The Fed’s Soft Landing Faces Turbulence
Treasury Secretary Janet Yellen says the U.S. is still on the path to a soft landing, but investors aren’t acting that way, selling off shares to make last week one of the worst weeks in a year. So what is it that she sees that investors don’t? How will the recent string of data affect the Fed’s decision to cut interest rates later this month? The previous two monthly jobs reports may show turbulence on the way to a soft landing.
Can The Pivotal Jobs Report Save The September Blues?
It seems like for months we’ve been focused on reports like the Consumer Price Index, Producer Price Index, and Gross Domestic Product growth. Everything had to line up perfectly to give us the soft landing, and for weeks, we were hoping to see a slowdown in growth just enough to give the Fed reason to cut interest rates. Now investors are getting that slowdown they asked for, but the stock market is falling instead. What can stop the fall and where can the market head from here?
Intel Setback Opens Door for Fresh Opportunities
Despite closing several profitable positions in August, Options Income Weekly members saw a net loss for the month after closing down a recovery trade in Intel (INTC). But with the capital we’ve freed up, we’re focusing on more lucrative opportunities in the technology and energy sectors.
Find out why we moved on from Intel and which new stocks we’re targeting here.
Nvidia Day Is Over – Now What?
With Nvidia representing 7% of the S&P 500, it’s no wonder why investors were held hostage to Nvidia’s earnings report, but now that is beyond us, what can we expect next? Before we get too far, Nvidia’s earnings remind me of years ago when I was trading Apple regularly and the stock got punished for making billions, but not enough billions in profit. Or they sold millions of phones, but not millions + 1. Nvidia’s earnings still show this market has room to go higher, but we’re still on fragile ground.
Big Defensive Win in VRT Yields 4-Figure Profit
Data-center systems specialist Vertiv Holdings (VRT) has become one of our go-to income stocks, offering profitable opportunities through both cash-secured puts and bull put spreads. However, when the summer tech-sell off hit stocks, we ended up being forced to play defense. But with some active trade management and a little help from the market, we ended up with our biggest winner to date on the stock.
Now, with our recovery trade closed, we’re back on the offensive.
Mission Accomplished
Despite investors’ hesitation toward the Jackson Hole Symposium, the event finished with the much-anticipated message from the Fed that it is now time for interest rates to come down. The market has already been pricing in rate cuts, so the next thing to watch for is how quickly rate cuts will be implemented. The market is pricing in a 0.25 basis point cut in September. How will this news impact trading for the week ahead?
The Fed’s Jackson Hole Gathering Brings Volatility
The Jackson Hole Symposium, a key gathering of central bankers and economists in Jackson Hole, Wyoming, runs from August 22-24. Powell is slated to deliver his remarks today at 10 a.m. Eastern time. The major indices fell over -0.05% yesterday, showing just how jittery investors are, waiting for a signal of upcoming Fed moves. You may remember 2022 when Powell spoke at Jackson Hole (a -5.5% move), but what does history have to say about the S&P 500 performance during this event?
Straddle Strategy Shines With Volatile TSLA
Despite our initial challenges with a Tesla (TSLA) credit spread position, we managed to greatly reduce our loss on the recovery trade. When we went back to the stock this month in the Income Masters program, we tried a new strategy that paid off quickly, yielding a nearly 15% return in just three days. Plus, we generated more than enough cash to offset our loss on the previous position.
Find out how we did it.
1 Stock, 20 Winners, $5,732 in Cash
Income Masters members pocketed over $3,100 in cash last week, closing out nine profitable trades. The largest income generator was a recovery trade on a drugmaker we’ve been trading successfully for the past year.
In fact, last week’s closeout represented the 20th winning trade on the stock in a row with more than $5,700 in total cash generated. And we plan to go back to it with another trade this week when we kick off Income Madness.
Searching For Stocks In Top Sectors
Stocks are rallying as investors jump back into technology stocks, again favoring growth over value. Investors quickly forget about the headwinds that spooked them in July and are jumping back into the market. The next leg higher of this rollercoaster ride has started, even though a week ago many investors were ready to sit on the sidelines. What happened this week and how can you find opportunities to take advantage of the movements?
