5 Signs Pointing to a V-Rocket Recovery
There’s a chance today’s Market Talk might blow your mind.
Right now, the market’s shaping up for a “V-ROCKET” recovery!
Investors who are stuck in the past will be shocked at what’s coming. But we see it all too clearly.
You see, there’s not just one factor — like the drastic descent of the weekly jobless claims — there are FIVE major happenings that point to a massive stock market rebound.
These five factors show that America 2.0 investors are in the best position to ride this rocket recovery to new highs.
But I know you don’t want to stop there. So, I’m also going to share another secret for investing in today’s market. I consider it the No. 1 way to make extreme fortunes in the V-recovery.
Check out this week’s Market Talk for the full scoop below:
Weekly Jobless Claims and Wall Street: Glimmers of Hope
Most economists are expecting the next monthly round of U.S. unemployment rate releases to top at least 20%. It’s a direct reflection of the overall economy shutdown to help flatten the virus curve and save lives.
They project this rate will eventually peak and then get better. Last week we saw not one, not two, but five glimmers of hope in the overall economic data. First, is the weekly initial jobless claims data. For the fifth week in a row, the U.S. saw a reduction in filings for unemployment benefits.
In all, weekly jobless claims rose by 3.17 million, down from 3.8 million the week prior. Bloomberg reports “as some states move toward reopening, further declines can be expected in the weeks ahead. A turn lower in continuing claims could provide a clearer signal that the economy has reached a bottom as it would indicate a rehiring of the temporarily unemployed.”
Second, looking at the April jobs report release a little deeper, it showed that 20 million jobs were lost per the Labor Department data. It shows of the 20 million jobs lost, two million were unfortunately permanent, but 18 million jobs were classified as temporary layoffs.
This means, per Bloomberg, “about 18 million Americans on temporary layoff have the potential of returning to the workforce more quickly provided that their former employers bring them back as the economy reopens.”
Another bright spot was seen in the weekly MBA mortgage applications. Last Wednesday, within the number released, data is showing that a market rebound is happening in home buying. Mortgage applications to buy a home increased for the third consecutive week. It’s up 7% from the week prior.
The fourth glimmer of hope comes from the IPO market. Per Bloomberg, “U.S. initial public offerings had their biggest week since the pandemic began in mid-March, ending a drought in the market that’s sensitive to volatility, including special purpose acquisition companies also known as SPACs which are blank-check firms. U.S. IPOs have raised more than $18 billion this year.”
The fifth hopeful stat is the S&P technology sector. A sector we pay very close attention to at Bold Profits. The S&P tech sector is expected to see earnings recoup all the lost earnings by the end of this year per a recent Baycrest Partners analysis.
Where U.S. economic releases are concerned, there are eight major releases this week. On Tuesday, March’s Consumer Price Index (CPI) month-over-month will post at 8:30 am. On Wednesday, MBA weekly mortgage apps and April’s Producer Price Index (PPI) final demand month-over-month will post at 7:30 am and 8:30 am, respectively.
On Thursday, initial jobless claims for the week ended May 9 will post at 8:30 a.m. and on Friday is a set of quadruple releases. April retail sales month-over-month and May Empire Manufacturing will post at 8:30 a.m. The April industrial production month-over-month and May preliminary University of Michigan sentiment will post at 9:15 a.m and 10 a.m., respectively.
Tesla Household Solar Plans
Tesla’s solar panel roofs recently made headlines. Elon Musk stated that the company plans to reach 1,000 home installations per week within the next year. Moreover, the CEO of SunPower, another solar company, announced solar demand is starting to rebound after the virus shock.
Real Estate Goes High-Tech
Digital brokerages Redfin and Zillow are jumping back into the new high-tech world of house flipping through their iBuying program. iBuying means they make fast offers to home sellers and upon the home seller’s acceptance of the offer, Zillow would buy the home, make light repairs and resell it.
During the pandemic, both companies are seeing an increase in web traffic from house hunters scouring the databases for homes to buy because, no matter what, we are still in the midst of an historic housing shortage.
The stock market is anticipating, predicting and telling you that is going to be America’s greatest recovery. We have been repeating that here week after week. It is going to be a V-recovery. Not just any V-recovery, it’s going to be a rocket ship V-recovery.
Homebuying has also moved into a different era. Clearly, many people who are looking to buy a house no longer have to go to the house to decide if they want to buy it. They are using all kinds of electronic mechanisms.
Everything from virtual reality to electronic closings, to virtual showings. Real estate buying has gone virtual. There is still an extraordinary level of demand out there. That underpins everything going on in our economy. This is why I believe the stock market is facing a V-recovery.
In other words, we are going to come out of this, and economic growth is going to be greater than before we went into this. There is so much pent-up spending that is now building up. Once people move into their homes, you are going to see an unbelievable amount of spending pushed through our economy.
It’s going to drive production figures higher, capacity utilization higher and consumption higher. It is going to shock so many people who are focused on the past, looking backwards instead of looking forward.
Stocks Leading the V-Recovery
The number one way to really participate in this V-rocket recovery is to buy the stocks of the companies today that are going up the fastest. These are the small stocks. These are tiny stocks that represent the heart and soul of America 2.0. This is where the innovation happens.
This is where the risk taking happens. This is where, for the last 10 or 15 years, these companies have struggled to get the support of everyone from the stock market to the banks. However, in this recovery they are perfectly situated to get the benefit of what the Federal Reserve is doing, what the government is doing and to get the benefit of what people are doing.
Editor, Profits Unlimited
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I’ve been investing for more than 25 years. I started my career on Wall Street in 1991 as an assistant portfolio manager at Bankers Trust. I quickly advanced to prominent positions at Deutsche Bank and ING, managing multimillion-dollar accounts. In 2006, the owners of a $6 billion firm named Kinetics Asset Management recruited me to manage their hedge fund.