Investors Are Losing Their Risk Appetite

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Investors Are Losing Their Risk Appetite The tensions kept building up on Wall Street, as the geopolitical conflict looks poised to escalate, according to White House spokesman John Kirby. The Pentagon said it will send a guided-missile submarine to the Iarsel region and the second aircraft carrier will arrive, as well. Israel and the U.S. expect Iran to avenge the killing of militant leaders in Tehran and Beirut. - The US and its allies “have to be prepared for what could be a significant set of attacks,” said White House spokesman John Kirby. He also added that Israel believes it’s “increasingly likely that there’ll be an attack” by Iran and its proxies. White House spokesman John Kirby (Photo: AP Photo/Alex Brandon) As a result, oil surged to $80 in anticipation of a potential escalation. Investors are losing their appetite for risks after a weak jobs report and recent geopolitical developments. At the same time, a strong market recovery after a solid initial jobless claims reading showed that investors are willing to get back in the market as soon as fears are proven wrong. - “When the world feels uneasy, people feel less inclined to take risks,” said Callie Cox at Ritholtz Wealth Management. - “But fear can be a healthy dynamic for a market that thrives on clearing low hurdles. When it turns out that bad news isn’t as bad as people think, they pile back in.” We will get the latest reading for the producer price index this morning. It is the first of two inflation readings for this week. The consumer price index will be out tomorrow. Economists expect the PPI to remain flat with a monthly gain of 0.2% — the same pace as the previous month’s reading. The market shouldn’t move much if the inflation data comes in as expected. Any surprises in either direction will likely spark volatility. A hotter-than-expected inflation may delay the first interest rate cut, while a cooler-than-expected reading may indicate a looming recession. - “Volatility could return this week,” Solita Marcelli at UBS Global Wealth Management said. - “If inflation is too low, this may heighten concerns that the US may be heading for a recession. If inflation is too high, it could encourage fears that the Federal Reserve may be unable to cut rates quickly enough to protect the economy. Geopolitical risks also remain elevated.” Later this month, Fed Chair Jerome Powell will make his speech in Jackson Hole, and Nvidia will report its results. These two catalysts can also be a game-changer for the market. Consumers Are Spending Big Money on Pets — Here’s How to Profit from the Trend Today’s Stock Pick: Freshpet (FRPT) Freshpet is a sneaky way to play the pet industry that is witnessing a major disruption. Namely, pet owners are starting to “humanize” pets more. They want to pander them. Feed them the same food that humans eat. Fresh, all-nautral foods are becoming popular with people, and they want their pets to also eat fresh foods, as well. That’s where Freshpet comes into the picture. (Source: Freshpet) You can see the evolution of pet foods in the graphic below: (Source: Freshpet) Pet food is a $52 billion industry, and Freshpet holds a whopping 96% of the market share for fresh/frozen foods in measured channels. Most of their sales came from dog food category. It only holds a 3% share in dog food which potentially offers a long growth runaway. (Source: Freshpet) Since Freshpet plays in a newer category, it takes time for the company to develop brand awareness. Household penetration grew steadily from just 5.7 million to 11.6 million in 2023. Last year saw an acceleration in household penetration growth. (Source: Freshpet) Sure enough, Freshpet posted six straight years of more than 25% revenue growth. 2023 grew by 29% That is a strong, strong growth rate that is a classic trait of a powerful compounding stock. (Source: Freshpet) As for its 2027 targets, Freshpet aims to nearly double its household penetration to 20 million, increasing net sales to $1.8 billion (from $766 million last year), and posting an adjusted EBITDA margin of ~18%. So, the next four years are poised to be a compounding growth story for Freshpet that could work wonders for its stock price. (Source: Freshpet) Bottom line: New companies leading new categories are often a strong growth story for the stock market. Freshpet has about 96% market share in fresh/frozen foods for pets, which gives it a huge head start over other competitors. With the company expecting ~15%+ annual growth for the next four years, this is the company to watch out for. [EARN WHILE YOU LEARN! 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