Analysis: AMD CBOE CHPT CMG COST DE GOOGL MSFT NVDA URI VZ AMZN AMN AWK AAPL AMAT CIBR F MA MKC MS NUE PEP UPS XLE PSQ SH

Markets staged a powerful rally this week stoked by some deeply oversold conditions that have been lingering for some time. It is often said, "never short a dull market," and with the statistics as bad as they could be, such as 50-day moving average on the S&P 500 and 20-day moving average on the Nasdaq, something had to give.

We mentioned recently some heavy resistance at the 3900 level of the S&P 500, but on Tuesday that was eclipsed and confirmed higher on Wednesday. We'll conclude 3900 is now going to be solid support when the market eventually tests that level. Ahead we have a gap open at 4017 and perhaps a big higher level to 4100 before a pause.

Perhaps the inflation readings the prior week and the bounce from deep lows was a sign from the market that it was OK to step in and buy again. Prior to this week, markets had been down 11 of the last 14 weeks and looked to be circling the drain fast. But then, we know markets don't go down forever and eventually bounce, this could be the one needed to get the bulls some energy.

Earnings season is well underway. We heard from big players, including Tesla, Netflix, Dow and Verizon. The theme so far has been soft guidance. That makes sense to us, as the economy appears screeching to a halt. Firms need to adjust their expectations drastically for what they see coming.

Meanwhile, Fed policy remains hawkish and firm, some businesses are already feeling the pinch of the higher cost of money. It's needed, of course to bring down rising inflation. We'll hear from the Fed next week after a two day meeting concludes, a day before the first look at second quarter gross domestic product, which is estimated to come in negative again (first quarter GDP came in at -1.5%).

The portfolio remains sturdy, we have names that are doing well with the market and are pleasantly surprised with some names showing good relative strength when the markets are down (such as AMN Healthcare, Cboe Global Markets Inc., Costco). We continue to look for more opportunities from the universe of stocks and in our own refreshed bullpen.

The AAP Portfolio

We were quiet in our actions this week, preferring to just play our hand out as the market rallied smartly during the week. There were strong performers that gained our attention, including Advanced Micro Devices, Nvidia, CBOE and Costco. The former two names benefited from a potential bill in Congress that will ease the burden on chip companies. These stocks pushed above strong resistance this week and still have some juice left in the tank.

Earnings hit late in the week on Nucor and Verizon. NUE put up some spectacular numbers, beating the top and bottom lines and estimating better numbers for the rest of the year. They forecast strong demand in the third quarter, which brings a sigh of relief. For VZ, they reported in line revenues, but missed on the bottom line. Further, the company reduced estimates for the remainder of 2022 as growth in services may be sluggish.

With a huge amount of earnings to come next week we like our positions in Microsoft, Alphabet, Amazon, Apple and Chipotle, among others. We added recently to our CIBR and United Rental positions -- those were timely.

While we could see a bit more upside, we remain skeptical this is a new bull market, as has been talked about in the media. As such, we'll be cautious and hold our exchange-traded fund positions of ProShares Short QQQ and ProShares Short S&P 500, as protective vehicles along with a generous horde of cash.

Key Global Economic Readings

(Note: T is the most recent period, T-1 is the prior period's reading and T-2 is two periods back, the intent being to illustrate any trends)

Economy

The first part of the week was rather light with economic data, it was mostly geared toward housing. Housing starts and permits missed the mark on Tuesday along with mortgage applications on Wednesday. Housing starts dipped lower, as well, a likely outcome from higher interest rates. We've noted recently that housing is going to come under some heavy pressure with weaker demand for higher interest loans. This in turn is going to soften the economy, without, we hope, leading to a long, drawn-out recession.

European inflation numbers came out Wednesday and to no shock to anyone, were very hot. We'll need to see that region get more aggressive with rate hikes in order to boost their currencies and snuff out inflation. So far, they are more concerned with a recession and not inflation, which we can see the euro currency has suffered greatly due to that flawed strategy.

Friday's PMI numbers were lower than prior month, but the surprising number was services index, which came in at 47. That is quite shocking to say the least, the estimate was for a. 52.3 reading. The composite index (manufacturing and services) came in at a contracting number of 47.5. That is the lowest reading since 2020 when the index plunged to the 20s. The Fed will certainly be watching these readings for signs of economic slowdown. European flash PMI are also showing contraction (below 50).

Chart of the Week: Healthcare Is Where It's At

With so much money coming into the health care space, it's no wonder this group has managed a nice recovery. The iShares Global Healthcare ETF (IXJ) is the iShares fund for global health care, and this chart is starting to look interesting. The weekly shows the ETF has been making higher highs, higher lows barely as it comes up to resistance.

That level is 83 bucks now, but the volume last week was spectacular. Note the strong green bar. The bottom oscillator has started to turn up, but we prefer to wait on the price action. A move over $85 would position the IXJ to make a run to 90 bucks.

The Coming Week

This coming week is the biggest so far for earnings, about half of the AAP portfolio names are reporting. The SPX 500 will have a huge amount of names coming down the pike, we'll be listening to the calls for clues about the second half of the year.

The Federal Open Market Committee will conduct a two day meeting where it's expected to bump up rates for a fourth time in 2022. This time, there is substantial talk of one percentage point hike,  but more likely we'll a three-quarter percentage point hike, to bring the funds rate to 2.25%. The September meeting is currently pricing in a three-quarter percentage point hike as well. Chair Powell will conduct a Q&A on Wednesday. While the inflation readings last week tells us nothing about prices coming down, it's always a wildcard with how Chair Powell "pitches it" to the public.

Before the open on Thursday, we'll get a first look at second-quarter GDP, which the Fed might have in hand during their meeting. It's the last week of trading in the month and so far it looks to be positive, but a turn could happen. If the markets are green in July, it'll be the first time since March.

Here's a closer look at the economic data coming at us next week:

U.S.

Tuesday, July 26

  • S&P Housing Price Index - May (9:00 AM ET)
  • New Home Sales - June (10:00 AM ET)

Wednesday, July 27

  • Weekly MBA Mortgage Applications (7:00 AM ET)
  • Durable Orders - June (8:30 AM ET)
  • Retail Inventories (Ex-Auto) - June (8:30 AM ET)
  • Pending Home Sales - June (10 :00 AM ET)
  • Weekly EIA Crude Oil Inventories (10:30 AM ET)
  • Federal Reserve Monetary Policy Statement (2 PM ET)

Thursday, July 28

  • Weekly Initial & Continuing Jobless Claims (8:30 AM ET)
  • PCE Prices - 2Q 2022 (8:30 AM ET)
  • Weekly EIA Natural Gas Inventories (10:30 AM ET)

Friday, July 29

  • Personal Consumption & Spending, PCE Price Index - June (8:30 AM ET)
  • Michigan Consumer Sentiment Index - July (10:00 AM ET)

International

Monday, July 25

  • Germany: Business Expectations, Ifo Business Climate - July

Wednesday, July 27

  • China: Industrial Profit - June
  • Germany: GfK German Consumer Climate - August

Thursday, July 28

  • France: PPI - June
  • Eurozone: Business and Consumer Survey, Consumer Confidence, Consumer Inflation Expectations - July

Friday, July 29

  • Japan: Tokyo Core CPI, Household Confidence - July
  • Japan: Unemployment Rate, Retail Sales - June
  • France, Germany, Italy, Spain: 2Q 2022 GDP
  • Eurozone: CPI - July

Here's a closer look at the earnings reports coming at us next week:

Monday, July 25

  • Close: Alexandria Re (ARE), Celestica (CLS), Crane (CR), F5 Networks (FFIV), Logitech International (LOGI), NXP Semiconductor (NXPI), Whirlpool (WHR).

Tuesday, July 26

  • Open: 3M (MMM), Albertsons (ACI), Archer-Daniels (ADM), Coca-Cola (KO), Corning (GLW), General Motors (GM), Kimberly Clark (KMB), McDonald's (MCD), Polaris Industries (PII), Sensata (ST), UPS (UPS).
  • Close: AMD (AMD), Alphabet (GOOGL), Chipotle Mexican Grill (CMG), Idex Corp. (IEX), Juniper Networks (JNPR), Microsoft (MSFT), Mondelez International (MDLZ), Texas Instruments (TXN), Visa (V).

Wednesday, July 27

  • Open: Boeing (BA), General Dynamics (GD), Genuine Parts (GPC), Hilton (HLT), Kraft Heinz (KHC), Norfolk Southern (NSC), Sherwin Williams (SHW), Shopify (SHOP).
  • Close: American Water Works (AWK), Cheesecake Factory (CAKE), Equinix (EQIX), Ford Motor (F), Lam Research (LRCX), Meta Platforms (META), Qualcomm (QCOM), United Rentals (URI).

Thursday, July 28

  • Open: Altria (MO), American Tower (AMT), Anheuser-Busch InBev (BUD), Comcast (CMCSA), Hershey Foods (HSY), Keurig Dr Pepper (KDP), Lab Corp. (LH), Mastercard (MA), STMicroelectronics (STM).
  • Close: Amazon (AMZN), Apple (AAPL), Digital Realty Trust (DLR), Intel (INTC), KLA Corp. (KLAC), Skyworks (SWKS), US Steel (X), VF Corp. (VFC), Yum China (YUMC).

Friday, July 29

  • Open: Capri Holdings (CPRI), Caterpillar (CAT), Cboe Global Markets (CBOE), Chevron (CVX), CNH Industrial (CNHI), Colgate Palmolive (CL), Exxon Mobil (XOM), Proctor & Gamble (PG).

Here are the positions for this week. Top is coming shortly. Metrics around 430pm

ONEs

Advanced Micro Devices (AMD) ; $88.10; 1,160 shares; 2.93%; Sector: Info. Tech.

WEEKLY UPDATE: AMD reports next week, but recently the stock has risen, thanks to some talk in Washington about a chips bill going around. This 50 billion dollar infusion seems to have support around 'the Hill', an attempt to unclog the logjam of orders being stifled by chip shortages and bottlenecks. Recently, TSM mentioned a favorable condition going forward, that stoked some interest in AMD and others. Bank of America analysts are not so enthusiastic; they expect an in-line quarter as competition ramps up, meaning lower prices and margins. This stock has made a nice recovery from the 2021 lows and now has closed above the tough 50-day moving average for the first time in six weeks. AMD is not overbought yet, but could be soon as it makes a run to the 100-day moving average, around $96 or so. The company reports July 29.

1-Wk. Price Change: 8.6% Yield: 0.00%

INVESTMENT THESIS: AMD is a chip maker that specializes in the development of both CPUs (like Intel) and GPUs (like Nvidia). On the CPU side, the company continues to take share from Intel in the data center thanks to its 2nd generation EPYC processor line, which is seeing increased adoption in the super computing and high-performance computing space (especially following execution missteps from Intel that has resulted in delays for the companies 7nm chips), which you can read more about at the link here. On the GPU side, while Nvidia remains the unquestioned leader in terms of overall performance, AMD is the close on its tail and provides a strong balance between price and performance. AMD is also seeing strong momentum in the mobile space, recently announcing that its Ryzen platform has exceeded its moonshot 25x20 goal set in 2014 that aimed to improve the energy efficiency of its mobile processors 25 times by 2020. Simply put, we think AMD has more room to run as it gains market share, especially when you factor in the current strength of data center and the company's positioning as it relates to the next-gen video game console cycle given that both PlayStation and Xbox use AMD graphics cards.

Target Price: Reiterate $160; Rating: One

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/27/21), CEO Interview (7/29/20), Readthroughs Are Still Positive for AMD (7/24/20), Initiation (7/7/20), Investor Relations

Cboe Global Markets Inc. (CBOE) ; $123.73; 820 shares; 2.91%; Sector: Financials

WEEKLY UPDATE: One of our best performing names this year, CBOE made a giant leap out of a long base formed earlier this year on strong turnover and solid price action. The stock shows an overbought reading on the relative strength index here, but being above all the relevant moving averages is a huge positive. There are not many names you can say that about today. This week Morgan Stanley gave CBOE a double upgrade and raised their price target to $140, Deutsche and CS also raised their targets after the strong June metrics were released.

1-Wk. Price Change: 4% Yield: 1.6%

INVESTMENT THESIS: Cboe's business, which centers on market infrastructure, data solutions, and tradable products for equities, derivatives, and foreign exchange across North America, Asia Pacific, and Europe. Those operations include the largest options exchange and the third largest stock exchange operator in the U.S., one of the largest stock exchanges by value traded in Europe, and EuroCCP, a leading pan-European equities and derivatives clearinghouse among others. The two primary drivers of the company's earnings are its options and North American equities business, which combined drive around 75% of its revenue but more importantly roughly 85% of its operating income. Viewed from a different perspective, 28%-30% of Cboe's revenue stream is from recurring non-transaction revenue that includes proprietary market data as well as access and capacity fees. We like the sticky nature and predictability of that business. The core driver of the company's business hinges on continued growth in options trading volume and the company expanding its recurring non-transaction revenue.

Target Price: Reiterate $140; Rating: One.

RISKS: IT spending, competition, supply chain challenges

ACTIONS, ANALYSIS & MORE: Addition to AAP Portfolio; Initial Technical Review, Addition to Bullpen, Investor Overview.

ChargePoint Holdings Inc. (CHPT) ; $13.85; 10,000 shares; 3.98%; Sector: Electrical Components & Equipment

1-Wk. Price Change: 19.7% Yield: 0.00%

WEEKLY UPDATE: It's been a strong week for ChargePoint, the stock rallied off the lows and made a run to resistance at 15 bucks. The stock was helped by positive news this week from other EV firms and of course Tesla, which reported earnings this week that beat street estimates. Even with oil prices coming down, there is positive sentiment surrounding the EV space, and potential shortages of charging stations. This is right in the sweetspot for ChargePoint, so we are happy to play this name for the future. A breakout past $15, a couple of closes above would be hugely bullish for the name. Above the 50-day moving average is solid, but a move above $17 and the 200-day moving average would be stronger.

INVESTMENT THESIS: ChargePoint Holdings designs, develops and markets networked electric vehicle (EV) charging system infrastructure and cloud-based services which enable consumers the ability to locate, reserve and authenticate Networked Charging Systems, and to transact EV charging sessions on those systems. As part of ChargePoint's Networked Charging Systems, subscriptions, and other offerings, it provides an open platform that integrates with system hardware from ChargePoint and other manufacturers. According to the US Department of Energy, the US reached a milestone this past year with its 100,000th EV charger installed in 2021. Industry analysts at Guidehouse Insights forecast that a total of 120 million chargers will be needed globally by 2030, providing a meaningful opportunity for ChargePoint to expand its charging footprint. To that end, the U.S. Departments of Transportation and Energy announced nearly $5 billion over the next five years that will be made available under the new National Electric Vehicle Infrastructure (NEVI) Formula Program established by President Biden's Bipartisan Infrastructure Law. The aim of NEVI is to build out a national electric vehicle charging network of high voltage chargers along designated Alternative Fuel Corridors, particularly along the Interstate Highway System.

Target Price: Reiterate $22; Rating: One

RISKS: EV adoption of passenger and fleet applications, changing technology, subscription renewals.

ACTIONS, ANALYSIS & MORE: We're Calling Up a Name From the Bullpen, The Needle Could Begin to Move on This Bullpen Name, Investor Relations.

Chipotle Mexican Grill (CMG) ; $1347.33; 70 shares; 2.71%; Sector: Restaurants

1-Wk. Price Change: 3.6% Yield: 0.00%

WEEKLY UPDATE: It's been a rough summer for Chipotle as the hot weather makes their business more challenging, not to mention the heat in prices. Technically speaking, the stock has made a nice bottoming pattern that if it continues to play out could see a rise to $1,600 in the weeks ahead. News this past week about shutting a store that wanted to unionize is getting some play, but we think this is just noise. Some analysts cut price targets for Chipotle, but they are well above the current levels. Earnings are out July 26.

INVESTMENT THESIS: Our investment thesis on CMG shares centers on its offering consumers better-for-you fare while also expanding its geographic density, embracing digital ordering and bringing to market limited-time menu offerings that should spur traffic and boost average revenue per ticket. With upside to our price target shrinking, we are once again reviewing the incremental upside and revisiting protein input costs.

Target Price: Reiterate $2,000; Rating: One

RISKS: Input costs, particularly for the protein complex, labor costs, consumer spending, food safety, industry dynamics and competition.

ACTIONS, ANALYSIS & MORE: Initiating a New Position in Chipotle, We're Adding Chipotle to the (Bullpen) Menu

Costco Wholesale (COST) ; $529.72; 265 shares; 4.03%; Sector: Consumer Staples

WEEKLY UPDATE: This retailer continues to move to the upper right on the chart. Costco remains one of the best performers in the portfolio, and lately the volume trends have turned up sharply. Last week saw the stock make a move above the 50-day moving average and it has stuck, a big win for the bulls. Relative Strength is a thing of beauty, but the stock is nearly overbought here. That could be a caution sign. Money flow is robust. Even as prices continue to rise in the economy, Costco does not budge much, preferring to be the value dollars for consumers.

1-Wk. Price Change: 1.3% Yield: 0.6%

INVESTMENT THESIS: We like Costco's long-term prospects, driven by a club-based operating model that focuses on volumes, not margins, and therefore offers its customers a value proposition of everyday low prices. The strength of this model has created an incredible loyal customer base with low churn and continued share gains in both brick and mortar and e-commerce. And this is a global concept, evidenced by the strength of sales both in the U.S. and abroad, which includes an emerging China opportunity. We see the company's membership model as a key differentiator vs. other retailers and its plans to open additional warehouse locations in the coming quarters should drive retail volumes and the higher margin membership fee income as well. We also appreciate management's approach to capital returns and their willingness to return cash when it is in excess on the balance sheet. Earlier this year, Costco announced a 13.9% increase for its quarterly dividend to $0.90 per share.

Target Price: Reiterate $620. Rating: One

RISKS: Inability to pass through higher costs, fuel prices, weaker consumer, membership churn.

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (9/23/21), FY2Q21 Earnings Analysis (3/4/21), Upgrading Costco to a One (2/25/21), $10 Per Share Special Dividend (11/16/20), Recent Buy Alert (2/28/20), Initiation (1/27/20), Investor Relations

Deere & Co.  (DE) ; $312.26; 310 shares; 2.78%; Sector: Farm Machinery & Equipment

WEEKLY UPDATE: Deere has fallen sharply of late as concerns over farm equipment demand has arisen here in the heartland of the U.S. We believe those concerns are overblown, the stock has been hammered but this may be an excellent spot to add some shares. Oppenheimer and Morgan Stanley reduced their target on Deere this week, but maintain an overweight rating. Recent trends in farm equipment show little slowing, however, and we believe the disconnect between the news and price will eventually resolve with Deere trading up substantially. Technically, the stock is once again above the key 20-day moving average, momentum is starting to turn bullish as the MACD is on a buy signal. We could see $329 come into play here (50 DMA) before too long.

1-Wk. Price Change: 4.9% Yield: 1.4%

INVESTMENT THESIS: The global agriculture equipment market size is expected to reach $166.5 billion in 2027, growing at 6% CAGR over the 2020-2027 period. The favorable outlook for equipment purchases in the coming quarters reflects rising farmer income that historically drives new equipment purchases. At the same time, Deere continues to lean into the sustainability movement with its precision ag offering. That technology is helping farmers drive crop yields higher while also realizing cost savings, which makes the new technology a productivity upgrade compared to older equipment.

Target Price: Reiterate $450; Rating: One

RISKS: Geopolitical uncertainty, economic conditions, raw material and other input prices, prices for key agricultural commodities.

ACTIONS, ANALYSIS & MORE: Initiation (10/25/21), Investor Relations

Alphabet (GOOGL) ; $107.90; 1,100 shares; 3.41%; Sector: Communication Services

WEEKLY UPDATE: Seeing Alphabet trading this low is a bit of a shock. When the company went public in 2004, the first day of trading the stock closed at 100 bucks. At the time, many thought it was expensive, but after a 2-1 split and now a 20-1 split, if you bought shares back then you're up substantially after 18 years. Google remains a jewel within the tech world, and dominates the advertising space. With poor earnings from Snap this week some investors are trying to connect the dots. Of course, this same thing happened in May but Google roared back. Is this an isolated incident or something more sinister? We'll find out as Google reports on July 26. Mizuho cut its price target to $150 on the company. As an aside, Barron's speculates Google and Amazon look "ready to join Down Industrials" after their recent stock splits. We're not sure how that helps the companies but it would sure bring even more credibility.

1-Wk. Price Change: -3.5%; Yield: 0.00%

INVESTMENT THESIS: We believe that while search and digital ad dominance are what will carry shares in the near- to- midterm, longer-term it is the company's artificial intelligence "moat" that will provide for new avenues of growth. AI is what has made the company's search, video and targeted ad capabilities best-in-class and is the driving force behind the company's success in voice (Google Home) and autonomous driving (Waymo). Furthermore, we believe it is this AI expertise that will also make the company more prevalent in other industries, including healthcare via subsidiary Verily, as AI and machine learning continue to disrupt operations across industries. We believe Alphabet's willingness to invest in new areas, knowing most will fail, is a recipe for long-term success as while most "X Moonshot Factory" projects may fail, every once in a while, you end up with a Waymo, perhaps the division's, most successful graduate to date. Lastly, compounding out positive view of the company's future opportunities, we believe that Alphabet's free cash flow generation and solid balance sheet set it apart and are what will allow the company to continue taking chances on far-out ground-breaking and potentially world changing projects.

Target Price: Reiterate $175; Rating: One

RISKS: Regulatory risk (data privacy), competition, macroeconomic slowdown impacting consumers and therefore ad buyer activity

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/27/21), Why GOOGL Has Shrugged Off Antitrust Headlines in Early Trading Tuesday (10/20/20), Initiation (11/27/13), Investor Relations

Microsoft Corp (MSFT) ; $260.36; 500 shares; 3.74%; Sector: Technology

WEEKLY UPDATE: Microsoft made a nice move this week on improved volume. The indicators have turned up nicely, but as the stock is in a downtrend still there is plenty of resistance. The close and confirmation above the 50-day moving average is a positive development, the 20-day moving average is turning up as well. MACD is on a buy signal and the stock is not yet overbought. The 100-day moving average comes in a bit higher at $275, where Microsoft may encounter some sharp selling. Cloud names have been under some pressure lately and IBM was dinged for weak cloud business and currency issues (strong dollar). Microsoft warned us on the latter in June. They announced this week cutting open job positions in cloud and security software units. Perhaps a sign of things to come.

1-Wk. Price Change: 1.4% Yield: 1%

INVESTMENT THESIS: We believe the cloud to be a secular growth trend and that upside to shares will result from Microsoft's hybrid cloud leadership as the company grab's market in this expanding industry. While companies may look to build out multi-cloud environments, Microsoft's Azure offering will be a prime choice thanks to the company's decision to provide the same "stack" used in the public cloud, to companies for their on-premise data centers. Additionally, we would note that hybrid environments are currently the preference for most companies because it allows them to maintain critical data in house while taking advantage of the agility and scalability provided by public clouds. Outside of the cloud opportunity, we maintain a positive view on the company's growing gaming business, which we believe is becoming an increasingly prominent factor in the Microsoft growth story as gaming becomes more mainstream, management works to convert its gaming revenue from one-time license purchase to a recurring subscription model and as technologies like augmented/virtual reality evolve. Finally, as it relates to LinkedIn and other subscription-based services such as O365 and various Dynamics products, we continue to value them highly for their recurring revenue streams, which we remind members, provides for greater transparency of future earnings.

Target Price: Reiterate $320; Rating: One.

RISKS: Slowdown in IT spending, competition, cannibalization of on premises business by the cloud

ACTIONS, ANALYSIS & MORE: FY4Q21 Earnings Analysis (7/27/21), Ignite 2021, Microsoft Acquires ZeniMax (9/22/20), CEO Satya Nadella on CNBC (3/25/20), CEO Satya Nadella speaks at the World Economic Forum (1/23/20)

Nvidia (NVDA) ; $173.19; 610 shares; 3.03%; Sector: Info. Tech.

WEEKLY UPDATE: Like AMD, we saw NVDA move higher this week as the CHIPS bill rattled through Congress. This is an attempt to help unlock some supply and ease the burden for chipmakers, who see robust demand. NVDA is a favorite among the momentum crowd, and when it's moving there is nothing that seems to be able to stop the pressure upward. The recent low around $140 seems to be solid, but the stock has risen sharply in a short period of time and is due for a rest. However, a couple of closes above the 50-day moving average is a positive development, first time since the stock broke down in April. The recent gap in June has now been filled, and while there is still a bit of momentum left we could see a pullback towards $160 or so before a next surge higher.

1-Wk. Price Change: 9.9% Yield: 0.1%

INVESTMENT THESIS: We believe upside will result from Nvidia's GPU dominance, the moat created by its CUDA, the company's parallel computing platform, and significant growth in all of the company's end markets including, the cloud (think datacenter), gaming, autonomous vehicles and pro visualization. Furthermore, we believe the cloud (i.e. data center) growth will be even more of a factor in upside following the acquisition of Mellanox, which thanks to its low latency "InfiniBand" technology, provides Nvidia the ability be a more integral player in the buildout of data centers by working to both accelerate server subsystems via GPU-acceleration and accelerate the data center overall by "tying together" the multiple subsystems and allowing them to operate as a single cohesive unit.

Target Price: Reiterate $225; Rating: One

RISKS: Slow uptake of raytracing chips which will depend on gaming publishers' implementation of the new technology in software releases, a slowdown in the IT/data center spending, competition, slower than expected inventory channel normalization.

ACTIONS, ANALYSIS & MORE: FY2Q22 Earnings Analysis (8/18/21), Highlights From the Nvidia Investor Day (4/12/21), Jim Discusses Arm Holdings Acquisition on Mad Money (9/24/20), Initiation (3/18/19), Investor Relations

United Rentals (URI) ; $274.29; 380 shares; 2.99%; Sector: Industrials

WEEKLY UPDATE: We recently added to our holdings of URI and it was a good move, the stock is up 14% since adding shares on July 14, only a week ago. The company is poised for big things as this infrastructure law continues to touch industrial names across the board. This week URI announced a major partnership with Turner Construction, one of the biggest building companies in the Midwest. Earnings are out July 27.

1-Wk. Price Change: 8.9% Yield: 0.0%

INVESTMENT THESIS: United Rentals is the largest equipment rental company in the world, operates throughout the United States and Canada, and has a limited presence in Europe, Australia and New Zealand. It serves the industrial and other non-construction; commercial (or private non-residential) construction; and residential construction. Industrial and other non-construction rentals represented approximately 50% of rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers and infrastructure entities; Commercial construction rentals represented approximately 46% of rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment and other commercial purposes; and residential rentals ~4% of revenue. We see the company benefitting on three fronts - the seasonal uptick in construction spending; the release of funds and projects associated with the five-year Biden Infrastructure Bill; and the company's nip and tuck acquisition strategy that should further enhance its geographic footprint. In January, the company announced a fresh $1 billion buyback authorization following the completion of $4 billion in share repurchases over the 2012-2021 period.

Target Price: Reiterate $380; Rating: One

RISKS: Industry and economic risk, competition and competitive pressures, acquisition risk.

ACTIONS, ANALYSIS & MORE: Initiating a Position in This Equipment Rental Company, We're Adding This Equipment Rental Company to the Bullpen, Investor Relations.

Verizon Communications (VZ) ; $44.45; 1,300 shares; 1.66%; Sector: Communication Services

WEEKLY UPDATE: Verizon took a large hit this week as competitor AT&T released soft numbers. In addition, Verizon also reported the quarter on Friday and missed on the bottom line, but with inline numbers for revenue. For the rest of 2022 they cut guidance, not a surprise as the consumer spending constraints are starting to broaden. Subscriber growth slowed a bit too, and we still like the business model. With the drop this week Verizon sports a large yield now, more than 5.5%. Verizon management reiterated their goals for long term growth on the call today, we'll stick by the company for now.

1-Wk. Price Change: -12.9% Yield: 5.8%

INVESTMENT THESIS: Verizon Communications is one of the largest communication companies in the U.S. Its Consumer business, includes wireless equipment and services as well as residential fixed connectivity solutions, including internet, video, and voice services, is ~75% of Verizon's revenue stream but ~90% of its operating income. Exiting the March 2022 quarter, the company had 115.2 million wireless customers split between 91.4 million pre-paid and 23.8 million postpaid, and 7.1 million broadband consumers, the vast majority of which are Fios Internet customers. From a revenue and operating profit contribution perspective, the Business segment accounts for ~25% and 10%, respectively. Through this segment Verizon offers wireless and wireline communications services and products, including data, video and conferencing services, corporate networking solutions, security and managed network services, local and long-distance voice services, and network access to deliver various Internet of Things (IoT) services and products.

Target Price: Reiterate $60; Rating: One

RISKS: Industry and economic risk, competition and competitive pressures, acquisition risk, labor relations, and the regulatory environment.

ACTIONS, ANALYSIS & MORE: Here's Why We're Attracted to This Telecom, Exiting 2 Positions, Initiating 1, and Adding to 3, Investor Relations

TWOs

Amazon (AMZN) ; $122.42; 600 shares; 2.12%; Sector: Consumer Discretionary

WEEKLY UPDATE: Following an extremely successful Prime Day Amazon shares shot up this week on very strong turnover, to put the stock in position for a larger breakout. There is resistance ahead at $130-$132 and. Then $145, but that might not get challenged before earnings. Nevertheless, the stock is not overbought and might tag that $130 area soon. This week however Amazon was named in an investigation about workplace safety, a serious issue if they are found negligent. Netflix released earnings and offered poor guidance, yet big caps drafted off the stock as it ran higher. Amazon Prime Video is a Chief competitor. Earnings are out next week and that should be something to watch closely, if they have drastically reduced spending.

1-Wk. Price Change: 7.8%; Yield: 0.00%

INVESTMENT THESIS: We believe upside will result from Amazon's continued Commerce dominance, AWS' continued leadership in the public cloud space, and ongoing growth of the company's advertising revenue stream, which feeds off Amazon's eCommerce business. Additionally, we believe profitability will continue to improve as AWS and advertising account for a larger portion of total sales as both these segments sport higher margins than the eCommerce operation. And while we believe the increasing share of revenue from these higher margin businesses will be key to driving profitability longer-term, we believe margins on ecommerce stand to improve as the company's infrastructure is further built out and economies of scale further kick in. The embedded call option is that management is always looking to enter a new space and generate new revenue streams. We continue to see the company's Prime, logistics service and learnings from its Chime video conferencing platform as a game changer for the healthcare industry.

Target Price: Reiterate $175; Rating: Two

RISKS: High valuation exposes the stock to volatile swings, eCommerce has exposure to slower consumer spending, competition, management is not afraid to invest heavily, potential headwinds resulting from new eCommerce regulation in India, management is not scared to invest aggressively for growth, which can at times cause volatile reactions as near-term concerns arise relating to the impact on margins.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/29/21), 2020 Letter to Shareholders (4/15/21), Initiation (2/2/18), Investor Relations

AMN Healthcare Services, Inc. (AMN) ; $117.3; 1,170 shares; 3.82%; Sector: Health Care Services

WEEKLY UPDATE: This stock continues to press onward after a scorching run since mid-May. We talked recently about the strength in the labor market and that directly links to AMN's primary business. The stock is within a stone's throw of an all-time high, there are not many stocks in the stock market you can say that about right now. We feel good about having the name in the portfolio but are wary of this recent run, up a stunning 50% just two months. That's quite a run and we are considering taking some more chips off the table.

1-Wk. Price Change: 3.9%; Yield: 0.0

INVESTMENT THESIS: AMN Healthcare's business centers on talent solutions for the health care sector in the U.S. The company's revenue stream is tied to talents solutions, it reports in three business segments: Nurse and Allied Solutions, which generated 61% of revenue for the first nine months of 2021 and ~59% of its operating profit; Physician and Leadership Solutions - 24% and 13%, respectively; and Technology and Workforce Solutions - 15% and 28%, respectively. That business mix positions the company to be capitalize on the rising demand for healthcare professionals, particularly for nurses and doctors, which is expected to grow significantly as more of the U.S. population moves past the age of 65 in the coming years.

Target Price: Reiterate $125; Rating: Two

RISKS: Economic downturns and the pace of economic recovery; the ability to win new contracts; the ability to recruit and retain quality healthcare professionals.

ACTIONS, ANALYSIS & MORE:, Initiation (1/27/22), Our Aging of the Population Investment Theme Explores Medical Staffing Issues, Investor Relations

American Water Works (AWK) ; $148.22; 600 shares; 1.7%; Sector: Utilities

WEEKLY UPDATE: American Water Works continues to be a volatile name. The stock has moved in a wide range from $172 down to $130 over the past four months. If that wasn't enough to get your stomach upset, the daily ranges have been wide. However, we should note the long-term trend smooths out nicely, the weekly and monthly chart are showing bullish tendencies. It is these timeframes that matter to us when looking out over many months and years for a holding period. Buying the dips in this utility is a smart move. Earnings out July 28.

1-Wk. Price Change: -0.2%; Yield: 1.7%

INVESTMENT THESIS: American Water is the largest and most geographically diverse, publicly-traded water and wastewater utility company in the United States, as measured by both operating revenues and population served. The company's primary business involves the ownership of utilities that provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers. The company's utilities operate in approximately 1,700 communities in 14 states in the United States, with 3.4 million active customers in its water and wastewater networks. Services provided by the Company's utilities are subject to regulation by multiple state utility commissions or other entities engaged in utility regulation, collectively referred to as public utility commissions (PUCs). Residential customers make up a substantial portion of the Company's customer base in all of the states in which it operates. The Company also serves (i) commercial customers, such as food and beverage providers, commercial property developers and proprietors, and energy suppliers, (ii) fire service customers, where the Company supplies water through its distribution systems to public fire hydrants for firefighting purposes and to private fire customers for use in fire suppression systems in office buildings and other facilities, (iii) industrial customers, such as large-scale manufacturers, mining and production operations, (iv) public authorities, such as government buildings and other public sector facilities. Because there is usually only one water utility available, the business has a rather wide moat, and the company has used its scale and balance sheet to acquire smaller, regional water utilities thereby further expanding its scale. pending rate increases under pin the company's 7%-9% annual EPS growth targets between now and 2026 as well as its stated objective to increase its annual dividend by 7%-10% over the next several years.

Target Price: Reiterate $165; Rating: Two

RISKS: Regulatory oversight risks, environmental safety laws and regulation, weather related service disruptions.

ACTIONS, ANALYSIS & MORE: We're Initiating 1 Name While Adding to Another Initiating a Position in This Public Water Utility Company, Investor Relations presentation.

Apple (AAPL) ; $154.09; 750 shares; 3.32%; Sector: Technology

WEEKLY UPDATE: The big Apple always seems to get everyone's attention around earnings season. After all, the company hardly ever misses and the trickle down effect to other companies is widespread. That said, some talk this past week of the company slowing down hiring. When these snippets are released Apple stock moves sharply. That happened on Monday, in fact this little piece of news translated into a massive selloff, but the bulls turned things around the following day. Apple's chart looks pretty strong here but is overbought. The stock has vaulted over the 100-day moving average now after pushing through the 50 DMA recently. Most stocks are doing the same, so Apple is certainly a leader in that respect. Volume trends are decent and the RSI is nearly overbought as it was in last March, before the stock declined sharply. Apple will report its June quarter results on July 28.

1-Wk. Price Change: 2.6% Yield: 0.6%

INVESTMENT THESIS: While we acknowledge that near- to- midterm performance remains heavily influenced by iPhone sales, the dynamic is shifting as investors finally being to place greater emphasis on Services growth. We are bullish on the 5G upgrade cycle and believe longer-term upside will continue to come as Services revenue grows its share of overall sales. Services provide for a recurring revenue stream at higher margins, a factor that serves to reduce earnings volatility while allowing for a higher percentage of sales to fall to the bottom line, as a result, we believe that Services growth and the installed base, are much more important than how many devices the company can sell in a given 90-day period. In addition to improved profitability, we also believe the transparent nature of this revenue stream will demand an expanded price-to-earnings multiple as segment sales grow. Furthermore, we believe that Apple's desire to push deeper into the healthcare arena will help make its devices invaluable as more life-changing features are added and the company works to democratize health records. Lastly, also see upside resulting from increased adoption of wearables (think the Apple Watch) and potential new product announcements such as an AR/VR headset or an update on project Titan, the company's secretive autonomous driving program.

Target Price: Reiterate $160; Rating: Two

RISKS: Slowdown in consumer spending, competition, lack of new product innovation, elongated replacement cycles, failure to execute on Services growth initiative

ACTIONS, ANALYSIS & MORE: FY3Q21 Earnings Analysis (7/27/21), Apple Product Launch Event Takeaways (4/20/21), Takeaways from WWDC (6/22/20), Initiation (1/4/10), Investor Relations

Applied Materials (AMAT) ; $101.67; 1,160 shares; 3.39%; Sector: Industrial Machinery

WEEKLY UPDATE: Applied had a strong week on the back of solid earnings from competitor ASML, but that company also cut their forward guidance. We'll hear from KLAC and LRCX next week which will give us more information on the equipment demand, supply and pricing environment. Applied recently traded at a very low historical multiple, so it is no surprise to see money flow here when the buyers finally became engaged. Deutsche Bank cut it's price target to 110 but maintained its rating as a buy. The funding bill being talked about for the chips is just about done and would be a net positive for Applied. Earnings out in August.

1-Wk. Price Change: 7.6% Yield: 1%

INVESTMENT THESIS: SEMI, the semiconductor capital equipment trade association, now sees global sales of semiconductor manufacturing equipment by original equipment manufacturers passing the $100 billion mark in 2022, after jumping 34% to $95.3 billion in 2021 and registering $71.1 billion in 2020. Other forecasts point to continued growth in the semiconductor capital equipment market due to the maturing of the 5G and IoT markets as well as the maturation of the other drivers for chip demand. We also like the company's policy of returning capital to shareholders and would note its growing track record of annual dividend increases. Applied's next $0.26 per share quarterly dividend will be paid on Sept. 15 to shareholders of record on Aug. 25.

Target Price: Reiterate $135; Rating: Two

RISKS: Semiconductor capital equipment spending. Geopolitical tensions and international trade disputes.

ACTIONS, ANALYSIS & MORE: Trimming 2 Names; Initiating a New Position, Investor Relations.

First Trust Nasdaq Cybersecurity ETF (CIBR) ; $42.89; 2,220 shares; 2.73%; Sector: Cybersecurity

WEEKLY UPDATE: Our pickup last week of more shares in the cybersecurity ETF was a smart one. CIBR is up nicely, about 5% since then and remains in a price zone from $38 to $44. Relative strength is perking up though, MACD is on a buy signal and CIBR is now trading above the 50-day moving average for second time this month. It spent a generous amount of time below this level until recently. We like the stock eventually to make a run to the 200-day moving average at 48 bucks before considering taking some profits off the table.

1-Wk. Price Change: 4.7% Yield: 0%

INVESTMENT THESIS: The First Trust Nasdaq Cybersecurity ETF is an exchange-traded fund. The Fund seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Nasdaq CTA Cybersecurity Index. The Nasdaq CTA Cybersecurity Index is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices in order to provide protection of the integrity of data and network operations. To be included in the index, a security must be listed on an index-eligible global stock exchange and classified as a cybersecurity company as determined by the Consumer Technology Association (CTA). Each security must have a worldwide market capitalization of $250 million, have a minimum three-month average daily dollar trading volume of $1 million, and have a minimum free float of 20%.

Target Price: Reiterate $62; Rating: Two

RISKS: Cybersecurity spending, technology and product development, timing of product sales cycle, new products, and services in response to rapid technological changes and market developments as well as evolving security threats.

ACTIONS, ANALYSIS & MORE: We're Swapping One Cybersecurity Stock for Another, ETF Product Summary

Ford Motor (F) ; $12.82; 8,670 shares; 3.19%; Sector: Industrials

WEEKLY UPDATE: Lots of news this week on Ford as we heard of the company's upcoming plans in the EV space. First and foremost, they have signed a MOU with a battery maker to supply them with enough capacity and raw materials to hit their targets on EV based cars/trucks. That was a relief to shareholders. They also announced a plan to cut thousands of salaried jobs, something that had been rumored recently. Lastly, they are routing EV production to China, to help satisfy their ambitious plans to be No. 1 in the space. They estimate a 2 million EV run rate by 2026. Ford reports their quarter on July 27.

1-Wk. Price Change: 7.9% Yield: 2.3%

INVESTMENT THESIS: Our bullish thesis on Ford is mainly predicated on the turnaround led by CEO Jim Farley and his new leadership team. Whether it be through restructuring underperforming parts of the business and getting out of low profitable vehicles or addressing a roughly $2 billion headwind related to warranty costs, we believe Farley and his management are executing in building a new Ford that grows profitably and generates sustainable free cash flow. We also think Ford's electric vehicle business is underappreciated. Not only do they have the Mustang Mach-E, but Ford is also developing all-new electric versions of the popular F-150 and the E-Transit cargo van. Plus, Ford has a strategic partnership and minority investment with Rivian who is best known for its customer delivery vehicles for Amazon.

Target Price: Reiterate $15; Rating: Two

RISKS: Turnaround execution, the transition from ICE (internal combustion engines) to EV vehicles, competition, economic cycle,

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/28/21), Ford Continues to Shine After Capital Markets Day (5/27/21), Our Take on Ford as It Continues Its Climb Higher (1/21/21), Looking for Opportunities After a Ford Downgrade (11/25/20), Initiation (11/24/2020), Investor Relations

Mastercard (MA) ; $343.88; 275 shares; 2.72%; Sector: Info. Tech

WEEKLY UPDATE: What's bad for the dollar is good for Mastercard. The greenback has been in a steady retreat of late, and that has been good for multinational firms like Mastercard and Visa. This stock has pulled off the recent lows (300 bucks) and is right back in the middle of a range. We've noted this many times, Mastercard is mired in a range from $300-$400, and if it ever breaks out this stock will make a monster run. JP Morgan maintained overweight on Mastercard. The company entered into an important relationship with D-Wave Systems into quantum computing, perhaps the next feature in digital financial services. Earnings are out July 28.

1-Wk. Price Change: 3.4% Yield: 0.6%

INVESTMENT THESIS: Mastercard is a card network company that benefits from the secular shift away from cash transactions and towards card based and electronic payments. On Covid-19 dynamics, we view MA as a "reopening" play and an economic recovery play within technology because its cross-border volumes fell sharply during the pandemic but will rebound as mobility increases and travel restrictions ease. Mastercard has more international exposure relative to Visa, making its growth outlook more susceptible to new travel restrictions. However, we view MA as the better long-term play as we are betting on that inevitable recovery. Mastercard's next $0.49 per share quarterly dividend will be paid on Aug. 9 to shareholders of record on July 8.

Target Price: Reiterate $425 Rating: Two

RISKS: The recovery in cross-border transactions, regulation in payments market, competition from other fintechs, pricing pressures.

McCormick & Co. Inc. (MKC) ; $84.11; 1,280 shares; 3.09%; Sector: Food; Consumer Non-Durables

WEEKLY UPDATE: McCormick may have put in a nice bottom around the 80 dollar level. We've noticed here the last couple weeks buyers picking up the shares when the stock dips to the low $80s. We had said recently a base building pattern was necessary before a bullish run can ensue, and we believe that is what is taking place. We'll wait patiently for this name, which often has a strong upward move after summertime is over.

1-Wk. Price Change: 2.9% Yield: 1.7%

INVESTMENT THESIS: McCormick is a global leader in flavor that manufacture spices, seasoning mixes, condiments, and other flavorful products to the entire food industry-retailers, food manufacturers and foodservice businesses. Roughly 65% and 75% of the company's sales and operating income are derived from its consumer business with the balance from its "Flavor Solutions" one. With consumers feeling the pinch of higher food prices, they are likely to repeat the historical pattern of shifting toward increasing food consumption at home, a driver of demand for McCormick's products. We are also entering the seasonally strong time of year for this dividend payer, which has increased its dividend each year over the past 37 years.

Target Price: Reiterate $110 Rating: Two

RISKS: Local economic and market conditions, input cost inflation, exchange rate fluctuations, and restrictions on investments, royalties, and dividends.

Morgan Stanley (MS) ; $82.43; 1,385 shares; 3.28%; Sector: Financials

WEEKLY UPDATE: Strong move up for this investment bank after strutting its stuff last week as the best bank earnings. We like the name here but would like to see a bit more upside movement as the stock swings toward the 100-day -- and then the 200-day -- moving average around the 90 dollar area. Moving above resistance this past week and following through was a huge undertaking, but Morgan Stanley has shown some resilience. Goldman Sachs' earnings Monday also gave MS a lift, while lower rates are going to be helpful for earnings in the future. We like the yield on MS, it is the biggest contributor of dividends (dollar-wise) to the AAP portfolio.

1-Wk. Price Change: 5.6%; Yield: 3.4%

INVESTMENT THESIS: The company's mission is to create three world-class businesses of scale: Institutional Securities, Wealth Management, and Investment Management. The bank has supercharged Morgan Stanley's push into the latter two businesses was recently enhanced by the acquisitions of E-Trade (for Wealth Management) and Eaton Vance (Investment Management). Both deals have increased the bank's exposure to fee-based and recurring revenue streams, making Morgan Stanley less dependent on volatile business lines and interest rates. Estimates suggest Wealth Management and Investment Management fees as a percentage of Morgan Stanley's overall revenues should increase to around 60% in the fourth quarter of 2022, up from about 46% in the first quarter of 2021. We see this transition as a multiple enhancing event. We also appreciate the bank's ability to return excess capital to shareholders.

Target Price: Reiterate $105; Rating: Two

RISKS: Capital Markets activity, Integration risk on recent acquisitions, increased regulation of banking industry, low interest rates

ACTIONS, ANALYSIS & MORE: 2Q21 Earnings Report (7/15/21), Initiation (7/12/21), Investor Relations

Nucor (NUE) ; $119.86; 325 shares; 1.12%; Sector: Materials

WEEKLY UPDATE: Nucor just reported earnings yesterday and crushed it on every metric. The earnings beat was stellar but so were revenues, and they continue to see more upside for the rest of 2022. it seems the infrastructure theme is paying off, and we may see more of this continue into the future. They said demand for steel remains strong in Q3, somewhat a sigh of relief about the economy in general. The move for the stock above the 200-day moving average yesterday on strong turnover was impressive, and we could see an easy move to $132 or more before taking a rest.

1-Wk. Price Change: 8.6% Yield: 1.6%

INVESTMENT THESIS: Nucor is the largest steel producer in the United States, primarily serving commercial, municipal construction, and industrial markets. The company operates in three major segments: steel mills, steel products, and raw materials. Nucor is also the largest metals recycler in North America. We believe the steel industry is going through a multi-year cycle of higher prices, leading to higher margins and bigger profits for Nucor. The sharp, V-shaped recovery in industry activity has been one driver of profit growth for Nucor, as the surge in demand for steel coming out of the pandemic was met with tight capacity. We also believe Nucor will be a major beneficiary of a comprehensive infrastructure package. Lastly, Nucor has a history of rewarding its shareholders with robust capital returns during its upcycles. The company recently announced a 23% increase in its quarterly dividend to $0.50 per share, up from the prior $0.405, and the approval of a $4 billion share repurchase program, which replaces Nucor's prior $3 billion program under which the company bought back $2.33 billion between May-December of this year.

Target Price: Reiterate $175 Rating: Two

RISKS: Steel prices, decline in industrial activity, no comprehensive infrastructure package.

ACTIONS, ANALYSIS & MORE: Nucor Preannounces Stronger-Than-Expected Third-Quarter Earnings (9/16/21), FY2Q21 Earnings Analysis (7/22/21), Initiation (6/7/21), Investor Relations

PepsiCo Inc. (PEP) ; $169.61; 560 shares; 2.73%; Sector: Consumer Defensive

WEEKLY UPDATE: After reporting strong earnings last week and a nearly 17% run higher in the stock price since mid-June we expected to see a bit of consolidation. Nothing wrong at all with the stock taking a breather before another run. We should note the stock is within spitting distance of an all-time high. Recent volume has been low as the stock pulls back, what you like to see (institutions are not selling). The dollar has started to slide of late and that is good for Pepsi products overseas, but as the CFO Hugh Johnston said on the earnings call, the company has tremendous "stickiness" in pricing power.

1-Wk. Price Change: -0.9%; Yield: 2.6%

INVESTMENT THESIS: PepsiCo is one of the largest food and beverage companies globally. It makes, markets, and sells a slew of brands across the beverage and snack categories, including Pepsi, Mountain Dew, Gatorade, Doritos, Lays, and Ruffles. The firm uses a largely integrated go-to-market model, though it does leverage third-party bottlers, contract manufacturers, and distributors in certain markets. In addition to company-owned trademarks, Pepsi manufactures and distributes other brands through partnerships and joint ventures with companies such as Starbucks. The combination of the consumable nature of those products along with PepsiCo's ability to realize price increases has led to consistent revenue, EPS and dividend growth during both the Great Recession and the Covid pandemic. This company's most recent dividend increase marks its 50th consecutive one and that 7% bump moves the annualized dividend to $4.60 per share up from the prior $4.30. The new quarterly dividend of $1.15 per share is payable on June 30 to shareholders of record on June 3.

Target Price: Reiterate $180; Rating: Two

RISKS: Economic conditions, supply chain constraints, raw material costs.

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating 1 Name While Adding to Another, This Stock Should Have 'Pep,' Even in a Recession, Investor Relations

United Parcel Service (UPS) ; $187.98; 520 shares; 2.81%; Sector: Industrials

WEEKLY UPDATE: This firm really needs to post a strong earnings report on July 26. On that day we'll learn more about the cost of fuel and labor, always the biggest expense for the company. UPS remains locked in a trading box, but above the rising 20-day moving average, under the 50-day moving average. The stock has been making higher highs, higher lows recently and with earnings due out July 26 this could make a run to the $200 area. Raymond James and Citi lowered their price target on UPS but maintained a buy rating. We like the shares here and might consider adding more on a pullback.

1-Wk. Price Change: 3% Yield: 2.7%

INVESTMENT THESIS: We are fans of CEO Carol Tomé. Throughout her time at Home Depot, Tomé built an impressive reputation as a turnaround artist, and we think her fresh perspective and intense focus on efficiencies will create a better UPS. However, near-term global supply chain issues paired with rising transportation costs could be a thorn in the company's side. We appreciate UPS's nearly 50 years of stability and growth in dividends, which management calls the "hallmark" of the company's financial strength. In February 2022, the company announced a 49% hike to its quarterly dividend putting it at $1.52 per share.

Target Price: Reiterate $230; Rating: Two

RISKS: Weakness in the broader economy, rising fuel prices, execution, cost management, pricing power.

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (7/27/21), Investor/Analyst Day Analysis (6/9/21), Initiation Post (9/25/20), Investor Relations

Energy Select Sector SPDR Fund (XLE) ; $71.15; 505 shares; 1.03%; Sector: Energy

WEEKLY UPDATE: XLE moved higher this week on the heels of a strong move up in natural gas. Crude was off the highs but still remains well bid as demand/supply issues remain constrained. We should note the war in Ukraine continues to be the wild card, and with more sanctions to come against Russia concerning caps in Europe there could be another big explosion in oil prices. Saudi Arabia does not seem to have the capacity to drill for more oil, the meeting last week with President Biden seems all for naught. Regardless, we like the potential move for this ETF to rise up to $100.

1-Wk. Price Change: 3.7; Yield: 3.9%

INVESTMENT THESIS: Energy Select Sector SPDR Fund is an exchange-traded fund (ETF) that tracks the performance of the Energy Select Sector Index. The ETF holds large-cap U.S. energy stocks. It invests in companies that develop & produce crude oil & natural gas, provide drilling and other energy related services. The holdings are weighted by market capitalization.

Target Price: Reiterate $98; Rating: Two

RISKS: interest rates, weakness in the broad economy, energy prices. seek

ACTIONS, ANALYSIS & MORE: Adding to 2 Positions on Market Weakness, We're Initiating a Position in the Energy Sector, State Street Global Advisors SPDR Fact Sheet for XLE.

Market-Hedging Positions

ProShares Short QQQ ETF (PSQ) ; $13.34; 2,940 shares; 1.13%

WEEKLY UPDATE: Nasdaq traded with good relative strength vs. the other indexes this past week as technology names surged higher. However, we are still in a bearish trend and as such we still need to protect the portfolio from any damaging downside action. That said, we will continue to hold the PSQ for the foreseeable future, at least until the bear market has completed.

1-Wk. Price Change: -3.4%; Yield: 0.00%

INVESTMENT THESIS: ProShares Short QQQ seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Nasdaq-100 Index. The Nasdaq-100 Index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.

Target Price: N/A

RISKS: Because QQQ shares track the inverse of the Nasdaq 100 Index, QQQ shares will move lower when the Nasdaq 100 Index moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1 and Initiating 1

ProShares Short S&P 500 ETF (SH) ; $15.73; 3,310 shares; 1.5%

WEEKLY UPDATE: As we are still in a bear market environment, it is absolutely necessary to use the tools that can blunt volatility in the portfolio. The inverse ETF can do this, even a small amount of shares can serve the purpose. We continue to hold this protection until it is not needed.

1-Wk. Price Change: -2.6%; Yield: 0.00%

INVESTMENT THESIS: The ProShares Short S&P 500 ETF seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the S&P 500. We are using SH shares to blunt market volatility and hedge the portfolio's performance against its benchmark, the S&P 500. Given the tactical nature of this position, we do not expect to hold SH shares for the same length of time as we do the portfolio's long positions.

Target Price: NA

RISKS: Because SH shares track the inverse of the S&P 500, SH share will move lower when the S&P 500 moves higher.

ACTIONS, ANALYSIS & MORE: Selling Shares in 1 Position, Closing Another, Adding to 1 and Initiating 1, Trimming 2 Names While Initiating Coverage of a Third

The AAP is long all stocks in the portfolio including SH PSQ XLE UPS PEP NUE MA F CIBR AWK AMZN VZ URI NVDA MS MSFT MKC GOOGL DE COST CMG CHPT CBOE AMAT AAPL AMN.