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We just witnessed the second straight BIG day for the markets on the back of the Fed's 75-point hike. The broad speculation is that the Federal Reserve won't be as aggressive with interest rates come September.
Now, we're ready for a third thanks to extremely strong numbers from Exxon (NYSE: XOM) and Chevron (NYSE: CVX). As I noted yesterday, I'm bullish on energy because of dwindling supplies and the coming end to the gimmicks to keep gasoline prices "lower" by the White House.
Today, Exxon Mobil reported an easy profit beat on top of a stunning $115.68 billion in revenue for Q2. Exxon generated $17.9 billion in cash flow for the quarter thanks to better cost management and an uptick in production.
Chevron, meanwhile, reported an 82.9% increase in revenue from the same period last year, and generated a stunning $10.6 billion in cash flow.
So, what now?
Well, I'm still very bullish on Crescent Energy Group (NYSE: CRGY).
This company spun out of a deal between private equity firm KKR, and Contango Oil and Independence Energy.
I expect it to become a major player in North American energy production space by 2025.
It's managed by KKR's Energy Real Assets team and led by David Rockecharlie, Head of KKR Energy Real Assets. He's the company's Chief Executive Officer and serves as a member of the Board of Directors. They're aggressively buying assets where they can find them to turn them into cash machines.
It's got DEEP pockets and a very established team.
It's also rallied back from near-term lows and remains one of my favorite plays. In fact, I'll break down the stock and why I argue it's a "Screaming Buy" at Midday Momentum.
Friday's Momentum Reading
Momentum is Green.
Chart of the Day: Lies at the Central Bank
The Federal Reserve told the markets that it would engage in large amounts of quantitative tightening to address inflation and normalize the economy.
This clearly has not occurred. The central bank owns 25% of U.S. Treasury bonds and 33% of mortgage-backed securities. But it's done a very bad job at following up on its promises.
Oddly, this is bullish for the market... but it raises questions about global liquidity of the dollar.
Yesterday, Jim Rickards joined me to discuss crises around the globe. He warned that a global liquidity crisis could hit major currencies due to surging U.S. interest rates and a stronger U.S. dollar. If you want to watch a replay, you can right here.
Friday's Schedule
- Markets will react to Amazon's earnings after the bell. But pay close attention to several companies that generate a LARGE PERCENT of their revenues from the e-commerce giant. For example, Aterian (NASDAQ: ATER) makes about 93% of its annual revenue off AMZN. Watch Plug Power (NASDAQ: PLUG) as well (40%/sales).
- Headline earnings reports come from Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), Abbvie (NYSE: ABBV), Proctor & Gamble (NYSE: PG), Phillips 66 (NYSE: PSX), Charter Communications (NASDAQ: CHTR), and CBOE Markets (BATS: CBOE).
- Ignore the headlines, and focus on Tal Education Group (NYSE: TAL), as the market implies a double-digit move following its earnings report in the morning.
We have Green momentum on a Friday, let's find some nice wins for Midday Momentum at 12:30 pm ET.
To catch an episode of Midday Momentum you may have missed click here to watch a REPLAY.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.