Unachievable disappointment... Um, oil prices are up 20% in a month... Gas prices hit an eight-month high... The Bank of Japan shocks the market... A major U.S. trucker goes bankrupt... $700 million wasted... $200 billion lost...
 First up, the 'low bar' for earnings has been cleared thus far...
I (Corey McLaughlin) wrote to you at the start of this month that Wall Street analysts had set a low bar for success for companies in the S&P 500 Index this quarterly earnings season. They had projected close to a 7% year-over-year decline in corporate earnings... If that actually played out, it would be the worst drop since the second quarter of 2020 when the world shut down. In other words, the estimates made for probably unachievable disappointment... and set the stage for an upside in the market more than anything. This earnings season is nearly finished. And so far, that's precisely what we've seen. As of Friday, a little more than half of the companies in the S&P 500 have reported second-quarter financials, and 80% of them have beaten earnings-per-share estimates by an average of 6%. That's just below the 10-year average for S&P 500 quarterly beats, according to research service FactSet. In other words, the majority of companies that have reported their financials have beaten expectations, but by a smaller margin than typical. You could say that's because of decent performances by the companies or above-average predictions by the analysts... That's the silly cat-and-mouse game of earnings estimates. But if you look just a touch deeper... You'll find actual revenue growth for America's largest businesses is mixed. Seven sectors, including consumer discretionary and financial stocks, have reported annual growth. But the rest are down, including the energy sector (we'll have more on the key asset for those businesses momentarily). In total, 0.1% is the actual growth rate for the S&P 500 companies for the second quarter, according to FactSet. But that's actually above the Wall Street estimate of a 0.3% earnings decline one month ago. So, again, we have low growth that's beating expectations... This week, 170 more S&P 500 companies will report their numbers. That'll make for more than 80% of all the companies in the U.S. benchmark index having disclosed their financials when the week is out. We'll keep an eye on whether the earnings-season story changes, but as of now, the takeaway is "low bar has been cleared" and most U.S. stocks are no worse for the wear. In the meantime, though, something bigger is brewing... All of a sudden, oil prices are up 20% in a month... This development could upend the earnings in the current quarter and into the future... We've written in the past few weeks that commodity prices have been generally rising... And I wrote less than a week ago that oil prices were higher by more than 10% since June 28. Well, prices have continued to move higher – and fast. As of today, a barrel of Brent crude oil – the international benchmark – is now up 18% in little more than a month to about $85 per barrel, and the cost of West Texas Intermediate is up 20% to more than $81 in the same period. We've seen and heard a few ideas about why this is... There are rumors out in the market that Saudi Arabia plans to extend its oil-supply cuts by at least another month through September... Also, the prospect of the U.S. and global economy avoiding an "official" recession is becoming more popular, leading futures traders to drive up prices as they bet on increased demand. In any case, oil prices rising 20% in a month certainly continues to muddy the idea that inflation is on a path straight down to hell. So long as the cost of oil continues to move higher, the global economy will likely continue to face higher prices on everything. For example, the average price of a gallon of regular gasoline in the U.S. hit an eight-month high in the past week, at $3.75. So, keep an eye on oil prices... Consumers like you and I could be facing higher costs than expected... and the central banks of the world may find continued reasons to "fight" high inflation (that they helped create, of course) by making their currencies more "expensive." About those government banks... We reported on the Federal Reserve's latest rate-hike decision last week... and Fed Chair Jerome Powell's messaging, which sounded less "hawkish" than we've heard over the past year and didn't upend the recent rally in stocks. Late last week, the Bank of Japan also made some news. It kept its short-term interest-rate target below zero but adjusted a policy that had essentially capped yields. The yen tanked on the news Friday, as it came as a surprise to traders and investors. But over the longer run, the move could strengthen the yen, including relative to the dollar. For our purposes, a relatively weaker dollar – compared with other major global currencies like the yen – could be good for U.S. stocks. On Thursday, the Bank of England ("BOE") will be next to announce its latest policy. Central bankers across the pond will likely choose between a 25-basis-point or 50-basis-point rate hike, as their inflation metrics appear to have peaked but are still high. As our Stansberry NewsWire editor Kevin Sanford wrote in his morning briefing today... Inflation remained at 7.9% in June – notably, the highest among major economies, and well above the BOE's 2% target. The BOE has faced recent criticism from investors for being perceived as behind the curve, as inflation has continued to climb higher than expected despite 13 consecutive rate increases since December 2021. This has raised concerns about the potential for a recession. Meanwhile, in bankruptcy news... We often warn about the next credit crisis ahead... and in particular the "zombie" companies that can't even afford to pay interest on their debts that are most at risk in a higher-interest-rate environment. Over the weekend, we saw a prime example of a zombie biting the dust... U.S. trucking company Yellow – which had counted retailers like Walmart and Home Depot as customers – has ceased operations and is filing for bankruptcy "after failing to reorganize and refinance over a billion dollars in debt," according to the Teamsters Union, which had been negotiating on behalf of 22,000 workers with the company. The company told employees in a memo Friday that it was "shutting down regular operations." Teamsters President Sean O'Brien said in a statement... Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. What the Teamsters official is referring to there is that the U.S. government took a 30% stake in Yellow in 2020, as part of a $700 million pandemic relief loan provided by the federal government. At last check, Yellow had $1.3 billion of debt due to be paid by 2024... So count those tax dollars, um, not-well-spent. What a waste... Yellow – a 99-year-old company based in Nashville, Tennessee – claims the Teamsters blocked the company's reorganization and modernization plans. In any case, the bankruptcy is unlikely to be the last we hear of this kind of story, either... for simple mismanagement reasons – or outright fraud and government mismanagement. In a report last month, an independent agency in the Treasury Department charged with investigating pandemic recovery funds said it was seeing an "alarming rate of defaults by borrowers who are failing to pay even the interest payments on the loans." According to the New York Times (which, yes, we admittedly don't quote often)... The office warned that the number of defaults on pandemic loans could increase over the next two years as payments come due. And last month, the U.S. Small Business Administration, which disbursed about $1.2 trillion in pandemic loans, said in a report that more than $200 billion – $200 billion! – of the money was disbursed to "potentially fraudulent actors." What a way to waste money... Give loans to a trucking company that goes out of business in three years, plus even more to purposely bad actors. Lastly, a housekeeping note... I am going to take a break from our regular Digest fare for the next few days and turn this space over to Stansberry Research partner Dr. David "Doc" Eifrig. Doc will share a special series on a highly successful investing approach that he has used for 30 years, yet which many folks in the market remain uneducated about. This is the kind of thing we've come to love learning about from Doc... As we've mentioned recently, he took the stage with Chaikin Analytics founder Marc Chaikin for a fascinating discussion about artificial intelligence and how individual investors can use it to their advantage. In a series of essays here, Doc will talk about something completely different – a trading strategy that he learned three decades ago while working as a trader at Goldman Sachs. Doc's method can both reduce risk and boost returns consistently. It's a simple approach, yet powerful. It also features a dirty word that scares a lot of investors but doesn't have to. Stay tuned. New 52-week highs (as of 7/28/23): Apple (AAPL), Analog Devices (ADI), Applied Materials (AMAT), Booz Allen Hamilton (BAH), Berkshire Hathaway (BRK-B), Cameco (CCJ), Covenant Logistics (CVLG), Commvault Systems (CVLT), Dice Therapeutics (DICE), DraftKings (DKNG), EHang (EH), iShares MSCI Mexico Fund (EWW), Expeditors International of Washington (EXPD), Comfort Systems USA (FIX), Fortive (FTV), Alphabet (GOOGL), Intuit (INTU), iShares U.S. Home Construction Fund (ITB), Meta Platforms (META), Madison Square Garden Sports (MSGS), New York Community Bancorp (NYCB), Invesco S&P 500 BuyWrite Fund (PBP), PulteGroup (PHM), Ryder System (R), SPDR Portfolio S&P 500 Value Fund (SPYV), ProShares Ultra S&P 500 Fund (SSO), Constellation Brands (STZ), Vanguard 500 Index Fund (VOO), and Walmart (WMT). In today's mailbag, feedback on Dan Ferris' latest Friday essay... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Dan, What a great e-mail!... I can't think of more aptly named shares than AMC's 'APE' shares. My mother always told me to not stand in front of a moving train. How can these people not see this!?!" – Subscriber Steve T. "I must admit that I am guilty of supporting AMC theaters. My wife and I went to see a movie at one of their theaters. The seats are comfortable, the place is clean. It must be because there was almost no one there! I see why they're going broke." – Subscriber Gary A. "Dan, stop being so wishy-washy and tell us what you really think! (With you all the way. Great presentation at the Rule Symposium.)" – Stansberry Alliance member Robert H. All the best, Corey McLaughlin
Baltimore, Maryland
July 31, 2023
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios | Stock | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 11/11/10 | 1,230.4% | Retirement Millionaire | Doc | MSFT
Microsoft | 02/10/12 | 1,062.1% | Stansberry's Investment Advisory | Porter | ADP
Automatic Data | 10/09/08 | 894.6% | Extreme Value | Ferris | wstETH
Wrapped Staked Ethereum | 02/21/20 | 703.9% | Stansberry Innovations Report | Wade | HSY
Hershey | 12/07/07 | 569.6% | Stansberry's Investment Advisory | Porter | WRB
W.R. Berkley | 03/16/12 | 551.0% | Stansberry's Investment Advisory | Porter | BRK.B
Berkshire Hathaway | 04/01/09 | 520.2% | Retirement Millionaire | Doc | AFG
American Financial | 10/12/12 | 415.5% | Stansberry's Investment Advisory | Porter | TTD
The Trade Desk | 10/17/19 | 356.6% | Stansberry Innovations Report | Engel | FSMEX
Fidelity Sel Med | 09/03/08 | 319.4% | Retirement Millionaire | Doc | Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals | | 4 | Stansberry's Investment Advisory | Porter | | 3 | Retirement Millionaire | Doc | | 2 | Stansberry Innovations Report | Engel/Wade | | 1 | Extreme Value | Ferris |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Stock | Buy Date | Return | Publication | Analyst | wstETH
Wrapped Staked Ethereum | 12/07/18 | 1,602.5% | Crypto Capital | Wade | ONE-USD
Harmony | 12/16/19 | 1,071.8% | Crypto Capital | Wade | POLY/USD
Polymath | 05/19/20 | 1,032.4% | Crypto Capital | Wade | MATIC/USD
Polygon | 02/25/21 | 811.7% | Crypto Capital | Wade | BTC/USD
Bitcoin | 11/27/18 | 680.9% | Crypto Capital | Wade | Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio.
Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios | Investment | Symbol | Duration | Gain | Publication | Analyst | | Nvidia^* | NVDA | 5.96 years | 1,466% | Venture Tech. | Lashmet | | Band Protocol crypto | | 0.32 years | 1,169% | Crypto Capital | Wade | | Terra crypto | | 0.41 years | 1,164% | Crypto Capital | Wade | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | Frontier crypto | | 0.08 years | 978% | Crypto Capital | Wade | | Binance Coin crypto | | 1.78 years | 963% | Crypto Capital | Wade | | Nvidia^* | NVDA | 4.12 years | 777% | Venture Tech. | Lashmet | | Intellia Therapeutics | NTLA | 1.95 years | 775% | Amer. Moonshots | Root | | Rite Aid 8.5% bond | | 4.97 years | 773% | True Income | Williams | ^ These gains occurred with a partial position in the respective stocks.
* The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. | 
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