After Americans elected Donald Trump president for a second time last week, with little of the chaos many expected, stocks “melted up.” The small-cap Russell 2000 led the way, soaring 8.6% higher. Meanwhile, the S&P 500 and Dow Jones Industrial Average both gained 4.6%, and the tech-heavy Nasdaq Composite jumped 5.7%. There were three catalysts here. First, like we said, was the presidential election. The Republicans have secured control of the Senate and the House. Combine that with Trump’s substantial margin in both the Electoral College and popular vote, and that creates a pretty compelling mandate to govern. In other words, we can expect Trump to make pro-business reforms and initiatives to stimulate economic growth priorities – and that has Wall Street and Main Street excited. In fact, InvestorPlace CEO Brian Hunt recently made a compelling case for why stocks should do terrific in a new Trump administration. Whether you love Trump or hate him, Brian argues that you may as well settle in and prepare for the gains to come. (You can read Brian’s essay in full here.) The second catalyst is the Federal Reserve. Last Thursday, November 7, the Fed unanimously decided to cut key interest rates by 0.25%. While the Fed hinted that it may have to start curtailing key interest rate cuts in its official policy statement, Fed Chair Jerome Powell also noted that Fed policy was “still restrictive.” So, if the Fed wants to move to a “neutral” level, that implies it will cut rates at least one more time. Whether that comes in December or in 2025, we’ll simply just have to see what the next inflation and jobs reports reveal. The third catalyst is an early “January effect.” Today, let’s “drill down” on that third catalyst. We’ll discuss what exactly an early January effect is… and why I expect stocks to head even higher in the near term. But… not all stocks are going to head higher. We can’t become complacent and start throwing darts at a board. So, I’ll also reveal which stocks should emerge as the market leaders… and tell you more about the system I use that helps me find them. What Is an Early January Effect? Essentially, an early “January effect” occurs when folks pour money into the market. Whether it’s people adding money to their retirement accounts, employers contributing to their employees’ retirement savings, or financial gifts... This all usually happens before the end of the year. It makes sense when you think about it... People tend to do a little financial housekeeping at the end of the year, before later trying to start the New Year off on the right foot. And these contributions tend to boost small- and mid-cap stocks. Now, typically, stocks need to “back and fill” and digest their gains. And that’s exactly what we’ve experienced the past couple days. On Tuesday, the Russell 2000 declined 1.8%, the S&P slipped 0.3%, the Dow dropped 0.9%, and the Nasdaq dipped about 0.09%. Then, on Wednesday, the action was a little more muted. The good news is I expect stocks to bounce back soon. Historically, stocks tend to rally in the weeks and days leading up to Thanksgiving. Bespoke Investment Group recently reported that the S&P 500 has risen an average of 3.81% in November in the past 10 years. The reason is simple. Folks are in a more positive mood during the holiday season. And when consumers are happy, investors are also happy. Get Ready for More Gains I anticipate that the stock market will continue to meander higher in the coming weeks and months, fueled by an early January effect… and the other two catalysts we talked about. And I look for fundamentally superior stocks – like the ones I recommend in my elite-level Accelerated Profits service– to lead the market higher. Case in point: Paymentus Holdings, Inc. (PAY). The company, which I recommended to my paid-up Accelerated members back in March, reported quarterly results after the market closed on Tuesday that crushed analysts’ earnings and revenue estimates. For the third quarter, the payments tech company reported earnings of $19.6 million, or $0.15 per share, and record revenue of $231.6 million. That represented 79.5% year-over-year earnings growth and 51.9% year-over-year revenue growth. The consensus estimate called for earnings of $0.09 per share on $190.63 million in revenue. So, Paymentus topped analysts’ earnings estimates by 66.7% and revenue forecasts by 21.5%. Company management noted that it ended the “excellent” third quarter with strong bookings and a robust backlog. It expects fourth-quarter revenue between $215.0 million and $220.0 million, which is up from $164.8 million in the fourth quarter of 2023 and nicely higher than analysts’ current projections for $203.62 million. As a result, PAY surged 27% higher on Wednesday. You can see the impact of that spike in the chart below... This wasn’t just a one-off occurrence, either. Last week, another one of my top Accelerated Profits stocks doubled after crushing analysts’ earnings estimates by 228% and increasing its outlook for fiscal year 2024. As a result, the stock surged 102% last week. That brought our current return to roughly 200% in only nine weeks! How to Find More Picks Like These... Now, these earnings results might have taken Wall Street by surprise, but I knew they were coming… and it’s all thanks to my Quantum Cash system. At its core, Quantum Cash uses a series of algorithms to constantly scour massive amounts of data looking for patterns. Many of these patterns are nonlinear, meaning you’re not going to be able to see them with the naked eye. But the more data you feed it, the more patterns it can spot. Thanks to my Quantum Cash system, my Accelerated Profits subscribers have closed a number of big trades in 2024, including: - YPF Sociedad Anonima (YPF) for a 187% gain
- CECO Environmental Corp. (CECO) for a 135% gain
- Builders FirstSource Inc. (BLDR) for a 95% gain
- Axcelis Technologies Inc. (ACLS) for a 74% gain
- e.l.f. Beauty Inc. (ELF) a nearly 61% gain
- Dorian LPG Ltd. (LPG) for about a 49% gain
- DHT Holdings Inc. (DHT) for a 48% gain
- PBF Energy Inc. (PBF) for a roughly 48% gain
- And more...
To learn more about my Quantum Cash system, be sure to check out my special presentation. You’ll learn how I have been able to give readers a chance to collect three income plays a month, regardless of stagnating markets or even market crashes. You’ll also see how it’s the perfect income vehicle for people with smaller portfolios. But best of all, you’ll get an inside look at the revolutionary algorithmic technology behind my Quantum Cash system. Click here to watch my special Quantum Cash presentation now. Sincerely, |
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