What’s Up This Week?
What is it?
Stocks were up on Monday for a modest start to the week. Tesla led the way from the opening bell as the stock was up over 5% initially with no sign of coming back down.* While the market has not been flying high as a whole lately, some companies have been. Some, like Tesla, are in the U.S. while others are international.
Why does it matter?
While we have found some good opportunities locally, there is some positive performance coming out of our investments focused in China for example. It will be interesting to see how China and the U.S. compete in the global market. For now, we see opportunities in both. Also, this is a chance to diversify our portfolios. That way we can limit the risk of having all our eggs in one basket, which we do not do.
Cannabis Stocks are Flying High
What is it?
“A move by the Drug Enforcement Administration to review the Schedule I status of cannabis has fueled optimism in the sector in the past week. The DEA is taking up the issue after the U.S. Department of Health and Human Services last week recommended that cannabis be re-classified to Schedule III, which would legalize cannabis for regulated medical use under federal law.”**
Why does it matter?
We do hold a position with exposure to cannabis companies in our Tactical MegaTrends model.
“Cannabis stocks have been out of favor for institutional investors since most avoid contact with plant-touching businesses because of the current federal classification of pot as a Schedule I substance with no medical value.”**
We could still be in the early stages of broader investment into this industry. If institutional investors begin investing as the laws become more laid back, there could be a lot of upside. However, we have seen retail investors buy up these stocks before just to have them fall lower. We will continue to analyze the risk to reward of these investments whether they are performing well or not.
Other articles we found interesting this week:
J.M. Smucker CEO: 4 reasons why buying Twinkies maker Hostess makes sense
Oracle revenue misses estimates as tough economy hurts cloud spending
UAW vs. Big Three: Where things stand as strike deadline looms
Current 401(k) portfolio
Our last 401(k) portfolio reallocation: 8/14/2023.
Want more information?
The weekly market insight provides a window into the process we use in our investment management process. At Breakaway, we believe markets are always changing and require a nimble yet data-oriented approach.
Our process attempts to identify trends and momentum in the financial markets. With that information, we align our clients’ portfolio accordingly in the hope to help our clients accomplish their life goals while attempting to lower the risk of a large drop in their portfolio.
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Sources:
*Christine Idzelis. “U.S. stocks finish higher as Tesla propels S&P 500”. Market Watch. 9/11/2023. https://www.marketwatch.com/story/u-s-stocks-finish-higher-as-tesla-propels-s-p-500-dow-rises-third-straight-day-24c43fc?mod=home-page
**Steve Gelsi. “Canopy Growth’s stock rockets to a record rally, has quadrupled in two weeks”. Market Watch. 9/11/2023. https://www.marketwatch.com/story/canopy-growth-stock-trades-above-1-for-first-time-since-may-ff5b992c?cx_testId=22&cx_testVariant=cx_1&cx_artPos=1&mod=home-page-cx#cxrecs_s
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