In his Daily Market Notes report to investors, Louis Navellier wrote:
Jamie Dimon’s War Room
Banking woes continue, debt ceiling in focus, stocks giving back most of yesterday’s gains.
Regional banks are seeing continued deposit outflows and the FDIC announced new fees to refill their depleted insurance fund with the major banks on the hook for 90% of it. The KRE regional banking ETF is down 2% this morning, -38% YTD.
The debt ceiling discussion remains at an impasse with Biden still saying that he won’t budge off the existing budget plans and won’t entertain the budget cuts the House wants for their vote to raise the debt limit. Jamie Dimon, CEO of JPMorgan Chase & Co (NYSE:JPM), is setting up a “war room” at the bank to deal with the possible repercussions of a default, or even coming close to one.
The US yield curve is down 5bps across the board as today’s PPI numbers, which were softer than forecast, and jobless claims, higher than expected, have heightened recession concerns, reflected in lower high-yield bonds and copper at the lows for the year.
There’s greater confidence that the Fed will pause in June, but also the likelihood that they won’t cut rates anytime soon, unless the economy suffers a recessionary shock.
Disney (NYSE:DIS) reported disappointing numbers last night, especially in their streaming service, and the stock is off 9% today though still up 3.5% YTD. Commodities are lower across the board, including energy, base metals, and gold. The China reopening continues to be a disappointment and there appears to be little change in the Ukrainian war.
Pockets of Strength
The pockets of strength are in defense stocks and everything AI, with Alphabet (NASDAQ:GOOG, AKA Google) holding a conference yesterday highlighting all the ways their AI plans will drive their business plans. The stock is up 4.8% today, 31.4% YTD.
The stock indexes appear to be stuck in a trading range, struggling to find a new reason to breakout to the upside.
Earnings are remarkably firm, but with YTD performance already strong and the Fed resolute to stay higher for longer to slow price increases, hopes seem pinned on profit growth through cost cutting, perhaps through AI implementation strategies, than through top line growth.
Good individual stock picking looks to be the best way to achieve meaningful returns for the time being, rather than simply being long the market.
Coffee Beans: Sweet Tooth
A woman who went missing in the Australian wilderness after making a wrong turn survived for five days on wine and candy. The police spotted her by helicopter, standing on a dirt road and waving her arms, about 37 miles away from the nearest town. Source: NPR. See the full story here.