Post by Admin/YBB on May 13, 2023 5:22:48 GMT -6
Pg 10-11.
REVIEW. Most investors should do nothing about this DEBT-CEILING mess. But concerns have caused large-caps to outperform small-caps, growth to outperform value, defensive sectors to outperform cyclicals. Treasuries are still seen as safe havens even as this debt-ceiling issue is all about the integrity of Treasuries – patient investors may just pickup some nice yields in Treasuries.
PREVIEW. AIRFARES and HOTEL room rates are high now due to strong Summer demand. International travel has been rebounding, and at some point, Chinese travelers will also return. Mentioned are UAL, MAR, BKNG.
DATA THIS WEEK. NY Fed Empire State manufacturing survey on MONDAY; housing market index, retail sales, capacity utilization, industrial production, business inventories on TUESDAY; housing starts on WEDNESDAY; LEI, existing home sales on THURSDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Nintendo (NTDOY; yield 2.6%; fwd P/E 19, only 14 if “cash” is backed out; moving beyond videogames (the newest is Zelda) into movies (The Super Mario Bros, Movie) and theme parks (Super Nintendo World areas in other theme parks); a new version of Switch console may be in 1-2 years; these moves may reverse declining revenues and profits; pg 14);
Small-cap Topgolf Callaway (MODG; fwd P/E 26.4; businesses include golf events (lagging), golf equipment, golf apparel; was smaller old Callaway Golf/ELY; pg 21).
BEARISH.
Pg 12: Some investors are looking to bottom fish during this BANKING CRISIS. Regional banks SVB, Signature, First Republic failed and were mostly acquired by JPM, FCNCA, NYCB, with the FDIC retaining some of their bad portfolios. Now PacWest/PACW is selling off; the regional bank KRE is in mid-30s. The FDIC is planning to impose 12.5 bps fee for 8 quarters on banks with uninsured deposits over $5 billion. The problems of underwater HTM Treasuries/MBS and CREs may work out gradually (with maturity or market recovery). There are temporary lending/liquidity facilities such as the Fed Discount Window and the new BTFP and these have easier terms for a while. The midsize banks may also be subjected to stress-testing (which itself may have to be adjusted to account for rate risks). Eventually things will calm down in banking. Some attractive banks include BKU, CMA, HOMB, VLY, WAL, ZION, and the giant JPM.
Pg 22, FUNDS. A piece on small-caps (R2000) cites favorable comments from Jill HALL/BAC and managers Chuck ROYCE/PENNX and George SMITH & Chris PEARSON/ DSCPX.
Pg 23, INCOME INVESTING. Despite the regional BANKING CRISIS, several regional bank dividends look juicy and stable, but be selective. The latest to slash dividend was PacWest/PACW (from 25c to 1c); KeyCorp/KEY may cut too. Regional bank ETF KRE (yield 3.50%) fell to mid-30s.
Pg 24: ECONOMY. Allan SLOAN, Loeb Award Winning Independent Business Journalist. The market-cap weighted SP500 (SPY, VOO, etc) is a better index than the price-weighted DJIA (DIA). The former has 170x more money indexed to it. There are many issues including the stock splits that don’t affect the SP500 but do affect the DJIA and have to be accounted for by adjusting the DJIA divisor. (If some stocks are replaced, BOTH indexes will have to adjust their divisors to maintain continuity)
Pg 25, TECH TRADER. Google/GOOGL has recovered from its poor rollout of its generative AI Bard in Paris. Now it has launched a more refined version that is integrated with Gmail, Google Maps, Google Photos. The long wait to try Bard is gone, and soon, 40 different language versions will be launched. Google executives are using the term “responsible AI” a lot (vs a wild ChatGPT?). Clearly, there is room for more than one player – ChatGPT/Bing AI (from OpenAI, Microsoft/MSFT), Bard (from Google/GPOOGL), etc. (for weak Chinese generative AIs, see International Trader in Part 1)
Pg 26, FUNDS. Rayna Lesser HANNAWAY, Polan SC-Gr PBSYX, SMID-Gr PBMIX. Small/mid-cap growth have been very challenging, but she sees rallies ahead; SC/MC tend to do well after the interest rates peak. Management teams are critical for SC/MC. She focuses on quality-growth companies that have scalability and durability. She likes internal growth. Selectivity is important as almost 40% of the SC universe has losses. Her funds are concentrated.
Pg 54, OTHER VOICES. Burton MALKIEL, Professor Emeritus, Princeton. The SOCIAL SECURITY “trust fund” (really a Treasury IOU) may be depleted by 2033, and without any fix, the payouts may be slashed by 23% (to match Social Security inflows and outflows). The problem now is that there is a large shortfall between the inflows and outflows with the gap being covered by trust fund accounting. The last Social Security reforms were in 1983. Solutions are simple in concept but difficult politically – increase the retirement age and/or the payroll tax, increase or eliminate salary caps, expand the pool to include all government employees, etc; the early start date (62) and disability benefits may remain as now. However, privatization isn’t a solution, but a contribution-based supplemental program may be added (like the IRA or 401k/403b).
(EXTRAS from online Friday that didn’t make the weekend paper version)
See Column Topics. It seems some consolidation/rearrangement of Columns is going on.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. Most investors should do nothing about this DEBT-CEILING mess. But concerns have caused large-caps to outperform small-caps, growth to outperform value, defensive sectors to outperform cyclicals. Treasuries are still seen as safe havens even as this debt-ceiling issue is all about the integrity of Treasuries – patient investors may just pickup some nice yields in Treasuries.
PREVIEW. AIRFARES and HOTEL room rates are high now due to strong Summer demand. International travel has been rebounding, and at some point, Chinese travelers will also return. Mentioned are UAL, MAR, BKNG.
DATA THIS WEEK. NY Fed Empire State manufacturing survey on MONDAY; housing market index, retail sales, capacity utilization, industrial production, business inventories on TUESDAY; housing starts on WEDNESDAY; LEI, existing home sales on THURSDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Nintendo (NTDOY; yield 2.6%; fwd P/E 19, only 14 if “cash” is backed out; moving beyond videogames (the newest is Zelda) into movies (The Super Mario Bros, Movie) and theme parks (Super Nintendo World areas in other theme parks); a new version of Switch console may be in 1-2 years; these moves may reverse declining revenues and profits; pg 14);
Small-cap Topgolf Callaway (MODG; fwd P/E 26.4; businesses include golf events (lagging), golf equipment, golf apparel; was smaller old Callaway Golf/ELY; pg 21).
BEARISH.
Pg 12: Some investors are looking to bottom fish during this BANKING CRISIS. Regional banks SVB, Signature, First Republic failed and were mostly acquired by JPM, FCNCA, NYCB, with the FDIC retaining some of their bad portfolios. Now PacWest/PACW is selling off; the regional bank KRE is in mid-30s. The FDIC is planning to impose 12.5 bps fee for 8 quarters on banks with uninsured deposits over $5 billion. The problems of underwater HTM Treasuries/MBS and CREs may work out gradually (with maturity or market recovery). There are temporary lending/liquidity facilities such as the Fed Discount Window and the new BTFP and these have easier terms for a while. The midsize banks may also be subjected to stress-testing (which itself may have to be adjusted to account for rate risks). Eventually things will calm down in banking. Some attractive banks include BKU, CMA, HOMB, VLY, WAL, ZION, and the giant JPM.
Pg 22, FUNDS. A piece on small-caps (R2000) cites favorable comments from Jill HALL/BAC and managers Chuck ROYCE/PENNX and George SMITH & Chris PEARSON/ DSCPX.
Pg 23, INCOME INVESTING. Despite the regional BANKING CRISIS, several regional bank dividends look juicy and stable, but be selective. The latest to slash dividend was PacWest/PACW (from 25c to 1c); KeyCorp/KEY may cut too. Regional bank ETF KRE (yield 3.50%) fell to mid-30s.
Pg 24: ECONOMY. Allan SLOAN, Loeb Award Winning Independent Business Journalist. The market-cap weighted SP500 (SPY, VOO, etc) is a better index than the price-weighted DJIA (DIA). The former has 170x more money indexed to it. There are many issues including the stock splits that don’t affect the SP500 but do affect the DJIA and have to be accounted for by adjusting the DJIA divisor. (If some stocks are replaced, BOTH indexes will have to adjust their divisors to maintain continuity)
Pg 25, TECH TRADER. Google/GOOGL has recovered from its poor rollout of its generative AI Bard in Paris. Now it has launched a more refined version that is integrated with Gmail, Google Maps, Google Photos. The long wait to try Bard is gone, and soon, 40 different language versions will be launched. Google executives are using the term “responsible AI” a lot (vs a wild ChatGPT?). Clearly, there is room for more than one player – ChatGPT/Bing AI (from OpenAI, Microsoft/MSFT), Bard (from Google/GPOOGL), etc. (for weak Chinese generative AIs, see International Trader in Part 1)
Pg 26, FUNDS. Rayna Lesser HANNAWAY, Polan SC-Gr PBSYX, SMID-Gr PBMIX. Small/mid-cap growth have been very challenging, but she sees rallies ahead; SC/MC tend to do well after the interest rates peak. Management teams are critical for SC/MC. She focuses on quality-growth companies that have scalability and durability. She likes internal growth. Selectivity is important as almost 40% of the SC universe has losses. Her funds are concentrated.
Pg 54, OTHER VOICES. Burton MALKIEL, Professor Emeritus, Princeton. The SOCIAL SECURITY “trust fund” (really a Treasury IOU) may be depleted by 2033, and without any fix, the payouts may be slashed by 23% (to match Social Security inflows and outflows). The problem now is that there is a large shortfall between the inflows and outflows with the gap being covered by trust fund accounting. The last Social Security reforms were in 1983. Solutions are simple in concept but difficult politically – increase the retirement age and/or the payroll tax, increase or eliminate salary caps, expand the pool to include all government employees, etc; the early start date (62) and disability benefits may remain as now. However, privatization isn’t a solution, but a contribution-based supplemental program may be added (like the IRA or 401k/403b).
(EXTRAS from online Friday that didn’t make the weekend paper version)
See Column Topics. It seems some consolidation/rearrangement of Columns is going on.
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).