Easing Monetary Policies and Portfolio New Buys
October 6th, 2024 Update
Macro Overview:
Financial Conditions: Financial conditions continue to improve.
Monetary Policy: Monetary policy is easing.
GDP Nowcast: The GDP Nowcast for Q3 is at 3%, and 2.7% for Q4—indicating no recession in sight.
Inflation: Inflation is expected to print at 2.25% for September 2024; however, the Nowcast is pointing to 2.49% for October 2024.
Brent Oil Prices: Brent oil is at $78, up from $70 just a week ago—a reaction to increasing tensions in the Middle East and Chinese monetary and fiscal stimulus (leading to higher demand for oil).
Global Monetary Easing: Globally, the world is moving into a “monetary easing” period, as shown by the chart below.
My takeaway: From a macro perspective, the background remains healthy for stocks as a recession is not in sight and as we move away from too-tight credit conditions. Inflation is not a real concern right now. An escalation in the Middle East or the Ukrainian-Russian conflict is the most worrisome piece of the puzzle. Also, as we head into elections, some extra volatility is expected.
The NASDAQ
The Nasdaq closed the week slightly positive. It remains in a clear uptrend, although it is underperforming the S&P 500. The Nasdaq is still below its high for the year.
In terms of sector performance, Energy had a strong week. More specifically, industries such as Airlines, Oil, Gas & Consumable Fuels, Interactive Media & Services, Broadline Retail, Aerospace & Defense, and Insurance performed well.
PORTFOLIOS
10X UNDERPRICED GROWTH PORTFOLIO
I started this portfolio less than a month ago, and it's off to a good start. I own seven fast-growing companies that are undervalued based on my analysis. I began this portfolio with $100,000 USD and am currently mostly in cash (63%).
My strategy is to hold these positions for several months, buying positions in halves or thirds. I'll be adding to my positions on weakness.
What I'm Doing This Week:
I am buying half a position in EHang, a Chinese player in the autonomous aerial vehicle (AAV) space. More specifically, I plan to:
buy 285 shares if the price touches $17.53 next week, with a first stop loss at $12.90.
I have updated my stop levels for my current stocks in the portfolio.
Here is the EH chart:
EH broke out on a very strong volume last week.
10X MOMENTUM PORTFOLIOS
CMPO keeps my small-cap momentum portfolio alive. I updated my Stop Loss. CMPO is up 92%
10X LARGE CAP MOMENTUM PORTFOLIO
Here I was kicked out from HRMY 0.00%↑ for an -11% loss.
This week I am placing 2 new trades:
I am buying 11 shares of CPAY 0.00%↑ if it touches $331.1. First Stop Loss at $299
I am buying 22 shares of LDOS 0.00%↑ if it touches $166.4. First Stop Loss at $149.7
I updated my Stop Loss levels for ZETA, RKLB and PRIM
Below are the charts of CPAY and LDOS:
Clear breakout on volume.
Weekly MACD crossover for LDOS.
Both names belong to good industry groups right now: Consumer Finance and Defense.
That’s all for the week!
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.