Today in the stock market, investors shifted their focus away from inflation (which is likely to come down in the next month or two) to a recession, and which companies (stocks) can battle through.
According to David Sharek, the Founder of The School of Hard Stocks,
It seems like we’re already in a recession. It’s like the media/big money want the little guys to sell their stocks now that they’ve dropped 30-50% or more.
Maybe it’s best to wait this through as an economic recovery could be coming in 2023 and the stock market could reach 6 to 9 months in advance.
Overall, S&P500 declined 0.3% to 3,790, while NASDAQ was flat at 11,251.
Tweet of the Day
Smart money is ignoring the pressure to sell. In fact, commercial hedgers are holding a record value of contracts net long. Although not a foolproof metric, this group seems to think the worst of the selling pressure is over, @JasonGoepfert writes. pic.twitter.com/KBw3zMyAhr
— SentimenTrader (@sentimentrader) July 14, 2022
Chart of the Day
Our chart of the day is the ten-year chart of Costco (COST).
COST is the second largest global retailer with 112 million members. The company began operations in 1983 in Seattle, Washington. In 1993 the company merged with Price Club, which pioneered the membership warehouse concept in 1976 (and was a hot stock during its early years). It ended Fiscal 2021 with 817 locations worldwide, including 3/4 in the US and 1/4 Internationally (Canada, Mexico, the United Kingdom, Japan and China).
COST is one of the world’s safest stocks, but its basically a 10% grower with a rich P/E. Analysts give the stock an Estimated Long Term Growth Rate of 13% per year. COST is a core holding in the Conservative Growth Portfolio. With a P/E of 34, I feel like that the Company is fairly valued.
