Bargain hunters on the move

Good morning!
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Looks like the markets want to try and put on a rally today which would be great to see after a 3-week losing streak.

Here’s my playbook.

How to trade holiday weeks

Holiday shortened weeks are notorious for lighter than normal volume, wide spreads – meaning the difference between bid and ask – and sharp movement between buyers and sellers.

The key is not doing anything stupid, a point I made during a late-week interview on CNBC (Watch)

The S&P 500 now reflects a forward PE of 16.5 which is below the 10-year average PE of 17.2 which tells me a little bargain hunting could be in order. AT the same time, I’m going to be adding to hedges using my favorite inverse funds “just in case” more recession-oriented headlines surface.

No surprise, Gazprom won’t reopen the spigot

To nobody’s surprise...

After shutting off the Nord Stream 1 gas pipeline into Germany last week for “emergency maintenance", Russian gas giant Gazprom has announced that the company will not be reopening the spigots as originally stated. EU gas prices jumped 25% immediately after the announcement which is par considering that Team Putin said it will not resume gas flow until sanctions are lifted.

The EU now has the tough decision of being woke and literally broke via a deeper than anticipated energy crisis, or finding ways to help citizens keep the lights on.

Counterintuitively, the US may become the world’s largest LNG exporter later this year. My favourite oil stock, for example, already inked a deal in June of this year to export LNG to Europe. Shares have since tacked on 12%. If you’re part of One Bar Ahead™, you know what the stock is.

BBBY

Making headlines. Beleaguered CFO Gustavo Arnal reportedly jumped to his death in Manhattan over the weekend. Shares are down sharply on what is aptly being described as a crisis in leadership. (Read)

Arnal was reportedly despondent over the company’s situation but also critically named in a “pump and dump” lawsuit alleging he and GameStop CEO Ryan Cohen made misleading statements regarding the company’s financial situation in an effort to artificially inflate the company’s value. (Read)

A cautionary tale. There’s a big difference between the “best” companies and the rest of which, sadly, BBBY is one even without Mr. Arnal’s terribly tragic situation.

Hot and coal’d

Tourists on the way to Virginia to visit suffered what can only be the ultimate comeuppance. A group of coal miners were photographed pushing their dead flat outta energy EV to the coal mine for a charge. (Read)

Many Americans refuse to buy an EV because they fear running out of energy. That and the fact that prices are still way beyond what the average American can afford might have something to do with it.

According to Kelley Blue Book, the average EV will set you back $67,000 versus $45,000 for an average full-size non-electric car. Non-electric compacts average $26,000 BTW. The average American income, meanwhile, is $1,118 a week or $58,136.

Yeah …

I’ve said it before and, at the risk of sounding like a broken record will say it again. The first company to produce a sub-$30,000 EV will take a monster share of the market. TESLA probably won’t but Ford might. So will two special Chinese car makers that have taken a page from Toyota’s 1970s playbook.

Honestly, I’d hoped Tata Motors would lead the charge in global markets but they’re just charging ahead in India where the company has a 90% EV market share … get it??!! (Read)

Apple day

Apple’s holding the company’s annual iPhone event tomorrow morning. Expected to be on the roster are new iPhones, Watches, AirPods, and maybe even a new iPad. And before you scoff at accessories, remember that those segments generated almost $10 billion dollars last year (nearly 10% of total revenue).

I’m keeping a close eye on it to see if they let any hints about the Apple Car slip through. I’m hearing that it’s already being integrated into leading car manufacturers' products, and want to see when it might come to mass markets.

26% of consumers would reportedly buy an Apple car even though it doesn’t yet exist. And the company has poached the former VP of Hyundai’s autonomous vehicle labs. (Read)

You can watch by clicking here: Apple

Bottom Line

The purpose of investing and trading is not to be right.

It's to be profitable.

Let’s MAKE it a great week!

Keith