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“No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation.”    Robert Rhea

Market Commentary:

Stunningly positive improvement in market breath.

• Which are the sectors with the greatest number of new highs? It is now banks, finance, medical, and insurance- after being market laggards all year.
• The number of 52- week lows expanded beyond the “safe” level last week, only to almost disappear one week later.
• Goldilocks has made an appearance on Wall Street! As of today, the economy is growing, but not too fast. Consumers are spending, but not too much. Remember that Goldilocks tends not to spend too much on Wall Street.
• The recession watch will once again take center stage as inflation data shows cooling- perhaps too much. Deflation is scarier than inflation for governments.
• Interest rates have been gradually coming down on longer term bonds and the “5% safe haven” has already evaporated.
• We are seeing an increasing number of buyouts, especially in the biotech space. I have one that I am looking forward to hearing about.
• It is summer- read a great investment book! Below is a short video where I highlight ten of my favorites.

Economic data and market clues:

A lot of economic data will be released, but not the big market moving clues. Look for more evidence that inflation has peaked and is coming down.

Earnings will dominate the market moves as we move into full earnings seasons. My favorite market analysis of the year goes to Louie Navellier who likes to say, “it is every stock for itself’”. It is more granular than what sector is hot for portfolio managers. A company’s future guidance is far more important than what bottom line number released. To be polite, the numbers are often “engineered.”

Selected current holdings:

Magnet®:

PennyMac Financial    PFSI

Generac                     GNRC

Medpace Holdings       MEDP

FACTS:

Allstate                        ALL

Ameriprise Financial     AMP

Leidos Holdings            LDOS

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