Hello Again,

The market has been stagnant for some time now. After dramatically moving up within a short period of time, this is not unusual. Increase in interest rates by the Federal Reserve to slow down the economy while the rate of growth in the economy is expected at 5% for this quarter, makes me believe that the Federal Reserve will create a mini recession to cool down the economy. To that effect, the trade war came at the best time as that alone might create the desired slow-down in the economy.

I would like to take this opportunity to take a victory lap. Many months ago, all analysts were negative on Apple. They declared that Apple is dead as a growth company and we could all expect a decline in the price. At that time, after making billions of dollars, Carl Icahn sold all of his Apple holdings and he stated that Apple has a negative future in China. When all this was taking place, I asked you to buy more of Apple and the shares of Apple owned by us increased. Our average cost of Apple is at $92. On 8/2/18, Apple became the first publicly owned company to have a market cap of one trillion dollars and the share price ended the day at $207 per share. Apple’s future looks very rosy according to their latest Wall Street call. Now Jim Cramer predicts that Apple will go up by another 50% to $300 per share! Along the way, Apple missed many golden opportunities. For the longest time, they had the biggest cash balance on their balance sheet-over $200 billion. As most analysts state, they should have bought Netflix when it was cheap or they could have done the same with companies like Square and Facebook. Apple is known not to have made a single huge acquisition but that does not mean that they will not do so in the future.

GE- General Electric's (GE) lead director, H. Lawrence Culp Jr., has bought $2.5 million in shares of the troubled conglomerate on the open market. He paid an average of $13.04 for 191,000 GE shares on July 24. Culp, who made the transaction through a holding company, now owns a total of 373,400 shares through that entity and through family trusts. The stock has dropped about 24% so far this year, excluding dividend payments. Despite its problems, GE does have its bulls. Culp, who joined GE's board earlier this year, is the former CEO and chairman of Danaher (DHR) and retired from that company in 2014.(Ed Lin,RealTime Analysis, 7/27/18)

GM-While earnings and tariffs play tug of war with stock performance, it's obvious that some companies would be hit harder than others in a trade war. Auto makers are a prime example of companies that have a target on their backs when trade tensions flare. But what if there we didn't have to worry about tariffs? Well, in that case, General Motors (GM) looks like a better buy than Ford Motor (F), says Piper Jaffray's Alexander Potter. Potter writes that "it's clear that GM is outperforming Ford in China." He points to GM's success in the luxury space as "particularly notable," as he estimates the Cadillac brand represented 16.7% of GM's second-quarter sales in China, up from 13.6% in the same period last year. He believes this will boost GM margins, and may even help the auto maker log better-than-expected income from its joint venture (versus guidance of $2 billion). Yet that's only if things carry on as is, a big if given worries about the escalating tit-for-tat trade war between the U.S. and China. Potter write that both GM and Ford would be hit hard by a trade war: "In addition to absorbing higher import duties, both companies would probably cede share if consumers began boycotting U.S. brands. So far no boycotts have materialized, but recent market-wide sales declines are probably due to trade-related price confusion, and GM/Ford are not immune."(Teresa Rivas,Sector Focus,7/25/18)

EXXON- Exxon Mobil (XOM) will report earnings a week from Friday, but JPMorgan's Phil Gresh warns that even though expectations aren't very high, the second quarter will probably still not provide the "panacea" for the energy giant's woes. Exxon has slipped 2.8% year to date, underperforming other oil majors such as Chevron (CVX) and ConocoPhillips (COP), along with the EnGresh reiterated a Neutral rating and an $88 price target on the shares today, writing that his earnings estimates are in line with consensus, but that "it feels like upside could be fairly limited."ergy Select Sector SPDR ETF (XLE), which is up 3.6% since the start of 2018. He writes that on the upstream (exploration) side, earthquake-recovery efforts likely hurt volumes, prices, and cash flows at the PNG LNG project that Exxon is spearheading, while maintenance and production issues in areas from Canada to Kazakhstan may also weigh on the quarterly results. In all, Gresh warns that Exxon could notch another year-over year and quarter-over-quarter production decline, the eighth quarterly production decline in the last 10 quarters.(Teresa Rivas, Sector Focus,7/20/18)

IBM(IBM) this afternoon reported Q2 revenue and profit that topped analysts' expectations, and re-affirmed its profit outlook for the year, led by sales of mainframes and operating-system software, sending its shares higher in late trading. Most other lines of business were flat to up slightly in the quarter. Chief Executive Ginni Rometty called the results "strong," and said they showed IBM's "progress and momentum in the emerging, high-value segments of the IT industry." Added Rometty, "More clients are engaging IBM on their journey to the cloud, and deploying IBM Cloud, Watson AI, analytics, blockchain and security solutions. "This demonstrates IBM's unique leadership in providing innovative technology coupled with deep industry expertise, trust and security." Revenue in the three months ended in June rose to $20 billion, yielding earnings per share of $3.08, excluding some costs. Analysts had, on average, been expecting $19.85 billion in revenue and $3.04 per share in net income. IBM's gross profit margin declined from a year earlier by half a point, to 46%, while its pre-tax The biggest increase among all IBM's businesses, percentage-wise, was its "systems" business, including its mainframe computers, up 25%, at $2.2 billion.operating profit margin rose to 13.9% from 12.7% a year earlier. IBM's "cognitive solutions" products, including its Watson business, was flat from the prior-year period, at $4.6 billion. Its "Global business services" business was upIBM said its revenue from cloud computing rose by 23% over the trailing twelve-month period, to $18.5 billion. 2% and "technology solutions and cloud platforms" revenue was also up 2%.(Tiernan Ray, Tech Trader Daily, 7/18/18)

Apple I would like to take this opportunity to pat myself on the back. Many months ago, all analysts were negative on Apple. They declared that Apple is dead as a growth company and we could all expect a decline in the price. At that time, after making billions of dollars, Carl Icahn sold all of his Apple holdings and he stated that Apple has a negative future in China. When all this was taking place, I asked you to buy more of Apple and the shares of Apple owned by us increased. Our average cost of Apple is at $92. On 8/2/18, Apple became the first publicly owned company to have a market cap of one trillion dollars and the share price ended the day at $207 per share. Now Jim Cramer predicts that Apple will go up by another 50% to $300 per share! Along the way, Apple missed many golden opportunities. For the longest time, they had the biggest cash balance on their balance sheet-over $200 billion. As most analysts state, they should have bought Netflix when it was cheap or they could have done the same with companies like Square and Facebook. Apple is known not to have made a single huge acquisition but that does not mean that they will not do so in the future.

Apple (AAPL) doesn’t report results until after the closing bell on Tuesday, July 31...but it’s never too soon to start pontificating about what to expect. The stock’s received a couple price target boosts today as analysts contemplate what Apple might say. Morgan Stanley’s Katy Huberty has dug into the work of quantitative analysts to find that probably the current quarter, not the one that Apple is reporting, is likely going to be lighter than expected. Huberty sees Apple probably delivering an "in-line June quarter but providing a slightly weaker-than-consensus September quarter outlook due to a possible October launch of the 6.1-inch LCD iPhone." Still, Huberty, who has an Overweight rating on the stock, raises her price target to $232 from $214 to reflect the fact that peer stocks are getting more richly valued of lateLTiernan Ray,Tech Trader Daily,7/25/18)

Have a great month!

Fernando