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What everybody else is missing with Ford

Jul 28, 2022

Good morning!

I was wondering last night if traders would stay on the gas today or do some quick profit taking having burned through the shorts.

Futures are down in the early going as I type which suggests the former but what we don’t know is how many FOMO buyers will pile through at the open.

Here’s my playbook.

Congrats if you traded WMT as suggested

I suggested that Walmart would be ripe for a quick, high probability trade in yesterday’s 5 with Fitz and that anybody interested should get on board. Then, just prior to the close, I said time to go.

Well done if you did!

That was a tidy 4.6% from the stock alone and considerably more if you went with options.

If you missed out, no worries.

There’s plenty more where that came from in the months ahead.

Summer is a long way from over, and there’s still plenty of money on the sidelines … substantially all of which will come running back to the very best companies if traders think they’ve got a bead on the Fed.

OBAers: You’ve got the buy list, I hope you have been using summer to your advantage. I also hope you’re as excited as I am for the first of four Master Classes included as part of your subscription.

Next week’s session will be a biggie... New Rules for New Times. (Learn more)

The real nugget in Ford’s earnings report

Ford just crushed expectations, raised the dividend AND hinted at job cuts. The stock is up significantly in the after hours as I type. (Read)

I expect it to come roaring out of the gate at $14+ per share before a bit of profit taking.

Interestingly, the single most compelling part of Ford’s announcement is something the mainstream has relegated practically to an afterthought. The company has secured 100% of the supplies needed to produce 600,000 electric vehicles by the end of 2023.

Now, about that 700hp F-150 Raptor …

Puts a smile on my face and some bling in my wallet.

Hopefully yours too.

Fed could raise rates until the cows come home and it wouldn’t dent inflation

I published my version of the Fed’s statement yesterday on Twitter as a joke. People immediately split into two camps: those who took it seriously and wanted to know what it meant and those who recognized the irony of going full Fedspeak.

Not that it matters, but the Fed could raise rates until the cows come home and still not make a dent in inflation as long as the supply chain remains challenged.

Mortgage rates have more than doubled to 5.54% while credit card companies are back at usury rates of 20% perhaps more. Meanwhile, consumers continue to spend because they must, not because they “want” to even as the housing market crumbles and unemployment claims jump. (Read)

Meta: Zucked again

Meta revenues declined for the first time ever.

Not entirely surprising, given the new privacy restrictions, economic conditions, and the fact that TikTok is absolutely eating their lunch.

Two things stand out to me.

First, STILL don’t touch this stock. Meta’s push into VR/AR/Metaverse is going to take another 10 years before obtaining widespread use if ever.

Second, the fact that a platform like Facebook/Meta with 1.97 billion daily active users (DAU’s) is experiencing a slump in ad revenue means that companies around the world are getting very serious about cutting spending in the face of economic headwinds. It’s “nice to have.”

Cybersecurity, on the other hand is “must have” which is why companies cannot afford to cut spending by even a penny. It’s about as recession-proof as it gets.

BTW, my favourite stock in this space is up 9.95% in the last 6 months vs the SPX’s 7.5% decline. It’s in the One Bar Ahead™ model portfolio, and I published a deep dive in the January 2022 issue if you’d like to learn more about it. (Click here)

If you want a pick me up today

Music plays an important role in my life, especially as I’m working the markets and doing investment research. Sometimes it's a tension breaker while at others a source of inspiration.

This morning I’m listening to a new-to-me London-based blues busker, singer, and artist I discovered named Cam Cole. Give him a listen and let me know what you think. (Listen)