Blue Chips & Cyclicals Rule This Week While Tech & Biotech Take A Dip

Happy Saturday All!

I hope that all of you created significant wealth for you and yours.

This week, we saw new record highs achieved on the S&P 500 & the Dow as blue chips and Cyclicals, including great performances from the energy sector (+8.9%), the materials sector (+5.9%), the financials (+4.2%),  & the industrials sector (+3.6%), & which powered the markets advance. However, the small caps limped a long and micros were shown the door most of the week and saw with increased downside volatility until reversing a bit on Friday.  The Dow 30 closed at 34,777.76 up +2.7% for the week & is now up +13.6% YTD & the S&P 500 closed at 4,232.60 up +1.2% for the week and is now up +12.7% YTD. The Nasdaq closed at 13,752.24, down 1.5% for the week, but up +6.7% YTD, as the information technology sector fell .5% and the consumer discretionary sector dropped 1.2%. The smalls on the Russell 2000 also recovered on Friday to close at 2,266.45 up +.2% for the week & are now up an impressive +15% YTD.  The micros 

The FAANGs ended down as follows: Apple (AAPL) shares closed at $130.21 down ~$1.20 from last Friday’s close of $131.46, Amazon (AMZN) closed at $3,291.61 down ~$175.82 from last Friday’s close of $3,467.42, Alphabet (GOOG) closed at $2,398.69 up ~$12/share from last Friday’s close of $2,410.12, Facebook (FB) closed at $319.08 down ~$5/share from last Friday’s close of $324.90 & Netflix (NFLX) closed at $503.84 up ~$10/share down from last Friday’s close of $513.47/share.  

Leading EV car maker Tesla (TSLA) moved lower again this week to close at $672.37 & down ~$31/share from the $709.44 close. 

THE MACRO & RATES

On Monday, the macroeconomic schedule produced the ISM Manufacturing Index report for April which moved down to 60.7%. Total construction spending rose by .2% month/month in March, while total private construction moved up .7% month/month, & total public construction spending dropped 1.5%. On Tuesday, the U.S. trade deficit report confirmed that it had widened to $74.4B in March as the economy saw increasing demand. Factory orders for manufactured goods also rose 1.1% month/month in March. Shipments of manufactured goods also rose 2.1%.
On Wednesday, the ISM Non-Manufacturing Index report confirmed a drop to 62.7% in April. The ADP Employment Change report confirmed an estimation that 742k jobs were added to private-sector payrolls in April. The IHS Markit Services PMI for April was also revised up to 64.7%. The weekly MBA Mortgage Applications Index report confirmed another drop by .9%. On Thursday, the Initial jobless claims report for the week ending May 1 confirmed a drop by 92k to 498k, while continuing claims for the week ending April 24 rose by 37k to 3.69M. The Nonfarm business sector labor productivity also moved up at a 5.4% annual rate in Q1 as unit labor costs dropped at an annual rate of .3%.  On Friday, the April employment report confirmed that only 266k jobs were created to nonfarm payrolls, a disappointing figure that missed expectations of  1M. The April unemployment rate was 6.1% & the April average hourly earnings rose .7%  The Consumer credit report confirmed a rise by $25.8B in March. The Wholesale inventories report confirmed a rise of 1.3% month/month in March.

The yield curve was relatively clam this week as the 10-yr yield fell 5 basis points to 1.58 wk/wk, while the 2-yr settled 2 basis points lower wk/wk at .14%. The U.S. Dollar Index moved lower from 92.77 to 9022. 

VISTA STORIES FROM THE DOW 30

Former Coca Cola (KO) & Uber (UBER) Global Chief Marketing Officer Rebecca Messina Joins INVO Bioscience’s (NASDAQ: INVO) Board

Walgreens Collaborates Uber Technologies Inc (UBER), DoorDash Inc, Etc. To Launch Same-Day Deliverynupiravi

Saadia Madsbjerg Named President of The Coca-Cola Foundation & VP of Global Community Affairs for The Coca-Cola Company (KO)

Microsoft Allows Its EU Public & Commercial Sector Customers To Store & Process Data In The Region

Salesforce Joins As Innovation Partner Of The Walt Disney Studios StudioLAB

Caterpillar Reports Improved Quarter Earnings- Raises Supply Chain Issues

Intel Investing $600M In Israel To Expand Its R&D Work -Also Spending $10B On New Chip Plant

BIOTECHS LAGGED

The Biotech sector took another hit week over week this week and a great deal of the pain could be attributed to the unwise move of President Biden and others to push for removal of valuable drug patent protections that the companies and their investors have invested in so dearly. In turn, volatility to the downside came into the sector for most of the week, but begin to subside towards the end. The Nasdaq Biotechnology ETF (IBB) closed at $149.71 down ~5 points from last week’s close of $154.64. The NYSE ARCA Biotech Index (^BTK) closed at 5,535.30 down ~77.11 points from last week’s close of 5,612.41. The SPDR S&P Biotech ETF (XBI) closed at $127.74,+1.63% on Friday as bounced off a ~4% dive in Thursday morning as fears subsided to some degree around the IP issues.  

Former Bristol-Myers Squibb (BMS) Cellular Therapy Development VP Appointed As Chief Medical Officer of NKcell Focused Cytovia Therapeutics

GOLD & SILVER MARKETS MOVE HIGHER (AGAIN)

Gold prices closed back above $1800/oz at $1,834, up $18 from the $1,771 close last week. This Friday silver prices closed at $27.56/oz. up a significant $1.58 from the $25.98/oz. close last Friday. Hecla Mining (HL) reported impressive Q1 2021 financial and operating results and closed at $7.28 up a solid $1.37/share up from the $5.91 close last Friday.  See our update story here for greater details.

TRADING, EARNINGS & REPORTS NEXT WEEK 

We are back to 5-trading sessions again next week as the earnings season begins to wrap up & we will receive the Michigan Sentiment index, Inflation data, and Retail Sales

OIL

Oil prices moved up 2% this week to close at $64.83 and are up +33.6% YTD. It may be time to be looking for a Tesla!

Thanks again for your attention this week. Please continue to share your thoughts, questions, & ideas as we move forward. 

In the meantime, please enjoy the balance of the weekly newsletter’s videos, quotes, updates. 

Investing & Inspiration

1. “The markets generally are unpredictable, so that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.” – George Soros
2. “Stop trying to predict the direction of the stock market, the economy or the elections.” – Warren Buffett
3. “An important key to investing is to remember that stocks are not lottery tickets.” – Peter Lynch
4. “Learn everyday, but especially from the experiences of others. It’s cheaper!” – John Bogle
5. “When purchasing depressed stock in troubled companies, seek out the ones with the superior financial positions and avoid the ones with loads of bank debt.” – Peter Lynch
6. “No stock price is too low for bears or too high for bulls.” –  John F. Heerdink, Jr.
7. “Investment is most successful when it is most businesslike.” – Ben Graham
8. “Value stocks are about as exciting as watching grass grow, but have you ever noticed just how much your grass grows in a week?” – Christopher Browne
9. “Even the intelligent investor is likely to need considerable willpower to keep from following the crowd.” – Benjamin Graham
10. “Individual who cannot master their emotions are ill-suited to profit from the investment process.” – Benjamin Graham
11. “I made my first investment at age eleven. I was wasting my life until then.” – Warren Buffet
12. “I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.” — Warren Buffett
13. “There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” – Jack Welch, former CEO of GE
14. “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble” ― Warren Buffett
15. “If you buy things you do not need, soon you will have to sell things you need.” – Warren Buffet
16. “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen
17. “It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.” – Warren Buffett
18. “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” — Warren Buffett
19. “Every once in a while, the market does something so stupid it takes your breath away.” — Jim Cramer
20. “The person who starts simply with the idea of getting rich won’t succeed; you must have a larger ambition.” — John D. Rockefeller
21. “Know what you own, and know why you own it.” – Peter Lynch
22. “Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part ownership of a business.” – Peter Lynch

23. “Wise spending is part of wise investing. And it’s never too late to start.” – Rhonda Katz

24. “Invest for the long haul. Don’t get too greedy and don’t get too scared.” – Shelby M.C. Davis

25. “Fear incites human action far more urgently than does the impressive weight of historical evidence.”
    -Jeremy Siegel

26. “With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” — Carlos Slim Helu
27. “If we like a business, we’re going to buy as much of it as we can and keep it as long as we can. And when we change our mind, we don’t take half measures.” – Warren Buffett
28. “The most contrarian thing of all is not to oppose the crowd but to think for yourself.” — Peter Thiel
29. “Never depend on a single income, make an investment to create a second source.” Warren Buffet“Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.” ― Warren Buffett
30. “The key to making money in stocks is not to get scared out of them.” – Peter Lynch
31. “Courage taught me no matter how bad a crisis gets … any sound investment will eventually pay off.” — Carlos Slim Helu
32. “Investing puts money to work. The only reason to save money is to invest it.” – Grant Cardone
33. “As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.” — John Maynard Keynes
34. “Given a 10% chance of a 100 times payoff, you should take that bet every time.” — Jeff Bezos
35. “Money is always eager and ready to work for anyone who is ready to employ it.” ― Idowu Koyenikan
36. “The secret to investing is to figure out the value of something – and then pay a lot less.” – Joel Greenblatt
37. “We don’t have an analytical advantage, we just look in the right place.” – Seth Klarman
38. “Men, it has been well said, think in herds. It will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” – Charles Mackay
39. “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” – George Soros
40. “In investing, what is comfortable is rarely profitable.” — Robert Arnott
41. “Don’t look for the needle in the haystack. Just buy the haystack!” — John Bogle
42. “No Price is too low for a bear or too high for a bull.” — Anonymous
43. “Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future.” — Anonymous
44. “Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
45. “Wise spending is part of wise investing. And it’s never too late to start.” –Rhonda Katz
46. “If there is one common theme to the vast range of the world’s financial crises, it is that excessive debt accumulation, whether by the government, banks, corporations, or consumers, often poses greater systemic risks than it seems during a boom.” — Carmen Reinhart
47. “It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble.” ― Robert Shiller
48. “A bull market is like sex. It feels best just before it ends.” — Barton Biggs
49. “The investor’s chief problem — even his worst enemy — is likely to be himself.” — Benjamin Graham
50. “No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation.” – Robert Rhea
51. “The most contrarian thing of all is not to oppose the crowd but to think for yourself.” — Peter Thiel
52. “Money is like a sixth sense – and you can’t make use of the other five without it.” – William Somerset Maugham
53. “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” — Albert Einstein
54. “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
55. “Thousands of experts study overbought indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply…and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.” – Peter Lynch
56. “Investing puts money to work. The only reason to save money is to invest it.” – Grant Cardone
57. “Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn
58. “You cannot save time for your future use however you can invest time for your future.” – John F. Heerdink, Jr. 
59. “We always live in an uncertain world. What is certain is that the United States will go forward over time.” – Warren Buffett
60. “Never test the depth of the river with both of your feet.” – Warren Buffet
61. “Know what you own, and know why you own it.” – Peter Lynch
62. “Liquidity is only there when you don’t need it.” -Old Proverb
63. “There is no such thing as no risk. There’s only this choice of what to risk, and when to risk it.” – Nick Murray
64. “If you want to be a millionaire, start with a billion dollars and launch a new airline.” – Richard Branson
65. “Fear incites human action far more urgently than does the impressive weight of historical evidence.” – Jeremy Siegel
66. “In investing, what is comfortable is rarely profitable.” – Robert Arnott
67. “Spend each day trying to be a little wiser than you were when you woke up.” – Charlie Munger
68. “The entrance strategy is actually more important than the exit strategy.” – Edward Lampert
69. “The rivers don’t drink their own water; Trees don’t eat their own fruits. The sun does not shine for itself, And flowers do not spread their fragrance For themselves. Living for others is a rule of nature” – PopeFrancis
70. “It is impossible to produce superior performance unless you do something different from the majority.” – John Templeton
71. “Inaction and patience are almost always the wisest options for investors in the stock market.” – Guy Spier
72. “Remember that the stock market is a manic depressive.”  – Warren Buffett
73. “An investment in knowledge pays the best interest.” – Benjamin Franklin
74. “I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates
75. “Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman
76. “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy
77. “If all the economists were laid end to end, they’d never reach a conclusion.
    -George Bernard Shaw
78. “The riskiest thing we can do is just maintain the status quo. I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” – Bob Iger, Former Ceo of Disney
79. “In the short run, the market is a voting machine. But in the long run, it is a weighing machine.” – Ben Graham
80. “In investing, what is comfortable is rarely profitable.” -Robert Arnott
81. “The fundamental law of investing is the uncertainty of the future.” -Peter Bernstein
82. “How many millionaires do you know who have become wealthy by investing in savings accounts?” -Robert G Allen
83. “Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself.”-Ivan Boesky
84. “Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner
85. “The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru
86. “I talk about macro themes a lot because they are fun to talk about, but it is the risk management that is the most important thing. The risk control is all bottom-up. I structured the business right from the get-go so that we would have lots of diversification.” -Michael Platt
87. “Blaming speculators as a response to financial crisis goes back at least to the Greeks. It’s almost always the wrong response.” -Larry Summers