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Where could markets go from here?

Aug 29, 2022

Good morning!

‍Futures suggest another sour day on tap. Futures are down in the early going, and absent any economic data or major earnings reports on tap, that’s probably where they’ll stay.

Here’s my playbook.

Powell risks the D-word

I raised more than a few eyebrows earlier this year when I said Powell wasn’t just risking a recession, but a depression. That narrative, unfortunately, still stands in the light of last Friday’s drubbing.

Here’s my take with the always terrific Ashley Webster on Fox Business ahead of today’s opening bell. (Watch)

You know it’s bad when even Senator Elizabeth Warren is worried. (Read)

Why you should care. The Fed cannot beat inflation without common sense fiscal policy.

What to do: Go shopping … a) for hedges and b) for the world’s best companies as they get put on sale. I wrote Your 5 Minute Guide to Hedging earlier this year in case that’s helpful. What’s more, I have real discussions about real companies in my investing journal, One Bar Ahead™. The next issue publishes this Friday!

Triple from here

NASA’s much ballyhooed Artemis 1 launch got scrubbed this morning when Mission Control detected a temperature problem with one of the rocket’s four liquid-fueled engines.

Billions over budget (again). Artemis is the biggest rocket ever assembled and a showstopper … if it works. The program has been delayed for years and is billions over budget. According to Real Engineering, it’s a jobs program that happens to go into space. (Watch)

Private enterprise can do it better, cheaper, and faster. Meanwhile, several private space companies are regularly shooting stuff up into space. The real money is going to be in small, cheap low-earth orbit satellites – and getting them up there.

My choice is in the One Bar Ahead™ model portfolio. Shares have been beaten down tremendously, but the company has a unique model using reusable launch vehicles and component manufacturing that makes it very different from NASA’s approach.

The stock could rise 2-3X from where it’s trading today.

Musk: the world still needs oil and gas

Tesla CEO Elon Musk isn’t afraid to ruffle feathers.

This morning he laid into the “eco” crowd big time saying that, “the world must continue to extract oil and gas in order to sustain civilization while also developing sustainable sources of energy.” (Read)

I couldn’t agree more strongly. That’s why we’ve been talking about energy as a “continuum” investment for years.

My favourite energy company is up 65% over the past 12 months versus a -7.28% drop in the S&P 500. Tesla, which I have also recommended and re-recommended till I’m blue in the face is up 15.95% over the same time frame.

I hope I’m smart enough to buy more of all three!

Zuckerberg steps in it again

What’s making news. Meta CEO Mark Zuckerberg stepped in it again on Joe Rogan’s podcast by discussing FBI warnings about “Russian propaganda” that resulted in material changes in how that company processed the Hunter Biden laptop story by limiting it.

Between the lines. Zuck has, of course, expressed “regret” for the uproar but not the fact that the NYT, Washington Post, NBC and Politico have all verified the laptop’s authenticity.

Avoid Meta like the plague.

$3 movie tickets won’t move the needle

A growing list of 3,000 theatres will offer $3 tickets to the movie-going public as a way to participate in the newly created National Cinema Day. (Read)

What they’re saying. That this will entice people to return to theatres. Shares of AMC, Cinemark and Imax may move for a bit but not long.

The only theatre stocks I’d even remotely consider buying would be IMAX where the experience is about the IMAX and the movie. Even that’s debatable, though.

We’ve seen this playbook before. Movies killed theatres 100 years ago and now streaming is going to do the same thing.