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🏠 Bad for Buyers, Good for Investors
Plus, this state may become the first to deploy a universal basic income program
Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟨 | US Stocks Were Mixed on Tuesday. The Dow fell roughly 1%, while the Nasdaq Composite gained over 1% and snapped its three-session losing streak.
📈 | One Notable Gainer: Shares of Nvidia soared 7%, rebounding after the stock fell 13% and lost $430 billion in market value in the previous three trading sessions.
📉 | One Notable Decliner: Boeing’s stock fell 2% following news that NASA astronauts who piloted the company’s Starliner capsule have been stuck at the International Space Station due to thrusters malfunctioning.
🏠 | Tomorrow's Trade: Bad for Buyers, Good for Investors. Scroll down for more.
Plus, our partner can’t wait to spell out exactly how he can identify and execute 7 out of 10 trades successfully.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 Bullish
🟨🟨🟨⬜️⬜️⬜️ Bearish
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
SPR (-4%) Shares of Spirit AeroSystems dropped following reports that Boeing changed the terms of its all-cash offer to acquire the company (YF)
ENVX (+35%) Enovix signed an agreement with a leading California-based technology company to provide batteries for a mixed-reality headset (YF)
NVO (+3%) Novo Nordisk plans to spend $4.1 billion on a new North Carolina facility to boost output of Wegovy and Ozempic amid shortages (CNBC)
POOL (-8%) Swimming pool industry leader Pool Corp cut its 2024 outlook as tough economic conditions cut into consumer spending (Investopedia)
SE (-2%) JPMorgan downgraded Singapore-based consumer internet stock Sea Limited to Neutral from Overweight, citing increased competition (SA)
TOGETHER WITH SIMPLERTRADING
What’s the secret to Taylor Horton’s account growing 147% in two weeks? That’s exactly what he covered in his live demo. Imagine no more FOMO, no more chasing trades, or stressing about market conditions. That’s just part of the payoff for only taking “A+ Setups.”
You’re probably wondering what an “A+ Setup” is. They’re so objective that members of Taylor’s Compounding Growth Mastery are able to identify the same trades. See why Tayor can’t wait to spell out exactly how he can identify and execute 7 out of 10 trades successfully.
OVERHEARD ON THE STREET
NYP: Hooters abruptly closed dozens of “underperforming stores” – the latest chain to shutter restaurants as inflation batters US consumers.
The Guardian: Tesla is recalling 11,688 Cybertrucks due to issues with their windshield wipers, marking the fourth Cybertruck recall.
Reuters: EvolutinaryScale, an artificial intelligence startup focused on biology, raised $142 million in seed funding backed by Amazon and Nvidia.
DM: Delta Air Lines has opened its hotly anticipated business and first-class lounge at JFK as part of its $1.5 billion investment at the New York airport.
MN: A federal judge in Brooklyn formally rejected a $30 billion settlement between Visa, Mastercard, and retailers to cap credit card swipe fees.
TOMORROW’S TRADE IDEA, TODAY
The Flip Side
Current mortgage rates might be bad for home buyers, but the Wall Street Journal (WSJ) says they’re not all bad for investors. Mortgage-backed securities are delivering some investors high yields right now.
The MBS realm is frequented by institutional investors. But retail investors can access them through funds like the Simplify MBS ETF (MTBA) which is currently yielding about 5.9%. That’s around 165 basis points better than the 10-year Treasury right now. The ETF focuses on buying newer MBS composed of newer mortgages with higher rates.
The Risk
As with any type of investing, a higher possible reward comes with a higher risk. The risks with MBS are realized through prepayments. If interest rates begin to fall, homeowners could refinance at lower rates and pay off their mortgages faster. When prepayment occurs, the MBS investor has a shorter period of growth than anticipated.
Prepayment Timelines
Some experts believe when rate cuts begin, refinancing might not happen as quickly as many expect. This could ring true if rate cuts are gradual rather than drastic. Americans might not be willing to go through the process of refinancing just to save 10 to 15 basis points.
In addition, new mortgage bonds are largely tied to first-time home buyers, who traditionally prepay at a much slower pace.
Mortgage-backed securities, fueled by high interest rates, are providing investors with a solid return right now. ETFs are a great way for everyday investors to get in on the action.
Are you bullish or bearish on mortgage-backed securities over the next 12 months? |
TOGETHER WITH SIMPLERTRADING
What’s the secret to Taylor Horton’s account growing 147% in two weeks? That’s exactly what he covered in his live demo. Imagine no more FOMO, no more chasing trades, or stressing about market conditions. That’s just part of the payoff for only taking “A+ Setups.”
You’re probably wondering what an “A+ Setup” is. They’re so objective that members of Taylor’s Compounding Growth Mastery are able to identify the same trades. See why Tayor can’t wait to spell out exactly how he can identify and execute 7 out of 10 trades successfully.
ON OUR RADAR
BI: Oregon could be the first state to have a universal basic income. Its proposed UBI program would grant each resident about $750 a year.
TC: Snapchat announced a suite of new safety features intended to protect teens from predators using the app for sextortion.
Axios: Bill Gates claims that nuclear energy is the only way to decarbonize the world’s electric grid.
CNN: The CDK Global system outage will take car dealerships across the United States months, if not years, to correct and recover from.
The Hill: The number of travelers screened by TSA hit an all-time high on Sunday, June 23, with over 3 million screened by the agency.
What did you think of today's edition? |
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