Economic Indicators, Sector Performance, and Portfolio Performance & New Picks
March 3, 2024 - Update
Let’s start with the NASDAQ on the daily chart: Healthy.
The NASDAQ on the weekly chart:
Making new all-time highs. Healthy. Lastly, here is the NASDAQ on the monthly chart:
It also looks healthy.
What about the equal-weight SP500 ($RSP)? It is also in an uptrend, although it has been underperforming the Nasdaq and the SP500, reflecting the dominance of the 'Magnificent 7.'
Last week's data on job claims and manufacturing were shared and they were slightly worse than expected. I like to look at the GDP Nowcast estimates, which are currently trending downward. Therefore, we need to monitor signs of economic softening and deterioration.
What about the other indicators I follow closely?
10-year Treasury yield: down 1.9% for the week (good)
Inflation Nowcast for February: pointing to 3.12% (neutral)
Crude oil: up about 3% for the week (bad)
Liquidity: M2 continues to contract at a very low rate (neutral)
Credit: Financial conditions are improving (good)
Sectors:
Technology, semiconductors, blockchain (Bitcoin)-related stocks, and biotech are the strongest sectors. Home construction and retail also deserve mention
Over the last week Natural Gas, Clean Energy, Solar, and EV cars/mobility were on the move
My take:
We are in a clear uptrend
The market is betting on a soft landing and the latest economic data increases the probability of rate cuts from the FED sooner than later
We are witnessing a strong technology revolution around AI and Robotics that will impact many industries reflected by the boom in tech stocks
In the very short term, the market might have a correction or take a breath… yet many have been expecting it for some weeks now
I expect the market to keep grinding higher on the back of the Nasdaq unless the economic outlook deteriorates rapidly and significantly
So I am taking it week by week
PORTFOLIOS
MY 7 PICKS for 2024 PORTFOLIO
If you have been following me, you know that in 2023 I created a Portfolio “for fun” intending to measure its performance at the end of the year. I picked 10 stocks based on my methodology and they performed well (+54% YoY). So I decided to do it again, this time I picked 7 stocks. Here is how the Portfolio is doing so far:
My 2024 picks are up 18% vs. 8% of the SP500 and 2.4% above the real Magnificent 7.
Let’s see how it goes moving forward.
10X LARGE CAP MOMENTUM POT
My LI 0.00%↑ order was triggered and it had a strong week. Let’s see how it develops.
SMCI 0.00%↑ is still the star within the portfolio
I have updated my Stop Loss levels as shown below:
I’m up 94% since the inception of this portfolio. This is what a big winner can bring to the table.
10X SMALL CAP MOMENTUM POT
My BLUE 0.00%↑ order was triggered while my EB 0.00%↑ order was not (luckily enough as the stock collapsed later in the week after its earnings report)
Out of the blue I bought MGNI 0.00%↑ as I made a mistake when creating my Stop Buy order a few weeks ago: basically, the order was a GTC one and didn’t expire and the end of the week. So this is why you’ll see MGNI 0.00%↑ in the portfolio below
I have updated my Stop Loss. Let’s see how BLUE 0.00%↑ behaves as it is very volatile, to say the least. Yet it might have lots of upside as the company is turning profitable
This week I’ll try to get into two new names to use the 4600 USD I have in the account, as follows:
BUY STOP order for 55 shares of DFH 0.00%↑ if it touches 39.75 USD. If triggered the first Stop Loss at 33.2 USD
BUY STOP order for 190 shares of ARQT 0.00%↑ in it touches 11.9 USD. If triggered the first Stop Loss at 8.45 USD
Dream Homes Finder is in the home building business, growing very fast, and shows strong fundamentals. With rates expected to go down might be a winner over the coming months.
Arcutis is a biopharmaceutical company that focuses on developing and commercializing treatments for dermatological diseases. Growing very fast (see below their results from the latest Earnings reports)
Arcutis is extended. I am taking an extra risk as my first stop loss is at 29% of my buy price.
That’s all for the week!
Please use the comment section to suggest how you want me to improve this newsletter.
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.