Dear Reader,
As the market reels from bank failures, debt ceiling standoffs, and unstable valuations, investors are looking at Apple Inc. (AAPL) as a potential - keyword, potential - island of stability.
With Q2 earnings expected at $1.43 per share and revenues of $92.1 billion, the tech giant's performance could make or break the U.S. market, which is desperately seeking a guiding force right now.
Apple's sheer size - which we'll look at in a second - gives it the power to lead the market higher... or tank it.
I can't say for sure what kind of numbers Apple will put up today, but I do know what we should be doing to get ready.
Let me show you...
Apple Is the Stock Market's Own 1,000-lb Gorilla
Apple's performance in the market is undeniably critical, given its influence on major indices such as the Nasdaq 100, S&P 500, and Dow Jones.
As an essential component of over 400 exchange-traded funds and boasting a market capitalization larger than all but seven countries, Apple's movements can easily dictate the broader market's direction.
In the current negative market cycle, a disappointing Q2 earnings report could send the stock plummeting and exacerbate the already precarious situation facing US equity markets.
Adding to the uncertainty is the Federal Reserve's completely misplaced priorities. Despite the central bank's recent warning about a possible "mild recession" due to a banking crisis, Jerome Powell's claims of a "sound and resilient" US banking system have sparked concerns.
The declines in shares of PacWest Bancorp (PACW) and First Horizon Corp. (FHN) have only intensified these worries. Investors are left questioning what it will take for the central bank to shift its focus from fighting inflation to addressing the ongoing banking crisis.
At the same time, we're witnessing what appears to be forced selling in the energy sector. This sell-off can be directly linked to the ongoing banking crisis, which is causing funds to sell stocks.
Although OPEC's voluntary cuts this month may offer some support, the US government's commitment to replenishing the Strategic Petroleum Reserve (SPR) remains uncertain due to the debt ceiling standoff. Additionally, oil is still being released on schedule until the end of June, with an additional 2m barrels released last week. Political complications might further impede progress in this area, adding to the unpredictability of an already unstable market.
So far this year, savvy energy traders have seized on oversold conditions and bought the dip, effectively creating a temporary floor for oil prices. As we approach those levels now, it raises the question: are you ready to be greedy in the face of widespread fear?
Today in Flashpoint Trader, we'll examine some of our top picks and discuss a trade that, should oil continue to get crushed in the short-term, could land us in OXY at $10 cheaper than Buffett's buy-in price. The trade pays a kind of "synthetic dividend," to boot. It's time to trade smarter, not harder. So, let's look to outdo the Oracle of Omaha. (Learn how to join me in Flashpoint - and all about Buffett's favorite play.)
So, the 1,000-lb gorilla could fall out of bed and through the floor, or it could hurl markets by the belt loops back to recent highs.
Today's Momentum Reading
WORLD'S BIGGEST INDICATORS
Recap: The World's Biggest Indicator (Momentum) is Red...
Yesterday, the markets experienced a significant downturn, with a sudden drop in the final hour of the day - a possibility I cautioned against during our "Trade the Fed" live event.. The energy sector continues to struggle, posing a short-term challenge as institutions seek to reallocate capital. However, this situation is also paving the way for an attractive bounce-back trade in the coming week or so.
Given the current state of negative momentum, I'm heavily in cash, patiently waiting for the right opportunity to deploy capital.
What You Missed
I've been beating the drum about a frantic merger race happening in oil...
Because to my mind, it's the greatest energy opportunity of the decade.
And I don't say that lightly.
I've uncovered huge energy opportunities in diesel... natural gas... and even water.
But what's happening right now - in front of your eyes - in the Permian Basin in West Texas...
Will blow everything else completely out of the water.
As we speak, over 400 firms are potential sitting ducks for every oil major who's flush with cash and looking to expand their operations.
And mark my words - all the big oil companies have money to burn right now.
In fact, institutional researcher's McKinsey believe we're on the cusp of something massive, as a direct result.
According to their recent analysis...
- The major oil companies will remain cash-flow positive in 2023 and beyond...
- Market conditions are perfect for an accelerated wave of M&A activity...
- The primary tool they have left is the deployment of cash through M&A...
Which is why the merger's race I've been telling you about is all but certain to happen.
For investors, the time to move on this is now.
My analysis points to five small companies that are huge takeover targets.
One of them is trading for just $10 a share right now.
And the right play on any one of them could triple your money in short time.
So don't miss this.
Everything you need to know is here.
Cheers,
Garrett
The post Be Ready - Apple Could Tank the Market or Save It appeared first on Midday Momentum.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.