It’s Thursday, August 20th and we got a little something called the U.S. Dollar on our mind…
Yes, last night you were probably dreaming of the face of Jerome Powell as the Fed’s policymaking arm released minutes yesterday stating that COVID-19 will dampen “economic activity.” In addition, Richmond Federal Reserve Bank President Thomas Barkin said that another stimulus was needed. Following this news, the dollar rallied after 5-day downdrift and the yield curve steepened.
And, in a galaxy far far away, Bitcoin listened to this news and marched upward, approaching almost $12k per coin.
In other news, Apple is huge. Under the leadership of Tim Cook, AAPL is the first company to reach a $2T market cap. The company broke the barrier at around 11 am EST on Wednesday. The Cupertino company’s market cap eclipses almost the entire value of the Russell 2000 Small Cap Index. Of all the FAATMAN stocks, Apple is our second favorite behind Alphabet. Both of them are money-printing machines, but if Google can ever figure out how to allocate capital, well, they may take over the world.
Target also had a fantastic Wednesday. The big-box retailer announced that overall sales tripled and many stores saw almost a 10% increase in sales. TGT joined Home Depot, Lowe’s, and Walmart as retailers who blew away analyst expectations.
Nice. Very nice. But, price is growing faster than value, and this brings us back to our value investing principles: find an adequate return.
Of course, the market right now is extremely expensive. With Powell and the Fed keeping interest rates at zero, higher multiples are what’s on the menu…Which is why you are seeing tech stocks like Apple explode…I mean it took Apple 42 years to hit $1 trillion and only 2 years to reach $2 trillion.
And yes, part of this is the coronavirus economy playing into technology’s wheelhouse. Dealing with customers from afar. So, let’s highlight a few of those in today’s picks below.
In other news, Gmail was down briefly, Airbnb filed a confidential IPO, and China and the U.S. agreed to hold trade talks in the coming days.
Futures are still jittery from the Fed meeting yesterday…And this reality check has been echoing across world markets as the CAC, DAX and FTSE 100 all fell in early trading.
Below you can find some of the most notable stocks to watch today.
CannaPharmaRx Inc (CPMD) – Last Close: $2.10
Volume has been thin at times for this Canadian cannabis stock, but CPMD is making a move into the California market. In June, the stock went from the pink sheets to the OTCQB and since then the stock has added more than a $1.00 in value. As with any speculative cannabis stock, do your due diligence and then do it again. But there is no harm in watching this one see if the company can make good on 120,000kgs of warehouse space.
Chegg Inc. (CHGG) – Last Close: $77.62
There is nothing wrong with being the Blockbuster Movies of education. More like the Netflix of education. Chegg is more than just a textbook rental company. They own content and they are growing. The stock is up 14% since June 1st and we are starting to paying attention.
Twilio Inc. (TWLO) – Last Close: $251.00
We said that the market was expensive. TWLO, a cloud provider, is benefiting from tailwinds across industries as digital adoption becomes all the rage. Since March of this year, the company’s revenue has increased 10% and with big customers like Nordstrom, Uber and WhatsApp, we are thinking about paying the high price for admission.
Baozun Inc. (BZUN) – Last Close: $43.96
The “Shopify of China” builds website creation tools for China’s e-commerce stars and rising stars. Plus, BZUN also counts Western companies like Nike and Microsoft as customers because the company’s technology is almost a MUST if you want to be successful in selling goods to consumers across the Chinese Mainland. And, hey, the stock is up almost $10 over the last 6 months.