling dramas, and the looming shadow of an economic recession. To be fair, the CPI has been losing steam for nine consecutive months, and the market's anxiety around it seems to be simmering down. The Cboe 1-Day Volatility Index is hanging around 18, which is the lowest pre-CPI reading we've seen in the past year. But let's not get too relaxed, because the stakes are still sky-high. Stock investors are currently displaying a range of attitudes that's as diverse as a buffet spread. While rules-based funds have been on a shopping spree in recent months, discretionary investors are playing hard to get. Quants haven't been this bullish relative to stock pickers since 2019, as per Deutsche Bank AG's data. Brent Donnelly, president of Spectra Markets, thinks that a soft CPI reading could force the bears to pack up and leave, which would give the S&P 500 a chance to take another shot at the elusive 4,200 mark. He says, "The market has been grinding to nowhere for ages and there is plenty of money available to buy stocks if the market can find a reason to do so." It's like everyone's just waiting for that one perfect moment to dive in and start the party. The market is a mixed bag of emotions right now, but all eyes are on that upcoming CPI release. If the numbers are kind to us, we could see a rally that'll put a smile on many investors' faces!  Disclaimer:  The material in this document is for informational purposes based on our proprietary research. It is not an offering, specific recommendation, or a solicitation of an offer to buy or sell any securities mentioned or discussed herein.  Any performance results discussed herein represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.  Due to the timing of information presented, any investment performance reflected within this document may be adjusted after the publication and distribution of this material. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, be equal to any corresponding indicated historical performance levels or be suitable for your portfolio.  Any investment results set forth in this document are not net of expenses and execution costs, nor do they account for other relevant trading or investment fees. 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