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😎 Looking on the Bright Side
Plus, Goldman Sachs' estimate on future job loss from AI.
Happy Monday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟩 | US Stocks Rose on Monday. With tensions in the Middle East cooling and optimism on the coming release of major earnings, stocks ripped higher today. The Dow climbed 253 points, and the S&P 500 gained 1%, breaking its 6-day losing streak.
📈 | One Notable Gainer: Shares of Bitcoin mining company Riot Platforms surged 23% after JPMorgan reiterated its overweight rating on the stock, claiming it is a bitcoin leader after the fourth-ever “halving” event on Friday.
📉 | One Notable Decliner: Tesla shares slipped 3% after announcing cuts to the sticker price of its Model 3 in China and additional cuts in other markets. This is the seventh day in a row Tesla’s stock has dropped, reaching its lowest price since January of 2023.
😎 | Tomorrow's Trade: Looking on the Bright Side. Scroll down for more.
Plus, start growing your investment portfolio… and keep your financial independence journey on track.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 Yes
🟨🟨🟨⬜️⬜️⬜️ No
S&P 500 Heatmap. Credit: Finviz
All stocks on US exchanges. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
VZ (-5%) Shares of Verizon fell as it came up short on the top line in its first-quarter earnings report. The company also lost postpaid net subscribers (YF)
LI (-6%) Chinese EV manufacturer Li Auto is lowering price tags on many of its models, including its newly launched MEGA SUV (Reuters)
NVDA (+4%) Nvidia and other AI stocks surged, showing a bounce back in AI enthusiasm and a strong bull market for the sector (Motley Fool)
AA (+2%) Morgan Stanely upgraded Aluminum company Alcoa, citing potential benefits from the Inflation Reduction Act (BI)
SQ (+2%) Shares of Block rose after Bank of America reiterated its buy rating on the financial services stock, predicting “significant expansions” ahead (BI)
TOGETHER WITH NURP
Here's the hard truth: Traditional investing methods rarely work.
That's right - investing isn't just about spreading your money in stocks and bonds.
Achieving portfolio growth in today’s market is also not about hiring a financial advisor or spending hours analyzing the market.
The volatility of the market and lack of time to manage investments often result in not seeing the desired growth.
A double financial whammy!
This is where our trading software comes in.
It has delivered 11.91% average monthly growth* (including winners and losers) and has worked for people who never traded before or hated staring at charts for hours.
Whether you're a trader, an investor, or an entrepreneur, fuel your financial goals with our trading software being used by 3,000+ high-income earners and entrepreneurs every week.
Past performance is not a reliable indicator of future results. Please click here to view important information and disclosures.
OVERHEARD ON THE STREET
Reuters: Fashion retailer Express has filed for Chapter 11 bankruptcy in the United States and intends to close more than 100 stores.
The Guardian: Musk revealed that he postponed his trip to India and meeting with Prime Minister Modi because of “very heavy obligations” at Tesla.
WSJ: Talks between Salesforce and data-management software firm Informatica have fizzled after the companies couldn’t agree on terms.
WSJ: In a bid to appease competition regulators, Kroger and Albertson have agreed to sell more than 160 additional stores in a divestiture package.
WP: Privately owned train company Brightline will break ground next week on a $12 billion high-speed rail project connecting Las Vegas and Southern California.
TOMORROW’S TRADE IDEA, TODAY
Inflation Is Benefitting Insurance Companies
You and I might not like inflation, but insurance companies sure do.
Currently, high inflation is resulting in higher insurance costs. For instance, car insurance is up over 22% over the past 12 months according to the Bureau of Labor Statistics.
Insurance companies are passing those costs on to consumers. Both Progressive (PGR) and Allstate (ALL) stocks have hit all-time highs this year, up 32% and 20%, respectively. Insurance companies could be headed for major profits when inflation begins to cool off.
Analyst Picks
Allstate currently holds either a buy or strong buy rating from 77% of the analysts covering the stock. According to Goldman (GS) analyst Robert Cox, a fundamental analysis of the company shows more upside than its competition. The analyst stated that Allstate has kept its price hikes similar to industry-wide trends, but is still far from its pre-pandemic profitability. He sees price hikes ahead for the company.
Wells Fargo (WFC) analyst Elyse Greenspan is bullish on Hamilton Insurance Group (HG), and recently upgraded the stock to overweight. The group is focused on reinsurance, so it’s less exposed to inflation than other insurance stocks. According to Greenspan, it can be bought at a discount, trading at the cheapest valuation among insurance stocks the bank covers. She also highlighted that HG has less reserve risk and is present in parts of the market experiencing high premium increases.
No Risk, No Reward
Insurance stocks are considered defensive and carry some risks. As their rally continues, there’s some concern about overvaluing the stocks with a possible correction ahead.
Some analysts are also worried about social inflation, which occurs when laws and regulations change, resulting in higher costs for insurance companies. Andrew McGee of Third Bridge believes this risk will continue to rise as younger individuals against big business serve on juries.
Finally, insurance numbers can be volatile from quarter to quarter. Earnings can be greatly affected by unforeseen circumstances like natural disasters.
There’s no doubt that insurance stocks are spiking right now. For investors willing to take on the risks, they could provide a bright side to inflation.
Which stock do you think will outperform over the next 12 months? |
TOGETHER WITH NURP
Here's the hard truth: Traditional investing methods rarely work.
That's right - investing isn't just about spreading your money in stocks and bonds.
Achieving portfolio growth in today’s market is also not about hiring a financial advisor or spending hours analyzing the market.
The volatility of the market and lack of time to manage investments often result in not seeing the desired growth.
A double financial whammy!
This is where our trading software comes in.
It has delivered 11.91% average monthly growth* (including winners and losers) and has worked for people who never traded before or hated staring at charts for hours.
Whether you're a trader, an investor, or an entrepreneur, fuel your financial goals with our trading software being used by 3,000+ high-income earners and entrepreneurs every week.
Past performance is not a reliable indicator of future results. Please click here to view important information and disclosures.
ON OUR RADAR
Reuters: More than 80 earthquakes, the strongest of 6.3 magnitude, struck Taiwan's east coast, shaking buildings in the nation’s capital, Taipei.
AP: The United Auto Workers’ election victory at a Tennessee Volkswagen plant is giving the union hope that it can make broader inroads in the South.
The Hill: Commerce Secretary Gina Raimondo proudly declared the U.S. has “out-innovated” China amid the two nations’ chips war.
Axios: A company called Juno is selling the first workplace benefit in the U.S. that provides disability coverage for your kids.
Forbes: Goldman Sachs predicts 300 million jobs will be lost or degraded by artificial intelligence.
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