Red-hot jobs report led to a monster rally

Beat The Market With Realtime Data! Join our LIVE Trading Session at 8amPT/11amET͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ THE WEEK IN REVIEW Every Saturday Starting At 8am PT / 11am ET Every week we review the rollercoaster ride that is the most dynamic stock market in history. We review, in detail, the best options and equity plays of the week. Your host, Mike Anderson, will provide a step by step breakdown of how these winning trades were first identified and how they were timed. Understanding how these trades are made will help you to identify similar trends and have confidence in executing your own successful trades. Plus: Bring your ticker and we will use Trade Algo's proprietary algorithms to help you analyze that trade you've been thinking about. [JOIN OUR LIVE TRADING SESSION @ 6am PT / 9am ET!]( [Shadow] Hello investor, Nonfarm payrolls report smashed the expectations. It wasn’t even close. The actual report had a payroll growth of 339,000 versus a modest expectation of just 190,000 increase. Wait a minute? Strong employment data should have been bad news for the market because it could mean extra rate hikes. But average hourly earnings grew less than economists expected. The unemployment rate also increased. These moved exactly how the Federal Reserve would want them to be. The central bank is worried about wage growth and has warned that the unemployment rate will need to rise in order for inflation to fall. All in all, it sets up for a potential soft landing for the Fed. - “The so-called Goldilocks has entered the house,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management said. “Clearly, on the bullish side, there are signs that inflation is starting to wane, speculation that the Fed is going to move into pause mode, increasing the likelihood of a soft landing.” Red-hot tech stocks: Tesla lost about two-thirds of its value in 2022. And guess what? The stock skyrocketed by 74% this year. This week was a phenomenal one with an 11% gain. Nvidia did even better with a 169% gain for the year. A lot of gains came after the AI hype hit a new level. Nvidia raised its guidance, while Broadcom expects its AI revenue to double this year. Moreover, the risks surrounding other stocks led investors to flock to mega-cap stocks. - “I’m focusing on mega-cap tech here and semiconductors as well,” said Danielle Shay, vice president of options at Simpler Trading. “The AI trade has been absolutely phenomenal.” Bank insiders are buying back shares: The collapse of three regional banks led to one of the worst quarters ever for the sector. But bank insiders are buying shares in their own companies. The number of buyers jumped to 778 in the second quarter from 524 in the first quarter. Research firm VerityData said the bulk of these purchases were for small and midsize banks. - “Insiders in this group are expressing a strong belief that the regional-banking system as a whole is sound, that there’s not a danger of a wide-scale collapse,” Ben Silverman, director of research at VerityData, said. - “This signifies long-term confidence in these banks’ ability to weather whatever near-term storm there might be.” (Source: Bloomberg) What’s more, the good metric for insider sentiment is the buyers-to-sellers ratio. This compares unique insider buying to unique insider selling. This means one insider making multiple transactions will still count as one. The average quarterly ratio for banks since 2011 was 1.8 to 1. In the second quarter, the ratio was at a whopping 14.7 to 1! Love Insane Free Cash Flow? Buy This Stock Immediately Today’s Stock Pick: Warner Bros. Discovery ([WBD]( You’re going to love the stock of Warner Bros. Discovery. First of all, stocks took a hard beating since April, falling by more than 50%, after the company began trading as a merged company between Warner Media and Discovery. Warner Media spun off from AT&T and merged with Discovery to form this new company. This company is basically another “Disney.” Its assets are incredible with Harry Potter, Game of Thrones, and the DC superheroes. That’s right. We are talking about the most popular book series ever (Harry Potter) and the most popular TV series ever (Game of Thrones). Following Disney’s blueprint, the company is creating sequels and spin-offs of the original content and expanding into video games and theme parks. Harry Potter’s new game, Hogwarts Legacy, will be released soon. It is an RPG game where the gamer can create its own character and become a student at Hogwarts. (Photo: Hogwarts Legacy) A spin-off series of Game of Thrones, House of Dragon, is averaging 29 million viewers per episode. To compare, Game of Thrones averaged more than 44 million viewers per episode for its final season in 2019. Warner Bros. TV is the biggest maker of television in the world, and HBO is perhaps the most precious storytelling studio in the world. It also makes movies (you’ve probably seen the Warner Bros. logo at the beginning of a film), news programming (CNN), Discovery content, and live sports TV where it owns rights to March Madness, NBA games, Stanley Cup finals, and MLB playoffs. All in all, Warner Bros. Discovery owns perhaps the biggest content assets in the world that they can monetize no matter where consumers go or what their preferences are: premium, pay-TV, free-to-air, theatrical, streaming, and gaming. - “I believe we have the strongest hand in the industry in terms of the completeness and quality of our portfolio of assets and our IP across sports, news, nonfiction, and entertainment, in virtually every region of the globe and in every language,” said CEO David Zaslav. CEO David Zaslav (Photo: David Buchan/Variety) A bad quarter: Warner Bros. Discovery struggled in the recent quarter with revenue declining by 11%. The net loss was $2.3 billion. The company took a massive debt of $43 billion to pay for the merger and there are some costs that had to be incurred during the quarter. But it offers an opportunity to buy while the stock is cheap. Warner Bros. Discovery is working on creating a powerful subscription package that would be similar to Disney+. Each of the company’s brands will stand alone as individual titles. For example, HBO will remain as its own brand under the umbrella of the streaming subscription. Now, let’s talk financials. Despite a bad quarter, the company expects to deliver a free cash flow of $3 billion for the year. This is H-U-G-E. The reason is simple – the stock is trading at a market cap of $27 billion. We are talking about more than a 10% return on free cash flow ALONE. Now, the company expects about $12 billion in adjusted EBITDA for the year 2023 and its free cash flow conversion rate to be in the 33% to 50% range. Let’s use the midrange for the FCF conversion rate of 41%. We would get about $4.9 billion in free cash flow for next year. That would be an 18% return on WBD’s market cap of $27 billion. That’s helluva of value for a proven company like Warner Bros. Discovery. And the return could increase over the years. The company expects to deliver $3.5 billion in savings from its merger through synergy. Plus, don’t forget about its massive debt from the merger. The more company pays down its debt, the bigger its free cash flow will be. (Source: Warner Bros. Discovery) Bottom line: Warner Bros. Discovery is a low-risk stock because of its high-value assets. Right now, the stock is going through rough patches because of an economic slowdown and merger costs. This is your opportunity to buy the company on the operating table when its economies are very, very attractive. [JOIN OUR LIVE TRADING SESSION @ 6am PT / 9am ET!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](