China, Aliens and Earnings … Oh My!
I leave for a week … and this is what I come back to?
Has the whole world gone mad?
Actual market news isn’t much better. China just posted its lowest quarterly growth in 27 years due to trade war headwinds. That said, the U.S. wishes it had China’s slowing economic growth.
The world’s second-largest economy grew by 6.2% in the second quarter — double the U.S.’s 3.1% growth in the first three months of the year.
How do you like them apples?
Speaking of apples, you’ve got about 15 days until Apple Inc. (Nasdaq: AAPL) releases its third-quarter earnings report. And … I have some bad news about this earnings season. Seems we’re looking at an “earnings recession” this quarter.
You may remember earlier this month that Banyan Hill expert Michael Carr weighed in on the potential for a brutal round of corporate earnings. He had this to say: “Misses will be punished more than average. Many companies failing to impress should see their stocks fall 5% or more.”
Hold on to your hats — this is going to be a bumpy ride.
I don’t even know where to start on the Area 51 thing. On the one hand, I can’t believe it’s taken this long to (even jokingly) organize something like that. On the other hand, this is going to end very badly for anyone who actually shows up.
As for the situation with China and the earnings recession, Michael Carr put it perfectly: “This is a perfect earnings season for stock pickers, not index investors.”
In other words, you must choose, but choose wisely.
Seriously, check these out … you won’t regret it.
Good: Stranger Things
And then there’s Disney+, The Walt Disney Co.’s (NYSE: DIS) $6.99-per-month streaming service launching this fall.
Now’s the time to panic, right? Nah, fam … Netflix is still the big dog. Competition is nothing new to this streaming behemoth. And that includes this week’s earnings report.
Netflix steps into the earnings confessional on Wednesday. The company beat expectations in each of the past four quarters, and there’s no reason to believe that streak will end now.
In fact, whispers are that Netflix’s earnings will come in $0.04 ahead of expectations.
Remember, Netflix still sports a strong lineup of exclusive programming, including Stranger Things, Black Mirror, Orange is the New Black and more.
Investors just need to chill.
Better: Just Say the Word
Now, she don’t even know my name … but I like Advanced Micro Devices Inc. (Nasdaq: AMD) just the same.
The company is stealing market share from rival Intel Corp. (Nasdaq: INTC), growing profits and doing so with cheaper and faster chips.
CEO Lisa Su is all you need. All your life.
We are a little more than a week away from AMD’s quarterly earnings report, and this quarter could be red hot.
Expectations are already low due to China and earnings recession fears, but the earnings whisper is running a penny ahead of the consensus.
Translating that: Actual expectations for an AMD earnings beat are rising. That’s a good thing.
If you got into AMD when Great Stuff recommended the stock back on June 18, you could add to your 10% gain with a solid report next week.
Best: I Like Turtles
Have you ever seen a stock rally on news of a non-buyout?
That’s exactly what we have today with Galapagos NV (Nasdaq: GLPG). Instead of outright buying Galapagos, Gilead Sciences Inc. (Nasdaq: GILD) is spending $5 billion on a collaborative agreement with the biotech company.
The 10-year deal bolsters funding for Galapagos’ impressive drug pipeline, while providing Gilead with much-needed new blood for its own.
Gilead now owns about 22% of Galapagos, giving it access to promising phase 3 and phase 2 drugs for Crohn’s disease, arthritis and a whole string of diseases I can’t even pronounce.
This cash injection is a big deal for Galapagos, and GLPG stock is up nearly 17% as a result. More proof that slow and steady wins the race.
Speaking of winning the race, Banyan Hill expert Jeff Yastine has the inside track on the biotechnology sector. To find out how you can make even bigger returns than Galapagos, click here now!
That is one booooooooring chart.
I mean, I almost fell asleep just putting it in here.
But, I’ve been on vacation for a week, so sue me.
Now, why am I including it? Because this chart details the biggest one-week outflow of cash from the U.S. equities market since February 2014. According to the ICI report, a cumulative $21 billion has flowed out of the U.S. equities market in the past five weeks.
Where is all that cash going? Bonds … and not the James type. The markets are clearly shaken (not stirred), as the bond market gained about $45 billion during this same period.
So, while the chart may be a snoozer, the data is something we all need to stand up and take note of.
But you don’t have to take my word for it. Here’s what Banyan Hill expert Ted Bauman has to say on the matter:
Ted knows all about “keeping your powder dry.” In fact, The Bauman Letter has three separate portfolios to help you do just that, while still keeping an eye out for potential market home runs. Click here to find out more now!
Great Stuff’s Greatest Hits
Is it greatest hits time again?
And who doesn’t remember last week’s wonderful issues by Jocelynn Smith?
Everyone give her a round of applause for some great coverage and excellent memes.
Before I go, don’t hoard all this Great Stuff for yourself! Share and share alike, I always say.
Forward this e-zine to your friends!
And friends, you can sign up for free right here!
Until next time, good trading!
Great Stuff Managing Editor, Banyan Hill Publishing