That was quite the Fourth of July celebration, wasn’t it?
The fireworks, the music … and stuff. Freedom was everywhere. It was awesome.
I don’t know about you, but I’m beat this morning. Apparently, so is the market. But we’ll get to that in a minute.
Next week, I’m going on vacation to celebrate my 20th wedding anniversary. My wife and I are heading down south for some fun in the sun in a much-needed getaway. Drinks will be drunk. We’ll converse with dolphins on trading tips. We’ll get sand in unintended places. It’s coarse and rough and irritating and it gets everywhere … but it will be fun.
Don’t worry, I won’t forget my towel. I’m one hoopy frood, after all.
In the meantime, I’m leaving you in more than capable hands. Banyan Hill senior analyst Jocelynn Smith will be taking the reins while I’m out. She’s a New York Times and USA Today bestselling author, so I think you’ll be in good hands.
Back to the market…
Good news is bad news, apparently. June’s employment data is in, and the U.S. economy added a whopping 224,000 jobs last month … far more than the 170,000 that were expected.
So, naturally, the market is down across the board. Wall Street is worried that it won’t get its precious Federal Reserve interest rate cut. Fed funds futures are now pricing in only a 92% chance of a rate cut this month, instead of a 100% chance.
I’d still take those odds over Vegas any day.
But 8% uncertainty is all it takes to tank this market, apparently.
Here’s your Friday Four Play:
No. 1: All the Way to the Bank
One quick look at any major financial publication will tell you that the market is down today. But you know what isn’t down? The financial sector.
June’s strong jobs numbers boosted Treasury yields and floated the possibility of rates remaining higher for a while longer. That means boosted profits and higher returns on loans for banks.
Bank of America Corp. (NYSE: BAC) is leading the pack at the moment, rising nearly 1%. JPMorgan Chase & Co. (NYSE: JPM) is close behind, as are Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC).
Enjoy this good feeling in the financial sector while you can. This sentiment boost for banking stocks is temporary. An interest rate cut is still 92% likely this month, so there’s no reason to change course now.
The real takeaway here is that the market continues to jump at shadows. And you don’t get more shadowy than an 8% dip in expectations. Nothing to see here.
No. 2: The Golden Rule
He who has the gold does not rule … today, at least.
The June jobs data put the kibosh on the recent gold rally, sending August gold down more than 2%.
The slight possibility that interest rates would not get cut this month has gold bugs bugging out.
Precious metals traders are still sitting pretty this year. Gold hit a six-year high of $1,438.63 an ounce last week. That’s still awfully shiny.
Like the situation with banks, today’s knee-jerk reaction is only temporary. There is still enough uncertainty in the global economy to keep gold prices stable at these levels for the time being.
And tariffs … let’s not forget about tariffs.
If you’re invested in gold, you’ve weathered these kinds of price jitters before. So, there’s nothing to get all worked up about this time around either.
For the real inside track on precious metals and mining stocks, you can’t go wrong with Banyan Hill expert Matt Badiali … he’s got magic metals!
No. 3: What’s in the Box?
Third-party vendors have been hiding behind Amazon.com Inc.’s (Nasdaq: AMZN) skirts for too long. At least, according to the Circuit Court of Appeals in Philadelphia.
The court reversed a lower court’s findings regarding a faulty dog leash bought from a third-party vendor on Amazon.
Back in 2016, a customer was hit in the eye and blinded when the dog leash broke. Courts have historically ruled that the vendors, not Amazon, were liable in these cases.
However, this particular vendor (The Furry Gang, if you’re interested … I’m not going there. Too many questions.) is nowhere to be found, leaving Amazon holding the doggy bag.
Amazon sells about $160 billion worth of third-party goods on its site, and this ruling opens up a huge can of worms for the world’s largest online retailer.
This particular ruling is still up in the air. The appeals court sent the case back down to the lower courts to decide if the leash was, in fact, defective. If so, Amazon could be found liable for the damages. That said, this case will be tied up in the courts for years.
Precedent already protects Amazon in such instances, even though the appeals court ruling weakens those protections. Investors should wait and see on this one. The impact could be huge for Amazon, but it will be some time before effects trickle down.
No. 4: Lucha Libra
Democrats are looking to body-slam Facebook Inc.’s (Nasdaq: FB) new cryptocurrency, libra.
The crypto is still under development and has the backing of a plethora of major businesses, including Mastercard, Visa, Uber and Coinbase.
However, members of the House Financial Services Committee want Facebook to stop development, citing risks of hacking, data security, global financial security and national security.
That’s a lot of security. And Facebook doesn’t exactly have the best track record on the subject — Cambridge Analytica, anyone?
With more than 2 billion users worldwide, libra could finally legitimize cryptocurrencies — something the alternative payment system has struggled with since its inception. Realizing the potential for libra, Facebook isn’t budging: “We look forward to responding to lawmakers’ questions as this process moves forward.”
Cryptocurrencies have their risks, certainly, but they are far from the “mass hysteria” narrative that Democrats are pushing. The problem is that pesky “national security” bomb that the Financial Services Committee dropped.
That could be a serious problem for Facebook’s libra.
If House Democrats push that particular point, Facebook may have no choice but to delay libra’s release. And that could have a chilling effect on FB shares and the cryptocurrency market.
Now is definitely not the time to be blindly trading cryptocurrencies. Get the advice you need on how to handle libra, bitcoin and the raft of other cryptocurrencies from Banyan Hill’s crypto expert, Ian King, now!
The volatility in marijuana stocks can be stomach-churning. But we saw similar moves last year. And they led to huge gains for our readers.
That’s because many investors get distracted when a “hot” sector slows down. But we take the long view. Moments like this are an opportunity to build a position for the next rally.
— Anthony Planas, Internal Analyst, Banyan Hill Publishing
It’s no secret that pot stocks have gone to … well … pot in the past month. Many investors are wondering if now is the time to ditch those high flyers and sober up a little. Fear not, for the cannabis rally is not cashed out. Anthony Planas, Banyan’s resident pot expert, has two ways to profit from the recent slide in cannabis stocks.
Great Stuff’s Greatest Hits
There are just so many great moments in Great Stuff!
Remember way back on June 4 when I recommended buying Spotify Technology S.A. (NYSE: SPOT)? SPOT is up more than 14% since then!
Then there was the Arena Pharmaceuticals Inc. (Nasdaq: ARNA) pick back on June 11 … up more than 11%.
Those were back-to-back weekly chart toppers!
Then there was “The Battle for Breadsticks,” and that time Great Stuff asked the hard-hitting question: “How many turkeys make an eagle?”
Ahh … I remember those articles like they were yesterday. Sniff … I’m getting a bit nostalgic here.
Now, you can go digging through your emails for back issues of Great Stuff to relive these epic moments, but who has time for that?
I certainly don’t. I’ve got too much great stuff to find for you!
But you don’t have to go digging through months of emails to find your favorite Great Stuff moments. You can find Great Stuff’s greatest hits all in one place, thanks to the magic of the internet!
So, what are you waiting for?
Go ahead and visit the Great Stuff website and see all the great stuff you’ve been missing.
Until next time, good trading!
Great Stuff Managing Editor, Banyan Hill Publishing