Today in the Chaikin PowerFeed, we're turning things over to our friend Sean Michael Cummings... Regular readers are familiar with Sean. He's an analyst over at our corporate affiliate Stansberry Research. And we've previously shared insights from him here in the PowerFeed.
Editor's note: Today in the Chaikin PowerFeed, we're turning things over to our friend Sean Michael Cummings...
Regular readers are familiar with Sean. He's an analyst over at our corporate affiliate Stansberry Research. And we've previously shared insights from him here in the PowerFeed.
Today's essay from Sean originally published in the May 19 edition of Stansberry's free DailyWealth e-letter. In it, Sean shares a promising setup in an international market that most investors probably don't have on their radar. As he explains, a huge economic shift is paving the way for more gains in this country...
How Government Reform Is Awakening One Market
By Sean Michael Cummings, analyst, Stansberry Research
In 2022, the decade-plus "spectrum stalemate" ended in South Africa...
See, if you want to transmit data across the airwaves, you must use the radio spectrum. That's what carries data wirelessly across the globe... and makes it possible to use your cellphone or satellite TV.
But spectrum is a finite resource. So governments will hold "spectrum auctions" to see who gets a slice.
The U.S. typically holds spectrum auctions every one to three years. But in 2022, South Africa hadn't had an auction in 17 years. That was long enough for the country to miss out on 4G/LTE wireless entirely.
As I'll explain, the turning point came in 2020, when a series of economic reforms finally broke the spectrum stalemate in 2022.
But I'm not writing to pitch some obscure telecom stock in Johannesburg. The context is much bigger than that...
South Africa's economy is expanding today. Investors are flocking to the country like never before. And South African stocks have emerged from a seven-year slumber.
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Economic Reforms Are Driving This Market Higher
Today, two unprecedented tailwinds are lifting South African stocks...
The first is the reform package I mentioned earlier, known as "Operation Vulindlela."
Phase 1 of Operation Vulindlela began in October 2020. It targeted key drivers of economic growth, including...
Paving the way for private investment in South Africa's energy grid
Slashing freight regulation
Modernizing South Africa's work-visa system
And of course, it unlocked South Africa's radio spectrum, bringing the country into the 5G era.
But Operation Vulindlela is just one side of South Africa's new pro-business crusade...
You see, South African politics were dominated for more than 25 years by Nelson Mandela's party, the African National Congress ("ANC"). But over the decades, the ANC fell prey to corruption and gridlock...
But that's changing today. The ANC failed to win a majority in the 2024 election. Instead, South Africa formed a coalition government for the first time since apartheid...
The new Government of National Unity is much more business-friendly than the ANC.
In fact, it announced Phase 2 of Operation Vulindlela earlier this month. The second phase will improve local government and continue building digital infrastructure.
And the market is cheering South Africa's reforms today. We can see it using the iShares MSCI South Africa Fund (EZA). This exchange-traded fund contains a broad sample of South African businesses and reflects the country's performance as a whole.
EZA has been in an uptrend since 2024. And it'll likely break out to a multiyear high in the coming months. Take a look...
EZA reached a historic peak in 2018 but collapsed into 2020. And after reclaiming some of those losses, it has turned sideways since. But with the current uptrend, South African stocks are set to punch through that ceiling. New highs are on the way.
You don't often get the chance to buy into an entire country just as it's turning a corner. But that's exactly what's possible as South African stocks break out of a seven-year slumber.
A generational economic shift is paving the way for more gains ahead in South Africa. Don't miss this historic expansion... Consider adding EZA to your portfolio today.
Good investing,
Sean Michael Cummings Editor's note: For regular insights like this from Sean and his colleagues at Stansberry, consider signing up directly for DailyWealth...
This e-letter is 100% free to read. And it publishes in the morning every weekday that the markets are open – just like the PowerFeed. Learn more about DailyWealth and sign up to receive it by clicking here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.57%
7
17
6
S&P 500
-0.58%
81
274
144
Nasdaq
-0.44%
20
63
17
Small Caps
-1.05%
386
1054
445
Bonds
-0.43%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Consumer Discretionary
+1.53%
Real Estate
+1.32%
Communication
+0.92%
Industrials
+0.91%
Information Technology
+0.85%
Financial
+0.6%
Consumer Staples
+0.17%
Materials
+0.06%
Health Care
-0.08%
Energy
-0.49%
Utilities
-0.9%
* * * *
Industry Focus
Biotech Services
18
72
33
Over the past 6 months, the Biotech subsector (XBI) has underperformed the S&P 500 by -18.47%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #14 of 21 subsectors and has moved down 2 slots over the past week.
Indicative Stocks
ACLX
Arcellx, Inc.
CRNX
Crinetics Pharmaceut
CGON
CG Oncology, Inc.
* * * *
Top Movers
Gainers
FICO
+7.74%
WBD
+4.92%
GEV
+2.86%
HOLX
+2.48%
DXCM
+1.93%
Losers
CDNS
-10.67%
SNPS
-9.64%
AOS
-6.33%
ANSS
-5.26%
DECK
-4.26%
* * * *
Earnings Report
Earnings Surprises
PSTG Pure Storage, Inc.
Q1
$0.29
Beat by $0.04
VEEV Veeva Systems Inc.
Q1
$1.97
Beat by $0.23
HPQ HP Inc.
Q2
$0.71
Missed by $-0.09
NTNX Nutanix, Inc.
Q3
$0.42
Beat by $0.04
NVDA NVIDIA Corporation
Q1
$0.81
Beat by $0.06
* * * *
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