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Click here to view this email in your browser. Hey Trader,
Today, we have another round of trading news and information from our top analysts here at Traders Agency. And of course, our Trade of the Day. Stocks Falter Then Pop: For most of the day, sellers pushed the markets lower as Treasury yields and oil prices spiked, but some afternoon buying saw markets close back in positive territory for the day. Bonds: The 10-year Treasury yield jumped to new multi-year highs and is now pushing up against the key 3% level ahead of Wednesday’s Federal Reserve meeting. Commodities: Crude oil prices made their way from red to green this afternoon, while precious metals like gold and silver both got hit by about 2%. Digital Currencies: Leading digital currencies BTC & ETH are both marginally in the green this afternoon but are well off of their earlier highs. Data Check: The ISM manufacturing index came in below expectations and fell from 57.1 to 55.4 in April, while construction spending also disappointed.To keep me up on what you’re thinking or what you want to see us cover – you can always email me directly at neilgeorge@tradersagency.com.
Now, on to our Trade of the Day… Leonardo S.p.a. ADR
Yesterday, I wrote about US defense contractor Raytheon Technologies Corporation (RTX), and today I’m bringing back the European contractor that we’ve talked about before, Leonardo S.p.a. ADR (FINMY).
The Ukraine-Russia conflict is reigniting the discussions by legislators and leaders in the nations that make up the European Union (EU) over defense spending. The EU does not have its own army, navy, air force or other dedicated military.
Instead, it relies on the US under both individual treaties and agreements as well as the North Atlantic Treaty Organization (NATO) for defense. And yes, each nation has its own forces, but they are arguably imbalanced on a nation by nation basis.
Even before the current conflict, there have been discussions about forming an EU joint military effort. And this is now getting a lot more attention. In addition, individual nations are now discussing the need to perhaps beef up their own military forces just to be on the safe side of things.
European defense contractors plug into plenty of US technologies and defense products and have access to US government security clearances for the manufacture of plenty of products and services. And recently, with the conflict, a host of the stocks in European defense companies have gotten attention and buying on the expectations that the EU members will now step up their own defense spending.
Leonardo S.p.a. ADRis an Italian-based company, formerly known as Finmeccanica, that is a leading engineering technology company. Its products make planes, helicopters, satellites, drones and pretty much everything on the ground, in the air and space, on the water and under the water work to attack or defend stuff.
It utilizes plenty of US-licensed technologies and sells the vast majority of its products outside of Italy with the US military as its largest geographically-located customer base.
The stock has been gaining recently, but it is still very much a bargain stock. It currently is valued at a discount to its trailing sales on a price-to-sales basis. And it is also valued at a discount to its intrinsic (book) value. This means that while the stock is moving up, it is still super cheap compared to its better known US peers that rely on Leonardo for many of its own products.
With the EU expected to spend more money either on an individual national basis, or on a collective one, Leonardo is set to be a prime beneficiary. And on top of that, the US, Asia and beyond are all expected to spend more and more on their own military operations.
Leonardo S.p.a. ADR Price -- Source: Dow Jones With the current price at $5.01, FINMY is a buy under $5.25 with a near-term target of $6.15 and even more beyond that. And for safety, consider a stop at $3.90.
Now, on to the best of Traders Agency… Will This Key Level Hold on the ES Daily Time Frame?
While markets have been falling, I’ve been looking ahead to see where the next big opportunities may arise.
And today, I just published my latest Weekly Idea via TradingView on the S&P 500 (ES) futures market.
For all of the details, click here! Get Josh's Daily DirectionWatchlist Update: Don’t Fight the Fed
Many of you have likely heard the old Wall Street adage, “Don’t fight the Fed.”
Usually, this phrase is uttered by bullish investors warning their bearish counterparts not to short a rising market being fueled by easy monetary policy.
But at this point, with the Federal Reserve seemingly set to defeat rising inflation by any means necessary, it’s taking on a different meaning.
For me, fighting the Fed right now would mean trying to buy stocks in the face of tightening monetary policy.
Instead of taking on that risk, I am starting to look for more ways to go with the market flow.
With that in mind, let’s get into our newest ideas… Get Stock Surge Daily
Recommended Link: You need to clear your calendar for TOMORROW at NOON! That’s when our resident equities expert and former JPMorgan VP Ross Givens will be sitting down to reveal the shocking results of an intensive research project… One that uncovered what may very well be the last genuine investment loophole. Click Here To Confirm Your Seat For Tomorrow’s Exclusive Event At 12 p.m. ET!
How the Fear of Missing Out Could Be Costing You
I’m sure you’ve heard the phrase, "buy the rumor, sell the news"... If you haven’t, well, it has everything to do with the fear of missing out (FOMO).
When the media report on something that’s happening in the market, the opportunity has already come and gone.
And as those reports start to circulate and a rumor is started, people tend to look into it and try to get in as soon as possible.
But I’ve learned over the years that too many traders rely on the news to find out what's happening in the market.
Ultimately, that’s why they're usually late to the biggest and greatest market movements!
If you’re ready to leave your FOMO behind and get into the next major move before the rest of the market…
How Boeing’s Poor Earnings Set Up a Great Bearish Trade Idea
When The Boeing Company (BA) reported on April 27, the company missed on earnings by $2.50 per share. It also missed revenue expectations by $2.03 billion.
It was a hard hit for Boeing, to say the least.
However, it could be the trigger for a nice shorting setup that could be well worth our while!
As long as price action settles below the channel structure the price action should follow through to test the full channel extension. Get A Better Way To Wealth
Thank you for reading Beyond The Trade! Look for much, much more every day the markets are open.
You’ll get further updates on all that is going on to make your job as a trader all the more profitable and better informed.
I’ll also continue to provide updates on the stock ideas I bring to you in Beyond The Trade.
To provide feedback, suggestions and questions, feel free to email me directly at neilgeorge@tradersagency.com.
Your friends,
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