Post by Admin/YBB on Jun 17, 2023 3:56:20 GMT -6
From Barron’s, June 19, 2023 (Part 1, Market Week+)
Pg 28, TRADER. For the rallying SP500, the former resistance level 4,200 is now a SUPPORT level. The SP500 is also in a BULL market (+20% from the recent low). Stocks have MOMENTUM even without clear indications of future rate hikes or recession. This rally is narrow (yet 70.20% of the SP500 stocks are above 50-dMA and that is almost overbought; SC R2000 is lagging now). With lots of CASH on the sidelines, DIPS are seen as buying opportunities. Don’t fight the TAPE (or was it Don’t fight the FED? Whatever).
Stocks with earnings momentum now include UAL, RCL, FTNT, ZS, GOOGL, LLY.
Generac (GNRC; fwd P/E 18) may benefit from Summer power blackouts. There were/are concerns that EV batteries may replace its self-standing generators. (A stinker since Barron’s 09/2022 recommendation)
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
FOMC 7/26/23+ hike +25 bps (cycle peak 5.25-5.50%)
FOMC 9/20/23+ hold
FOMC 11/1/23+ hold
FOMC 12/13/23+ hold
(POWELL said that there may be 2 MORE hikes in 2023 and NO CUTS for 2 years. He also said that the Fed doesn’t want the markets to be surprised. So, expect lot of jawboning to move fed fund futures in line with the Fed’s narrative. Things may change if the economy suddenly turns sour or something important breaks (but more important than cryptos or regional banks))
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +1.25%, SP500 +2.58%, Nasdaq Comp +3.25%, R2000 +0.52%. DJ Transports +3.86%; DJ Utilities +1.06%. (Rotating spot tech XLK +4.33%) US$ index (spot) -1.23%, oil/WTI futures +2.30%, gold futures -0.19%.
YTD (index changes only), DJIA +3.48%, SP500 +14.85%, Nasdaq Comp +30.79%. (Rotating spot tech XLK +39.18%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE rose for a 3rd week; ratio of winners:losers 3:2.
AAII Bull-Bear Spread +17.5% (above average).
%Above 50-dMA for NYSE-listed stocks 68.03% (high) (StockCharts $NYA50R; $SPXA50R for the SP500 is also included in the bottom panel),
stockcharts.com/h-sc/ui?s=%24NYA50R&p=D&b=5&g=0&id=p91704957718 .
Delta MSI 60.8% (good) (a proprietary index for %Above 75-dMA for selected 1,800 stocks). The all-cap $NYA50R is typically closer to it than the large-cap $SPXA50R.
Pg 32, INTERNATIONAL TRADER. A trade deal between the EU and Brazil (really, EU-Mercosur) may save Amazon rainforests. The new/returning President LULA (77) is more environment-friendly than his predecessor. He is also willing to use new technological tools and financial incentives.
EMERGING MARKETS. (Place holder)
COMMODITIES. (Place holder)
(It looks like these regular columns are gone. Barron’s page count is lower too, but it still costs $5 per issue. Long-term subscription prices may be lower with promos.)
Pg 19: El Nino threatens sugarcane crops and that is bullish for SUGAR that has already run up. Top producers are Brazil, India, Thailand. ETF is CANE.
Pg 33, OPTIONS. Big investors are concerned about high volumes of call buying. (What about the high SKEW? It indicates heavy put buying for hedging.)
(SP500 VIX 13.54, Nasdaq 100 VXN 19.55, options SKEW 147.86 (high), bond MOVE 104.43 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: An up week in EUROPE (Germany +2.03%, Norway -0.28%) and a good week in ASIA (Japan +3.16%, S Korea -0.88%).
TREASURY* 3-mo yield 5.34%, 1-yr 5.24%, 2-yr 4.70%, 5-yr 3.99%, 10-yr 3.77%, 30-yr 3.86%. REAL yields 5-yr 1.82%, 10-yr 1.55%, 30-yr 1.63%.
DOLLAR rose, ^DXY 102.3, -1.2% (pg 50). GOLD (still) flat at $1,960, UNCH (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 124.25, +0.29% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, NEW rate from May 1, 2023, is 4.30%; the fixed rate is +0.90%, the semiannual inflation is +1.69%.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) www.treasurydirect.gov/marketable-securities/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16, COVER STORY, “How the World’s Most Popular Shopping App (SHEIN) is Quietly Upending RETAIL”. Shein (say shee-in) is now the most popular global retail app (#2 in the US); revenues $23 billion, private market-cap $66 billion. It was founded in CHINA but later shifted to SINGAPORE. The US venture-capital has invested in it (Tiger Global, Sequoia Capital, etc). Its US IPO may be coming, but it wants to establish US roots first through local warehouses, distribution centers and some jobs – similar to its local expansion strategies elsewhere (Brazil, India, Turkey). This is quite an ambitious plan considering the US-China frictions including on the Chinese ADRs listed in the US. It claims that its rock-bottom PRICES are from its on-demand/user-activity business model for small-batch manufacturing that ships product direct from small manufacturers to customers. It owns no manufacturing/production facilities (so, all is by contract-manufacturing) and does minimal warehousing to only speed up the distribution. Its US competitors don’t see it as a disruptor yet (that may be a fatal mistake), and AMZN even considers it a partner. But the lawmakers in DC are watching it. It avoids the US duties by keeping shipments from China under $800 (the lawmakers are considering eliminating that loophole). A few other Chinese retail apps (Temu, etc) are hoping to piggyback on Shein’s success in the US.
Pg 6, UP AND DOWN WALL STREET. The FOMC decision on hawkish-pause was unanimous, yet there was lot of divergence in rate opinions in the FOMC dot plots. If the idea was to send a subtle tough message to the markets, that didn’t work either for cooling this AI-rally in the new economy stocks or for significantly changing the fed fund futures (see above). The SP500 has already overshot several strategists’ yearend targets.
You thought Nvidia was a hot AI stock? What about C3.ai/AI, Kroger/KR, Lennar/LEN? All are touting some AI angle; even the stodgy utilities have an AI angle. The short-term AI prospects may be quite different from long-term. Surprisingly, the AI-for-images came before the AI-for-texts (ChatGPT, Bard), but those haven’t fared well. Investors may want AI exposure through baskets/ETFs (AIEQ, AIQ, BOTZ, IRBO).
Pg 9, STREETWISE. Bud Lite/BUD ad fiasco has benefitted Modelo/STZ (now #1, Corona #2, former frontrunner Bud Lite #3). Ironically, while Americans are crazy over Mexican-style beers, the Mexican are developing a taste for European lager.
Nasdaq’s/NDAQ cash+stock acquisition of private Adenza from Thoma BRAVO (he will own 15% of NDAQ) was poorly received.
(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.
(More later….)
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).
Pg 28, TRADER. For the rallying SP500, the former resistance level 4,200 is now a SUPPORT level. The SP500 is also in a BULL market (+20% from the recent low). Stocks have MOMENTUM even without clear indications of future rate hikes or recession. This rally is narrow (yet 70.20% of the SP500 stocks are above 50-dMA and that is almost overbought; SC R2000 is lagging now). With lots of CASH on the sidelines, DIPS are seen as buying opportunities. Don’t fight the TAPE (or was it Don’t fight the FED? Whatever).
Stocks with earnings momentum now include UAL, RCL, FTNT, ZS, GOOGL, LLY.
Generac (GNRC; fwd P/E 18) may benefit from Summer power blackouts. There were/are concerns that EV batteries may replace its self-standing generators. (A stinker since Barron’s 09/2022 recommendation)
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
FOMC 7/26/23+ hike +25 bps (cycle peak 5.25-5.50%)
FOMC 9/20/23+ hold
FOMC 11/1/23+ hold
FOMC 12/13/23+ hold
(POWELL said that there may be 2 MORE hikes in 2023 and NO CUTS for 2 years. He also said that the Fed doesn’t want the markets to be surprised. So, expect lot of jawboning to move fed fund futures in line with the Fed’s narrative. Things may change if the economy suddenly turns sour or something important breaks (but more important than cryptos or regional banks))
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +1.25%, SP500 +2.58%, Nasdaq Comp +3.25%, R2000 +0.52%. DJ Transports +3.86%; DJ Utilities +1.06%. (Rotating spot tech XLK +4.33%) US$ index (spot) -1.23%, oil/WTI futures +2.30%, gold futures -0.19%.
YTD (index changes only), DJIA +3.48%, SP500 +14.85%, Nasdaq Comp +30.79%. (Rotating spot tech XLK +39.18%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE rose for a 3rd week; ratio of winners:losers 3:2.
AAII Bull-Bear Spread +17.5% (above average).
%Above 50-dMA for NYSE-listed stocks 68.03% (high) (StockCharts $NYA50R; $SPXA50R for the SP500 is also included in the bottom panel),
stockcharts.com/h-sc/ui?s=%24NYA50R&p=D&b=5&g=0&id=p91704957718 .
Delta MSI 60.8% (good) (a proprietary index for %Above 75-dMA for selected 1,800 stocks). The all-cap $NYA50R is typically closer to it than the large-cap $SPXA50R.
Pg 32, INTERNATIONAL TRADER. A trade deal between the EU and Brazil (really, EU-Mercosur) may save Amazon rainforests. The new/returning President LULA (77) is more environment-friendly than his predecessor. He is also willing to use new technological tools and financial incentives.
EMERGING MARKETS. (Place holder)
COMMODITIES. (Place holder)
(It looks like these regular columns are gone. Barron’s page count is lower too, but it still costs $5 per issue. Long-term subscription prices may be lower with promos.)
Pg 19: El Nino threatens sugarcane crops and that is bullish for SUGAR that has already run up. Top producers are Brazil, India, Thailand. ETF is CANE.
Pg 33, OPTIONS. Big investors are concerned about high volumes of call buying. (What about the high SKEW? It indicates heavy put buying for hedging.)
(SP500 VIX 13.54, Nasdaq 100 VXN 19.55, options SKEW 147.86 (high), bond MOVE 104.43 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: An up week in EUROPE (Germany +2.03%, Norway -0.28%) and a good week in ASIA (Japan +3.16%, S Korea -0.88%).
TREASURY* 3-mo yield 5.34%, 1-yr 5.24%, 2-yr 4.70%, 5-yr 3.99%, 10-yr 3.77%, 30-yr 3.86%. REAL yields 5-yr 1.82%, 10-yr 1.55%, 30-yr 1.63%.
DOLLAR rose, ^DXY 102.3, -1.2% (pg 50). GOLD (still) flat at $1,960, UNCH (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 124.25, +0.29% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, NEW rate from May 1, 2023, is 4.30%; the fixed rate is +0.90%, the semiannual inflation is +1.69%.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) www.treasurydirect.gov/marketable-securities/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16, COVER STORY, “How the World’s Most Popular Shopping App (SHEIN) is Quietly Upending RETAIL”. Shein (say shee-in) is now the most popular global retail app (#2 in the US); revenues $23 billion, private market-cap $66 billion. It was founded in CHINA but later shifted to SINGAPORE. The US venture-capital has invested in it (Tiger Global, Sequoia Capital, etc). Its US IPO may be coming, but it wants to establish US roots first through local warehouses, distribution centers and some jobs – similar to its local expansion strategies elsewhere (Brazil, India, Turkey). This is quite an ambitious plan considering the US-China frictions including on the Chinese ADRs listed in the US. It claims that its rock-bottom PRICES are from its on-demand/user-activity business model for small-batch manufacturing that ships product direct from small manufacturers to customers. It owns no manufacturing/production facilities (so, all is by contract-manufacturing) and does minimal warehousing to only speed up the distribution. Its US competitors don’t see it as a disruptor yet (that may be a fatal mistake), and AMZN even considers it a partner. But the lawmakers in DC are watching it. It avoids the US duties by keeping shipments from China under $800 (the lawmakers are considering eliminating that loophole). A few other Chinese retail apps (Temu, etc) are hoping to piggyback on Shein’s success in the US.
Pg 6, UP AND DOWN WALL STREET. The FOMC decision on hawkish-pause was unanimous, yet there was lot of divergence in rate opinions in the FOMC dot plots. If the idea was to send a subtle tough message to the markets, that didn’t work either for cooling this AI-rally in the new economy stocks or for significantly changing the fed fund futures (see above). The SP500 has already overshot several strategists’ yearend targets.
You thought Nvidia was a hot AI stock? What about C3.ai/AI, Kroger/KR, Lennar/LEN? All are touting some AI angle; even the stodgy utilities have an AI angle. The short-term AI prospects may be quite different from long-term. Surprisingly, the AI-for-images came before the AI-for-texts (ChatGPT, Bard), but those haven’t fared well. Investors may want AI exposure through baskets/ETFs (AIEQ, AIQ, BOTZ, IRBO).
Pg 9, STREETWISE. Bud Lite/BUD ad fiasco has benefitted Modelo/STZ (now #1, Corona #2, former frontrunner Bud Lite #3). Ironically, while Americans are crazy over Mexican-style beers, the Mexican are developing a taste for European lager.
Nasdaq’s/NDAQ cash+stock acquisition of private Adenza from Thoma BRAVO (he will own 15% of NDAQ) was poorly received.
(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.
(More later….)
Accessible from Morningstar (M*), PB-Big Bang, Facebook (“at”yogibearbull), Twitter (“at”YBB_Finance).