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: $145.76"
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$DG and $WMT
It has been a wild ride since the start of the pandemic.

I'll publish a complete update on $DG on Tuesday morning (Monday is a holiday in the U.S.), but one quick thought: I'm pretty surprised to see them reiterate the FY22 EPS guide (I think the market is as well, which is why shares are up 10%+ premarket). We saw significant P&L pressure on both GM's and SG&A this Q (with EBIT -18% YoY), which leaves a lot of work over the remainder of the year to get to DD EPS growth (53rd week helps).

On the other hand, $DG looks well positioned IMO to navigate through this period (relative to retail peers; I'll need to update $WMT, $DLTR, and $FIVE as well). As shown above, they lagged by a wide margin throughout FY21, largely due to business mix. Based on commentary from Walmart and Target, I think we'll see some of that reverse going forward. (A lot of the general merchandise categories that $DG has a small / no presence in are rolling over.)

As always, it's important to keep short-term results in the proper context (assuming you're a long-term investor, as I am). The underlying TSR algorithm for $DG remains in tact, and pOpshelf, Mexico, etc., are important additions to the thesis (optionality). FWIW, the equity traded at ~17x forward in advance of the Q1 results.

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Looking forward to it, I had noticed that Dollar General rocketed this morning, more so than the broader market.

Anything in particular during the call you felt that catalysed that? Not that it ultimately matters, but.
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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:
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$9.7m follower assets
📈 Weekly Optimum Mix Balance Update and List of Trades
Investments go up and investments go down but stocks have averaged a return of over 9% per year for 10 year periods so always plan on investing in stocks for at least another 10 years--better yet: forever! While fluctuating over time, $10,000 invested in the Optimum Mix on 3/11/2009 would have grown to $3,142,597 on 10/29/2021 (see image).

The FREE Leveraged Momentum newsletter is sent less than once week and provides all the details needed to get started and maintain over time including specific, quick, and easy trades. Invest just 10 minutes less than once per week reading the short newsletter and placing simple trades to align part of a portfolio with the updated Optimum Mix and accelerate your progress toward financial freedom. The next regular Leveraged Momentum newsletter/trading day is June 2. Click here for link to worksheet listing actual trades placed since January 1, 2021, using the Optimum Mix. Every day is a good day to pursue your goals and dreams but the time required can be minimized to allow you to live an abundant life! Any questions or feedback? $UPRO $TQQQ $FNGU $WMT $TSLA $MA $ADBE
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$JWN Nordstrom Crushes Expectations
Yesterday, Nordstrom $JWN quietly beat expectations and raised its full-year guidance sending the stock up 9% after the report. This came as a surprise to many investors following the awful reports from Target $TGT and Walmart $WMT. Let's dig in and see if the financials could’ve helped us see this move coming.

$JWN has been cut in half from its previous 52wk highs but is holding up surprisingly better than other retailers like $ANF, $GPS, and $URBN. Maybe some investors saw this move coming.

Heading into earnings, $JWN Nordstrom had the highest revenue growth and the third-highest valuation multiple. Perhaps, investors could’ve argued the stock was undervalued leading up to its report.

Unlike the other retailers on this list, Nordstrom $JWN has seen its margins rise in recent quarters. This focus on profitability could’ve been an early sign of an earnings beat.

Lastly, we can’t forget about the new metric we just added, free cash flow! When looking at the smaller retailers, Nordstrom $JWN delivered the second-highest amount of free cash flow per dollar of market cap. Although it is easy to look at the data in hindsight, trends can be a helpful part of the research process.
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Pete Nikolai's avatar
$9.7m follower assets
📈 Leveraged Momentum Trading Update for Optimum Mix
Momentum has weakened for $TSLA and $WMT relative to $MA and $ADBE so I placed the appropriate orders. Any questions or feedback?
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Pete Nikolai's avatar
$9.7m follower assets
📈 Optimum Mix target allocations--weekly update
Momentum continued to be relatively strong for $WMT, $TSLA, and $MA as of May 16, 2022, but was relatively weak for $AAPL, $TQQQ, $UPRO, and $FNGU so the Optimum Mix target allocations changed to the following based on a $10,000 total balance:
cash: $10,000 x 50% = $5,000
$WMT: $10,000 x 25% = $2,500
$TSLA: $10,000 x 12.5% = $1,250
$MA: $10,000 x 12.5% = $1,250
The 3-year total return for the Optimum Mix was 518.59% as of that date.

The next Leveraged Momentum newsletter/trading is tomorrow so visit website today to subscribe to the FREE newsletter. Click image to see larger image of complete list of strategies with their 3-year total return rates. Any questions or feedback?
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This Week's YouTube market update
Take a look at Left Brain's weekly market recap from over the weekend! We cover the profound weakness in retail stocks (both discretionary and staples), along with opportunities we are beginning to see in the bond market and some signs of bottoming in hypergrowth.


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