A Fresh Wave of Optimism Ahead
This week, the market is riding high, fueled by the passage of the “One Big Beautiful Bill.” Investors are excited about the tax cuts, infrastructure investments, and a more robust defense spending plan. We believe the provisions will support continued economic growth, drive job creation, and boost consumer confidence in the long run. While there are still some concerns, the overall momentum is strong, and the market is positioning for further gains.
As of July 14th, the S&P 500 is breaking through new highs, reflecting the positive market reaction to the bill's passage. With strong corporate earnings, a solid economic foundation, and investor confidence on the rise, it’s clear that the market is setting up for a continued upward trajectory. The outlook remains highly favorable, and we expect the momentum to carry into the second half of the year.
Reviewing Past Trade Idea: CAPR Short
We took profit on most of our position as CAPR continued its downward movement.
The FDA unexpectedly dropped their decision ahead of schedule, which has added additional volatility and caused the price to crash.
With this in mind, a short secured put strategy could still be profitable, and so could a raw short as there is no FDA approval risk. Just be mindful of borrow fees when shorting.
Trade Idea: FICO
Fair Isaac Corporation (FICO) recently saw a sharp pullback, currently trading around $1,550. The decline was mainly triggered by the FHFA’s decision to allow the use of a competitor’s credit scoring model, VantageScore 4.0, for mortgages.
However, we believe this move won’t significantly impact FICO’s dominant position in the market, as their scores remain the industry standard for most lending decisions.
We are buying shares.
Disclaimer: We own shares of FICO, are short shares of CAPR and hold option positions of CAPR as of writing this. The content in this newsletter is for informational and educational purposes only and should not be considered financial, investment, or legal advice. A4K Capital and its affiliates are not responsible for any financial losses or decisions made based on the information provided.
