The week was short, but big on market and economic activity.

A chart of the week as measured by the S&P 500 would closely resemble that of a roller coaster. Week-over-week, the S&P 500 shed 1.2% with both the Nasdaq Composite and the Nasdaq 100 losing roughly 1%.

Midweek, the Fed began its efforts to shrink its $8.9 trillion balance sheet, injecting fresh questions over how effective it will be and whether combined with the Fed's plan to boost interest rates will send the U.S. economy into a tailspin. As we noted at the time, when even a Fed governor describes the combined tightening effort as "highly uncertain" despite the "using a variety of models and assumptions" there are bound to be unanticipated effects.

As that effort began, Shanghai authorities commenced easing Covid rules with curbs loosening for about 22.5 million people in low-risk areas and businesses no longer needing so-called "white list" approval to have employees working on site. But that quickly swung back to lockdowns, reflecting China's continued zero-Covid policy that runs a risk to supply chains returning to normal.

During the week, it was reported the Biden administration was actively considering adding new Chinese companies to the government's economic blacklist and reports the U.S. will send Ukraine advanced rocket systems and munitions as part of a new $700 million package of military equipment. While this action has been called for by many, we could see the return of more pronounced geopolitical tension that could challenge the market's attempts to reclaim lost territory so far in 2022.

Soon thereafter, JPMorgan Chase CEO Jamie Dimon sounded alarm bells on the economy, warning investors to prepare for an economic "hurricane." That was quickly followed by Salesforce citing foreign currency headwinds as the driver behind its trimming its full year revenue forecast. Microsoft quickly followed by reducing expectations for the current quarter, also naming foreign currency headwinds. With the Fed poised to boost interest rates further in the coming months and the other central banks lagging behind, notably the European Central Bank, we are likely to see sustained strength in the dollar. This means the foreign exchange headwinds we're hearing about for the current quarter are likely to persist in the second half of the year, creating another reason EPS expectations are likely to be culled back vs. those had just a few months ago.

In our view, Microsoft's announcement about the impact of foreign exchange isn't injecting a significant level of fresh uncertainty into the stock market, rather it's another log thrown on the uncertainty fire. That's especially the case for those companies with significant international exposure.

In recent days, we've heard a growing number of companies, including Uber, Lyft, Microsoft, Salesforce and others share plans to slow hiring. On Friday, Coinbase shared it will extend its hiring pause for the foreseeable future and rescind a number of accepted offers. What added fuel to that concern was a report from Reuters reports that Tesla is aiming to eliminate 10% of jobs as CEO Elon Musk has a "super bad feeling" about the US economy.

Coming into this week, it looked like some of the headwinds the market was facing were to have faded but as we saw that the case but a few new headwinds emerged as well. Once again, we'll be staring down questions over the speed of the global economy, how well it can absorb the Fed's inflation fighting efforts, to what extent will businesses slow their hiring and spending, and to what degree will consumers tighten their spending belts?

Our plan remains the same: Listening to the data, watching the market and position specific technicals as we cautiously move forward through the coming weeks. We have ample cash and our inverse exchange-traded fund in play that will buffer market volatility, which is likely to persist through the coming weeks as we arrive at the Fed's next monetary policy meeting and before too long the June-quarter earnings season. With the next few weeks bringing an array of investor conferences, we'll be closely watching for guidance revisions, both up and down, and revising our investment mosaic accordingly.

Our inverse ETF positions moved higher, which along with the portfolio's cash position, helped buffer the impact of the market action this week. Those weren't the only positive portfolio movers this week. We saw outsized gains in ChargePoint, Amazon, AMN Healthcare, and AMD, as well as Cboe Global Markets. To be fair, we did take some modest lumps in several positions as evidenced by the week-to-week declines in Nucor, Apple, Applied Materials, and McCormick & Co.

During the week we got off the energy bench with our starter position in the Energy Select Sector SPDR Fund that brings exposure to not only oil, but also natural gas and gasoline prices. We also started a new position in American Water Works, the largest public water utility and a company that targets growing its annual dividend 7%-10% over the coming years. Initial ratings for both positions are "Two," and our price target on XLE shares is $98, while the one for AWK shares is $165.

Following the midweek June Members Only call, we upgraded the shares of both McCormick & Co. and Nvidia to "Ones" from "Twos." We also trimmed back our price target on Microsoft to $320 from $360.

As we enter next week, we will continue to examine new positions for the portfolio that reflect more defensive business models, inelastic demand and dividend payers. It goes without saying that we'll also be eyeing adding to more recently started positions as well. With our "Three" rating on Walmart shares, they could be a source of funds for any such moves next week.

(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)

The shortened week brought with it the usual compliment of start-of-the month economic activity that included an array of May PMI data and concluded with the May employment report. Exiting May we have learned consumer confidence fared better than expected, falling to 106.4 from 108.6 the prior month, besting the expected reading of 103.7. Soon thereafter, the weekly MBA Mortgage Applications Index data showed the deteriorating in refinancing and new purchase activity continued as homeowners and prospective ones faced incrementally higher housing costs thanks to higher mortgage rates vs. year ago levels.

The May ISM Manufacturing Index increased to 56.1% with gains in new order activity vs. the prior month as well as the backlog of orders and new export orders. In addition to those positives, the supplier delivery index moved lower month-over-month indicating some improvement in supply chain woes. The report's prices index moved lower, hitting 82.2 vs. 84.6 the prior month, but the real read on this is that raw material prices increased for the 24 consecutive month just at a somewhat slower rate in May. These figures should put some context around that May data: The Prices Index has exceeded 70% in 17 out of the last 18 months and been above 60% for 21 straight months. To us, the real standout comment in the May ISM Manufacturing report was this, "A Prices Index above 52.6%, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials." We interpret this to mean that while inflation data may tick lower, in the coming months it will likely hover at significantly higher levels on a year over year basis.

By comparison, the ISM Non-Manufacturing Index for May slipped to 55.9% from 57.1% in April. While still well above the expansion-contraction line at is 50, the May headline figure marks another month of slower growth for the domestic services economy. Similar to what we saw with the May manufacturing report from ISM, the new orders component in the May services report ticked higher month-over-month. Also too, the prices index inched lower to 82.1 in May from the all-time high of 84.6% in April but again, comments point to continued input cost pressure that suggests sustained levels of inflationary pressures are likely in the coming months.

Turning to the May jobs report, while the headline figure of 390,000 non-farm jobs created during the month was better than expected, and much better than feared following the sharp drop in the May ADP Employment Report, nonetheless the pace of job creation over the last few months continued on its slowing trajectory. The unemployment rate remained at 3.6% for the third consecutive month, while average workweek and factory overtime were both unchanged vs. April. Both the labor force participation rate and the employment to population ratio were unchanged at 62.3% and 60.1%, respectively, which tells us the thorn in the side of the economy that is a tight labor force remains in place. And while the average hourly earnings data inched lower vs. April, the May reading remained well ahead of 5%, another reason for the Fed to remain in a more hawkish mode, especially following the upwardly revised unit labor cost reading for 1Q 2022 to 12.6% from the initial one of 11.6%. Again, some needed context for this one of the Fed's preferred gauges of inflation - the 8.2% increase in unit labor costs over the last four quarters was the largest since the third quarter of 1982.

Also on Friday, the EU formally adopted its sixth package of sanctions against Russia that contains a complete import ban on all Russian seaborne crude oil and petroleum products. This covers 90% of the block's current oil imports from Russia and is subject to certain transition periods to allow the sector and global markets to adapt. We also read late this week that 573 members of Norway's Industri Energi oil and gas union, the largest one in Norway, plan to go on strike from June 12 onwards if state-brokered mediation with employers fail. Even as OPEC+ looks to boost oil production the EU ban on Russian imports combined with tight crude inventories likely means oil prices will remain at elevated levels as will gas prices, continuing to sap consumer disposable income and weigh on corporate margins.

As we exit the week, there has been no meaningful update on the status of contact talks with International Longshore and Warehouse Union, which represents 15,600 dockworkers at the Port of Lost Angels and the Port of Long Beach. While the current contract doesn't expire until July 1, contract negotiations have historically stretched past expiration dates. Should that happen once again, we're likely to see port congestion creep higher once again.

We look forward to the Atlanta Fed updating its GPDNow model on June 7 as it will incorporate all of the above-data following its last revision on June 1. In that revision, the Atlanta Fed reduced its GDP forecast for the current quarter to 1.3% from 2.5% in mid-May. The math behind the Atlanta Fed's GDPNow model has been induced some serious head scratching in the past, but if its forthcoming GDP forecast for the current quarter break below 1.0, we would expect renewed questions over the Fed's ability to fight inflation without torpedoing the economy to resurface.

Going back to old school economic principles, it is said an economy is only as strong as its currency. If that is truly the case, the U.S. economy is still winning the global race.

https://share.trendspider.com/chart/UUP/4669ydhcuc

The dollar shows incredible resilience and strength in the face of higher inflation. To wit, inflation saps the buying power of the consumer and the holder of the currency, making purchase more expensive than before. A drop in purchasing power is a huge negative for a growing economy.

But again, we have not seen the dollar being hit negatively from the highest inflation in 40 years. Perhaps the best house in a bad neighborhood (other currencies are worth far less). The chart shows an interesting pattern of higher highs and higher lows on both the daily and weekly chart. The daily chart (blue, chaikin) has retreated toward the uptrend line, it seems ready to move upward. The weekly chart (trendspider) is similar, the Relative Strength index has pulled back for a modest correction and we could see a bit of sideways movement here. Make no mistake, the strong dollar is not going unnoticed. We heard from companies this week blaming currency issues (Microsoft, Salesforce) as a drag on their next few quarters (higher dollar seen as more difficult to sell products overseas). As for the economy, we think a strong dollar is a necessity, and will only get stronger as the Federal Reserve continues its campaign to raise interest rates.

Following the jam-packed economic data from this week, we have a rather light one next week that should allow from some digestion and further inspection of the data. Given the growing concern over consumer spending power, especially as the Fed lifts interest rates further, the April read on consumer credit is one that we'll be anxious to see, especially what it says about revolving consumer credit vs. February and March. The other focal point on the economic calendar will be the May Consumer Price Index report, which is currently expected to rise 8.3% on a year-over-year basis with the core reading up 5.9%. Those figures compare to the April readings of 8.3% and 6.2%, respectively. With gasoline prices hitting record levels in May and food prices remaining at elevated levels, the risk to the May CPI headline figure is more to the upside in our opinion. Should that come to pass, and the May figure come in above expectations that would suggest the reprieve we saw in the April data was temporary and likely lead to more hawkish expectations from the Fed. What the May CPI report tells us, will make the initial June reading for the University of Michigan Sentiment Index all the more interesting. A deep plunge in that figure could suggest consumers are growing increasingly wary, a scenario that could further crimp consumer spending.

In addition to those inflation figures, we'll also be getting several inflation figures for Japan and China late next. Other international economic data we'll be eyeing includes May China Services PMI data, retail sales for both the U.K. and Italy as well as the European Central Bank's (ECB's) interest rate decision. Exiting this week, the prevailing thought is we could see the ECB lift interest rates but by smaller increments than the Fed given the more fragile nature of its economy. While any such action would look to stymie inflationary pressures, smaller moves vis a vis the Federal Reserve likely means further dollar strength ahead. In our view that likely means we will be hearing more companies discussing foreign exchange headwinds in the coming weeks, and more than likely that will lead to top and bottom line expectations being inched lower.

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

While we have no portfolio companies reporting next week, given our comments about on foreign exchange and inflationary pressures, we'll following what's said from those companies that are reporting their latest quarterly results.

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

WEEKLY UPDATE: Quarter-to-date Transportation Security Administration checkpoint data is up 42% year-over-year, and the next read on where consumers are spending will be had from Mastercard's SpendingPulse report for May and the analogous report from Visa due in the coming days. Given our concerns on consumer spending power, we will be on watch for any shift in spending away from travel and tourism as it relates to our current investment rating and price target; so far all indications point to continued strength in that area. To that point, late in the week Alaska Air upped its guidance for the current quarter sharing the following: "We continue to experience sustained strong demand for air travel throughout our network. As a result, expected total revenue compared to 2019 has increased by 6.5 points at the midpoint, as load factors have increased, and passenger yields remain at double-digit percentages above 2019 levels." This follow similar comment of late from United Airlines and Delta Airlines.

1-Wk. Price Change: -0.6%; Yield: 0.00%

INVESTMENT THESIS: Airbnb is a global technology platform that matches travelers or "guests" with hosts that make their home or other dwelling available for use over a period of days. Airbnb makes its money is on services associated with usage of its platform, customer support and payment processing. That revenue stream, which is tied to facilitating a guest's stay, is recognized when the guest check-in occurs. Airbnb updated or introduced 50+ products for guests and hosts that are designed to increase host confidence to list properties with greater insurance coverage, making listings more informative with improved and automated translation in 62 languages, verified accessibility features and verified Wi-Fi speeds. For guests, there is improving discoverability, such as the "I'm Flexible" feature now extends for stays out to 12 months and can be filtered by property type. In our view the more comfortable Airbnb is able to make hosts, there more hosts the company can attract, and the more properties hosts are likely to list. Similarly, the more options and greater flexibility it can provide guests, the greater the likelihood of winning consumer wallet share. We would argue Airbnb has learned one of what we think is Amazon's (AMZN) great value propositions -- the ability to reduce transactional friction.

Target Price: Reiterate $200; Rating: One

RISKS: The COVID-19 pandemic and its impact on travel spend, economic challenges, geopolitical risks, host growth and retention.

ACTIONS, ANALYSIS & MORE: Investor Relations

WEEKLY UPDATE: On the heels of positive PC comments from both HP and Dell, AMD announced it will hold its next financial analyst day on June 9. The following day, Taiwan Semiconductor will announce its May sales data. That combination sets up next week as a catalyst filled one for AMD shares.

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

WEEKLY UPDATE: The April job openings and labor turnover survey report was released this week and while its showed a mover lower in health care and social assistance job openings for the month to 1.8 million vs. 2.067 million in March, the number of open jobs was still up significantly vs. 1.4 million in April 2021. Meanwhile, the number of hires for the category only rose 37,000 in April vs. May indicating it will be some time until those job openings are filled, especially given that category separations remain unchanged near 760,000 in April. With U.S. Covid cases higher now than this time last year, we suspect calls for declines in contract labor use for health care could be a tad premature.

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: One

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

WEEKLY UPDATE: Morgan Stanley warned Apple may have seen some slowing App Store growth in May even though third-party data provided by Sensor Tower, showed just 4% year-over-year growth in May. In our view, while one month doesn't a trend make given the risk of softer consumer spending that could impact App Store sales and therefore Apple's Service revenue, we'll keep close watch on data to be had by Sensor Tower and others. And as expected, Apple continues to pivot its manufacturing plans given supply chain disruptions in China. This week it was shared the company is shifting a portion of its iPad production to Vietnam. Even as Shanghai starts to re-open, reports indicate Apple asked suppliers specifically around Shanghai to bolster their inventories with printed circuit boards, mechanical and electronics parts as well as other key components used to create and distribute products efficiently. And next week brings the much awaited 2022 Worldwide Developer Conference, with the keynote taking place on Monday, June 6 at 1 PM ET. Typically the event centers on what's next for Apple's array of operating systems that tend to be released later in the year. Speculation does tend to run rampant ahead of this event, but as we shared during the June Members Only Call this week, we suspect folks will be digging into the soon to be released beta software for clues as to what's next for Apple's hardware line up. That includes potential timing for its augmented reality glasses, which currently sound like a 2023 product.

1-Wk. Price Change: -2.8% 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 $200; Rating: One

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

WEEKLY UPDATE: While there were no company-specific headlines this week, members should mark their calendars for Tuesday, June 7, which is when Applied Materials will present at the BofA Securities Global Technology Conference. During that appearance we expect the company will speak to the long-term demand drivers for chip equipment but we expect the market to focus what Applied says about improving supply and capacity constraints.

1-Wk. Price Change: -3.8% Yield: 0.8%

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.

Target Price: Reiterate $165; Rating: One

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

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

WEEKLY UPDATE: During the week, Cboe completed its previously announced acquisition of Neo, fintech organization comprised of a fully registered Canadian securities exchange (NEO Exchange) with a diverse product and services set ranging from corporate listings to cash equities trading and a non-listed securities distribution platform. This expands the company's presence in North America, building on its cross-border offering, and we would expect to see cross marketing of products into Canada in the coming quarters. Early next week is typically when Cboe should report its May 2022 trading volume. Soon after that report, the company will be presenting at Piper Sandler's Global Exchange & FinTech Conference on June 9.

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 $137; Rating: One.

RISKS: IT spending, competition, supply chain challenges

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

WEEKLY UPDATE: ChargePoint reported mixed April-quarter results with better-than-expected revenue for the quarter, and the company reiterating its full year revenue forecast of $450 million - $500 million. That guidance implies a strong second half compared to both the first half of the year and the second half of last year. Similar to a growing list of other companies, ChargePoint is feeling the pangs of supply chains and other factors. Those factors are expected to lessen in the coming quarters, which should keep the company on path being cash flow positive in several quarters. In terms of the company's cash position, the cash burn during the quarter was roughly $71 million and exiting the quarter it had $541 million in cash on its balance sheet. During the earnings conference call, management alluded to 2023 being even stronger than 2022, especially as the full year of infrastructure spending is had and reiterated its target of being cash flow positive in calendar 2024. We trimmed our price target to $22 from $27, but we would not be surprised if it's back at that level in a few quarters. Soon after the company's earnings report, Evercore ISI reduced its price target to $24 from $28, while DA Davidson lowered its target to $20 from $25.

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.

1-Wk. Price Change: -2% Yield: 0.00%

WEEKLY UPDATE: Through a deal with Flexa, Chipotle is now accepting digital currency payments nationwide, including bitcoin, ethereum, polygon, litecoin, dogecoin and others. While we appreciate the company continuing to lean into its digital offering, we'll be more focused on the consumer spending data to be had in the coming weeks. In particular we'll be looking for confirmation consumers continue to dine out but it will be the data from the National Restaurant Association that confirms diners are embracing fast casual dining, like Chipotle, vs. higher priced casual dining options.

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

WEEKLY UPDATE: Thursday night Costco Wholesale reported net sales of $18.23 billion for May, up 16.9% year over year. Comparable sales excluding the impact of gasoline prices and foreign exchange rose 11.8% in total and were up 10.3% in the U.S., 19.5% in Canada, and 10.1% Other International. E-commerce sales for the month rose 7.7% vs. year-ago levels. While we strongly suspect those figures point to Costco continuing to win consumer wallet share, we'll look to confirm that against the upcoming May retail sales reports as well as similar reports from Mastercard and Visa. As we review upcoming monthly data from the company, we'll be tracking the number of open warehouse locations, looking to confirm it remain on track to further expand both its footprint and the higher margin membership revenue stream that separates it from a wide number of other retailers.

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. Costco announced a 13.9% increase for its quarterly dividend to $0.90 per share. The dividend is payable May 13, 2022, to shareholders of record at the close of business on April 29, 2022.

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

WEEKLY UPDATE: Soybean prices remained at significantly higher levels vs. year ago levels as we moved into July with the same being said for corn prices as well as wheat prices despite some softening for those two key agriculture commodity prices. These recent trends blend a mix of planting levels and growing conditions, which at the margin will continue to influence crop prices. Even so, famer income is expected to improve considerably with recent drops in fertilizer prices lending a helping hand. That decline should free up incremental capital that can be applied to upgrading the aged ag equipment fleet.

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

WEEKLY UPDATE: Disney hired Mark Bozon, a gaming executive from Apple, as a senior creative leader for its cross-divisional Next Generation Storytelling initiative, which encompasses Disney's "metaverse" ambitions. During the week, Wolfe Research cut its price target on DIS shares to $128 from $211. Given Disney's exposure to consumer spending through its parks and consumer businesses, we will continue to examine consumer spending prospects, and look to revisit our "One" rating, should we see travel data begin to soften or other data indicate travel and tourism spending is rolling over. As we noted in our Airbnb comments above, so far those signs have yet to materialize, which explains why Needham recent upped its current quarter operating profit expectations for Disney's Parks business.

1-Wk. Price Change: -0.6% Yield: 0.00%

INVESTMENT THESIS: We believe Disney is excelling in its pivot from pay-TV to direct-to-consumer. The launch of Disney+ has been met with incredible fanfare and has surpassed 100 million subscriptions globally. In total, Disney projects its family of offerings could reach 300 to 350 million global subscribers by fiscal 2024, and we believe there is upside to management's profitability projections. Disney is also a strong "re-opening" play through its theme park, cruise line, and theatrical entertainment businesses. We also see margin expansion opportunities at the parks through the implementation of new reservation systems, new technologies, new experiences, and new membership programs.

Target Price: Reiterate $150; Rating: One

RISKS: Covid-19 related closures and movie production delays, macroeconomic slowdown impacting the consumer, churn on subscription products.

ACTIONS, ANALYSIS & MORE: The Selloff in Disney Makes the Stock Look Attractive (5/14/21) FY2Q21 Earnings Analysis (5/13/21), Disney Tells a Great Story at Its Investor Day (12/11/2020), CEO Bob Chapek Discuss Disney's Media & Entertainment Restructuring (10/12/20), Initiation (9/21/21), Investor Relations

WEEKLY UPDATE: While there are near-term concerns over the pace of advertising spend, a new forecast from Statista calls for digital advertising revenue to surpass $700 billion globally by 2025, up from $566 billion this year and the $378 billion spent in 2020. That forecast supports the view that digital advertising will continue to win advertising dollars from TV, radio, print and other forms of advertising as companies look to reach consumers where they are spending their time. We continue to see the company's core Search & Advertising business as well as YouTube benefitting from the continued shift in advertising spend.

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 (AI) "moat" that will provide for new avenues of growth. AI is what has made the company's Search, Video (YouTube) 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. Following the company's announced 20-for-one stock split, a move that could very well help the shares land in the Dow Jones Industrial Average, we will adjust our new price target on July 1.

Target Price: Reiterate $3,500; 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

WEEKLY UPDATE: We used the recent retreat in MKC shares to boost our rating to a One from Two even as we kept our price target intact. While the company's "flavor solutions" business (40% of sales, 26% of operating profit) will continue to benefit from consumers dining out, we continue to see the core consumer business (60% of revenue, 74% of operating income) benefitting from consumers shifting their dining dollars to grocery ones, as they contend with higher prices, greater borrowing costs, and pressured disposable income. With that in mind the United Nations published its FAO Food Price Index for May, which came in at 157.4, down 0.9 points month-over-month but still at some of the highest level in the data's history and up considerably from 128.1 in May 2021 and 2020's reading of 98.1. We'd remind members that shoring up its position in grocery, McCormick is a leading supplier of private-label items, as well, which insulates its revenue from consumer trade down shopping.

1-Wk. Price Change: -3.3% Yield: 1.5%

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: One

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

WEEKLY UPDATE: Citing foreign currency headwinds, Microsoft trimmed its outlook for the current quarter. The company now sees EPS for the current quarter in the range of $2.24-$2.32 vs. the prior outlook for $2.28-$2.35 with revenue for the period between $51.94- $52.74 billion vs. prior guidance of $52.4 billion -$53.2 billion. We are somewhat surprised that with roughly a month to go in the quarter, Microsoft made the announcement. The company will not be the only one to feel this pinch, but focusing on the nuts and bolts of Microsoft's business, PC demand remains solid, cloud adoption continues, and the company continues to shift to a subscription model for a number of its offering, notably Office. We see those factors driving solid performance in the coming quarters as we enter the seasonably stronger period for gaming. We'd remind members that Microsoft will pay its next $0.62 per share quarterly dividend on June 9.

1-Wk. Price Change: -1.2% Yield: 0.9%

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)

WEEKLY UPDATE: We have ample upside to our Morgan Stanley (MS) price target, which factors in a rebound in investment banking activity, however, so far the initial public offering market has been quiet. We chalk that up to the ongoing market volatility, but per data from IPO Monitor, the backlog of filed, but not priced, IPOs continued to rise over during April and May. This suggests pent-up demand for companies to tap the IPO window once market conditions find their footing. Given its leading market share in global equity league table year-to-date, with 7.97% market share, Morgan Stanley is in a good position when that market eventually rebounds. Given our position as longer-term investors as well as Morgan's strategy to grow assets under management and its fixed fee business, we're inclined to remain patient investors with MS shares.

1-Wk. Price Change: -2.7%; Yield: 2.9%

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. Following 2021's CCAR, the bank doubled its quarterly dividend payment to $0.70 per share and announced a share repurchase program worth up to $12 billion.

Target Price: Reiterate $120; Rating: One

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

WEEKLY UPDATE: Continued strength in data center, coupled with favorable PC comments from HP and Dell, particularly for higher-end models, led us to boost our rating on NVDA shares to "One" from "Two," even as we kept our existing price target intact. During the week, Bank of America named NVDA shares as a top pick. Next week brings a likely catalyst for NVDA shares in the form of AMD's next financial analyst day that will be held on June 9. The following day, Taiwan Semiconductor (TSM) is expected to report its monthly May sales figures and we'd remind members that high performance computing, which includes data center chips, is now its largest end market.

1-Wk. Price Change: -.05% 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

WEEKLY UPDATE: This week brought the April construction spending report, which showed nonresidential construction rose 6.6% year over-year-during the month. Competitor Herc Holdings will hold a corporate access event with Northcoast Research on June 9, and we expect Herc will offer an update on not only rental equipment demand but its view on ramping infrastructure projects.

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 $420; 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.

WEEKLY UPDATE: Early in the week, Amazon shares were added to JPMorgan's Top Idea Stock List, a monthly collection of best ideas across the firm's equity analysts. Favorable ratings were reiterated at Jefferies this week (Outperform), JPM Securities (Outperform), and Morgan Stanley (Overweight) but all three firms cut their price targets -- to $3,250, $3,450, and $3,500, respectively. While we still think Amazon is a stock to hold for the long-term, timing issues associated with Prime Day 2022 vs. Prime Day 2021 will set the company up for tough year-over-year comparisons in the current quarter. We'd look to revisit our rating on AMZN shares after that. We'd remind members that before U.S. equity markets open on Monday, AMZN shares will split 20 for one, which means we will be adjusting our current price target to $175. This is purely cosmetic in nature, although the stock split could open the door for AMZN shares to be considered for the Dow Jones industrial average.

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 $3,500; 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

WEEKLY UPDATE: This week we added a starter position for the portfolio in the shares of American Water Works, the largest publicly traded water utility. Our price target is $165, which equates to 33.8-times expected calendar 2023 EPS of $4.88 and a dividend yield of 1.7% on the calendar 2023 consensus dividend of $2.80 per share. For a frame of reference, AWK shares have peaked over the 2015-2021 period at an average P/E multiple of 34.4-times and a dividend yield of 1.8%. We would look to revisit our "Two" rating should AWK shares pull back near $145 or rate increase news that is greater than expected. Longer-term we would look to revisit our price target as the company executes on its dividend increase targets.

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: Initiating a Position in This Public Water Utility Company, Investor Relations presentation.

WEEKLY UPDATE: CIBR's second largest holdings, CrowdStrike (CRWD) reported better-than-expected April-quarter results for both its top and bottom lines, and issued upside guidance for both the current quarter and its full fiscal year. We like the company's expanding focus on the subscription business model as well as its modular offering. Exiting the April quarter, CrowdStrike's subscription customers that adopted four or more modules, five or more modules and six or more modules increased to 71%, 59%, and 35%, respectively. Also this week Okta, another CIBR constituent, reported favorable quarterly results that revealed the company's subscription revenue rose 66% year-over-year and guided total revenue for the current quarter to $428 million-$430 million, up 36% year-over-year. These figures confirm to us that cybersecurity remains a growth industry and should continue to be so as the digital aspects of our lives and the number of connected devices continues to grow, opening up new attack vectors along the way.

1-Wk. Price Change: -1% 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

WEEKLY UPDATE: The company reported its U.S. sales fell 4.5% to 154,461 vehicles in May, a smaller declined vs. the 10.5% one it posted in April. Truck sales were down 1.4% year-over-year to 74,595 units, car sales tumbled 57.7% to 4,388 units, and electrified vehicles sales soared 221.5% to 6,254 units and SUVs fell 4.4% year-over-year to 76,625 units. Total retail sales fore the month fell 5.7% with trucks down 3.7%, electrified vehicles up 193.4% and SUVs down 1.9%. Part of the sharp jump in EV sales was attributed to the addition of the F-150 lighting during the month. Also this week, Ford shared plans to invest $3.7 billion and add more than 6,200 new union manufacturing jobs in Michigan, Ohio and Missouri to support "all-new global Mustang coupe and Ranger pickup for North America, as well as an all-new electric commercial vehicle for Ford Pro customers" as well as the overall Ford+ strategy to produce 2 million electric vehicles a year globally by the end of 2026. The expansion in Michigan is set to focus on Mustang coupe, Ranger pickup, and F-150 Lightning production for North America while Ohio and Missouri will home in on "all-new EV commercial vehicle" and "transit and all-electric ETransit" production, respectively. We see the May sales data and others news this week not only pointing to the company's transformation accelerating but also setting the groundwork for the company's 2023 contract expiration with the UAW.

1-Wk. Price Change: -1% Yield: 1.5%

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 $25; 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

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.

Target Price: Reiterate $425 Rating: Two

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

WEEKLY UPDATE: Goldman Sachs lowered its price target on NUE shares this week to $130 from $148 citing potential economic concerns. While we, too, have concerns about the speed of the economy, ours are more focused on prospects of consumer spending given the expected lift associated with infrastructure spending. We will continue to watch steel prices, but also nonresidential construction spending and the monthly Architecture Billings Index data. This week the April Construction Spending report showed nonresidential construction rose 6.6% year over year, which points to a solid start for the current quarter.

1-Wk. Price Change: -6.6% Yield: 1.3%

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

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

WEEKLY UPDATE: This week we started a position in this ETF that gives us broad based exposure to the energy sector following news the Eurozone will ban up to 90% of Russian oil imports exiting this year and potential supply issues as China emerges from its Covid lockdowns. Late in the week, the OPEC oil cartel and allied producing countries including Russia announced they will raise production by 648,000 barrels per day in July and August, offering modest relief for a global economy suffering from soaring energy prices. barring a sharp and sustained drop, oil prices are poised to remain above year ago levels and those in 1Q 2022, which bodes well for top and bottom line performance at the ETF's basket of companies as does continued supply-demand imbalances for natural gas. As we've shared with members, should XLE shares retreat closer to $80, we are inclined to be buyers.

1-Wk. Price Change: -0.4; Yield: 3.1%

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: We're Initiating a Position in the Energy Sector, State Street Global Advisors SPDR Fact Sheet for XLE.

Weekly Update: Walmart will participate in the Baird Global Consumer, Technology & Services Conference on Tuesday, June 7. The company could discuss foreign exchange headwinds, but we'll be far more interested on its comments about future consumer spending and its record inventory levels. The combination of potentially slower consumer spending in the coming months and those record inventories raise margin pressure concerns that will weigh on retailer earnings in the coming quarters as they contend with challenged consumer spending and utilize discounting to clear through excess inventory levels. As we have shared with members, we intend to use the current Three rating to work our way out of WMT shares given that risk, and would look to do so as WMT shares approach $130.

1-Wk. Price Change: -2.5%; Yield: 1.8%

INVESTMENT THESIS: We believe Walmart to be a defensive name that can withstand the pressures of the coronavirus pandemic that is at the same time transforming itself for the digital, post-pandemic world. While its scale is well understood and to a large part what allows the name to be so resilient despite a difficult macroeconomic environment, we believe investments into ecommerce are what will provide longer-term upside. On this offensive front, we believe multi-year investments in eCommerce (previously rolling Jet.com into the core online operation) and initiatives such as Walmart+ stand to increase engagement and customer loyalty. We also believe the recent partnership with Shopify will help expand the online marketplace and view a potential deal with TikTok Global as an "embedded call option" that can greatly aid the online segment's growth as it provides the company an Instagram like play with the ability to leverage online influencers. Moreover, we believe Walmart to have a strong foothold in the rapidly growing emerging Indian market via its majority ownership of Flipkart. Finally, we believe there to be a budding advertisement business that can leverage the company's omni-channel investments (and resulting data) that has yet to be appreciated by the market.

Target Price: Reiterate $130; Rating: Three

RISKS: Consumer spending levels, FX, Competition, Margin headwinds related to e-commerce,

ACTIONS, ANALYSIS & MORE: FY2Q21 Earnings Analysis (8/17/21), Why We Are Upgrading Walmart to a One (6/24/21), Walmart Moves Higher After Bloomberg Reports 7Flipkart Could IPO in Q4 (4/6/21), Adding to Walmart (2/19/21). Initiation (11/6/20), Investor Relations

WEEKLY UPDATE: We view the use of PSQ shares as tactical in nature, which likely means we expect to use the shares for a shorter duration than we would most other positions in the portfolio. Unlike the ProShares Short S&P 500 ETF, PSQ shares specifically target tech stocks, an area that has been pressured in a rising rate environment.

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.

RISKS: Because QQQ shares track the inverse of the Nasdaq 100 Index (NDX), 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

WEEKLY UPDATE: Calling high inflation the Federal Reserve's "number one challenge," Vice Chair Lael Brainard on Thursday said she backs at least a couple more half percentage point interest rate hikes, with more on tap if price pressures fail to cool. This combined with growing concerns over foreign currency headwinds, comments from several PMI reports that inflation pressure remain elevated, and pressures on disposable income, prospects for further earnings revisions for the S&P 500 are likely in the coming quarters. Also, given technical indicators that skew to risk rather than reward, we are continuing to hold this portfolio benchmark hedging positions.

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.

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  AWK, XLE, CBOE,  AAPL AMZN GOOGL AMD AMN  NVDA F COST ABNB WMT DIS UPS DE MA NUE  MSFT MS SH.

Among our moves this week, we exited Union Pacific and Marvell Technology and added to McCormick & Co., the First Trust Nasdaq Cybersecurity ETF, and Nucor.

We trimmed Amazon and fled Cisco, while adding to the ProShares Short S&P 500 exchange-traded fund and buying into the ProShares Short QQQ ETF.

We added to ChargePoint holdings and added two names to the bullpen -- Digital Realty and American Water Works.

Let's analyze this two-part week, and review a few adds -- to ChargePoint, Cboe Global Markets, and McCormick & Co. -- and why we shed Skyworks, while also introducing some price changes.