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Since the inception of civilization, humanity has perpetually sought the next groundbreaking advancement, extending across diverse fields, including entertainment, fashion, and technology. It is the forecasters, with one foot in the present and the other steering toward the future, whose evolutionary visions brought about automobiles, airplanes, and the internet.
While such visionaries may not always accurately predict the future, their ambitions fuel our relentless quest for innovation. In the spotlight recently has been Artificial Intelligence (AI), notably after OpenAI unveiled ChatGPT, a comprehensive language model that millions employ for diverse purposes such as searching, parsing, and content creation.
In the current digital era, the significance of semiconductors is evident. Powering an extensive array of devices from smartphones to aircraft, these components enhance the utility of modern electronics and act as technological accelerators, driving advancements in AI, machine learning, and quantum computing.
The semiconductor industry displays robust growth and is expected to expand at a CAGR of 9.18% by 2030, reaching $1.03 trillion.
The surge in demand for AI applications across different sectors for effective big data management serves as a key factor propelling the worldwide AI chip market’s growth. Consequently, the market is anticipated to reach about $372.01 billion in 10 years.
Additionally, the rising requirement for quantum computing, especially for handling mammoth datasets linked to operational efficiency, is gaining increased prominence, which is forecasted to drive substantial market expansion.
Chip giant Advanced Micro Devices, Inc. (AMD) is set to officially join the AI chip competition in 2024. At the beginning of the second half of 2023, the tech titan announced the forthcoming MI300x GPU chipset.
According to AMD, the AI chip market, valued at $45 billion, is predicted to soar nearly tenfold to $400 billion by 2027. With an eye on this lucrative landscape, AMD’s newly developed MI300X chipset is designed to vie with the AI-darling Nvidia Corporation’s (NVDA) flagship H100 for AI data center clientele.
According to AMD’s forecasts, the new chips will generate an additional $2 billion in sales in 2024 – a figure some deem conservative considering the immense potential of the total addressable market. In contrast, analysts at Barclays project a figure closer to $4 billion – translating to roughly 18% growth rate based on AMD’s trailing-12-month revenue, assuming all other business operations remain steady.
Over the past three and five years, AMD’s revenue grew at CAGRs of 36.8% and 28.2%, respectively, while its levered FCF grew at 68.2% and 84.4% CAGRs over the same periods.
For the fiscal third quarter that ended September 30, 2023, AMD delivered strong revenue and earnings growth fueled by rising demand for its Ryzen 7000 series PC chips and an all-time high in server processor sales. Its revenue for the quarter stood at $5.80 billion, up 4.2% year-over-year.
AMD’s data center business is on a significant growth trajectory, rooted in the strength of its EPYC CPU portfolio and the accelerated shipments of Instinct MI300 accelerators. These factors have fortified multiple deployments across hyper-scale, enterprise, and AI customer frameworks.
Moreover, its non-GAAP net income and net income per share increased 3.7% and 4.5% from the year-ago quarter to $1.14 billion and $0.70, respectively.
AMD is scheduled to report fourth-quarter earnings on January 30, 2024. AMD EVP, CFO and Treasurer Jean Hu said, “In the fourth quarter, we expect to see strong growth in Data Center and continued momentum in Client, partially offset by lower sales in the Gaming segment and additional softening of demand in the embedded markets.”
Wall Street expects AMD’s revenue and EPS for the fiscal fourth quarter ending December 2023 to be $6.14 billion and 77 cents, up 9.6% and 11.6% year-over-year, respectively. If it delivers on those estimates, it will mark the fastest sales growth in one year. The company has surpassed the consensus revenue and EPS estimates in all of the trailing four quarters, which is impressive.
Shares of AMD jumped 5.9% on January 24, soaring above 140% over the past year. Since October, AMD has seen an approximate increase of 65%, comfortably outperforming the AI darling NVDA and the Philadelphia Semiconductor Index during this period. The S&P 500 registered just a 15% uptick.
This week alone, AMD surged above 12%, trouncing NVDA’s increase. The significant leap in AMD shares is attributed mainly to the burgeoning potential to secure a prominent slice of this year’s AI chip market.
Additionally, this week saw a significant boost when several notable analytics firms – including Barclays Plc, Susquehanna Financial, and TD Cowen – elevated their price targets for AMD.
Barclays emerged with the loftiest target at $200 per share, surging from $120. This optimistic adjustment primarily stems from high expectations for artificial intelligence as a key growth stimulant. Notably, over 70% of analysts monitoring AMD are recommending a buy-equivalent rating.
However, Wall Street analysts expect the stock to reach about $156 in the next 12 months, indicating a potential downside of 12.6%. The price target ranges from a low of $105 to a high of $215.
Bottom Line
Growth projections from AMD’s MI300X chip family are a lot to receive from one type of product. Should AMD’s ambitious forecasts regarding AI chip demand materialize, investors could anticipate a considerable escalation in sales in a couple of years.
Investors should remain aware that the AI sector does not exclusively entail a winner-take-all scenario. The market’s rapid expansion could allow multiple companies to carve out their successes. Although entering the market later than others, AMD may establish a competitive edge through cost-effectiveness, nurturing an esteemed standing within a balanced and diversified investment portfolio.
The early adopters of the MI300A/X are unlikely to obtain high profits initially – they will enjoy competitive pricing until demand gains traction. By nature, building momentum takes time, and if AMD stays true to its usual course of action, it will focus on long-term progress rather than immediate financial gain.
AMD’s stock price could fluctuate significantly, and despite positive reports and guidance, it may take several estimated returns to invoke a maximum increase. This is because AMD must substantiate its guidance, requiring, at a minimum, another quarter to validate and replicate its success.
Moreover, there are significant issues like demonstrating market competitiveness, particularly concerning software adoption. Some investors view AMD’s rival, NVDA, as a dominant player in the GPU space. For AMD to make its mark, it must prove its ability to lead on its terms, complementing its other endeavors. This validation process will require time and consistency.
While waiting, macroeconomic risks persist, ranging from ongoing wars to the potential of economic recession and fluctuating interest rates. Staying the course involves maintaining progress amid potentially adverse circumstances.
From an investment standpoint, it is critical to acknowledge AMD’s forward non-GAAP P/E multiple of 67.17, signaling that AMD’s stock is substantially more expensive than the industry average.
Furthermore, AMD’s 12.71x forward P/S is 330% greater than the industry average of 2.95x. Its revenue has increased at a modest CAGR over the past three years, and analysts predict a 15% annual growth rate for the next three years. However, these projections are less robust than the industry average, suggesting a potential shortfall in expected revenue for AMD. It is thus concerning that AMD’s P/S supersedes most within the same industry.
The disquieting underperformance in its revenue projections spells potential risk for AMD’s elevated P/S. If the anticipated revenue trend doesn’t take an upward turn, it could negatively impact the already high P/S. Given the current market prices, it would be prudent for investors to exercise caution, particularly if the situation fails to enhance.
Therefore, investors could wait for a better entry point in the stock.

The past few days have proven to be quite turbulent for Spirit Airlines, Inc. (SAVE), with notable fluctuations in its market value. From a federal judge opposing a proposed merger, sending SAVE stock into a nosedive, to David Portnoy investing in and promoting the company on January 18, resulting in SAVE’s share price surge – the airline stock garnered significant attention.
The initial blow to the ultra-low-cost carrier’s stock unfolded last week when JetBlue Airways Corporation’s (JBLU) $3.8 billion bid to takeover SAVE was thwarted by court intervention. This resulted in a sharp drop of as much as 74% over three days, throwing the fate of the previously secure deal into uncertainty. This drew attention to the mounting question about the survival prospects for SAVE.
Navigating the airline industry presents several complications. The inevitable costs associated with acquiring aircraft and employing relevant staff mount up, especially considering the volatile nature of jet fuel prices. This renders the sector vulnerable to bankruptcy, as demonstrated by prominent airlines, such as Pan Am, and countless smaller entities. Occasionally, airlines can re-emerge post-Chapter 11 restructuring, emulating the revival of American Airlines in 2013.
In other instances, they vanish indefinitely, leaving travelers in the lurch. According to TD Cowen analyst Helene Becker, SAVE may also be at risk.
Additionally, there is fervor among the investment community fueled by a return to bullish attitudes and a robust performance by S&P 500 and Nasdaq in the past year. Such success encourages “get rich quick” mentalities, evidenced by a flood of social media messages advocating for SAVE shares to skyrocket imminently without any factual basis.
Despite this, some analysts do not predict either a bankruptcy or a dramatic escalation for SAVE. Furthermore, the company reaching a book value of $12.06 per share is also not anticipated.
This article sheds light on the latest updates, evaluates SAVE’s fundamentals, and provides prospective investors with guidance regarding SAVE’s future value.
The Merger
The proposed merger would position JBLU as the fifth-largest airline in the U.S., vigorously contesting long-standing dominators Southwest, American, Delta and United Airlines. With an estimated domestic market share of 10%, it promised to diversify flight options and stimulate industry competition.
The acquisition was conjectured to enhance JBLU’s cancellation policy through the planned substitution of SAVE’s non-refundable fares with JBLU’s Passenger Bill of Rights, which ensures an automatic reassessment upon inevitable delays and cancellations. The resultant entity could minimize flight delays and cancellations due to the availability of an expanded fleet and heightened pilot workforce following the merge.
Furthermore, JBLU’s route network was expected to broaden, encompassing SAVE’s reach in Central and South America and the Caribbean, supplementing its existing local and international destinations.
A federal judge, however, recently blocked the merger, arguing that SAVE’s cost-sensitive customer base could be harmed. The court determined that the consolidation would infringe on antitrust law, which is designed to prevent anti-competitive harm to consumers. The decision highlighted a potential decrease in affordable ticket options for price-conscious travelers nationwide.
Concerns were voiced about escalating ticket prices, particularly for low-cost seekers, considering JBLU’s previous estimation of a 30% price hike in the absence of SAVE as a competitor.
A surge in SAVE’s market value triggered by the proposed merger piqued the interest of arbitrage investors looking to capitalize on price gaps between company equity and the offer price. However, the merger’s block prompted investors to withdraw, subsequently depreciating SAVE’s stock value.
A joint appeal by JBLU and SAVE against the ruling in hopes of reviving the merger is another interesting twist in the carriers’ merger attempt. SAVE’s stock price experienced a slight rebound in response to this move.
SAVE’s stock witnessed an upward trend after Barstool Sports founder Dave Portnoy took to Twitter and openly commended SAVE’s value. His proclamation of SAVE as a “mega buy” sparked a late-week rally.
Despite these developments, it seems improbable that the judicial verdict will be overturned. The merger blockage is anticipated to persist. Potential investors should assess SAVE on individual merit and without expectations for the completion of such a corporative action.
Let’s delve deeper into the fundamentals of SAVE.
The airline, with a market cap of approximately $898 million, boasts an extensive workforce numbering over 11,000 employees. The ownership structure of the company shows a mix of roughly 0.5% insiders and about 67.7% institutional holders.
Since the onset of the COVID-19 pandemic, SAVE has grappled with financial sustainability. Their ticket sales have not seen recovery at the pace anticipated, and several of its planes are being temporarily grounded due to engine problems necessitating inspection and possible replacements. SAVE anticipates an average of 26 grounded aircraft, over 10% of its fleet, during 2024. As a result, Pratt & Whitney engines on numerous Airbus jets could drastically hamper immediate growth predictions for the company.
SAVE raised $419 million through the mortgage of many of its airplanes. However, the future options for raising liquidity seem limited. As per results for the fiscal third quarter that ended September 30, 2023, SAVE’s overall operating revenue stood at $1.26 billion, a 6.3% year-over-year decline. The net loss for the quarter was reported at $157.55 million, a 333% rise year-over-year, while net loss per share surged by 336.4% from the year-ago quarter to $1.44.
The precarious liquidity situation at SAVE is hinted at by its quick ratio of 0.69. Its Total Debt/Equity ratio exceeding 500% indicates that for every dollar of equity, the company holds five dollars in debt. This high leverage exposes the company to greater risk while settling its debt.
On December 31, 2023, SAVE’s liquidity stood at $1.3 billion, including unrestricted cash and equivalents, short-term investment securities, and $300 million under a revolving credit facility. The company is currently in talks with Pratt & Whitney to negotiate compensation for the geared turbofan engine faults that may provide significant liquidity in the next few years.
While SAVE is not bankrupt and still commands liquidity, they are not without challenges. Their $1.3 billion is barely above their debt due in 2025 – amounting to $1.1 billion, which is slated for restructuring next year.
Given that higher risk-free rates have led to a cooling of corporate debt markets, creating an unfavorable environment for debt refinancing, SAVE’s management team must explore severe measures to ensure the corporation’s ongoing viability, especially when the likelihood of the merger being off the table is high.
Credit rating company Fitch has issued a warning regarding the “significant refinancing risk” SAVE is expected to encounter in the coming year due to the $1.1 billion debt owed by its loyalty program, which is due for repayment in September 2025. Although Fitch has maintained a B/Negative credit rating for SAVE’s debt, it has encouraged the airline to formulate a near-term strategy to increase liquidity, reduce refinancing risk, and boost profitability to prevent further negative ratings.
Details concerning this scenario are expected to emerge on February 8, 2024, when the company will disclose its 2023 fourth-quarter results.
Despite the challenges, SAVE is optimistic about its future earnings – projecting that total revenue will surpass prior estimations. The airline anticipates its fourth-quarter revenue to come at $1.32 billion, which exceeds the higher benchmarks established in its prior projection. This optimistic outlook is primarily attributed to the robust bookings received during the 2023 year-end travel peak.
The airline also forecasts a fuel cost reduction that would help relieve some revenue pressure and enable increased earnings. Operational costs for the quarter are expected to be lower than predicted, primarily due to decreased fuel expenses driven by improved fuel efficiency, reduced airport costs, and other factors. Additionally, SAVE predicts a significant contraction in its negative margin, foreseeing it to shrink down to between 12% and 13% from the previously anticipated negative margin of up to 19%.
Is SAVE a Worthy Investment?
When a stock encounters difficulties as notable as those faced by SAVE, the conversation invariably turns toward short-squeeze speculation. Despite recent losses, SAVE’s share trajectory appears to have rebounded. However, it’s plausible that this upward momentum results in more from short-squeeze speculation among retail investors than it does from positive news about the airline itself.
The current high level of short interest in SAVE stock further buttresses this theory. Data pulled from the short analysis platform Fintel corroborates this, showing that the short interest is 19.75%. Short sellers presently only have a minuscule 0.27-day window to cover their positions.
Considering SAVE’s shaky foothold, Citi’s analyst, Stephen Trent, has downgraded the company from a Hold to a Sell, simultaneously lowering the price target from $13 to $4.
While there remains the possibility of an appeal, Trent questions its logic, stating, “…it is unclear why JetBlue wouldn’t cut its losses here and recognize that it avoided a risky bid on a highly levered carrier with steep losses.”
He further predicts that SAVE’s EBITDA isn’t likely to turn positive until 2025. A bond yield surpassing 40% augments the hurdles SAVE faces in securing another merger proposal.
Bottom Line
Undoubtedly, the previous week proved to be a stormy period for SAVE. However, some observers are optimistic that the company may recover and could potentially regain its value.
The future now hinges on the appeal filed jointly by SAVE and JBLU; its potential impact on the stock price in the coming weeks remains unknown.
Given the various challenges currently plaguing SAVE, the trend of short selling seems almost unavoidable. Indeed, SAVE presents a distinct possibility for a short squeeze, given its bleak future, which might include bankruptcy or liquidation. It’s feasible that investors could identify it as their subsequent target. Nevertheless, this offers no guarantee of sustained squeeze or any significant profits.
It becomes crucial for investors to closely monitor SAVE’s overall performance moving forward. Unlike its competitors, the company hasn’t been able to recover due to a host of difficulties. This includes the availability of pilots, engine malfunctioning, saturation in certain domestic markets, and pronounced exposure to regions impacted by air traffic control adversities.
Considering the broader context, investors are advised to exercise caution and look for more favorable entry points in the stock.

On January 10, 2024, the Securities and Exchange Commission (SEC) authorized 11 U.S.-listed exchange-traded funds (ETFs) focused on Bitcoin investments, subsequently unlocking a new asset class for a broad spectrum of investors and simplifying the path to gaining direct exposure to the digital currency.
This highly anticipated decision garnered significant participation from institutional and retail investors in the cryptocurrency market, spurring substantial inflows. Notably, new U.S. spot Bitcoin ETFs witnessed $4.6 billion in volume on their inaugural trading day, as per data from the London Stock Exchange Group.
A week after the launch of these ETFs, intriguing patterns began to materialize. Spot Bitcoin ETFs currently command more than 100,000 Bitcoin, which implies an Asset Under Management (AUM) estimated at approximately $4 billion. This important revelation signifies the escalating amalgamation of Bitcoin into traditional financial systems and underlines the amplified role of cryptocurrency within the investment community.
Grayscale, leading the pack as the largest Bitcoin holder in the ETF segment, remains at the cutting edge of this Bitcoin acquisition drive. Its holdings reached an impressive tally of 552,681.2268 BTC. This substantial investment further solidifies Grayscale’s standing as a major contributor in the crypto sphere and hoists Bitcoin ETFs above Silver to rank them as the second-largest commodity ETF based on holding size.
Following Grayscale’s lead, BlackRock’s ishares Bitcoin Trust (IBIT) secures its position as the runner-up in terms of Bitcoin holdings with an impressive 39,925 BTC in its vault. Fidelity Wise Origin Bitcoin Fund (FBTC) continues to hold robust with 34,126 BTC. These figures exhibit significant engagement from leading financial institutions in the expanding cryptocurrency market, marking a considerable shift toward digital assets in investment strategies.
Upon winning ETF approval, Bitcoin’s price momentarily soared to $48,000, only to face a subsequent downturn. This volatility alludes to an unpredictable market where current selling pressures seem to outweigh buying activities.
Adding to the uncertainty is BitMEX founder Arthur Hayes foreseeing a further dip in Bitcoin’s value below the $40,000 mark, a prediction affirmed by acquiring 29Mar $35k strike puts. Hayes’ cautious approach mirrors his acquisition, amounting to 5 BTC, revealing a reserved perspective for the immediate future of this cryptocurrency.
The existing market landscape, combined with expert evaluations and forecasts, hints at a potential slump for Bitcoin in the near term. While the approval of spot Bitcoin ETFs stands as a critical step in Bitcoin’s mainstream acceptance, the path ahead presents an element of vagueness.
U.S. Spot Bitcoin ETF fluctuations could be rooted in various factors apart from Bitcoin’s price oscillations. The spot Bitcoin ETFs depend on Authorized Participants (APs) to create and redeem ETF shares in return for Bitcoin. These APs procure Bitcoin from varied platforms, which might differ in liquidity levels, fees, and risks; these variations can impact the price of the ETF and the NAV of funds. Furthermore, management fees could also have an impact on the returns on ETFs.
Of the 11 freshly introduced spot ETFs, two funds particularly stood out in terms of net inflows: BlackRock’s ishares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC).
BlackRock and Fidelity commanded the investors’ attention, jointly netting 68% of all inflows during the first week (IBIT accounting for 37% and FBTC for 31%). IBIT swiftly amassed $1 billion in assets within four days of trading, while FBTC achieved the same feat on the fifth trading day. The two funds have each generated over $2 billion in trading volumes since inception.
The regulatory nod sparked intense competition for market share among the issuers. The issuers have deployed strategies to cut expense ratios and offer fee waivers. For instance, the FBTC underwent an initial proposal of a 0.39% fee, which was later reduced to 0.25%, coupled with a fee waiver effective until July 2024. Meanwhile, IBIT charges a 0.12% fee for the first 12 months for assets up to $5 billion. Both IBIT and FBTC charge 25 basis points in fees.
Investors considering a Bitcoin ETF should bear in mind that although these ETFs generally operate in a similar fashion with minor disparities, the expense ratio remains a pivotal factor in the decision-making process.
Let’s delve deeper into the Bitcoin ETFs leading the pack now.
ishares Bitcoin Trust (IBIT)
IBIT, the BlackRock-owned Bitcoin ETF, emerges as a leading choice for retail investors due to its superior liquidity and affordable expense ratio. As a titan in the financial world, BlackRock remains unparalleled in its position as the most extensive ETF manager globally, with an AUM of $3.5 trillion across its portfolio of global ETF investment vehicles as of December 31, 2023. This powerhouse backing makes IBIT an assured choice for those seeking Bitcoin offerings buttressed by a sophisticated and large-scale financial structure.
The planning is such that IBIT vows an accessible expense ratio of 0.12% for the fund’s initial $5 billion in assets over the ensuing year. An annual expense ratio of 0.25% is projected to kick in from January 2025.
Standing true to its promise of liquidity, IBIT has already amassed over $1 billion worth of Bitcoin in its reserves, a feat rivaled only by the SPDR Gold Trust (GLD), which impressed the markets by garnering $1 billion in assets within three days of its inauguration in 2004.
As of January 22, IBIT had $1.34 billion in AUM and an impressive NAV of $22.86. It registered net inflows of $1.12 billion over the past five days. IBIT holds about 39,925 BTC, valued at roughly $1.62 billion.
Despite experiencing a dip of 7.2% over the last five days, closing the last trading session at $22.95, IBIT maintains its allure among investors. Its swift popularity underscores it as an ideal option for those looking to diversify their portfolio with cryptocurrency and cultivate growth over time.
Fidelity Wise Origin Bitcoin Fund (FBTC)
FBTC, another notable name in Bitcoin ETFs, boasts a low expense ratio. However, investors with significant capital ready for deployment into Bitcoin ETFs are in luck, as FBTC has decided to waive even these modest fees until August 1, 2024. After this date, it will implement an expense ratio of 25 basis points.
Notably, Fidelity serves as the largest 401(k) plan and service provider in the nation. This development positions both individual investors and asset managers to seamlessly incorporate Bitcoin into comprehensive retirement strategies.
Crypto bears might argue against such a move, but it’s worth considering: Would a competent asset manager willingly forsake prospective gains by excluding a Bitcoin ETF from their client portfolio? Allocating even a small portion toward this asset could potentially yield substantial returns in relation to the total investment, given Bitcoin’s impressive performance trajectory over the past decade. Concurrently, with individuals reevaluating their 401(k) strategies leading up to 2024, a surge of capital directed toward FBTC is predictable.
As of January 22, FBTC had $1.21 billion in AUM and an NAV of $35.08. Its net inflows were $1.07 billion over the past five days. FBTC holds about 34,126 BTC, valued at roughly $1.37 billion.
Despite these positive indicators, FBTC plunged 7.3% over the past five days, closing its last trading session at $35.18.
Bottom Line
With the advent of Bitcoin ETFs, investing in this unique asset class has become less complex, potentially elevating its position within the financial industry. These recently launched ETFs provide a broad spectrum of investors with a simpler approach to gaining exposure to the crypto asset.
Shortly before the SEC approved the ETFs, it re-emphasized its previous “no FOMO” cautionary message to investors. Aimed at highlighting the volatility of digital assets, the warning underlines how investments tied to current popular trends like cryptocurrencies can experience periods of severe fluctuations, translating into drastic changes in value both positively and negatively.
The SEC’s approval brings much-needed standardization and regulatory supervision to digital asset investment. However, experts are advising mainstream investors to proceed with caution, pointing out that Bitcoin still distinguishes itself as a speculative asset.
News of Bitcoin ETFs has made headlines, even though their trading results may not meet the initial hopes of crypto bulls. Nevertheless, many see brighter days closing in. Potential future record cash inflows into these funds might be on the horizon as financial advisors and wealth managers consider incorporating them into their clients’ diversified portfolios.
Bitcoin’s primary utility arises from its function as a form of value storage akin to gold. The day that central banks initiate the acquisition and storage of Bitcoin will signify its arrival at the forefront of the financial world. The price is now around $39,000, and it appears to be headed lower. After the establishment of a true base, a progressive increase in its price over time could be projected as governments devalue their fiat currencies.
With the introduction of spot ETFs, we’re starting to see the beginnings of real price discovery. This process could further develop in a couple of months.
Prestigious investment managers such as Fidelity and BlackRock’s iShares should not be overlooked in this space. Their competitive edge in the traditional ETF fees arena may eventually give them an advantage over smaller rivals. Considering the slight disparity in fees between these funds and market leaders, long-term Bitcoin ETF investors might consider opting for these established alternatives.
Although the issuer’s role is arguably minor, ETFs governed by larger asset managers could be more resistant to liquidity issues arising from insufficient demand.
As an example, the IBIT ETF concluded January 22 trading at a 0.41% premium to its net asset value, indicating high demand. On the other hand, the FBTC traded at a 0.30% discount relative to its net asset value, suggesting weaker demand.
In view of the overall market situation, adopting a strategic position in IBIT and FBTC once the price stabilizes would be prudent.

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.Click Here to learn more about Reitmeister Total Return

SPY – Once again stocks flirted with the all time highs for the S&P 500 (SPY). This has happened 2 times recent both leading to failure and this 3rd time doesn’t seem to be the charm either. What is holding stocks back from making new highs? And what should an investor do to find better performance? 43 year investment veteran Steve Reitmeister shares his view including a preview of his 11 favorite stock picks now. Read on below for the answers…

In my recent commentaries I have speculated that we were due for a trading range to digest some of the rampant gains at the end of 2023. However, so far it has been more of a consolidation under the all time highs at 4,796 for the S&P 500 (SPY).
Consolidations are simply much tighter trading ranges. That investors refuse to have a serious sell off while also not being ready to climb higher. Kind of feels like cars revving up at the starting line of a race…lots of noise, but going nowhere.
We will discuss more of the reasons behind this consolidation and when stocks should be ready to race ahead.
Market Commentary
Stocks have tried twice over to make new all time highs above 4,800 for the S&P 500. And twice thwarted at that level followed by share pullbacks.
Yes it looks like Thursday’s action signals a 3rd such attempt. Yet that was a very hollow rally with the usual suspects in the S&P 500 doing well with small caps and other riskier stocks lagging. That is not the sign of a healthy bull. And give very low odds of breaking to new highs.
(1/20/24 update: Yes, the S&P 500 officially made new highs above 4,800 on Friday. I honestly thought it was a fairly hollow rally mostly led by the usual mega cap tech stocks and not such a broad rally. Meaning I do not believe this rally has staying power and likely will fall back below 4,800 this coming week. And at best we consolidate just above 4,800 with little true upside coming in the days ahead).
Some are pointing to economic data being too weak as the problem. Such as the horrific -43 showing for the Empire State Manufacturing Index on Tuesday.
While others are pointing to economic data being too strong like Retail Sales being above expectations on Thursday. This had 10 Year Treasury rates breaking further above 4% and also lowered the odds of the first rate cut coming at the March Fed meeting.
Sorry folks…you can’t have it both ways. And perhaps the answer is that neither of these theses are correct.
Meaning I don’t believe that investors are truly worried about a looming recession. Nor are they fearful of rates spiking again as they did in the Fall of 2023.
Simply, the market has come a long way from bear market bottom in October 2022. A total gain of 37% from that valley to now is a lot of profit in a short time when the long term average annual gain for the S&P 500 is only 8%.
So now is a healthy time for an extended pause. The same way you would take a long break after running a marathon.
Rest is what is needed. And then gaining the strength for the next run higher.
In the stock market world that typically comes hand in hand with a pullback in price leading to a trading range. Along with that you will see these investment terms show up more often:

Profit taking
Sector rotation
Change of leadership
Buy the Dip
The Pause that Refreshes
And so on…

Yet right now the most apt term is consolidation. As shared up top, that is simply a very tight trading range right under a point of resistance. Currently that resistance corresponds with the all time closing highs at 4,796…but for simplicity easier to think of it as 4,800.
The point is at this stage it is healthy and normal for stocks to relax after such a long run higher. Don’t be surprised if the consolidation does turn into a wider trading range with a subsequent test of the 50 day moving average at 4,628 being a likely downside target.

Moving Averages: 50 Day (yellow), 100 Day (orange), 200 Day (red)
A break below 4,600 is unlikely without some greater fundamental concerns arising. But let’s do appreciate the 2 next levels of price support rest at 4,488 for 100 day moving average and about 4,400 for the 200 day moving average.
Your trading plan should be to stay bullish. Use any subsequent pullback as a buy the dip opportunity. NOT for the stocks that led the charge in 2023. That game plan is played out.
Instead valuation and quality will be held in higher regard this year as the overall PE of the market is not cheap. GAARP is fine (Growth At A Reasonable Price)…but not growth at ANY price like last year.
If you want my favorite stock ideas for 2024, then read on below…
What To Do Next?
Discover my current portfolio of 11 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model.
Yes, that same POWR Ratings model generating nearly 4X better than the S&P 500 going back to 1999.
Plus I have selected 2 special ETFs that are all in sectors well positioned to outpace the market in the weeks and months ahead.
These 13 top trades are based on my 43 years of investing experience seeing bull markets…bear markets…and everything between.
If you are curious to learn more, and want to see these lucky 13 hand selected trades, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com and Editor, Reitmeister Total Return

About the Author

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.