Post by Admin/YBB on Oct 22, 2022 6:14:06 GMT -6
Pg 8-9.
REVIEW. This has been a terrible year for allocation 60-40 but that will eventually end. Both stocks and bonds are down simultaneously and both may rebound at some point.
PREVIEW. Zoom/ZM is back to its pre-pandemic level in January 2020. Pandemic boom also ended for NFLX, PYPL, PTON, CVNA.
DATA THIS WEEK. Manufacturing PMI, services PMI on MONDAY; home price index, consumer confidence on TUESDAY; new home sales on WEDNESDAY; Q3 GDP, durable goods on THURSDAY; personal income and consumption, UM sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Big banks (investor concerns are rising about recession in 2023; housing and general loan demand are weakening; on the other hand, higher rates are good for banks; competition for deposits is rising from m-mkt funds; banks have strong balance sheets; stick with the giants; pg 10);
Tesla (TSLA; investors are looking beyond weak Q3 to Q4; growth in 2023 will be from new factories in TX and Germany; energy storage business is growing; lower-priced models and cybertrucks are coming; profit margins per car are declining; Elon MUSK may be distracted by Twitter/TWTR and he may have to sell $5-10 billion of TSLA stocks; pg 11);
Truck manufacturer Paccar ( PCAR; yield 1.6% and there are also special dividends; fwd P/E 11.7; premium brands Peterbilt, Kenworth, DAF; it may ride out the recession; there are supply-chain issues for parts (21% of sales); EV trucks is a growing segment; pg 19);
Diagnostics company Hologic (HOLX; its Covid-19 PCR testing business has been stable; chips and parts shortages are affecting deliveries; pg 20).
BEARISH. Hair-care products company Olaplex (OLPX; late-2021 IPO; suddenly its fortunes have turned for the worse; sales and EBITDA are declining; COO has resigned; Barron’s has reversed its positive recommendation just a few weeks ago; turnaround may not be until mid-2023; pg 12).
Pg 21: INCOME. Yields on M-MKT FUNDS are rapidly becoming attractive (with some lag to T-Bills). Although there is no FDIC insurance, risks are less with government m-mkt funds. Fidelity is around 2.6%, Vanguard 2.8%, Federated 2.9%. During the ZIRP, many firms absorbed costs (to keep stable $1 NAV), but now the m-mkt funds are again profitable.
Pg 22: TECH TRADER. Most BIG TECHS are reporting this week (GOOGL, MSFT, META, AAPL, AMZN, INTC, SAP, etc). Concerns are recession, ad spending, PC demand, enterprise capex budgets, holiday season. Some investors are waiting to buy on any declines.
Pg 23, ECONOMY. A seize in the TREASURIES market will be bad. Liquidity has dried up since the start of QT and bond volatility is high (MOVE). Falling global CURRENCIES mean that foreigners are dumping US Treasuries to defend their currencies. Rising DOLLAR is also a negative for foreign returns of the US investors. Some think that the disaster in bonds isn’t yet reflected in stocks and the SP500 may fall to 2,950. Falling US stocks and real estate will hurt consumers' pocketbooks. The US FISCAL policies are contributing to inflation. There are troubles ahead for stocks and bonds.
Pg 24: David HERO, Harris (international CIO; OAKIX). There are attractive values in EUROPE and CHINA (several big Chinese companies have dual-listed in the US and HK). Rising dollar is a headwind for international investing. ENERGY crisis in Europe is hurting big companies while smaller companies are getting relief. Some of these stocks are near their March 2009 and March 2020 valuations. European banks and German autos are very cheap. Several euro-zone countries are having troubles. European unemployment is low.
Pg 54: OTHER VOICES. Marc CHANDLER, Bannockburn/FFBC. Chinese YUAN fell -12% vs DOLLAR index (DXY) but is down only -2% on trade-weighted basis. The PBOC has taken several steps – reduce reserve requirements; daily resets of the dollar rate; interventions; using the communications channels. President XI has consolidated his power. Chinese savings rates are high. Demographic challenges have led to 3-child policies. Nationalistic tendencies are rising. The US-China tensions are high. But don’t overlook the strategic aspects of that partnership.
(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. This has been a terrible year for allocation 60-40 but that will eventually end. Both stocks and bonds are down simultaneously and both may rebound at some point.
PREVIEW. Zoom/ZM is back to its pre-pandemic level in January 2020. Pandemic boom also ended for NFLX, PYPL, PTON, CVNA.
DATA THIS WEEK. Manufacturing PMI, services PMI on MONDAY; home price index, consumer confidence on TUESDAY; new home sales on WEDNESDAY; Q3 GDP, durable goods on THURSDAY; personal income and consumption, UM sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Big banks (investor concerns are rising about recession in 2023; housing and general loan demand are weakening; on the other hand, higher rates are good for banks; competition for deposits is rising from m-mkt funds; banks have strong balance sheets; stick with the giants; pg 10);
Tesla (TSLA; investors are looking beyond weak Q3 to Q4; growth in 2023 will be from new factories in TX and Germany; energy storage business is growing; lower-priced models and cybertrucks are coming; profit margins per car are declining; Elon MUSK may be distracted by Twitter/TWTR and he may have to sell $5-10 billion of TSLA stocks; pg 11);
Truck manufacturer Paccar ( PCAR; yield 1.6% and there are also special dividends; fwd P/E 11.7; premium brands Peterbilt, Kenworth, DAF; it may ride out the recession; there are supply-chain issues for parts (21% of sales); EV trucks is a growing segment; pg 19);
Diagnostics company Hologic (HOLX; its Covid-19 PCR testing business has been stable; chips and parts shortages are affecting deliveries; pg 20).
BEARISH. Hair-care products company Olaplex (OLPX; late-2021 IPO; suddenly its fortunes have turned for the worse; sales and EBITDA are declining; COO has resigned; Barron’s has reversed its positive recommendation just a few weeks ago; turnaround may not be until mid-2023; pg 12).
Pg 21: INCOME. Yields on M-MKT FUNDS are rapidly becoming attractive (with some lag to T-Bills). Although there is no FDIC insurance, risks are less with government m-mkt funds. Fidelity is around 2.6%, Vanguard 2.8%, Federated 2.9%. During the ZIRP, many firms absorbed costs (to keep stable $1 NAV), but now the m-mkt funds are again profitable.
Pg 22: TECH TRADER. Most BIG TECHS are reporting this week (GOOGL, MSFT, META, AAPL, AMZN, INTC, SAP, etc). Concerns are recession, ad spending, PC demand, enterprise capex budgets, holiday season. Some investors are waiting to buy on any declines.
Pg 23, ECONOMY. A seize in the TREASURIES market will be bad. Liquidity has dried up since the start of QT and bond volatility is high (MOVE). Falling global CURRENCIES mean that foreigners are dumping US Treasuries to defend their currencies. Rising DOLLAR is also a negative for foreign returns of the US investors. Some think that the disaster in bonds isn’t yet reflected in stocks and the SP500 may fall to 2,950. Falling US stocks and real estate will hurt consumers' pocketbooks. The US FISCAL policies are contributing to inflation. There are troubles ahead for stocks and bonds.
Pg 24: David HERO, Harris (international CIO; OAKIX). There are attractive values in EUROPE and CHINA (several big Chinese companies have dual-listed in the US and HK). Rising dollar is a headwind for international investing. ENERGY crisis in Europe is hurting big companies while smaller companies are getting relief. Some of these stocks are near their March 2009 and March 2020 valuations. European banks and German autos are very cheap. Several euro-zone countries are having troubles. European unemployment is low.
Pg 54: OTHER VOICES. Marc CHANDLER, Bannockburn/FFBC. Chinese YUAN fell -12% vs DOLLAR index (DXY) but is down only -2% on trade-weighted basis. The PBOC has taken several steps – reduce reserve requirements; daily resets of the dollar rate; interventions; using the communications channels. President XI has consolidated his power. Chinese savings rates are high. Demographic challenges have led to 3-child policies. Nationalistic tendencies are rising. The US-China tensions are high. But don’t overlook the strategic aspects of that partnership.
(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).