It's a bull market...

It's a bull market... 1,000 days without a correction... Payrolls increase... And beer sales... And auto sales... A 300%-plus gain with a World Dominator... Only five losers in Q2... What an insider has to say about government's money printing... How to get a free copy of one of the most important books you'll read this year...
 

 It's a bull market... There's nothing else to say.

 

The Dow and the S&P 500 are both at all-time highs, flirting with 17,000 and 2,000, respectively. The Volatility Index (the "VIX") – the market's "fear gauge" – is nearing a seven-year low.

 

The Federal Reserve has once again assured the markets it will remain accommodative for the foreseeable future... Federal Reserve Bank of San Francisco President John Williams said in a speech in Sun Valley, Idaho, "We won't raise interest rates for some time." He claimed the Fed "can control short-term interest rates as needed to stem any inflationary pressures down the road."

 

 Today marks the 1,000th day in a row where the S&P hasn't had an official correction, (a 10% drop). The 1,000-day mark is the fifth-longest streak without a correction since 1928, according to financial research firm Bespoke Investment Group. (The longest, most recent run without a 10% correction was 1,127 days between July 1984 and August 1987.)

 

Remain cautious... But don't fight the trend. Stay conservative and mind your trailing stops.

 

 The good news keeps coming...

 

Payrolls at U.S. companies increased 281,000 in June to the highest number since November 2012, according to payroll firm ADP. That's on top of a 179,000 increase in May. It shatters the estimates of 205,000 jobs.

 

 And people are buying more beer...

 

Constellation Brands (STZ), the country's third-largest beer supplier – and Extreme Value holding – announced earnings of $206.7 million for the quarter, up from $52.9 million this quarter a year ago. Sales more than doubled to $1.5 billion.

 

Most of the gains came from last summer's $5.3 billion purchase of the U.S. distribution rights for Corona and Modelo, among other Mexican beers and a Mexican brewery.

 

Sales for Constellation's beer segment grew 14% due to strong consumer demand. The company also raised its guidance for 2015, increasing earnings per share from $3.90-$4.05 to $4.10-$4.25.

 

 We asked Extreme Value editor Dan Ferris to comment on Constellation's performance...

 

Just over a year ago, Constellation closed on the acquisition of the other 50% of Crown Imports it didn't already own. Crown is the biggest beer importer in the country. It imports Corona, the No. 1 imported beer in the U.S. Constellation also got rights to import, market, and sell the Corona and Modelo brands in the U.S., which means that in the U.S., Constellation effectively owns Corona and has the freedom to develop new brand extensions.   The acquisition's effect has been dramatic. In the first quarter of last year, free cash flow was $19 million. This year, that number soared to $101 million. Constellation will continue to expand the state-of-the-art Mexican brewery it picked up in the Crown deal. That won't take forever, and a big chunk of spending will go away when it's done. This year's capital expenditures range of $575 million to $625 million includes $450 million to $500 million for the brewery expansion. When the expansion is done, spending will drop and cash profits will rise. We expect Crown to do $1 billion in free cash flow by 2017 – about double what it will do this year.   That's why the stock keeps rising. Constellation is a cash gusher that will gush even more cash in the next few years. We like to hold fantastic businesses that gush free cash flow, so we're continuing to hold.

 

 As of midday trading, shares were up more than 3% on the news... Extreme Value subscribers were up 316% as of yesterday's close since Dan originally recommended Constellation Brands in June 2011.

 

 People are also buying more cars...

 

U.S. auto sales rose 1.2% to 1.4 million in June, bringing the annualized rate to nearly 17 million – the highest pace since July 2006, according to market research firm Autodata. Carmakers sold 8.2 million vehicles in the first half of the year, up 4.3% from a year ago.

 

Much of the increase is thanks to easy financing and record-low interest rates. I spoke to some friends in the car business last month who said car companies are essentially financing everybody.

 

 Regardless, it's another sign the economy is marching higher. And it's a good sign for platinum and palladium prices. Both metals share similar industrial uses and are usually mined together. Most of the world's platinum and palladium production is used for catalytic converters in automobiles. But those aren't the only reasons we like platinum and palladium.

 

They're also a way to profit from political instability in South Africa and Russia. Russia is in the midst of its crisis with Ukraine. And South Africa is just ending massive mining strikes that decimated both precious metals' production.

 

 Last week, the strike ended. Daily production of palladium has already increased by 5,000 ounces. But more protests are expected... And there's a new worry that 220,000 workers may go on strike.

 

In addition to a supply crunch, the market fears Russia's palladium stockpile is waning... And the country may face further sanctions over Ukraine. As a result, palladium is expected to reach a deficit of 1.6 million ounces this year... the highest ever, according to metals firm Johnson Matthey.

 

 Palladium has quietly been the best-performing precious metal over the last five years. Since July 2009, the metal's spot price is up nearly 240%, far outpacing the gains in silver (57%), gold (43%), and platinum (27%).

 

 In January, S&A Global Contrarian editor Kim Iskyan recommended his favorite way to profit off rising platinum and palladium prices – through shares of the Sprott Physical Platinum and Palladium Trust (SPPP). His subscribers are already up nearly 10%.

 

 Practically everything is up lately. In the second quarter, just five stocks in the S&P 500 posted a loss... They were: Darden Restaurants (down 0.1%), Jacobs Engineering Group (down 0.1%), VeriSign (down 0.3%), Express Scripts (down 0.4%), and Urban Outfitters (down 1.2%).

 

 Like we said, it's a bull market. But we know the source of these gains is the massive amounts of money central banks have printed around the world. Eventually, these boom times will end. The question is how. Governments are battling deflation by printing trillions of dollars.

 

Still, one of the world's top experts on this, Wall Street veteran Jim Rickards, says deflation is still a possibility.

 

Rickards has served on the front lines of many financial crises... He was general counsel for hedge fund Long Term Capital Management (LTCM), which collapsed and nearly brought the economy down with it... Rickards led the bailout talks for LTCM with the Federal Reserve.

 

He has also worked on Wall Street for 35 years. Rickards knows so much about finance that the government asks him for help. He has a rare insider perspective to what we're experiencing today. That's why we were thrilled to hear that he wrote a new book titled The Death of Money.

 

Steve Sjuggerud wrote about Rickards' new book this week in a pair of DailyWealth essays titled "The Coming Death of the Dollar" and "The World's Most Important Financial Battle Is Coming to a Head." Yesterday, Steve wrote of the possibilities of inflation or deflation:

 

Inflation is the easy one to understand... For the most part, the government creates this one... by "printing" trillions of dollars.   Deflation is less easy to understand... For starters, we "have no living memory of it." The last episode of persistent deflation was in the Great Depression. Rickards calls deflation "the Federal Reserve's worst nightmare." For one, deflation "increases the value of government debt, making it harder to repay."   Because of fear of deflation, the Fed can't stop its money printing. If it did stop, "deflation would quickly dominate the economy, with disastrous consequences for the national debt, government revenue, and the banking system."   Which will win – inflation or deflation? Rickards explains that "the most likely path of Federal Reserve policy in the years ahead is the continuation of massive money printing to fend off deflation." The Fed assumes it can later deal with inflation that it might create.

 

 If you're concerned about what's happening in today's economy, The Death of Money is required reading. In fact, we think it's so important, we're giving you a free copy. (We simply ask you to pay the $4.95 it costs to ship you the book.) To learn how to get your copy of what could be the most important book you read this year, click here.

 

 New 52-week highs (as of 7/01/14): Activision Blizzard (ATVI), Bank of Montreal (BMO), Callon Petroleum (CPE), Comstock Resources (CRK), Carrizo Oil & Gas (CRZO), WisdomTree Japan Small-Cap Dividend Fund (DFJ), Discover Financial Services (DFS), Dorchester Minerals (DMLP), Eni (E), ProShares Ultra MSCI Emerging Markets Fund (EET), Enterprise Products Partners (EPD), Energy Transfer Equity (ETE), Corning (GLW), GW Pharmaceuticals (GWPH), Halcon Resources (HK), Integrated Device Technology (IDTI), Intel (INTC), SPDR S&P International Health Care Fund (IRY), Johnson & Johnson (JNJ), KLA-Tencor (KLAC), PowerShares Buyback Achievers Fund (PKW), PowerShares QQQ Fund (QQQ), ProShares Ultra Technology Fund (ROM), RPM International (RPM), ProShares Ultra Health Care Fund (RXL), ProShares Ultra S&P 500 Fund (SSO), Teekay LNG Partners (TGP), and Alleghany (Y).

 

 In the mailbag, still more praise for Porter's nine-day Digest series. I've got a lot to live up to. Send your notes to feedback@stansberryresearch.com.

 

 "Congratulations Porter – for your age you have a wealth of financial and personal life experiences. I really appreciate the lessons that I have learned from S&A and consider your most recent Digest work a wonderful summary of extremely relevant material. Stansberry Radio is also an auditory pleasure and following some your mentors, such as Mark Ford, have been most helpful. I was brainwashed growing up about financial matters – let's say that's just the way the system was rigged. Learning through my entrepreneurial endeavors, firing personal financial advisors and plugging into and learning through S&A research has been a most rewarding experience. I do wonder how you are to going to teach your own children about our corrupt financial systems and ensure the legacy that you have worked so hard to build. Kind Regards to you and your fine Team." – Paid-up subscriber Dan Cornett

 

Regards,

 

Sean Goldsmith

Baltimore, Maryland

July 2, 2014

 

Activision Blizzard shares are up for a reason...

 

Stansberry's Investment Advisory research analyst E.B. Tucker just returned from the Electronic Entertainment Expo in Los Angeles. While he was there, he got a preview of Activision Blizzard's latest blockbuster video game.

 

In today's Digest Premium, he shares his findings and explains why the stock has soared over the last year...

 

To subscribe to Digest Premium and receive a free hardback copy of Jim Roger's latest book, click here.

Activision Blizzard shares are up for a reason...
 

Editor's note: Stansberry's Investment Advisory research analyst E.B. Tucker just returned from the Electronic Entertainment Expo (E3) in Los Angeles. While he was there, he got a preview of Activision Blizzard's latest blockbuster video game. In today's Digest Premium, he shares his findings and explains why the stock has soared over the last year...

 

 

 The characters are so real, you can see fear in their eyes.

 

And there's a lot to be afraid of. You're at war with a ruthless enemy. The action escalates quickly. But when the commander speaks, you feel a strange sense of confidence. His voice sounds familiar, and it is... it's Kevin Spacey.

 

 I (E.B. Tucker) wasn't screening the next big-budget Hollywood thriller... Instead, I was getting a preview of the new video game, Call of Duty: Advanced Warfare. It's the next release of one of the most profitable video game franchises in history... Its creator – Activision Blizzard (ATVI) – is a holding in the Stansberry's Investment Advisory model portfolio.

 

I had the chance to see what's next for Activision last week at the E3 in Los Angeles. E3 is the biggest annual trade show for game developers and device makers.

 

I'm not a gamer. But what I saw at E3 blew me away. And Activision was a huge part of it...

 

 Video-game brands are no different from any other powerful consumer brands. Once gamers embrace a franchise, they shell out $60 or so for the latest release every year. Activision Blizzard says the 10 iterations of Call of Duty have generated nearly 140 million unit sales. The previous release, Call of Duty: Ghosts, raked in $1 billion in sales on the first day it was available.

 

 Many of the most popular games now sport budgets bigger than most Hollywood thrillers. And developers can do a lot with that kind of money. Games are being produced in movie quality. They have detailed storylines and plot development. Characters have defined skin tones and features. Activision partnered with the University of Southern California's Institute for Creative Technologies to develop these features.

 

And Call of Duty is just one of several blockbuster franchises under the Activision label. The company is about to release another highly anticipated title: Destiny. The first release is expected to be huge for the company. It could give Activision a new long-term source of revenue.

 

If Destiny becomes the next in a long line of powerful franchises, it would mean another major source of revenue for Activision. The anticipation is part of the reason shares are up nearly 60% in the last year.

 

 Stansberry's Investment Advisory subscribers know that Activision is also extremely capital-efficient, meaning it's run for the benefit of shareholders... not management. These types of companies have track records of producing profits and returning them to shareholders. In Activision's case, the company has returned $2 billion to shareholders over the last three years through dividends, share buybacks, and purchasing its own debt.

 

 The rest of 2014 should be big for Activision. Destiny is set to release in September. Then Call of Duty: Advanced Warfare will come out in the fourth quarter. We'll keep an eye on it and be sure to keep Stansberry's Investment Advisory subscribers updated on the latest.

 

– E.B. Tucker

 

Editor's note: Last week, thousands of people tuned in to watch Porter host a live webinar where he revealed the secret to his favorite trading strategy. It's a strategy Porter and his analysts used on Activision Blizzard shares to generate a 123% return on margin since last November in his Stansberry Alpha service. To learn more about this strategy – and to get started with a six-month, 100% risk-free money-back guarantee – click here. But don't delay... this offer expires tomorrow at midnight.

Activision Blizzard shares are up for a reason...

 

Stansberry's Investment Advisory research analyst E.B. Tucker just returned from the Electronic Entertainment Expo in Los Angeles. While he was there, he got a preview of Activision Blizzard's latest blockbuster video game.

 

In today's Digest Premium, he shares his findings and explains why the stock has soared over the last year...

 

To continue reading, scroll down or click here.