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Hundreds of investing and finance newsletters hit my (and maybe your) inbox every week. This is the best of the best.
This week:
🐂 Trump’s 90-day Tariff Pause Drives 3rd-highest S&P 500 Daily Increase (9.5% on April 9)
🚬 Bank of America Digs the Classics
📉 Market Finds Sole Confidence In Rate Cuts
🌍 China Says ‘Mine’ To Rare Earth Exports
🎯 GDPNow Model Tells a Sad Tale
🤝 Intel Shakes Hands With Long-Time Rival
🇰🇷 South Korea is Fastening Its Seatbelt
🤔 3 stocks to consider
With how quickly the market and investment climate is changing right now, we can’t afford to not stay up to date… You can always read the latest and most relevant finance news & updates at FinanceWrapped.com.
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🚬 BofA Sees Cigarettes as a Safe Haven
Bank of America's latest analysis revealed that consumer staples, particularly companies like Philip Morris, Coca-Cola, and McCormick, remain resilient safe havens during economic downturns.
These defensive stocks are already outperforming in 2025. The market's violent reaction to the confirmed 104% China tariffs has only reinforced the appeal of these traditionally recession-resistant sectors.
📉 Markets Price In Emergency Fed Rate Cut
The market's brutal response to President Trump's tariff policy has traders betting on aggressive Fed action, with five rate cuts now priced in for 2025.
Recent reports show there's now a 40% chance of an emergency cut before the May meeting. Investors looking for refuge are watching short-term bonds, anticipating policy easing on the horizon.
🌍 China Tightens Grip on Rare Earth Elements
China has expanded restrictions on rare earth element exports, tightening its control over these crucial materials for tech and military applications.
The immediate restrictions affect elements including samarium, gadolinium, terbium, and scandium, prompting a surge in exploration activity by Western companies.
Crypto’s Most Influential Event
Consensus is the world’s longest-running gathering of the global crypto, blockchain, and AI communities.
Celebrated as ‘The Super Bowl of Blockchain’, Consensus will welcome 20,000 attendees shaping the decentralized digital economy to Toronto this May 14-16.
Ready to invest in your future?
Attending is your best bet.
🎯 GDPNow Model Flashes Recession Warning
The Atlanta Fed's GDPNow model, launched in 2014 as a real-time GDP tracker, is currently signaling significant economic weakness.
This data-driven model strips out subjective assumptions and narrative bias, though its accuracy record is mixed. The model's latest reading suggests a concerning trajectory for Q1 growth.
🤝 Intel Inks Historic Alliance with TSMC
In a White House-brokered deal, struggling chipmaker Intel is nearing a strategic partnership with longtime rival TSMC.
The proposed arrangement would give TSMC a 20% stake in Intel's manufacturing operations, with TSMC contributing expertise rather than cash. The unexpected alliance comes as Intel attempts to recover from $16 billion in losses during 2024.
🇰🇷 South Korea Takes Evasive Economic Action
South Korea, home to auto giants Hyundai and Kia, has enacted emergency measures in response to rising trade tensions with the US.
The auto industry, which makes up 13% of South Korea's economy, is especially vulnerable given its significant share of the US market, particularly in electric vehicles.
Stock ideas
Here are three of my favorites from this past week.
Analysis provided by public.com.
Remember to always DYOR.
United Rentals, Inc. (URI)
Bullish Case
Market Leadership and Scale Advantages: URI benefits from greater efficiency and higher equipment utilization rates than competitors.
Strong Growth Through Acquisitions: URI has successfully executed dozens of acquisitions since its founding in 1997.
Counter-Cyclical Cash Flow and Capital Allocation: URI generates counter-cyclical free cash flow with high returns on equity.
Bearish Case
Tariff and Economic Uncertainty: President Trump's new reciprocal tariffs and potential escalation with China create uncertainty for equipment costs.
Exposure to Construction and Industrial Sectors: Given URI’s exposure, economic slowdowns or reduced infrastructure spending could significantly impact demand.
CACI International Inc. (CACI)
Bullish Case
Strong Government Contract Position: 74% of revenues come from the Department of Defense, with a massive $32.4 billion backlog.
Impressive Growth Trajectory: Management targets high single-digit revenue growth and mid-11% EBITDA margins through FY 2027.
Disciplined Capital Allocation: CACI maintains exemplary capital allocation with $4.8B in value-accretive acquisitions since 2007 and consistent share repurchases.
Bearish Case
DOGE Concerns: The November 2024 announcement of DOGE triggered a broad sell-off in government contractor and recs for revised contract structures.
Contract Structure Risks: With 61% of contracts being cost-plus fee arrangements, any policy shift toward fixed-price contracts could pressure margins.
Neogen Corporation (NEOG)
Bullish Case
Insider Confidence: In the last 100 transactions, insiders bought 511,562 shares while selling only 230,716.
Analyst Optimism: Guggenheim initiated coverage with a "Buy" rating in December 2024, suggesting professional analysts see value despite recent technical weakness.
Essential Industry Position: As a developer of food and animal safety diagnostic products, Neogen occupies a critical position in food safety testing.
Bearish Case
Severe Technical Weakness: NEOG has fallen 32.31% since a pivot top in March, with no support from accumulated volume below current levels.
Negative P/E Ratio: NEOG's current P/E ratio of -3.57 indicates the company is not profitable, creating fundamental concerns alongside the technical price weakness.
💙 That’s a wrap
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Disclosure
Nothing above is financial advice