Post by Admin/YBB on Aug 20, 2022 9:39:43 GMT -6
Pg 12-13. Fed Symposium in Jackson Hole, WY from Thursday-Saturday (POWELL speaks at 10 AM EDT on FRIDAY).
REVIEW. Forget what Warren BUFFETT/BRK says, just be like him and buy T-Bills; BRK owns $105 billion.
PREVIEW. While OIL prices have come down, NATURAL GAS prices remain near their highs. One factor is that Russia keeps exporting oil but has cut down sharply on the exports of natural gas. Investors can play with EQT, RRC, SWN, CTRA and LNG, GLNG, EOG, SHEL.
DATA THIS WEEK: Chicago Fed national activity index on MONDAY; new home sales, manufacturing PMI, services PMI on TUESDAY; durable goods report on WEDNESDAY; GDP (2nd est) on THURSDAY; personal income and spending, wholesale inventories, UM Sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Regional bank PNC (yield 3.5%; fwd P/E 12; 4% buybacks; good Q2 report and good guidance; assets $541 billion but not a G-SIB, so has lesser capital requirements; bought the US operations of Spanish bank BBVA in 2021 from the sale of its BLK stake; now in top 30 markets; pg 16);
Haleon (HLN; planned yield 2.3% from 2023; fwd P/E 13.4; never heard of it? It is the new consumer-healthcare spinoff from GSK with brands Advil, Aquafresh, Centrum, ChapStick, Excedrin, Flonase, Polident, Preparation H, Robitussin, Sensodyne, Theraflu, Tums, etc; risks – high net debt/EBITDA of 4 with goal to reduce, 45% owned by GSK & PFE with lockups expiring on 11/10/22, liabilities from lawsuits over Zantac; pg 17).
BEARISH. See other stories.
Pg 14, CHINA Reassessed. After years of strong performance, China has been sputtering. Its techs, property sector and startup/IPO markets are suffering. Youth unemployment is rising. High debt levels make new stimulus difficult, but it is using other tools for easing monetary policy (while much of the world is tightening). Some of it is due to misdirected government policies and authoritative turn but China has also been affected by other factors (Covid, geopolitical, US-China tensions, China-Taiwan tensions). The 20th Communist Party Congress is in Fall and President XI is aiming for an unprecedented 3rd term. Now, with Chinese stocks down -50% from 2021 highs, fwd P/E of only 10 and investor sentiment extremely negative, some attractive values are emerging. However, the newer plays would be different (e.g. healthcare, financials, consumer-oriented, semis, renewable energy, even some state-owned/controlled companies) than those in the past (big techs whose business models may be damaged). Mentioned are ODMAX, DREGX, LZOEX, GQGPX, MACSX, ETF RAYC.
Pg 18: With increased budget (by +$80 billion), the IRS will step up audits for partnerships, S Corps, crypto traders, foreign income, more middle/high-class households to close the estimated $600 billion gap between what the taxpayers owe vs pay. Audit rates may go up from the current historic low of 0.25% to more typical (1% in 2010, 1.7% in 1995); most audits may be automatic notices based on inconsistency flagged by IRS computers followed by some rigorous in-person audits. Taxpayers should keep good records. Its phone service and computer systems may improve; IRS still relies on paper, mail or faxes for most communications.
Pg 22: Hyung KIM of the emerging-markets (EM) small-cap VAESX has a long-term view beyond the short-term difficulties of the EMs now. The fund is concentrated with about 40 holdings and uses a fundamental approach; China exposure is only 7%. He is concerned about the US-China and China-Taiwan relations.
Pg 24, TECH TRADER. TECHS have soared since mid-June lows, but a bear-rally led by COIN, FUBO, etc isn’t sustainable. Demand for consumer electronics (PCs, smartphones, appliances/gadgets, etc) is soft and that is now spreading to enterprise (with reduced capex). Several tech companies have reported poor Q2 earnings and/or provided poor guidance. Stick with long-term winners (MSFT, AMD, GOOGL, TSM, etc).
Pg 25: INCOME. The FEBRUARY-effect for DIVIDENDS in the dogdays of August? Most companies are on calendar fiscal years and February has been the month with most dividend increase announcements; August has been a so-so month. But with new TAXES on buybacks in 2023, there is a rush to boost dividends in August; some buybacks may also be pulled forward. 2022 should be another record year for dividend $payouts. YTD and short-term, high-dividend funds (PRFDX, VYM) are outperforming dividend-growth funds (PRDGX, VIG) (dividend-blend SCHD is in-between but a better longer-term performer).
Pg 26: Haim ISRAEL, BoA/BAC looks for BIG THEMES such as demographics (peak working population, Gen Z (born 1996-2016) and Gen C (born after 2016), pensions, healthcare), changing world order (US, China, Europe), deglobalization, energy independence, quantum computing and 6G, climate, nuclear fusion. Some trends have been impacted by Covid pandemic, US-China tensions, Russia-Ukraine war. The next important demographic groups will be Gen Z and Gen C (not Gen X or millennials) as they are growing up fully in the online-smartphone-e-commerce-Uber world and their thinking and habits will be fundamentally different (on cars, shopping, housing, credit). Mentioned are PRU, HON, NEE, BE.
Pg 54, Kenneth PRINGLE, Barron’s Feature Writer. There is a long history of WAR/conflicts leading to PROGRESS. (In the following, I have included notable developments, good or bad; the look here is beyond the human death and tragedy of the wars) Post-Civil War, there were better government, evolution of Capitalism (Morgan, Vanderbilt, etc), transcontinental railroad, American Industrial Revolution, etc. Post-WW I, there were several new global systems and rise in wealth (Roaring 1920s) until the Great Depression (1929). Post-WW II saw UN, NATO, Marshal Plan (for Europe), EU and Eurozone, military-industrial complex, highways, air travel, fast foods, suburbia, digital revolution, Vietnam War, September 11 (2001) and more wars, mortgage crisis (2008), Covid pandemic (2020), etc. It is too early to determine all of the impacts of Russia-Ukraine war that is now approaching 6 months – so far, the effects have been mostly negative (inflation, supply-chain disruptions), and opposite to what PUTIN/Russia intended/wanted; but we need to know the outcome first before the positives emerge.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. Forget what Warren BUFFETT/BRK says, just be like him and buy T-Bills; BRK owns $105 billion.
PREVIEW. While OIL prices have come down, NATURAL GAS prices remain near their highs. One factor is that Russia keeps exporting oil but has cut down sharply on the exports of natural gas. Investors can play with EQT, RRC, SWN, CTRA and LNG, GLNG, EOG, SHEL.
DATA THIS WEEK: Chicago Fed national activity index on MONDAY; new home sales, manufacturing PMI, services PMI on TUESDAY; durable goods report on WEDNESDAY; GDP (2nd est) on THURSDAY; personal income and spending, wholesale inventories, UM Sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Regional bank PNC (yield 3.5%; fwd P/E 12; 4% buybacks; good Q2 report and good guidance; assets $541 billion but not a G-SIB, so has lesser capital requirements; bought the US operations of Spanish bank BBVA in 2021 from the sale of its BLK stake; now in top 30 markets; pg 16);
Haleon (HLN; planned yield 2.3% from 2023; fwd P/E 13.4; never heard of it? It is the new consumer-healthcare spinoff from GSK with brands Advil, Aquafresh, Centrum, ChapStick, Excedrin, Flonase, Polident, Preparation H, Robitussin, Sensodyne, Theraflu, Tums, etc; risks – high net debt/EBITDA of 4 with goal to reduce, 45% owned by GSK & PFE with lockups expiring on 11/10/22, liabilities from lawsuits over Zantac; pg 17).
BEARISH. See other stories.
Pg 14, CHINA Reassessed. After years of strong performance, China has been sputtering. Its techs, property sector and startup/IPO markets are suffering. Youth unemployment is rising. High debt levels make new stimulus difficult, but it is using other tools for easing monetary policy (while much of the world is tightening). Some of it is due to misdirected government policies and authoritative turn but China has also been affected by other factors (Covid, geopolitical, US-China tensions, China-Taiwan tensions). The 20th Communist Party Congress is in Fall and President XI is aiming for an unprecedented 3rd term. Now, with Chinese stocks down -50% from 2021 highs, fwd P/E of only 10 and investor sentiment extremely negative, some attractive values are emerging. However, the newer plays would be different (e.g. healthcare, financials, consumer-oriented, semis, renewable energy, even some state-owned/controlled companies) than those in the past (big techs whose business models may be damaged). Mentioned are ODMAX, DREGX, LZOEX, GQGPX, MACSX, ETF RAYC.
Pg 18: With increased budget (by +$80 billion), the IRS will step up audits for partnerships, S Corps, crypto traders, foreign income, more middle/high-class households to close the estimated $600 billion gap between what the taxpayers owe vs pay. Audit rates may go up from the current historic low of 0.25% to more typical (1% in 2010, 1.7% in 1995); most audits may be automatic notices based on inconsistency flagged by IRS computers followed by some rigorous in-person audits. Taxpayers should keep good records. Its phone service and computer systems may improve; IRS still relies on paper, mail or faxes for most communications.
Pg 22: Hyung KIM of the emerging-markets (EM) small-cap VAESX has a long-term view beyond the short-term difficulties of the EMs now. The fund is concentrated with about 40 holdings and uses a fundamental approach; China exposure is only 7%. He is concerned about the US-China and China-Taiwan relations.
Pg 24, TECH TRADER. TECHS have soared since mid-June lows, but a bear-rally led by COIN, FUBO, etc isn’t sustainable. Demand for consumer electronics (PCs, smartphones, appliances/gadgets, etc) is soft and that is now spreading to enterprise (with reduced capex). Several tech companies have reported poor Q2 earnings and/or provided poor guidance. Stick with long-term winners (MSFT, AMD, GOOGL, TSM, etc).
Pg 25: INCOME. The FEBRUARY-effect for DIVIDENDS in the dogdays of August? Most companies are on calendar fiscal years and February has been the month with most dividend increase announcements; August has been a so-so month. But with new TAXES on buybacks in 2023, there is a rush to boost dividends in August; some buybacks may also be pulled forward. 2022 should be another record year for dividend $payouts. YTD and short-term, high-dividend funds (PRFDX, VYM) are outperforming dividend-growth funds (PRDGX, VIG) (dividend-blend SCHD is in-between but a better longer-term performer).
Pg 26: Haim ISRAEL, BoA/BAC looks for BIG THEMES such as demographics (peak working population, Gen Z (born 1996-2016) and Gen C (born after 2016), pensions, healthcare), changing world order (US, China, Europe), deglobalization, energy independence, quantum computing and 6G, climate, nuclear fusion. Some trends have been impacted by Covid pandemic, US-China tensions, Russia-Ukraine war. The next important demographic groups will be Gen Z and Gen C (not Gen X or millennials) as they are growing up fully in the online-smartphone-e-commerce-Uber world and their thinking and habits will be fundamentally different (on cars, shopping, housing, credit). Mentioned are PRU, HON, NEE, BE.
Pg 54, Kenneth PRINGLE, Barron’s Feature Writer. There is a long history of WAR/conflicts leading to PROGRESS. (In the following, I have included notable developments, good or bad; the look here is beyond the human death and tragedy of the wars) Post-Civil War, there were better government, evolution of Capitalism (Morgan, Vanderbilt, etc), transcontinental railroad, American Industrial Revolution, etc. Post-WW I, there were several new global systems and rise in wealth (Roaring 1920s) until the Great Depression (1929). Post-WW II saw UN, NATO, Marshal Plan (for Europe), EU and Eurozone, military-industrial complex, highways, air travel, fast foods, suburbia, digital revolution, Vietnam War, September 11 (2001) and more wars, mortgage crisis (2008), Covid pandemic (2020), etc. It is too early to determine all of the impacts of Russia-Ukraine war that is now approaching 6 months – so far, the effects have been mostly negative (inflation, supply-chain disruptions), and opposite to what PUTIN/Russia intended/wanted; but we need to know the outcome first before the positives emerge.
(EXTRAS from online Friday that didn’t make the weekend paper version)
None
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).