Rare Earth ETF Commentary Highlighting Global Supply Shift
"This episode is brought to you by VANC. Rare earth metals are the hidden backbone of modern technology and defense, powering everything from smartphones and electric vehicles to fighter jets and wind turbines. Van recognized this early, launching the rare earth and strategic metals ETF, ticker RMX, 15 years ago, well before supply chain security became a global priority. Today, China dominates the production and refining capacity of rare earths, creating real challenges for the global supply security. As these materials are essential for technological innovation, clean energy, and national security, that's why countries around the world are racing to build their own supply chains and reduce reliance on China. As this global shift continues, investment in the rare earth ecosystem is growing rapidly from mining to advanced manufacturing. Investors can access this powerful trend through REMX. Visit van.com/remx compound to learn more."
The transcript opens with an advertisement for VANC, highlighting their early launch of a rare earth and strategic metals ETF (ticker RMX). The speaker underscores the global shift driven by the geopolitical dominance of China in rare earth production and outlines the increasing importance of securing domestic supply chains to support technological innovation and defense. This commentary emphasizes a bullish outlook on the rare earth sector and positions the ETF as a means for investors to tap into this trend.
Barclays Benefits from Earnings Beat and Share Buyback
"So that on L'Oreal Barclays though has announced a narrow earnings beat and also this 500 million pound share buyback. Investors seem to be viewing that fairly positively. Yeah, absolutely. So actually upgraded its guidance for net interest income as well and announced that it is now going to move towards quarterly share buybacks. Of course, it had to almost quadruple the provisions related to the motor finance redress program and booked a 110 million pound credit impairment charge, but overall the market reaction has been positive."
The commentary highlights that Barclays has posted a narrow earnings beat coupled with a 500 million pound share buyback and an upgrade of its net interest income guidance. Despite some headwinds such as increased provisions and a credit impairment charge, investors have reacted positively to the news.
L'Oreal Shares Weighed Down by Disappointing Q3 Sales
"Yeah, absolutely. So, yeah, L'Oreal Shaza you say are getting hit quite hard this morning because of those disappointing sales for the third quarter and that was due primarily to a lot of weakness in the US market. So, one of the key problems is that L'Oreal is really overexposed to the makeup category in the US and that is a category that has been struggling lately and consumer demand in the US is quite weak just generally. Um there's signs however of improvement in China where it saw quite good demand for the more high-end side of those beauty products. But that really wasn't enough to offset that drag from the US. And the CEO also was quite cautious about China saying that analysts should not get too excited because one good quarter does not mean that there's a trend there."
The speaker explains that L'Oreal's shares suffered due to disappointing third-quarter sales, largely because of overexposure to the struggling US makeup category. Although there were signs of recovery in China, these were not enough to counterbalance the weakness in the US market, and the CEO remains cautious about interpreting isolated positive results as a trend.
Kering Gets Sell Rating Amid Luxury Sector Concerns
"But then today, uh, Caring got cut to a sell rating at Baronburgg and that is driving down those shares. Baronberg cut Carring to a sell and also LVMH to a hold, saying that the luxury sector faces structural demand issues with continued pressure in China and low consumer confidence among aspirational buyers. This will be particularly tough on Caring and LVMH, while companies with less exposure to the aspirational end of the market might fare better."
The commentary highlights that Kering (referred to as "Caring" in the transcript) was downgraded to a sell rating by Baronberg due to structural demand issues, headwinds in China, and shifting consumer behavior, signaling a cautionary stance in the luxury segment.
Sell Signal for Reddit Amid Technical Breakdown
"Reddit. Tough day for Reddit. Had that nice earnings report that saw the stock gap up close to the 200 level. Looked like it might come down and test the 50-day moving average. ... But by this time, decisive break of the 50-day line, pretty clear-cut sell signal here. ... Signs that some big investors have been selling shares recently."
The analyst describes Reddit as experiencing a clear technical breakdown, notably a decisive break of the 50-day moving average combined with heavy volume selling. While acknowledging the company's strong fundamentals and revenue growth, the technicals suggest a sell signal, advising investors to consider scaling out of positions.
Avoid IWM ETF due to Structural Issues
"I would never buy IWM."
Kirk expresses a strong negative view on IWM, citing that the Russell 2000 is largely populated by unprofitable companies and subject to volatility from retail manipulation. He advises investors to avoid this ETF in favor of more attractive opportunities.
Increase Small-Cap Exposure
"Third, consider some small-cap exposure with ETFs like IWM, which tracks the Russell 2000."
Investors are advised to add small-cap exposure via IWM, capitalizing on the benefit of lower borrowing costs for small companies during periods of falling interest rates.
Bullish Small Cap Breakout Signal via IWM
"IWM is up two and a half percent while Qs are up 0.9% ... my read is this could be actually good for all the small guys."
The discussion highlights a breakout in small cap performance with IWM showing significant gains compared to its peers. This is interpreted as an actionable signal suggesting a bullish short-term opportunity in small cap equities.
Increase Exposure to Small Caps via IWM
"For small cap exposure, the iShares Russell 2000 ETF, IWM, is a solid choice."
The host highlights that small cap and value stocks have been outperforming, with the Russell 2000 surging 7.1% in August and trading at a 15% discount to fair value. He suggests investors consider increasing their exposure to small cap stocks by buying IWM to capture potential gains amid a Fed rate-cut cycle.