The fear is gone... The VIX has been crushed... A rare but bullish signal... The summer shocks have settled in... Eyes on Jackson Hole... Why you want to own stocks and more inflation protection...
 Eight in a row...
As I (Corey McLaughlin) wrote late last week, the panic of earlier this month appeared to be on ice. Now, it now seems to be melting into a wimpy puddle. For the eighth straight trading day, the benchmark S&P 500 Index closed higher. It now sits less than 2% from an all-time high set just about a month ago. The CBOE Volatility Index ("VIX") is around 15, below its long-term average... suggesting that market fear has evaporated. Whatever concerns investors had about an impending recession or market crisis a few weeks ago are not having the same effect today. Whether that's "right" or "wrong" is another matter, but for now, the market has recovered from its recent mini panic. "We've seen this huge reversal in stocks, across the board pretty much," Ten Stock Trader editor Greg Diamond said in his free Diamond's Edge video today. The VIX has been 'crushed'... The VIX shows traders' near-term expectations for the S&P 500 by measuring options bets and activity and displaying it with a single number representing the index's "implied volatility." This value is essentially an aggregate of a wide range of S&P 500 Index options, based on bullish or bearish bets – call and put options – expiring in roughly 30 days. The higher the index, the more volatility traders expect. As our Dan Ferris detailed in the August 9 Digest, the VIX spiked above 60 in the pre-market hours of August 5 largely due to a "technical glitch." But while that's not necessarily a meaningful reflection of overall market volatility, by the day's close, the VIX was still at 38... one of its highest readings since 2020. Now, as our Sean Michael Cummings wrote in DailyWealth today, "it's as though that spike never happened." Take a look... 
There's a word for this, Sean said... This type of reversal is known as a "VIX crush" – when a huge spike in the VIX collapses about as quickly as it appeared. This behavior in the VIX is also extremely rare. It fell 28% on August 6. According to Sean, this is the VIX's second-biggest one-day drop since 1990. The lone exception over those 30-plus years: May 10, 2010. Back then, markets were cooling off after a panic about a European debt crisis and a Greek default. This time history rhymed, with the interconnectedness of the global economy a central factor... This time, the culprit was dual concerns about a weakening U.S. economy and the Bank of Japan simultaneously raising interest rates to fight inflation there. This would upend the status quo of the relationship between two major global currencies, the U.S. dollar and the Japanese yen, which could lead to potential knock-on consequences that we won't get into today. Those may still be legitimate concerns, but Mr. Market evidently has a poor memory and/or an optimistic view of the future. The summer shocks could be settling in... The weakening jobs market of the past several months hasn't completely reversed. But the "bad news" of a few weeks ago – like the Sahm Rule/inflation signal triggering as the unemployment rate continues to rise – has gotten "less bad" more recently... Initial jobless claims have moved lower in each of the past two weeks. As we wrote in Thursday's edition, 227,000 Americans filed for initial unemployment benefits in the week ending August 10. That was below the 234,000 first-time filings from the week before and the 250,000 from the week ending July 27. Yet, at the same time, investors also believe that the Federal Reserve can't avoid lowering interest rates to juice the economy for much longer. So they're betting the central bank will start rate cuts at its next policy meeting in September. Election Day is still in November and carries a bunch of uncertainties with it. But Kamala Harris and Donald Trump have been out recently talking up economic proposals that have made their positions more evident, even if they never come to fruition. Whether you agree with their supposed plans or not, they at least provide a framework that investors can use to set expectations for if Harris or Trump wins the White House in a few months. We plan to dive into these subjects more in the week and weeks ahead. For now, though, you could argue the political and economic shocks of the summer are settling in... as much as an assassination attempt on Donald Trump, Joe Biden dropping out of the race for the White House, and a potential recession can drift into the background. A bullish signal... Interestingly and perhaps counterintuitively, after such (rare) falls in the VIX like we just saw, Sean found that the S&P 500 has outperformed its average year that followed. Though it's a very small sample size of four, as Sean wrote in DailyWealth today... I identified any time the VIX fell 25% or more in a single day... all of the other cases pointed to outperformance over the next year... 
... Stocks have returned 8% a year on average since 1990. But you could have done a lot better if you bought on the day of a VIX crush... Historically, these opportunities have returned an average of 17% in a year – more than double the return of a typical buy-and-hold strategy. The S&P 500 is already up 7% since August 5's close. What to watch this week... On Friday morning, Fed Chair Jerome Powell will speak at the annual confab of central bankers in Jackson Hole, Wyoming. Some will fly fish. All will talk about the Fed's supposed 2% inflation goal and nonsense about really caring for the American people. This meeting is notable because it typically marks an event when the Fed chair outlines a long-term stance about the U.S. economy and potential significant changes to policy moving ahead. It has also been a time when the central bank has made significant changes to its operations... like back in August 2020, when the Fed "moved the goalposts" and decided that it was just fine to let inflation run above its 2% goal. As we wrote in the August 27, 2020 edition, the day Powell spoke back then in a virtual conference because of the pandemic... If you read nothing else of this Digest, just know what Fed Chair Jerome Powell essentially told the world today... The Fed will let inflation run higher than normal until the economy gets well back on track. To which we say... Prepare and invest accordingly, if you haven't already. This served as a framework for analyzing the macroeconomic backdrop of the time... and helped encourage a bubbly, wild bull market for the rest of 2020 and much of 2021. Four years ago, the Fed wanted inflation after years of it below 2%... and it sure got what it wished for, though it was the opposite of what folks on Main Street wanted. That was a 40-year-high inflation rate spurred on by the Fed's own near-zero interest-rate policies for far too long, which were compounded by trillions of dollars in government spending. On Friday, I'll listen for any hints that the Fed is "officially" OK with letting inflation again run above that supposed 2% goal, if only for confirmation about what we've already heard "unofficially." Remember, we heard from Powell back in July at a conference in Portugal that he thought the annual inflation rate next summer would be somewhere "between 2% and 2.5%." Why does this matter? Well, if the central bank is again "just fine" with higher inflation than it would have accepted for most of the past 20 years, that means a heck of a lot for long-term issues like the compounding cost of the U.S. debt, more inflation fuel, and the path ahead for the rising costs of goods, services, or commodities. It's also one gigantic reason why – once again – you want to own stocks of high-quality companies and other inflation-protection assets, such as gold, to protect and grow your wealth in a fiat-currency world. | | | | Don't Forget About Time and Price In this week's Diamond's Edge, Ten Stock Trader editor Greg Diamond outlines his "time and price" outlook for the next few weeks... talks about Dow Theory... and explains why he's excited to pounce on trading opportunities he expects to emerge... 
As a Digest reader, you get the first look at Greg's new Diamond's Edge video each Monday. For more free videos, check out our YouTube page... And if you're interested in more research and analysis from Greg, click here for information on how to get started with a subscription to his Ten Stock Trader advisory. | | | | |
| Recommended Links: | |  Man Who Called 18% Market Surge Has Surprising New Prediction... On January 9, he told his readers, "I'm as 'bullish' as ever on stocks in 2024"... and he predicted that the S&P 500 would rise 13% to 18%. And in the first half of the year, it did exactly that. Then stocks were hit by a wave of volatility. With investor anxiety running high, he sat down on camera to explain his new outlook on the market. Fair warning: What he sees coming in the next few weeks may trouble you. Full story here. | |
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New 52-week highs (as of 8/16/24): AbbVie (ABBV), Automatic Data Processing (ADP), Agnico Eagle Mines (AEM), Alamos Gold (AGI), Altius Minerals (ALS.TO), Brown & Brown (BRO), iShares MSCI South Africa Fund (EZA), Fidelity National Financial (FNF), SPDR Gold Shares (GLD), Barrick Gold (GOLD), Intercontinental Exchange (ICE), iShares U.S. Aerospace & Defense Fund (ITA), Kellanova (K), Cheniere Energy (LNG), London Stock Exchange Group (LNSTY), Altria (MO), VanEck Morningstar Wide Moat Fund (MOAT), Newmont (NEM), Northrop Grumman (NOC), NVR (NVR), Novartis (NVS), Sprott Physical Gold Trust (PHYS), PayPal (PYPL), Regeneron Pharmaceuticals (REGN), ResMed (RMD), RenaissanceRe (RNR), Seabridge Gold (SA), Skeena Resources (SKE), Torex Gold Resources (TORXF), ProShares Ultra Gold (UGL), Consumer Staples Select Sector SPDR Fund (XLP), Utilities Select Sector SPDR Fund (XLU), and Health Care Select Sector SPDR Fund (XLV). In today's mailbag, feedback on Dan Ferris' Friday essay about "why value investing is never dead"... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Dan, What a brilliant essay! I agree with you 100%. Many fools have made this mega bubble. The old saying 'The bigger they are, the harder they fall!' seems quite apropos for this bubble. The soft landing (I think) is a myth! Thanks for your guidance on preparation!" – Subscriber Larry N. All the best, Corey McLaughlin
Baltimore, Maryland
August 19, 2024
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. | Investment | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 11/11/10 | 1,371.4% | Retirement Millionaire | Doc | MSFT
Microsoft | 02/10/12 | 1,334.4% | Stansberry's Investment Advisory | Porter | ADP
Automatic Data Processing | 10/09/08 | 956.6% | Extreme Value | Ferris | WRB
W.R. Berkley | 03/16/12 | 795.0% | Stansberry's Investment Advisory | Porter | BRK.B
Berkshire Hathaway | 04/01/09 | 688.1% | Retirement Millionaire | Doc | HSY
Hershey | 12/07/07 | 481.7% | Stansberry's Investment Advisory | Porter | AFG
American Financial | 10/12/12 | 452.1% | Stansberry's Investment Advisory | Porter | TT
Trane Technologies | 04/12/18 | 445.5% | Retirement Millionaire | Doc | NVO
Novo Nordisk | 12/05/19 | 389.0% | Stansberry's Investment Advisory | Gula | TTD
The Trade Desk | 10/17/19 | 383.9% | Stansberry Innovations Report | Engel | 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 | | 5 | Stansberry's Investment Advisory | Porter/Gula | | 3 | Retirement Millionaire | Doc | | 1 | Extreme Value | Ferris | | 1 | Stansberry Innovations Report | Engel |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Investment | Buy Date | Return | Publication | Analyst | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | BTC/USD
Bitcoin | 11/27/18 | 1,466.7% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,107.2% | Crypto Capital | Wade | MATIC/USD
Polygon | 02/25/21 | 727.0% | Crypto Capital | Wade | OPN
OPEN Ticketing Ecosystem | 02/21/23 | 279.3% | 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 | | Microsoft^ | MSFT | 12.74 years | 1,185% | Retirement Millionaire | Doc | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | 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 | | PNC Warrants | PNC-WS | 6.16 years | 706% | True Wealth Systems | Sjuggerud | | Maxar Technologies^ | MAXR | 1.90 years | 691% | Venture Tech. | Lashmet | | Silvergate Capital | SI | 1.95 years | 681% | Amer. Moonshots | Root | ^ 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%.
Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio | Investment | Symbol | Duration | Gain | Publication | Analyst | | Band Protocol | BAND/USD | 0.31 years | 1,169% | Crypto Capital | Wade | | Terra | LUNA/USD | 0.41 years | 1,166% | Crypto Capital | Wade | | Polymesh | POLYX/USD | 3.84 years | 1,157% | Crypto Capital | Wade | | Frontier | FRONT/USD | 0.09 years | 979% | Crypto Capital | Wade | | Binance Coin | BNB/USD | 1.78 years | 963% | Crypto Capital | Wade | | 
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