Post by Admin/YBB on Dec 31, 2022 7:44:10 GMT -6
Pg 8-9. FOMC Minutes on WEDNESDAY.
REVIEW. Futures-based crude OIL ETFs (USO) far outpaced the crude oil (WTIC) itself. Investors beware – the futures markets don’t track the underlying commodities well.
PREVIEW. Video STREAMING is a crowded field. Several big players are piling into major league sports (GOOGL, AMZN, AAPL). But high prices for streaming rights will make profits more difficult. NFLX is now focusing on less popular sports (tennis, surfing, racing) and niche sports (boxing, wrestling, pickleball) may also attract sponsors.
DATA THIS WEEK. Construction spending on TUESDAY; JOLTS report (1.7 job openings per unemployed), ISM manufacturing PMI on WEDNESDAY; ADM national employment report, international trade balance on THURSDAY; ISM services PMI, factory orders, jobs report (+217,500), unemployment report (3.7%) on FRIDAY.
CLOSED. Most global markets are closed on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. 6 value stocks (BATRN, DIS, LH, MKL, UBER, WSC; from a list of 40 value gems from Boyer Value Group; pg 12).
BEARISH.
Pg 10: CRYPTO ice age or not, FIDELITY is pushing ahead with its crypto initiatives (institutional, retirement, retail). It says that it wants to provide its clients with choices. Its digital assets unit has 500+ people and hiring continues. It will offer Bitcoin within its 401k and more cryptos on its regular platform. Lawmakers, the SEC and DOL have been warning firms and investors. Critics point to FOMO; despite an early start, Fido missed the train on ETFs. Fido is counting on first-mover advantage by lending its reputable name in a devasted, washed-out and scandal-ridden industry. It has urged the SEC to approve “physical” crypto ETFs; its own application was rejected by the SEC (like many others), but Fido is moving ahead with ETFs in crypto-related areas (FDIG, etc). It sees its competitors as HOOD, COIN, PAYPL, SQ, etc. Although financial risks are small for Fido, it risks regulatory risks and reputational damage if things go wrong. Other major brokers (SCHW, IBKR) are watching.
Pg 12: Financial PLANNING for RECESSION 2023: Increase 401k/403b contributions; increase cash holdings; rebalance portfolios; take RMDs as required (note that QCDs are still allowed from 70.5).
Pg 18: The IRS has hired 4,000+ new agents. It will deploy new scanning technology to process paper returns. There are still 15 million unprocessed old paper returns. In the good old days, almost 80% of calls to the IRS were answered, but in 2021 only 9% were, in 2022 only 10% (despite a sharp drop in call volume as many didn’t bother to call); hopefully, this situation will improve. There are also some changes for 2022 returns – child tax credits, child/dependent care credits, earned income tax credits, charitable deductions, etc.
Pg 20: The US Treasury issues Community Development Financial Institution certification (CDFI status; 1994- ) to lenders that gives them some business edge – a government seal of approval; some government funding; bank funding under the CRA (banks can do the required community development themselves, or just give money to the CDFI certified firms). Treasury has temporary stopped taking new applications for CDFI status as it revises guidelines to curb abuses (certified in the past were an aggressive auto-possession firm, an abusive personal-loan company).
Pg 23: FR/BL funds offer attractive yields (SOFR + 400-500 bps spreads; SOFR is a LIBOR alternative) from lower-quality credits. That is a big risk in recession, especially when many such loans are covenant-lite. Beware of (unmanaged) index funds in specialized and illiquid areas. Hybrid PRWCX manager GIROUX has 15% in FR/BL. Also mentioned are OEFs BFRAX, FFRHX, FRFAX, PRFRX, etc and ETFs BLKN, SRLN, etc.
Pg 25, TECH TRADER. CES 2023 in LV may provide battered TECHs a much-needed boost. In many cases, supply shortages have turned into product and inventory gluts. Metaverse isn’t getting anywhere; streaming is crazy-crowded; self-driving is too much hype; cryptos have crashed into an ice age. KEYNOTES will be from lower-profile speakers (from AMD, BMWYY, DAL, DE, STLA, etc). But AI ChatGPT shows promise. (There will be a follow up report after the CES).
Pg 26: Brian DEMAIN of mid-cap growth JDMAX (ER 1.12%; load 5.75%) watches upside/downside capture ratio (U/D CR); discounted cash flows; sustainable growth; GARP. Fund has low turnover due to its longer-term horizon. In 2023, the cost of capital will be higher due to Fed rate hikes; some growth multiples are still too high; inflation should moderate; the economy will slowdown. His current themes include EVs; semis; renewables; sport franchises.
Pg 54 OTHER VOICES. Karim FAWAZ, S&P Global. Events of 2022 (Russia-Ukraine war, various sanctions on Russia) have fundamentally altered the OIL markets. Oil benefitted from globalization that encompassed “free” trade/flow (albeit driven by the OPEC & the US shale producers), fungible oil and financialized commodity markets – the 3Fs. The US shale oil was serving as “regulator/controller” to cap global oil prices. Now, all those factors have changed, and GEOPOLITICS has trumped them all. The US SPR has been deployed for nonemergency use. The Russian oil has been mostly rerouted to Asia. New non-European shippers will emerge to escape the sanctions by the US + EU + UK. Oil prices will become more volatile (they were already very volatile) due to identification/differentiation of oil from various sources.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Cathie WOOD of ARK (ARKK, ARKF, etc) doubled down on Tesla/TSLA and Coinbase/COIN, TDOC, ZM, ROKU, RBLX, DKNG, etc.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. Futures-based crude OIL ETFs (USO) far outpaced the crude oil (WTIC) itself. Investors beware – the futures markets don’t track the underlying commodities well.
PREVIEW. Video STREAMING is a crowded field. Several big players are piling into major league sports (GOOGL, AMZN, AAPL). But high prices for streaming rights will make profits more difficult. NFLX is now focusing on less popular sports (tennis, surfing, racing) and niche sports (boxing, wrestling, pickleball) may also attract sponsors.
DATA THIS WEEK. Construction spending on TUESDAY; JOLTS report (1.7 job openings per unemployed), ISM manufacturing PMI on WEDNESDAY; ADM national employment report, international trade balance on THURSDAY; ISM services PMI, factory orders, jobs report (+217,500), unemployment report (3.7%) on FRIDAY.
CLOSED. Most global markets are closed on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. 6 value stocks (BATRN, DIS, LH, MKL, UBER, WSC; from a list of 40 value gems from Boyer Value Group; pg 12).
BEARISH.
Pg 10: CRYPTO ice age or not, FIDELITY is pushing ahead with its crypto initiatives (institutional, retirement, retail). It says that it wants to provide its clients with choices. Its digital assets unit has 500+ people and hiring continues. It will offer Bitcoin within its 401k and more cryptos on its regular platform. Lawmakers, the SEC and DOL have been warning firms and investors. Critics point to FOMO; despite an early start, Fido missed the train on ETFs. Fido is counting on first-mover advantage by lending its reputable name in a devasted, washed-out and scandal-ridden industry. It has urged the SEC to approve “physical” crypto ETFs; its own application was rejected by the SEC (like many others), but Fido is moving ahead with ETFs in crypto-related areas (FDIG, etc). It sees its competitors as HOOD, COIN, PAYPL, SQ, etc. Although financial risks are small for Fido, it risks regulatory risks and reputational damage if things go wrong. Other major brokers (SCHW, IBKR) are watching.
Pg 12: Financial PLANNING for RECESSION 2023: Increase 401k/403b contributions; increase cash holdings; rebalance portfolios; take RMDs as required (note that QCDs are still allowed from 70.5).
Pg 18: The IRS has hired 4,000+ new agents. It will deploy new scanning technology to process paper returns. There are still 15 million unprocessed old paper returns. In the good old days, almost 80% of calls to the IRS were answered, but in 2021 only 9% were, in 2022 only 10% (despite a sharp drop in call volume as many didn’t bother to call); hopefully, this situation will improve. There are also some changes for 2022 returns – child tax credits, child/dependent care credits, earned income tax credits, charitable deductions, etc.
Pg 20: The US Treasury issues Community Development Financial Institution certification (CDFI status; 1994- ) to lenders that gives them some business edge – a government seal of approval; some government funding; bank funding under the CRA (banks can do the required community development themselves, or just give money to the CDFI certified firms). Treasury has temporary stopped taking new applications for CDFI status as it revises guidelines to curb abuses (certified in the past were an aggressive auto-possession firm, an abusive personal-loan company).
Pg 23: FR/BL funds offer attractive yields (SOFR + 400-500 bps spreads; SOFR is a LIBOR alternative) from lower-quality credits. That is a big risk in recession, especially when many such loans are covenant-lite. Beware of (unmanaged) index funds in specialized and illiquid areas. Hybrid PRWCX manager GIROUX has 15% in FR/BL. Also mentioned are OEFs BFRAX, FFRHX, FRFAX, PRFRX, etc and ETFs BLKN, SRLN, etc.
Pg 25, TECH TRADER. CES 2023 in LV may provide battered TECHs a much-needed boost. In many cases, supply shortages have turned into product and inventory gluts. Metaverse isn’t getting anywhere; streaming is crazy-crowded; self-driving is too much hype; cryptos have crashed into an ice age. KEYNOTES will be from lower-profile speakers (from AMD, BMWYY, DAL, DE, STLA, etc). But AI ChatGPT shows promise. (There will be a follow up report after the CES).
Pg 26: Brian DEMAIN of mid-cap growth JDMAX (ER 1.12%; load 5.75%) watches upside/downside capture ratio (U/D CR); discounted cash flows; sustainable growth; GARP. Fund has low turnover due to its longer-term horizon. In 2023, the cost of capital will be higher due to Fed rate hikes; some growth multiples are still too high; inflation should moderate; the economy will slowdown. His current themes include EVs; semis; renewables; sport franchises.
Pg 54 OTHER VOICES. Karim FAWAZ, S&P Global. Events of 2022 (Russia-Ukraine war, various sanctions on Russia) have fundamentally altered the OIL markets. Oil benefitted from globalization that encompassed “free” trade/flow (albeit driven by the OPEC & the US shale producers), fungible oil and financialized commodity markets – the 3Fs. The US shale oil was serving as “regulator/controller” to cap global oil prices. Now, all those factors have changed, and GEOPOLITICS has trumped them all. The US SPR has been deployed for nonemergency use. The Russian oil has been mostly rerouted to Asia. New non-European shippers will emerge to escape the sanctions by the US + EU + UK. Oil prices will become more volatile (they were already very volatile) due to identification/differentiation of oil from various sources.
(EXTRAS from online Friday that didn’t make the weekend paper version)
FUNDS. Cathie WOOD of ARK (ARKK, ARKF, etc) doubled down on Tesla/TSLA and Coinbase/COIN, TDOC, ZM, ROKU, RBLX, DKNG, etc.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
