Analysis originally distributed on April 19, 2018 By: Michael Vodicka of Cannabis Stock Trades
US cannabis stocks just had their best day of the year after a game-changing shift in US cannabis policy hit the Street. If I’m correct, the stage is now set for a huge rally that could send cannabis stocks deep into a new all-time high.
On April 13, the US cannabis index jumped more than 15%, the largest one-day gain of the year, on news of a huge shift in US cannabis policy.
In news that completely shocked the cannabis industry and stocks, President Trump promised to support legislation to protect state cannabis rights.
Here’s a clip from a Bloomberg article with more details: Continue reading "Game-Changing Reversal In US Cannabis Policy"
When Donald Trump goes to Twitter Inc. (TWTR) to voice his negative opinions, investors should begin trying to find opportunities. Over just the past few weeks we have seen two separate occasions in particular in which the President of the United States has directed negative tweets at specific industries or companies. In both cases, first with Amazon.com Inc. (AMZN) and more recently with The Organization of Petroleum Exporting Countries (OPEC), his tweets have sent asset prices lower for a short period, before they have recovered, opening up big opportunities for investors.
The end of March, beginning of April, Donald Trump assaulted Amazon with some tweets. First, it was that the company paid little to no state and local government taxes and then it was that the e-commerce company was a ‘scam’ which costs the US Post Office and therefore the American people, billions of dollars a year. Another string of tweets pointed the finger at Amazon claiming it was the reason thousands of retailers were going out of business, and millions of US workers had been laid off.
The tweets from Trump sent Amazon shares lower each day he would reignite his attack on the e-commerce giant. A 1-month chart of Amazon shows how the stock fell during the Presidents attacks and has since recovered.
From Yahoo Finance
Despite the fact that the President attacked Amazon and no real solution has come from the issues he pointed out, Amazon’s recovery appears to be nearly complete. This is not to say that the problems with Amazon not paying taxes or its contract with the Post Office couldn’t be reignited again in the future. But as most analysts have noted, the Presidents threats and claims against Amazon have no real teeth. Continue reading "Trump Tweets Create Opportunity for Investors"
New Federal Reserve chair Jerome Powell had all kinds of excuses not to raise interest rates at last week’s FOMC meeting:
- The yield on the 10-year Treasury note was trading close to its highest point in more than four years and dangerously close to breaking the 3% barrier.
- Stocks have fallen well off their highs, and investors are nervous about the prospects of a potential trade war between the U.S. and its biggest trading partners, particularly China and Canada.
- The threat of that trade war has influenced some economic forecasters to lower their GDP growth forecasts for the first quarter to below 2%, which would be the lowest level since President Trump took office.
- The turmoil in the Trump Administration, with cabinet secretaries and other senior officials jumping ship or being pushed overboard, doesn’t help calm the waters.
Yet Powell and the seven other voting members of the Federal Open Market Committee saw fit to raise the federal funds rate by a quarter percentage point to a range between 1.5% and 1.75%. Not only that, but the FOMC stuck to its guns and indicated a steady diet of rate increases over the next three years, pushing rates closer and closer back to what used to be normal before the global financial crisis. After three rate increases this year, three more are likely next year followed by two more in 2020, which would boost the fed funds rates to a range of 3.25% and 3.5%.
And yet the world didn’t end. In fact, the yields on Treasury securities actually fell after the meeting ended on Wednesday afternoon. The 10-year note, the bond market’s long-term benchmark, trading just below 2.90% on Tuesday, fell five basis points after the meeting to 2.85%. The yield on the two-year note, which is more sensitive to interest rate changes, dropped seven bps after the meeting. Continue reading "The Powell Era Begins"
As Trader's, we've experienced a lot of uncertainty recently around a pending global trade war. In fact, I have read that economists believe a full-blown trade war could cost the global economy $470 billion. Now that's a significant number, and it certainly could negatively impact your portfolio if you're not careful.
So how do you protect your portfolio and preserve capital?
The answer may have come from your Grandma; it certainly did from mine. She used to say this simple phrase to me on what seemed like a weekly basis, "don't put all of your eggs in one basket!"
Well, it turns out Grandma was right! Grandma knew a great deal about the power of diversification and how it reduces risk in different aspects of your life, and we can relate that directly to trading and investing.
It just doesn’t make sense to trade only one market. There is just too much risk and too little opportunity. A trader needs to stay flexible, and at the same time be diversified. Before we get into the meat and potatoes of market diversification, let's take a look at how the dictionary defines "diversification." Continue reading "One Word Can Protect Against A Trade War"
When doing some background research for this column, I came across this article in the May 12, 2017, edition of the Los Angeles Times: “Something Trump and Elizabeth Warren Agree On: Bringing Back Glass-Steagall to Break Up Big Banks.”
Whatever happened to that idea?
As kookie and wrong-headed on other issues as Senator “Pocahontas” often is, she’s at least been pretty consistent when it comes to her view of the banking industry (she doesn’t like it). And according to the article, she wasn’t alone in wanting to “break up the biggest U.S. banks.” Guess who else was on that list? None other than departing White House chief economic advisor Gary Cohn.
Trump himself said, “We’re looking at it right now as we speak,” referring to “going back to the old system” under the Glass-Steagall Act in which commercial and investment banking were separated. Continue reading "Be Careful What You Wish For"