| Here's a rundown... Will Tech/AI Continue to Buoy the Markets? The S&P 500 gained +16% in 2025, driven primarily by the 3-year AI/tech stock rally. But as we look back, cracks are starting to show. Only Nvidia and Google out-performed their benchmark indexes last year. Now, as we enter 2026, even the smallest disappointments could start to unravel the upside. January Pre-Announcement Risk? A recent trend shows that companies tend to pre-announce bad news in January, just to set a low bar and reset expectations for the remainder of the year. Mid-Term Presidential Cycle Risk? Historically speaking, mid-term election years have been the worst of any given presidential cycle. The S&P 500 finishes higher in mid-term years only 53% of the time – with an average gain of +4.6% (while the other three years in the presidential cycle have finished higher 78% of the time with an average gain of +11%). Baton Passing Over to the "Suddenly Sexy 3" Memory Stocks? The AI trade is now moving over to big memory stocks, which is why the three top-performing stocks in the S&P 500 last year went to Western Digital (WDC) with a +282% gain, Micron (MU) with a +239% gain and Seagate (STX) with a +219% gain. But even more shocking than those returns is the fact that these stocks still trade at P/E valuations in the low 20s, which is still a discount to the overall market. With the Consumer Electronics show coming to Las Vegas January 6-9, these three could still have a trigger catalyst for even more upside. YOUR ACTION PLAN As any of these themes produce trade candidates, I'll be issuing new recommendations live inside The War Room. If you've been considering joining us inside our live trading community, then I urge you to join me and Ryan Fitzwater this Wednesday at 2 p.m. ET for a LIVE Emergency "Partner Meeting." Learn how you can gain partner-level access to our entire trading ecosystem - every alert, AI tool, research service, and live room - with no subscriptions ever again. Mark your calendar here: Click here to sign up for FREE today. |
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