Seven Lakes weekly summary

Hello Seven Lakers,

below a summary of relevant events happened in the stock market in the last week

📈 1/ Stocks and sectors bought by US politicians last week

This week, the trading activity at Capitol Hill was substantial, with ~223 transactions taking place

Semiconductors & Equipment was the most invested sectors

If you want to receive daily updates on politicians trades, click here

🏦 2/ US Politicians potential insider trading: Rep. Gottheimer bought defense stocks before Israeli war

• Rep. Josh Gottheimer is one of the most regular stock traders in the US Congress

• Serving in office since 2017, the New Jersey Representative has predominantly traded in tech stocks

• On September 26, the Representative reported a purchase of defense stock Northrop Grumman Corp (NOC:US)

• NOC stock has had a price surge of almost 15.05% since Gottheimer’s purchase: NOC is one of several defense stocks that has been seeing a rally since early October when a war between Israel-Hamas was declared

• Iteresting to note that Josh Gottheimer sits on two House Committees: The Intelligence and the Financial Services Committees

If you want to receive daily updates on political trading, click here 

🔔 3/ How to be notified when politicians buy / sell stocks

As seen before, some suspicious trades were made by Congress Members and their relatives

However, the GOOD NEWS is that their moves can be copied (politicians need to disclose their stock positions)

The Seven Lakes Research analyst team provides PREMIUM detailed updates from Monday to Friday with all the relevant fact on: 

Click on the button below to start receiving them 👇👇👇👇👇

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📄 4/ Interesting stock market stories

STORY #1: MSFT asked to pay $28.9 billion in taxes

Microsoft's Contention with IRS

• Microsoft (MSFT:US) has been issued a notice by the IRS, demanding an additional $28.9 billion in taxes, spanning from 2004 to 2013

• The company expects to reduce the owed amount to below $20 billion within the next year

Scrutiny on Tech Giants' Profit-Shifting

• Microsoft plans to challenge this substantial demand

• Initially, they will engage with the IRS, but legal action may become necessary

• Tech companies often shift profits to low-tax countries to reduce their tax bills

• The IRS demand is linked to this practice during the specified period

• Microsoft acknowledges it as a historical practice and deems it irrelevant today

Microsoft Under Pressure

• Microsoft is currently facing multiple challenges, including scrutiny of its $68.7 billion acquisition of Activision Blizzard and a $20 million settlement with the FTC

Susan Delbene have been selling a lot of Microsoft stocks recently

• Suzan DelBene's recent $750,000 - $1.5 million sale of MSFT stock gains significance, considering her position on the Ways and Means Committee, responsible for federal revenue, including corporate taxes

• Dan Sullivan and Michael Burgess also made noteworthy stock sales.

• Despite the IRS notice, Microsoft's stock remains stable, trading at approximately $332.

If you want to be notified when politicians trade stock, we send daily email alerts here

STORY #2: Despite Israeli conflict, RTX stock continues to tumble

What’s happening

• Raytheon Technologies Corp (RTX:US) has grappled with engine issues for three months, initially reporting possible problems with 1200 engines, which later increased to 3000 engines

• Manufacturing flaws have adversely impacted the company's stock performance in the last quarter of the year

• Raytheon's stock has remained around the $73 mark for about a month and is down nearly 25% over the past three months

Impact of Israeli-Hamas war

• Tensions between Israel and Palestine briefly boosted Raytheon's stock by 5% due to its involvement in the Iron Dome defense system

• However, the excitement was short-lived, and Raytheon faces challenges that exceed its initial expectations

Which politicians are selling

• Daniel Goldman and Ro Khanna both bet against Raytheon, with Goldman selling $50,000 - $100,000 worth of RTX stock shortly before an engine inspection announcement

• Rep. Khanna, a frequent trader, has been actively selling stocks this year, including $45,000 - $150,000 worth of Raytheon stocks in February

If you want to be notified when politicians trade stock, we send daily email alerts here 

STORY #3: Lululemon Rises on S&P 500 Inclusion

What’s happening

• Lululemon Athletica's (LULU:US) stock rose by 6.6% in early Monday trading due to its inclusion in the S&P 500 to replace Activision Blizzard (ATVI:US).

• This change is effective before the opening of trading on October 18th, as announced by S&P Dow Jones Indices

Stock being added to S&P500

• Stocks often benefit from inclusion in major indices like the S&P 500, leading to increased visibility, investor confidence, liquidity, and trading volume

• Institutional investors, including pension funds, use index components in their investment strategies and may need to adjust their portfolios, leading to increased buying when a stock is added to a major index

• Being part of widely followed indices like the S&P 500 enhances stock visibility and attracts passive funds (e.g., ETFs and mutual funds) that need to buy the stock to replicate the index, increasing demand

Politicians who are trading the stock

• Congressman Pete Sessions sold LULU shares in June this year, and the stock has seen a year-to-date increase of over 20%

If you want to be notified when politicians trade stock, we send daily email alerts here