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Today’s rally is Powell’s to make or break

Apr 21, 2022

Good morning!

The markets are up in the early going as traders await commentary from Fed Chair Jerome “JPow” Powell. The nascent rally is his to make or break.

Here’s my playbook.

1 – Just in case Powell actually says what I think he will

Barring something miraculous – like hell freezing over or the Pope wearing blue jeans – I think he’ll start jaw-boning about higher rates. Various Fed officials have been busy floating trial balloons related to 50-75 point rate hikes recently and the markets didn’t crater.

I think Powell will read that as justification for his commentary …shame.

Puts will be comparatively cheap until he speaks.

2 – Never bet against Elon

CEO Elon Musk may be a lot of things but stupid isn’t one of ‘em. Tesla reported a record quarter and – get this – an 81% jump in annual revenue. CNBC reports that several analysts now consider Tesla stock a “core holding” and a “must own.” (Read)

Gee, I thought to myself; where have we heard that specific language before? Oh, that’s right...

Tesla stock is still down ~7.5% for the year which tells me there’s still room to buy. Smaller investors, BTW, can buy fractional shares so no bullsh!t about “it’s expensive.”

3 – Oh, hail no!

Unfortunately, this is not an isolated story.Terry’s Taxi, a Columbia, Missouri-based taxi company is closing up shop forever after business owners Terry and Angie Nickerson decided that running the business just “isn’t worth it anymore.” (Read)

Contrary to what the White House and the Fed believe, higher fuel, insurance, labor costs and more really do add up to the point that running a small business in the face of it all becomes unfeasible.

Staying long energy, BTW. Oil is $103 a barrel this morning.

4 – Bad day to be Bill (Ackman)

Billionaire and erstwhile activist investor Bill Ackman apparently dumped Netflix shares following the company’s disappointing quarterly reports. Apparently, he wanted out so bad that he took a $400 million loss.

Makes sense.

Netflix is “dead money” and has been for some time now. My take on why and what’s next with the fantastic Dagen McDowell on Mornings with Maria. (Watch)

Want to know what to buy instead?

Consider a subscription to One Bar Ahead™. I’ll be spilling the beans along with new recommendations in the May issue which is, unbelievably, just around the corner! (Join)

5 – No, you can’t hear me now

Verizon reported outages across the US yesterday. (Read)

Not surprising to my way of thinking. Cell phone companies will go the way landlines did shortly.

Bottom Line

The way forward in today’s markets is filled with risk, is uncertain, is uncomfortable and more.

It’s still the way forward.

And the only way you can tap into everything the future has on offer is to get moving.

I’d love to help if I can.

You got this – I promise!



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