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Biden’s Security Plan Please click here for a chart of oil futures.
Note the following:
- The chart shows a big run up in oil. When oil crossed over $90, $100 oil became the consensus in the marketplace.
- As the chart shows, the $100 consensus caused a short squeeze.
- As the chart shows, Biden’s security plan for the Middle East started gaining traction, causing the biggest fall in oil in a year. Biden’s security plan calls for Saudi Arabia to normalize relations with Israel in return for a security pact with the U.S. and other major concessions from the U.S. The presumption is that the result will be Saudi Arabia increasing oil production to help lower oil prices. Considering the presidential election is next year, lowering oil prices with Saudi cooperation is high on Biden’s agenda.
- In The Arora Report analysis, lower oil prices are a positive for the stock market with the exception of oil stocks. The reason is that lower oil prices mean lower inflation.
- In The Arora Report analysis, Middle East politics is very volatile and there does not seem to be enough support in the U.S. Congress to support the security pact with Saudi Arabia at this time. For these reasons, the fall in oil prices could turn out to be temporary.
- Weekly initial jobless claims came at 207K vs. 225K consensus. This indicates that the job picture continues to stay very strong. This strong data caused an immediate uptick in yields and turned money flows in the Magnificent Seven stocks lower. This is important because the stock market is being held up due to the strength in the Magnificent Seven stocks based on AI frenzy.
- Weekly initial jobless claims is a leading indicator and carries heavy weight in our adaptive ZYX Asset Allocation Model with inputs in ten categories. In plain English, adaptiveness means that the model changes itself with market conditions. Please click here to see how this is achieved. One of the reasons behind The Arora Report’s unrivaled performance in both bull and bear markets is the adaptiveness of the model. Most models on Wall Street are static. They work for a while and then stop working when market conditions change.
- The next major data release is the jobs report. The jobs report will be released at 8:30am ET on October 6. The consensus for non-farm private payrolls is 150K. The consensus for the headline is 158K.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Weight Loss Drugs Walmart Inc (NYSE: WMT) says that people on weight loss drugs are buying slightly less food. The consensus is beginning to develop that weight loss drugs from Eli Lilly And Co (NYSE: LLY) and Novo Nordisk A/S (NYSE: NVO) are negative for many med-tech stocks, restaurant stocks, alcohol stocks, and food and beverage stocks. If these predictions start coming true, money will rush out of these stocks and will likely go into artificial intelligence stocks. There is a fortune to be made in artificial intelligence over the next seven years, but it will be treacherous at times. Investors who develop in-depth knowledge of investing in artificial intelligence will do better compared to those who do not. The easiest way to develop your knowledge about investing in artificial intelligence is to listen to the podcasts in Arora Ambassador Club.
Magnificent Seven Money Flows In the early trade, money flows are positive in Tesla Inc (NASDAQ: TSLA) and NVIDIA Corp (NASDAQ: NVDA).
In the early trade, money flows are negative in Apple Inc (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META) and Microsoft Corp (NASDAQ: MSFT).
In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust (ARCA:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is buying stocks in the early trade. Smart money is