Shah Gilani's Archive

So far, it’s been a mixed bag for tech earnings this quarter, at least as far as their reported metrics.

What hasn’t been mixed however is how investors have decidedly been selling big tech names, including selling Netflix down on less than expected subscriber growth and selling Microsoft on excellent earnings metrics, except for slower growth in its cloud business, if you can call 43% growth slow.

Something’s bothering Big Tech investors.

Maybe it’s how fast and furiously big tech names rallied off their March coronavirus crisis lows. Maybe it’s because most mega-cap tech darlings made new all-time highs. Maybe it’s because of this Monday’s House Judiciary Antitrust Subcommittee virtual hearing the CEOs of Apple, Amazon, Facebook, and Google face. Or maybe it’s nervousness over Facebook reporting earnings on Wednesday next week, then Amazon, Google, and Apple reporting on Thursday.

Whatever it is, it’s not looking good for big tech darlings right now.

The bottom-line is: if Big Tech falters the rest of the market’s headed lower, maybe a lot lower and maybe quickly…

Technology stocks have powered America’s markets higher for more than two decades, including leading almost parabolic rallies on the heels of every selloff, correction, or bear market since 2009.

That certainly includes “Big Tech” powering equity markets higher off their coronavirus crisis lows.

But now mega-cap technology darlings face political, regulatory, and tax threats, possibly all at once.

Investors need to know what those threats are, what could happen to big tech companies, and how the stock market might fare if big tech leadership stocks falter, exposing the market’s weak underbelly…

Despite the Nasdaq Composite ending last week down 1.1%, the other major benchmarks ended the week higher. The trend for all of them, including the Nasdaq Composite, is still, up.

But there were minor cracks in the yellow-brick road last week.

A big crack developed on Monday when the Nasdaq 100 (NDX), an important index of the biggest 100 (non-financial) stocks listed on the Nasdaq, rose 2% in the morning, breaking through to new all-time highs, then collapsed spectacularly, ending the day down more than 2%.

That kind of intraday reversal is often a turning point signal. By turning point, I mean a change in the trend.

The country’s biggest too-big-to-fail banks have all reported second quarter earnings and the results were chock full of good news and bad news, depending on the bank and its banking model.

What the banks’ earnings, profits and losses tell us about the economy, about their health, and about the outlook for their stocks gives investors a window into the economy and how to play the banks.

A window into the economy…

The stock market’s risen like a bat out of hell since bottoming out on March 23, 2020.

Remarkably, the institutional benchmark S&P 500 is up 43% after being hit by the coronavirus pandemic.

And while there’s still no vaccine for Covid-19, as the country sees dangerous spikes across 32 states, with mayors and governors again calling for businesses to shut down, as the additional $600 per week unemployed workers were getting runs out, the stock market looks clearly poised to go higher.

Here’s where we’re at, what hurdles are left to jump over, and why we’re headed higher.

With markets working themselves higher last week, higher since the March lows, higher forever for the Nasdaq Composite, you could say the good news is behind us and what’s up next will be weightier.

When I say good news, I’m not talking about the bad news all around the country showing dramatic and frightening coronavirus spikes, I’m talking about most of the economic indicators coming out ahead of analysts’ expectations over the past four weeks. Not all of them mind you, but most of them.

Why? Because analysts knocked down every number, every expectation, every hope they had.

And they were wrong. They were too pessimistic.

Is it too late to buy the FAANG stocks, Facebook, Apple, Amazon, Netflix, Google, and Microsoft?

In a word, “no.”

But with their valuations peaking, concentration in them at all-time highs, and pushback from advertisers, regulators, and politicians mounting, an increasing cadre of skeptics and analysts think their run’s about over.

Let’s examine the bull case and bear case for these mega-cap tech darlings and why it’s not too late to buy them.

Most importantly, I’ll show you how to make money on them going up if you don’t own them, and why and how to buy them lower if they come down.

Everyone knows shopping has changed forever. Online shopping is in, bricks-and-mortar stores are out.

Maybe not forever, but with cities, counties, and states prone to stay-at-home orders, no thanks to the coronavirus pandemic, shopping in physical stores is less appealing than ever.

Shopping malls, with their higher density, which get closed quicker than standalone stores and take longer to open, have been hit even harder by the pandemic and changing consumer habits.

For malls, suffering systemically, it’s the end of an era and the end of the line for many of them.

However, that doesn’t mean that there isn’t opportunity in their downfall…

Last week, equity markets roared back to life in a shortened trading week. The Dow Jones climbed 3.2% on the week, the S&P 500 climbed 4%, and the Nasdaq Composite climbed 4.6%.

That healthy rise came on the heels of the previous week’s losses, which came on the heels of the previous week’s gains, which came on the heels of the previous week’s losses. Which collectively amounted to a lot of sideways, go-nowhere action for the Dow, the S&P, and the Russell 2000.

But not so for the Nasdaq Composite, which just keeps defying gravity.

The back and forth in equity markets has been about risk-on versus risk-off, which has been about Covid-on versus Covid-off, which forces the fight between stimulus-on versus stimulus-off.

Of course, the Nasdaq Honey Badger don’t care; it keeps eating capital inflows and getting fatter.

To celebrate your financial freedom this Fourthwsq of July I’ve got five dividend paying stocks you can retire on.

You’ll know they’re great recommendations if you read my last two Total Wealth articles.

In the first article of this three-part series I showed you how to look through a few simple, easily found metrics to determine if a company’s dividend is safe, and by how much.

But you won’t have to do any calculations today, I’ll give you the safety-stretch numbers.

In the second article in this series I told you how trillions of dollars of buybacks are going to be converted to dividends in the future. Because the public’s outraged at companies manipulating their stock prices higher to compensate executives while workers’ wages stagnate. Because politicians are going on the warpath over the same issues and how the last tax cut juiced up buybacks by another trillion dollars. And because dividend payments are good for shareholders and the economy.

Here in the third and final installment in the series are five dividend paying stocks you can retire on.