#39 Weekly Report - Meta Succeeds Where Apple Failed - This Week Picks - MMT Quants So You Don't have To.
🚨 Buffett Indicator flashing after 50 years silence 💥 - Insider Intel: What's happening Apple 📈
Hi fellow investors and welcome back for a Quant-data driven analysis for the week ahead.
Updates:
Meta’s Orion AR glasses prototype
MOAT of Midas Touch Portfolio updated
Insider Activity - Annalists Upgrades, Downgrades, Price Targets
Weekly Picks
ICYMI:
🌟 Unlimited Expansion: META 0.00%↑ Scaling NVDA 0.00%↑
Meta is not just a social media company; it's transforming into a leader in AI and virtual reality (VR). Recent initiatives show a strong commitment to creating immersive digital environments and smarter platforms that anticipate user needs.
💼 Insider Intel: Rotten AAPL 0.00%↑
Recent developments suggest that the company may be facing new challenges that could impact its trajectory. Let's look into what's happening with Apple and what it might mean for you as an investor.
🔮 Recap & Next Week's Forecast
Dive deep into our comprehensive analysis. But that's not all – Quant data-driven predictions for the coming week, including events that could shake things up.
Let's dive in and make some smart moves! 💰🚀
Short Term Update - Newest Additions
Market Movements: Navigating the Shifts
Recent updates reveal notable changes across various sectors:
Roku ( ROKU 0.00%↑ ) is turning up the volume! With a 1.32% price jump and 39 sales, this streaming giant is writing a binge-worthy narrative. Are investors changing the channel, or is this the opening scene of a blockbuster performance?
PacBio ( PACB 0.00%↑ ) is sequencing its way to success. A modest 0.74% price uptick might not turn heads, but 68 buys suggest this DNA dynamo is replicating interest faster than a petri dish culture!
Amazon ( AMZN 0.00%↑ ) is playing hard to get. A 2.32% price dip might have some running for the hills, but don't be fooled! With a 9.6% position change and 7 buys, it seems the smart money is seeing a prime opportunity. Is the e-commerce titan gearing up for a comeback tour?
Early week updates highlight these intriguing movements.
Strategic Shifts in Focus
Mid-week updates reveal ongoing strategic adjustments in key sectors:
Roku ( ROKU 0.00%↑ ) is changing channels faster than your dad with a remote! A 1.32% price uptick might look like smooth streaming, but with 40 sales, it seems investors are cutting the cord. Is this a temporary buffer or a full system reboot?
Vuzix ( VUZI 0.00%↑ ) is facing a virtual reality check with a 7.53% price plunge and 32 sales. Are investors taking off their AR glasses, or is this a chance to see the future at a discount?
Palantir ( PLTR 0.00%↑ ) is playing 4D chess with our expectations. A 0.44% price increase looks promising, but pair that with a 51.75% position plummet and 15 sales, and you've got a data puzzle that'd stump Sherlock. Is big data facing a big dilemma?
Mid-week updates highlight these strategic shifts.
Last week Report:
Market Recap: This Week's Market Waves
The Big Picture: Markets on the Move
The markets have been buzzing with activity, and there's a lot to unpack. Here's how the major indices performed this week:
S&P 500: Closed at 4,300.58, up 0.62% for the week.
Dow Jones Industrial Average: Reached 34,500.75, climbing 0.59%.
Nasdaq Composite: The tech-heavy index surged to 13,500.45, gaining 0.95%.
What's Driving the Markets?
Federal Reserve Signals
The Federal Reserve hinted at a possible pause in rate hikes due to cooling inflation, which has investors optimistic. This potential shift in monetary policy has eased some concerns about the cost of borrowing and could spur further investment in growth sectors.
Economic Data Highlights
Consumer Spending: Increased by 1.2%, reflecting strong consumer confidence and spending power.
Unemployment Rate: Holding steady at 3.8%, indicating a stable labor market.
Global Factors
China's recent economic stimulus measures are influencing global markets, especially in tech and commodities. These policies aim to boost domestic consumption and could have ripple effects on global supply chains.
Sector Spotlight: Tech Takes the Lead
Tech Stocks Soar
Technology stocks have been the stars of the show this week. Companies like Apple (AAPL) and Microsoft (MSFT) have seen significant gains:
Apple ( AAPL 0.00%↑ ): Up 2.5% this week, closing at $175.50.
Microsoft ( MSFT 0.00%↑ ): Increased by 3.1%, ending at $310.20.
What's Fueling Tech Growth?
AI Developments: Advances in artificial intelligence are driving investor interest. Companies are investing heavily in AI research, leading to breakthroughs that could revolutionize various industries.
Earnings Beats: Many tech companies are reporting earnings that surpass expectations, signaling robust business models and effective management strategies.
Energy Sector: Oil and Gas on the Rise
Oil Prices Climb
The energy sector is heating up as oil prices rise due to supply constraints and geopolitical tensions:
Crude Oil: Prices have increased by 4%, now at $80 per barrel.
Exxon Mobil ( XOM 0.00%↑ ): Stock price up 2.8%, closing at $65.40.
What’s Behind the Surge?
Supply Constraints: OPEC+ nations have signaled potential production cuts.
Geopolitical Factors: Tensions in key oil-producing regions are causing supply concerns.
Renewable Energy Gains
Renewable energy companies are also seeing growth, benefiting from global sustainability efforts:
NextEra Energy ( NEE 0.00%↑ ): Rose by 3.5%, ending at $85.60.
Driving Factors
Government Initiatives: Increased subsidies and favorable policies for clean energy.
Corporate Sustainability Goals: Businesses are investing in renewables to meet ESG criteria.
Buffett Indicator Flashing After 50 Years of Silence For the second time in less than 5 years!
The Buffett Indicator, represented by the blue line in the chart, has reached alarming levels not seen in decades, signaling potential overvaluation in the stock market. This market valuation metric, which compares the total stock market capitalization to GDP, has surged to unprecedented heights.
Historic Highs in Recent Years
What's particularly striking is that this is the second time in less than 5 years that the indicator has climbed to such extreme levels. The blue line has surged well above the 130% mark, which is traditionally considered the threshold for an overvalued market. Currently, it stands at approximately 170%, a level that has only been breached once before in recent history.
The indicator has only surpassed its current levels once before, reaching a peak of around 180% in the early 2020s.
After the 2008 crisis, the indicator dropped sharply to 78% in 2008, demonstrating its sensitivity to major market corrections.
Key Metrics and Implications
Current Level: The Buffett Indicator is currently at about 170% of GDP.
Historical Context: This level is significantly higher than the long-term average and previous peaks.
Recent Peak: The indicator reached its highest point of approximately 180% in early 2022.
Rapid Recovery: After a brief dip in 2022, the indicator has quickly rebounded to near-record levels.
Comparison to GDP Growth: The stock market's total value is growing at a much faster rate than the overall economy.
Current Buffett Indicator vs. 2008 Pre-Crisis Levels
Current Level:
The Buffett Indicator is currently at approximately 170% of GDP, as shown by the blue line in the chart reaching near its highest point in recent years.
2008 Pre-Crisis Level:
According to the dataset provided, the Buffett Indicator was at 138% in 2007, just before the 2008 financial crisis.
Comparison:
The current level (170%) is significantly higher than the pre-2008 crisis level (138%).
This represents an increase of about 23% from the 2007 peak to the current level.
The current reading is closer to the 200% threshold that Warren Buffett himself described as "playing with fire" for investors.
Market Implications
The fact that the Buffett Indicator is now substantially higher than it was before the 2008 crisis suggests that:
The stock market may be more overvalued relative to the broader economy than it was in 2007.
There could be an increased risk of a market correction or downturn.
Investors might need to exercise more caution in their investment strategies, given the historically high valuation levels.
Other Relevant Indicators
P/E Ratio: The S&P 500's P/E ratio is also elevated at 27.30 as of September 2024, compared to historical averages.
CAPE Ratio: Shiller's Cyclically Adjusted P/E Ratio remains at high levels, further supporting the overvaluation thesis.