2 FAANG Stocks Staging A Comeback

Posted on by The MarketClub Team

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.

Big Tech

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.

In your opinion, which of the below factors is driving the recent string of layoffs in the technology sector the most?

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Gap Offers Opportunity

Posted on by Aibek Burabayev

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.

Vanguard VOO VT VEU Monthly

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. Continue reading "Gap Offers Opportunity" →

6 Reasons to Become Bullish Now

Posted on by The INO.com Team

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

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. Continue reading "6 Reasons to Become Bullish Now" →

ETFs For Increasing Military Spending

Posted on by Matt Thalman

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. Continue reading "ETFs For Increasing Military Spending" →

Get Exposure To Gold With These 2 Leaders

Posted on by Taylor Dart

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. Continue reading "Get Exposure To Gold With These 2 Leaders" →