Post by Admin/YBB on May 28, 2022 5:07:34 GMT -6
Pg 35, TRADER. Finally, a WINNING WEEK! But keep your fingers crossed. The FOMC Minutes indicated strong possibilities for 2 50-bps hikes but they were vague about further hikes; Fed’s favorite inflation measure PCE indicated that inflation may have peaked. But Fed’s average inflation target of +2% may be difficult to achieve (elsewhere some suggest changing it). Former highflyers continued to fall (SNOW, WDAY, SNAP). Investors should focus on companies with earnings and cash flows.
J.P. Morgan Chase/JPM (its investor day was on Monday) led the BANK stocks (ETF KBE). But be selective on banks due to possible recession.
Online PET food and supply company Chewy’s/CHWY earnings report on Wednesday may disappoint, but it has been adding new customers. Its stuff is a bit more expensive but is in-stock (unlike AMZN where lot of lower price stuff is out-of-stock). Stock has sold off but has attractive future prospects due to new customers.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
4th & 5th rate hikes, FOMC 6/15/22+ (50 bps hike possible)
6th & 7th rate hike, FOMC 7/27/22+ (50 bps hike possible)
8th rate hike, FOMC 9/21/22+
9th rate hike, FOMC 11/2/22+
10th rate hike FOMC 12/14/22+ (target 2.50-2.75%)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +6.24%, SP500 +6.58%, Nasdaq Comp +6.84%, R2000 +6.46%. DJ Transports +7.07%; DJ Utilities +4.48%. (Rotating spot long-term Treasury TLT +0.48%) US$ index (spot) -1.44%, oil/WTI futures +1.63%, gold futures +0.52%.
YTD (index changes only), DJIA -8.60%, SP500 -12.76%, Nasdaq Comp -22.46%. (Rotating spot long-term Treasury TLT -19.64%)
Pg 48: NYSE cumulative (5-day) A/D line rose sharply after 7 weeks of decline.
Pg 39, EUROPE. Smaller European integrated-OIL/ENERGY companies TotalEnergies (TTE; fwd P/E 5; yield 5.4%), Equinor (EQNR; fwd P/E 6.8; yield 2.4% & special dividends), Repsol (REPYY; fwd P/E 5; yield 1.9%) are attractive with decent dividend prospects.
Pg 39, EMERGING MARKETS. The US-CHINA relations are a bit better since 2018. The past TARIFFS haven’t affected the US-China trade imbalance. President BIDEN is considering relaxing some tariffs to ease the inflationary pressures but there are mixed views within the administration. The Treasury Secretary YELLEN favors relaxing them but the US Trade Representative TAI and the Secretary of State BLINKEN don’t in view of complex US-China relations in global context. While President can impose tariffs easily, removing them requires Section 301 reviews that may take months; however, the President may issue selective waivers.
Pg 40, OPTIONS. Recommended are selling puts on stocks one would like to own (financial XLF, etc).
(SP500 VIX 25.72 (high), Nasdaq 100 VXN 32.00 (high), options SKEW 121.25 (not high), bond MOVE 98.48 (high) (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 41, COMMODITIES. Favorable weather in South America and weaker COFFEE demand (exports to Russia and Ukraine disappeared; China lockdowns) should lead to lower prices. ETN is JO for those willing to short.
Pg 53: A good week in EUROPE (Spain +5.02%, Denmark -1.46%) and an up week in ASIA (Indonesia +1.55%, New Zealand -2.22%).
TREASURY* 3-mo yield 1.08%, 1-yr 2.01%, 2-yr 2.47%, 5-yr 2.71%, 10-yr 2.74%, 30-yr 2.97%. DOLLAR fell, ^DXY 101.64, -1.5%% (pg 58). GOLD rose to $1,852, +0.9% (Handy & Harman spot, Thursday) (pg 68); the gold-miners rose. (^XAU was at 132.09, +1.98% for the week)
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
Top FDIC insured savings deposit rates** (This feature seems to be discontinued)
**For local rates www.depositaccounts.com/banks/rates-map/
US SAVINGS I-Bonds, current rate 9.62% (annualized). Rates change on May 1 & Nov 1.
www.treasurydirect.gov/tdhome.htm
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16: COVER STORY “CRYPTOS Roundtable – Crypto’s Future is Even More Exciting, and Maybe More Volatile, than its Present”. Panelists were Dan MOREHEAD, Pantera Capital; Eswar PRASAD, Cornell U; Alkesh SHAH, BAC; Lisa SHALETT, Morgan Stanley.
Cryptos are correlated with tech highflyers, and both have collapsed. BITCOIN has a limited supply while other cryptos have unlimited supply. Recent failures of some private STABLECOINS didn’t help. Yet institutional, corporate and retail investors are sticking with cryptos, so it may be bottoming rather than entering a new crypto-Winter phase. With collateralized stablecoins, there cannot be much secrecy that has been a strong selling point for cryptos. Privately backed stablecoins may not have much future along with the CBDC (some exist already, e.g. digital-yuan). Uncharacteristically, cryptos are showing correlations with inflation, interest rates, market liquidity. Investors may have to look into multiple aspects of crypto ecosystem – mining, exchanges, custody. More REGULATIONS are coming. The DOL will resist industry efforts (by Fidelity, etc) to introduce cryptos within the workplace retirement plans citing ERISA. The SEC hasn’t approved any physical-crypto funds yet but has approved several crypto-futures based funds. The SEC concern has been various cryptos trading on hundreds of unregulated crypto exchanges. Global crypto regulations will be further complicated by varying restrictions by countries. Crypto-mining uses lots of energy, so it isn’t ESG-friendly. Some fees on crypto transactions may support some of its costs. The underlying technology of BLOCKCHAINS is finding broader uses. New decentralized Web3 (or Web4 or Web5) may provide a boost for cryptos. Intrinsic value argument is also weak as there exist many things without intrinsic value (gold, art, collectibles).
Pg 6, UP & DOWN WALL STREET. Broad RALLY this week may cause the FED to stick to its tough message (investors have been debating whether the Fed would really go through all of the rate hikes it has talked about). The SP500 fwd P/E has come down to 16.5 (vs 21 on 1/1/22), but the analysts have yet to lower earnings estimates.
Stock and bond markets rose after several losing weeks. There was new hope that the FED may not have to tighten as much as indicated earlier. The next jobs report on Friday should be decent (+300,000); JOLTS report may show narrower gap between job openings and unemployed.
Pg 9, STREETWISE. Even with YTD losses, the SP500 indexers (-15% YTD) are beating large-cap growth (-24%), small-cap R2000 (-25%; selective SP SC 600 did better), small-cap growth R2000G (-34%), Cathie WOOD’s ARKK (-67%). It’s like the Who’s Who of the worsts. Some growth is now cheaper than value; small-cap valuations are near 2009 financial crisis lows. Rising RATES have turned the investment world upside down. But this oversold situation for small-cap growth may change by Summer. Mentioned are small-cap growth funds VBK, AOFAX and 3 cloud-software stocks AVLR, BSY, GWRE. Among the other tidbits are positive mentions for NVDA, FB, AMZN, IBKR.
(More later….)
Accessible from Morningstar (M*), Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
J.P. Morgan Chase/JPM (its investor day was on Monday) led the BANK stocks (ETF KBE). But be selective on banks due to possible recession.
Online PET food and supply company Chewy’s/CHWY earnings report on Wednesday may disappoint, but it has been adding new customers. Its stuff is a bit more expensive but is in-stock (unlike AMZN where lot of lower price stuff is out-of-stock). Stock has sold off but has attractive future prospects due to new customers.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
4th & 5th rate hikes, FOMC 6/15/22+ (50 bps hike possible)
6th & 7th rate hike, FOMC 7/27/22+ (50 bps hike possible)
8th rate hike, FOMC 9/21/22+
9th rate hike, FOMC 11/2/22+
10th rate hike FOMC 12/14/22+ (target 2.50-2.75%)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +6.24%, SP500 +6.58%, Nasdaq Comp +6.84%, R2000 +6.46%. DJ Transports +7.07%; DJ Utilities +4.48%. (Rotating spot long-term Treasury TLT +0.48%) US$ index (spot) -1.44%, oil/WTI futures +1.63%, gold futures +0.52%.
YTD (index changes only), DJIA -8.60%, SP500 -12.76%, Nasdaq Comp -22.46%. (Rotating spot long-term Treasury TLT -19.64%)
Pg 48: NYSE cumulative (5-day) A/D line rose sharply after 7 weeks of decline.
Pg 39, EUROPE. Smaller European integrated-OIL/ENERGY companies TotalEnergies (TTE; fwd P/E 5; yield 5.4%), Equinor (EQNR; fwd P/E 6.8; yield 2.4% & special dividends), Repsol (REPYY; fwd P/E 5; yield 1.9%) are attractive with decent dividend prospects.
Pg 39, EMERGING MARKETS. The US-CHINA relations are a bit better since 2018. The past TARIFFS haven’t affected the US-China trade imbalance. President BIDEN is considering relaxing some tariffs to ease the inflationary pressures but there are mixed views within the administration. The Treasury Secretary YELLEN favors relaxing them but the US Trade Representative TAI and the Secretary of State BLINKEN don’t in view of complex US-China relations in global context. While President can impose tariffs easily, removing them requires Section 301 reviews that may take months; however, the President may issue selective waivers.
Pg 40, OPTIONS. Recommended are selling puts on stocks one would like to own (financial XLF, etc).
(SP500 VIX 25.72 (high), Nasdaq 100 VXN 32.00 (high), options SKEW 121.25 (not high), bond MOVE 98.48 (high) (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 41, COMMODITIES. Favorable weather in South America and weaker COFFEE demand (exports to Russia and Ukraine disappeared; China lockdowns) should lead to lower prices. ETN is JO for those willing to short.
Pg 53: A good week in EUROPE (Spain +5.02%, Denmark -1.46%) and an up week in ASIA (Indonesia +1.55%, New Zealand -2.22%).
TREASURY* 3-mo yield 1.08%, 1-yr 2.01%, 2-yr 2.47%, 5-yr 2.71%, 10-yr 2.74%, 30-yr 2.97%. DOLLAR fell, ^DXY 101.64, -1.5%% (pg 58). GOLD rose to $1,852, +0.9% (Handy & Harman spot, Thursday) (pg 68); the gold-miners rose. (^XAU was at 132.09, +1.98% for the week)
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
Top FDIC insured savings deposit rates** (This feature seems to be discontinued)
**For local rates www.depositaccounts.com/banks/rates-map/
US SAVINGS I-Bonds, current rate 9.62% (annualized). Rates change on May 1 & Nov 1.
www.treasurydirect.gov/tdhome.htm
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16: COVER STORY “CRYPTOS Roundtable – Crypto’s Future is Even More Exciting, and Maybe More Volatile, than its Present”. Panelists were Dan MOREHEAD, Pantera Capital; Eswar PRASAD, Cornell U; Alkesh SHAH, BAC; Lisa SHALETT, Morgan Stanley.
Cryptos are correlated with tech highflyers, and both have collapsed. BITCOIN has a limited supply while other cryptos have unlimited supply. Recent failures of some private STABLECOINS didn’t help. Yet institutional, corporate and retail investors are sticking with cryptos, so it may be bottoming rather than entering a new crypto-Winter phase. With collateralized stablecoins, there cannot be much secrecy that has been a strong selling point for cryptos. Privately backed stablecoins may not have much future along with the CBDC (some exist already, e.g. digital-yuan). Uncharacteristically, cryptos are showing correlations with inflation, interest rates, market liquidity. Investors may have to look into multiple aspects of crypto ecosystem – mining, exchanges, custody. More REGULATIONS are coming. The DOL will resist industry efforts (by Fidelity, etc) to introduce cryptos within the workplace retirement plans citing ERISA. The SEC hasn’t approved any physical-crypto funds yet but has approved several crypto-futures based funds. The SEC concern has been various cryptos trading on hundreds of unregulated crypto exchanges. Global crypto regulations will be further complicated by varying restrictions by countries. Crypto-mining uses lots of energy, so it isn’t ESG-friendly. Some fees on crypto transactions may support some of its costs. The underlying technology of BLOCKCHAINS is finding broader uses. New decentralized Web3 (or Web4 or Web5) may provide a boost for cryptos. Intrinsic value argument is also weak as there exist many things without intrinsic value (gold, art, collectibles).
Pg 6, UP & DOWN WALL STREET. Broad RALLY this week may cause the FED to stick to its tough message (investors have been debating whether the Fed would really go through all of the rate hikes it has talked about). The SP500 fwd P/E has come down to 16.5 (vs 21 on 1/1/22), but the analysts have yet to lower earnings estimates.
Stock and bond markets rose after several losing weeks. There was new hope that the FED may not have to tighten as much as indicated earlier. The next jobs report on Friday should be decent (+300,000); JOLTS report may show narrower gap between job openings and unemployed.
Pg 9, STREETWISE. Even with YTD losses, the SP500 indexers (-15% YTD) are beating large-cap growth (-24%), small-cap R2000 (-25%; selective SP SC 600 did better), small-cap growth R2000G (-34%), Cathie WOOD’s ARKK (-67%). It’s like the Who’s Who of the worsts. Some growth is now cheaper than value; small-cap valuations are near 2009 financial crisis lows. Rising RATES have turned the investment world upside down. But this oversold situation for small-cap growth may change by Summer. Mentioned are small-cap growth funds VBK, AOFAX and 3 cloud-software stocks AVLR, BSY, GWRE. Among the other tidbits are positive mentions for NVDA, FB, AMZN, IBKR.
(More later….)
Accessible from Morningstar (M*), Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).