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Fed’s next move makes this stock a no-brainer

Jan 11, 2022

Good morning!

The markets are drifting lower ahead of Powell’s confirmation hearing, but buyers are starting to circle.

Here’s my playbook.

1 – The Fed’s next move makes this stock a no-brainer

The Golden Rule when it comes to making money in the markets is to buy low and sell high. It may be scary, and it certainly doesn’t feel good but that’s exactly why you should when a major stock like Apple or the entire tech-laden Nasdaq index tumbles to a 90-day low.

Not every stock stinks. It just feels that way because Wall Street wants you to think that’s the case. Then make you feel good when they pick your pockets and steal your shares away at a song.

Fed or no Fed, the path is sharply higher over time. (Read)

If you still have doubts, perhaps this’ll help.

JPMorgan Chase CEO Jamie Dimon said yesterday during an interview with Maria Bartiromo that “this will be one of the strongest economies we’ve ever seen in 2021 and 2022 will probably be pretty good too.” (Watch)

Dimon is the single smartest banking CEO on the planet and if there’s anybody who knows how to turn a buck from what’s happening, it’s him. In fact, JPM is my choice ahead of the Fed for reasons I laid out with the fantastic Ashley Webster yesterday on the Fox Business Network ahead of the bell. (Watch)

2 – Powell-schmowell

Fed Chair Jerome Powell’s going to be “on the hill” for his confirmation hearing tomorrow and his prepared remarks are completely BTDT (been there, done that). You’d think he’d have something decisive to say about how he’ll clean up the mess he’s made but noooooooo.

The real fireworks (and potentially market-moving events) will come from economically illiterate grandstanding officials trying to make themselves look smart in front of the cameras. And what Powell may say in answer; he doesn’t seem to do well “off script.”

Do yourself a favour … the Fed is reversing course yet again. The only thing the markets want to know is 3 rate hikes or 4. And how fast.

If you’re keen to speculate, buy a few UVXY calls or an inverse fund like SH. Otherwise, turn off the volume on your TV set; the hearing will make a great substitute for Animal Planet.

3 – Move along, nothing to see here (again)

Fed Vice Chair Richard Clarida is apparently stepping down a few weeks early and before his term expires over questionable trades made in 2020 into the Fed’s bailout of the US economy.

What kinds of questions about what kinds of trades? Oh I dunno… the same kinds of trades that have already cost former Fed President’s Kaplan and Rosengren theirs and which should arguably cost Speaker of the House Pelosi hers. (Read)

No word on who’s going to provide stock picks to erstwhile Fed officials next.

4 – Investors treating this company like it’s going out of business

Shares tanked on news that COO Rod Copes has left amidst disappointing 2021 vehicle production numbers. Rivian was only 185 vehicles short of its planned target.

What they should have focused on is the fact that the company did deliver 920 trucks to owners against overwhelming odds and that Copes retirement was planned for months so it is not unexpected.

I’d love to own shares at $65 and am thinking that selling a few well-placed putskies while volatility is higher than normal makes lots of sense. (Read)

5 – Intel: Death by 1,000 cuts

I think CEO Pat Gelsinger is fabulous and if there’s anybody capable of returning Intel to glory, he’s the guy. Meanwhile, it’s “death by 1,000 cuts” according to KeyBanc and in a just-issued report echoing my remarks last year that the company is dead money. Grabbing David Zinsner from Micron and making him CFO is a savvy move but, sadly, probably won’t make the company any more creative. (Read)

Reminds me of Sony.