Making Sense of the S&P 500

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Midas Letter

The Digital Businesss Channel for Cannabis, Crypto and Technology Stocks.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Future of Wealth Head Trader Lance Ippolito joined Midas Letter to discuss big tech earnings reports that have been released this week and the food shortages that could materialize across North America.

There has been a rotation out of small-cap stocks. The Russell 2000 Index (INDEXRUSSELL:RUT) down 3.2% today. Perhaps not the greatest surprise as the index had six consecutive days of green. Capital has, instead, been flowing into the NASDAQ as top players are reporting better-than-expected earnings.

We all still feel the effects of the Coronavirus pandemic – unemployment rates continue to rise and U.S. gross domestic product (GDP) fell by 4.8% in this quarter alone. The fastest drop-off since the financial crisis of 2008.

So, how did the S&P 500 Index (INDEXSP:.INX) still manage to appreciate more than 2% on Wednesday? The answer is due to the proportion of large companies that dominate the index. The 5 largest firms in the S&P 500 make up roughly 20% of it.

Facebook, Inc. (NASDAQ:FB) climbed 4.8% after the social media company reported better-than-expected quarterly revenue and we still wait until after the bell to hear from market leaders: Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN)

The pair also discuss the future effect on the economy. We are learning beef and poultry plants are being closed down temporarily because of COVID-19 outbreaks. Is beef and chicken going to disappear from store shelves? Are consumers about to face less selection and higher prices?

As we look into the answer to those questions, McDonald’s Corp (NYSE:MCD) CEO suggests we will see plant-based items on future menus. Will we see veganism as a potential investment play? Possibly, seeing as Beyond Meat Inc (NASDAQ:BYND) shares were up more than 40% last week and report quarterly earnings on May 5.

Transcript

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.