By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
AI As Consequential As Electricity
Please click here for a chart of JPMorgan stock (JPM).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of JPM stock is being used to illustrate the point.
- JP Morgan is the largest U.S. bank. Its CEO Jamie Dimon is the most influential banker in the world. Prudent investors pay attention to what Jamie Dimon says. Prudent investors recognize that Dimon has access to more private data than almost anyone else.
- Jamie Dimon said, “We are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others.”
- The trendline on the chart shows the strong up move in JP Morgan stock since the last earnings.
- A quick look at the JPM chart shows that JPM is doing significantly better than popular stocks such as Apple (AAPL) and Tesla (TSLA).
- JP Morgan will kick off the earnings season on Friday, April 12.
- JPM is long from $34.14 in the ZYX Buy Model Portfolio from The Arora Report. The current price of $197.85 represents a gain of 480% for members of The Arora Report.
- A part of the rise in JPM stock is due to AI. This illustrates the point that we have been sharing with you that the beneficiaries of AI are far beyond popular AI tech stocks such as Nvidia (NVDA).
- The Arora Report was one of the first to say that a fortune is to be made in AI all the way to 2030. However, making a fortune from AI is not going to be a straight line. It will be treacherous at times. To emphasize the importance of making a fortune in AI, along the way, The Arora Report has continuously reinforced this message. The purpose of this capsule is to reinforce this message again with information from JP Morgan.
- The stronger your conviction about AI and the more knowledge you have, the more money you will extract from the markets. At the same time, two points are important.
- There is too much AI hype. This over-hype can cause you losses.
- There are also many gurus calling AI a fad. You will be doing yourself a disservice by believing such gurus. The easiest way to build the AI knowledge you need to make a fortune is to listen to the podcasts in Arora Ambassador Club. To get on the waitlist to join Arora Ambassador Club, please click here to fill out the form.
- Here are the key points from Jamie Dimon’s letter to shareholders:
- The importance of AI simply cannot be overstated.
- JPM has 300 use cases in production today.
- AI has helped JPM significantly reduce risk in retail business by reducing fraud.
- JPM has 2500 professionals working on AI and supportive tasks.
- The markets are taking a sigh of relief that over the weekend, Iran did not attack Israel.
- In The Arora Report analysis, prudent investors should not join the momo crowd in being oblivious to the potential of a wider Middle East conflict. In The Arora Report analysis, the response from Iran is likely to be a surprise and at a time of Iran’s choosing and certainly not based on what stock market traders think.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Magnificent Seven Money Flows
In the early trade, money flows are positive in NVDA, Amazon (AMZN), Meta (META), and TSLA.
In the early trade, money flows are neutral in Alphabet (GOOG) and Microsoft (MSFT).
In the early trade, money flows are negative in AAPL.
In the early trade, money flows are positive in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is *** (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** in the early trade.
Gold
The momo crowd is *** in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is *** in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
After the weekend hype, retail investors are aggressively buying bitcoin (BTC.USD) ETFs. This time it is the retail buying and not bitcoin whales that is running up bitcoin. Bitcoin has moved above $72,000.
Markets
Our very, very short-term early stock market indicator is ***. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up and bonds are ticking down.
The dollar is stronger.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $2346, silver futures are at $27.72, and oil futures are at $86.35.
S&P 500 futures are trading at 5258 as of this writing. S&P 500 futures resistance levels are 5400 and 5500 : support levels are 5256, 5210, and 5020.
DJIA futures are up 35 points.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills or allocated to short-term tactical trades; and short to medium-term hedges of ***, and short term hedges of ***. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
Traditional 60/40 Portfolio
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
