😋 Crypto Is Cooking - And Looking Delicious

What’s on the Menu 🍴

Things are heating up…

But your average person is oblivious to what’s happening.

Thankfully you have us (The Daily Dough Team) to help you stay in the know!

Here’s what we’ve got for you today:

• Why Do Investors Love Apple Stock So Much? 🍎

• Q3 Earnings Season: Nearing The Finish Line 🏁

• Crypto Is Cooking (And Looking Delicious) 😋

• Massive Bitcoin Breakout! (Don't Miss This) 📺

Today’s newsletter is a 5 minute read.

Why Do Investors Love
Apple Stock So Much? 🍎

Apple, the biggest company in the world seems unable to do any wrong.

Its success has been astonishing over the decades and investors seem to want to purchase this stock at any valuation.

In fact, over the past decade, revenue growth has been trending lower (as is normal when a corporation grows larger) while the valuation of the stock has been trending higher.

Apple is essentially trading at an “above market multiple”.

To put this simply:

1. The S&P 500 trades at a current forward price to earnings (PE) ratio of around 17.8x.

2. While Apple is trading ABOVE that at a whopping 28x PE.

So, if revenue growth hasn’t been looking very strong lately and we’re seeing weakness in their core iPhone segment, why do investors love Apple stock so much?

In the image above, it’s clear to see weakness in revenue year-over-year in iPhone, Mac, iPad and even wearables.

Here’s why investors can’t get enough:

• Apple is seen as a safe haven stock. They’re a cash COW and have 51 billion of net cash on their balance sheet.

• Apple is simply the well run company that investors dream of. They have been steadily increasing their dividend payment amount while decreasing the amount of shares outstanding.

  

• Apple has been growing wearable and services over the years which gives investors some confidence in their future. Apple is becoming more of a necessity for most people over a luxury with sticky subscriptions.

• They have skin in the metaverse game with their Vision Pro headset AND they are bound to be a big player in artificial intelligence.

So, Apple has their hands in a lot of pots, and while revenue growth has looked paltry over the past year, I think investors are simple happy to own the best company in the world.

They feel safe owning it, and they feel that there is no way Apple can’t stay ahead of the pack.

Apple needs to play its cards right from here to keep investors happy.

Q3 Earnings Season: Nearing The Finish Line 🏁

90% of the companies in the S&P 500 index have now reported Q3 earnings so let us take a look at the overall results!

Revenue growth in aggregate for the quarter was just +1.7%, but earnings growth clocked in at a healthy +3.7%. Here’s the breakdown by sector:

If we exclude the energy sector, which saw a big decline in earnings due to lower oil prices, growth would have been even more robust.

Q3 marks the first quarter of year-over-year earnings growth in 2023 after declines of 3.1% and 5.8% in Q1 and Q2 respectively.

You might think that stocks would have reacted positively to Q3 results, but in aggregate the response has been lukewarm.

The S&P 500 index is roughly flat since reporting season started back in mid October, even after the huge rally last week.

The culprit? Forward guidance for Q4.

Corporate guidance has been relatively cautious for Q4, and wall street analysts revised their Q4 earnings forecasts down about 4% last month.

However, overall earnings growth is still estimated at around 4% for Q4. So it may just be the case that analysts got too optimistic there for awhile.

Speaking of optimistic forecasts, analysts currently expect more than 10% earnings growth for the S&P 500 in 2024!

That level of growth would probably require the economic “soft landing” that many investors are hoping for, but leading economic indicators don’t look particularly strong at the moment.

Nonetheless, valuation (based on forward P/E multiple) for the S&P 500 is currently around the ten year average, so there’s room for upside if robust earnings growth does materialize in 2024.

That’s even more true for small and mid cap stocks where valuations are sitting at the low end of their historical range:

There’s been a lot of uncertainty and headwinds this year, but many large corporations have found a way to return to earnings growth.

This earnings season is a reminder:

Despite so many concerns and negative headlines in the world, we shouldn’t underestimate the ability of strong leaders and organizations to adapt to tough conditions.

It’s a key reason why stocks remain such a surprisingly resilient asset class!

Crypto Is Cooking (And Looking Delicious) 😋

Are you ready for some wild volatility?

Well, buckle up because Bitcoin, Ethereum, and other crypto-assets are moving again!

Over the past few months, we’ve been telling you to watch out for signs of a Bitcoin Spot ETF approval.

And the big news yesterday was:

"The SEC has started talks with Grayscale on the details of the company's application to convert its trust product GBTC to a spot bitcoin ETF.”

In other words, strap in for a wild ride. There’s now a 90%+ chance that a bitcoin ETF gets approved.

But that’s not all!

BlackRock registered the iShares Ethereum Trust Thursday.

The response?

Ethereum popped over 10% on the news… And is now testing the key resistance level of $2,000.

The weird part is a majority of people around the world have NO IDEA what’s happening!

In fact, most people still think crypto is dying… or already dead.

But the truth is quite the opposite:

So we hope you’re ready for some entertaining Thanksgiving Day dinners, because crypto is back on the menu!

Want to see what we’re trading? Check out our Wealth Building Community here.

📺 Video of the Day: 
Massive Bitcoin Breakout! (Don't Miss This)

In today’s video, we're diving deep into the charts to unravel Bitcoin's massive breakout after a six-month hibernation.

Chris breaks down the technicals behind the breakout, analyzes key resistance levels and the impact of a potential Bitcoin ETF approval.

We also explore how Bitcoin has been defying the trends, possibly decoupling from the stock market, and what this means for our trades.

Food For Thought 🧠

“The market will do whatever it can to cause pain in the most amount of market participants.”
- Chris Dunn

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.