In partnership with

Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,459.10 ( ⬆️ 1.11%)

Nasdaq Composite @ 17,357.88 ( ⬆️ 1.03%)

Bitcoin @ $69,608.90 ( ⬆️ 2.07%)

Hey Scoopers,

Happy Monday! Here’s what we’re covering today

👉 3M crushes estimates

👉 Inflation’s slow descent

👉 The Bitcoin event

So, let’s go 🚀

Market Wrap 📉

Equities climbed higher on Friday, capping off a turbulent week on a positive note as investors weighed fresh U.S. inflation data. The uptick stemmed from a combination of oversold sentiment, a stronger-than-expected GDP report, and the hope of interest rate cuts.

Elsewhere, investors continue to pivot into cyclical sectors and small caps, with the Russell 2000 index rising 1.67%.

Meanwhile, Wall Street assessed June’s personal consumption expenditures price index, which rose 2.5% year over year, in line with estimates.

The positive inflation news lifted investor hopes for more rate cuts in 2024, with traders pricing in cuts in September, November, and December.

Trending Stocks 🔥

WW International - The Weight Watchers parent lost 12.5% after Morgan Stanley downgraded the stock to equal weight from overweight.

Ford - The automaker tumbled 20% last week, reporting its worst weekly performance in more than four years.

Newell Brands - Shares surged by 40% after it reported earnings of $0.36 per share and revenue of $2.03 billion, vs. estimates of $0.15 per share and $2.05 billion, respectively.

3M Stock Surged 23%

Shares of 3M surged 23%, reporting their best day in over 50 years on the back of better-than-expected earnings. The office suppliers maker jumped 23%, marking its biggest one-day gain since 1972.

Friday’s jump comes after 3M reported revenue of $6.26 billion and earnings of $1.93 per share, above estimates of $5.88 billion and $1.68 per share.

In its post-earnings call, 3M attributed its earnings beat to organizational changes and the optimization of supply chains as it moved from a geographic to a business-unit structure.

3M emphasized it will improve spending on research and development to drive innovation and reinvigorate new product development while continuing to invest in growth markets such as electric vehicles, data centers, and semiconductors.

3M increased its free cash flow by $400 million to $1.2 billion sequentially. Comparatively, it paid shareholders $385 million in quarterly dividends, indicating a payout ratio of less than 35%.

Despite the recent uptick, 3M stock has trailed the broader markets by a wide margin, returning 56% in the last decade after accounting for dividend reinvestments.

Inflation Continues to Decelerate

Stubborn inflation in Q1 dashed hopes for aggressive policy easing in the first half of 2024. However, inflation is much below the June 2022 peak, and disinflationary momentum has regathered steam in recent months.

In fact, headline inflation in June rose 3%, below the 3.5% growth seen this March.

Food and energy prices have been in control, and core goods have been a steady source of disinflation. Meanwhile, gains in shelter and auto insurance have remained elevated, prolonging inflation’s journey back to the Fed’s 2% target.

With real-time data across categories pointing to easing price pressures, inflation should continue its slow descent and return to 2% by mid-2025.

In case inflationary pressures ease through the summer, the Fed could cut interest rates twice this year.

Steal our best value stock ideas.

PayPal, Disney, and Nike all dropped 50-80% recently from all-time highs.

Are they undervalued? Can they turn around? What’s next? You don’t have time to track every stock, but should you be forced to miss all the best opportunities?

That’s why we scour hundreds of value stock ideas for you. Whenever we find something interesting, we send it straight to your inbox.

Subscribe free to Value Investor Daily with one click so you never miss out on our research again.

Donald Trump Supports Bitcoin Adoption

Bitcoin prices rose over the weekend after former U.S. President Donald Trump stopped short of promising to establish the digital currency as a strategic reserve during the biggest Bitcoin conference of the year.

Trump, the current Republican presidential nominee, has instead pledged to maintain the current level of bitcoin holdings that the U.S. has amassed from asset seizures tied to criminal activities.

Trump emphatically stated, “If I am elected, it will be the policy of my administration, United States of America, to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future.”

Senator Cynthia Lummis said she intends to introduce a bill to direct the U.S. Treasury to purchase 1 million BTC worth $69 billion over a five-year period.

A bitcoin reserve would grant the digital currency a greater level of legitimacy and fuel the momentum of Wall Street’s growing adoption of the digital asset.

Headlines You Can't Miss!

Philips shares rise 8% after record revenue in Q2

Heineken shares fall 7% after earnings miss

Fast-food chains battle for low-income diners

Generative AI requires a massive amount of power

Bitcoin surges over $69k post flagship 2024 event

Chart of The Day

Last year, the Magnificent Seven stocks outperformed the S&P 500 index by a wide margin. However, these stocks have underperformed previously, making it crucial to have a balanced and diversified portfolio.

In 2022, every single Mag 7 stock trailed the S&P 500, led by Tesla, which fell 65%, while the index declined by 19.4%.

The trend flipped in 2023 as every Mag 7 stock beat the benchmark, led by Nvidia, which more than tripled in market value.

Factors such as recession, wars, and natural disasters impact stock market performance for each country. So, it makes sense to have investment exposure across geographies to diversify your portfolio and lower overall risk.

For instance, the S&P 500 index returned 27% in 2023, while emerging markets gained 9.8%. It means investors with exposure to the emerging markets would have missed out on the stronger performance of U.S. equities.

Meme of the Day

Don’t follow us on social yet? Follow us on Twitter and LinkedIn now.

DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.