Hot Small Caps: NKLA TLRY LIFW CYBN ELUT TTOO

Insider Financial recaps the day's stock market action and discusses our small cap trading plan for tomorrow.This video covers NKLA, TLRY, LIFW, CYBN, ELUT, TTOO, CART, ARM, TSLA, SPY, QQQ, TLT.

Market Summary

Stocks ended largely unchanged while Treasury yields made small moves, as market participants stayed on the sidelines ahead of the Federal Reserve's rate decision on Wednesday.The benchmark S&P 500 (SP500) advanced 0.07% to close at 4,453.53 points, rebounding ever so slightly from the two-week losing streak it had notched on Friday. The blue-chip Dow (DJI) added 0.02% to settle at 34,624.27 points, while the tech-heavy Nasdaq Composite (COMP.IND) gained 0.01% to finish at 13,710.24 pointsOf the 11 S&P sectors, six ended in positive territory. Consumer Discretionary and Real Estate topped the losers.Energy was the top gainer as WTI crude oil futures (CL1:COM) pushed above $92/bbl, extending a gain fueled by the recent larger-than-anticipated OPEC+ production cuts.Treasury yields were mixed. The longer-end 10-year yield (US10Y) was down 1 basis point to 4.31%, while the more rate-sensitive 2-year yield (US2Y) was up 3 basis points to 5.06%.The Fed's two-day monetary policy committee meeting kicks off on Tuesday, with markets widely anticipating the central bank to hold rates steady. The big question is what the Fed will do next, and investors will be closely watching the updated dot plot of economic and rate projections along with chair Jerome Powell's post-decision press conference.Headwinds for Fed.

1. Rising oil prices
2. UAW strike
3. Federal government shutdown
4. Student loan repayments

The United Auto Workers launched a strike against all three major automakers on Friday with an initial walkout of around 13,000 employees at three plants, but those numbers could grow. Federal elected officials have only until Sept. 30, when current spending authorizations expire, to come up with a deal or federal agencies will have to shutter, and congressional Republicans have stymied negotiations. Student loan repayments restart in October after a three-year suspension during the COVID-19 pandemic."Oil continued its climb higher, and so did energy stocks (XLE), stoking fears of a re-acceleration in inflation rates. At current multiples (S&P 500 forward P/E: ~19-20x), equity markets have priced in a soft landing; however, a resurgence of inflation could force the Fed into overtightening the U.S. into a recession. With VIX (VIX) in the low teens, equity investors seem complacent. In our view, staying cautious is the prudent thing to do here.Aside from the Fed, this week will also see rate decisions from the Bank of England and the Bank of Japan. Last Thursday, the European Central Bank delivered a tenth straight rate hike, while also signaling that it was the end of its tightening cycle.The economic calendar was light on Monday, with just the NAHB housing market index on the docket. The figure dipped in September and trailed consensus.Tesla (TSLA) slipped more than 3% and was among the top percentage losers on the Nasdaq Composite (COMP.IND). Goldman Sachs slightly lowered its 2023 and 2024 earning per share estimates for the electric vehicle giant, primarily on lower average selling prices. Meanwhile, the Wall Street Journal said that Tesla (TSLA) was in early talks with Saudi Arabia to build a manufacturing facility in the Middle Eastern nation, a report that top boss Elon Musk denied.

BOTTOM LINE

As we keep saying, there are always opportunities in the markets, and it’s our job to find winning stocks to trade. Huge gains can be made in such a short amount of time.It’s essential to look for stocks that have yet to run. There are plenty of opportunities, and we look at hundreds of stocks weekly for our subscribers.Remember, all it takes is one or two to become a winner, and you’ve crushed the market indices (and Jim Cramer) for the year.Good luck to all (except the shorts and Cramer)!

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Disclosure: We have not been compensated for this article/video. Insider Financial is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.