The Next Market Crash Could Start Here (2 Stocks Built to Survive)

Easy money has fueled the stock market for years. That may be changing because Japan holds a whopping 1.2 trillion in US government debt and that the US has just joined them in their first coordinated move to defend the yen in more than a decade. Now, if this is the beginning of the end for easy money, some stocks are about to look a whole lot more vulnerable than others. In this video, I'll share with you what is happening and why. Even more importantly, I will show you exactly how to position your portfolio followed by two stocks poised to not just survive, but actually thrive in this new environment. Now, if you like the sound of that, then please hit that like button as it tells YouTube algorithm to send you more quality content like this in the future. Now, first, a little context on this unfolding story. For months, the yen has been sliding towards a 40-year low trading about 164 to the dollar. So, the Japanese government stepped in and bought yen directly. Then, for the first time in over a decade, the US joined them in defense of the yen. The New York Fed sold euros to buy the yen on the Treasury's behalf and Secretary Bacent said the US will not hesitate to participate in further joint intervention. That combination pushed the yen back down from 164 to about 156 pretty darn fast. Now, here's the part most investors are missing. Japan is the largest foreign holder of US government debt on the planet. We are talking about a full 1.2 trillion. Yeah, with a T. When their currency wobbles, so does their appetite for buying more of our bonds. That's the serious chain reaction that's about to separate the stocks getting crushed from those currently set to benefit. And yes, I'll be sharing two of the likely winners in this video, so stick around for that. By the way, before digging in any deeper, I should probably tell you who I am. I'm Steve Reitmister, but all my friends call me Reity. I've been investing for over 40 years and today I'm a partner at wallstreetzen.com where a quant rating system identifies stocks with the highest likelihood of outperforming the market. Now, back to the case for potential ending of easy money. Now, historically, investors have called this the yen carry trade. It's been currently funding a large chunk of the US stock market for years. Now, Japan kept their rates near zero. So, big funds borrowed cheap yen, turned it into dollars, and poured into the US stocks, pocketing the spread. That's a great trade as long as the yen stays weak. The moment their currency strengthen, those loans getting much more expensive and the funds rush to sell US stocks to cover the loans. That's the trigger sitting under this story right now. Let's Let's remind ourselves that the 10-year US Treasury yield was already above 4.7 before this intervention even happened. That is basically the highest level in 20 years. Now, if Japan keeps defending the yen by selling US Treasuries, then yields climb higher. And the most overvalued, the most leveraged stocks get hit first and hit the hardest, right? Translation, money is about to move fast out of the most crowded, overpriced stocks. The reality is that party has already started with painting across much of tech, including software, semiconductors, and many of the AI-related stocks. Now, you really want to hear what's next because coming up, I'll give you the exact playbook for making sure the money moves towards you, not the other way, before it's too late so you're properly positioned. Now, first, a quick heads-up. If you like market-moving conversations like this, the best thing you can do is sign up for my next live training session this coming Monday. The focus on timely market insights plus my top picks. Now, it's totally free, but you do need to sign up. Do that now and join me this coming Monday. Just go to wallstreetzen.com/live. Okay, you now understand what is happening with the potential unwinding of the yen carry trade. So, here is what it means for your investment strategy. Let me be straight. I'm not going to tell you I know how to predict Japan's next move. Nobody can do that reliably. But, there's a clear framework here and it doesn't depend on being right about the perfect timing. So, let's dig in. Framework principle number one, know what's leverage in your portfolio. Now, if you're holding stocks that have run hard purely on momentum, you know, richly valued, growth-at-any-cost kind of names, then know that those are the stocks that are exactly the kind of positions that will be sold first because the borrowing costs are too high, right? That doesn't mean sell everything. It means know what your holdings are actually the most at risk. Those are the ones to remove from your portfolio, and then use the cash to get into better stocks. The hallmark for those are lower debt on the books and attractive valuation, right? Never a bad idea to be in those kind of stocks anyways. That's exactly where our Zen Ring's quant model can help It evaluates stocks across 115 different factors, everything from growth to value to momentum and more. Then it distills it down into an intuitive letter grade of A through F. And yes, A-rated stocks are the best performers, doing about three times better than the S&P 500 over the years. The overall grade is further broken down into seven underlying component grades to help you see a stock's unique areas of strength and weakness. Now, that includes our financial strength grade, which includes a review of debt and health of the balance sheet. This will be the key component grade that determine what to sell from your portfolio as the yen carry trade unwinds. All right. Know that the Zen Rings are free on our quote pages of wallstreetszen.com. Plus, they are updated daily. So, it's a pretty smart habit to check the ratings for all your stocks before making any buy, sell, hold decisions, right? And be sure to bookmark wallstreetszen.com now on your browser for frequent future visits. Before I continue with the framework, I should note that neither of the two stocks I'm recommending today is a direct play on Japan or the dollar. They're not going to move just because of the the yen moves, right? What they have in common is the right combination of solid growth with impressive financial strength that is also trading at attractive valuation, which to be honest is a great hallmark of stocks over the years, right? Framework principle number two, favor companies that don't need cheap financing to work. I'm talking about low debt, strong free cash flow, real earnings today instead of earnings promised, you know 5 10 years down the road. Yeah. Hello quantum computing. The low debt part is certainly key because the unwinding of the carry trade leads to higher interest rates making debt all the more expensive. That brings us to our first stock today in RingCentral the symbol RNG. It immediately stood out because the Zen Ring's quant model puts in the top 2% of all stocks right better than 98% of the stocks out there. Again, this is based on a full 115 factor fundamental review everything from growth to financial strength to value and beyond. I'm not going to go to great detail on RingCentral or other stock. I just want to quick fire give you the best hits of what is going on here. First, it runs on recurring software revenue. That's the kind of business that doesn't need to keep reinventing itself just to keep growing you know like a hardware company or some other service business. Second is that the growth has been very consistent with over 20 straight quarters of earnings beats. This most recent quarter being the most impressive with future estimates flying higher right third and probably the one that matters the most for this video the component grade for financial strength is in the top 0.2% so not top 2% top 0.2%. This speaks to such strong balance sheet and reasonable debt levels right. Like I said this is meant to be a rapid fire review of what makes these stocks appealing. So if you want the full breakdown on RingCentral or any other stock then enter the ticker on wallstreetzen.com and see its full Zen ratings profile yourself and also what Wall Street is saying about the firm. It's all there for free and a pretty smart habit to check out those ratings before buying or selling any stock. Now, by the way, if you haven't already then now would be a great time to hit that subscribe button and the notification bell. I release timely news videos like this a few times a week and I hate for you to miss the next one. Back to our framework for buying stocks as the easy money continues to fade away. Framework principle number three, favor companies with real pricing power. Now, companies that can raise prices without losing customers tend to hold up well when rates and inflation pressures rise. That's because inflation is exactly what a weak in rising yield backdrop can feed. To illustrate this example, let's consider our second stock in Oil Dri with a symbol ODC. Most people have never heard of them and that's kind of the point of finding hidden gems before the rest of the crowd. Once again, we have a stock that earns an elite A rating in our Zen Ratings Quant model based upon a well-rounded fundamental profile. Same deal as with Brink's Central. Let me quickly highlight just a few things I really like about this stock. First, this isn't a commodity business. Oil Dri sells branded absorbent products under names like Axorb and Flow Free, giving it more ability to raise prices without losing customers. Now, that's exactly the kind of business you want if inflation starts creeping higher again. And the number suggests it's working gangbusters right now. Earnings have grown about 28.35% annually over the past 3 years, more than three times the industry's pace. Zoom out further and and you'll find that earnings are up 311% over the past decade. Back to the pricing power conversation. Now, when a company consistently grows profits that much faster than its peers over the years, it's often a a sign of expanding profit margins while competitors struggle to keep pace. Second, the people who know this business best are buying shares. Yes, company insiders have been net buyers of the stock over the past year. Now, insiders sell for all kinds of personal reasons, right? They have too many shares and they need to sell to uh you know, buying a new house or a yacht. But there's only one reason to buy more shares and that is a firm belief that the company will continue to grow earnings, which pushes up the share price. There are few better signals in all of investing than strong insider buying and we have it here. Third, the balance sheet is exactly what I'm looking for in this environment. Look at the financial strength component. They're ranked in the top 4% of all stocks, meaning a a financial makeup than 96% of the companies we analyze. It's a niche market leader funded by its own cash flow, not cheap debt or overseas financing. If higher rates and a weaker yen create more turbulence, then this is exactly the kind of stock I want to have in my portfolio. Now, be sure to pull up that quote page for Oil-Dri on wallstreetzen.com to see the full Zen Ratings profile. And before I tie this up with a bow, one more thing. If you want to stay one step ahead of the market, then join me live every Monday. That's when I share my updated market outlook and trading plan to outperform. This is also when I unveil my trade of the week based upon our proven Zen Ratings quant model and my greater than 40 years of investing experience. It's a free event, but you do need to register. So, just go to wallstreetzen.com/live or click the link in the description or scan the QR code coming up on your screen. Just pause the video for a moment to sign up. Don't worry, I'll wait for you, and then I look forward to seeing you on Monday. Okay, so now you have the framework in place with three investing principles to get you on the right side of the market action. Plus, I shared two tickers that perfectly fit the bill of what will be rewarded if the easy money continues to flow out of the market, making things tougher for many of the stocks that might be lurking in your portfolio. Now, I want to hear from you. Is there a stock in your portfolio you're not fully sure could survive this real leverage unwind? Now, drop the ticker in the comment section below so our crowd can discuss. The next thing on your to-do list should be to watch the video coming up on your screen right now. It's about the government's hidden $5 billion investment that marries AI, quantum, and nuclear all in one initiative.