Shah Gilani's Archive

Just when you thought you knew what to expect in a “Convention” to nominate a party’s presidential candidate, along comes Alexandria Ocasio-Cortez (aka AOC) and says what almost no one expected her to say at the virtual 2020 Democratic National Convention.

In her 90-second speech Tuesday evening, she didn’t mention the Convention. She didn’t mention Joe Biden.

After endorsing what sounded more like the platform Bernie Sanders would champion, she seconded the nomination of, Bernie Sanders.

You read that right. Bernie Sanders, not Joe Biden.

And while I did promise you Monday to talk about the three stocks that you should buy if Biden wins the election, we have to dig a little deeper first into AOC’s speech, why she seemingly upstaged Joe Biden with Bernie Sanders’ rhetoric, and what it means for those three stocks.

Let’s dive in…

The upcoming election is going to change all our lives, not just because it will determine who the President is going to be, or how divided or united Congress is going to be, moreover because whatever the outcome is, there are going to be huge winners and losers in the economy and the stock market.

And being on the right side of all the opportunities ahead of us will truly be life changing.

While it matters who wins and who loses, to a lot of Americans, what matters to me is what’s going to change and how to position ourselves as traders and investors to make money from what will and won’t change, depending on the outcome of the election.

Here’s what the outcomes could be and how markets and sectors will move initially and longer-term.

The news cycle this year has been crazy, crazier than ever, and this week was far from an exception. The new coronavirus updates coming from the CDC, claiming we’re seeing the “biggest fall, from a health perspective,” EVER and “sleepy” Joe Biden announcing Senator Kamala Harris as his running mate, were only the tip of the news iceberg.

I’m not going to talk about either of those things, at least not right now.

So far this year retail bankruptcy filings total 43, according to S&P Global Market Intelligence.

That’s only 5 fewer than the 48 bankruptcy filings by retailers in 2010, the worst year for retail during the Great Recession, and we’ve still got four and a half months left in 2020.

There could be dozens, or hundreds, more bankruptcies by the end of this year. I say hundreds because according to S&P Global in 2008 a whopping 441 retailers filed for bankruptcy.

Here’s what’s happening behind shuttered and reopened stores to demand, to supply chains and vendors of apparel companies; and who’s going to make it and who’s not.

What investors, analysts and retailers call the Amazon effect, I call the “Amazonation” of retail, of America, which happens to be just the tip of the “Retail Ice Age.”

Bricks and mortar retailers in the U.S. were just starting to come to grips with their own self-inflicted mistakes when Amazon.com Inc. (NasdaqGS:AMZN) shone an even brighter light on an even bigger mistake they were making.

Now, retailers are facing an even more deadly existential threat to their bricks and mortar as well as their online existence, no thanks to the coronavirus…

Because it’s my nature, and because it’s prudent, and because sometimes reality bites, for the last couple of months I’ve typically interspersed my positive assessment of equity markets and forecasts why they’re going higher, with negatives, citing pitfalls, white, gray, and black swans all around us.

Still, the forecasts have been bullish.

This morning the Bureau of Labor Statistics released July payroll numbers. They weren’t even as good as the headline 1.8 million workers added announcement, but that’s another story, which I’ll get to.

The numbers, which all beat consensus estimates, making them appear better, weren’t that good at all.

But that’s not going to stop equity markets from rallying.

Here’s the story behind the headline numbers and why equity markets are headed higher.

U.S. equity markets, as measured by the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average, rocketed off their March coronavirus crisis lows and are headed higher.

The Nasdaq Composite’s already been making successive higher all-time highs and is poised to break out north of 11,000. The S&P 500’s only 87 points or 2.56% from its all-time highs, as of Tuesday’s close. And the venerable Dow, bringing up the rear, is 9.26% from its February 12, 2020 all-time highs, after plunging 11,354.92 points or 38.4% at its March 23, 2020 lows.

Stocks have bounced back, even the zombies parading around as healthy companies.

The markets have been roaring higher based on fulfilling the economic, and now market, postulate “more is always better sooner.”

But there are caveats to “more,” to “better,” to “sooner,” and especially to “always.”

I’ll touch on those later in the article – and I’ll have a special request for you as well…

In the meantime, here’s what to look out for and what’s on the other side of what’s been driving equity benchmarks higher and what could happen to them if the consequences of more, better, and sooner aren’t always and forever.

My favorite economic and market postulate is: More is always better sooner.

It’s never been truer.

Another favorite saying of mine is: Nothing matters, and what if it did?

And last but not least: Everything’s good, until it isn’t.

Put them all together and that’s the kind of market we have.

One day after the CEOs of Apple, Amazon, Facebook, and Google’s parent Alphabet faced a hostile House Judiciary Antitrust Subcommittee hearing, where they were each questioned about how they got so big, so profitable, and at whose expense, the four mega-cap tech darlings reported blowout second-quarter revenues and profits.

Tim Cook, Apple’s CEO, feigned embarrassment in his address of the company’s earnings, almost apologizing for Apple’s flood of riches as the rest of America and the world suffer the ravages of the coronavirus crisis.

The question is now: Will these giants be allowed to keep on squashing all competition, keep on minting money, see their stock prices keep on rising? Or will political winds blowback their relentless growth and market dominance?

Here’s what they face, what they’re going to do about it, and what’s going to happen to their stock prices.