Post by Admin/YBB on Jun 19, 2021 9:50:04 GMT -6
Pg 12-13: BOE monetary policy on THURSDAY.
REVIEW. Opendoor/OPEN (December SPAC merger) buys houses online – homeowner uploads basic information and gets a cash offer; if not like the offer, the site connects to an agent.
PREVIEW. ENERGY sector YIELDS are attractive with XLE yielding 3.7%, well above those for utility XLU and real estate XLRE. If oil is headed to $100, energy sector will remain strong with good profits and dividend boosts. Several energy companies have restored or raised dividends, and some have, or will have, variable dividends (DVN, PXD, XEC, EQT). And the next move in XOM drama may be higher dividend.
DATA THIS WEEK. Chicago Fed national activity index on MONDAY; existing-home sales on TUESDAY; new-home sales, manufacturing PMI, services PMI on WEDNESDAY; final Q1 GDP, durable goods report on THURSDAY, personal income and consumption, UM sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Homebuilder Lennar (LEN; yield 0.9%; fwd P/E 7.5; P/B 2.5; low debt-to-capital at 23%; buybacks; housing remains incredibly strong; margins are better despite rising materials and labor costs; class A and supervoting B shares at unusual discount; segment is entry level and move-up homes; also apartment and home rental businesses (may spinoff); stake in online home buyer OPEN; pg 15);
small-cap Six Flags Entertainment (SIX; fwd P/E 21.5; losses in 2020 and 2021 but returns to profit in 2022; attractive reopening play; 27 parks; typical season is from Memorial Day to Labor Day; risks include continuing Covid-19 restrictions and labor shortages; pg 16).
BEARISH. See other stories.
Pg 14: FOLLOWUP. Oracle/ORCL has rebounded since the cover story on 2/19/21 but has more upside. Its recent earnings report and guidance were good, but the stock fell on concerns for capex to grow the cloud business.
Pg 25: 100 YEARS OF BARRON’S traces the history of pandemics and inflation and says not to worry. Much of extra income/savings (1940s and now) will be saved permanently although some will be spent. In fact, the real worry should be weak recoveries abroad and poor export growth.
Pg 27: BUFFER ETFs (120 now), or defined-outcome ETFs, use options to cap gains and limit losses over the outcome periods (typically 1 year) but their ERs are high. They work as advertised only if you buy at issue and hold until expiration. Mentioned are BJUN, PJUN, UJUN, FMAY, DMAY.
Pg 28: TECH TRADER. The new FTC Chair Lina KHAN, 32-year-old Columbia U professor, will be more aggressive on tech regulation. She may use FTC’s rule-making powers to force changes that may not clear Congress. The new tech regulations may address monopolistic powers of big techs and their M&A activities. Don’t ignore the new FTC.
Pg 29: DIVIDEND and DIVIDEND-GROWTH ideas for uncertain inflationary times include ABBV, CVX, KMB, PFE, VLO, PRU, TROW. Also mentioned are MCD, KO, PEP, TGT, WMT, JNJ, BMY, UNH, MMM, C, GS, T, WMB, MO.
Pg 30: Tom SLATER, the US Head for the UK-based Baillie Gifford. He looks for long-term growth with 5-10-year outlook. He looks for companies led by founder-CEOs. EARLY-STAGE companies have to sacrifice profits to grow revenues and he will invest in them if they have sound plans. It is easier to predict TECH TRENDS than economic trends. In several new areas such as genetics, e-commerce, EVs, the NEWER companies have advantages; in theory, older companies may adjust and transform, but that is less likely to happen. CHINA is now the world’s largest auto market and it would be natural to expect some future innovations there; China also has huge e-commerce markets (social-media, food-delivery, etc).
Pg 32: ECONOMY. In spite of some new hawkish talk, the FED remains dovish. The market already sees high current inflation measures, but longer-term inflation projections remain subdued. POWELL has discounted the FOMC dot-plots. St Louis Fed chief BULLARD, who moved the markets on Friday, is not even a voting FOMC member this year but will be next year. Reactions post-FOMC have been mixed/confusing. 5-yr/5-yr OIS (overnight index swaps) fell to 1.71% (vs 2.40% earlier in the year), meaning that the FUTURES markets don’t believe the hawkish Fed talk (other futures market indicator show just the opposite). The Fed balance sheet has grown to 40% of GDP; federal debt-to-GDP is near 100%. How will the Fed tighten with rising deficits and huge fiscal stimulus? Stagflation may be in the cards. Continue to stick with cyclicals and foreign stocks (Europe, Asia, EMs).
Pg 34. OTHER VOICES. Alex PENTLAND, Alex LIPTON, Thomas HARDJONO, MIT. Needed is a new, digital “Bretton Woods” (that was dollar-centric monetary system from WW II). In the coming DIGITIZATION of everything, China, Singapore and Switzerland are moving faster with digital systems some of which were designed at MIT. There is lack of international cooperation and coordination. The US and the G-7 countries should be leading this new GLOBAL ORDER rather than just reacting and following.
(EXTRAS from online Friday that didn’t make the weekend paper version)
MUTUAL FUNDs. Fidelity launched several new ESG mutual funds (FAEBX, FCAEX, FFEBX) and ETFs (FSST, FDWM) and now has a total of 11 ESG funds. Fidelity has been late to ESG and is now joining the party as the regulatory environment is becoming more favorable for general and retirement ESG funds.
(NOTE. Postings will be delayed to afternoon & evening on Saturday, 6/26/21)
REVIEW. Opendoor/OPEN (December SPAC merger) buys houses online – homeowner uploads basic information and gets a cash offer; if not like the offer, the site connects to an agent.
PREVIEW. ENERGY sector YIELDS are attractive with XLE yielding 3.7%, well above those for utility XLU and real estate XLRE. If oil is headed to $100, energy sector will remain strong with good profits and dividend boosts. Several energy companies have restored or raised dividends, and some have, or will have, variable dividends (DVN, PXD, XEC, EQT). And the next move in XOM drama may be higher dividend.
DATA THIS WEEK. Chicago Fed national activity index on MONDAY; existing-home sales on TUESDAY; new-home sales, manufacturing PMI, services PMI on WEDNESDAY; final Q1 GDP, durable goods report on THURSDAY, personal income and consumption, UM sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Homebuilder Lennar (LEN; yield 0.9%; fwd P/E 7.5; P/B 2.5; low debt-to-capital at 23%; buybacks; housing remains incredibly strong; margins are better despite rising materials and labor costs; class A and supervoting B shares at unusual discount; segment is entry level and move-up homes; also apartment and home rental businesses (may spinoff); stake in online home buyer OPEN; pg 15);
small-cap Six Flags Entertainment (SIX; fwd P/E 21.5; losses in 2020 and 2021 but returns to profit in 2022; attractive reopening play; 27 parks; typical season is from Memorial Day to Labor Day; risks include continuing Covid-19 restrictions and labor shortages; pg 16).
BEARISH. See other stories.
Pg 14: FOLLOWUP. Oracle/ORCL has rebounded since the cover story on 2/19/21 but has more upside. Its recent earnings report and guidance were good, but the stock fell on concerns for capex to grow the cloud business.
Pg 25: 100 YEARS OF BARRON’S traces the history of pandemics and inflation and says not to worry. Much of extra income/savings (1940s and now) will be saved permanently although some will be spent. In fact, the real worry should be weak recoveries abroad and poor export growth.
Pg 27: BUFFER ETFs (120 now), or defined-outcome ETFs, use options to cap gains and limit losses over the outcome periods (typically 1 year) but their ERs are high. They work as advertised only if you buy at issue and hold until expiration. Mentioned are BJUN, PJUN, UJUN, FMAY, DMAY.
Pg 28: TECH TRADER. The new FTC Chair Lina KHAN, 32-year-old Columbia U professor, will be more aggressive on tech regulation. She may use FTC’s rule-making powers to force changes that may not clear Congress. The new tech regulations may address monopolistic powers of big techs and their M&A activities. Don’t ignore the new FTC.
Pg 29: DIVIDEND and DIVIDEND-GROWTH ideas for uncertain inflationary times include ABBV, CVX, KMB, PFE, VLO, PRU, TROW. Also mentioned are MCD, KO, PEP, TGT, WMT, JNJ, BMY, UNH, MMM, C, GS, T, WMB, MO.
Pg 30: Tom SLATER, the US Head for the UK-based Baillie Gifford. He looks for long-term growth with 5-10-year outlook. He looks for companies led by founder-CEOs. EARLY-STAGE companies have to sacrifice profits to grow revenues and he will invest in them if they have sound plans. It is easier to predict TECH TRENDS than economic trends. In several new areas such as genetics, e-commerce, EVs, the NEWER companies have advantages; in theory, older companies may adjust and transform, but that is less likely to happen. CHINA is now the world’s largest auto market and it would be natural to expect some future innovations there; China also has huge e-commerce markets (social-media, food-delivery, etc).
Pg 32: ECONOMY. In spite of some new hawkish talk, the FED remains dovish. The market already sees high current inflation measures, but longer-term inflation projections remain subdued. POWELL has discounted the FOMC dot-plots. St Louis Fed chief BULLARD, who moved the markets on Friday, is not even a voting FOMC member this year but will be next year. Reactions post-FOMC have been mixed/confusing. 5-yr/5-yr OIS (overnight index swaps) fell to 1.71% (vs 2.40% earlier in the year), meaning that the FUTURES markets don’t believe the hawkish Fed talk (other futures market indicator show just the opposite). The Fed balance sheet has grown to 40% of GDP; federal debt-to-GDP is near 100%. How will the Fed tighten with rising deficits and huge fiscal stimulus? Stagflation may be in the cards. Continue to stick with cyclicals and foreign stocks (Europe, Asia, EMs).
Pg 34. OTHER VOICES. Alex PENTLAND, Alex LIPTON, Thomas HARDJONO, MIT. Needed is a new, digital “Bretton Woods” (that was dollar-centric monetary system from WW II). In the coming DIGITIZATION of everything, China, Singapore and Switzerland are moving faster with digital systems some of which were designed at MIT. There is lack of international cooperation and coordination. The US and the G-7 countries should be leading this new GLOBAL ORDER rather than just reacting and following.
(EXTRAS from online Friday that didn’t make the weekend paper version)
MUTUAL FUNDs. Fidelity launched several new ESG mutual funds (FAEBX, FCAEX, FFEBX) and ETFs (FSST, FDWM) and now has a total of 11 ESG funds. Fidelity has been late to ESG and is now joining the party as the regulatory environment is becoming more favorable for general and retirement ESG funds.
(NOTE. Postings will be delayed to afternoon & evening on Saturday, 6/26/21)