Weekly Economic Commentary and Portfolio Update 📈
Below is a paraphrase of the full portfolio update and market review article I write weekly. Click here for a full portfolio with more statistics, an economic review, plus a break down of all my trades (which you can see in my Commonstock profile as well).

Market Review

"This week the S&P 500 broke a seven-week losing streak. Last Friday the S&P hit its lowest level since March of 2021, only to rally back a strong 6.6% this week. The NASDAQ did better with a gain of 6.8% while the DOW was at 6.2%.

All eleven sectors of the S&P finished positive with consumer discretionary leading the way with a 9.2% performance to follow its rather disappointing performance last month. The sector still down over 5% for the month of May, largely due to the terrible showing of large retailers being shocked by inflation and supply chain concerns. However, the second half of this past week saw renewed gumption from the retailers with hopes that the worst is behind us. This is evident if the performances of Best Buy ($BBY), Costco ($COST), Target ($TGT), and Walmart ($WMT) with respective gains of 16.7%, 12.2%, 8.3%, and 7.7% for the week.

Mega caps also did some work with Apple ($AAPL), NVIDIA ($NVDA), and Tesla ($TSLA) contributing to the rally with similar gains.

Through this rally, the energy sector continues to show strength and is up to almost 17% gains for the month of May. Crude oil is back to its high prices for the month.
Treasuries continued their gains for the third consecutive week this week, drawing some strength from speculation that the Fed could pause its rate hikes in September.

Portfolio

To date, I have invested $9,100 into the account, the total value of all positions plus any cash on hand is $9,531.06. That’s a total gain of 4.74%. The account is $448.18 for the week which is a 4.93% gain, after briefly being in the negative territory last week.

I love tracking my portfolio against a benchmark like the S&P. The above chart comes from Sharesight which makes portfolio and dividend management a breeze!

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

Dividends

This week we received two dividends. $1.84 from ETRACS levered dividend ETN ($SMHB) and $2.45 from Starbucks ($SBUX).

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.

Dividends received for 2022: $122.84

Portfolio’s Lifetime Dividends: $145.76"
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Pending Home Sales, Retailer Earnings: Daily Contrarian, May 26
Good morning contrarians! Pending home sales are out at 1000. Initial jobless claims at 0830 seeing how it’s Thursday. Also a slew of earnings: $M, $DLTR, $DG, $ULTA in the pre-market. $COST after the close.

Pending home sales would probably need to be really disappointing to move markets. The news that housing growth is slowing is no secret, so you figure a lot of that would have to be mostly priced in at this point.

Costco earnings are worth watching. This is an important bellwether for the U.S. consumer, who apparently can’t get enough of this store. It’s especially important after the disappointing earnings we got from $WMT and $TGT last week (though this week has been better for retailers with $WSM the latest to surprise to the upside yesterday). Costco is like crack cocaine for American consumers so if there are any indications at all that they are slowing their Costco shopping binges it would bode very poorly for the global economy indeed.

The three major U.S. indexes (S&P, Dow, Nasdaq) are quietly positive for the week. All have long losing streaks (eight weeks in a row for the Dow, seven for the S&P and Nasdaq). Is the worst behind us already?

More here:
As we all know, ESG is a total joke and only exists to make certain investors feel better about themselves.
The S&P 500 ESG Index rebalancing once again shows that the criteria don’t make much sense.
Companies on the exclusion list: $TSLA, $BRK.B, $JNJ, $FB, $COST, etc. 😂
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👏🏻 for calling it how you see it. I agree, ESG is a nice theory but it has seemingly devolved into a game of politics. To your point.. taking $TSLA off? What? Lol it’s the leading EV pioneer if that’s not green what is?
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Paul Cerro's avatar
$18.6m follower assets
Power behind Costco’s private label brand, Kirkland Signature
$59 billion+: Total 2021 sales of Kirkland Signature brands, a 13.5% change from last year. Costco’s $COST total revenues for 2021 equaled $192 billion, a year-over-year increase of 18%. Kirkland is the biggest consumer packaged goods brand in the US by sales, larger than Hershey $HSY, Campbell Soup $CPB, or Kellogg $K, per CNN.

31%: Kirkland Signature’s percentage of Costco sales, per RetailWire. Online, Costco carries 125 private label SKUs, which represent 8.1% of total SKUs.

$75 billion: Kirkland Signature’s valuation in 2019, according to UBS, per Insider. According to the Private Label Manufacturing Association, private label sales have grown nearly 40% from 2019 to 2021, so that $75 billion valuation is likely more.

15% to 20%: How much less Kirkland Signature products cost than branded alternatives, according to Jim Sinegal, co-founder and former CEO at Costco. According to an EY survey from October 2021, 58% of respondents are more focused on value than they were pre-pandemic.

89.7%: The percentage of US adults who cited better value as the reason they switched from a national brand to a private label brand. Other reasons include better assortment/selection (52.0%), deal/membership rewards offered with purchase (47.9%), and national brand was not available (41.1%).
Amazing.

This is unfortunately one of those companies that I am fascinated by, and seems like an obvious buy -- but have never gotten around to making it a holding.

May change that soon after seeing this data laid out . 🙏🙏
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Sachiv's avatar
$655.8k follower assets
$TTD short and long term outlook?
$TTD reports tonight, but I’m looking forward to so many more quarters regardless, as long as management maintains integrity and credibility, and then regulatory environment works in its favor or remains neutral to it. (UID2, regional gdpr equivalents etc)
I first bought $TTD in 2018, using a service most are familiar with as part of an owner operator portfolio approach. That was a post-split price range of $3-5 if I remember correctly. We then added in late 2018, before the correction in December, and then only much later added very large positions in the drawbacks of 2020 through April 2021. Due to the volatility I sold out a very large position before the run up in late October 2021(my nerves are definitely not made of steel!), got FOMO for 4-5 weeks, and then let it go.
This week, via an accumulator (option series) I’m buying $TTD at much lower but also risking a multiple compression further if near term outlook isn’t what the “market wants”. But Long term at these prices (sub $35 delivery) i believe that Jeff green and $TTD have built a momentum machine in DSP globally that will do well with an economy that does well. The continued shift to CTV and gaming will continue grow over 5 years l, and the trade desk is positioned well to capture a large chunk of it.
2022 is going to be challenging as people turn away from being indoors and online…I get it. $WMT $COST help ground my portfolio for that trend…but I’m not sure how to time the $TTD bottom so I tried it this way. 🤷🏾‍♂️
Thoughts going into earnings?
I’m NOT a growth investor and I was even digging in to check on some like Teledoc and Shopify, after having fallen so far recently. If I owned either and believed in them I’d sure as hell be adding. I’ve added to something almost daily as prices continue dropping dramatically and will continue to do so with the $5-$50 a day I can swing, chipping away at my entry price on my long-term convictions🧘‍♂️
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Paul Cerro's avatar
$18.6m follower assets
Can deeper gas discounts drive more people to sign up for Walmart+?
The news: Walmart doubled the fuel discount it offers members of its Walmart+ program. Members will receive five to 10 cents off each gallon at both Walmart-run and Murphy USA stations (the discount varies based on state regulations).
  • Members will also receive 10 cents off each gallon at roughly 12,000 ExxonMobil stations.
  • The announcement comes days after AAA reported that the national average for a gallon of regular gas rose four cents over the past week to $4.12, which is a 43% increase year-over-year (YoY).

More on this: The increased gas discount provides Walmart shoppers with another reason to enroll in the $98-per-year Walmart+ program, which already offers free delivery on items, like groceries, purchased in stores, free shipping for online orders, and prescription drugs discounts.
  • Nearly all Walmart customers, 91%, are aware of rising gas prices and nearly half of those shoppers have changed their behaviors because of those increased costs, wrote Chris Cracchiolo, senior vice president and general manager of Walmart+, in a blog post. “We want Walmart+ to help our customers save time and money, not only when they’re shopping with us, but throughout their day. We’re excited to continue to find new ways to deliver for them.”

Growing membership: Boosting membership in Walmart+, which launched in September 2020, is a key priority for the retailer.
  • Walmart has a significant opportunity to do so because of its vast reach. About 90% of the U.S. population lives within 10 miles of a Walmart store, according to the company. And 95% of shoppers had visited a Walmart store two or more times in the past year, according to data based on a Numerator consumer panel reported on by Business Insider.
  • However, only 15% of US households had Walmart+ access in February, a far cry from the 62% of households with an Amazon Prime membership, according to research conducted by Bizrate Insights for Insider Intelligence.
  • Increasing that share can produce significant dividends given that Walmart+ members are more lucrative and more frequent shoppers, Cracchiolo told CNBC. They spend more than twice as much with the company as the typical Walmart shopper, since they shop both online and in stores.

Inflation as an advantage: US inflation rose to 8.5% in March YoY, per the US Labor Department, which is the largest increase since December 1981.
  • Soaring gas prices, which rose 18.3% in March, accounted for a significant share of that gain.
  • Periods of inflation push consumers across all income levels to be increasingly price sensitive, which is an advantage for Walmart given its long-standing positioning as a value-oriented mass merchant, CEO Doug McMillon, during the company’s Q4 earnings call.

The big takeaway: Retention is critical to the success of every retailer’s membership program. That can be challenging. For example, while 18.3% of households had Walmart+ access in December, that share fell 3.2 percentage points two months later after the holiday season.
  • While gas discounts may spur some shoppers to enroll in Walmart+, the retailer needs to ensure that it offers a wide enough array of benefits to keep them enrolled.

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There aren’t many Exxon Mobil gas stations in the Bay Area and Silicon Valley. Because of that, I don’t see a need for people to get Walmart+. However, if the gas discounts included Chevron, Shell, Armco, and Valero, then that’s a major reason for people in the Bay Area/Silicon Valley to get Walmart+.

This is coming from a friend who lives in the Bay.
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