Post by Admin/YBB on Oct 1, 2022 10:53:24 GMT -6
Pg 8-9.
REVIEW. Biogen/BIIB (with partner Eisai/ESALY) will get another shot at ALZHEIMER with drug lecanemab after its debacle with aducanumab/Aduhelm; it is also looking for a new CEO. LLY and RHHBY also have similar drugs under development.
PREVIEW. US MULTINATIONALS and companies with high foreign exposures are being hurt by strong DOLLAR (PM, MDLZ, BKNG, LRCX, etc).
DATA THIS WEEK. ISM manufacturing PMI, construction spending on MONDAY; JOLTS Report, factory orders on TUESDAY; ADP national employment report, ISM services PMI, international trade balance on WEDNESDAY; weekly initial jobless claims on THURSDAY; consumer credit, jobs report (+250,000), unemployment rate (3.7%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Hair-care company Olaplex (OLPX; EV/EBITDA 17.4; 09/2021 IPO now down -54%; private-equity Advent owns 76%; channels include barbers/hairstylists, direct-to-consumers online, retail stores (Sephora, etc); business model is remote operations; pg 15);
SPAC survivors post-boom (OWL, CHPT, LAZR, RKLB, VCSA, SEAT; the SPAC boom ended in 2021 and these are among the survivors; pg 16).
BEARISH. See other stories.
Pg 10: INCOME. A historic BOND BEAR market (with LT Treasuries down more than EM debt!) has now created several opportunities. The FED rate tightening isn’t over but is near the tail end; the fed funds may peak at 4.6% in 2023 (current 3.25%; remember that the Fed only controls the ST rates while the IT/LT rates are market-based and look ahead). The BOE had to intervene to rescue the UK bond/gilt market last week. There is no coordination (yet) among the central bankers/countries on rates/currencies although most are facing the same global issues (supply-chain, inflation, energy, Russia-Ukraine war, etc). I have filled some (obvious gaps).
Treasuries: SHY, IEF, VGIT, (T-Bills/Notes at brokerages or Treasury Direct)
Corporates: VCSH, LQD; individual from MSFT, GS, BUD, ABT, T, BAC, etc.
Munis: MUB, individual munis
Preferreds: PFF, individuals from BoA, Munich Re, etc
Dividend Stocks: NOBL, (VYM, VIG, SCHD); individual JNJ, KO, KMB, BMY, SRE, etc
REITs: WWMCX, (VNQ, XLRE); individual ARE, NSA, AMH, etc
Pg 13: New UK Government’s (PM TRUSS) tax cut proposals sank the UK pound, bonds/gilts (BOE had to intervene) and stocks. The UK also faces several issues related to N Ireland, Scotland and with the EU post-Brexit. The UK stocks look cheap but may not be bargains yet (EWU P/E 8.5), especially with new government’s economic policies that have drawn worldwide criticism/ridicule. The BOE also lacks resources to continue propping up the UK gilt and pound.
Pg 17: FUNDS. Karl ZEILE of core intermediate-term muni AFTEX buys munis at discounts. He is willing to take some credit risks and has some munis rated BBB+ (technically investment-grade but considered low for munis). Fund has 10% cash now for extra liquidity.
Pg 19: ECONOMY. The FED PUT isn’t dead, it is just deferred. With GLOBAL financial concerns growing, it is believed that in a crunch, the Fed will act appropriately. BANKS are required to hold lots of Treasuries because they are considered risk-free and stable assets, and there is chaos when that isn’t so. Bond volatility MOVE has risen sharply to crisis levels. DOLLAR’s rise is also causing global CURRENCY problems that are forcing other governments/central banks to intervene. The US QT isn’t just from the Fed, but the overseas demand for dollars has also dried up; in fact, other governments have to sell dollars to defend their collapsing currencies. The bottom line is that the current worsening of financial conditions is due to Fed’s inflation fighting agenda, but when that leads to other systemic issues, the Fed will pivot.
Pg 20: Rick RIEDER, BlackRock CIO; BSIIX, etc. This has been an ugly bear market for BONDS and financial conditions are still tightening very rapidly. Combined effects of rising RATES and QT are underestimated. Strong DOLLAR is causing global problems – the BOE had to intervene to rescue the UK bond market; the EMs will have difficulty with dollar-denominated debt; several countries have intervened in the currency markets. Stick with shorter durations and better credits for now. There will be time later to extend duration and credit risks when FED’s terminal rate for fed funds is in sight. HY spreads are so-so although HY at 9%+ look interesting. The MBS may be under stress, so avoid credit risks there. For STOCKS, put buying is high, so puts are expensive; sell OTM puts to buy OTM calls. Both stocks and bonds have adjusted sharply to monetary tightening, the latter faster than the former. “Buy the dips” doesn’t work during QT. But better times will arrive, so suitably adjust portfolios and be patient.
Pg 22, TECH TRADER. Bottom fishing is dangerous. But several techs are now attractive after selloffs due to valuations and lower earnings. Especially attractive are cloud-businesses (AMZN, MSFT, GOOGL), software (CRWD, DDOG, INTU, IOT, NET, RNG, SMRT, SNOW, ZS), software-as-a-service (Saas; TEAM, PANW, HUBS, SNOW), semis for autos (ON, NXPI, IFNNY, WOLF, STM).
Pg 50: OTHER VOICES. Joseph QUINLAN and Lauren SANFILIPPO, BoA/ML (BAC). A European RECESSION will also impact the US through earnings (multinationals), trade, dollar (currency translations), geopolitics (defense expenditures; resolve to support Ukraine). Global GDPs are Europe 25%, US 24%, China 18%. Europe also has wealthy consumers. Energy may be the only US sector to immediately benefit from the current troubles of Europe. The US should look broadly for its global interests in dealing with Europe. The US investors too should think beyond the Fed, US-China frictions, and pay attention to what is going on in Europe.
Supplement GUIDE TO WEALTH has the Cover Story (see Part 1), the following features, and ad listings of Top Advisor Guide (by states), Top RIA Firms, Top Advisory Teams.
Pg S2: See Cover Story in Part 1
Pg S4: 5 top stocks from 5 advisors/portfolio managers: AMZN, CP, MSFT, CVX, LAMR
Pg S6: BOND LADDERS for Treasuries and corporates are popular now. A 5-yr bond ladder involves buying bonds with 1- to 5- year maturities right away and then roll maturing ones into 5-yr maturities. Advantages are that bonds are held to maturity and periodic cash flows are available if needed. On the other hand, typical bond funds don’t mature, and their values fluctuate based on interest rates and duration. There are also some ETFs with term-maturities.
Pg S8: ALTERNATIVES can be used to diversify portfolios beyond the traditional stock-bond mix. Directly investing in alternatives requires more research and accredited-investor status as many strategies are illiquid. There may be gates and/or holding periods. Beware of high ERs and quarterly mark-to-market practices. Liquid-alts are funds (OEFs/ETFs/CEFs) with hedge-fund like strategies; (some may be interval-funds).
Income: GLIFX; JEPI, GBDC, MFIC, ARCC, VNQ
Diversification/Downside Protection: VCMDX, HMEZX; PHDG, DBMF, DBEH
(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. Biogen/BIIB (with partner Eisai/ESALY) will get another shot at ALZHEIMER with drug lecanemab after its debacle with aducanumab/Aduhelm; it is also looking for a new CEO. LLY and RHHBY also have similar drugs under development.
PREVIEW. US MULTINATIONALS and companies with high foreign exposures are being hurt by strong DOLLAR (PM, MDLZ, BKNG, LRCX, etc).
DATA THIS WEEK. ISM manufacturing PMI, construction spending on MONDAY; JOLTS Report, factory orders on TUESDAY; ADP national employment report, ISM services PMI, international trade balance on WEDNESDAY; weekly initial jobless claims on THURSDAY; consumer credit, jobs report (+250,000), unemployment rate (3.7%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Hair-care company Olaplex (OLPX; EV/EBITDA 17.4; 09/2021 IPO now down -54%; private-equity Advent owns 76%; channels include barbers/hairstylists, direct-to-consumers online, retail stores (Sephora, etc); business model is remote operations; pg 15);
SPAC survivors post-boom (OWL, CHPT, LAZR, RKLB, VCSA, SEAT; the SPAC boom ended in 2021 and these are among the survivors; pg 16).
BEARISH. See other stories.
Pg 10: INCOME. A historic BOND BEAR market (with LT Treasuries down more than EM debt!) has now created several opportunities. The FED rate tightening isn’t over but is near the tail end; the fed funds may peak at 4.6% in 2023 (current 3.25%; remember that the Fed only controls the ST rates while the IT/LT rates are market-based and look ahead). The BOE had to intervene to rescue the UK bond/gilt market last week. There is no coordination (yet) among the central bankers/countries on rates/currencies although most are facing the same global issues (supply-chain, inflation, energy, Russia-Ukraine war, etc). I have filled some (obvious gaps).
Treasuries: SHY, IEF, VGIT, (T-Bills/Notes at brokerages or Treasury Direct)
Corporates: VCSH, LQD; individual from MSFT, GS, BUD, ABT, T, BAC, etc.
Munis: MUB, individual munis
Preferreds: PFF, individuals from BoA, Munich Re, etc
Dividend Stocks: NOBL, (VYM, VIG, SCHD); individual JNJ, KO, KMB, BMY, SRE, etc
REITs: WWMCX, (VNQ, XLRE); individual ARE, NSA, AMH, etc
Pg 13: New UK Government’s (PM TRUSS) tax cut proposals sank the UK pound, bonds/gilts (BOE had to intervene) and stocks. The UK also faces several issues related to N Ireland, Scotland and with the EU post-Brexit. The UK stocks look cheap but may not be bargains yet (EWU P/E 8.5), especially with new government’s economic policies that have drawn worldwide criticism/ridicule. The BOE also lacks resources to continue propping up the UK gilt and pound.
Pg 17: FUNDS. Karl ZEILE of core intermediate-term muni AFTEX buys munis at discounts. He is willing to take some credit risks and has some munis rated BBB+ (technically investment-grade but considered low for munis). Fund has 10% cash now for extra liquidity.
Pg 19: ECONOMY. The FED PUT isn’t dead, it is just deferred. With GLOBAL financial concerns growing, it is believed that in a crunch, the Fed will act appropriately. BANKS are required to hold lots of Treasuries because they are considered risk-free and stable assets, and there is chaos when that isn’t so. Bond volatility MOVE has risen sharply to crisis levels. DOLLAR’s rise is also causing global CURRENCY problems that are forcing other governments/central banks to intervene. The US QT isn’t just from the Fed, but the overseas demand for dollars has also dried up; in fact, other governments have to sell dollars to defend their collapsing currencies. The bottom line is that the current worsening of financial conditions is due to Fed’s inflation fighting agenda, but when that leads to other systemic issues, the Fed will pivot.
Pg 20: Rick RIEDER, BlackRock CIO; BSIIX, etc. This has been an ugly bear market for BONDS and financial conditions are still tightening very rapidly. Combined effects of rising RATES and QT are underestimated. Strong DOLLAR is causing global problems – the BOE had to intervene to rescue the UK bond market; the EMs will have difficulty with dollar-denominated debt; several countries have intervened in the currency markets. Stick with shorter durations and better credits for now. There will be time later to extend duration and credit risks when FED’s terminal rate for fed funds is in sight. HY spreads are so-so although HY at 9%+ look interesting. The MBS may be under stress, so avoid credit risks there. For STOCKS, put buying is high, so puts are expensive; sell OTM puts to buy OTM calls. Both stocks and bonds have adjusted sharply to monetary tightening, the latter faster than the former. “Buy the dips” doesn’t work during QT. But better times will arrive, so suitably adjust portfolios and be patient.
Pg 22, TECH TRADER. Bottom fishing is dangerous. But several techs are now attractive after selloffs due to valuations and lower earnings. Especially attractive are cloud-businesses (AMZN, MSFT, GOOGL), software (CRWD, DDOG, INTU, IOT, NET, RNG, SMRT, SNOW, ZS), software-as-a-service (Saas; TEAM, PANW, HUBS, SNOW), semis for autos (ON, NXPI, IFNNY, WOLF, STM).
Pg 50: OTHER VOICES. Joseph QUINLAN and Lauren SANFILIPPO, BoA/ML (BAC). A European RECESSION will also impact the US through earnings (multinationals), trade, dollar (currency translations), geopolitics (defense expenditures; resolve to support Ukraine). Global GDPs are Europe 25%, US 24%, China 18%. Europe also has wealthy consumers. Energy may be the only US sector to immediately benefit from the current troubles of Europe. The US should look broadly for its global interests in dealing with Europe. The US investors too should think beyond the Fed, US-China frictions, and pay attention to what is going on in Europe.
Supplement GUIDE TO WEALTH has the Cover Story (see Part 1), the following features, and ad listings of Top Advisor Guide (by states), Top RIA Firms, Top Advisory Teams.
Pg S2: See Cover Story in Part 1
Pg S4: 5 top stocks from 5 advisors/portfolio managers: AMZN, CP, MSFT, CVX, LAMR
Pg S6: BOND LADDERS for Treasuries and corporates are popular now. A 5-yr bond ladder involves buying bonds with 1- to 5- year maturities right away and then roll maturing ones into 5-yr maturities. Advantages are that bonds are held to maturity and periodic cash flows are available if needed. On the other hand, typical bond funds don’t mature, and their values fluctuate based on interest rates and duration. There are also some ETFs with term-maturities.
Pg S8: ALTERNATIVES can be used to diversify portfolios beyond the traditional stock-bond mix. Directly investing in alternatives requires more research and accredited-investor status as many strategies are illiquid. There may be gates and/or holding periods. Beware of high ERs and quarterly mark-to-market practices. Liquid-alts are funds (OEFs/ETFs/CEFs) with hedge-fund like strategies; (some may be interval-funds).
Income: GLIFX; JEPI, GBDC, MFIC, ARCC, VNQ
Diversification/Downside Protection: VCMDX, HMEZX; PHDG, DBMF, DBEH
(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).