Hey, Ross here:
As expected, the Fed cut rates again yesterday.
But during the press conference, Fed Chair Powell said that a third cut in December was “far from certain” – which caused indexes to dip.
As I said yesterday, this shouldn’t have come as a surprise.
Most of the time, whenever Powell opens his mouth, markets take a dip.
Anyway, enough about Powell and the Fed.
For today, let’s look at all the multi-hundred-billion-dollar moves happening in the market right now.
Chart of the Day
This is Alphabet stock surging over 7% after hours after reporting third-quarter earnings that was stronger than expectations.
With a $3.3 trillion market cap before the surge, that equates to an over $200 billion move in a matter of minutes.
And it can happen the other way as well.
This is Meta stock falling over 8% in the after hours right after reporting its latest quarterly earnings, which obviously disappointed.
Its market cap before the drop was $1.9 trillion – making that about a $150 billion downward move.
That’s the power of earnings season.
Hundreds of billions of dollars in market value can be added – or wiped out – in an instant.
And while the biggest stocks in the market obviously capture the most investor attention and make the largest moves in terms of market cap…
We often see similar, or even more drastic moves in smaller stocks.
For example, here’s what happened to financial services company Fiserv. Still a large-cap stock, but nowhere near the size of the tech giants.
Its stock got nearly chopped in half after earnings – down 44% in a single day.
And remember, the broader market is pretty much at all-time highs right now…
Which brings us to an important insight about earnings season, which I elaborate on below.
Insight of the Day
Earnings season can create big moves that are uncorrelated to the broader market trend.
It doesn’t matter if the broader market is moving up, down, or sideways…
During earnings season, we will always see large moves in individual stocks – in both directions…
Because it’s when investors’ expectations of a stock get reset – sometimes violently – as they get caught by surprise.
Of course, there is one group of investors who almost never get caught off guard by earnings…
High-level execs at the company itself – CEOs, CFOs, and directors.
And not only do they not get taken by surprise, they often take full advantage of it by trading ahead of or after earnings.
Take a look at this chart of Fiserv here:
It shows how Fiserv’s insiders have been dumping stock – millions of dollars at a time – while the stock was at its highs.
If you had seen that kind of selling, you would already have known to stay away from this stock, and avoided that catastrophic 44% plunge.
And it works the other way too…
Insider buying can often pinpoint us to stocks that are about to surge.
The caveat is – not all insider buying is created equal.
A lot of insider buying is just routine, with no predictive signal at all.
If you want to follow the insiders into potentially big moves, you need to understand how to separate the “right” kind of insider buying from the wrong kind.
And tomorrow, Friday Oct 31, at 10 a.m. Eastern…
I’m going LIVE to walk you through my complete strategy for following the top insiders, including:
- Where to find insider trades – publicly and legally
- How to tell which ones matter (and which to ignore)
- The 3 unusual signals that insiders leave behind when they’re confident a stock is about to move
This strategy has never had a losing year since 2017…
It could have delivered a total compounded return of about 1,900% since then…
And now may be the best time to use it all year.
So click here to save your seat for my live insider strategy walkthrough tomorrow…
And I’ll see you Friday at 10 a.m. ET.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
Android: https://play.google.com/store/search?q=goto&c=apps
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Ross Givens
Editor, Stock Surge Daily
