No recession in sight … where Luke is bullish … what history tells us about investing in new technologies … Bitcoin loses one support level, holds another
The U.S. economy is not on the brink of a recession, as feared. Rather, it appears to be in the early innings of a recovery.
The Fed will continue to support this recovery with rate cuts over the next few months. And that will set the stage for stocks to have a great holiday season.
So wrote our tech expert Luke Lango in his Early Stage Investor Daily Notes in the wake of last Friday’s blowout jobs report.
In making his point, Luke highlighted a handful of details. Here are a few excerpts:
The U.S. economy added 254,000 jobs last month, much higher than expectations and the biggest monthly job growth number since March…
July and August job growth numbers were revised higher by a very meaningful 74,000 jobs…
Private payrolls increased by 223,000, far higher than expectations and the biggest monthly job growth number since March, showing that this jobs recovery is not being driven just by government hiring…
The unemployment rate fell from 4.2% to 4.1%, marking its second consecutive monthly drop…
Average hourly earnings rose 4% year-over-year, better than expected and up from the previous month’s 3.9% gain. Real-time estimates for inflation in September are running around 2.2%. That means wage growth outpaced inflation yet again last month for the 16th straight month…
It’s hard to look at these numbers and not agree with Luke’s bottom line and takeaway: the September jobs report was strong from head-to-toe… it bodes well for our economy, corporate earnings, and stock market… it’s time to put some money to work.
Luke has been doing exactly this, making new “buy” recommendations over the last handful of days.
This has us paying attention. After all, Luke’s subscribers have been cashing in on his prior recommendations over the last few months.
For example, since August, Early Stage Investors subscribers have locked in:
- 270% gains on AST SpaceMobile (ASTS)
- 50% gains on Life Time Holdings (LTH)
- 50% gains on ON Holding (ONON)
- 120% gains on Palantir (PLTR)
- 110% gains on Rocket Lab (RKLB)
A big “congrats” to Luke’s subscribers. But they’re not coasting on these returns.
Here on October, Luke has made six new recommendations, and there’s one main area in his crosshairs. Let’s jump to his trade alert from yesterday:
[We’re seeing] some intriguing buying opportunities, especially in the autonomous vehicle (AV) sector. With Tesla’s upcoming Robotaxi event this Thursday, we’re seeing potential for a major shift in the AV landscape…
We think that could prove to be a watershed moment for the autonomous vehicle (AV) revolution. This event could tip the revolution from niche disruption to mainstream transformation. We would be buyers of AV stocks ahead of that watershed moment.
What Tesla’s “We, Robot” event means for the AV/EV sector
As we’ve been tracking here in the Digest, this Thursday, Tesla is holding its “We, Robot” event. It’s expected that the company will reveal its first dedicated robotaxi, tentatively called the “Cybercab.”
We believe this is going to revolutionize the auto industry and beyond. The economic/investment daisy chain is vast and loaded with opportunities.
Now, the obvious investment choices are straightforward. Here’s Luke:
The obvious picks in this space are Alphabet and Tesla.
The former owns Waymo. The latter is about to roll out Robotaxi. If Waymo and Robotaxi scale and take over the global ride-hailing industry – estimated to be an $11 trillion market by 2030 – GOOGL and TSLA stock will be big winners.
But a study of history reveals that the best way to play a revolutionary technology isn’t always the most obvious choice, meaning the company bringing the final product to market. Often, it’s the suppliers that outperform.
Luke stressed this point using Apple. Since launching the iPhone in 2007, Apple has grown more than 6,000%. Meanwhile, Broadcom, which has become an important Apple supplier, has exploded more than 16,000% over the same period.
Investors saw the same dynamics with Nvidia supplying chips to Tesla, and with Intel supplying IBM. In both cases, the stock return of the supplier vastly outperformed that of the company behind the headline innovation.
Luke believes we’re about to see this pattern repeat, which is why he held a time-sensitive event yesterday ahead of Tesla’s “We, Robot” presentation later this week. In it, Luke discussed certain suppliers he believes have multi-bagger potential as AV/EV technology reshapes our world. You can catch a free replay by clicking here.
Here’s Luke’s summation:
Our work strongly suggests that self-driving cars are here. They are spreading rapidly. And they’ll likely become a global ubiquity, possibly entirely replacing human-driven cars, trucks, and buses at some point.
Of course, the arrival of the Age of Autonomous Vehicles also means the arrival of huge opportunities in AV stocks.
The global transportation services market is estimated at over $7 trillion. And autonomous vehicles will likely change everything about everything inside that industry.
To help prepare for this shift, in yesterday’s event, I unveiled a playbook of what I believe are some of the best AV tech supplier stocks to buy right now.
I could be biased, but I think this is the “must-watch” event in October – and one that could highlight the next batch of potential superstar tech stocks.
Again, you can watch Luke’s briefing for free and learn more about his playbook right here.
Meanwhile, circling back to last Friday’s labor report, Luke believes the strong data won’t juice only the stock market
He also sees it being a tailwind to Bitcoin and the crypto sector. Importantly, the economic strength won’t change the Fed’s planned course with interest rate cuts, which has been a concern for some on Wall Street.
Here’s Luke from this weekend’s Crypto Investor Network update:
The Fed knows that economic recoveries can be fragile. They don’t want to jeopardize that. They want to support the recovery. And they will do so as long as inflation remains low – which, as of right now, it does. Real-time inflation estimates for September and October are running between 2% and 2.5%.
So… the U.S. economy is not on the brink of a recession… but rather, in the early innings of the recovery… and the inflation picture remains soft enough to allow the Fed to continue to support that recovery with rate cuts… which this recovery will strengthen and broaden in the coming months… likely leading to further crypto market strength.
Zeroing in on Bitcoin’s recent price action, the last few days brought an important display of strength.
Two weeks ago, Bitcoin surged past $66,000, breaking north of its multi-month down-sloping trendline. While we were encouraged, we knew the grandaddy crypto would have to test those gains and those technical levels.
Specifically, we were watching $64,000 as it correlated to Bitcoin’s bearish trendline. We wanted to see Bitcoin retreat to $64,000 then hold that level, turning it from resistance into support, from which it would begin a new leg higher.
Unfortunately, that didn’t happen. Last week, Bitcoin fell from $66,000 then crashed through $64,000, falling all the way to roughly $60,500. However, it found support at its 100-day moving average (MA), and this was a welcomed sign of strength.
As you can see below, the 100-day MA was resistance for Bitcoin in August, but it just served as support. Though we would have preferred this happen at $64,000, we’re pleased to see it nonetheless.
After highlighting this bounce, Luke shifted his technical analysis to Bitcoin’s Moving Average Convergence/Divergence (MACD) Indicator
This reflects an asset’s momentum, helping identify wise entry/exit timing. From Luke:
Bitcoin has put up enough of a fight around the $50,000 to $70,000 range over the past several months that it is very close to triggering a bullish weekly MACD crossover above the zero line.
This sort of bullish weekly MACD crossover above the zero line is rare. It has only happened two times before in the past five years.
Once was in August 2021. The other time was in October 2023. Both times, BTC rallied strongly over the next few weeks and months.
We therefore think that if BTC can continue to push higher and fully trigger a bullish MACD crossover above the zero-line, cryptos will be in a position to soar into the end of the year.
We continue to believe that Bitcoin and select top-tier altcoins are a critical part of a diversified portfolio that will protect your wealth. Whether or not this is the Bitcoin breakout that we’ve been awaiting since the spring, we remain bullish on crypto.
We’ll keep you updated here, as well as on Tesla’s “We, Robot” event.
Have a good evening,
Jeff Remsburg
