Post by Admin/YBB on Sept 10, 2022 5:23:11 GMT -6
Pg 33, TRADER. 2022 has been a VOLATILE year. This week had a technical bounce from SP500 of 3,900 (that was 9% below 200-dMA; recent high-low range was 4,300-3,600). TA projects 3,900-4,300 range near-term; a rally if the SP500 rises above 4,300; a down leg to low test if it goes below 3,900. A prudent strategy would be to lighten positions around 4,300 (with fwd P/E 18). EARNINGS for the next few quarters will decline due to Fed tightening and weakness in Europe, China, etc.
Profits while you sleep? Tiny ETFs NSPY and NIWM buy SP500 and R2000 futures, respectively, at the market close and sell at the market open.
UK-based EM wireless/telecom/infrastructure company IHS (10/2021 IPO; -63% from the IPO price; fwd P/E 12). 50% of revenues are in dollar or euro, the rest in local EM currencies (weak now). Many EMs have unreliable power and IHS relies on increasingly expensive diesel generators for backup. Insiders own 95% and tranches of 20% will be released every 6 months.
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.
10th, 11th & 12th rate hikes, FOMC 9/21/22+ (75 bps hike possible)
13th & 14th rate hikes, FOMC 11/2/22+ (50 bps hike possible)
15th rate hike, FOMC 12/14/22+ (rate 3.75-4.00%)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +2.66%, SP500 +3.65%, Nasdaq Comp +4.14%, R2000 +4.04%. DJ Transports 2.35%; DJ Utilities +3.57%. (Rotating spot small-cap R2000 +4.04%) US$ index (spot) -0.48%, oil/WTI futures -0.09%, gold futures +0.37%.
YTD (index changes only), DJIA -11.52%, SP500 -14.66%, Nasdaq Comp -22.58%. (Rotating spot small-cap R2000 -16.14%)
Pg 45: NYSE cumulative (5-day) A/D line rose; ratio of winners:losers 5:2. (Friday was also a 91% upside-volume day)
Pg 36, EUROPE. French consumer products company Danone is attractive (DANOY; fwd P/E 14). It is benefiting from strong dollar. Its brands include Evian (water), Activa (yogurt), Silk (soy milk), Delight (creamer), Aptamil (baby formula), etc.
Pg 36, EMERGING MARKETS. CHILE is a big producer of metals needed for EVs (copper, lithium, etc). Supply of those would benefit producers (BHP, ANFGF, TECK) due to the recent rejection of the new Chilean constitution that wasn’t friendly for the mining industry. The new President BORIC fired his interior and mining ministers after the defeat of the new constitution.
Pg 37, OPTIONS. This market is difficult as the rally from June lows has turned into a bull trap. Higher rates are also making bonds attractive again. Options investors should watch VIX – be bullish on quality stocks like AXP when VIX > 30, i.e. sell puts on quality stocks one wants to buy.
(SP500 VIX 22.79, Nasdaq 100 VXN 29.23, options SKEW 119.66, bond MOVE 121.54 (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 38, COMMODITIES. Even with drought, water shortages and rally in WATER futures (+21% YTD), not all water investments are doing well and that is hurting water-related ETFs (FIW, PIO, PHO) and stocks (AWK, XYL). On the other hand, water companies specializing in water infrastructure, transportation, recovery, desalination have better potential (AQWA, FEMA).
Pg 50: A down week in EUROPE (Denmark +0.34%, Norway -4.00%) and a flat week in ASIA (India +1.57%, China -2.05%).
TREASURY* 3-mo yield 3.08%, 1-yr 3.67%, 2-yr 3.56%, 5-yr 3.45%, 10-yr 3.33%, 30-yr 3.47%. REAL yields 5-yr 0.94%, 10-yr 0.91%, 30-yr 1.14%.
DOLLAR declined, ^DXY 108.97, -58% (20-yr high was 110.79 on Wednesday; pg 58). GOLD was flat at $1,713, UNCH (Handy & Harman spot, Thursday) (pg 60); the gold-miners rose sharply. (^XAU was at 105.00, +7.07% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, current rate 9.62% (annualized). Rates change on May 1 & Nov 1.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) 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 18: COVER STORY, ”El Salvador’s Lonely BITCOIN Experiment: It’s Either the Biggest Failure or the Biggest Con.” Bitcoin is legally accepted for the purchases of goods in El Salvador but few are using it ( < 20% in spite of aggressive promos, including distributing some free Bitcoin) beyond tourist spots and beaches. Crypto crash hasn’t helped. Internet use and e-commerce remain at low levels. The economic situation has worsened due to pandemic, high government debt, losses on Bitcoin held. Hard currency bonds coming due soon may not be paid on time and are trading at discounts. Talks for the IMF loans have broken down. Lesson for other countries is to wait for official CBDCs.
Pg 5, UP & DOWN WALL STREET. Kim KARDASHIAN has a new private-equity venture. Private-equity hasn’t yet declined like the public markets but that may be coming with some delay. Stephanie POMBOY (MacroMavens) says that household net worth will be negatively impacted by the FED tightening (rate hikes, QT); housing is already seeing that effect; some formerly retired workers may have to rejoin the workforce; the current household exposure to equities is quite high; declines in housing and stocks will cause consumer spending to go down.
Taming INFLATION (to +2% average) could be harder than the FED thinks. Stocks rallied Wednesday-Friday as traders returned from their Summer vacations. The CME FedWatch is projecting +75 bps hike on 9/21/22, +50 bps in November, +25 bps in December. The ECB hike was +75 bps, and the postponed BOE meeting (due to the passing of Queen Elizabeth II) may hike by +50 or +75 bps on 9/22/22. The next CPI report will show whether the US inflation is moderating. The question for the US investors would then be whether the Fed has to go beyond 4% in 2023 or may pause there for a while. Keep in mind that QT will contribute additional hike(s) of unknown magnitude(s), and higher dollar has already caused +100 bps hike effect.
Pg 9, STREETWISE. The US (CF, LXU, etc) and Canadian (NTR, etc) FERTILIZER companies are rallying due to severe shortages of NATURAL GAS in Europe. They can use much cheaper natural gas (the European prices are 8x-10x the US prices) to produce and export nitrogen fertilizers to Europe (natural gas is used to produce ammonia and urea for fertilizers). Fertilizers are also easier to ship than LNG. Prices of ag-crops are rising as fertilizers are important inputs.
Forget iPhones, WATCHES stole the show at Apple’s/AAPL ho-hum new products launch.
(More later….)
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
Profits while you sleep? Tiny ETFs NSPY and NIWM buy SP500 and R2000 futures, respectively, at the market close and sell at the market open.
UK-based EM wireless/telecom/infrastructure company IHS (10/2021 IPO; -63% from the IPO price; fwd P/E 12). 50% of revenues are in dollar or euro, the rest in local EM currencies (weak now). Many EMs have unreliable power and IHS relies on increasingly expensive diesel generators for backup. Insiders own 95% and tranches of 20% will be released every 6 months.
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.
10th, 11th & 12th rate hikes, FOMC 9/21/22+ (75 bps hike possible)
13th & 14th rate hikes, FOMC 11/2/22+ (50 bps hike possible)
15th rate hike, FOMC 12/14/22+ (rate 3.75-4.00%)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +2.66%, SP500 +3.65%, Nasdaq Comp +4.14%, R2000 +4.04%. DJ Transports 2.35%; DJ Utilities +3.57%. (Rotating spot small-cap R2000 +4.04%) US$ index (spot) -0.48%, oil/WTI futures -0.09%, gold futures +0.37%.
YTD (index changes only), DJIA -11.52%, SP500 -14.66%, Nasdaq Comp -22.58%. (Rotating spot small-cap R2000 -16.14%)
Pg 45: NYSE cumulative (5-day) A/D line rose; ratio of winners:losers 5:2. (Friday was also a 91% upside-volume day)
Pg 36, EUROPE. French consumer products company Danone is attractive (DANOY; fwd P/E 14). It is benefiting from strong dollar. Its brands include Evian (water), Activa (yogurt), Silk (soy milk), Delight (creamer), Aptamil (baby formula), etc.
Pg 36, EMERGING MARKETS. CHILE is a big producer of metals needed for EVs (copper, lithium, etc). Supply of those would benefit producers (BHP, ANFGF, TECK) due to the recent rejection of the new Chilean constitution that wasn’t friendly for the mining industry. The new President BORIC fired his interior and mining ministers after the defeat of the new constitution.
Pg 37, OPTIONS. This market is difficult as the rally from June lows has turned into a bull trap. Higher rates are also making bonds attractive again. Options investors should watch VIX – be bullish on quality stocks like AXP when VIX > 30, i.e. sell puts on quality stocks one wants to buy.
(SP500 VIX 22.79, Nasdaq 100 VXN 29.23, options SKEW 119.66, bond MOVE 121.54 (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 38, COMMODITIES. Even with drought, water shortages and rally in WATER futures (+21% YTD), not all water investments are doing well and that is hurting water-related ETFs (FIW, PIO, PHO) and stocks (AWK, XYL). On the other hand, water companies specializing in water infrastructure, transportation, recovery, desalination have better potential (AQWA, FEMA).
Pg 50: A down week in EUROPE (Denmark +0.34%, Norway -4.00%) and a flat week in ASIA (India +1.57%, China -2.05%).
TREASURY* 3-mo yield 3.08%, 1-yr 3.67%, 2-yr 3.56%, 5-yr 3.45%, 10-yr 3.33%, 30-yr 3.47%. REAL yields 5-yr 0.94%, 10-yr 0.91%, 30-yr 1.14%.
DOLLAR declined, ^DXY 108.97, -58% (20-yr high was 110.79 on Wednesday; pg 58). GOLD was flat at $1,713, UNCH (Handy & Harman spot, Thursday) (pg 60); the gold-miners rose sharply. (^XAU was at 105.00, +7.07% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, current rate 9.62% (annualized). Rates change on May 1 & Nov 1.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) 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 18: COVER STORY, ”El Salvador’s Lonely BITCOIN Experiment: It’s Either the Biggest Failure or the Biggest Con.” Bitcoin is legally accepted for the purchases of goods in El Salvador but few are using it ( < 20% in spite of aggressive promos, including distributing some free Bitcoin) beyond tourist spots and beaches. Crypto crash hasn’t helped. Internet use and e-commerce remain at low levels. The economic situation has worsened due to pandemic, high government debt, losses on Bitcoin held. Hard currency bonds coming due soon may not be paid on time and are trading at discounts. Talks for the IMF loans have broken down. Lesson for other countries is to wait for official CBDCs.
Pg 5, UP & DOWN WALL STREET. Kim KARDASHIAN has a new private-equity venture. Private-equity hasn’t yet declined like the public markets but that may be coming with some delay. Stephanie POMBOY (MacroMavens) says that household net worth will be negatively impacted by the FED tightening (rate hikes, QT); housing is already seeing that effect; some formerly retired workers may have to rejoin the workforce; the current household exposure to equities is quite high; declines in housing and stocks will cause consumer spending to go down.
Taming INFLATION (to +2% average) could be harder than the FED thinks. Stocks rallied Wednesday-Friday as traders returned from their Summer vacations. The CME FedWatch is projecting +75 bps hike on 9/21/22, +50 bps in November, +25 bps in December. The ECB hike was +75 bps, and the postponed BOE meeting (due to the passing of Queen Elizabeth II) may hike by +50 or +75 bps on 9/22/22. The next CPI report will show whether the US inflation is moderating. The question for the US investors would then be whether the Fed has to go beyond 4% in 2023 or may pause there for a while. Keep in mind that QT will contribute additional hike(s) of unknown magnitude(s), and higher dollar has already caused +100 bps hike effect.
Pg 9, STREETWISE. The US (CF, LXU, etc) and Canadian (NTR, etc) FERTILIZER companies are rallying due to severe shortages of NATURAL GAS in Europe. They can use much cheaper natural gas (the European prices are 8x-10x the US prices) to produce and export nitrogen fertilizers to Europe (natural gas is used to produce ammonia and urea for fertilizers). Fertilizers are also easier to ship than LNG. Prices of ag-crops are rising as fertilizers are important inputs.
Forget iPhones, WATCHES stole the show at Apple’s/AAPL ho-hum new products launch.
(More later….)
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).