📏The Fed Inches Closer to a Hard Landing

Good morning. After being told that inflation was transitory for a year, we’re now being told... It’s the monthly jobs numbers today and they’re not going to be pretty and will be possibly the tip of the iceberg as we head into May. [Trading Tips] Good morning. After being told that inflation was transitory for a year, we’re now being told that negative GDP growth for two quarters in a row isn’t a recession. In the meantime, the Fed continues to raise interest rates aggressively, with another rate hike yesterday. This fast pace of rate increases only makes it more likely that we’ll avoid what the Fed calls a “soft landing” – where we somehow avoid a recession, or just have a mild one, while inflation dissipates from 40-year highs. It’s clear that we still have some turbulence in store for the markets, and that the Fed isn’t ready to pivot quite yet. Traders should continue to look for big daily swings in the market – with an eye towards buying long-term holdings on down days, and using rallies to buy shorter-term trades like put options to profit from the market’s likely continued downside. Now here's the rest of the news: Sponsored Content [“Infinite Energy”: New AI Tech Unleashes Largest Untapped Energy Source on Earth]( A tiny Silicon Valley company is using artificial intelligence to unleash the largest untapped energy source in the world. I’m not talking about oil, gas, wind, solar, hydro, nuclear … or anything you’ve likely heard about before… Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen. In fact, the growth here could be almost unimaginable. [To get the whole story, including details of the company responsible, click here now…]( MARKETS DOW 32,197.59 +1.37% S&P 4,023.61 +2.62% NASDAQ 12,032.42 +4.06% *As of market close • Stocks surged on Wednesday, as the Federal Reserve raised interest rates exactly as expected. • Oil rallied 3.6 percent, closing at $98.38 per barrel. • Gold rose 0.8 percent, last going for $1,732 per ounce. • Cryptocurrencies jumped higher, with Bitcoin at $22,761 at the stock market close. Today’s TOP TIPS [High Profit Margin Companies Will Win in Time]( The current earnings season is showing which companies can fare well with high inflation right now, and which companies are struggling. While a company may report far different earnings than average right now, companies with high profit margins will likely continue to grow in time. That’s because these companies can either reinvest at a high rate of return, or give capital back to shareholders via dividends or share buybacks. » [FULL STORY]( [Insider Trading Report: Baker Hughes Company (BKR)]( Michael Dumais, a director at Baker Hughes Company (BKR), recently added 10,000 shares. The buy increased his holdings by nearly 67 percent, and came to a total price of just under $244,000. This marks the first insider buy at the company since September 2020. Otherwise, company insiders have been regular and steady sellers of shares in the past two years, with a more even mix of buyers and sellers going back to 2019 and early 2020. » [FULL STORY]( [Unusual Options Activity: Rollins Inc. (ROL)]( Shares of pesticide control company Rollins Inc. (ROL) have traded flat over the past year. One trader sees the possibility for a decline in the weeks ahead. That’s based on the August $35 puts. With 22 days until expiration, 12,561 contracts traded compared to a prior open interest of 206, for a 61-fold rise in volume on the trade. The buyer of the puts paid $1.88 to get into the trade. » [FULL STORY]( IN OTHER NEWS • [Home Prices Show Signs of Slowing]( Although US home prices are up an average of 20 percent over the past year, signs of a slowdown have increased in recent weeks. Price gains have slowed in recent data, with home price up 19.7 percent for the 12 months ending in May, compared to a 20.6 percent rise in April. With interest rates rapidly rising, the slowdown is likely to become more obvious in the months ahead. • [China Property Market to See Drop Worse than 2008]( Property sales in China are on track to drop about 30 percent this year compared to last year. That’s about twice as bad as previously expected. It’s also on track to be worse than 2008, when sales fell by about 20 percent. This drop is also likely to delay a recovery in China’s real estate market, which started showing some strains last year. • [SEC Increases Insider Trading Cases]( The Securities and Exchange Commission (SEC) is increasing its number of insider trading cases. On Monday, the agency announced 4 separate cases, including a former member of Congress, a member of the FBI, and an information chief at a Silicon Valley company, among others. The agency is using computer data to better track anomalies. • [Demand for Travel Nurses Slides]( With the job market starting to show signs of slowing down, some niche jobs are being hit harder. One area is travel nurses. Demand surged during the pandemic, with some experienced nurses able to make as much as $10,000 per week. With a slowdown here, salaries are falling. • [Microsoft Misses on Earnings]( In a busy week to tech stocks reporting earnings, Microsoft (MSFT) missed on expectations. However, the firm was able to point to the strong US dollar weighing on foreign sales, and a weakening PC market due to declining demand as the culprits. Even with the slowdown, shares rallied immediately following the company’s earnings. S&P 500 MOVERS TOP ENPH 17.895% CMG 14.704% PYPL 12.176% SEDG 9.684% ROK 9.584% BOTTOM SHW 8.777% GRMN 8.722% TDY 7.014% KHC 5.952% CME 3.823% Quote of the Day There is this moderating of earnings expectations. The overall corporate sentiment seems to be declining, there is a lot of cautionary commentary around inflation, the dollar. As the Fed continues on its trajectory with its main goal to weaken demand for goods and services, that will translate into a weaker top line – if they are able to get inflation under control and temper that demand. That’s something we would be concerned about for the second half of this year. - Stephanie Lang, chief investment officer of Homrich Berg, on why the market may see further downside as corporations report lower earnings and guidance this earnings season. Sponsored Content [“Infinite Energy”: New AI Tech Unleashes Largest Untapped Energy Source on Earth]( A tiny Silicon Valley company is using artificial intelligence to unleash the largest untapped energy source in the world. I’m not talking about oil, gas, wind, solar, hydro, nuclear … or anything you’ve likely heard about before… Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen. In fact, the growth here could be almost unimaginable. [To get the whole story, including details of the company responsible, click here now…]( Not sure the best way to get started? 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