The Insider Report: A Bull Market for the Taking

Market Overview The Fed raised rates by 25 basis points and stocks shrugged it off. 72%. 69% lower. Money looks to be rotating back into risk assets again, especially crypto.

Remember that higher rates are not automatically bearish but they do signal an aging market. This is where the real fun begins. Stocks I Like Disney (DIS) — 90% Return Potential What’s Happening The Walt Disney Company (DIS) is a leading global entertainment and media company that operates theme parks and resorts, produces and distributes films and television content, and offers streaming services such as Disney+, ESPN, and Hulu, offering investors exposure to the rapidly growing entertainment, media, and experiential leisure sector with a focus on iconic storytelling, parks and experiences, and multi-platform content distribution. 65 billion.

Valuation in DIS is decent. 37. At a technical level, Disney has built a massive saucer formation. If prices clear resistance, look for a big move to the upside.

6 billion. 06 as parks, cruises, and streaming more than offset softer sports results. Experiences remains the cash engine. 0 billion of operating income, up 20%.

Domestic park attendance rose 3%, guest spending per capita increased 4%, and cruise passenger days jumped 17% after the launches of Disney Destiny and Disney Adventure. Streaming has crossed into durable profitability. 5 billion, subscription revenue rose 15%, and direct-to-consumer operating income more than doubled to $712 million, lifting the SVOD margin to about 13%. Management is positioning Disney+ as the digital centerpiece of the broader Disney ecosystem.

The franchise flywheel is still working. Toy Story 5 topped $1 billion at the box office and continues to feed parks, merchandising, and streaming, while D23 showcased a deep slate including Zootopia 3, Ahsoka Season 2, Percy Jackson Season 3, and a theatrical X-Men film—keeping the pipeline of IP that drives parks, consumer products, and subscriptions. Capital returns and parks investment are both accelerating. 2 billion in cash.

00. 00. V. (ESTC) is a leading search AI company that provides the Elasticsearch platform for enterprise search, observability, and security, enabling organizations to ingest, search, analyze, and visualize large volumes of data in real time across hybrid and multi-cloud environments, offering investors exposure to the rapidly growing search, observability, cybersecurity, and AI-powered data analytics sector with a focus on turning data into actionable insights.

73 million. Valuation is high in ESTC is high. 66. From a technical standpoint, ESTC just retested the breakout from former-resistance-turned-support of the saucer.

This will reinforce the uptrend even further. Why It’s Happening Elastic is turning search into the data layer for enterprise AI. First-quarter fiscal 2027 revenue rose 15% to $478 million, with sales-led subscription revenue up 18% to $399 million as customers used the platform across search, observability, and security. Backlog is building faster than reported sales.

85 billion—evidence of longer, multi-year commitments from larger accounts. AI features are becoming a real expansion driver. Elastic now has more than 1,800 customers with over $100,000 in annual contract value, a record quarter of net additions to that cohort. About 37% of large clients are using premium AI capabilities, nearly double a year earlier, and those AI users have been growing faster than the rest of the base.

Product velocity is aimed at agentic workloads. The company launched a serverless Elasticsearch Vector Database for large-scale vector search, is integrating OpenAI GPT cyber models into Elastic Security, and completed the Deductive AI acquisition to speed agentic incident investigation for engineering teams. The model is generating cash while still growing. 46 billion in cash and marketable securities—giving it room to keep investing in cloud, vector search, and security while customers consolidate more data onto one platform.

00. 00. Philip Morris International (PM) — 27% Return Potential What’s Happening Philip Morris International Inc. (PM) is a leading global tobacco and nicotine company that manufactures and sells cigarettes as well as smoke-free products including heated tobacco (IQOS), e-vapor, and oral nicotine pouches (ZYN), offering investors exposure to the rapidly evolving reduced-risk nicotine and consumer staples sector with a focus on transitioning adult smokers to smoke-free alternatives.

82 billion in earnings. Valuation in PM is elevated. 53. From a charting point of view, PM is starting to break through resistance of a massive cup and handle.

This can lead to a massive acceleration in upside momentum. Why It’s Happening Philip Morris International is converting its business toward smoke-free products at scale. 6% organically, with smoke-free brands contributing about 42% of sales. IQOS remains the core growth engine.

6%, PMI holds roughly three-quarters of the global heated-tobacco category it created, and international smoke-free revenue grew in the mid-teens even after temporary headwinds from Japan’s excise increase and flavor restrictions in parts of Europe. The multi-category portfolio is broadening beyond IQOS. S. SKUs and shifting more dry cans to a 20-pouch pack.

Combustibles are still funding the transition. Cigarette volumes and pricing held up better than expected in markets where smoke-free alternatives are banned or limited, helping lift adjusted operating income and supporting the cash needed to scale IQOS, ZYN, and VEEV. The smoke-free runway is still long. Products are sold in 109 markets and used by more than 43 million legal-age consumers.

50. 00. 00. Market-Moving Catalysts for the Week Ahead Kevin "Perma-Hawk" Warsh Normally, we like to tease the perma-bulls and the perma-bears in the trading community.

It really stems from a broken clock being right twice a day, but now we may have a new type of perma-animal in Kevin Warsh. The Fed raised interest rates 25 basis points last week in alignment with the market’s estimates. " Core CPI has been trending lower, but oil prices remain stubbornly high. I’m curious to see how Warsh will move with the data, or if he will turn into a perma-hawk.

The economy’s resilience should be able to handle these higher rates — for now. An Inversion on the Table? The odds of the Fed’s rate hike triggering a short squeeze in long-term Treasuries is significant. Keep in mind that when former Fed Chair Powell cut rates in the summer of 2024, long-term Treasuries sold off hard (yields went up).

The Fed only moves on the short-end of the yield curve, and based on what I’m seeing now, I’m not ruling out the chance of an engineered recession in order to combat inflation. To be clear — this wouldn’t happen next week, next month, or even next quarter — and probably not even next year. I’d need to see the yield curve invert first before truly saying a recession is on the horizon, but the setup for a flattening of the curve has begun. There’s typically an 18-24 month lag after the curve inversion before a recession begins, and until that happens, equity returns tend to be pretty strong.

Magnificent ELEVEN Leadership AMD started to lift off again and continues to be the top-performing mega-cap name this year. Meta staged a nice rebound, but we’re still waiting on SpaceX and Tesla to join the party. It shouldn’t be long until they do. Sector & Industry Strength Tech tried to come alive again next week, but healthcare stole the show.

It’s now sitting in second-place since the start of the second quarter, although it’s being buoyed by in large by biotech. Utilities in last place is something I like to see, but it would be ideal to see consumer discretionary rally back above consumer staples sooner than later. A pullback in energy would be welcomed too. 1 week 3 Weeks 13 Weeks 26 Weeks Healthcare Energy Energy Technology Editor’s Note: The later-innings of the rally are confirmed — doesn’t mean it’s bearish.

The Next Shift in AI (Sector ETF: XLC/XLK) Over the past few months, I’ve covered numerous shifts within the AI trade. First it was biotech, then it was software, and now, it looks like a third one is lining up. I’m looking at the ratio between communications (XLC) and technology (XLK). To be clear, there’s some notable overlap between these two sectors.

XLC’s biggest holding include stocks like META and GOOGL. Regardless, this sector is shaping up to express the next phase of AI, especially when one considers how it could transform social media and the internet even further. Over the past few years, XLK has outperformed XLC by a notable margin. This is evidenced by the series of lower-lows and lower-highs.

But note how a higher-low is being attempted here. This gives communications a base from which to make an attempt at outperformance. Inflation Acceleration (Sector ETF: DBC/SPY) Inflation is the talk of the tape with oil prices this high. This makes it a great time to check in on one of the most trusted ratios when it comes to measuring inflation’s momentum.

I have commodities (DBC) stacked against the S&P 500 (SPY) below. In the long run, stocks offer a much better refuge against inflation than commodities. This may sound counterintuitive at first, but it makes sense if you understand momentum. When DBC outperforms SPY, it is a signal that inflationary pressures are accelerating.

When SPY outperforms, it signals that inflationary pressures can still be present, but slowing down. The higher-low formed back in June was a warning sign that the tide was turning. Now, there’s a rounding bottom to watch. If the ratio clears resistance of the formation, then your chances of outperforming will be much better with commodities than the S&P.

Bond Market Confirming(Sector ETF: TIP/IEF) It’s not just commodities warning of higher inflation, but bond markets are signaling this as well. It goes well beyond rising rates — which are in of themselves the result of inflation. There are certain types of bonds that theoretically weather the inflation storm better. I have the ratio between Treasury Inflation Protected Securities (TIP) stacked up against 7-10 Year Treasuries (IEF).

As you can see, there’s been a general uptrend in this ratio going back to 2023. The ratio was rejected at its 2022 high earlier this year. It dropped sharply, but formed another higher-low in the process. There’s a massive ascending triangle formation on this ratio chart, and if it breaks above resistance, be ready for another massive inflationary wave.

Cryptocurrency The constructive price action continued in cryptocurrencies over the past week. I have the chart of Ethereum this week, and prices have continued to consolidate their gains following the explosive move higher in August. Remember that as a rule, consolidations near the highs of a move are considered to be bullish price action. Former-resistance-turned-support continues to hold well in the rounding bottom formation in Ethereum.

This pattern is projecting a move as high as 3400-3600 at least. There’s really no reason to be bearish Ethereum if it’s above 2000-2100 now. It would be ideal if we started moving out from this range in the next week. Legal Disclosures: This communication is provided for information purposes only.

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