The fall of retail continues…
The recession caused by the pandemic caused an unthinkable of large American companies to file bankruptcy this summer. But the worst part? More are on the way.
Just to name a few: Brooks Brothers, Hertz (HTZ), California Pizza Kitchen, and Chuck E. Cheese are only three of the dozens that have fell victim to this crisis. And that’s just a sampling of Chapter 11 filings since the start of summer.
And despite record-breaking aid from the Federal Reserve and Congress, large company bankruptcies spiked 244% in July and August from the same period of 2019. And even the names that have been around for centuries aren’t safe. JCPenney (JCP), established 118 years ago, has found buyers to save the business and emerge from bankruptcy. Others, like department stores Lord & Taylor and Century 21, are shutting their doors altogether.
This wave of bankruptcy filings is a potent reminder of the economy’s current state despite the impressive numbers on Wall Street and a healthy housing market. And I think it’s important to remember that.
With that said, I believe there’s still plenty of profit opportunities out there. Still, I do think it’s essential that you plan your trade and continue to stick to your risk profile because I see volatility becoming more substantial over the weeks to come.
The earnings report to watch:
It’s another week of earnings reports.
And I know you don’t have time to be sifting through all the numbers and news.
So, here’s the one I’ll be focusing on, and I think you should too:
Adobe Inc (ADBE).
The cloud software giant has outperformed the tech sector and crushed the Nasdaq in 2020. And it’s no surprise as the cloud space has continued to thrive, especially with the work from home climate that the pandemic has created.
Recently, Adobe has been upgraded as analysts expect a knock out performance from this tech stock during earnings season. And the stock is set to release those numbers on Tuesday, September 15. Now, ADBE has been a favorite stock of mine for a while, and I’ve secured some nice size gains from it.
So, I’m looking forward to seeing the numbers this company posts, and I’ll be keeping a close eye on this report, and the second I see an opportunity, you’ll be the first to know.
Trading tip of the week…
My tip of the week?
The stock market goes down a lot faster than it goes up. And that’s an important fact to remember.
Over the last few months, we saw a predominately bullish market. And despite some volatility, the market has continued to hit new highs, running up and presenting lucrative bullish opportunities.
But lately, we’ve seen a lot of volatility come into the market. In fact, I’m the least bullish I’ve been in months. And I’ve been adjusting my trading plans accordingly. Because if you are entirely long in the stock market, you’ll be in trouble when the bottom falls out.
So, be sure to set a protection plan in place for the weeks to come. A great option is to hedge yourself with out of the money SPY put spreads.
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