Good morning investors! The market hit new highs as investors await earning reports.
Today we cover:
Estate tax exemptions
New meme stock
Identifying stocks to buy
Let’s Turn Market Noise Into Money Notes
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📊 Economy and News
New Tax Law Boosts Estate Tax Exemption to $15M
The One Big Beautiful Act, signed into law by President Trump on July 4, 2025, raises the federal estate tax exemption from $13.99M to $15M starting in 2026, with annual inflation adjustments.
This prevents a scheduled drop to $7M.
For married couples, the exemption doubles to $30M, as unused portions transfer to the surviving spouse.
The tax rate on estates remains 18%-40%.
The change will reduce taxable estates from 0.2% to even less, costing $212B in federal revenue over a decade.
Twelve states and D.C. impose their own estate taxes, with exemptions as low as $2M and rates up to 35%.
Global hits:
Foreign investors buy nearly 100 billion euros of euro zone debt in May, Citi says.
Brazil economists trim 2026 inflation forecast in boost for central bank.
Turkish central bank expected to cut rates by 200bp at July meeting.
UK second-hand online shopping reaches two-thirds of consumers.
Note: About 80% people think Fed should remain independent (as per yesterday’s poll), so here’s another one.
Do you agree (with Trump) that Powell is to slow to cut rates?
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📈 Stocks
S&P 500 6,305.60 (+0.14%)
DJIA 44,323.07 (-0.048%)
NASDAQ 20,974.17 (+0.38%)
BRENT CRUDE 69.03 (-0.31%)
* Prices as of Jul 22nd, 12:20 AM UTC
Opendoor ($OPEN) Is a new Meme Stock!
Opendoor Technologies ($OPEN), an Arizona-based home-buying tech company, surged 42.67% on Monday, echoing the wild retail-driven rallies of GameStop in 2021.
The stock, which accounted for over 16% of Nasdaq's trading volume, spiked nearly 120% intraday before experiencing volatility, trading halts, and a subsequent climb, marking its strongest performance in years, though shy of a 120%+ close.
The rally was sparked last week by Eric Jackson, founder of EMJ Capital, a Canadian hedge fund leveraging proprietary AI and machine learning for stock picks. Jackson, likening $OPEN to Carvana, which soared from $4 to $342 in three years.
He highlighted that retail sentiment could propel the stock, stating, "If $OPEN hits $12B in revenue (Bloomberg consensus estimate) and regains a 5x EV/revenue multiple as in 2021, that’s a stock price of $82—100x from current levels."
Despite reporting net losses since June 2023, the company has improved its margins, fueling Jackson’s optimism that cost-cutting could lead to profitability and a multi-billion-dollar valuation. However, the stock remains 90% below its SPAC listing high of nearly $40.
But beware! There is a 19% short interest in $OPEN, suggesting high risk of a decline but also potential for short sellers covering positions to drive further gains. The stock faces a reverse split vote on July 28, 2025, after trading near $1 for months, risking Nasdaq delisting. A reverse split, consolidating 10 or 50 shares into one, could quickly boost the share price, though such moves are often cosmetic without fundamental improvements.
The surge mirrors the 2021 $GME saga, where short squeezes and retail enthusiasm on platforms like r/wallstreetbets drove explosive gains.
Good to know: Google removed nearly 11,000 YouTube channels and other accounts tied to state-linked propaganda campaigns from China, Russia and more in the second quarter.
Block rose 7% Monday after S&P Global said the fintech company will replace Hess in the S&P 500.
Pepsi introduced a prebiotic version of its namesake cola that will include three grams of prebiotic fiber.
Shocking: Microsoft hit with SharePoint attack affecting global businesses and governments. Also, Figma IPO could value design software maker at $16 billion.
Elsewhere, LVMH-backed investor group takes 20% stake in private jet company Flexjet. Lastly, Jeep maker Stellantis warns of a shock $2.7 billion loss as tariffs bite.
Ford recalls more than 694,000 Bronco Sport and Escape SUVs
💵 Personal Finance
Signs to Buy a Stock
Investing in stocks requires careful analysis to identify promising opportunities. Here are key signs to consider when deciding to buy a stock, based on fundamental and market indicators.
Strong Fundamentals: Look for companies with consistent revenue and earnings growth, ideally over multiple quarters. A low debt-to-equity ratio (below 0.5) and high return on equity (above 15%) signal financial health. For example, firms like Opendoor ($OPEN) with improving margins despite losses may indicate potential if profitability is near.
Undervaluation: Stocks trading below their intrinsic value, assessed via metrics like price-to-earnings (P/E) ratios (below industry averages, e.g., 15 for tech) or discounted cash flow analysis, suggest upside potential. A stock down significantly from its highs, like Disney’s drop, may be undervalued if fundamentals improve.
Positive Catalysts: Upcoming events like new product launches, earnings beats, or macroeconomic shifts (e.g., expected Fed rate cuts in 2025 boosting housing stocks) can drive prices higher. Analyst upgrades or hype from credible sources can spark momentum.
High Short Interest: Stocks with high short interest can rally if short sellers cover positions, especially during retail-driven surges, as seen in 2021’s $GME frenzy.
Technical Signals: Rising trading volume, breakouts above key resistance levels, or bullish chart patterns (e.g., golden cross) indicate momentum. However, avoid chasing overbought stocks (RSI above 70).
Risk Management: Ensure the stock aligns with your portfolio and risk tolerance. Diversify and set stop-loss orders to limit downside. Always research thoroughly, as market sentiment can be fleeting, and macroeconomic factors like interest rates can impact stocks.
Here’s an old but interesting video on the topic:
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.