Image Source:  As the markets gear up for another trading session, the spotlight remains on key stock performances and macroeconomic trends. Today’s pre-market analysis revealed a strong risk-on sentiment fueled by tax deferral strategies and robust earnings reports. Watch the full pre-market prep video . Below, we summarize the macro landscape and dive into the top five stock picks of the day, analyzed using StoryTrading’s 4-Pillar Strategy: ⚡️Catalysts, ❤️Sentiment, 📊Fundamentals, and 📈Technicals. Macro Overview The market continues to ride a Santa Rally, buoyed by favorable tax-deferral dynamics and a stronger-than-expected jobs report. While job growth exceeded expectations, a rise in the unemployment rate has introduced a mixed narrative. However, bond market reactions suggest bullish tailwinds for small-cap and risk assets, as evidenced by renewed strength in IWM. Investors should prepare for potential tax-related selling in early January, but for now, markets appear poised for a “melt-up.” Top Picks of the Day GitLab () ⚡️ Catalyst: The company crushed earnings expectations, posting a 50% beat for the quarter and a 35% beat for its annual guidance. Analysts are revising their price targets upward, many pointing to levels above $80. ❤️ Sentiment: Positive momentum is building as institutional and retail investors recognize the implications of GitLab’s outperformance. 📊 Fundamentals: Although operating in “low numbers” territory (EPS in cents), the company’s growth trajectory is solid. The magnitude of the beat justifies a continued re-rating of the stock. 📈 Technicals: Key levels include $72.51 as support and $78.53 as the next upside target. With […]

Image Source:   As part of a new series, each week we typically conduct a DCF on one of the companies in our screens. This week we thought we’d take a look at one of the stocks that is not currently in our screens, PepsiCo Inc ().  ProfilePepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay’s, Cheetos, and Doritos, among others. The company dominates the global savory snacks market and also ranks as the second-largest beverage provider in the world (behind Coca-Cola) with diversified exposure to carbonated soft drinks, or CSD, as well as water, sports, and energy drink offerings. Convenience foods account for approximately 55% of its total revenue, with beverages making up the rest. Pepsi owns the bulk of its manufacturing and distribution capacity in the US and overseas. International markets make up 40% of total sales and one third of operating profits.  Recent PerformanceOver the past twelve months the share price is down 2.66%.Source: Google FinanceInputs Discount Rate: 8% Terminal Growth Rate: 3% WACC: 8% Forecasted Free Cash Flows (FCFs) Year FCF (billions) PV(billions) 2024 16.86 15.61 2025 18.36 15.74 2026 19.98 15.86 2027 21.75 15.99 2028 23.67 16.11 Terminal ValueTerminal Value = FCF * (1 + g) / (r – g) = 487.60 billionPresent Value of Terminal ValuePV of Terminal Value = Terminal Value / (1 + WACC)^5 = 331.85 billionPresent Value of Free Cash FlowsPresent Value of FCFs = ∑ (FCF / (1 + r)^n) = 79.31 billionEnterprise ValueEnterprise Value = […]

After opening the day flat, Indian benchmark turned negative as the session progressed and ended the day lower.The Benchmark equity indices gave up their 5-day winning streak to settle in red after the Governor Shaktikanta Das-led Monetary Policy Committee of the Reserve Bank of India (RBI MPC) announced to keep the repo rate unchanged at 6.5%At the closing bell, the BSE Sensex stood lower by 57 points (down 0.1%).Meanwhile, the NSE Nifty closed lower by 39 points (down 0.2%).Tata Motors, Bajaj Auto, and Axis Bank are among the top gainers today.Cipla, Asian Paint,s and Adani Ports, on the other hand, were among the top losers today.The GIFT Nifty was trading at 24,769, up by 4 points at the time of writing.The BSE MidCap index ended 0.4% higher and the BSE SmallCap index ended 0.6% higher.Sectoral indices were trading mixed today with stocks in the IT sector and the metal sector witnessing buying. Meanwhile, stocks in the IT sector and the realty sector witnessing selling pressure.MCX, Coforge, and HCL Tech hit their respective 52-week highs today.The rupee is trading at 84.68 against the US$.Gold prices for the latest contract on MCX are trading 0.3% higher at Rs 76,734 per 10 grams.Meanwhile, silver prices were trading 0.7% higher at Rs 93,047 per 1 kg.  Advait Infratech Hits 5% Upper Circuit. Here’s WhyIn news from the engineering sector, shares of Advait Infratech hit the 5% upper circuit at Rs 1,713.35 on the BSE after the company secured a significant order for the supply and installation of 24F OPGW (Optical Ground Wire) on a turnkey basis for a 400 kV transmission […]

The strange jobs reports continue as the divergence between jobs and employment widens again.(Click on image to enlarge)Data from the BLS, chart by MishPlease consider the  for November.Jobs vs EmploymentFrom September 2020 through early 2022, nonfarm payroll job gains and full time employment changes tracked together.Starting around March of 2022, a divergence between employment and jobs became very noticeable, and I have been discussing the divergence since then.Job Stats vs One Year Ago Nonfarm Payrolls: +2,274,000 Employment: -725,000 Full Time Employment: -1,342,000 In the last year, nonfarm payrolls are up by 2.3 million while employment is down by 725,000 and full-time employment is down by over 1.3 million.Job Report Details Nonfarm Payroll: +227,000 to 159,288,000 – Establishment Survey Civilian Non-institutional Population: +174,000 to 269,463,000 Civilian Labor Force: -193,000 to 168,286,000 – Household Survey Participation Rate: -0.1 to 62.5% – Household Survey Employment: -355,000 to 161,141,000 – Household Survey Unemployment: +161,000 to 7,145,000 – Household Survey Baseline Unemployment Rate: +0.1 to 4.2% – Household Survey Not in Labor Force: 368,000 to 101,177 – Household Survey U-6 unemployment: +0.1 to 7.8% – Household Survey Nonfarm Payrolls Change by Sector(Click on image to enlarge)Government and Health Services are related to the surge of illegal immigrants and the need to address them.Monthly Change in Nonfarm Payrolls(Click on image to enlarge)Monthly Revisions The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000. The change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined […]

The jobs data just came out, and it seems like mildly bad news: the unemployment rate inched up to 4.2% (expected: 4.1%) and the hourly wages went up more than expected as well (suggesting inflation). In spite of this, equity futures got a quick bump, although as of this composition the /ES and /NQ are only up about one-tenth of a single percent. Meh.With this uncertainty out of the way, the VIX is again plunging toward sub-teen levels. Complacency rules o’er the land, as folks figure there will never, ever be any problems again in their lives. For real.One stock which has been resolutely muscling higher, largely because its CEO is the de facto Co-President of the United States, is Tesla.Only half a year ago, this was a garbage stock, and literally the 500th performer of all the 500 S&P 500 stocks. Now it is poised to burst through its lifetime highs in the weeks ahead.As we work toward the end of the year, the last huge event is the Fed meeting in two weeks, which I suspect will be a nothing-burger. One key data point for those lovely gentlemen will be the Core CPI, which comes out on Wednesday before the market opens.It’s mildly annoying that, having had the first tiny “down” day in what feels like months, it looks like we’re back to the same old/same old green. Still, in spite of the blowtorch being applied to my puts, they have handled themselves admirably, as they have held up exceptionally well in, as we’ve all heard, the 56th record lifetime high in 2024. I continue to have a particular focus on semiconductor shorts.Teflon […]

The AUD/USD outlook shows brief bullish momentum for the Aussie after most economists forecast the first RBA rate cut in Q2 of next year. Meanwhile, there was uncertainty about the greenback as market participants geared up for the US nonfarm payrolls report. A Reuters poll on Friday revealed that most economists expect the RBA to keep rates unchanged at the policy meeting on Tuesday. At the same time, most do not expect a rate cut until the second quarter of next year.Policymakers have maintained a cautious outlook due to the robust labor market. At the same time, core inflation in Australia has remained high at 3.5%. Market participants are pricing a 70% chance of a rate cut in April. Meanwhile, economists believe the Aussie will gain next year because the RBA will implement fewer rate cuts than the Fed. On the other hand, the traders remained cautious, awaiting the US monthly employment report. In the previous session, unemployment claims unexpectedly rose from 215,000 to 224,000, raising fears of weaker demand in the labor sector. However, all focus is on the looming NFP report. Forecasts show the US economy added slightly under 200,000 jobs in November, a significant surge from the previous month’s reading. Meanwhile, the unemployment rate might increase from 4.1% to 4.2%. An upbeat report will show resilience in the labor sector, which might call for more caution among Fed policymakers. On the other hand, if employment is weaker than expected, the dollar might collapse. At the same time, Fed rate cut bets will […]