Weekly Roundup

Stocks continued to sell off this week, leading the Dow to turn negative for 2023, while the Russell 2000 moved deeper into the red.

Fresh signs that the U.S. economy is stronger than expected, that inflation remains stubborn and questions about earnings, no matter how good, were some of the factors leading to the bleeding in stocks. Others were concerns over the Israel-Hamas conflict, and whether it would spread in the Middle East. While the S&P 500 and Nasdaq remain positive on a year-to-date basis, the continued selloff has both of those market indicators negative quarter to date and in correction territory (market lingo for falling more than 10%) since mid-to-late July.

The portfolio's inverse-exchange-traded fund positions have been bright spots as have our SPDR Gold Shares ETF. The move to close out recent positions earlier this month also upped the portfolio's cash position, something that has also helped insulate the portfolio from the market's accelerated declines over the last three weeks. And there is little question that our decision to close the portfolio's position in Ford Motor in late July was the right call -- those shares are down more than 25% from where we sold them after the company pulled its 2023 guidance this week.

With the market in correction territory and oversold, we may see buyers dip their toes in stocks in the coming days but given Friday's Middle East developments, we'll have a better sense for that early Monday morning. As AAP team member Bob Lang pointed out on Friday, the key level to watch for the S&P 500 is 4,100, when we dig into all of next week's economic data, hear from the Fed and Fed Chair Powell on Wednesday, and process what Apple has to say after Thursday's market close. Because AAPL shares account for about 7.2% of the S&P 500, with no other earnings from a Top 10 S&P 500 holding next week, odds are Apple's results and guidance will dictate how the market finishes its first few days of November trading.

With the Fear & Greed Index back in Extreme Fear as we close out the week, down from Fear last Friday, we'll continue to move cautiously with the portfolio. We will be on the lookout for catalysts that give us reasons to put some of our cash to work as we continue to watch the market's technical setup.

Catching Up on the AAP Portfolio This Week

We made several moves with the portfolio this week that included some rating upgrades and price target revisions. More specifically, we upgraded Microsoft shares to a "Two" rating following the company's quarterly results. Later in the week, with its shares below $125, we boosted our rating on Alphabet shares to a "One" rating. For Mastercard, United Rentals, and Vulcan Materials, more conservative assumptions for what lies ahead led us to trim their respective targets following their quarterly results over the last few days. Earlier in the week, we made a similar move with Coty's price target as well. We made no changes to the panic points for COTY, GOOGL, MA, VMC, or URI shares compared to the comprehensive list of panic points for the portfolio we published on Thursday.

Following another positive data point for the smartphone industry, one that showed shipments of those devices accelerated double digits in 3Q 2023 vs. the prior quarter, we added to our holdings of Qualcomm and Universal Display. We made no changes to their respective price targets or panic points.

We will continue to employ our inverse ETFs as Middle East tensions rise, being sure to revisit developments over the weekend. Another reason we continue to hold those inverse ETFs is the high probability of more "tough talk" from Fed Chair Powell following Friday's in-line reading for the September core Personal Consumption Expenditure Price Index. At +3.7% year over year, there remains quite a distance to the Fed's 2% target. Even the 0.3% month-over-month increase for that data points to an annualized figure of 3.6%. As we shared on Friday, we will need to see more meaningful progress in the data for the Fed to concede that additional rate hikes are off the table. Until such a time, we're likely to see the Fed keep its policy options. On the back of recent stronger-than-expected economic data, that means more tough talk ahead next week.

This Week's AAP Videos and Podcasts

We cover a lot of ground during the week in our Daily Rundowns and the AAP Podcast. If you happened to miss one or more of them, here are some helpful links:

Monday, October 23: Happy Merger Monday ... and Earnings Bonanza

Tuesday, October 24: Here's How We See Things Amid Big Earnings and Big Question Marks

Wednesday, October 25: Your Top Questions Answered on Panic Points, the Ozempic Effect, and More

Thursday, October 26: Fear and Uncertainty Are Taking Over. Here's Our Advice

Friday, October 27:

Key Global Economic Readings

(Note: T is the most recent period, T-1 is the prior period's reading and T-2 is two periods back, the intent being to illustrate any trends)

Chart of the Week: The Road to Rebuilding Infrastructure

Even with the money being spent by the U.S. government as part of the Biden Infrastructure Law, we remain in the early innings of this multi-year program. Last year we looked at the Global X Funds X US Infrastructure ETF PAVE as a way to get exposure to all of these projects. The ETF holds names such as Eaton, Union Pacific, Parker-Hannifin, and AAP names Vulcan Materials and United Rentals. We selected names that we believed would take advantage of the new law with a bunch of spending targeted toward big construction projects.

Yet, the chart of PAVE has not been strong since late summer likely due to concerns over higher interest rates on housing as well as private construction spending. What we see in the PAVE chart below is a downtrend of lower highs and lower lows. The GoNoGo indicator is purple, this composite of indicators tells us when the price action is strong or weak. It is currently reflecting strong bearish price action. The MACD is solidly on a sell signal, Woodies CCI at the bottom though is starting to turn upwards. This indicator tells us the difference between the price and its simple moving average, and as we can see below the indicator is rising and is on a buy signal. If the bars are above zero, as we see below, the trend for this indicator is rising, which we view positively. PAVE is very oversold and a nice base between $27.50 to $30 would tell us buyers are supporting PAVE shares.

For a closer look at the chart, click here.

Other charts we shared with you this week were:

Monday, October 23: S&P 500 (SPX) - What Has Been Support Could Become Stiff Resistance

Monday, October 23: SPDR Gold Shares ETF (GLD) - A Portfolio Diversifier Shines

Tuesday, October 24: Elevance Health (ELV) - A Big Move Coming Down the Road?

Wednesday, October 25: Ferrari (RACE) - When Can We Take Ferrari for a Spin?

Thursday, October 26:

Poll of The Week

In our latest AAP Poll of the Week, we asked members where they were likely to cut back discretionary spending. We'll use this result as we size up current quarter guidance from McDonald's and other restaurant companies next week and the week after.

The Coming Week

Next week will be one of the more frenetic market weeks we've seen in some time. It will be the peak of the current earnings season as well as the start of October economic data that will tell us about the state of the US and global economy starting the final quarter of the year. Fresh figures for the manufacturing and services economy will be complemented by multiple sets of job creation and wage data. Sandwiched in between all of it will be the Fed's net monetary policy meeting.

The odds of a Fed rate hike following that meeting are very low. However, coming off a string of vibrant economic data following Fed Chair Powell's recent Economic Club of New York appearance strongly suggests the Fed Chair will tough talk for the market. We suspect Powell will keep the Fed's options open, but odds are, at a minimum, we will see timing expectations for the first Fed rate cut move in 2H 2024 from the current June consensus. Some think we may not see the first rate cut until late 2024. We will need to see more data before we jump on board that call, but should upcoming inflation metrics suggest that is likely, it would mean another resetting of market expectations might be in the cards.

On the earnings front, we have several holdings reporting next week including McDonald's (MCD), Qualcomm (QCOM), Universal Display (OLED), and Apple (AAPL) as well as several constituents in the First Trust Nasdaq Cybersecurity ETF (CIBR). We will also be digging into results and guidance from Estee Lauder (EL), elf Beauty (ELF), Samsung, Qorvo (QRVO), Skyworks (SWKS), AGCO (AGCO), Caterpillar (CAT), and Motorola Solutions (MSI) given our positions in Coty, Deere, United Rentals, Axon (AXON) and others.

Here's a closer look at the economic data coming at us next week:

U.S.

Tuesday, October 31

• Chicago PMI - October (8:30 AM ET)
• Employment Cost Index - 3Q 2023 (8:30 AM ET)
• FHFA Housing Price Index - August (9:00 AM ET)
• S&P Case-Shiller Home Price Index - August (9:00 AM ET)
• Consumer Confidence - October (10:00 AM ET)

Wednesday, November 1

• Weekly MBA Mortgage Applications (7:00 AM ET)
• ADP Employment Change Report - October (8:15 AM ET)
• S&P Global Final US Manufacturing PMI - October (9:45 AM ET)
• ISM Manufacturing Index - October (10:00 AM ET)
• JOLTs - Job Openings Report - October (10:00 AM ET)
• Construction Spending - September (10:00 AM ET)
• Weekly EIA Crude Oil Inventories (10:30 AM ET)
• FOMC Rate Decision - (2:00 PM ET)

Thursday, November 2

• Weekly Initial & Continuing Jobless Claims (8:30 AM ET)
• Productivity and Unit Labor Cost - 3Q 2023 (8:30 AM ET)
• Factory Orders - September (10:00 AM ET)
• Weekly EIA Natural Gas Inventories (10:30 AM ET)

Friday, November 3

• Employment Report - October (8:30 AM ET)
• S&P Global Final US Services PMI - October (9:45 AM ET)
• ISM Non-Manufacturing Index - October (10:00 AM ET)

International

Monday, October 30

• UK: Bank of England Consumer Credit - September
• Eurozone: Economic Sentiment and Consumer Confidence - October
• Germany: Inflation Rate (Preliminary) - October

Tuesday, October 31

• China: NBS Manufacturing and Non-Manufacturing PMI - October
• Japan: Consumer Confidence - October
• Germany: Retail Sales - September
• Eurozone: 3Q 2023 Flash GDP Growth
• Eurozone: Inflation Rate (Flash) - October

Wednesday, November 1

• Japan: Jibun Bank Final Manufacturing PMI - October
• China: Caixin Manufacturing PMI - October
• UK: S&P Global-CIPS Final Manufacturing PMI - October

Thursday, November 2

• Eurozone: HCOB Final Manufacturing PMI - October
• UK: Bank of England Interest Rate Decision

Friday, November 3

• China: Caixin Services PMI - October
• UK: S&P Global-CIPS Final Services PMI - October
• Eurozone: Unemployment Rate - September

Here's a closer look at the earnings reports coming at us next week:

Monday, October 30

• Open: Check Point Software (CHKP), McDonald's (MCD), On Semiconductor (ON), SoFi Technologies (SOFI).
• Close: Chegg (CHGG), Denny's (DENN), Harmonic (HLIT), Lattice Semiconductor (LSCC), Monolithic Power (MPWR), Pinterest (PINS), Simon Properties (SPG), Trex (TREX), Welltower (WELL), Wolfspeed (WOLF)

Tuesday, October 31

• Open: AGCO Corp. (AGCO), Caterpillar (CAT), Eaton (ETN), JetBlue Airways (JBLU), Pfizer (PFE), Sensata Tech (ST), Sprouts Farmers Market (SFM), Sysco (SYY),
• Close: AMD (AMD), Caesars Entertainment (CZR), First Solar (SFLR), Yum China (YUMC)

Wednesday, November 1

• Open: Apollo Global Management (APO), Brinker (EAT), CVS Health (CVS), Dine Brands (DIN), DuPont (DD), Estee Lauder (EL), Kraft Heinz (KHC), Martin Marietta (MLM), Radware (RDWR), Yum! Brands (YUM)
• Close: Airbnb (ABNB), CF Industries (CF), Cheesecake Factory (CAKE), Door Dash (DASH), ELF Beauty (ELF), Electronic Arts (EA), Ingersoll Rand (IR), Mondelez International (MDLZ), PayPal (PYPL), Qorvo (QRVO), Qualcomm (QCOM), Roku (ROKU), Zillow (ZW)

Thursday, November 2

• Open: ConocoPhillips (COP), Crocs (CROX), Cummins (CMI), CyberArk (CYBR), Eli Lilly (LLY), Ferrari (RACE), InterDigital (IDCC), Kellanova (K), Marriott (MAR), Molson Coors (TAP), Papa John's (PZZA), Parker Hannifin (PH), Portillo's (PLTO), Shopify (SHOP), Starbucks (SBUX), Wendy's (WEN)
• Close: Apple (AAPL), Block (SQ), Cirrus Logic (CRUS), Cloudflare (NET), Dropbox (DBX), Fortinet (FTNT), Insulet (PODD), Motorola Solutions (MSI), Omega Health (OHI), Skyworks (SWKS), Universal Display (OLED), WW (WW)

Friday, November 3

• Open: AMC Networks (AMCX), American Axle (AXL), Cardinal Health (CAH), Physicians Realty Trust (DOC).

ONEs

Alphabet GOOGL; $122.17; 850 shares; 3%; Sector: Communication Services

WEEKLY UPDATE: Despite reporting overall September quarter results that topped expectations, Wall Street focused on slower year over year growth for Google Cloud, missing that it grew sequentially faster vs. Microsoft's (MSFT) Intelligent Cloud business and Amazon's AWS during the September quarter. Considering GOOGL shares were up more than 30% since May that set the earnings bar pretty high. However, continued cloud adoption along with strength at the company's core Search & Advertising and YouTube businesses, led us to bump our price target to $155 from $145. With the shares below $125 toward the end of the week, we upgraded them to a One rating from Two. Barclays maintained its Outperform rating on GOOGL shares but trimmed its target to $180 from $200 while JMP Securities lifted its target to $140, keeping its rating at Outperform. Morgan Stanley and William Blair reiterated their Outperform rating.

1-Wk. Price Change: -9.9%; Yield: 0.00%

INVESTMENT THESIS: We believe that while search and digital ad dominance are what will carry shares in the near- to mid-term, longer-term it is the company's artificial intelligence "moat" that will provide for new avenues of growth. AI is what has made the company's search, video, and targeted ad capabilities best-in-class and is the driving force behind the company's success in voice (Google Home) and autonomous driving (Waymo). Furthermore, we believe it is this AI expertise that will also make the company more prevalent in other industries, including healthcare via its subsidiary Verily, as AI and machine learning continue to disrupt operations across industries. Lastly, compounding our positive view of the company's future opportunities, we believe that Alphabet's free cash flow generation and solid balance sheet set it apart and are what will allow the company to continue taking chances on far-out ground-breaking and potentially world-changing projects.

Target Price: Reiterate $155; Rating: Two

Panic Point: $115

RISKS: Regulatory risk (data privacy), competition, and macroeconomic slowdown impacting consumers and therefore ad buyer activity.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/27/21), Why GOOGL Has Shrugged Off Antitrust Headlines in Early Trading Tuesday (10/20/20)

Applied Materials Inc. AMAT; $131.30 ; 275 shares; 1.04%; Sector: Semiconductor Manufacturing

WEEKLY UPDATE: Applied Materials struggled to stay above the 200-day moving average this week but managed to skirt that marker. After falling sharply over the last couple of weeks, the shares may be stabilizing at current levels as they move with earnings from other semi-cap companies and capital spending guidance for key players in the industry. With data pointing to the reacceleration in smartphone and PC shipments and continued growth in data, AI, and auto chip demand, we are likely to see chip capacity tighten in the coming quarters, which bodes well for additional capital spending. We continue to see Applied benefitting from chip production re-shoring in the US, eurozone and Japan but recognize China demand could reign in those growth prospects. We remain interested in adding to our AMAT position below $135 and are inclined to do so as the market finds its footing.

1-Wk. Price Change: -2.1% Yield: 1%

INVESTMENT THESIS: Applied provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. With its diverse technology capabilities, Applied delivers products and services that improve device performance, power, yield, and cost. Applied's customers include manufacturers of semiconductor chips, liquid crystal, and organic light-emitting diode displays, and other electronic devices. Applied operates in three reportable segments: Semiconductor Systems (73% of 2022 revenue, 78% of 2022 operating income), Applied Global Services (22%, 19%), and Display and Adjacent Markets (5%, 2%). Key customers include Samsung (12% of 2022 sales), Taiwan Semiconductor (20%), and Intel (10%). The company has a rising dividend bias with the current annualized dividend reaching $1.28 per share vs. the 2017 dividend of $0.43 per share and 2018's $0.64 per share.

Target Price: Reiterate $165; Rating: One

Panic Point: $120

RISKS: Manufacturing and Supply Chain, Competitive Factors, Government Regulation, Technology Change.

ACTIONS, ANALYSIS & MORE: We're Pulling This Name Up From the Bullpen, Investor Relations.

Amazon AMZN; $127.74; 835 shares; 3.08%; Sector: Consumer Discretionary

WEEKLY UPDATE: We reiterated our One rating on AMZN shares and our $170 price target following the company's stellar September quarter earnings. Those results showed cost reduction efforts embarked upon by CEO Andy Jassy and continued revenue gains are driving margins higher. With revenue poised to grow sequentially in the current quarter, due in part of the holiday shopping season, those same cost reduction efforts suggests management's profit guidance for the quarter may be conservative. Post earnings, Citi raised its AMZN price target to $177 from $167, while Barclays lifted its to $190 from $180. As upcoming retail sales and holiday spending data is had, we will look to revisit our AMZN price target as needed.

1-Wk. Price Change: 2.1%; Yield: 0.0%

INVESTMENT THESIS: We believe upside will result from Amazon's continued eCommerce dominance, AWS' continued leadership in the public cloud space, and ongoing growth of the company's advertising revenue stream, which feeds off Amazon's eCommerce business. Additionally, we believe profitability will continue to improve as AWS and advertising account for a larger portion of total sales as both these segments sport higher margins than the eCommerce operation. And while we believe the increasing share of revenue from these higher margin businesses will be key to driving profitability longer-term, we believe margins on eCommerce stand to improve as the company's infrastructure is further built out and economies of scale further kick in. The embedded call option is that management is always looking to enter a new space and generate new revenue streams.

Target Price: Reiterate $170; Rating: One

Panic Point: $108

RISKS: High valuation exposes the stock to volatile swings, eCommerce has exposure to slower consumer spending and competition, management is not afraid to invest heavily, potential headwinds resulting from new eCommerce regulation in India, and management is not scared to invest aggressively for growth, which can at times cause volatile reactions as near-term concerns arise relating to the impact on margins.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/29/21), 2020 Letter to Shareholders (4/15/21), Initiation (2/2/18), Investor Relations

Axon Enterprise Inc.AXON; $200.76; 620 shares; 3.60%; Sector: Aerospace & Defense

WEEKLY UPDATE: Axon shared it will report its quarterly results on November 7. Ahead of that, we will be leaning into quarterly results next week from competitor Motorola Solutions (MSI), and what it says about federal and state public safety spending as well as that from other institutions and agencies. Given how the market reacts to corporate earnings, members should wait to buy AXON shares until we at least have results and guidance from Motorola Solutions in hand. As the market finds its footing, a pickup of AXON shares below $210 would be a good one.

1-Wk. Price Change: -4.8% Yield: 0.00%

INVESTMENT THESIS: Axon Enterprise Inc develops, manufactures, and sells conducted energy devices and cloud-based digital evidence management software designed for use by law enforcement, corrections, military forces, private security personnel, and private individuals for personal defense. The company operates in two segments: Taser and Software & Sensors. Taser develops and sells CEDs used for protecting users and virtual reality training. Software & Sensors manufactures fully integrated hardware and cloud-based software solutions such as body cameras, automated license plate reading, and digital evidence management systems. Axon delivers its products worldwide and gets most of its revenue from the United States. President Biden's fiscal year 2023 budget requests a fully paid-for new investment of approximately $35 billion to support law enforcement and crime prevention -- in addition to the President's $2 billion discretionary request for these same programs. According to Mordor Intelligence, the wearable, and body-worn cameras market on its own was valued at $1.62 billion in 2020 and is expected to reach $424.63 billion by 2026.

Target Price: Reiterate $255; Rating: One

Panic Point: $185

RISKS: Manufacturing and supply chain, competitive factors, government regulation, technology change.

ACTIONS, ANALYSIS & MORE: Strong Demand Bodes Well for This Conducted Energy Devices Firm, Initiating a New Position in a Public Safety Technology Name, Investor Relations.

Bank of America Corp. BAC; $25.17 ; 3,615 shares; 2.63%; Sector: Financial Services

WEEKLY UPDATE: Since reporting earnings two weeks ago the financial sector has taken the brunt of the market selling. No doubt the charts were already damaged goods before third quarter reporting, but stocks in the group including Bank of America took a leg down as interest rates rose and questions about the speed of the economy in the coming quarters resurfaced. BAC shares taking out the lows from March this month has us concerned, but more than likely the stock is building a base here in the $25-$27 range. We'll continue to evaluate the company's prospects as well as those for BAC shares and their rating in the portfolio as fresh economic data is published. With the company gaining share across all of its businesses, should the economy continue to grow above trend and foster greater than expected loan growth and/or the investment banking landscape rebound, it would give us reasons to become incrementally bullish on BAC shares.

1-Wk. Price Change: -4.3% Yield: 3.8%

INVESTMENT THESIS: Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 56 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking, and trading across a broad range of asset classes, serving corporations, governments, institutions, and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories, and approximately 35 countries. From a reporting basis, the company's business breaks down as follows: Net Interest Income breakdown: Consumer Banking 57%, Global Banking 23%, Global Wealth & Investment Management 14%, and Global Markets 6%; Income Before Tax breakdown: Consumer Banking 42%, Global Banking 27%, Global Wealth & Investment Management 16%, and Global Markets 15%. Bank of America pays a quarterly dividend of $0.22 per share.

Target Price: $35; Rating: One

Panic Point: $23.50

RISKS: Financial markets, fiscal, monetary, and regulatory policies, economic conditions, and credit ratings.

ACTIONS, ANALYSIS & MORE: We're Upgrading and Building Upon a Position, We're Initiating a Bank Position, Investor Relations

Coty Inc. COTY; $9.14; 12,850 shares; 3.40%; Sector: Consumer Discretionary

WEEKLY UPDATE: We trimmed our price target on COTY shares to $14 from $16 early this week, and our panic point remains at $9 for this beauty company. The catalyst for that reduction was continued concerns over consumer spending and smaller dollar tailwinds. Coty management continues to execute and the combination of additional pricing action, tight cost controls, and falling balance sheet leverage bode well for further margin improvement and EPS growth. We look forward to quarterly results from competitors Estee Lauder (EL) and elf Beauty (ELF) next week as they update their outlook for the holiday shopping season. Those results could be the catalyst to spark COTY shares.

1-Wk. Price Change: -3.7%; Yield: 0%

INVESTMENT THESIS: Founded in Paris in 1904, Coty is one of the world's largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling luxury and mass-market products in more than 130 countries and territories. The company derives almost 45% of its revenue from the Americas, 44% from Europe, the Middle East and Africa, and the balance from Asia Pacific. By revenue category, Prestige drives 62% of Coty's revenue but more than 80% of its operating income with the balance derived from its Consumer Beauty segment. Management intends to further grow the Prestige business, expanding its prestige fragrance brands, through the ongoing expansion into prestige cosmetics, and the building of a comprehensive skincare portfolio leveraging existing brands. Management is also targeting margin improvement at its Consumer Beauty brands as well as expanding its presence in China across both of its reporting segments. China's beauty and personal care market is expected to grow at a quicker pace of 5.4% per annum through 2027, putting it at $70 billion-$75 billion by 2027.

Target Price: $14; Rating: One

Panic Point: $9.00

RISKS: Industry competition and consolidation, product efficacy and safety, currency, and brand licensing.

ACTIONS, ANALYSIS & MORE: We're Making Our Portfolio a Little More Beautiful Today, We're Adding a Name to the Bullpen, Investor Relations.

Deere & Co. DE; $361.15; 357 shares; 3.73%; Sector: Farm Machinery & Equipment

WEEKLY UPDATE: Comments this week from United Rentals and others about strong prospects for infrastructure spending bode well for Deere's construction equipment business. We'll cross reference that next week against results and guidance from Caterpillar. Next week also brings results from ag equipment competitor AGCO (AGCO) with CNH Industrial reporting the following week. Those collective data points will lay the groundwork for Deere's next earnings report on November 22.

1-Wk. Price Change: -3.7% Yield: 1.5%

INVESTMENT THESIS: The global agriculture equipment market size is expected to reach $166.5 billion in 2027, growing at a 6% CAGR over the 2020-2027 period. The favorable outlook for equipment purchases in the coming quarters reflects rising farmer income that historically drives new equipment purchases. At the same time, Deere continues to lean into the sustainability movement with its precision ag offering. That technology is helping farmers drive crop yields higher while also realizing cost savings, which makes the new technology a productivity upgrade compared to older equipment. In February, Deere announced a 4.2% in its quarterly dividend per share to $1.25 from $1.20.

Price Target: Reiterate $500; Rating: One.

Panic Point: $300

RISKS: Geopolitical uncertainty, economic conditions, raw material, and other input prices, prices for key agricultural commodities.

ACTIONS, ANALYSIS & MORE: Initiation (10/25/21), Investor Relations

Elevance Health Inc. ELV; $441.46; 275 shares; 3.51%; Sector: Health Care

WEEKLY UPDATE: Not much news for Elevance this week but the chart shows the stock has pushed back into a recent trading range. With a burst of energy following earnings, Elevance made a nice run above July and June resistance but was thrown back when the sellers hit the stock hard. Recent volatility in the stock has put the shares back in the $445-$465 range. While the lower end of that range offers a favorable entry point, stronger support below is had at t $435. Should we see ELV shares reach that level of stronger support, it would be a level at which members can more aggressively pick up ELV shares.

1-Wk. Price Change: -2.7%; Yield: 1.3%

INVESTMENT THESIS: Elevance, formerly Anthem/Blue Cross Health, is a premier healthcare brand that appears to be in the sweet spot for HMO companies. Mostly domestic, this company has a wide reach and coverage across the U.S., serving more than 118 million people via medical, pharmacy, clinical, and care solutions. Founded in 1944, Elevance offers a terrific business model that works in boom or bust economic times. The opportunity to find a company with reliable and dependable revenue and cash flows is right here with Elevance. Revenue growth for this company has surged in recent years, with better than double-digit growth since 2018 as the company thrived during the pandemic.

Target Price: Reiterate $550; Rating: One

Panic Point: $410

RISKS: With any insurance business the risk is high for changes in regulation and government programs. Since the onset of Obamacare more than 10 years ago, companies like Elevance have changed their model to be more in line with a better cost/benefit analysis, reducing waste and squeezing out excesses (as was outlined and suggested in Obamacare). Separately, as the population increases and ages, there is more opportunity for Elevance to grow, but with those changes, there is a risk. Lastly, competition is brisk with some very strong opponents who keep their costs low (Humana, Cigna, UNH, CVS/Healthnet).

ACTIONS, ANALYSIS & MORE: We're Trimming One Stock to Add to Another,2021 Annual Report, 2Q 2022 Earnings Report, Investor Relations.

PepsiCo Inc.PEP; $159.62; 730 shares; 3.37%; Sector: Consumer Defensive

WEEKLY UPDATE: Shares of salty snack company Utz Brands (UTZ) were upgraded this week by research firm Stephens to "Overweight" from "Equal Weight." With PepsiCo, we've discussed how the December quarter is a strong one for its snacking business, and we see that same pattern with Utz's business. Between PEP and UTZ shares, we've previously shared how PepsiCo overpowers Utz in the salty snack category, plus it also has the beverage business and a far greater dividend track record. With the valuations being nearly the same, we favor PEP shares. Also, this week, PepsiCo competitor Coca-Cola lifted its organic growth revenue forecast due to a combination of pricing and positive volume growth. We see that as a positive for PepsiCo's beverage business during its seasonally strongest quarter. During the September quarter, PepsiCo bought back 1.6 million shares at an average price of $183.44 and continues to target buying back $1 billion in shares for all of 2023. With PEP shares trading well below that repurchase price, it would be logical to assume the company will be back picking up shares before too long with the remaining $249 million for this year. That effort should enhance bottom line results for the current quarter. Longer-term, the company should still have close to $7.5 billion left under its current repurchase authorization that runs through February 2026. Recent findings from Mark Zandi, the Chief Economist at Moody's, adds to our thinking consumers will continue to shift back to eating at home especially as they feel the pinch of returning student debt payments. We see that playing right into PepsiCo's wheelhouse. Our price target for this one-rated stock remains $210 and our panic point continues to be $140.

1-Wk. Price Change: -0.2%; Yield: 3.2%

INVESTMENT THESIS: PepsiCo is one of the largest food-and-beverage companies globally. It makes, markets, and sells a slew of brands across the beverage and snack categories, including Pepsi, Mountain Dew, Gatorade, Doritos, Lays, and Ruffles. The firm uses a largely integrated go-to-market model, though it does leverage third-party bottlers, contract manufacturers, and distributors in certain markets. In addition to company-owned trademarks, Pepsi manufactures and distributes other brands through partnerships and joint ventures with companies such as Starbucks. The combination of the consumable nature of those products along with PepsiCo's ability to realize price increases has led to consistent revenue, EPS, and dividend growth during both the Great Recession and the Covid pandemic.

Target Price: Reiterate $210; Rating: One

Panic Point: $140

RISKS: Economic conditions, supply chain constraints, raw material costs.

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating 1 Name While Adding to Another, This Stock Should Have 'Pep,' Even in a Recession, Investor Relations

United Rentals URI; $399.02; 335 shares; 3.87%; Sector: Industrials

WEEKLY UPDATE: The combination of recent selling pressure and prospects for improving fleet utilization rates as interest rates remain higher for longer against continued infrastructure spending strength led us to upgrade URI shares to a One rating early this week. Following United's better than expected September quarter earnings report, we trimmed our price target to $470 from $500 to reflect a more conservative outlook on housing and private construction spending in the coming quarters. If we're wrong, and non-infrastructure construction demand turns out to remain stronger than expected, we may need to reverse course and boost those price targets. We see possible risk of the market continuing to sell off in the coming days, so we would recommend members continue to stay on the sidelines with URI shares in the very near-term. Bank of America also trimmed its URI price target to $490 from $530 but KeyBanc reiterated its $525 target.

1-Wk. Price Change: -1.8% Yield: 1.5%

INVESTMENT THESIS: United Rentals, the largest equipment rental company in the world, operates throughout the United States and Canada, and has a limited presence in Europe, Australia, and New Zealand. It serves industrial and other non-construction; commercial (or private non-residential) construction; and residential construction. Industrial and other non-construction rentals represented approximately 50% of rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers, and infrastructure entities; commercial construction rentals represented approximately 46% of rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment, and other commercial purposes; and residential rentals around 4% of revenue. We see the company benefiting on three fronts -- the seasonal uptick in construction spending; the release of funds and projects associated with the five-year Biden Infrastructure Bill; and the company's nip-and-tuck acquisition strategy that should further enhance its geographic footprint. In January, the company announced a fresh $1 billion buyback authorization following the completion of $4 billion in share repurchases over the 2012-2021 period.

Target Price: Reiterate $470; Rating: One

Panic Point: $380

RISKS: Industry and economic risk, competition and competitive pressures, and acquisition risk.

ACTIONS, ANALYSIS & MORE: Initiating a Position in This Equipment Rental Company, We're Adding This Equipment Rental Company to the Bullpen, Investor Relations

Vulcan Materials Company VMC; $193.69; 613 shares; 3.43%; Sector: Building Materials

WEEKLY UPDATE: Early in the week Seaport Research upgraded VMC shares to Buy from Neutral with a $260 price target. Following the company's in-line September quarter earnings report, our more conservative stance on housing and private construction prospects led us to trim our VMC price target to $245 from $260. We kept our panic point at $175. We see possible risk of the market continuing to sell off in the coming days, so we would recommend members continue to stay on the sidelines with VMC shares in the very near-term.

1-Wk. Price Change: -3.9% Yield: 0.9%

INVESTMENT THESIS: Vulcan Materials operates primarily in the U.S. and is the nation's largest supplier of construction aggregates (primarily crushed stone, sand, and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services. Its products are the indispensable materials used in building homes, offices, places of worship, schools, hospitals, and factories, as well as vital infrastructure including highways, bridges, roads, ports and harbors, water systems, campuses, dams, airports, and rail networks. Ramping spending associated with the Biden Infrastructure Law should drive demand for Vulcan's products over the coming years. Vulcan has historically complemented its organic growth prospects by acquiring businesses to expand its geographic reach and product scope. Since 2014, the company has acquired more than two dozen companies, including the 2021 acquisition of U.S. Concrete. That combination has allowed the company to deliver steady top and bottom-line growth over the last decade, with only a modest decline when the pandemic hit in 2020.

Target Price: Reiterate $245; Rating: One

Panic Point: $175

RISKS: General economic and business conditions; dependence on the construction industry; timing of federal, state, and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction.

ACTIONS, ANALYSIS & MORE: Initiation Post, Investor Relations

TWOs

Apple AAPL; $168.22; 700 shares; 3.41%; Sector: Technology

WEEKLY UPDATE: 3Q 2023 smartphone data from research firm IDC put iPhone shipments at 53.6 million units during the quarter, up modestly year over year but up 26% vs. the June quarter. That also suggests Apple picked up some market share from Samsung and others smartphone vendors during the quarter. Meanwhile comments from Intel (INTC) build on others pointing to a positive turn in the PC market, another potential positive for Apple. Ahead of its September quarter earnings report on November 2, Apple will hold a product event on October 30th at 8 PM ET with the tagline "Scary fast" at which it is expected to share the latest Apple Silicon developments, including the awaited M3 chip. While we expect continued gains in Apple's Services business and others during the holiday shopping season, the key to driving the shares higher rests on the prospects of Apple's iPhone business for the current and coming quarters. What we learn next week between Qualcomm's guidance and that for Apple could give us reasons to re-think our Two rating on AAPL shares.

1-Wk. Price Change: -2.7% Yield: 0.6%

INVESTMENT THESIS: While we acknowledge that near-to-midterm performance remains heavily influenced by iPhone sales, the dynamic is shifting as investors finally place greater emphasis on Services growth. We are bullish on the 5G upgrade cycle and believe longer-term upside will continue to come as Services revenue grows its share of overall sales. Services provide for a recurring revenue stream at higher margins, a factor that serves to reduce earnings volatility while allowing for a higher percentage of sales to fall to the bottom line; as a result, we believe that Services growth and the installed base, are much more important than how many devices the company can sell in each 90-day period. In addition to improved profitability, we also believe the transparent nature of this revenue stream will demand an expanded price-to-earnings multiple as segment sales grow. Furthermore, we believe that Apple's desire to push deeper into the healthcare arena will help make its devices invaluable as more life-changing features are added and the company works to democratize health records. Lastly, also see upside resulting from increased adoption of wearables (think the Apple Watch) and potential new product announcements such as an AR/VR headset or an update on Project Titan, the company's secretive autonomous driving program.

Target Price: Reiterate $200; Rating: Two

Panic Point: $150

RISKS: Slowdown in consumer spending, competition, lack of new product innovation, elongated replacement cycles, failure to execute on Services growth initiative.

ACTIONS, ANALYSIS & MORE:FY3Q21 Earnings Analysis (7/27/21), Apple Product Launch Event Takeaways (4/20/21), Takeaways from WWDC (6/22/20), Initiation (1/4/10), Investor Relations

Chipotle Mexican Grill CMG; $1,887.59; 46 shares; 2.51%; Sector: Restaurants

WEEKLY UPDATE: Chipotle handily beat consensus expectations as the company's revenue for the quarter rose more than 11% vs. year-ago levels to $2.47 billion, matching the consensus forecast. Comp sales increased +5.0% year over year, coming in at the higher end of the company's previous low to mid-single digit forecast. Management continues to see 2023 comp sales growth in the mid to high-single-digit range and targets opening 255-285 locations this year and 285-315 in 2024. That supports the growth argument for Chipotle, which is reinforced by recent pricing action of around 3% that should reaccelerate comp sales in the current quarter to the mid-to-high single-digit range. Recent pricing action should help contain continued footprint expansion as well as higher input and wage costs but given the climb in beef, pork, and chicken prices until we see falling protein costs, the impact on the company's bottom line is likely to be minimal. While we do see the company benefitting from consumers trading down with their dining spend, the prospect for restrained margin improvement leads us to keep our Two rating on CMG shares.

1-Wk. Price Change: 3.1% Yield: 0.00%

INVESTMENT THESIS: Our investment thesis on the shares centers on the company offering consumers better-for-you fare while also expanding its geographic density, embracing digital ordering, and bringing to market limited-time menu offerings that should spur traffic and boost average revenue per ticket. With the upside to our price target shrinking, we are once again reviewing the incremental upside and revisiting protein input costs.

Target Price: Reiterate $2,100; Rating: Two

Panic Point: $1,675

RISKS: Input costs, particularly for the protein complex, labor costs, consumer spending, food safety, industry dynamics, and competition.

ACTIONS, ANALYSIS & MORE: Initiating a New Position in Chipotle, We're Adding Chipotle to the (Bullpen) Menu

Costco Wholesale COST; $543.03; 262 shares; 4.11%; Sector: Consumer Staples

WEEKLY UPDATE: Costco made news last week with a new CEO in place, while this week the shares were pushed down a bit following a break of the key 50- and 200-day moving averages. These important levels were breached on higher turnover, which would be considered negative. However, the stock remains above the $530 support level from mid-August, and if that level is tested, it would be a great spot to add more shares. Costco reports earnings on November 29th after the close.

1-Wk. Price Change: -1.8% Yield: 0.8%

INVESTMENT THESIS: We like Costco's long-term prospects, driven by a club-based operating model that focuses on volumes, not margins, and therefore offers its customers a value proposition of everyday low prices. The strength of this model has created an incredibly loyal customer base with low churn and continued share gains in both bricks-and-mortar and e-commerce. And this is a global concept, evidenced by the strength of sales both in the U.S. and abroad, which includes an emerging China opportunity. We see the company's membership model as a key differentiator vs. other retailers and its plans to open additional warehouse locations in the coming quarters should drive retail volumes and the higher-margin membership fee income as well. We also appreciate management's approach to capital returns and their willingness to return cash when it is in excess on the balance sheet.

Target Price: Reiterate $600. Rating: Two

Panic Point: $495

RISKS: Inability to pass through higher costs, fuel prices, weaker consumer, and membership churn.

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (9/23/21), FY2Q21 Earnings Analysis (3/4/21), Upgrading Costco to a One (2/25/21), $10 Per Share Special Dividend (11/16/20), Recent Buy Alert (2/28/20), Initiation (1/27/20), Investor Relations

Energy Select Sector SPDR Fund XLE; $84.63; 865 shares; 2.12%; Sector: Energy

WEEKLY UPDATE: Energy prices have taken it on the chin this week as oil prices moved lower early in the week amid signs of diplomatic progress in the Middle East. However, Israel has been talking about more action and late this week the Israeli army increased its air attacks in Gaza and its ground forces are "expanding their activity" in the Gaza Strip. The led to oil prices moving higher on Friday amid renewed concerns the Middle East conflict could expand in the region, disrupting oil supplies. Next week also brings the latest PMI data for China and should it show that economy perking up in October, it could renew oil supply-demand concerns.

1-Wk. Price Change: -6.2%; Yield: 3.9%

INVESTMENT THESIS: The Energy Select Sector SPDR Fund is an exchange-traded fund that tracks the performance of the Energy Select Sector Index. The ETF holds large-cap U.S. energy stocks. It invests in companies that develop & produce crude oil & natural gas and provide drilling and other energy-related services. The holdings are weighted by market capitalization.

Target Price: Reiterate $98; Rating: Two

Panic Point: $82.50

RISKS: Interest rates, weakness in the broad economy, energy prices.

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating a Position in the Energy Sector, State Street Global Advisors SPDR Fact Sheet for XLE.

First Trust Nasdaq Cybersecurity ETF CIBR; $43.77; 2,900 shares; 3.67%; Sector: Cybersecurity

WEEKLY UPDATE:

This week A newly emerged ransomware gang claims to have successfully gained access to the systems of a US plastic surgeon's clinic, leaking patients' pre-operation pictures in an attempt to hurry a ransom payment. We also learned that thousands of Massachusetts customers who use the Bank of Canton may have had personal information, such as account numbers and social security numbers, exposed following a data breach. These and other breaches and the need for companies to shore up their cyber defenses set up quarterly results next week from CIBR constituents including Checkpoint Software (CHKP), Cloudflare (NET), and Fortinet (FTNT). Confirmation of the growing cyber threat and spending to fend it off could lead to a nice pick up point for CIBR shares, especially if they successfully test their 200-day moving average near $43.30.

1-Wk. Price Change: -2.3% Yield: 0%

INVESTMENT THESIS: The First Trust Nasdaq Cybersecurity ETF seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of an equity index called the Nasdaq CTA Cybersecurity Index. The Nasdaq CTA Cybersecurity Index is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices to protect the integrity of data and network operations. To be included in the index, a security must be listed on an index-eligible global stock exchange and classified as a cybersecurity company as determined by the Consumer Technology Association. Each security must have a worldwide market capitalization of $250 million, have a minimum three-month average daily dollar trading volume of $1 million, and have a minimum free float of 20%.

Target Price: Reiterate $62; Rating: Two

Panic Point: $38.50

RISKS: Cybersecurity spending, technology, and product development, the timing of product sales cycle, new products, and services in response to rapid technological changes and market developments as well as evolving security threats.

ACTIONS, ANALYSIS & MORE: We're Swapping One Cybersecurity Stock for Another, ETF Product Summary

Lockheed Martin Corp. LMT; $443.39; 295 shares; 3.78%; Sector: Aerospace & Defense

WEEKLY UPDATE: Following last week's above consensus earnings report from Lockheed, last Friday the White House sent Congress a supplemental funding request for roughly $105 billion that includes aid for Israel, Ukraine, countries in the Indo-Pacific region, and border security. With House Speaker Mike Johnson now in place, the House can now get back to governing and that means working through the White House's supplemental funding request. Recent news suggests Johnson may look to split the bill, but the coming days should bring a greater level of clarity for that as well as plans to avoid a potential government shutdown in mid-November. In other developments, Lockheed continues to win new programs, adding to its multi-year backlog including a $364.31 million contract to deliver MH-60R aircraft for Norwegian government.

1-Wk. Price Change: 0.2% Yield: 2.8%

INVESTMENT THESIS: Lockheed Martin is the largest defense contractor globally and has dominated the Western market for high-end fighter aircraft since the F-35 program was awarded in 2001. Lockheed's largest segment is aeronautics, which is dominated by the massive F-35 program. Lockheed's remaining segments are rotary and mission systems, which is mainly the Sikorsky helicopter business; missiles and fire control, which creates missiles and missile defense systems; and space systems, which produces satellites and receives equity income from the United Launch Alliance joint venture. Historically, the stability of defense spending has been a haven during periods of economic uncertainty, and we see that repeating once again even as geopolitical conflicts are likely to lead to incremental demand for Lockheed's products. The company has increased its dividend consistently over the last 19 years and is widely expected to boost it again in the coming days. In October 2022, Lockheed announced its board authorized the purchase of up to an additional $14.0 billion of LMT stock under its share-repurchase program.

Target Price: $520; Rating: Two

Panic Point: $360

RISKS: Contracts and budget risk with the U.S. government and the Department of Defense, F-35 program funding and renewal, competition, and subcontractor issues.

Mastercard MA; $364.08; 275 shares; 2.90%; Sector: Info. Tech

WEEKLY UPDATE: Following Mastercard's quarterly results, management's guidance for slower December quarter revenue growth, and our concerns over slower consumer spending led us to reduce our MA target by $20 to $410. Our thinking centers on higher credit-card balances in the U.S. and Europe as well as the return of student debt payments in the US suggest MA will see slower gross dollar volume growth. We continue to see consumers swiping, tapping, and using mobile payments -- and that should continue to drive share gains against cash and checks. However, we are adopting a more conservative view on those prospects, overall consumer spending, and therefore MA shares. Should our revised gross dollar volume expectations prove to be conservative, that would be a reason for us to revisit our new price target. However, should forthcoming data for the U.S., eurozone, and China point to a consumer spending rollover in a more meaningful way, that could lead us to rethink the role of MA shares in the portfolio.

1-Wk. Price Change: -5.3% Yield: 0.6%

INVESTMENT THESIS: Mastercard is a card network company that benefits from the secular shift away from cash transactions and toward card-based and electronic payments. On Covid-19 dynamics, we view MA as a "reopening" play and an economic recovery play within technology because its cross-border volumes fell sharply during the pandemic but will rebound as mobility increases and travel restrictions ease. Mastercard has more international exposure relative to Visa, making its growth outlook more susceptible to new travel restrictions. However, we view MA as the better long-term play as we are betting on that inevitable recovery.

Target Price: Reiterate $410 Rating: Two

Panic Point: $340

RISKS: The recovery in cross-border transactions, regulation in the payments market, competition from other fintechs, pricing pressures.

Microsoft Corp. MSFT; $329.81; 325 shares; 3.1%; Sector: Technology

WEEKLY UPDATE: Following Microsoft's stellar September quarter earnings report and guidance, we upgraded MSFT shares to a Two rating from Three, keeping our $390 target price for now. Our thinking is we will need to see either upside in the shares closer to $415 to justify upgrading MSFT shares to a One rating or the shares retreat to the $310ish level. We continue to think the company's eventual briefing on the integration of Activision and the corresponding synergies and cost savings are potential catalysts for such an upgrade. While some, like Goldman Sachs, have started to bake those expectations into their price targets, we'll hold off until we have more concrete insights on that front.

1-Wk. Price Change: 1% Yield: 0.9%

INVESTMENT THESIS: We believe the cloud to be a secular growth trend and that upside to shares will result from Microsoft's hybrid cloud leadership as the company grabs market share in this expanding industry. While companies may look to build out multi-cloud environments, Microsoft's Azure offering will be a prime choice thanks to the company's decision to provide the same "stack" used in the public cloud, to companies for their on-premises data centers. Additionally, we would note that hybrid environments are currently the preference for most companies because they allow them to maintain critical data in-house while taking advantage of the agility and scalability provided by public clouds. Outside of the cloud opportunity, we maintain a positive view on the company's growing gaming business, which we believe is becoming an increasingly prominent factor in the Microsoft growth story as gaming becomes more mainstream, management works to convert its gaming revenue from one-time license purchase to a recurring subscription model and as technologies like augmented/virtual reality evolve. Finally, as it relates to LinkedIn and other subscription-based services such as O365 and various Dynamics products, we continue to value them highly for their recurring revenue streams, which we remind members, to provide for greater transparency of future earnings.

Target Price: $390; Rating: Two

Panic Point: $280

RISKS: Slowdown in IT spending, competition, cannibalization of on-premises business by the cloud.

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (7/27/21), Ignite 2021, Microsoft Acquires ZeniMax (9/22/20), CEO Satya Nadella on CNBC (3/25/20), CEO Satya Nadella speaks at the World Economic Forum (1/23/20)

McDonald's Corp. MCD; $255.76; 410 shares; 3.03%

WEEKLY UPDATE: Ahead of McDonald's reporting its September quarter results on Monday, Deutsche Bank initiated coverage on the shares this week with a Buy rating and a $287 target. Oppenheimer cut its target to $315 from $330, but reiterated its Outperform rating as Wedbush lowered its target to $310 from $330. The September Retail Sales report as well as quarterly results from American Express (AXP) pointed to strong restaurant sales during 3Q 2023, a positive for McDonald's. When the company reports, we'll be sizing up its global comp sales against the +11.7% figure reported in the June quarter and be interested in what management says about prospects for additional price increases given food and wage inflation. Based on those learnings, we have some additional room to grow the portfolio's position in MCD shares. Our panic point remains at $235.

1-Wk. Price Change: -0.9%; Yield: 2.6%

INVESTMENT THESIS: The company franchises and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 40,275 McDonald's restaurants at year-end 2022, approximately 95% were franchised. The US market accounts for ~40% of total revenue, International 50%, and International Developmental Licenses Markets & Corporate ~10%. With consumers facing continued inflation pressures, we see McDonald's winning consumer wallet share as it benefits from pricing action put in place in recent quarters and improving input costs.

Target Price: $325; Rating Two

Panic Point: $235

RISKS: Consumer spending, competition, supply chain interruption, franchise business model, employment challenges.

ACTIONS, ANALYSIS & MORE: We're Moving This Bullpen Name Up to the Portfolio, Here's Why We're Adding This Name to the Bullpen, McDonald's Investor Relations.

Marvell Technology Inc.MRVL; $47.26 ; 2,000 shares; 2.73%; Sector: Technology

WEEKLY UPDATE: Marvell had a rough week after failing to hold the 200-day moving average last week. Volume trends have started to pick up, but the stock did manage to fill the gap from May's earnings report. At this point, the stock is very oversold and is due for a good-sized bounce but could face some resistance at the 200-day moving average near $50.50. A successful move through that level would attract institutional money as traders tend to closely watch movement relative to the 200-day moving average. Intel's September quarter earnings likely point to further data center market share erosion amid continued growth at Alphabet, Amazon, and Microsoft. We will look to verify that with quarterly results next week from AMD (AMD). If confirmed, it would be a positive reason to wade into MRVL shares, especially after American Tower (AMT) posted a strong quarter this week, sharing it sees a coming surge of network development spending as 5G networks continue to densify. Marvell reports earnings Friday December 1st.

1-Wk. Price Change: -4.5%; Yield: 0.5%

INVESTMENT THESIS: Marvell is a fabless supplier of high-performance standard and semi-custom infrastructure semiconductor solutions. These solutions power the data economy, enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. With roughly 75%-80% of Marvell's revenue stream tied to digital infrastructure, we see it continuing to benefit from rising content consumption and creation. Pointing to that rising demand that necessitates network densification and the build of digital infrastructure, Ericsson sees global monthly average usage per smartphone reach 46 gigabytes (GB) by the end of 2028 vs. 19 GB in 2023 and 15 GB in 2022.

Target Price: Reiterate $62; Rating: Two

Panic Point: $45

RISKS: Technology risk, customer risk, competition risk, reliance on manufacturing partners, and supply chain constraints.

ACTIONS, ANALYSIS & MORE: We're Watching These Three Names Set to Report Thursday, Why We Added This Chip Stock to the Bullpen, Investor Relations.

ProShares Short QQQ ETF PSQ; $11.35; 4,070 shares; 1.34%

WEEKLY UPDATE: We have continued to keep our PSQ position active as the economy has proved to be stronger than previously while inflation pressures have rekindled, and recent data shows a lack of meaningful progress. We see that setting the market up for another round of "tough talk" from Fed Chair Powell following next week's November Fed monetary policy decision. This raises the possibility the first Fed rate cut may come even later than expected next year something the market would need to wrap its head around. To that we can add uncertainty around the Israeli-Hamas War and the risk it may spread in the Middle East region. Next week also brings another leg up in the September quarter earnings season that will see companies contend with higher borrowing costs year over year, concern over consumer spending power amid the return of student debt repayments, and dollar tailwinds less robust than previously expected. When we see signs the Fed shifts from a hawkish to a more neutral tone, we would be open to exiting our position in PSQ shares subject to the market's technical setup at that time.

1-Wk. Price Change: 2.8%; Yield: 0.0%

INVESTMENT THESIS: ProShares Short QQQ seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Nasdaq 100 Index. The Nasdaq 100 Index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.

Target Price: N/A; Rating Two

RISKS: Because PSQ shares track the inverse of the Nasdaq 100 Index, PSQ shares will move lower when the Nasdaq 100 Index moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1, and Initiating 1

ProShares Short S&P 500 ETF SH; $15.14; 3,310 shares; 1.45%

WEEKLY UPDATE: We have continued to keep our SH position active as the economy has proved to be stronger than previously while inflation pressures have rekindled, and recent data shows a lack of meaningful progress. We see that setting the market up for another round of "tough talk" from Fed Chair Powell following next week's November Fed monetary policy decision. This raises the possibility the first Fed rate cut may come even later than expected next year something the market would need to wrap its head around. To that we can add uncertainty around the Israeli-Hamas War and the risk it may spread in the Middle East region. Next week also brings another leg up in the September quarter earnings season that will see companies contend with higher borrowing costs year over year, concern over consumer spending power amid the return of student debt repayments, and dollar tailwinds less robust than previously expected. When we see signs the Fed shifts from a hawkish to a more neutral tone, we would be open to exiting our position in SH shares subject to the market's technical setup at that time.

1-Wk. Price Change: 2.6%; Yield: 0.0%

INVESTMENT THESIS: The Pro Shares Short S&P 500 ETF seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the S&P 500. We are using SH shares to blunt market volatility and hedge the portfolio's performance against its benchmark, the S&P 500. Given the tactical nature of this position, we do not expect to hold SH shares for the same length of time as we do the portfolio's long positions.

Target Price: N/A; Rating Two

RISKS: Because SH shares track the inverse of the S&P 500, SH shares will move lower when the S&P 500 moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1, and Initiating 1.

Qualcomm Inc. QCOM; $106.46 ; 1,100 shares; 3.39%

WEEKLY UPDATE: On Friday we added to our position in Qualcomm shares following 3Q 2023 smartphone data from IDC that showed a reacceleration in smartphone shipments. That same data suggests September quarter expectations for Qualcomm are overly conservative. Qualcomm reports its earnings on November 1, with customers Samsung reporting the day before and Apple the day after. When Qualcomm does report, we expect it will discuss its recently announced multi-year extension with Apple, something that should provide some lift to 2024-2025 expectations. We also expect Qualcomm to update its progress in the auto chip market and discuss other end market prospects, including IoT, when it reports its quarterly results.

1-Wk. Price Change: -2%; Yield: 3%

INVESTMENT THESIS: Qualcomm focuses on foundational technologies for the wireless industry, including 3G (third generation), 4G (fourth generation), and 5G (fifth generation) wireless technologies and processor technologies including high-performance, low-power computing, and on-device artificial intelligence technologies. As a connected processor company, its technology roadmap aims to enable the connected intelligent edge (the next generation of smart devices) across industries and applications beyond handsets, including automotive and the Internet of Things (IoT). Qualcomm has three reportable segments: QCT (Qualcomm CDMA Technologies) semiconductor business, which develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in mobile devices; automotive systems for connectivity, digital cockpit, and ADAS/AD; and IoT including consumer electronic devices; industrial devices; and edge networking products. QCT accounts for 80%-85% of revenue. QTL (Qualcomm Technology Licensing) licensing business grants licenses or otherwise provides rights to use portions of the company's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. QTL accounts for ~15% of Qualcomm's revenue but contributes a greater portion of the company's operating income. The company has been paying a quarterly dividend since 2003, and its next quarterly dividend of $0.80 per share will be paid on September 21 to shareholders of record on August 31.

Target Price: $150; Rating Two

Panic Point: $97

RISKS: Customer risk, technology advancement, competition risk, third-party supplier and manufacturing partner risk.

ACTIONS, ANALYSIS & MORE: We're Making Another Call to the Portfolio's Bullpen, Here's When We'd Consider Taking a Position in Qualcomm, Qualcomm Investor Relations

SPDR Gold Shares ETF GLD; $186.15 ; 312 shares; 1.68%; Sector: Commodities

WEEKLY UPDATE: Inflation is still rising, and geopolitical tensions persist and could potentially expand in the Middle East. Gold is the preferred vehicle during unstable times, and GLD shares continued to rise as gold futures approach $2,000 per ounce. That level has been a tough one to crack since the summer, but a move above that level bodes well for GLD to climb back up into the $190's again. Given the sharp move from around $168 (oversold) to the current share price (overbought), subject to what weekend developments bring, we may opt to convert some of that move into realized gains for the portfolio and for members.

1-Wk. Price Change: 1.4% Yield: 0.0%

INVESTMENT THESIS: The GLD ETF is a proxy for gold. This "trust" buys and sells gold futures each day to mimic the daily moves in the underlying asset, in this case, gold. We see gold as an ideal hedge against a weaker dollar, strong inflation (which tends to weaken the dollar) alternative, and in uncertain times (worry over war and battles). For the past 15 years, gold has been a strong asset class held by fund managers, countries, and banks. The metal is not correlated with markets and will move based on the demand/supply dynamic in the marketplace. Other precious metals such as silver and platinum are good proxies for the criteria stated earlier, however, gold is far more liquid and offers better upside opportunities.

Target Price: Reiterate $200; Rating: Two

Panic Point: $165

RISKS: Weak inflation data, interest rate risk, dollar strength relative to other currencies, geographic risk.

Trinity Capital Inc. TRIN; $13.65; 4,610 shares; 1.79%

WEEKLY UPDATE: It was another quiet week for Trinity Capital but that will change next week when the company reports its quarterly results after the market close on November 1. The following day, earnings from fellow business development company Main Street Capital (MAIN) will give us some additional context for Trinity's results. When we dig into Trinity's report, we'll want to hear how management plans on investing proceeds from its common stock offering during 3Q 2023. We expect that offering will impact Trinity's net asset value (NAV) per share, but we are far more focused on the growth trajectory for its portfolio that will drive its NAV per share and dividend payments higher over the longer-term. We remain interested in expanding the portfolio's exposure to the shares and their dividend income stream as the market finds its footing.

1-Wk. Price Change: -1.8%; Yield: 16.1%

INVESTMENT THESIS: Trinity Capital is a Business Development Company that provides debt, including loans and equipment financing to growth-stage companies, including venture-backed companies and companies with institutional equity investors. Trinity aims to generate current income and, to a lesser extent, capital appreciation through its investments. It does this by making investments consisting primarily of term loans and equipment financings and, to a lesser extent, working capital loans, equity, and equity-related investments. Because Trinity is a BDC, it must pay out at least 90% of its net income to shareholders in the form of dividends. Trinity is positioned to fill the gap left by recent bank failures and shareholders should benefit as that lifts the company's investment portfolio and income stream, and its dividend payout to shareholders.

Target Price: $16; Rating Two

Panic Point: $11.25

RISKS: Global economic, political, and market conditions; regulations governing our operations as a BDC; credit facility provisions

ACTIONS, ANALYSIS & MORE: Let's Dig Into the Thesis Behind Our Newest Position, As Banks Start Tightening Up on Loans, Let's Check This Bullpen Stock, Listen as We Make a Bullpen Pick -- and Talk Business Development Cos.; Investor Relations.

Universal Display OLED; $144.12; 595 shares; 2.48%; Sector: Semiconductors

WEEKLY UPDATE: We added to our Universal Display holdings on Friday following data from research firm IDC showing smartphone shipments reaccelerated in the September quarter, rising just over 14% sequentially after being flat quarter over quarter in Q2 2023. This is the latest data point supporting the expected turn in the smartphone market and the seasonal ramp is unfolding. Higher smartphone volumes, especially for larger screen smartphones, bode very well for Universal Display's organic light-emitting diode materials business while higher shipment volumes are positive for Qualcomm. IDC's data also suggests consensus expectations for Universal's September-quarter revenue to grow just over 1% sequentially is overly conservative. Ahead of Universal report its September quarter on November 2, the next two catalysts to watch will be quarterly results from Samsung on October 31 and Qualcomm on November 1. We will also be focused on Apple's earnings on November 2 and what it says about iPhone prospects for the coming quarters. Late in the week, Oppenheimer reduced its OLED price target from $188 to $180, still keeping it above our $175 target.

1-Wk. Price Change: -7.9% Yield: 0.9%

INVESTMENT THESIS: Universal Display focuses on the development and commercialization of organic light-emitting diode technologies and materials for use in display and solid-state lighting applications. OLED displays are capturing a growing share of the display market, especially in the mobile phone, television, monitor, wearable, tablet, notebook, personal computer, augmented reality (AR), virtual reality (VR), and automotive markets. This adoption reflects advantages over competing display technologies with respect to power efficiency, contrast ratio, viewing angle, video response time, form factor, and manufacturing cost. Universal's business strategy is to develop new OLED materials and sell existing and new materials to product manufacturers for display applications, such as mobile phones, televisions, monitors, wearables, tablets, portable media devices, notebook computers, personal computers, and automotive applications, and specialty and general lighting products. The company also looks to license its OLED material, device design, and manufacturing technologies to those manufacturers. As such, Universal has a significant portfolio of proprietary OLED technologies and materials with more than 5,500 patents issued and pending worldwide.

Target Price: Reiterate $175 Rating: Two

Panic Point: $140

RISKS: Patent and Intellectual property protection; maintaining OLED manufacturing and customer relationships; technology risk; market risk.

ACTIONS, ANALYSIS & MORE: We're Initiating a New Position Out of the Bullpen; Let's Visit Two Bullpen Stocks; Universal Display Investor Relations.

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