The Daily Dough team is always asking - “What’s the next big trend nobody’s thinking about yet?”

And that’s where Exploding Topics comes into play. Their platform helps us find hot ideas, company, and trends before the masses.

We think this is a tool every entrepreneur, trader, and investor needs in their toolbelt.

What’s on the Menu 🍴

There’s a ton of opportunity in these markets IF you know where to look.

So today we’re taking a look at some ideas to help you navigate this inflation-obsessed economic landscape.

Let’s dive in!

• Gold Glides Lower - But is a Bounce Brewing? 👑

• Customers Outraged by Chase's Crypto Ban 🚫

• What To Watch This Week 👀

• Why We’re In A Stock Pickers Market ⛏️

Today’s newsletter is a 4 minute read.

Gold Glides Lower - But is a Bounce Brewing? 👑

Gold bugs may be feeling some pain lately as the precious metal continues its downward slide.

When we zoom out, you can see Gold’s been in a long-term bull market since the early 2000s.

But gold moves like a snail with a hangover, often chopping around in consolidation zones for years.

Right now, it's swinging between $1,600 and $2,100, with $1,800 acting like a magnet.

We've been accumulating physical gold in the $1,200s, and are eyeing a price target of $2,550.

What's weighing on gold?

• For starters, rising interest rates make gold less appealing. As rates move higher, the opportunity cost of holding zero-yield gold increases.

• A surging dollar is also creating headwinds. With the greenback climbing since 2008, gold is more expensive for foreign buyers.

So, is gold going to boom or crash?

It depends. If interest rates stay “higher for longer”, expect gold to slog around in its big consolidation zone.

But if rates decide to nosedive, we could see gold smashing through the $2,100 ceiling quickly.

Saxo Bank sums it up: "Demand for gold as a hedge against a soft-landing failure isn't going away."

The data shows assets like gold and bitcoin are a great addition to a portfolio, and we want to keep them as a hedge in a world where governments keep spending above their means!

Customers Outraged by Chase's Crypto Ban 🚫

Chase UK, the United Kingdom subsidiary digital bank for JPMorgan Chase, recently announced a big-brother style policy for their customers.

The banking platform noted that they will be blocking all crypto-related transactions.

Their announcement has already sparked outrage amongst cryptocurrency advocates throughout Europe, with Coinbase calling for action from the United Kingdom government.

Brian Armstrong, CEO of Coinbase, also notes that the U.K. government has largely been an advocate for Web3 and cryptocurrency, attempting to bring outside businesses to their domain.

This restriction from Chase UK is setting a troubling precedent amongst global banking superpowers.

Restricting specific, legal transactions from customers is not a good idea.

The block from Chase UK comes as a surprise to many, particularly because a significant number of large banks and institutes throughout the world have begun investing in cryptocurrency.

The primary argument coming from Chase revolves around the increasing scams in cryptocurrency. Data from Action Fraud found that dollars lost to cryptocurrency scams are up 40% year-over-year.

While this is within their right as a private institution, this should certainly raise alarms for consumers looking to engage in cryptocurrency transactions.

What do you think?

Should banks restrict all transactions related to cryptocurrency to avoid potential scams? Is this too controlling or restrictive on customers?

What To Watch This Week 👀

In a surprising weekend development, the impending US government shutdown was narrowly avoided due to a compromise between Democrats & Republicans.

That’s not only good news for economic activity, it also means we’ll get the previously scheduled macro data releases for the week including the key September jobs report.

While very few companies report earnings this week, Q3 earnings reporting season will swing into gear in roughly two weeks.

One stock that could be a major mover this week is Tesla, which will release its Q3 vehicle delivery numbers.

We’ll also be tuning into the ISM manufacturing and non-manufacturing reports for another read on economic activity.

Several Federal Reserve board members will be speaking this week, which could add to the recent volatility in the bond market.

However, the probabilities of another rate hike have fallen to just 13% from 33% a month ago:

Regional banks, tech, and retail stocks stabilized a bit last week but real estate and airline stocks remained under pressure.

Energy stocks continue to be a bright spot with crude above $91 per barrel.

Is the recent market correction over? We think it’s too early to call, but stay tuned to the price action this week as it could tell us a lot about where markets are headed!

Why We’re In A Stock Pickers Market ⛏️

Investing in the S&P 500 index or Nasdaq 100 index over the last decade has been a lucrative (and easy) investment.

A practically zero interest rate environment has helped keep things running smoothly in terms of returns.

But, what happens now that we’re seeing higher interest rate policy?

Is “buying the stock index and chilling” still a good strategy?

We think absolutely, yes. Most people will do great with this strategy long term.

However, we also think that this market is giving an opportunity for skilled stock pickers as interest rates rise, and valuations of the stock indices stay elevated.

We know the top 10 stocks in the S&P 500 has been a contributor to elevated stock valuations.

Comparing P/E ratios of the top 10 stocks vs. the rest, it clearly shows the valuation disparity.

When many stocks are trading at a valuation below the overall S&P 500 index, this is when stock pickers should be paying attention.

A stock scan shows that out of 503 stocks in the S&P 500, 304 of them are BELOW their 200-day moving average.

Breaking that down even more, 223 of S&P 500 companies are trading at a below market multiple (17x PE or less).

What this tells us, is there are plenty of stocks out there that could be showing value as many are still growing revenues.

It’s time to look past the top 10 stocks and really get under the hood of the S&P 500 companies to find “alpha”.

Food For Thought 🧠

“Flat is a position too. You don’t have to be in a long or short trade to be active in the markets. Being ready to pounce on a solid opportunity is a position of strength.
- 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.