Hey Wealth Builders!
We had a relatively flat week in the markets with nothing too exciting in the news.
Technical Analysis 📈
SPY
We are still in a declining market and trading between the downward trending channel.
QQQ
Notice the similar pattern of high-growth, tech stocks (that often don't pay a dividend) being sold off the fastest.
DIA
This is in comparison to more steady stocks that are a part of the DOW30 (and most likely pays a dividend), where these companies have have much more institutional conviction. Remember, institutions have more of a reason to keep dividend-paying DOW30 stocks since they have dividend payouts, no matter the market conditions, and have a long history of perseverance through economic hardships.
AMD
As we expected, AMD fell even lower this week and revisited the $71 level, which has been a strong area of support over the past few years. If nothing negative surfaces in the news this upcoming week, I expect a small bounce back up.
AAPL
I'm keeping a close eye on AAPL in the next coming days to see if there are any breakouts. There seems to be some sort of bull flag formation going on. If not, I expect the stock to revisit the $130 levels. If there is a breakout, I expect the entire S&P500 index to move up as well since AAPL is the main leader in the market.
Earnings 📰
NKE
Fourth Quarter Income Statement Review
Fourth quarter reported revenues were $12.2 billion, down 1 percent compared to prior year.
NIKE Direct reported revenues for the fourth quarter were $4.8 billion, up 7 percent compared to prior year.
Wholesale reported revenues for the fourth quarter were $6.8 billion, down 7 percent compared to prior year.
Revenues for NIKE, Inc. decreased 1 percent to $12.2 billion compared to the prior year.
Revenues for the NIKE Brand were $11.7 billion, down 1 percent on a reported basis.
Revenues for Converse were $593 million, down 1 percent.
Fiscal 2022 Income Statement Review
Revenues for NIKE, Inc. increased 5 percent to $46.7 billion.
Revenues for the NIKE Brand were $44.4 billion, up 5 percent on a reported basis. This was driven by double-digit growth in NIKE Direct.
NIKE Direct revenues were $18.7 billion, up 14 percent on a reported basis. This was led by NIKE Brand digital growth of 18 percent and NIKE-owned stores were up 10 percent.
Revenues for Converse were $2.3 billion, up 6 percent on a reported basis. This was led by double-digit growth in their direct to consumer business.
Nike’s board authorized a four-year, $18 billion buyback program, which will replace Nike’s current $15 billion share-repurchase program that ends in fiscal year 2023.
Though Nike has increased in sales in an annual lens and is issuing share buybacks, I am still going to rate this stock as a hold for now as we get through the market sell-off.
Ask Steve 💭
Let's see what some of our members asked this week. Here are the top questions we received:
Q1: Where can I find financial reports and company earnings?
A1: The most reliable source is to find it on the company's investor relations page. To find this, you can search, for example, "Apple Investor Relations," on Google. The company's investor relations page will most likely be one of the first links in the search.
Q2: How can I check a company's dividend?
A2: You can find dividend payouts here.
You should also be able to find it within your brokerage app when searching for the specific company.
Q3: I bought some SPY back in March, but should have waited like you said. Should I sell them right now?
A3: It's up to you on what you do with your portfolio. However, I wouldn't recommend selling the shares since your intention was most likely to hold onto your shares for the long-term. Be patient and let the markets start to retrace above your previous buy price before deciding if you want to purchase any more. As a beginner, this will ease your stomach as you will be buying more assets when you see your portfolio in the green.
📌Submit Your Questions 🙋♂️🙋♀️
Have any other questions? Before asking me and my team, feel free to check out our Level 1 FAQ. This FAQ is located on the Dashboard. You might find what you're looking for. 😊
If you do have questions, make sure to ask them on our Dashboard, rather than asking us via email. We also encourage you to watch all of the core video content and some of the past archived videos, read past Membership Positions, and take all the quizzes before sending us your questions.
📌Join Our Discord 💬
Investing, trading, and building wealth was a lonely journey for me. This is why my team and I created a Discord group for you and the other members to shares ideas and support one another. You don't have to go through it alone as we're all here to help. 😉
Make sure to check it out on the bottom of your "Dashboard" and follow the instructions on how to sign up. Coming from a teacher's perspective, I believe it's important to engage in conversations with people who are also seeking to reach financial freedom.
Remember that we are a community of wealth builders at all different levels, so be positive, kind, and helpful to others, so we can help each other get to financial freedom much faster.
📌Steve's Recommendations 💡
I'm going to pin this here since many people ask similar questions each week about why I'm hesitant with starting new positions. Until I see any trend changes or updates with the news, we will pivot our strategies. In the meantime...
I don't recommend starting any new wheel positions (selling new covered calls or cash-secured puts) until there is a trend reversal and positive market sentiment.
Through it may not matter in a long-term lens, I don't recommend buying any shares or ETFs for the long-term at the moment.
Continue to buy to close past covered call positions once they shrink down to around 50-80% of their values, and roll out to a further date to collect more premium. This is a great environment to sell short-term options as IV is high due to all the fear. I favor 30 to 45 day expirations. It's a boring and repetitive process, but it's like collecting "free money" or another "dividend" while 95% of other retail investors are panicking.
If you have more than 100 shares of long-term positions, you can consider selling 30 to 45 day covered calls at around a delta 0.10 to bring in cash.
Continue to deposit money into your account.
Continue to set up bear call spreads.
Let your capital stay as cash so we can have plenty of ammo when the bull market returns. And trust me, when it does, it will be glorious since we will be prepared.
Stay positive and patient. I know it's easier said than done, but keep in mind that you have knowledge on how to still generate income during a downward market. This is something that more than 95% of retail investors don't know how to do!
Have a wonderful 4th of July weekend! 🙂👍
-Steve and the Call to Leap Team
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.
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