Post by Admin/YBB on Nov 5, 2022 7:08:21 GMT -6
Pg 10-11. The US Election Day, Tuesday, November 8.
REVIEW. Wash sale rules don’t apply to CRYPTOS (as they are considered property). Rules may be changed by the Congress in future. (Note – Wash sale disallows loss if a security or its options are traded within +/- 30 days)
PREVIEW. Money-market funds are catching up fast with T-Bills. Also attractive are ultrashort bond funds (BIL, ICSH), I-Bonds (6.89%, 11/1/22-4/30/23; includes fixed rate of 0.40%), banks or brokered CDs. (It is easy to set up T-Bill ladders at brokerages with 13-, 26-, 39-, 52- wk T-Bills with cash flow every 3 months)
DATA THIS WEEK. Consumer credit on MONDAY; small business optimism index on TUESDAY; wholesale inventories on WEDNESDAY; CPI (est +8%, core +6.5%), Treasury budget on THURSDAY; UM consumer sentiment on FRIDAY.
CLOSED. The US bond market on Friday (Veterans Day, US Federal Holiday); the US stock markets are open.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. MetLife (MET; yield 2.8%; fwd P/E 9.2; buybacks; up YTD; beneficiary of rising rates now, but may be hurt by recession; businesses include employee benefits, related investments, alternatives; spun off BHF (2017; annuity and life insurance), Metropolitan P&C, noncore foreign operations; (no longer a SIFI by FSOC, 2018- ); pg 12);
Bill ACKMAN’s Pershing Square (PSHZF; fee 1.5% base plus 16% of performance above high-water mark; PFIC tax issues for the US investors; concentrated holdings, but no shorts now; 35% discount from NAV; 21% owned by Ackman; may buy real estate co HHC, owns 27% now; pg 13);
Infertility treatment company Progyny (PGNY; P/S 3.7; included in some employee plans; Prior recommendation 4/15/22; pg 15).
BEARISH.
Pg 14: ROTH CONVERSIONS are attractive tax-wise when the markets are down; taxes on conversions should be paid from taxable funds. Other benefits of Roth IRAs include no RMDs; TAX-FREE withdrawals in retirement (some limitations apply); tax benefits carry over to INHERITED Roth IRAs but now, most non-spouses must drain the Roth IRA within 10 years (spouses can retitle as their own). Seniors beware of Medicare IRMAA in conversion planning.
Pg 21, FUNDS. GOLD (GLD, IAU, etc) is having a bad year and GOLD-MINERS (GDX, GDXJ, etc) are doing even worse. Gold has disappointed as any kind of hedge (for geopolitics, inflation). Strong DOLLAR and rising US RATES are headwinds for gold (the two are related to some extent). All-in costs of gold-mining operations are about $1,250/oz (but is highly variable across the industry), so gold-mining remains profitable, but not as much when gold prices were much higher. Analyst opinions are mixed – valuations are attractive, but prices may fall further as the Fed continues to tighten. (Central banks have also been buying gold in record amounts, pg 52) Mentioned are INIVX, SGGDX, GOLDX; NEM, GOLD, AEM, AGI (some have variable dividends).
Pg 22: INCOME. Both stocks and bonds have suffered this year. But there are a few bond funds with complex strategies that have positive returns this year: PMORX (MBS; IOs, futures, swaps), RPIEX (nontraditional; long-short strategies), ETF RISR (agency IOs). (Beware that these are very risky fixed-income strategies using complex instruments).
Pg 23, TECH TRADER. Tech EARNINGS have been weak. Even cloud computing and software disappointed (AMZN, MSFT; TEAM, TWLO). But there were some positive surprises from BKNG, EBAY, ETSY, EXPE, DASH. Explanation seems to be that businesses are trying to cut costs, but many consumers are too tired of being cooped up at homes and are venturing out.
Pg 24: Thasunda Brown DUCKETT, President and CEO of TIAA (AUM $1.2 trillion). She came to TIAA 18 months ago from JPMorgan Chase/JPM. Almost 40% of Americans face INCOME-GAPS in retirement and risk exhausting their resources. High INFLATION and simultaneously bad stock and bond markets (unusual in 2022 and especially bad for HYBRID portfolios) will make this situation even worse. Traditional pensions have largely disappeared. Nearly 33% of private industry workers don’t even have ACCESS to workplace retirement plans (IRAs alone aren’t enough for those). Among those with access to workplace retirement plans, about half aren’t saving much/enough; policies such as AUTO-enrollment and AUTO-escalation would help. Then comes the availability of basic low-cost annuities with guaranteed LIFETIME INCOME options. SECURE 2.0 will address some of these issues. With the current FED tightening, we are headed into a RECESSION – not if, but when, how deep, how long. The HOUSING market is weakening; decline in home sales will impact many industries that support housing. She wants to FOCUS TIAA on things that it does best, rather than trying to be all things to all the people (divestiture of TIAA Bank was announced on 11/3/22; TIAA is already out of LTCI, life insurance; what next?). TIAA will focus on retirement markets (accumulation, decumulation/income), digitalization, ESG issues (impactful beyond just $s and numbers), financial education/literacy.
Pg 26, ECONOMY. Higher RATES won’t fix the current INFLATION problem but will cause economic damage. The additional tightening from the QT of -$95 billion/mo in Treasuries and MBS is not known (estimates vary widely). Tight LABOR market is contributing to inflation through wage growth (especially, from job switchers/hoppers) and higher rates won’t have much impact on these. Structurally, baby boomers are retiring but the growth in working age population has been low/nil. The real rates remain negative. Some economists think that the Fed may have to revise its +2% average inflation target to +4% temporarily. We may end up with high rates, high inflation, slow growth. (This is Lisa BEILFUSS’ final column for Barron’s)
Pg 54: OTHER VOICES. J.W MASON, John Jay College of Criminal Justice, CUNY. HOUSING enters the CPI through rents/OERs that lag supply-demand driven housing prices. There are many local constraints on housing construction and in many areas, the housing prices are well above their construction costs (NYC, LA, Boston, Boulder, etc). Governments may provide incentives for housing developments near transportation facilities/hubs and for affordable housing. Rent controls/regulations also impact housing developments but rational policies may have positive effects.
(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. Wash sale rules don’t apply to CRYPTOS (as they are considered property). Rules may be changed by the Congress in future. (Note – Wash sale disallows loss if a security or its options are traded within +/- 30 days)
PREVIEW. Money-market funds are catching up fast with T-Bills. Also attractive are ultrashort bond funds (BIL, ICSH), I-Bonds (6.89%, 11/1/22-4/30/23; includes fixed rate of 0.40%), banks or brokered CDs. (It is easy to set up T-Bill ladders at brokerages with 13-, 26-, 39-, 52- wk T-Bills with cash flow every 3 months)
DATA THIS WEEK. Consumer credit on MONDAY; small business optimism index on TUESDAY; wholesale inventories on WEDNESDAY; CPI (est +8%, core +6.5%), Treasury budget on THURSDAY; UM consumer sentiment on FRIDAY.
CLOSED. The US bond market on Friday (Veterans Day, US Federal Holiday); the US stock markets are open.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. MetLife (MET; yield 2.8%; fwd P/E 9.2; buybacks; up YTD; beneficiary of rising rates now, but may be hurt by recession; businesses include employee benefits, related investments, alternatives; spun off BHF (2017; annuity and life insurance), Metropolitan P&C, noncore foreign operations; (no longer a SIFI by FSOC, 2018- ); pg 12);
Bill ACKMAN’s Pershing Square (PSHZF; fee 1.5% base plus 16% of performance above high-water mark; PFIC tax issues for the US investors; concentrated holdings, but no shorts now; 35% discount from NAV; 21% owned by Ackman; may buy real estate co HHC, owns 27% now; pg 13);
Infertility treatment company Progyny (PGNY; P/S 3.7; included in some employee plans; Prior recommendation 4/15/22; pg 15).
BEARISH.
Pg 14: ROTH CONVERSIONS are attractive tax-wise when the markets are down; taxes on conversions should be paid from taxable funds. Other benefits of Roth IRAs include no RMDs; TAX-FREE withdrawals in retirement (some limitations apply); tax benefits carry over to INHERITED Roth IRAs but now, most non-spouses must drain the Roth IRA within 10 years (spouses can retitle as their own). Seniors beware of Medicare IRMAA in conversion planning.
Pg 21, FUNDS. GOLD (GLD, IAU, etc) is having a bad year and GOLD-MINERS (GDX, GDXJ, etc) are doing even worse. Gold has disappointed as any kind of hedge (for geopolitics, inflation). Strong DOLLAR and rising US RATES are headwinds for gold (the two are related to some extent). All-in costs of gold-mining operations are about $1,250/oz (but is highly variable across the industry), so gold-mining remains profitable, but not as much when gold prices were much higher. Analyst opinions are mixed – valuations are attractive, but prices may fall further as the Fed continues to tighten. (Central banks have also been buying gold in record amounts, pg 52) Mentioned are INIVX, SGGDX, GOLDX; NEM, GOLD, AEM, AGI (some have variable dividends).
Pg 22: INCOME. Both stocks and bonds have suffered this year. But there are a few bond funds with complex strategies that have positive returns this year: PMORX (MBS; IOs, futures, swaps), RPIEX (nontraditional; long-short strategies), ETF RISR (agency IOs). (Beware that these are very risky fixed-income strategies using complex instruments).
Pg 23, TECH TRADER. Tech EARNINGS have been weak. Even cloud computing and software disappointed (AMZN, MSFT; TEAM, TWLO). But there were some positive surprises from BKNG, EBAY, ETSY, EXPE, DASH. Explanation seems to be that businesses are trying to cut costs, but many consumers are too tired of being cooped up at homes and are venturing out.
Pg 24: Thasunda Brown DUCKETT, President and CEO of TIAA (AUM $1.2 trillion). She came to TIAA 18 months ago from JPMorgan Chase/JPM. Almost 40% of Americans face INCOME-GAPS in retirement and risk exhausting their resources. High INFLATION and simultaneously bad stock and bond markets (unusual in 2022 and especially bad for HYBRID portfolios) will make this situation even worse. Traditional pensions have largely disappeared. Nearly 33% of private industry workers don’t even have ACCESS to workplace retirement plans (IRAs alone aren’t enough for those). Among those with access to workplace retirement plans, about half aren’t saving much/enough; policies such as AUTO-enrollment and AUTO-escalation would help. Then comes the availability of basic low-cost annuities with guaranteed LIFETIME INCOME options. SECURE 2.0 will address some of these issues. With the current FED tightening, we are headed into a RECESSION – not if, but when, how deep, how long. The HOUSING market is weakening; decline in home sales will impact many industries that support housing. She wants to FOCUS TIAA on things that it does best, rather than trying to be all things to all the people (divestiture of TIAA Bank was announced on 11/3/22; TIAA is already out of LTCI, life insurance; what next?). TIAA will focus on retirement markets (accumulation, decumulation/income), digitalization, ESG issues (impactful beyond just $s and numbers), financial education/literacy.
Pg 26, ECONOMY. Higher RATES won’t fix the current INFLATION problem but will cause economic damage. The additional tightening from the QT of -$95 billion/mo in Treasuries and MBS is not known (estimates vary widely). Tight LABOR market is contributing to inflation through wage growth (especially, from job switchers/hoppers) and higher rates won’t have much impact on these. Structurally, baby boomers are retiring but the growth in working age population has been low/nil. The real rates remain negative. Some economists think that the Fed may have to revise its +2% average inflation target to +4% temporarily. We may end up with high rates, high inflation, slow growth. (This is Lisa BEILFUSS’ final column for Barron’s)
Pg 54: OTHER VOICES. J.W MASON, John Jay College of Criminal Justice, CUNY. HOUSING enters the CPI through rents/OERs that lag supply-demand driven housing prices. There are many local constraints on housing construction and in many areas, the housing prices are well above their construction costs (NYC, LA, Boston, Boulder, etc). Governments may provide incentives for housing developments near transportation facilities/hubs and for affordable housing. Rent controls/regulations also impact housing developments but rational policies may have positive effects.
(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).