Post by Admin/YBB on Apr 30, 2022 8:36:52 GMT -6
Pg 6-7. FOMC Statement (50-75 bps hike) and POWELL’s press conference on WEDNESDAY.
REVIEW. In Q1 earnings calls, companies have reported some easing of the SUPPLY-CHAIN issues and the worst may be behind.
PREVIEW. With Summer approaching, PUTIN’s threats for NATURAL GAS supplies will matter less. Europe has also found some alternate supplies as new pipelines have come on line and LNG imports have increased.
DATA THIS WEEK. ISM manufacturing PMI, construction spending on MONDAY; JOLTS report, durable goods orders, factory orders on TUESDAY; ADP employment report, ISM services PMI, international trade deficit on WEDNESDAY; Q1 productivity on THURSDAY; jobs report (+375,000), unemployment rate (3.6%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Cruise industry (CCL, RCL, NCLH; post-pandemic rebound is hoped but many challenges remain; pg 12);
Small-cap used-car dealer Lithia Motors (LAD; fwd P/E 6; 280 dealerships; high sales growth from organic growth and acquisitions; 25% profits from parts and services; EV service promotions; omnichannel strategy; growing auto loans; competition from VRM, CVNA, etc; pg 20).
BEARISH. See other stories.
Pg 8, FOLLOW UP. Music streaming leader Spotify/SPOT (2018 IPO; peaked at P/S 5, now P/S 2) fell to new all-time low after disappointing results. Since 2019 it has tried to expand into podcasting but that hasn’t worked out well. Losses are expected at least until 2023. May be it should go private like Twitter/TWTR (Musk is taken, but does he have a brother?).
Pg 9: FIDELITY will offer Bitcoin and other CRYPTOS within its 401k/403b with 0.75-0.90% account fees. Employers will have the choice to include in their plans; MicroStrategy/MSTR has already signed up. The DOL has indicated concerns about ERISA. Investor-protection groups are against the idea. Insurers may raise retirement plan insurance premiums for those employers who decide to offer cryptos.
Pg 10: Despite FDA’s controversial approval of Biogen’s/BIIB Alzheimer drug, companies (BIIB, LLY, ESALY, RHHBY) face challenges ahead due to Medicare’s reluctance.
Pg 18: Ruchir SHARMA, Chairman (02/2022- ) of Rockefeller International (unit of Rockefeller Capital Management) and Breakout Capital (new). Russia-Ukraine WAR will have minor long-term economic effects. CHINA has many issues now and is not attractive; he has reduced exposure but has not completely exited. Bilateral and regional TRADE deals will replace globalization for which the pandemic and Russia-Ukraine war were the last straws. There will be impacts of this global shift in margins and earnings for several years. EM growth expectations have to be reduced. EMs generally benefit from strong commodities (Brazil and other Lat Am, Indonesia, etc). Another play is shift away from China into other EMs (Vietnam, etc). Beneficiaries of these trends will be companies in consumer, infrastructure areas; less attractive are global luxury companies. The US is now 62% of global market cap but only 26% of global economy, so investors have to realistic about the future prospects. DOLLAR has been a dominant currency for 100 years and historically there have been shifts beyond that (British pound, etc); weaponization of dollar will have negative impact on its reserve status although there is no good alternative now.
Pg 21, FUNDS. Peter ZYMALI, Mike HUNSTAD, Jeffrey SAMPSON of US high-quality large-cap ESG fund NUEIX/ NUESX don’t use exclusionary approach to ESG but inclusionary approach with desirable/ positive ESG changes (so, energy is 0.9%). Fund uses proprietary Northern Trust Quality Scores for ESG and uses an active quantitative approach for portfolio construction; risk controls include +/- 2% deviation from index sector and industries. NUEIX is no-load/ NTF at Fidelity and Schwab.
Pg 23, TECH TRADER. BIG TECHS couldn’t save the tech sector. Problems cited included supply-chain disruptions; slowing ad revenues (lower budgets; privacy setting change by AAPL); expectations (too high or low); poor guidance (pandemic boom for online sales has passed). Good news was from cloud-computing.
Pg 24: ECONOMY. Forget soft landing. RECESSION is the only fix for high inflation and hot housing market. Perish those false hopes – 1st, it was transitory inflation; 2nd was the peak inflation; 3rd now is that the negative Q1 GDP was a fluke. The pandemic, followed by Russia-Ukraine war, followed by Covid-19 lockdowns in China – those shocks are too much for fragile and recovering global economy. Some superficially strong data have weak underpinnings. SMALL BUSINESSES have become less optimistic, and their capex are down. Economists, strategists and the Main Street have yet to adjust for possible recession. The FOMC is this week on Wednesday. The Fed may have to prioritize inflation fighting at the expense of economy and the markets and the Fed-put may not kick in until 50% decline in the markets.
Pg 25: INCOME INVESTING. Selected REITs are attractive: Grocery-anchored malls BRX; lodging/hotels APLE, HST, PK; senior housing VTR; apartments CPT, MAA. Avoid industrial, office, other mall REITs.
Pg 62: OTHER VOICES. Marcus BUCKINGHAM and Nela RICHARDSON, ADP. There is post-pandemic realignment between work and home. Employers will need flexibility on locations and time schedules. Remote work option will become a long-term reality. Diversity, equity and inclusion (DEI) will become key factors. While many job openings remain, many employers are finding it hard to fill some positions as these factors play out.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Also accessible from Morningstar (M*), Big Bang, Facebook (“at” yogibearbull), Twitter (“at” YBB_Finance).
REVIEW. In Q1 earnings calls, companies have reported some easing of the SUPPLY-CHAIN issues and the worst may be behind.
PREVIEW. With Summer approaching, PUTIN’s threats for NATURAL GAS supplies will matter less. Europe has also found some alternate supplies as new pipelines have come on line and LNG imports have increased.
DATA THIS WEEK. ISM manufacturing PMI, construction spending on MONDAY; JOLTS report, durable goods orders, factory orders on TUESDAY; ADP employment report, ISM services PMI, international trade deficit on WEDNESDAY; Q1 productivity on THURSDAY; jobs report (+375,000), unemployment rate (3.6%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Cruise industry (CCL, RCL, NCLH; post-pandemic rebound is hoped but many challenges remain; pg 12);
Small-cap used-car dealer Lithia Motors (LAD; fwd P/E 6; 280 dealerships; high sales growth from organic growth and acquisitions; 25% profits from parts and services; EV service promotions; omnichannel strategy; growing auto loans; competition from VRM, CVNA, etc; pg 20).
BEARISH. See other stories.
Pg 8, FOLLOW UP. Music streaming leader Spotify/SPOT (2018 IPO; peaked at P/S 5, now P/S 2) fell to new all-time low after disappointing results. Since 2019 it has tried to expand into podcasting but that hasn’t worked out well. Losses are expected at least until 2023. May be it should go private like Twitter/TWTR (Musk is taken, but does he have a brother?).
Pg 9: FIDELITY will offer Bitcoin and other CRYPTOS within its 401k/403b with 0.75-0.90% account fees. Employers will have the choice to include in their plans; MicroStrategy/MSTR has already signed up. The DOL has indicated concerns about ERISA. Investor-protection groups are against the idea. Insurers may raise retirement plan insurance premiums for those employers who decide to offer cryptos.
Pg 10: Despite FDA’s controversial approval of Biogen’s/BIIB Alzheimer drug, companies (BIIB, LLY, ESALY, RHHBY) face challenges ahead due to Medicare’s reluctance.
Pg 18: Ruchir SHARMA, Chairman (02/2022- ) of Rockefeller International (unit of Rockefeller Capital Management) and Breakout Capital (new). Russia-Ukraine WAR will have minor long-term economic effects. CHINA has many issues now and is not attractive; he has reduced exposure but has not completely exited. Bilateral and regional TRADE deals will replace globalization for which the pandemic and Russia-Ukraine war were the last straws. There will be impacts of this global shift in margins and earnings for several years. EM growth expectations have to be reduced. EMs generally benefit from strong commodities (Brazil and other Lat Am, Indonesia, etc). Another play is shift away from China into other EMs (Vietnam, etc). Beneficiaries of these trends will be companies in consumer, infrastructure areas; less attractive are global luxury companies. The US is now 62% of global market cap but only 26% of global economy, so investors have to realistic about the future prospects. DOLLAR has been a dominant currency for 100 years and historically there have been shifts beyond that (British pound, etc); weaponization of dollar will have negative impact on its reserve status although there is no good alternative now.
Pg 21, FUNDS. Peter ZYMALI, Mike HUNSTAD, Jeffrey SAMPSON of US high-quality large-cap ESG fund NUEIX/ NUESX don’t use exclusionary approach to ESG but inclusionary approach with desirable/ positive ESG changes (so, energy is 0.9%). Fund uses proprietary Northern Trust Quality Scores for ESG and uses an active quantitative approach for portfolio construction; risk controls include +/- 2% deviation from index sector and industries. NUEIX is no-load/ NTF at Fidelity and Schwab.
Pg 23, TECH TRADER. BIG TECHS couldn’t save the tech sector. Problems cited included supply-chain disruptions; slowing ad revenues (lower budgets; privacy setting change by AAPL); expectations (too high or low); poor guidance (pandemic boom for online sales has passed). Good news was from cloud-computing.
Pg 24: ECONOMY. Forget soft landing. RECESSION is the only fix for high inflation and hot housing market. Perish those false hopes – 1st, it was transitory inflation; 2nd was the peak inflation; 3rd now is that the negative Q1 GDP was a fluke. The pandemic, followed by Russia-Ukraine war, followed by Covid-19 lockdowns in China – those shocks are too much for fragile and recovering global economy. Some superficially strong data have weak underpinnings. SMALL BUSINESSES have become less optimistic, and their capex are down. Economists, strategists and the Main Street have yet to adjust for possible recession. The FOMC is this week on Wednesday. The Fed may have to prioritize inflation fighting at the expense of economy and the markets and the Fed-put may not kick in until 50% decline in the markets.
Pg 25: INCOME INVESTING. Selected REITs are attractive: Grocery-anchored malls BRX; lodging/hotels APLE, HST, PK; senior housing VTR; apartments CPT, MAA. Avoid industrial, office, other mall REITs.
Pg 62: OTHER VOICES. Marcus BUCKINGHAM and Nela RICHARDSON, ADP. There is post-pandemic realignment between work and home. Employers will need flexibility on locations and time schedules. Remote work option will become a long-term reality. Diversity, equity and inclusion (DEI) will become key factors. While many job openings remain, many employers are finding it hard to fill some positions as these factors play out.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Also accessible from Morningstar (M*), Big Bang, Facebook (“at” yogibearbull), Twitter (“at” YBB_Finance).