The Odd Couple: Trump and Xi
Are you watching this year’s hottest sitcom, Trading Tariffs?
If not, you’re missing out big time.
U.S. President Donald Trump and Chinese President Xi Jinping have an on-screen chemistry not seen since the golden age of American TV.
Remember Moonlighting? Remington Steele? The Odd Couple?
Amateurs. They’re nothing compared to this season of Trading Tariffs. Trump and Jinping shine so brightly that whenever they meet on screen, they move world markets! It’s both funny and heartwarming.
You won’t want to miss this week’s event. After a heated exchange of “inappropriate” actions and calls for respecting “each other’s sovereignty,”Trump and Xi are meeting again on screen at this week’s G20 summit in Osaka, Japan!
It’s an episode you won’t want to miss, even if you’re new to the series.
Will they make up and resolve world trade issues amid the romantic backdrop of Japan’s oldest Shinto shrines?
You’ll have to tune in to find out.
The financial media are claiming that the confirmed G20 meeting between Trump and Xi is moving the market today. If that’s the case, it’s not much of a move. With both the S&P 500 and the Dow up only fractionally … “cautiously optimistic” is what I would call it.
But we’ve seen this type of rally before. The market gets its hopes up, only to be let down later.
UBS had some real talk on the Trump-Xi meeting earlier this morning. According to UBS, a failed meeting would bring about a “mild recession” similar to the euro zone crisis or the 1980s oil embargo. I lived through the 1980s oil crisis, and I’m not sure I (or my parents) would call that one “mild.”
The biggest problem for investors here is a lack of yield. With no trade deal, world central banks will be embroiled in a race to the bottom on interest rates. UBS sees the yield on U.S. 10-year Treasurys falling to all-time lows.
In layman’s terms, that means very little income for you — especially if the stock market hits the skids at the same time. It’s time to start looking for an income-based investment strategy now.
Good: I Heard a Rumohr
They say United Technologies Corp. (NYSE: UTX) got an upgrade. I heard…
Cowen analyst Cai von Rumohr was spreading bullish rumors on UTX this morning.
If you’ve been watching UTX, you know the stock has sold off since the proposed merger with Raytheon Co. (NYSE: RTN).
But Rumohr believes this is a “win-win” for investors, lifting his rating to outperform and his price target to $150. That’s a 15.5% upside from current levels. Rumor has it that investors don’t fully understand the benefits of the proposed merger.
Should the merger fail, UTX is still valued fairly at $150 per share. If the merger goes through, synergies will result in greater cash flow.
I’m always worried when generic “synergies” are cited as a reason to invest. But cash flow is one rumor we can all get behind.
Better: It Really Turns Her On
Jefferies thinks Deere & Co.’s (NYSE: DE) tractor is sexy. It really turns them on.
The ratings and research firm upgraded DE to buy from hold this morning, setting a price target at $190. What’s got Jefferies all hot and bothered?
The current farm cycle and farmer net income.
Whisper those sweet nothings, Jefferies: “Weather challenges in the U.S. and abroad coupled with increased demand look to fundamentally drive better balance in global crop and livestock markets, with higher prices for the next several years.”
DE has been on a tear since bottoming in mid-May. The stock is up more than 23%, despite U.S. trade concerns with China — a major source for parts and manufacturing for Deere. If the Trump-Xi meeting goes well this week, expect DE to add to its recent rally in a big way.
Best: The Road to Eldorado
The market is torn on Caesars Entertainment Corp.’s (Nasdaq: CZR) buyout. For Caesars, there’s gold and a 16% rally.
For Eldorado Resorts Inc. (Nasdaq: ERI), there’s the painful, agonizing failure of a near 10% decline.
Eldorado must be made of gold, because it’s shelling out $8.6 billion for Caesars — a 28% premium to CZR’s close on Friday.
The $17.3 billion deal will create “the largest owner and operator of U.S. gaming assets,” says Eldorado CEO Tom Reeg.
If you’re a CZR investor, you were already sitting on a 15% gain over the past three months. This deal is like icing on the cake.
If you’re an ERI investor, you just hit a major pothole in the golden road. The stock is down more than 8% on the buyout news. But ERI is now trading in value range, so a rebound after the deal settles could make this a prime buying opportunity.
Gold has been on a tremendous run lately, driven by global uncertainty, recessionary fears and tense U.S. trade relations. Gold bugs have been looking forward to this rally for some time, pointing out every conceivable pattern to justify a gold rally.
However, mocking technical traders’ propensity to find a pattern in everything, the YOLO-ing degenerates over at Reddit trading sub-Reddit WallStreetBets have designed this brilliant chart pattern for gold.
Forget bulls and bears, the “Dinosaur Pattern” is totally real.
The Great IPO Debate
To IPO or not to IPO?
Is that really a question at this point?
It shouldn’t be for investors. This year’s crop of initial public offerings (IPOs) is among the hottest and potentially most profitable we’ve seen in years.
Market disruption is everywhere!
You’ve got cloud-collaboration companies such as Slack Technologies Inc. (NYSE: WORK), ridesharing and autonomous vehicle companies such as Uber Technologies Inc. (NYSE: UBER) and Lyft Inc. (Nasdaq: LYFT), meat-busting food firms such as Beyond Meat Inc. (Nasdaq: BYND) and online pet-pampering firms such as Chewy Inc. (NYSE: CHWY).
Your problem isn’t whether to invest — it’s where to invest.
But something amazing is happening over at Banyan Hill right now that could remove all of your IPO confusion.
The Bold Profits team is holding an online IPO Fortunes Symposium.
It’s not your usual symposium, either … oh, no.
The team is looking to change people’s lives by revealing key company names and stock tickers ripe for investment. Their unique insights include a crucial factor that many in the market are missing right now: an IPO rating system.
This symposium is already making a big impact on readers. (Click here to find out how!)
You won’t believe how great this stuff is. But you don’t have to take my word for it. Check out Banyan Hill expert Paul Mampilly’s video below for the real deal.
Also, don’t miss a moment of this ongoing IPO extravaganza. Visit www.IPOFortunes.com to see all of the IPO Symposium videos now.
Until next time, good trading!