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DR Barton Jr

Trading Strategies

Why "Bad News Is Good News Again" and How to Profit

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

Like it has been since March, truly good news is kind of thin on the ground.

The economic recovery is slowing as cases of coronavirus skyrocket in regions that were spared the worst of the initial winter and spring 2020 outbreaks.

And yet stocks have largely made up their March losses, with the NASDAQ Composite in particular blowing right past its early 2020 highs to all-new territory.

In fact, we've seen the fastest and perhaps unlikeliest stock market rally in American history all while getting bad news this year…

Frankly, this performance is because of, not despite, bad news – or, more to the point, unprecedented measures the Fed has taken in an unprecedented crisis.

When we look closer, it's actually a pretty amazing feat of "financial alchemy" that Fed Chair Jerome Powell has pulled off – and understanding it is the key to picking the right shares to buy now, like these two "bad news is good news" stocks to pick up today… Full Story

When we look closer, it's actually a pretty amazing feat of "financial alchemy" that Fed Chair Jerome Powell has pulled off - and understanding it is the key to picking the right shares to buy now, like these two "bad news is good news" stocks to pick up today...

Facebook

Facebook Advertisers Boycott, and You Make More Money

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

Social media giant Facebook Inc. is in hot water again.

This time, people are angry at the company's apparent refusal to take down hate speech, calls for violence, and other distasteful content from the network.

So far, more than 160 companies have signed up for the "Stop Hate for Profit" campaign, pledging to "pause" advertising on Facebook.

We're talking about big names like Ben & Jerry's, Coca-Cola, Hershey's, Honda, Levi Strauss, Starbucks, The North Face, Unilever, Verizon, and many more. All of these companies will not be buying Facebook ads in July, and some are going even further.

Since almost all of Facebook's $70 billion in revenue comes from advertising, this is hitting CEO and founder Mark Zuckerberg right where it hurts.

Or at least, that's what we're being told.

As the advertising boycott really took off last Friday, Facebook stock dropped 8.32%. Zuckerberg himself lost about $7 billion in wealth because of it. Stock markets as a whole went down partly because of this.

But don't believe the hype. Facebook will not only survive this scandal; it will grow even bigger.

In fact, this is a great opportunity to buy the dip. Here's why… Full Story

In fact, this is a great opportunity to buy the dip. Here's why...

Trading Strategies

My Favorite COVID-19 "Safe Haven" Plays Are Moving This Week

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

American retail sales had their biggest monthly jump ever, soaring 17.7% in May and adding some "oomph" to a rather tepid stock market rally.

The jump was mostly driven by thousands of retail stores and restaurants reopening after months under lockdown.

But the thing is, the future of retail and the entire economy is very uncertain right now. Even though, after the initial "coronavirus crash" in March, investors seemed to shrug off the pandemic and all its economic destructiveness in April and May.

Since then, states have reopened their economies and people have resumed their daily lives.

And now, we're seeing some troubling signs that COVID-19 infections are surging in places like Texas, Arizona, California, and Florida.

That's provoked a psychological 180 among investors.

They're suddenly very concerned with the pandemic's progress, so much so that they sent the big indexes tumbling by high single digits last week in the biggest losses since March.

That disconnect – the contrast between a piecemeal public approach toward virus containment measures and the markets' sudden concern over new infections after months of ignoring them – is in fact a "Reality Gap" that we can leverage for big profits this week.

Here's D.R. to show you how...

Retirement

Our Shift in Retirement Planning Has Made Us All Dependent on the Stock Market (and What to Do About It)

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

We're in the middle of the worst global health crisis since 1918. That in turn has precipitated the worst economic crisis in 12 years, though it may very well prove to be worse than the decade-long Great Depression of 1929.

Unemployment is at record highs; Thursday's print of 1.877 million new claims was worse than expected, and would've been unthinkable as recently as Presidents Day.

The world is wracked by the worst geopolitical tension since the fall of the Soviet Union in 1991, and our cities are inflamed by the worst civil unrest since Martin Luther King, Jr., was assassinated in 1968.

And the markets are within sight of their February highs. The Nasdaq is up almost 8% for the year; the Dow Jones and S&P 500 are off just 8% and 4%, respectively.

And still the Nasdaq is up almost 8% for the year, while the Dow and the S&P 500 are down only about 8% and 4%.

The market is a big, complicated, discounting mechanism. In Business 101, we're taught stock prices reflect future earnings.

But, on balance, companies are not going to make 4% or 8% less than they would during good times. No, the drop in earnings for the second quarter of 2020 is going to be much, much steeper.

But if you listen to the news media, or investment banks' analyst desks, or to government officials, they'll repeat this old story about "future earnings" anyway.

Folks, this is probably the biggest Reality Gap in the country right now. It's the Reality Gap of the decade. And, as always, there are big profits to be had in that gap.

You see, stock markets are no longer about owning a share of a company's future earnings. It's no longer an arena where investors win by making the best long-term predictions, and traders win by predicting what investors will do next.

The truth is that the Big Four – News Media, Madison Ave, Big Government, and the Wall Street Heavyweights – have together turned stock markets into something else altogether.

The Big Four have turned rising markets into a good, much like tap water, public libraries, or electric utilities.

Once you see how and why that's happened, profits await… Full Story

Once you see how and why that's happened, profits await... Full Story

Trading Strategies

The Two Stocks to Buy amid Market-Media Tensions

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

Many stocks, with a few exceptions, moved up last week. Clearly, investors are seeing some cause for optimism out there, pushing the Dow back over 25,000.

But you couldn't tell that from the news. I'm looking at a CNN headline chyron right now, for instance, that reads: "COVID-19 cases are rising in 18 states." The business section leads with "Markets are pushing higher as lockdowns ease. But huge risks remain."

However, in that same business section, decent gains are being reported, too.

So there's clearly a "Reality Gap" between those negative headlines and the prevailing, generally positive mindset and upward moves in the markets.

In that gap, there's plenty of room for making money… Full Story

In that gap, there's plenty of room for making money... Full Story

Trading Strategies

It's Smart to Enjoy the Bull Parade Even with Economic Rain Clouds Ahead

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

The rally we've seen the past few weeks sped up Monday, with the Dow gaining more than 900 points – even though we had two investing legends say last week that things were looking bad for both the stock market and the economy.

That's this week's Reality Gap. Let me explain…

As you saw me saying last week on FOX Business Network's "Varney & Co." and on our own Markets Live livestream, the Fed's and Congress's financial stimulus allowed traders to move markets up above the key support levels recently and pushed them up big time late on Friday.

Then Fed Chair Powell appeared on "60 Minutes" Sunday night. Two quotes from the Fed Chair were particularly important in driving the market's reaction.

First, he said he has plenty of ammunition left if more stimulus is needed, showing that the Fed is not "out of ammunition" to fight further economic downturn: "There's really no limit to what we can do in lending programs."

The second was that the economy could recover over the second half of this year. It was an intermediate-term pronouncement on economic possibilities: "Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year."

Then on Monday morning, biotech firm Moderna Inc. announced positive results from its early trial of an experimental vaccine against COVID-19. This phase 1 study looked only at safety, and there were no significant side effects among the patients. But the fact that all the patients in the small dose vaccine subset developed antibodies the same as a recovering COVID-19 patient really stoked the stock markets.

The mood, in other words, is bullish. (Cue The Beach Boys' "Good Vibrations!")

It's so bullish, in fact, that headlines are starting to leave out some nuance that I don't want you to ignore… Full Story

It's so bullish, in fact, that headlines are starting to leave out some nuance that I don't want you to ignore... Full Story

Trading Strategies

As America Reopens, Explosive Pent-Up Demand Will Benefit These Companies First

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

After the long coronavirus shutdowns, 35 states are now reopening or about to reopen.

While the U.S. has shed about 26 million jobs over the pasts two months, the hope is that companies rehire the employees they've had to let go, and that business will quickly go "back to normal."

But consumers have been absolutely battered over the past two months and as the opportunity to spend re-emerges, folks in these states are going to have to decide what they've missed most during the lockdown.

And we're seeing some early signs that some industries are experiencing a quicker recovery than others.

So today, our D.R. Barton has isolated a few stocks, all trading at bargain basement prices, that should be the first to benefit from that severely pent-up demand...

Trading Strategies

Why Testing Is the Best Treatment for the Market and Economy

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

It's clear the next stage of coronavirus coverage is going to focus on testing.

Testing for COVID-19 is the crucial step toward protecting healthcare workers, meat packers, checkout clerks, and other frontline workers.

It's an essential component in all of the many plans for how to restart our economy.

It's something we desperately need much more of as a nation.

Unfortunately, it's also something that we, as a nation, have done a poor job of at many stages during this pandemic.

Maybe it's only to be expected, then, that there's a lot of confusion around "testing" – what it is, what it could do for us, why we still don't have enough of it, and so on.

But as America continues to "reopen," it's a big factor in keeping us from shutting down again. So let's clear up some testing misconceptions today – and look at two great stock recovery plays at the same time… Full Story

But as America continues to "reopen," it's a big factor in keeping us from shutting down again. So let's clear up some testing misconceptions today - and look at two great stock recovery plays at the same time...

Trading Strategies

The COVID-19 "Meat Shortage" Is a Corporate Cash Grab; Here's How to Play It

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks - • Print | Email

I recently shared a mobile phone snap with my Straight-Up Profits readers. I was on a shopping trip here in my home state of Delaware…

At the time, I said there would be no food shortages, but that we'd probably have to settle for different food in different packaging – maybe less processed, maybe of a different variety.

Since then, the headlines about and statements from the food industry have only gotten worse.

Lisa Lochridge, director of public affairs for the Florida Fruit and Vegetable Association, says the food supply chain is in "a disastrous situation." And in an ad – a full page, no less, this past Sunday in The Washington Post, The New York Times, and The Arkansas Democrat-Gazette, John Tyson, the board chairman of meat processor Tyson Foods, warns "the food supply chain is breaking."

And the statistics look scary, too. About 33% of U.S. pork processing capacity is down right now, and Tyson just closed its first large poultry plant.

"World's Biggest Wheat Supply Dries Up When Some Want It Most," declares a recent Bloomberg News headline.

Friends and even family are reaching out to me, worried about a pending food shortage. Who wouldn't be after seeing these headlines?

Well, I'm not – and you don't have to be, either. Because this situation is a classic Reality Gap – and another COVID-19 myth that needs handling.

Not only are we not about to run out of food, but there's a very profitable setup unfolding that could put a little extra something on your family table… Full Story

Not only are we not about to run out of food, but there's a very profitable setup unfolding that could put a little extra something on your family table...