JD DURKIN: Good morning, Action Alerts Plus subscribers. Chris Versace and I are now back, as always, as we are every Monday, ready to rock and roll for the week ahead. But as always, let's take a look at the week that was. Chris, thank you for being here, as always. Looking back, what was the most consequential story, you think, of last week? There's a lot to pick from, I feel like.

CHRIS VERSACE: Yeah, there's a lot to pick from. The obvious choice is the Fed and the 25 basis point increase, but also the language that they would be looking to continue to decide what to do with monetary policy as we get more data over the next not only two months, but into the balance of the year, going meeting by meeting.

But that's not what I would choose. I would actually choose earnings. We're in the midst of the June quarter earnings season. And so far, the reports have been solid, arguably, in some areas better than expected. But what we haven't seen, JD, is any dramatic upward revision in expectations, either for the second half of the year or for 2024.

And we told members that we would be watching this, largely because the market multiple that is the S&P 500 multiple is now north of 20 times, way above its historical average. And what this says is, we really need to see earnings growth to see the S&P 500, or the market, drive demonstrably higher. So as we move into the second half of the earnings season, that is what we will continue to be watching for.

JD DURKIN: In terms of overall portfolio management, Chris, give us a recap for members who may have missed an alert or two. Is there anything really important from the last week in terms of--

CHRIS VERSACE: Well, we actually did a couple things last week.

JD DURKIN: --bullpen et cetera. Yeah, talk to me.

CHRIS VERSACE: Yeah, sorry about that. So, yeah, we actually did a number of things last week, even though it was, as you pointed out, a very busy week. We came into the week where we trimmed our position in Cboe Global Markets. And we had said, above 140, we were likely to use this as a source of funds. And that's exactly what we did. We trimmed back that position, and we redeployed the capital into shares of Applied Materials and Axon Enterprises, both of which pulled back the week before.

We also exited our final slug of ord shares. And remember, that really came on the heels of the deal between the Teamsters and UPS, where the Teamsters, it appears, really got, let's just say, a wonderful package for their members. What that means, however, for UPS is escalating costs. And the reason that we were concerned about this, the UAW and the big three, including Ford, are going through their own labor negotiations.

And to us, as I said in the note, it was the straw that broke the camel's back in terms of why we needed to move out of that remainder slug of Ford. And then finally, you alluded to this, some bullpen action. We just reminded members about the seasonality in the smartphone market. We're getting signs that the excess smartphone inventory in China continues to come down. We're warming up, if you will, to the shares of Qualcomm. And they report later this week.

JD DURKIN: Chris, with the benefit of an oopsie-daisy button-- I think that's what it would be, hypothetically, officially known as-- if you could redo anything with an oopsie-daisy button from last week, what would you do differently?

CHRIS VERSACE: So the oopsie-daisy potentially from last week would have been calling McDonald's shares up into the portfolio ahead of their earnings. We Telegraphed it to members as we added it to the bullpen that we were really waiting to see what they had to say about the back half of the year. Did we do it? No, we didn't. And we missed out on a couple points in the stock price. But let's remember that the market is entering a very seasonally weak time of year. And I think that we'll actually get that ability, I can't believe I got to say this, JD, but take a bite out of McDonald's shares.

JD DURKIN: Did you have that one teed up? Or was that purely improvised on the spot? I could see it going either way.

CHRIS VERSACE: As we were chatting, it just came to me, fell out of my head, if you will.

JD DURKIN: I like it. All right, moving ahead to this week, what is topping your radar? It's not, I'd argue, data perspective-wise, maybe not quite as many little frantic things to cover as last week. But we still have quite a few data drops, don't we, in the days ahead?

CHRIS VERSACE: Yeah. So let's put it into two big buckets, shall we? So the first is going to be economic data. As we move past July, we move into August, we get the usual start of the month data, which is pretty heavy. What do I mean by that? Well, we get multiple looks at the manufacturing and services economy through the July PMI data from S&P Global as well as the Institute for Supply Management.

Then we have, of course, twin looks at the number of jobs and wages created during the month of July, courtesy of ADP. And then, of course, on Friday, the official employment report, and we also get the June data for construction spending. So that's a lot of data coming at us. As we parse through it, we'll want to be mindful, again, because the Fed met last week and we're going to have a barrage of Fed heads picking back up again what all of that data says about inflation.

Now, remember, that's part of the data that we'll be getting between now and the Fed's next meeting. But we do expect the market to dig into this as they try to determine, is the Fed actually done raising rates? So that's the first bucket. Second bucket, without a doubt, earnings, earnings, earnings. We've got over 1,600 companies reporting, up more than 50% from last week. It's going to be a barnburner of a week.

JD DURKIN: And we did have that interview, those comments from Neel Kashkari yesterday. We will have other Fed heads, as you call them, throughout the week as well. Chris, let's move on to our portfolio earnings-- or holdings, rather. What's on the calendar from the earnings perspective, in terms of what's in the portfolio?

CHRIS VERSACE: So we've got a number going out. Obviously, we're going to continue to see earnings from the magnificent seven. So from the portfolio this week, that means we've got Apple and we've got Amazon. We've also got Clear Secure and then Vulcan Materials. So those are the four big ones that we'll be watching this week. And of course, as I mentioned a second ago, we've got Qualcomm reporting as well, bullpen resident.

JD DURKIN: All right. And which reports outside of the portfolio will you be most closely paying attention to?

CHRIS VERSACE: This is where it's going to get really busy, JD, because as I said, with 1,600 companies, there's going to be a lot that we have to pay attention to, dig into the conference calls looking for confirming data points, but also some potential flags for anything that's going on in the portfolio. So we've got Caterpillar. We've got Terex. Comments on infrastructure spending.

We'll be listening to that as it relates to Vulcan Materials, and of course, United Rentals. We've also got Blink Charging and EVgo. We want to hear what they have to say, parsing those comments with an eye towards ChargePoint. We've got Motorola Solutions that's reporting. We want to pay attention to their comments about federal, state, local public safety spending, with an eye towards Axon.

We've also got AMD, Qualcomm, Qorvo, Equinix. We'll be wrapping our head around that, not only for what Apple's going to say, but also for what we could be hearing when Marvell reports in the coming weeks as well. And there's some others in there too. I would suggest members just take a look at the comprehensive review of what's ahead this week for earnings in Friday's roundup.

JD DURKIN: I'm sure they will. The great Chris Versace helping us kick off another busy week. Thank you, as always.

CHRIS VERSACE: Thank you, JD.

JD DURKIN: All right, folks, that's going to do it for today. Thanks for watching. We'll see you soon.