💴 More earning reports

and revised GDP comes higher

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Good morning investors!

Today we cover:

  • Stocks to go up?

  • Economy reports

  • More earnings

📊 Economy and News 

Prepare for a wild run, says this expert

Zac Diles What GIF by VH1

Gif by vh1 on Giphy

Stocks may be on the verge of a significant rally, not seen in three decades, according to Paul Christopher, head of global investment strategy at Wells Fargo. He noted similarities between the current market and the stock boom of 1995, when the S&P 500 hit 77 all-time highs.

Christopher highlighted that declining inflation and steady economic growth could create a favorable environment for investors. The Commerce Department recently estimated a 2.8% year-over-year GDP growth in the second quarter, supporting the idea that the economy is not in freefall.

He suggested that the Federal Reserve is well-positioned if it acts proactively, predicting a 50-basis-point rate cut in September followed by more cuts through the year's end. “We’ve still got a good chance to soft-land this economy,” Christopher said during a Thursday interview on CNBC.

Many market analysts agree that stocks could experience more fluctuations in the coming months as investors wait for Fed decisions and monitor the strength of the U.S. economy. Meanwhile, New York Fed economists have projected a 56% chance of a recession by next July.

Global hits:

China talk: China's central bank buys government bonds, stirs intervention talk. Moreover, China will not impose anti-dumping measures on EU brandy for now.

Pending home sales fall: Contracts to purchase previously owned homes in the U.S. hit an all-time low in July as rising prices and borrowing costs discouraged potential buyers from entering the market.

According to the National Association of Realtors (NAR) on Thursday, its Pending Home Sales Index, which tracks signed contracts, dropped 5.5% in July to 70.2, marking the lowest level since the index began in 2001. All four regions experienced declines in pending home sales last month. Economists surveyed by Reuters had anticipated a 0.4% increase in contracts, which typically turn into sales within a month or two.

On a yearly basis, pending home sales plunged 8.5% in July.

Also check: If the unemployment rate is 4.3%, Fed will cut by 50bps, says Citi. Elsewhere, Russian central bank says new rate hike in September is not a certainty.

Revised GDP: The U.S. economy expanded at a quicker pace than previously estimated in the second quarter, driven by robust consumer spending and a rebound in corporate profits, which are likely to support continued growth.

According to the Commerce Department's Bureau of Economic Analysis, gross domestic product (GDP) rose at an annualized rate of 3.0% in the last quarter, as reported in its revised estimate on Thursday. This marks an increase from the 2.8% growth rate initially reported last month.

In comparison, the economy grew at a 1.4% rate in the first quarter. Economists surveyed by Reuters had predicted that the GDP would remain unchanged at a 2.8% growth rate.

📈 Stocks

S&P 500 4, (+%)
DJIA 34, (+%)
NASDAQ 13, (+%)
BRENT CRUDE 13 (-%)
* Prices as of Mar 3rd, 12:20 AM UTC

Here are some more earnings

The earnings season is still going on, here are some of the latest reports:

  • Affirm shares have best day in three years, surge +32% after earnings beat.

  • Dell beats estimates as server sales soar 80%, riding AI wave. The stock jumps about +7% after the bell.

  • Lululemon cuts guidance, misses sales estimates after botched product launch.

  • Dollar General missed Wall Street’s expectations on the top and bottom lines mainly due to its core, lower-income consumer being under financial pressure. The report sent the stock down nearly -25%.

  • Ulta Beauty fell short of second-quarter expectations and trimmed its full-year guidance. Comparable sales for the second quarter fell 1.2%, compared to an 8% increase a year earlier.

  • Gap beat fiscal second-quarter earnings and revenue estimates and hiked its profit margin outlook. The apparel retailer released its results earlier than expected after a presentation was inadvertently posted on its website Thursday morning.

  • MongoDB shares jumped as much as +16% in extended trading on Thursday after the database software maker reported healthy fiscal second-quarter earnings and pushed up full-year guidance.

  • American Eagle delivered mixed quarterly results that beat Wall Street’s profits expectations but fell short of its sales targets. The longtime mall brand, which also runs the Aerie intimates line, saw profits grow by nearly 60% as costs begin to tick down for the company.

  • Best Buy raised its fiscal-year profit guidance Thursday after exceeding earnings and revenue expectations for the most recent quarter. The retailer now expects to see full-year adjusted earnings per share in the range of $6.10 to $6.35, up from a prior range of $5.75 to $6.20. Best Buy posted comparable sales growth of 6% in the domestic tablet and computing categories. The report sent the stock up about +14%.

Surprising: Yelp sues Google, alleging a search engine monopoly that promotes its own reviews .

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💵 Personal Finance

Exit strategies in stocks - Part II

Let’s continue yesterday’s topic and highlight some more exit strategies:

  1. Fundamental Analysis: Continuously assess the fundamentals of the company you've invested in. If there are negative changes in the company's financial health, business model, or outlook, it may be a signal to exit your position.

  2. Technical Analysis: Use technical indicators and chart patterns to identify potential exit points. Common technical signals include moving average crossovers, overbought or oversold conditions, and trendline breaks. These can help you make informed decisions about when to sell.

A few things to remember:

  • Stay diversified. If you pull out of an industry, consider replacing it with something else so your investment remains diversified.

  • Conduct regular portfolio reviews to assess the performance of your holdings.

  • Be aware of macroeconomic events, news, and market trends that can impact your stocks.

  • Revisit your financial goals and life circumstances periodically. If your goals change or you encounter significant life events (e.g., retirement, college expenses, medical bills), your exit strategy for certain stocks may need to be adjusted.

  • Factor in tax implications when planning your exit strategy since gains will be taxed.

  • Instead of selling all your shares at once, consider gradually scaling out of your position. This approach allows you to capture potential gains while maintaining exposure to any further price appreciation.

Check this video for more:

💰 Be a Better Investor

"You've got to be very careful if you don't know where you're going because you might not get there."

Yogi Berra

Resources:

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.