Post by Admin/YBB on Jul 17, 2021 8:02:24 GMT -6
Pg 12-13. ECB monetary policy on THURSDAY (recently it also adopted, like the US Fed, average 2% target for inflation).
REVIEW. AT&T/T held a 5G party to demonstrate how it will benefit. It has mostly low-band spectrum now that has slower speed but higher range. It recently acquired some mid-band spectrum that has a good compromise between speed and range.
PREVIEW. Chewy/CHWY (2019 IPO) did well during the pandemic and is expected to do well post-pandemic (pets aren’t going to office or school). 70% of sales are from automatic-delivery programs.
DATA THIS WEEK. Housing market index on MONDAY; housing starts on TUESDAY; existing home sales, LEI on THURSDAY.
7-day average of NEW Covid-19 cases in the US is 23,000, up from 11,300 3 weeks ago.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Synthetic biology (Amyris/AMRS, Zymergen/ZY, SPAC merger Ginko Bioworks + Soaring Eagle/SRNG; industry revenues of $1 billion may soar by orders of magnitude as more successes come from the combination of biology and chemistry; scaling of manufacturing processes is an issue now; pg 15);
German SAP (50-yr old enterprise software company has started a painful transition to subscriptions-based cloud-apps model and is catching up with competition; not interested in cloud-infrastructure business; holds stakes in several promising companies; pg 17);
small-cap Academy Sports & Outdoors (ASO; fwd P/E 8.8 even after stock tripling; low debt; 259 stores in 16 states; online sales skyrocketing; 80-20 mix of brand name and private-label products; October 2020 IPO; huge pandemic beneficiary should continue strong post-pandemic; pg 19).
BEARISH. See other stories.
Pg 14: FOLLOWUP. DELISTING threat/risk for Chinese stocks listed in the US (248 with $2 trillion market-cap) is very real. They are now under attack by both the US and China. The deadlock is that the US will soon require compliance with the US audits within 2-3 years, while the Chinese Government is preventing that and is also no longer turning blind eye to the VIE structure that many of these companies use to bypass Chinese restrictions. January delisting of China Mobile for another reason (ties to Chinese military) showed how messy it can become for retail investors many of whom are still in limbo with their shares that they cannot sell. While institutional investors can adjust to listing change from the US to HK or China Mainland, the retail investors may be better off with funds (OEFs, ETFs). Due to these concerns, the US ADR ETF PGJ is badly lagging MCHI (with HK-listed shares) and CNYA (with Chinese A-shares).
Pg 34: FUNDS. Nataliya KOFMAN (stocks) and Loren MORAN (bonds) of world-allocation Global Wellington VGWLX (ER 0.44%; AUM $1.8 billion) look for dividend-paying mid/large-cap stocks (relative-value approach) and global bonds across the credit spectrum (50% in BBB-rated bonds). Moderate-allocation ranges are 60-70 for equity, 30-40% for bonds; fund avoids huge country or sector bets.
Pg 36: FUNDS. Tiny firm Engine No 1 that took upon Exxon/XOM (and won) has launched M* index-based Transform 500 ETF VOTE (AUM $133 million). It will be like other large-cap index ETFs (i.e. it will not use ESG screens for its holdings) but the Firm will be active on ESG issues through proxies in collaboration with others. Big indexers (Vanguard, BLK, STT) claim to address ESG issues through private channels but some are now disclosing their votes/actions.
Pg 37: TECH TRADER. Q2 tech earnings are expected to be strong across the board. Watch for PC sales, effects of semi chip shortages, IT spending/capex, rideshare rebound, unstoppable big techs FAAMG.
Pg 37: ECONOMY. Market may be overlooking the risks from Covid-19/DELTA. NEW CASES are rising in almost all states and the 7-day average now is the highest since mid-May. While the issue is more serious in states with low vaccination rates, new cases are also rising (from a low base) in San Francisco where 75%+ of population over age 12 has been fully vaccinated. And people will soon return to offices and kids will be back to school. This while all eyes are on economy reopening and related high inflation readings. While we may not see a repeat of 2020, unexpected developments on Covid-19 and/or economy may cause a market CORRECTION.
Pg 38. OTHER VOICES. Thomas SONDERMAN, SkyWater/SKYT (semi foundry). He recommends PUBLIC-PRIVATE partnerships for RESHORING the critical SEMI chip industry. The current chip shortages due to supply-chain disruptions are impacting many US industries. Taiwan-China tensions may further disrupt the chips market. While the US leads in designing chips, it has lost leadership in chip manufacturing to Asian countries (S Korea, Taiwan, China). The governments in those countries have actively encouraged and participated in chip industry development. The US needs a plan for investments in STEM education, R&D and manufacturing (chip fabrication is very expensive).
Pg 39: INCOME. 32 DIVIDEND KINGS have increased dividends for 50+ years: JNJ, KO, MMM, PG, EMR, SWK, CINF, TGT, FMCB, AWR, DOV, PH, GPC, etc. Unfortunately, there is no related index or ETF as there are for Dividend Aristocrats (25+ years of increasing dividends).
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. 2021 will be another record year for ETF INFLOWS – those in all of 2020 may be exceeded in July/August. The heaviest inflows are into stock ETFs with energy and financial ETFs leading (unlike 2020 when bond and commodity ETFs had the heaviest inflows). New ETF launches will also be at a new record; several have converted from mutual funds/OEFs into ETFs (DFA, etc).
REVIEW. AT&T/T held a 5G party to demonstrate how it will benefit. It has mostly low-band spectrum now that has slower speed but higher range. It recently acquired some mid-band spectrum that has a good compromise between speed and range.
PREVIEW. Chewy/CHWY (2019 IPO) did well during the pandemic and is expected to do well post-pandemic (pets aren’t going to office or school). 70% of sales are from automatic-delivery programs.
DATA THIS WEEK. Housing market index on MONDAY; housing starts on TUESDAY; existing home sales, LEI on THURSDAY.
7-day average of NEW Covid-19 cases in the US is 23,000, up from 11,300 3 weeks ago.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Synthetic biology (Amyris/AMRS, Zymergen/ZY, SPAC merger Ginko Bioworks + Soaring Eagle/SRNG; industry revenues of $1 billion may soar by orders of magnitude as more successes come from the combination of biology and chemistry; scaling of manufacturing processes is an issue now; pg 15);
German SAP (50-yr old enterprise software company has started a painful transition to subscriptions-based cloud-apps model and is catching up with competition; not interested in cloud-infrastructure business; holds stakes in several promising companies; pg 17);
small-cap Academy Sports & Outdoors (ASO; fwd P/E 8.8 even after stock tripling; low debt; 259 stores in 16 states; online sales skyrocketing; 80-20 mix of brand name and private-label products; October 2020 IPO; huge pandemic beneficiary should continue strong post-pandemic; pg 19).
BEARISH. See other stories.
Pg 14: FOLLOWUP. DELISTING threat/risk for Chinese stocks listed in the US (248 with $2 trillion market-cap) is very real. They are now under attack by both the US and China. The deadlock is that the US will soon require compliance with the US audits within 2-3 years, while the Chinese Government is preventing that and is also no longer turning blind eye to the VIE structure that many of these companies use to bypass Chinese restrictions. January delisting of China Mobile for another reason (ties to Chinese military) showed how messy it can become for retail investors many of whom are still in limbo with their shares that they cannot sell. While institutional investors can adjust to listing change from the US to HK or China Mainland, the retail investors may be better off with funds (OEFs, ETFs). Due to these concerns, the US ADR ETF PGJ is badly lagging MCHI (with HK-listed shares) and CNYA (with Chinese A-shares).
Pg 34: FUNDS. Nataliya KOFMAN (stocks) and Loren MORAN (bonds) of world-allocation Global Wellington VGWLX (ER 0.44%; AUM $1.8 billion) look for dividend-paying mid/large-cap stocks (relative-value approach) and global bonds across the credit spectrum (50% in BBB-rated bonds). Moderate-allocation ranges are 60-70 for equity, 30-40% for bonds; fund avoids huge country or sector bets.
Pg 36: FUNDS. Tiny firm Engine No 1 that took upon Exxon/XOM (and won) has launched M* index-based Transform 500 ETF VOTE (AUM $133 million). It will be like other large-cap index ETFs (i.e. it will not use ESG screens for its holdings) but the Firm will be active on ESG issues through proxies in collaboration with others. Big indexers (Vanguard, BLK, STT) claim to address ESG issues through private channels but some are now disclosing their votes/actions.
Pg 37: TECH TRADER. Q2 tech earnings are expected to be strong across the board. Watch for PC sales, effects of semi chip shortages, IT spending/capex, rideshare rebound, unstoppable big techs FAAMG.
Pg 37: ECONOMY. Market may be overlooking the risks from Covid-19/DELTA. NEW CASES are rising in almost all states and the 7-day average now is the highest since mid-May. While the issue is more serious in states with low vaccination rates, new cases are also rising (from a low base) in San Francisco where 75%+ of population over age 12 has been fully vaccinated. And people will soon return to offices and kids will be back to school. This while all eyes are on economy reopening and related high inflation readings. While we may not see a repeat of 2020, unexpected developments on Covid-19 and/or economy may cause a market CORRECTION.
Pg 38. OTHER VOICES. Thomas SONDERMAN, SkyWater/SKYT (semi foundry). He recommends PUBLIC-PRIVATE partnerships for RESHORING the critical SEMI chip industry. The current chip shortages due to supply-chain disruptions are impacting many US industries. Taiwan-China tensions may further disrupt the chips market. While the US leads in designing chips, it has lost leadership in chip manufacturing to Asian countries (S Korea, Taiwan, China). The governments in those countries have actively encouraged and participated in chip industry development. The US needs a plan for investments in STEM education, R&D and manufacturing (chip fabrication is very expensive).
Pg 39: INCOME. 32 DIVIDEND KINGS have increased dividends for 50+ years: JNJ, KO, MMM, PG, EMR, SWK, CINF, TGT, FMCB, AWR, DOV, PH, GPC, etc. Unfortunately, there is no related index or ETF as there are for Dividend Aristocrats (25+ years of increasing dividends).
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. 2021 will be another record year for ETF INFLOWS – those in all of 2020 may be exceeded in July/August. The heaviest inflows are into stock ETFs with energy and financial ETFs leading (unlike 2020 when bond and commodity ETFs had the heaviest inflows). New ETF launches will also be at a new record; several have converted from mutual funds/OEFs into ETFs (DFA, etc).