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Software giant Oracle Corporation’s (ORCL) second-quarter revenue and EPS exceeded Wall Street’s estimates. The company’s EPS was 3.2% above the consensus estimate, while its revenue beat analyst estimates by 2.1%.
The strength in cloud infrastructure and cloud-based applications drove a solid topline performance.
Its total cloud revenue, including infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS), rose 48% year-over-year in constant currency to $3.80 billion.
IaaS revenue increased 59% year-over-year in constant currency to $1 billion.
Without the impact of the foreign-exchange rates, ORCL’s adjusted EPS would have been 9 cents higher.
ORCL’s CEO, Safra Catz, said, “In Q2, Oracle’s total revenue grew 25% in constant currency-exceeding the high end of our guidance by more than $200 million. That strong overall revenue growth was powered by our infrastructure and applications cloud businesses that grew 59% and 45%, respectively, in constant currency.”

“Fusion Cloud ERP grew 28% in constant currency, NetSuite Cloud ERP grew 29% in constant currency- each and every one of our strategic businesses delivered solid revenue growth in the quarter,” she added.
For fiscal 2023, the company expects its cloud revenue to grow more than 30% in constant currency compared to the 22% growth in fiscal 2022.
ORCL expects its revenue to rise 17% to 19% on a reported basis and 21% and 23% on a constant currency basis in the third quarter. Also, it expects adjusted EPS for the third quarter to be between $1.17 and $1.21, lower than the consensus estimate of $1.24.
ORCL’s stock has gained 13.3% in price over the past three months and 13.6% over the past six months to close the last trading session at $88.46.
The company paid a quarterly dividend of $0.32 on January 24, 2023. Its annual dividend of $1.28 yields 1.45% on the current share price. It has a four-year average yield of 1.59%.
Its dividend payouts have increased at a 10.1% CAGR over the past three years and an 11% CAGR over the past five years. The company has grown its dividend payments for eight consecutive years.
Here’s what could influence ORCL’s performance in the upcoming months:
Steady Topline Growth
ORCL’s total revenues increased 18.5% year-over-year to $12.27 billion for the second quarter that ended November 30, 2022.
The company’s non-GAAP operating income increased 4.8% year-over-year to $5.08 billion. Its non-GAAP net income declined 2% year-over-year to $3.31 billion.
In addition, its non-GAAP EPS remained flat year-over-year at $1.21.
Favorable Analyst Estimates
Analysts expect ORCL’s EPS for fiscal 2023 and fiscal 2024 to increase 0.1% and 13.7% year-over-year to $4.91 and $5.58.
Its revenue for fiscal 2023 and 2024 is expected to increase 17.5% and 7.5% year-over-year to $49.85 billion and $53.58 billion.
Mixed Valuation
In terms of forward non-GAAP P/E, ORCL’s 18.03x is 10.4% lower than the 20.11x industry average. Its forward EV/EBIT of 15.58x is 7.6% lower than the 16.87x industry average.
However, the stock’s 6.47x forward EV/S is 124.4% higher than the 2.88x industry average. In addition, its 4.78x forward P/S is 64.9% higher than the 2.90x industry average.
High Profitability
In terms of the trailing-12-month gross profit margin, ORCL’s 76.10% is 54.7% higher than the 49.19% industry average.
Likewise, its 20.85% trailing-12-month levered FCF margin is 180.1% higher than the industry average of 7.45%. Furthermore, the stock’s trailing-12-month Capex/Sales came in at 14.49%, compared to the industry average of 2.51%.
Technical Indicators Show Promise
According to MarketClub’s Trade Triangles, the long-term trend for ORCL has been UP since November 15, 2022, and its intermediate-term trend has been UP since October 17, 2022. The stock’s short-term trend has also been UP since February 1, 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, ORCL, scored +90 on a scale from -100 (strong downtrend) to +100 (strong uptrend). ORCL is in a strong uptrend that is likely to continue. While ORCL is showing intraday weakness, it remains in the confines of a bullish trend.

The Chart Analysis Score measures trend strength and direction based on five different timing thresholds. This tool considers intraday price action; new daily, weekly, and monthly highs and lows; and moving averages.
Click here to see the latest Score and Signals for ORCL.
What’s Next for Oracle Corporation (ORCL)?
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.
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The fabled group of five large-cap tech businesses, so-called FAANG — Facebook (currently Meta Platforms), Amazon, Apple, Netflix, and Google (currently Alphabet) — dominated the stock market through late 2021.
However, a challenging macroeconomic environment in 2022, characterized by stubborn inflation and removal of Covid restrictions, saw big tech struggling to meet and exceed the high expectations of growth in subscribers/users and advertisement revenues set at the height of the pandemic.
The slump in the performance of these tech businesses was soon reflected in the price action of their stocks. Their dismal year can be summarized by the below snapshot at the end of October 2022.
Source: Forbes
However, the drawdown brought the valuations of these compounders to a more comfortable buying point while they did the needful to recapture lost demand and improve the efficiency of their businesses.

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Hence, it could be wise to load up on Meta Platforms, Inc. (META) and Netflix, Inc. (NFLX) to capitalize on trends that indicate a potential comeback.
Meta Platforms, Inc. (META)

The global stock market’s market distortion was revealed last week. Let me share it with you in visual form below.
I put together three ETFs: Vanguard S&P 500 ETF (NYSEARCA:VOO) in the blue line representing the S&P 500 broad U.S. stock index; Vanguard Total World Stock ETF (NYSEARCA:VT) in the black line representing the global stock market and Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) in the red line representing the stock market outside of the United States.
Source: TradingView
The first chart above depicts the price dynamics since September 2010. Over this long period, the US stock market has outperformed both the global market and the rest of the world.
VOO received +257%, VT received +107%, and VEU received only +21%. Indeed, the gap is huge.

Smart money waits for a market crash before adding or purchasing stocks. In this regard, I’ve created a new chart below to show how these three instruments have performed from the deep valley in 2020 to the top of 2021.
Source: TradingView
More than half of the time, all three stock markets have demonstrated close dynamics. The gap began to appear in 2021 and continued to grow until the end of the period.
The VOO gained more than 100%, the VT gained close to 100%, and the rest of the world did not set a new high, with the surplus remaining just above +70%.
Let’s jump ahead to the most recent trough, which was established in October, and create a new comparison.
Source: TradingView
It’s amazing to see how the dynamics changed dramatically this time, flipping the positions of the lines in the chart above.
During this period, the stock market outside of the United States (VEU, red line) gained an impressive +25%, while the global stock market (VT, black) scored +18%. The U.S. stock market (VOO, blue) lags behind, accounting for nearly half of VEU’s profit (+13%).
A more aggressive Fed has put pressure on its domestic stock market to allow the rest of the world to get ahead.

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Let us look closer at the VEU ETF.
Source: investor.vanguard.com
Europe and Emerging Markets are the top two regions in this ETF, accounting for two-thirds of its assets as of 12/31/2022.
The top 10 holdings are in the table below.
Source: investor.vanguard.com
In the VEU chart below, I noticed a well-known powerful pattern.
Source: TradingView
In the weekly chart above, the combination of three troughs, with the deepest one in the middle, has formed the eye-catching Inverse Head & Shoulders pattern (blue). It is a bullish reversal model. This pattern has a beautiful symmetry. The Neckline formed by the top points of the inverse head is ideally flat.

When the price was shaping the Right Shoulder, the largest Volume Profile area (orange) acted as a strong support around the $50 level, so it is smaller than the Left Shoulder.
The price has already broken above the 52-week simple moving average (red) as well as the Neckline resistance. The target is located at the height of the Head added to the breaking point of the Neckline, and it was highlighted at $62.8. Potential gain is around 14% from last week close. The peak of 2021, at 65.3, is the next aim.
Close to the target of the Inverse Head & Shoulders pattern, the next Volume Profile barrier is located between $61 and $62. So, keep an eye on the progress and book a profit if it stalls there.

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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.

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.
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I was not the first guy to get bearish in 2022, but by May I got the memo just in the nick of time. This led to a major shift in my portfolio that allowed me to profit on the way down. And I have been steadfastly bearish since.
But just like the Fed, my outlook is “data dependent”. And recent data has me becoming less bearish. Note that is not the same thing as becoming bullish.
Why the change of heart? And what does that mean for trading strategy going forward?
Read on below for the full story…
Market Commentary
First, let’s start with some important terminology. Less bearish is quite different than being bullish.
Imagine that I previously saw 80% odds of bear market and lower stock prices in 2023. Thus, only a 20% possibility of bull market.
Given recent information my view has shifted down to about 65% bearish probability versus 35% bullish. That is nearly 2 to 1 in favor of bear market forming… just a notch less bearish than before. The next logical question is…
Why still bearish?
You have already me talk non-stop since last May about all the reasons to be bearish. That is overflowing in my article archive. Plus my most recent presentation puts that all into perspective in a nice concise way: Stock Trading Plan for 2023.
Now we are going to flip over this coin and talk about the bullish view. It is hard for me to say it in a straight forward manner. Instead, I am going to flush out all the individual ideas that point in a bullish direction…the sum total of them is still less likely than the bearish thesis playing out.
Employment is Too Strong: That was on full display Thursday when Jobless Claims went even lower to 186,000 claims. You can not have a recession without job loss. That is why the first half of 2022 was not labeled a recession even though we had 2 straight quarters of negative GDP.
So yes, we all see the headlines about job cuts at some high profile tech firms. But overall there are far too many job openings which is why the unemployment has been going lower…not higher. The trends in jobless claims say that is not going to change anytime soon as you usually need claims over 300,000 to make the unemployment go up.
To put it together, we may very well have an economic contraction coming soon, but it likely will barely effect employment…and thus increases odds of a soft landing for which stocks don’t need to fall further.
Break Above 200 Day Moving Average: For as much as I rely upon the fundamentals, I have learned to pay close attention to the 200 day moving average for the S&P 500 (SPY). We broke above on 1/19 and have only rallied higher since then. 6 straight closes above and 100 points north of the mark seems to confirm the breakout for now.
“As January Goes…So Goes the Rest of the Year”: This is another one of those classic investment sayings that does have a bit of truth behind it. Not just the 6% gain for the S&P 500 on the month, but the very Risk On nature of the groups leading the way. So if the saying holds true it means more of the same in 2023.
Less Bad = Good: This notion comes from the idea that expectations are incredibly low for the economy and corporate earnings. Lower hurdles like these make it easier to impress investors where things being less bad than expected is all it takes to bid up stock prices.
Too Many Bears: Have you ever noticed that investor sentiment is a contrary indicator? The more bullish people feel = optimism too high = greater odds of downside to follow.
The same is true in reverse. When folks are too bearish…then too often the opposite happens. And indeed this is the most widely expected recession and bear market that I can remember. That increases the odds that the opposite will play out. This also fits in with the time honored notion that “the market climbs a wall of worry”.
Fed Pivot on 2/1?: The Fed is a slow and deliberate group. And given statements in the past, and all throughout January, they will continue to raise rates into the future.
However, any softening in their language to acknowledge that inflation is moderating and just maybe they do not need to stay hawkish for as long as previously stated could well be the final nail in the bearish coffin with more upside to come. That is because it increases odds of soft landing.
Note that the absolute opposite could happen and that firmly hawkish statements would stop this rally in its tracks with significant downside to follow.
I realize that after reading these 6 reasons to become bullish that it may sound like a convincing argument. Thus, I bring your attention back to the statement at the top where I still see 65% likelihood of continuation of the bear market with new lows later in 2023.
That is because there is at least 6 more months of restrictive Fed policies ahead…plus the 3-6 months of lagged effect of these policies equals a lot more time for a full blow recession to take root. And thus plenty of opportunity for unemployment to finally worsen.
This is the Pandoras Box of the economy. Once that PAIN starts to roll out then everyone becomes more fearful of their job security. This leads to more saving and less spending which further weakens the economy with more job layoffs as a consequence.
If we can truly avoid this vicious cycle, and enjoy a soft landing, then yes, the bull market starts now. The odds of which will keep moving with each new economic fact in hand.
Again, my reading of all of this is still 65% likelihood of recession and deepening bear market. However, am prepared to adjust more bullish if the preponderance of the evidence swings in that direction.
The next key piece of evidence comes on Wednesday 2/1 when the Fed has their rate decision and announcement. That could be incredibly bullish…incredibly bearish…or incredibly uncertain.
I will do my level best to decipher it all for you in next week’s commentary. Just make sure that your mind is open to all new facts as they roll in because the most dangerous thing with investing is to only listen to evidence that proves your point and ignoring the rest.
We are investors. Not bulls or bears.
Yes, there are times we are feeling more bullish or bearish. But that label should never be affixed to you as a point of identity as it could become too permanent stopping you from switching gears for the betterment of your portfolio.
Right now we all need to be flexible to review the facts with as open a mind as possible.
Stay tuned more updates and associated trades as these facts roll in.
What To Do Next?
Watch my brand new presentation: “Stock Trading Plan for 2023” covering:

Why 2023 is a “Jekyll & Hyde” year for stocks
4 Warnings Signs the Bear Returns in Early 2023
9 Trades to Profit on the Way Down
Plan to Bottom Fish @ Market Bottom
2 Trades with 100%+ Upside Potential as New Bull Emerges
And Much More!

Watch “Stock Trading Plan for 2023” Now >
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.

As we approach the one-year anniversary of the start of the Russian-Ukraine war, we are seeing more evidence that a significant boom is continuing in the defense industry.
I know what you may be thinking… the rally in defense stocks has already occurred, and the time to buy these stocks was at the start of the war in Ukraine.
While that would have been the ideal time to buy defense stocks, just because you didn’t buy back then doesn’t mean now is also not a good time to buy.
Let me explain why now is an excellent time to buy defense stocks, or better yet, Exchange Traded Funds that focus on defense stocks, and then I will give you a few different defense ETFs that you can buy today.

The Foundation for Defense of Democracies Center on Military and Political Power recently estimated that the total spending required by United States NATO allies could be as high as $21.7 billion to replace military equipment given to Ukraine to fight the war with Russia.
That number could be higher or lower based on how different countries decide to replace arms that were given to Ukraine, but the point is if NATO member countries want to build their own militaries back up to meet the level they were before the Russian-Ukraine war began, a lot of money will need to be spent, to get them back to par.
Furthermore, based on the situation in Ukraine, many believe that we will not only see countries replenish their weapons stockpiles but increase what they have in reserve.
Additionally, we are seeing more countries apply for acceptance into NATO since the Russian invasion of Ukraine. As we see NATO increase in size, it is likely that the alliance will also increase its own arms stockpile.
Ideally, the Russian-Ukraine war will end soon, and this conflict will be a short-term catalyst for defense spending.
But even if you are on the fence about the defense industry in the short term, the long-term prospects of the industry still look good.
Besides a slight year-over-year dip in spending in 2012, worldwide military spending has nearly doubled since the late 1990s, going from just over $1.1 trillion to $2.1 trillion in 2021.
More so than other industries, the defense industry is one in which cherry-picking individual stocks is challenging. The best way to play the never-ending spending in this field is with exchange-traded funds that own a basket of companies operating in the space.
Let’s take a look at a few ETFs that will give you good exposure to the industry.
To start, we have the largest, based on assets under management, defense-focused ETF, the iShares U.S. Aerospace & Defense ETF (ITA).
ITA has $4.95 billion under management, an expense ratio of 0.39%, and a yield of 0.97%. The fund currently holds 37 positions, with the top ten holdings representing 72% of the fund.
More so, Raytheon Technologies (RTX) makes up more than 21% of the ETF. Over the past three months, ITA is up 9.98% but down 2.24% year-to-date. Over a longer term, the fund is down 0.95% over the last three years; however, it is up 13.28% annually over the previous ten years.
The Invesco Aerospace & Defense ETF (PPA) is an ETF that is slightly less top-heavy but still gives you similar exposure.
PPA has 55 holdings, with the top ten representing 53% of the fund and Boeing (BA) holding the top spot with 7.65% of assets. Raytheon holds the second spot with 7.05% of the ETFs assets. PPA also pays an 0.84% yield and has an expense ratio of 0.61% while having $1.71 billion in assets.
Two other defense ETF options are the SPDR S&P Kensho Future Security ETF (FITE) and the SPDR S&P Aerospace & Defense ETF (XAR).
These are both ETFs that have some companies that operate directly in the defense sector, but they also hold a large number of companies that operate in defense-related industries but are not directly related to weapons manufacturing.
For example, XAR holds a lot of space-related stocks, such as Virgin Galactic (SPCE). In contrast, FITE holds several companies that operate in the communications industry, like Iridium Communications (IRDM) and Broadcom Inc (AVGO).
One other option to look at if you are incredibly bullish on the defense industry is the Direxion Daily Aerospace & Defense Bull 3X Shares ETF (DFEN).

DFEN is a three-times leveraged bullish ETF that will give you maximum exposure to the upside if defense stocks rally in the near future. However, due to the nature of this ETF, it should only be held for short periods, or contango will eat away at any gains you realize from owning it.
DFEN has an expense ratio of 0.96% with $181 million in assets. It is up more than 25% over the last three months but down more than 7% year-to-date.
The biggest issue with investing in defense-focused ETFs is that none of the current options are focused solely on defense stocks. They all hold a combination of defense and aerospace companies, which usually move together but may not give you absolute defense stock exposure.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: As of this writing, Matt Thalman owned Iridium Communications. 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.

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.

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.

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.
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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.
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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.
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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.

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]

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.