Post by Admin/YBB on Dec 18, 2021 10:19:32 GMT -6
Pg 14-15.
REVIEW. Some CRYPTO QUOTES went crazy on Tuesday at CoinMarketCap (owned by Binance) and that affected quotes elsewhere at Coinbase/COIN, etc. Some crypto industry spokesmen initially made light of the situation (enjoy being fake trillionaires, etc). But the episode gave a black eye to the unregulated crypto industry.
PREVIEW. RETAIL SALES for November were below expectations as many shoppers did their shopping early in October. There may be a surge in online and in-store shopping on Saturday, December 18, the last Saturday before Christmas. Holiday sales for November 1-December 31 are still expected to be up by +10.5%.
DATA THIS WEEK. LEI on MONDAY; existing home sales, consumer confidence on WEDNESDAY; weekly initial jobless claims, new home sales, personal income and spending, durable goods report, UM sentiment on THURSDAY.
CLOSED. US markets on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Fortress Transport & Infrastructure LP (FTAI; yield 5%; fwd P/E 18.2; businesses include aircraft engine and airplane leasing, maintenance/repair; power plants (OH), energy terminals (TX), small railways; joint-venture with Chromalloy on aircraft engine parts; converting to corporate structure and splitting into 2 companies – 1) aviation and 2) infrastructure; pg 22).
BEARISH. See other stories.
Pg 17: FOLLOWUP. Oracle/ORCL remains attractive on continued expansion of its cloud business and strong buyback program. News of talks to acquire electronic medical records company Cerner/CERN ($30 billion) spooked the investors. If it goes through, it would be Oracle’s largest acquisition but there is a history of successful acquisitions.
Pg 18: New Covid-19-OMICRON is causing a replay of last year – shows and conferences cancelled, return to offices delayed, holiday season ruined, long lines for Covid testing. Hopefully, the effects of Omicron will be mild, the wave will be short-and-transient, and lockdowns will be avoided. One concern is the load from Omicron on HOSPITALS so soon after DELTA. BOOSTER programs are starting and there is also a significant US population that is UNVACCINATED by personal choice.
Pg 20: 2021 was a record year (prior record 1996) for companies to become PUBLIC via IPOs (40%), SPAC mergers (60%) and direct-listings (handful). Unfortunately, 41.1% of the new companies are trading below their INITIAL/OFFER prices; retail investors may buy them now selectively. This sour performance may slowdown the pace of companies going public in 2022 but it is still expected to be a good year with pending Stripe, Chobani, Chime, Instacart, Reddit, Houzz, Databricks, Discord, etc. Missing would be new CHINESE companies (VIEs-ADRs), and many existing ones may be moving to list in HK or Shanghai or just go private.
Pg 36: Martin SCHULZ of international growth PIGDX (no-load/NTF at Schwab, TF at Fido) starts with top down global view on countries and adjusts weights accordingly. Fund looks for quality companies with stable or accelerating growth, and includes ESG factors. Fund has increased exposure to Europe, Japan (14%), EMs (28%).
Pg 38: FUNDS. TAX-LOSS harvesting works for sectors that are down for the year. To avoid wash-sales, one can simply swap into something similar but not identical. This year these areas include EMs, marijuana, clean energy, gold miners, biotech, airlines, ARK funds (how things have changed), fixed-income (US, EM). (Options are substantially similar to underlying stocks, so one cannot replace stocks at loss with options)
Pg 39: INCOME. Dividend-growth ideas include SWK, ZTS, MCD, MS, Dividend Aristocrats (ETF NOBL).
Pg 42: TECH TRADER. 2022 may be a tough year for tech stocks. Some pandemic era highflyers (with unprofitable growth) have already sold off sharply and that may get worse (ARKK -36% since 11/1/21). On the other hand, techs with cash flows and profits may do fine – cloud-computing (AMZN, FB, ORCL, ANET, CIEN, CSCO), semi chips (ON, WOLF, ADI, MCHP, NXP; KLAC, AMAT, LRCX), crypto industry (COIN), turnarounds (INTC).
Pg 43: ECONOMY. What if the FED is NOT BEHIND the curve, but AHEAD of the curve? There is Covid Winter ahead with the new Omicron an added complication for those even fully vaccinated. Consumer behaviors and spending are beginning to change by rising Covid cases (average 120K/day) – shows and events are being cancelled, restaurant reservations are down, companies are delaying return to offices. These Covid affects may tame the current high inflation without any Fed action. Fiscal stimulus payments to consumers are gone and monetary stimulus is being reduced. So, the Fed may be raising rates at a wrong time. Of course, the Fed may flip again.
Pg 78: OTHER VOICES. Ian SIEGEL, ZipRecruiter. Businesses are having problems ATTRACTING and RETAINING workers. Employee quit/resignation rates are high. Small/medium size businesses are affected the most. They are offering higher wages and benefits, signing and referral bonuses and better working conditions. There are 11 million job openings and only 6.9 million unemployed (record low ratio of 0.6 for unemployed/openings when 2+ is normal, 5-6 in recessions). Possible reasons: Covid recession was very short, and many workers are reluctant to return to work; many have retired or shifted lifestyles from 2-worker families to 1-worker families. PROACTIVE recruiting is evolving using MILITARY recruiting model and ONLINE tools (social-media, digital-platforms). Companies are starting OUTREACH programs and are not waiting for people to just apply in response to position ads. These changes to the job market are long lasting.
(EXTRAS from online Friday that didn’t make the weekend paper version)
DFA is cutting ERs on several of its mutual funds and ETFs. While DFA mutual funds are sold through advisors, or are within retirement plans, the ETFs are available to anyone.
CES will be live January 5-8, 2022 in LV. Attendees will have to show proof of vaccinations and Abbott’s Covid-19 self-test kit will be included in the registration package.
REVIEW. Some CRYPTO QUOTES went crazy on Tuesday at CoinMarketCap (owned by Binance) and that affected quotes elsewhere at Coinbase/COIN, etc. Some crypto industry spokesmen initially made light of the situation (enjoy being fake trillionaires, etc). But the episode gave a black eye to the unregulated crypto industry.
PREVIEW. RETAIL SALES for November were below expectations as many shoppers did their shopping early in October. There may be a surge in online and in-store shopping on Saturday, December 18, the last Saturday before Christmas. Holiday sales for November 1-December 31 are still expected to be up by +10.5%.
DATA THIS WEEK. LEI on MONDAY; existing home sales, consumer confidence on WEDNESDAY; weekly initial jobless claims, new home sales, personal income and spending, durable goods report, UM sentiment on THURSDAY.
CLOSED. US markets on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Fortress Transport & Infrastructure LP (FTAI; yield 5%; fwd P/E 18.2; businesses include aircraft engine and airplane leasing, maintenance/repair; power plants (OH), energy terminals (TX), small railways; joint-venture with Chromalloy on aircraft engine parts; converting to corporate structure and splitting into 2 companies – 1) aviation and 2) infrastructure; pg 22).
BEARISH. See other stories.
Pg 17: FOLLOWUP. Oracle/ORCL remains attractive on continued expansion of its cloud business and strong buyback program. News of talks to acquire electronic medical records company Cerner/CERN ($30 billion) spooked the investors. If it goes through, it would be Oracle’s largest acquisition but there is a history of successful acquisitions.
Pg 18: New Covid-19-OMICRON is causing a replay of last year – shows and conferences cancelled, return to offices delayed, holiday season ruined, long lines for Covid testing. Hopefully, the effects of Omicron will be mild, the wave will be short-and-transient, and lockdowns will be avoided. One concern is the load from Omicron on HOSPITALS so soon after DELTA. BOOSTER programs are starting and there is also a significant US population that is UNVACCINATED by personal choice.
Pg 20: 2021 was a record year (prior record 1996) for companies to become PUBLIC via IPOs (40%), SPAC mergers (60%) and direct-listings (handful). Unfortunately, 41.1% of the new companies are trading below their INITIAL/OFFER prices; retail investors may buy them now selectively. This sour performance may slowdown the pace of companies going public in 2022 but it is still expected to be a good year with pending Stripe, Chobani, Chime, Instacart, Reddit, Houzz, Databricks, Discord, etc. Missing would be new CHINESE companies (VIEs-ADRs), and many existing ones may be moving to list in HK or Shanghai or just go private.
Pg 36: Martin SCHULZ of international growth PIGDX (no-load/NTF at Schwab, TF at Fido) starts with top down global view on countries and adjusts weights accordingly. Fund looks for quality companies with stable or accelerating growth, and includes ESG factors. Fund has increased exposure to Europe, Japan (14%), EMs (28%).
Pg 38: FUNDS. TAX-LOSS harvesting works for sectors that are down for the year. To avoid wash-sales, one can simply swap into something similar but not identical. This year these areas include EMs, marijuana, clean energy, gold miners, biotech, airlines, ARK funds (how things have changed), fixed-income (US, EM). (Options are substantially similar to underlying stocks, so one cannot replace stocks at loss with options)
Pg 39: INCOME. Dividend-growth ideas include SWK, ZTS, MCD, MS, Dividend Aristocrats (ETF NOBL).
Pg 42: TECH TRADER. 2022 may be a tough year for tech stocks. Some pandemic era highflyers (with unprofitable growth) have already sold off sharply and that may get worse (ARKK -36% since 11/1/21). On the other hand, techs with cash flows and profits may do fine – cloud-computing (AMZN, FB, ORCL, ANET, CIEN, CSCO), semi chips (ON, WOLF, ADI, MCHP, NXP; KLAC, AMAT, LRCX), crypto industry (COIN), turnarounds (INTC).
Pg 43: ECONOMY. What if the FED is NOT BEHIND the curve, but AHEAD of the curve? There is Covid Winter ahead with the new Omicron an added complication for those even fully vaccinated. Consumer behaviors and spending are beginning to change by rising Covid cases (average 120K/day) – shows and events are being cancelled, restaurant reservations are down, companies are delaying return to offices. These Covid affects may tame the current high inflation without any Fed action. Fiscal stimulus payments to consumers are gone and monetary stimulus is being reduced. So, the Fed may be raising rates at a wrong time. Of course, the Fed may flip again.
Pg 78: OTHER VOICES. Ian SIEGEL, ZipRecruiter. Businesses are having problems ATTRACTING and RETAINING workers. Employee quit/resignation rates are high. Small/medium size businesses are affected the most. They are offering higher wages and benefits, signing and referral bonuses and better working conditions. There are 11 million job openings and only 6.9 million unemployed (record low ratio of 0.6 for unemployed/openings when 2+ is normal, 5-6 in recessions). Possible reasons: Covid recession was very short, and many workers are reluctant to return to work; many have retired or shifted lifestyles from 2-worker families to 1-worker families. PROACTIVE recruiting is evolving using MILITARY recruiting model and ONLINE tools (social-media, digital-platforms). Companies are starting OUTREACH programs and are not waiting for people to just apply in response to position ads. These changes to the job market are long lasting.
(EXTRAS from online Friday that didn’t make the weekend paper version)
DFA is cutting ERs on several of its mutual funds and ETFs. While DFA mutual funds are sold through advisors, or are within retirement plans, the ETFs are available to anyone.
CES will be live January 5-8, 2022 in LV. Attendees will have to show proof of vaccinations and Abbott’s Covid-19 self-test kit will be included in the registration package.