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Get Exposure To Gold With These 2 Leaders

While 2022 was a year to forget for the major market averages, the Gold Miners Index (GDX) managed to claw its way back from significant underperformance to finish the year down just 10%, outperforming the S&P 500 (SPY) by 1000 basis points.
Fortunately for investors in the gold space, we’ve seen follow-through to this outperformance to start the new year, with the GDX up 13% year-to-date and back into positive territory on a 1-year trailing basis.
However, while the index may be up sharply off its lows and gold miners are outperforming most stocks, this doesn’t mean that any miner can be bought on dips, and a few have become expensive and increasingly risky now that they’re up more than 50% off their Q3 2022 lows.
In this update, we’ll look at two names that continue to fire on all cylinders and are much safer ways to buy any upcoming pullbacks in the space, given their operational excellence, attractive dividend yields, and superior diversification vs. their peer group.

Let’s take a closer look below:
Agnico Eagle Mines (AEM)
Agnico Eagle Mines (AEM) is the world’s third-largest gold producer and has been one of the busiest companies in the sector from an M&A standpoint.
In Q1 2022, the company closed its merger with the 9th largest gold producer globally, Kirkland Lake Gold, and is now in the process of acquiring Yamana Gold’s Canadian assets in a two-way acquisition with Pan American Silver (PAAS).
The result of these two acquisitions is that the company will grow into a ~3.9 million-ounce producer by 2024 (assuming the Yamana deal closes), placing it just behind Barrick Gold (GOLD) for the #2 spot among the world’s largest gold miners.
The result of this M&A activity is that Agnico Eagle now has ten mines in the safest mining jurisdictions globally (up from seven previously) and will gain the other 50% ownership of one of its largest gold mines in Quebec if the Yamana deal closes.
Plus, while Agnico Eagle may not be the largest gold producer, it is one of the top-6 lowest cost gold producers globally with all-in-sustaining costs below $1,000/oz and has one of the best pipelines in the sector, sitting on multiple world-class assets with some able to leverage off existing infrastructure, resulting in lower capital expenditures and benefit from synergies.
One example is Upper Beaver in Ontario, which sits in the same camp as its newly acquired Macassa Mine, a gold-copper project that could enjoy industry-leading margins due to by-product credits.
Another is its recently acquired Wasamac Project, a high-grade underground project in the Abitibi Region of Quebec that could potentially provide ore feed for mills in the region with excess capacity.
Finally, while the San Nicolas Project that it partnered on with Teck may not have clear synergies, this is one of the highest-margin VMS deposits globally, and it should enjoy 60% plus margins at current commodity prices.
Given Agnico Eagle’s unique position with multiple assets in safe jurisdictions and a development pipeline that could allow the company to grow production to 5.0+ million ounces per annum without any further M&A, I see the stock as one of the best ways to get exposure to gold.
This is especially true given that few million-ounce producers offer meaningful growth, which is related to the fact that it’s harder to grow once miners reach a certain scale.
Plus, Agnico Eagle can be considered a “sleep well at night miner”, operating out of Canada, Finland, Australia, and Mexico – which are ranked the safest jurisdictions globally.
So, while I have no plans to add to my position here at $58.00, I would view any sharp pullbacks in the stock as buying opportunities.
Barrick Gold (GOLD)
Barrick Gold (GOLD) is the world’s second-largest gold producer and owns the most Tier-1 scale (500,000+ ounces of production per annum) among its peers, but the stock has seen lifeless share-price performance over the past decade.
This can be attributed to the company’s heavy debt under its previous management, evidenced by net debt of more than $10 billion during the 2011-2015 secular bear market for gold.
The weaker balance sheet forced the company to divest some assets at the worst possible time, and the unfavorable position of being leveraged in a secular bear market earned Barrick the title of being of the worst-performing gold producers.
However, following the merger of equals with Randgold in 2018, the company’s new CEO has done an incredible job turning the company around.
Not only does the company have a net cash position today, but it has an attractive dividend yield of more than 3.0% and is aggressively buying back shares, regularly buying back over 1 million shares per week in Q3 and Q4.
Meanwhile, from an operational standpoint, its new CEO Mark Bristow has turned around several of its operations.
One major example is the agreed-upon joint venture in Nevada to take the borders off its operations and allow for synergies to make both its operations and Newmont’s operations much leaner.
Unfortunately, we haven’t seen the fruits of this hard work from a headline standpoint, given that Barrick’s production has declined since 2019, and its costs have risen sharply due to inflationary pressures.
Fortunately, this will change in 2023, with production hitting a major trough in 2022 at 4.14 million ounces but with growth to ~5.0+ million ounces by the end of the decade.
This growth will come from multiple assets, and costs are expected to drop by more than $200/oz in the same period as we see several assets optimized and lower-cost assets come online.
The result is that Barrick is finally investable and trades at a reasonable price, given that the stock remains stuck in a multi-decade downtrend.

Based on what I believe to be a fair cash flow multiple of 10.0 and FY2023 cash flow per share estimates of $2.35, I see a fair value for Barrick of $23.50, pointing to an 18% upside from current levels.
However, this assumes that we don’t see further strength in copper and gold prices, which could push its price target closer to $25.00.
At a current share of $19.80, this doesn’t translate to enough margin to rush into the stock just yet, given that I prefer a minimum 25% discount to fair value. However, if we were to see GOLD pullback below $17.70, I would view this as a buying opportunity.
Although Agnico Eagle Mines and Barrick Gold are two best-of-breed names in the sector, I have never seen much value in chasing rallies, so I have no plans to add to my positions in either stock here, given that they’ve had a nice run.
However, if we saw a sharp pullback in these names to unwind their current overbought conditions, I would view this as a buying opportunity.
Hence, for investors looking for exposure to gold, I believe these are two liquid leaders with generous shareholders returns that should be at the top of one’s watchlist.
Disclosure: I am long GOLD, AEM
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

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Treasury Default Hysteria Begins

While fights over Supreme Court and Federal Reserve Board nominations come sporadically as vacancies arise, there is one political battle we can almost always count on from year to year, and that is the struggle over extending the federal debt ceiling.
If it’s not increased, we’re told, the U.S. government will default on its obligations, Social Security and other government program beneficiaries will be rendered destitute, Treasury bondholders will see the value of their holdings decimated as they go without their interest payments, our soldiers and other government employees won’t get paid, and the global financial system will grind to a halt.
Most serious-minded adults, however (I hope), have learned to ignore this annual game of chicken that the White House and Congress insist on playing every year, although the financial press and media commentators profess to take it seriously.
Whichever political party controls the White House or the houses of Congress, the drama generally follows the same predictable format, namely the Democrats always favor raising the debt ceiling to avoid the catastrophes described in the first paragraph, while the Republicans express opposition in the name of fiscal responsibility.

Yet no matter how long the drama plays out, the outcome is always the same: the Republicans eventually knuckle under, life goes on and everyone gets their money, until the next debt debacle. Lather, rinse, repeat.
This year, it seems, the play has begun early.
Five whole months before the government allegedly runs out of money without a debt limit increase, Treasury Secretary (and former Fed Chair) Janet Yellen has already sounded the alarm and instructed her troops to put in place “extraordinary measures” to allow the government to keep paying its bills before it hits the current $31.4 trillion debt limit in June.
Yellen wasted no time in using the dreaded D-word to emphasize the supposed seriousness of the situation.
“A failure on the part of the United States to meet any obligation, whether it’s to debtholders, to members of our military or to Social Security recipients, is effectively a default,” she said. 
She also quickly dismissed suggestions that should the debt limit not be raised in a timely fashion the Treasury would be able to prioritize payments to recipients, be they bondholders, senior citizens or soldiers.
“The Treasury’s systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another,” she said last week.
I find that a little difficult to believe — every computer system in the world can be modified to accommodate some hiccup or another — but her comment went unchallenged.
One thing I’ve always found amusing about the whole annual debt limit-default drama is the market’s reaction to it, which is generally no reaction at all or the one you would least expect to happen, namely investors rushing to buy the very instrument that is supposedly being defaulted on, i.e., Treasury bonds.
If you knew a country or a corporation might default on their debt obligations, your first instinct would be to avoid them, wouldn’t it?
Yet, the closer we ostensibly get to a U.S. government default, the market reaction is to buy Treasuries, under the time-honored flight to safety.
That alone should tell you how seriously to take all this. No sensible person believes — or should believe — that the U.S. government is going to default, no matter how much scare talk comes out of Washington. Ain’t gonna happen.
But stay tuned. We’ll no doubt be hearing more about this as doomsday approaches. Try not to let it disturb your sleep or influence your financial decisions.
Meanwhile, we have a Fed meeting announcement to prepare for next Wednesday.
Compared to the Fed’s 2022 meetings — during which it raised interest rates seven times by a total of 425 basis points — next week’s meeting should be relatively uneventful and fairly predictable.

That is, we can probably expect the Fed to raise its federal funds target by another 50 bps, the same increase as the one at its previous meeting in mid-December following four straight 75 bp hikes. That would bring the fed funds rate to 4.75%, or close to where most people believe the Fed will end up.
Given the recent softening in the labor market and moderation in the inflation rate, it certainly could be argued that the Fed should reduce the increase to 25 bps, although that doesn’t seem likely to happen.
The Fed doesn’t want to send the message that it is losing its zeal to drive down inflation to its 2% target and giving in to just about everyone else clamoring for the Fed to at least pause its rate increases.
Even a 25 bp hike would be seen as the Fed giving into pressure, so a 50 bp increase seems the most likely outcome, whether warranted or not.
George YacikINO.com Contributor
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

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Stock Buyers Beware!

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

The bull vs. bear tug of war is at another critical juncture as they battle over 4,000. The two previous skirmishes were won by the bears.
I am referring to the big rallies that ran out of steam in mid August and early December. The hawkish Fed was the main catalyst each time to swing things back to the downside.
Will that be the case once again after the February 1st Fed announcement?
That is the topic that most deserves our attention at this time, and will be the focus of this week’s Reitmeister Total Return commentary.
Market Commentary
The boiled down version of today’s commentary can easily be labeled: Stock Buyers Beware!
That’s because price action is saying one thing…but fundamentals are saying another with the final verdict likely coming after the 2/1 Fed announcement.
Now let’s go back to the starting line by evaluating this picture of where we stand now with a possible breakout above the long-term trend line. Also known as the 200 day moving average for the S&P 500 in red below.
Yes, it appears that we have a break out forming at this time. However, see how similar events happened back in late March and late November before the bears took charge once again.
Chartists will also note that this is still quite bearish. First, because we are officially in a bear market. We would need to cross above 4,189 to state that a bull market was in place.
Second, we have a series of lower highs which is a negative trend until it is officially reversed.
To be clear, this could be the forming of the new bull market. And you should never fully ignore the wisdom of the crowd as it appears in price action.
Yet viewing this without the context of the fundamental landscape is a bit hollow. So, let’s switch in that direction where we have another crossroads. That being investors who are solely focused on the state of inflation (and likely future Fed actions) vs. those who see a recession forming.
This battle was at the center of my last commentary: Investors: Please OPEN Your Eyes. The main theme is that, yes, inflation is coming down faster than expected. But before you cheer that good news it is BECAUSE there is a recession forming which is normally the root cause of bear markets.
That recessionary forecast only grew darker this week starting Monday with a worse than expected -1% reading for Leading Economic Indicators. Check out this quote from Ataman Ozyildrim, Senior Director, Economics at the Conference Board (who creates this indicator):
“The US LEI fell sharply again in December—continuing to signal recession for the US economy in the near term. There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead. Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023.”
Next up to bat was the S&P Composite PMI Flash report on Tuesday coming in at 46.6. This was an even handedly bad showing as Services at 46.6 was on par with the nasty 46.8 showing for Manufacturing. (Remember under 50 = contractionary environment).
These poor economic readings make it hard to be bullish at this time. Even worse is that we are running head long into the next Fed announcement on 2/1 where they are likely to repeat their “high rates for a long time” mantra.
Bulls keep jumping the gun expecting a Fed pivot only to get smacked down again. Such was the case in mid-August when the 18% summer rally ended with the famed Jackson Hole speech from Powell had us making new lows in the weeks ahead. Then the October/November rally ran out of steam when Powell poured cold water on bullish aspirations with the higher for longer rate expectations.
To be clear, the Fed no doubt sees the same signs of moderating inflation. And yet just as clearly, there will be no change in their stance given how the higher for longer mantra was repeated ALL MONTH LONG at nearly every Fed speech in January including similar sound bites from Powell.
These guys are singing from the same song sheet on purpose. That is part of their mission to provide clarity to all market participants. And thus to expect them to abandon the higher for longer mantra as soon as the 2/1 announcement is borderline insane.
Yes, they likely will downshift to quarter point hikes. That seems appropriate at this time. But that is greatly different than ending rate hikes or going lower in time to stave off the formation of the recession at hand.
To boil it down, bulls could stay in charge of price action going into the 2/1 Fed announcement. This could have stocks looking like they are breaking out with some investors getting drawn in by serious FOMO.
However, going back to the main theme of this article, I would say strongly; STOCK BUYER BEWARE!
Simply to get bullish now coming into that 2/1 announcement given the facts in hand seems quite risky. Bears still have the upper hand til proven otherwise.
If by some amazing stretch of the imagination that the normally slow and steady Fed officials do a 180 degree turnabout to become undeniably dovish on 2/1, then certainly join the bull party that afternoon.
Long story short, the risk to the downside is greater than the risk to the upside which is why I remain entrenched in my bearish portfolio and recommend the same for others.
What To Do Next?
Discover my special portfolio with 10 simple trades to help you generate gains as the market descends further into bear market territory.
This plan has been working wonders since it went into place mid August generating a robust gain for investors as the market tumbled.
And now is great time to load back as we deal with yet another bear market rally before stocks hit even lower lows in the weeks and months ahead.
If you have been successful navigating the investment waters this past year, then please feel free to ignore.
However, if the bearish argument shared above does make you curious as to what happens next… then do consider getting my updated “Bear Market Game Plan” that includes specifics on the 10 unique positions in my timely and profitable portfolio.
Click Here to Learn More >
Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & 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.

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3 Energy Stocks To Load Up On In 2023

While it is broadly expected that the pace of interest rate hikes may be dialed down to 25-basis points, concerns over terminal interest rates being higher than expected and its effect on the U.S. economy have kept markets on edge.
With the likely less aggressive but drawn-out interest rate hikes by the Fed expected to add further stress to subdued corporate performance, the stock market volatility is expected to continue in the foreseeable future.
Hence, it could be wise for investors to increase exposure to instruments and assets whose prospects are robust enough to remain relatively unaffected by the turbulence.

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With supply constraints due to turbulent geopolitics and extreme weather events acting to keep demand robust, global energy consumption is expected to grow by 1.3% in 2023 as many countries use fossil fuels to manage their energy transition.
Source: https://www.eia.gov/Besides, energy demand is expected to grow in the long run due to increased economic activity and the effects of climate change. The global energy as a service market is projected to grow at a 10.3% CAGR to reach $144 billion by 2028.

Hence, it would be opportune to load up on energy stocks Halliburton Company (HAL), Baker Hughes Company (BKR), and Camber Energy, Inc. (CEI) as some technical indicators point to their upside.
Halliburton Company (HAL)
HAL provides products and services to the energy industry. The company operates through two segments: the Completion and Production segment and the Drilling and Evaluation segment. Over the last three years, its net income and EPS have grown at 13.6% and 12.3% CAGRs, respectively.
During the third quarter of fiscal 2022, ended September 30, due to increased activity and pricing in North American and international markets, HAL’s total revenue increased 38.8% year-over-year to $5.36 billion, while its adjusted operating income increased 84.7% year-over-year to $846 million.
During the same period, the adjusted net income attributable to HAL came in at $544 million, or $0.60 per share, up 119.4% and 114.3% year-over-year, respectively.
HAL’s revenue and EPS for the fiscal ended December 2022 are expected to come in at $20.30 billion and $2.10, indicating increases of 32.7% and 94.4% year-over-year, respectively. The company has further impressed by surpassing consensus EPS in each of the trailing four quarters.
HAL is currently trading at a premium, indicating high expectations regarding the company’s performance in the upcoming quarters. In terms of forward P/E, HAL is presently trading at 20.32x, 149.1% higher than the industry average of 8.16x. Also, it is trading at a forward EV/EBITDA multiple of 11.53, compared to the industry average of 5.50.
The stock is currently trading above its 50-day and 200-day moving averages of $37.79 and $34.05, respectively, indicating an uptrend. It has gained 17.7% over the past month and 50.7% over the past six months to close the last trading session at $42.66.
MarketClub’s Trade Triangles show that HAL has been trending UP for two of the three time horizons. The long-term trend for HAL has been UP since October 20 and its intermediate term trend has been UP since January 6, 2023, while its short-term trend has been DOWN since January 18, 2023.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, strong swings in price.
In terms of the Chart Analysis Score, another MarketClub proprietary tool, HAL scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the longer-term bullish trend is likely to resume. Traders should continue to monitor the trend score and utilize a stop order.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for HAL.
Baker Hughes Company (BKR)
BKR is an energy technology company that operates through three segments: Oilfield Services (OFS); Oilfield Equipment (OFE); Turbomachinery & Process Solutions (TPS); and Digital Solutions (DS). BKR’s revenue grew at a 6.8% CAGR over the past five years.
For the fiscal 2022 third quarter, ended September 30, 2022, BKR’s revenue increased 5.4% year-over-year to $5.37 billion. During the same period, driven by higher volume and pricing with all segments expanding their margins, the company’s adjusted operating income and adjusted EBITDA increased 25.1% and 14.2% year-over-year to $503 million and $758 million, respectively.
The adjusted net income attributable to BKR for the quarter came in at $264 million or $0.26 per share, up 87.2% and 62.5% year-over-year, respectively.
Analysts expect BKR’s revenue and EPS for the fiscal year ended December 2022 to increase 3.9% and 46.6% year-over-year to $21.33 billion and $0.92, respectively.
In terms of forward P/E, BKR is currently trading at 34.24x compared to the industry average of 8.16x. Similarly, its forward EV/EBITDA multiple of 11.81 is greater than the industry average of 5.50.
BKR’s stock is currently trading above its 50-day and 200-day moving averages of $29.27 and $28.91, respectively, indicating a bullish trend. It has gained 7.9% over the past month and 31.6% over the past six months to close the last trading session at $31.63.
MarketClub’s Trade Triangles show that BKR has been trending UP for two of the three time horizons. The long-term and intermediate-term trends for BKR have been UP since November 1, 2022, and January 3, 2023, respectively, while its short-term trend has been DOWN since January 18.
Source: MarketClub
In terms of the Chart Analysis Score, another MarketClub proprietary tool, BKR scored +75 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating short-term weakness. However, the stock still remains in the confines of a long-term uptrend.

Click here to see the latest Score and Signals for BKR.
Camber Energy, Inc. (CEI)
CEI is an independent oil and natural gas company. It is engaged in the acquisition, development, and sale of crude oil, natural gas, and natural gas liquids and manufacturing and supplying industrial engines, power generation products, services, and custom energy solutions.
During the third quarter of the fiscal, ended September 30, 2022, CEI’s revenue increased 53.6% year-over-year to $158.51 thousand. During the same period, the company’s net loss attributable to common shareholders narrowed to $23.28 million or $0.05 per share, compared to $264.56 million or $1.63 during the previous-year quarter.
CEI’s total liabilities stood at $70.60 million as of September 30, 2022, compared to $118.22 million as of December 31, 2021.
CEI’s stock is trading at a premium compared to its peers. In terms of trailing-12-month EV/EBITDA, CEI is trading at 107.02x, compared to the industry average of 1.98x. Also, it is currently trading at a forward Price/Sales of 22.97x, compared to the industry average of 1.38x. It closed its last trading session at $1.90.

MarketClub’s Trade Triangles show CEI has been trending UP for each of the three time horizons. The long-term trend for CEI has been UP since December 21, 2022, while its intermediate-term and short-term trends have been UP since December 19, 2022, and January 20, 2023, respectively.
Source: MarketClub
In terms of the Chart Analysis Score, another MarketClub proprietary tool, CEI scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend will likely continue. Traders should protect gains and look for a change in score to suggest a slowdown in momentum.

Click here to see the latest Score and Signals for CEI.
What’s Next for These Energy Stocks?
Remember, the markets move fast and things may quickly change for these stocks. Our MarketClub members have access to entry and exit signals so they’ll know when the trend starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]

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Bitcoin VS Gold VS S&P 500

How does gold and its digital competitor Bitcoin relate to each other?
Gold is a traditional store of value, while Bitcoin from a conventional standpoint is highly risky. Even though the latter was nicknamed “digital gold,” we can see from the chart below that it does not act like one.

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Source: TradingView
In the above quarterly chart, I combined 5 items:
The gold price is in black bars on scale A. The Bitcoin price is in orange bars on scale B. The U.S. money supply indicator M2 (M2) is in histogram on scale C. The red line represents the U.S. real interest rate (RIR) on scale D. There is a 2-year correlation coefficient of Bitcoin to gold (blue) in the sub-chart.

Both prices of gold and Bitcoin were moving higher with the M2 which has shown the extensive work of the “printing press”. The impact of the pumped money supply can be seen clearly in the dynamics of the RIR, which has fallen in the deep negative zone.
Gold has peaked five quarters ahead of the M2 climax point. However, following the repeated attempt to retest the all-time high, the price has nearly reached it, and the top coincides with M2 as well as with the bottom of the RIR.
Bitcoin has hit the all-time high close to the extreme of M2 and bottom of RIR with amazing accuracy.
While the move was in sync, the real reasons behind it were quite different. Gold buyers were trying to save the value of money. Bitcoin enthusiasts used cheap money to take a risk.
When the “printing press” stopped and M2 collapsed, both the top metal and main coin weakened at different speeds. The rapid growth of RIR forced by the Fed has caused more damage to Bitcoin than to gold: -68% vs -22% since the bottom of RIR. This confirms the speculative nature of the main crypto. This is evident in the next chart as well.
The correlation ratio clearly shows all the above-mentioned sync and de-sync periods. Currently, the link is slightly positive because both instruments are growing against the dollar.    

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Source: TradingView
In the above chart, I put Bitcoin vs. gold within the ratio (orange bars) and compared it with the gauge of risk represented by the S&P 500 index (blue line).
Since the correlation ratio is almost 0.87, it has mostly been positive over the past three years. The link has been weakening when the more volatile ratio has been falling sharply compared to the index.
The ratio peaked 3 months earlier than the index did at the start of 2022. If we consider the most recent valley as a bottom, then the ratio reached it 1 month later than the index.

There is a big gap between these instruments on the chart that remains stable over the observed period. It closes only when the Bitcoin/Gold ratio strikes new highs with a much larger amplitude than the S&P 500 matching on the chart.     
Both instruments have been recovering after a massive sell-off and the stronger ratio could be a harbinger of renewed appetite for risk as the market thinks that the Fed is about to stop tightening.
The ratio has the 12-month moving average (purple) as the strong barrier at 14.5 ounces ahead. The RSI indicator is moving north and it needs to cross over the 50 line to support further growth.
In order to close the gap with the current S&P 500 level it would require a huge gain of almost three times to reach 30 ounces.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

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This Airline Stock is Expecting a Strong 2023

The last few years have been difficult for the airline industry as it was among the biggest losers when the pandemic first hit in early 2020. However, with lesser restrictions on travel, the airline industry has bounced back strongly and is close to surpassing the pre-pandemic performance levels.
Delta Air Lines, Inc.’s (DAL) earnings and revenue exceeded analyst estimates in the fourth quarter.
Its EPS came 11.9% above the consensus estimate, while its revenue beat the estimate by 6.6%. The company’s operating margin came in at 10.9%, while its adjusted operating margin came in at 11.6%.
DAL’s CEO Ed Bastian said, “Delta people rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance, and I’m looking forward to recognizing their achievements with over $500 million in profit-sharing payments next month.”
Glen Hauenstein, DAL’s President, said, “For the year, we delivered $45.60 billion in adjusted revenue, a $19 billion increase over the prior year, with record unit revenue performance expected to sustain a revenue premium to the industry of more than 110%. Momentum continues in 2023 with strong demand trends, and we expect March quarter adjusted revenue to be 14 to 17% higher than 2019 on capacity that is 1 percent lower.”

The company’s revenue passenger miles for the fourth quarter increased 24.9% year-over-year to 50.47 billion. Its passenger revenue per available seat mile increased 30.8% year-over-year to 18.30 cents.
Also, its total revenue per available seat mile (TRASM) increased 23.4% from the prior-year period to 22.58 cents. In addition, its total passenger revenue increased 50.4% year-over-year to $10.89 billion.
For the fiscal first quarter ending March 31, 2023, DAL expects its total revenue to increase 14% to 17% over the same quarter of 2019 and its operating margin to come in between 4% and 6%. Its EPS is expected to come between $0.15 and $0.40. For fiscal 2023, DAL expects its total revenue to increase 15% to 20% and operating margin to rise 10% to 12% over the previous year. Its EPS is expected to come between $5 to $6.
DAL’s CEO Ed Bastian said, “As we move into 2023, the industry backdrop for air travel remains favorable, and Delta is well positioned to deliver significant earnings and free cash flow growth.”
DAL’s President Glen Hauenstein said, “The recent rise in COVID cases associated with the omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from President’s day weekend forward. Factoring this in to our outlook, we expect total March quarter revenue to recover to 72% to 76% of 2019 levels, compared to 74% in the December quarter.”
DAL is trading at a discount to its peers. The airline’s forward non-GAAP P/E of 7.40x is 57.1% lower than the 17.23x industry average. Its forward EV/EBITDA of 6.08x is 44.6% lower than the 10.97x industry average. Also, the stock’s 0.44x forward P/S is 66.6% lower than the 1.32x industry average.
DAL’s stock has gained 22.9% in price over the past three months and 27.2% over the past six months to close the last trading session at $38.26. Wall Street analysts expect the stock to hit $51 in the near term, indicating a potential upside of 33.3%.
Here’s what could influence DAL’s performance in the upcoming months:
Robust Financials
DAL’s total operating revenue for the year ended December 31, 2022, increased 69.2% year-over-year to $50.58 billion. Its operating income increased 94.1% year-over-year to $3.66 billion.
The company’s operating revenue increased 41.9% year-over-year to $13.44 billion for the fourth quarter ended December 31, 2022. Its non-GAAP net income increased 564.3% year-over-year to $950 million. In addition, its non-GAAP EPS came in at $1.48, representing an increase of 572.7% year-over-year.
Favorable Analyst Estimates
DAL’s EPS for fiscal 2023 and 2024 are expected to increase 61.6% and 29.8% year-over-year to $5.17 and $6.71, respectively. Its revenue for fiscal 2023 and 2024 is expected to increase 9.7% and 0.9% year-over-year to $55.49 billion and $56.01 billion, respectively.
Mixed Profitability
In terms of the trailing-12-month EBIT margin, DAL’s 7.57% is 22.2% lower than the 9.73% industry average. Its 2.61% trailing-12-month net income margin is 61.4% lower than the 6.75% industry average.
On the other hand, its 25.49% trailing-12-month Return on Common Equity is 79.6% higher than the industry average of 14.19%. In addition, its 10.64% trailing-12-month Capex/Sales is 259.6% higher than the industry average of 2.96% industry average.
Technical Indicators Show Promise
According to MarketClub’s Trade Triangles, the long-term trend for DAL has been UP since November 10, 2022, and its intermediate-term trend has been UP since January 6, 2023. However, the stock’s short-term trend has been DOWN since January 13, 2023.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, intense swings in price.

In terms of the Chart Analysis Score, another MarketClub proprietary tool, DAL, scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend. While DAL shows short-term weakness, traders may look for the longer-term bullish trend to resume.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for DAL.
What’s Next for Delta Air Lines, Inc. (DAL)?
Remember, the markets move fast and things may quickly change for this stock. Our MarketClub members have access to entry and exit signals so they’ll know when the trend starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
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Best,The MarketClub Team[email protected]

INO.com by TIFIN

This Warren Buffett Holding Has Upside Potential

With retail sales declining more sharply than expected during the holiday month and the third consecutive month of contraction in industrial activity, there is concern on Wall Street that the Federal Reserve may have overcooked it with respect to interest-rate hikes to cool down and contain inflation.
Amid widespread bearish sentiments, it could be wise to bank on fundamentally strong, profitable, and fairly-priced sector-leading businesses, such as Taiwan Semiconductor Manufacturing Company Limited (TSM).
Headquartered in Hsinchu City, Taiwan, TSM provides integrated circuit manufacturing services globally. This involves manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices.
The super-advanced semiconductor chips that TSM produces are difficult to fabricate due to their high development costs. Hence, this presents a significant barrier to entry into the competition.

On December 29, 2022, TSM held a 3 nanometer (3nm) Volume Production and Capacity Expansion Ceremony at its Fab 18 new construction site in the Southern Taiwan Science Park (STSP).
TSM announced that 3nm technology has successfully entered volume production with good yields. The company estimates that the technology will create end products with a market value of $1.5 trillion within five years of volume production.
On December 6, TSM updated that in addition to its first fab in Arizona, which is scheduled to begin production in 2024, it has also started the construction of a second fab, scheduled to begin production in 2026.
The overall investment for these two fabs will be approximately $40 billion. When complete, TSM Arizona’s two fabs will manufacture over 600,000 wafers annually, with an estimated end-product value of more than $40 billion.
On November 15, it was revealed that Warren Buffett’s Berkshire Hathaway (BRK.B) spent $4.1 billion to acquire a stake in the world’s largest contract chipmaker during the third quarter. According to SEC filings, the fabled conglomerate bought just over 60 million of TSM’s New York-listed American Depositary Shares at an average price of around $68.56.
Mirroring the positive developments, the stock has gained 16.9% over the past month to close the last trading session at $89.47.

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TSM is trading above its 50-day and 200-day moving averages of $77.44 and $82.48, respectively, indicating an uptrend.
Here is what may help the stock maintain its performance in the near term.
Solid Track Record
Over the past three years, TSM’s revenue has exhibited a 28.4% CAGR, while its EBITDA has grown at a stellar 33.4% CAGR. The company has increased its net income and EPS at a 42.1% CAGR during the same period.
Robust Financials
Despite the fourth quarter of fiscal 2022 ended December 31, characterized by end-market softness and customers’ inventory adjustment, TSM’s net sales increased 42.8% year-over-year to NT$625.53 billion ($20.63 billion), while its income from operations increased 77.8% year-over-year to NT$325.04 billion ($10.72 billion).
During the same period, TSM’s net income and EPS increased 78% to NT$295.90 billion ($9.76 billion) or NT$11.41 per share.
Attractive Valuation
Despite solid financials and upward momentum in price, TSM is still trading at a discount compared to its peers, thereby indicating upside potential. In terms of forward P/E, the stock is trading at 15.73x, 18.9% lower than the industry average of 19.40x.
In terms of the forward EV/EBITDA, TSM is currently trading at 7.94x, which is 40.2% lower than the industry average of 13.26x. Its forward Price/Cash Flow of 8.42x also compares favorably to the industry average of 18.30x.
Favorable Analyst Estimates for Next Year
While TSM expects a challenging fiscal amid weak overall macroeconomic conditions, analysts expect the company’s revenue for the fiscal ending December 2023 to increase 2.2% year-over-year to $76.12 billion.During the fiscal ending December 2024, TSM’s revenue is expected to increase 20.7% year-over-year to $91.88 billion, while its EPS is expected to increase 23% year-over-year to $7.00.
TSM has also impressed by surpassing consensus EPS estimates in each of the trailing four quarters.
Technical Indicators Look Promising
MarketClub’s Trade Triangles show that TSM has been trending UP for each of the three time horizons. The long-term trend has been UP since December 1, 2022, while the intermediate-term and short-term trends have been UP since January 9, 2023, and December 29, 2022, respectively.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, strong swings in price.

In terms of the Chart Analysis Score, another MarketClub proprietary tool, TSM scored +90 on a scale from -100 (strong downtrend) to +100 (strong uptrend), indicating that the uptrend will likely continue. While TSM is showing intraday weakness, it remains in the confines of a bullish trend. Traders should use caution and utilize a stop order.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool takes into account intraday price action, new daily, weekly, and monthly highs and lows, and moving averages.
Click here to see the latest Score and Signals for TSM.
What’s Next for Taiwan Semiconductor Manufacturing Company Limited (TSM)?
Remember, the markets move fast and things may quickly change for this stock. Our MarketClub members have access to entry and exit signals so they’ll know when the trend starts to reverse.
Join MarketClub now to see the latest signals and scores, get alerts, and read member-exclusive analysis for over 350K stocks, futures, ETFs, forex pairs and mutual funds.
Start Your MarketClub Trial
Best,The MarketClub Team[email protected]

Invest In Women With This New ETF

A new Exchange Traded Fund is taking the next step with gender diversity investing. The Hypatia Women CEO ETF (WCEO) is the first ETF to focus strictly on women-run companies.
The only two requirements for a company be owned in WCEO are that it has a market cap of at least $500 million and a woman runs the company, either from the CEO or Chairperson position.
WCEO will have at least 80% of its assets in US companies that female Chief Executive Officers lead. Furthermore, the fund may invest up to 20% of holdings in US companies with an Executive Chairperson or a Chairperson who is female.
WCEO is a one-of-a-kind ETF, but it does have some competition if an investor is looking for a woman-focused ETF.

The Impact Shares YWCA Women’s Empowerment ETF (WOMN) tracks an index of large and mid-cap US equities selected and weighted to maximize exposure to firms that score highly on gender diversity.
WCEO has an expense ratio of 0.85% and just began trading in January. WOMN has an expense ratio of 0.75%, has been trading for about four years, and has over 200 holdings. Year-to-date, the fund is up 4.7%, down 12.41% over the last year, but up 11.83% annualized over the previous three years.
Another ETF focusing on women in the workforce is the SPDR MSCI USA Gender Diversity ETF (SHE). SHE tracks a market cap-weighted index of large and mid-size US companies that promote gender diversity through a relatively high proportion of women throughout all levels of their organization.
SHE has been trading for about seven years and has an expense ratio of 0.20%, the best out of this group. Year-to-date SHE is up 3.88%, down 14.48%, but up 2.53% annualized over the last three years and 4.82% annualized over the previous five years.
While each of these three ETFs promotes the idea of gender diversity in the workplace, WCEO has taken it to the next level, and I believe the requirement for a company to be run by a woman will set this ETF apart from the rest over the next few years.
I feel WCEO is a good buy because, over the last few years, we have continued to get more evidence indicating that women are better leaders than men. One recent example of this is the Covid pandemic, in which women-run countries managed the crisis better. Another study showed that US states with women governors had fewer people die than states with male governors.
A study on leadership performed by Jack Zenger and Joseph Folkman found that women were rated more competent on every level of leadership than men. This study used 360 assessments to evaluate the effectiveness and get an accurate result.
If you aren’t yet sold, this may help push you over the edge. As of May 2022, 32 companies in the S&P 500 were led by women. If we look at the performance of those 32 companies compared to the rest of the S&P 500 over the past ten years, the results are the female lead companies rose 384% compared to just a 261% increase by the male lead businesses.
Let me leave you with one more thought. There is a story about Billy Beane, the manager of the Oakland A’s baseball team and a key figure in the movie “Moneyball.” If you recall, in the film, Billy Beane went out and found players that didn’t necessarily appeal to the scouts because of their physical appearance or something as small as the way they threw a baseball, say, sidearm.

Apparently, this way of thinking was how he made stock picks. The story goes that he would buy stocks based on how the CEO looked. He would only invest in companies that did not have a tall white male CEO.
It is said that he thought some, or even most, tall white men gained respect and where eventually promoted to CEO because of their physical appearance, not because of their ability. Billy Beane wanted a CEO that gained their position because they earned it based on skill and business knowledge.
So if you want to invest like Billy Beane, or ‘Moneyball’ investing, try out the new ETF WCEO and invest with the women.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Stock News by TIFIN

2 Tech Stocks That Have Finally Bottomed

2022 was a year to forget for investors and one of the worst years in history for the 60/40 stock/bond portfolio strategy in history.
This was evidenced by both assets posting double-digit declines, with the S&P 500 (SPY) actually performing the best with a 20% decline for the year, which says a lot about the magnitude of the decline in bonds.
Fortunately, 2023 is off to a better start, and while the S&P 500 entered the year in rough shape, the Nasdaq Composite was over 30%, with sentiment for the tech sector arguably the worst it’s been in nearly a decade.
This has set up some oversold buying opportunities, and some tech names have ~65% of their value, placing them in an interesting position from a valuation standpoint.

In this update, we’ll look at two tech stocks that look to have finally bottomed and where investors could find some value in buying the dip.
Crowdstrike (CRWD)
Crowdstrike (CRWD) is a $24 billion company in the cybersecurity space, and it continues to be one of the fastest-growing companies globally, increasing annual revenue from $119 million in FY2018 to $1.45 billion in FY2022, and sales estimates are sitting at $3.8 billion for FY2025.
The company is currently the market leader in endpoint security. Its flagship product is the Falcon Platform, with continuous AI analytics on trillions of signals helping to defend the thousands of customers on its platform.
As of the company’s most recent quarter, it has 15 of the top 20 US banks on its platform, 537 of the Global 2000 companies, and 21,100 customers in total.
Notably, the company is certainly not seeing a slowdown in line with other S&P 500 companies in this recessionary environment, growing customers by 44% year-over-year and revenue by 53% to $580.9 million.
The result is that Crowdstrike is set to grow annual EPS yet again this year by a market-leading 130%, with annual EPS estimates sitting at $1.54, up from $0.67 last year. This growth is expected to continue in FY2024, with annual EPS set to come in at $2.02.
(Source: Company Filings, Author’s Chart, FactSet Estimates)
Based on what I believe to be a fair earnings multiple of 65 to reflect Crowdstrike’s market-leading growth rates and positioning as a leader in its industry, I see a fair value for the stock of $131.30, pointing to 30% upside from current levels (FY2024 estimates: $2.02).
However, Crowdstrike is likely to triple annual EPS by F2027 to $6.50,, and even at a more conservative multiple of 50, this would translate to a fair value of $325.00 per share (230% upside from current levels).
So, for investors looking for high growth at a reasonable price, I would view any pullback below $99.00 on CRWD as low-risk buying opportunities for an initial position.
Intuit (INTU)
Intuit (INTU) is a $110 billion company in the computer software industry group and is best known for QuickBooks, an accounting software package developed and marketed by the company and first offered in 1983.
Like Crowdstrike, Intuit has seen incredible earnings growth over the past several years and, despite the recessionary environment, continues to see strong top-line growth as well. This was evidenced by revenue of $2,597 million in Q1 2023, a 29% increase from the year-ago period.
At the same time, margins have seen minimal contraction, coming in at 75.5%, with annual EPS up 9% to $1.66.
Unfortunately, with the higher interest rate environment leading to multiple compression across the market as higher discount rates are used to calculate future cash flows, Intuit has suffered materially.
This is evidenced by its share price decline by nearly 55% to a recent low of $352.00 (all-time high: $717.00). In addition, revenue in its Credit Karma segment was softer than expected, with guidance revised to a decline of 10-15% year-over-year vs. 10-15% growth, a massive guidance cut.
Still, the company still expects to grow annual EPS year-over-year due to strength in other categories, on track to report annual EPS of $13.69 in FY2023, a 16% increase year-over-year.
(Source: Company Filings, Author’s Chart, FactSet)
Historically, Intuit has traded at an average earnings multiple of 37 (10-year average), and the stock is currently trading at just ~25.2x FY2024 estimates at a share price of $390.00. This leaves the stock trading at a deep discount to historical multiples, and even based on a more conservative multiple of 32.0x earnings, I see a fair value for Intuit of $495.30.

If we measure from a current share price of $390.00, this translates to a 27% upside to fair value but assumes that Intuit doesn’t beat what I would consider conservative estimates.
So, if the stock were to decline below $373.00, which would give it a 33% upside to fair value, I would view this as a buying opportunity.
While the tech sector is full of unprofitable land mines, Intuit and Crowdstrike are unique because they are profitable and growing rapidly, but they’ve been thrown out with the bathwater.
Just as importantly, they’re now trading at more reasonable valuations and are oversold on their long-term charts. So, if we see further weakness in these names, I would view this as a buying opportunity.
Disclosure: I am long CRWD
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing.

KISS Investing in 2023

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

It been roughly 40 years since investors have been faced with high inflation as the cause of a recession and bear market. And yet we have been dealt 5 bear markets since that time.
The point being that the majority of today’s investors have either never seen inflation cause a recession… or it is so far back in the memory banks that they don’t know how to properly react to the information in hand.
This begs us to get back to KISS investing.
Instead of what it usually means: Keep It Simple Stupid
In 2023 we will go with: Keep Inflation Separate Stupid
The reason for this pearl of investing wisdom will be fully illuminated in this week’s Reitmeister Total Return commentary.
Market Commentary
There have been quite a few joyous bear market rallies this past year based on the notion that inflation was cooling…which would mean the Fed would pivot to more dovish policies soon… which eventually fell apart when the Fed dumped cold water on the situation.
I sense the same set up is taking place now coming into their February 1st rate hike decision and announcement. And that is why I continue to be bearish even as the S&P 500 (SPY) is flirting with a breakout above the long term trend like (aka 200 day moving average) @ 3,978.
Yes, one could say that we have closed above for 2 straight sessions. Yet hard to call it a breakout when the psychologically important 4,000 level looms large overhead. Until we break above that key hurdle, then the bears are still in control.
Back to the KISS theme: Keep Inflation Separate Stupid
Bulls continue to not appreciate the seriousness of the Feds higher rate mantra about “a long time”. I sense that message will be shouted again from the rooftops at their next meeting on February 1st leading to another stock sell off.
To be clear, there is a softening of inflation. No two ways about it. However, sticky inflation in wages and housing will have the Fed maintaining their restrictive policies a while longer only increasing the odds we descend into recession in the first half of the year.
And over the past couple weeks several Fed officials were quoted repeating this higher rates for “a long time” mantra. That includes Chairman Powell. So the idea that only a couple weeks later on February 1st they would say the long time is now over is borderline insane.
Thus, when that message does come through loud and clear in a couple weeks, we will likely see a retreat from recent highs just like we did in mid August and early December. This is why I remain quite bearish.
However, that is truly missing the main point of today’s commentary which we will pivot to now. That being a focus on inflation is completing missing the much more important signals coming from the economy.
That indeed we have an economy teetering on recession. And that should hold MUCH GREATER sway in investor decision making than the state of inflation.
You have heard me write enough on the worsening economic outlook to induce carpel tunnel syndrome. So today I am going to lean one of the industry’s heavyweights to help explain why the market outlook is not just about inflation. And why it should be separated from the bigger recession question that is usually at the forefront of the bull/bear debate… and in time will likely return to the center when investors realize their focus on inflation was misguided.
I have often quoted from John Mauldin in the past because he does such a great job of breaking down “wonky” economic concepts to make it understandable. He was at his level best once again this week with his article: The Punchbowl is Gone.
The title is mean to say that the good times afforded the economy by easy money policies are now gone. And thus the road is tougher from here for the Fed, corporations and yes, investors.
In this article he shares a lot of thoughts he rounded up from other leading investment thinkers. So now I am going to share the best of that article to help round out our understanding of the road ahead of us (spoiler alert: still quite bearish).
“…bond market wizard Jeff Gundlach placing this year’s recession odds at 75%. That seemed low to me…”
Samuel Rines of CORBU adds; “No one wants to say, ‘a recession is fine.’ But the FOMC is highly implying it.”
“Could worse conditions still be coming? Sure. Fed policy changes have lagging effects. But from the FOMC’s perspective, the current strategy seems to be producing the desired benefit (lower inflation) without undesirable consequences (unacceptably high unemployment or credit markets crashing). This gives them room to continue.”
David Rosenberg sees a 100% chance of recession this year for the following reasons: “The seeds for the 2023 recession were sown a while ago by the relentless decline in the Conference Board’s leading economic indicator, which has now fallen for nine consecutive months. The data go back to 1959 and I can tell you that at no time in the past have we seen a string of weakness like this, with a 5.6% annualized contraction over such a timeframe, that failed to presage a recession within a quarter or two. Call it nine for nine back to fifty-nine. The recession is staring us in the face (and if it is so ‘priced-in,’ why is the consensus calling for positive EPS growth for next year?).”
Tuesday provides yet more proof of the deteriorating economy with The NY Empire State Manufacturing report plummeting to -32.9. The lowest level since May 2020 when Covid was ravaging the economy. This and Chicago PMI are considered the most influential of the regional manufacturing reports and both are showing ill health.
So yes, bulls started 2023 in charge thanks to a combination of new year optimism plus signs of moderating inflation. And yes, they may keep the reigns a little longer with FOMO creeping higher.
Let’s sum it up.
To join the bull party now as recessionary odds are on the rise seems quite unwise. And the same could be said for getting bullish on the hopes of a Fed pivot on February 1st. This seems downright fanciful given the facts in hand.
This is why I remain bearish at this time. I even added a 3X inverse ETF to my portfolio the end of last week as stocks were bumping up against resistance.
Down makes more sense than up. Trade accordingly.
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Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & 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.