Will Verizon bounce from current oversold extreme?Verizon Communications Inc. - 30d expiry - We look to Buy a break of 32.01 (stop at 30.01)
We are trading at oversold extremes.
This stock has recently been in the news headlines.
In our opinion this stock is undervalued.
A higher correction is expected.
A break of bespoke resistance at 32, and the move higher is already underway.
Our profit targets will be 37.01 and 38.01
Resistance: 32.00 / 33.70 / 35.00
Support: 31.25 / 30.00 / 29.00
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Value
CNN: Bulls and bears clash in a brutal battle on Wall Street.The views and feelings, as well as the understanding of the current situation, are so divided among bulls and bears that it is more and more like a political landscape. The stock market rally has sparked a war of controversy of unprecedented magnitude. The bottom line is that AI-related Big Tech shares are indeed growing faster than the rest of the market. If you take a basket of AI-related stocks and compare it to the rest of the SP500, the lines will move in completely opposite directions. And now the difference between them has become simply huge. The accumulated steam must go somewhere. And the most important question is "when will it happen???".
Source: CNN.
Demand for oil will decline.Global oil demand to grow slower than expected due to economic slippage
developed countries, according to a report released today by the International Energy
agencies. By the end of 2023, global demand for black gold is expected to grow by 2.2 million
b/d (about +2% y/y), i.e. 220 thousand b/d less than the previous (June) forecast.
Retail investors did not believe in artificial intelligence.The reason for the revival of the US stock market was the explosion of interest in AI. The market is up nearly 25% since its October low. Most interestingly, retail investors did not show active interest according to sources US retail investors were selling US tech stocks. And even more interesting is that, based on the analysis of historical data, experts draw the following conclusion - the lack of interest of retail investors in new developments is a good sign. Whenever their interest in something new was at a minimum, this "new" had a beneficial effect on the market. That is, we expect further growth.
Reporting is not the end of life. We need to look further.The reporting season for the second quarter begins this week. All investors will want to know about the state of companies and their economies.
Earnings included in the SP500 are projected to decline by approximately 7.6% year-on-year. This will be the third consecutive quarter of decline and the largest decline in earnings reported by the broad-based index after a loss of approximately 32% in the second quarter of 2020.
But investors will be watching even more closely to see what companies forecast for their financials and the economy as a whole. This will be more important than looking back on earnings results to determine whether this year's rally can continue and whether the economy is headed for a downturn.
The S&P 500 is up about 16% for the year, driven by the artificial intelligence hype that propelled tech stocks to sky-high heights and an economy that has remained resilient despite the Federal Reserve's aggressive pace of interest rate hikes.
The economy showed no signs of slowing down this year. Gross domestic product, the broadest measure of economic output, rose at an annualized rate of 2% in the first quarter, compared with a second estimate of 1.3% reported last month.
Some investors say the strength of the economy could begin to wane as the Fed continues to raise interest rates and consumers draw on savings built up in the midst of the pandemic.
Source: CNN
A little bit about the labor market in the USA.The labor market remained resilient despite aggressive
Fed tightening, but job growth was mostly in the service sector
with low wages, which led to a decrease in labor productivity. In the first quarter
US GDP growth was 2%. Forecasters polled by the Philadelphia Fed expect GDP to
will grow by only 1.3%.
Everyone is worried about the prospects for inflation.This week, companies in the US will report on how much profit or loss they have made. Of course, most likely it will be about profit. And these data will tell the experts what dynamics of inflation is expected. Many experts are sure that the received profit is closely connected with the future indicators of inflation.
Inflation is finally coming down. But consumer goods prices continue to rise, and just as fast.
Earlier, the Fed chairman said that wage growth should slow down to reduce inflationary indicators. But at the same time, some experts point to another culprit: corporate profits. The International Monetary Fund also claims that half of inflation is due to corporate profits.
This week will be published two major indicators of inflation in the US - the consumer price index on Wednesday and the producer price index on Thursday. Friday morning earnings reports for the second quarter start with reports from JPMorgan Chase, Wells Fargo, Citi and Blackrock.
Source: CNN
Check out this week's events:11.07 EUR German Consumer Price Index (CPI) (MoM) (June).
11.07 USD Short-term forecast of the situation on the energy markets from the EIA.
12.07 NZD Interest rate decision 12.07. 15:30 USD Base index. Consumer Prices (CPI) (MoM) (June) .
12.07 USD Consumer Price Index (CPI) (MoM) (June).
12.07 USD Consumer Price Index (CPI) (YoY) (June).
12.07 CAD Interest Rate Decision .
12.07 USD Crude oil reserves.
13.07 GBP GDP (MoM) (May) .
13.07 USD The number of initial applications for unemployment benefits.
13.07 USD Producer Price Index (PPI) (MoM) (June).
The money will get even faster.The Federal Reserve is unveiling its new "FedNow" system - it will allow banks to send domestic payments instantly. Even at midnight Saturday and even on a holiday. Now all payments are processed in old systems and their processing takes several hours or even days. With the new, everything will become much faster. But, as always, there is one "BUT!" - If you provide full access to individuals, they will be able to withdraw and cash out any amount in a short time. That could prove a problem for smaller banks. Therefore, most likely the system will work in full access only between banks and enterprises. And individuals will have full access only to repay loans/mortgage debts.
Source: CNN
MKTX - The OpportunityWhat a magnificent company.
Total debt sits at around 80mil$ with net income of 250mil$ at a profit margin of 35% in 2022. Before 2019, their debt was 0$. This leaves them with highest debt to equity of 0.13 in 2019.
Profit margins range from 34% to 44% several years back. This metric is great in itself but adding consistent, rising revenue makes it stellar.
The company always has cash on hand. Free cash flow closely matches net earnings, consistently, year over year. In 2022 it was 290mil$, of which their total debt represented only 28%. Exceptional.
Now, great financial health, impressive earning power, rising revenue, equity and sales lead us to the opening line of this text. But let's look further.
At the current price of 250$ per share, using the earnings based valuation, a conservative estimate would indicate that the company is trading somewhere around 80% of its intrinsic value.
Acquiring 1$ of this kind of company at 80¢ is worth consideration, at least.
Have A Great Day.
CNN: "Job market reports are encouraging".The decrease in the number of jobs created in June compared to May data gave a slight hope for inflation easing. Job growth in June was a third less than in May. A slowdown in job growth is not necessarily a bad thing. Perhaps this will lead to the achievement of the inflation target.
Source: CNN
The Fed and the Interest Rate - The story continues.The Fed still believes that inflation will continue to rise. They have already scheduled a rate hike at the end of July. But the release of employment reports in June made the timing of the increase unclear. The Fed is aiming to cut inflation, which is now above its target. Officials are indeed worried that inflation may rise despite favorable labor market conditions.
Source: CNN
The chip war begins.In the world with semiconductors, there was no particular expanse anyway. And now, against the backdrop of heightened tensions between China and the United States over restrictions imposed by China today on foreign exports of raw materials such as gallium and germanium, chip prices will rise even more. This means it is necessary to buy shares of semiconductor manufacturers. I didn't mess anything up?