Post by Admin/YBB on Jun 17, 2023 5:10:26 GMT -6
Pg 10-11. POWELL at House subcommittee on WEDNESDAY, at Senate subcommittee on THURSDAY. The BOE monetary policy decision is on THURSDAY.
REVIEW. A Schwab WEALTH survey showed that investors thought themselves to be wealthy with an average net worth of $560K but said that it took $2.2 million for others to be wealthy. Of course, they took other nonmonetary factors into account, and they could do this best for themselves, but not for others.
PREVIEW. German Adidas/ADDYY is finally moving ahead by boosting its CHINA business, focusing on Lionel MESSI for promos in the US, and finally dumping its old YEEZY shoes inventory.
DATA THIS WEEK. Housing market index on MONDAY; housing starts on TUESDAY; LEI, existing home sales on THURSDAY.
CLOSED: The US markets for Juneteenth Day, MONDAY. (T-Bill Auctions shift to TUESDAY but the THURSDAY settlements remain)
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Music industry (UNVGY, WMG, SONY, SPOT; fears of AI writing and producing music are overblown; AI usage will change the music industry; new issues – whether the AI-generated music from copyrighted music is a violation of copyright, AI mimicry, etc; pg 12);
Freeport McMoRan (FCX; variable dividends; fwd P/E 21.6; net Debt/EBITDA 0.28; best Dr Copper play, 75% of revenue; beneficiary of EVs and alternative energy; China is world’s biggest copper consumer; pg 15).
BEARISH.
Pg 20, ECONOMY. TRUMP vs BIDEN economies in 11 side-by-side charts – GDP, SP500, inflation, interest rates, government debt, jobs, unemployment rate, labor force participation rate, employment cost index, housing, consumer confidence.
Pg 22, FUNDS. ALL-WEATHER funds with decent upside/downside or good performance in both 2022 and 2023 include AVALX, PVCMX, HFMDX, FBBYX, EBSAX, RYMFX, MCTOX. (By MFO @lewisbraham)
EXTRA, FUNDS: This market has bad BREADTH and that makes it difficult for stockpickers to beat the indexes. In May, only 23% of the SP500 stocks outperformed the index; it was better for large-caps (LC) where 54% of active LC funds outperformed the LC R1000. For many LCs, 2023 has been the flipside of 2022. Mentioned are ZVNBX, FBGRX, BIOPX.
Pg 23, INCOME INVESTING. MBS funds with 4-5% yields are attractive (some listed funds have high exposures to MBS) – DLTNX, MFAAX, PMZIX; ETFs MBB, SPMB, VMBS. Mortgage spreads are 175 bps (high). Headwinds include the Fed QT (includes -$35 billion/mo for MBS) and slowdown in housing.
Pg 24, TECH TRADER. Oracle/ORCL has caught up in CLOUD-computing and may soon be a force in AI. It has partnered with (private) Cohere on generative AI and has a good business relationship with the advanced chipmaker Nvidia/NVDA. Its 3-prong AI strategy includes generative AI, expert databases, and AI enhancements to its enterprise software.
Pg 25, ECONOMY. Why the FED’s hawkish-pause now? It was telegraphed well by the Fed Vice-Chair nominee JEFFERSON; and the FOMC vote was unanimous. The Fed Chair POWELL testifies before House (Wednesday) and Senate (Thursday) subcommittees this week. Speculations as to why the skip now and hike(s) later are the large Treasury issuances now to fill Treasury coffers and political considerations (2 and done in 2023, before the election year 2024).
Pg 26: Joyce CHANG, JPM. The DISCONNECT between the stock market and economy is from analysts’/strategists’ belief that less painful soft-landing will be achieved. Many investors are holding lot of “CASH” and may be missing opportunities in stocks (best – Japan, Europe, US) and bonds. There is more fallout to come yet from REGIONAL BANKS; many have high CRE exposures. The US stock market has a narrow LEAD; #11-#50 in SP500may be more attractive. The 60-40 hybrids look attractive for many investors. The AGING demographics will lead to higher savings and higher rates. The 10-yr may be 2.5% in 2030s (vs 1% by Blue Chip Economists, 1.8% by the CBO, 0.50% by the IMF). The real rates may be +2.5% (based on the forward-looking inflation-expectations, not the backward-looking CPI or PCE). The CLIMATE issues may cause severe weather (droughts, storms, floods, forest fires) and pandemics that may lead to higher inflation. TECH TRANSFORMATIONS are occurring at rapid pace (digitization, AI, etc) and these will lead to tradeoffs between productivity and unemployment.
CHINA looks different to businesses and investors – the latter can decouple easily, but not so the former. The US-China issues will affect the supply-chains. China is also changing internally from investments and exports driven to consumer driven; its long-term growth will slow to +2.5% to +3.0% (vs +5.9% now). The developed and EM countries are facing similar issues (debts, deficits, inflation, central bank policies) but the former have more tools available. The GLOBAL investors have to worry about volatility, economic growth, consumer spending, political and geopolitical risks. Due to DOLLAR diplomacy, several countries may be forced to shift to other currencies (Euro, yuan, EMs – yuan, etc).
Pg 54, OTHER VOICES. Stephen MIRAN, Amberwave Partners; formerly at the US Treasury 2021-22. The Fed’s hawkish-pause may become permanent. The real yield for 1-yr T-Bill is 3% over inflation-expectations. Strong economy has confounded its doubters so far. But now, of the 4 pillars supporting the economy, 3 are giving way. First, the excess SAVINGS have almost disappeared. Second, FISCAL policy has been stimulative, but will be restrained by the debt-ceiling agreements. Third, the YIELD-CURVE is inverted and banks’ borrowing costs have gone up. Deposits are also fleeing banks for higher yielding T-Bills and money-market funds. Finally, HOUSING acts with a lag, and it remains healthy even in the face of higher mortgage rates, but for how long?
SUPPLEMENT, “The Top 100 Women Financial Advisors” includes several features and a listing.
(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. A Schwab WEALTH survey showed that investors thought themselves to be wealthy with an average net worth of $560K but said that it took $2.2 million for others to be wealthy. Of course, they took other nonmonetary factors into account, and they could do this best for themselves, but not for others.
PREVIEW. German Adidas/ADDYY is finally moving ahead by boosting its CHINA business, focusing on Lionel MESSI for promos in the US, and finally dumping its old YEEZY shoes inventory.
DATA THIS WEEK. Housing market index on MONDAY; housing starts on TUESDAY; LEI, existing home sales on THURSDAY.
CLOSED: The US markets for Juneteenth Day, MONDAY. (T-Bill Auctions shift to TUESDAY but the THURSDAY settlements remain)
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Music industry (UNVGY, WMG, SONY, SPOT; fears of AI writing and producing music are overblown; AI usage will change the music industry; new issues – whether the AI-generated music from copyrighted music is a violation of copyright, AI mimicry, etc; pg 12);
Freeport McMoRan (FCX; variable dividends; fwd P/E 21.6; net Debt/EBITDA 0.28; best Dr Copper play, 75% of revenue; beneficiary of EVs and alternative energy; China is world’s biggest copper consumer; pg 15).
BEARISH.
Pg 20, ECONOMY. TRUMP vs BIDEN economies in 11 side-by-side charts – GDP, SP500, inflation, interest rates, government debt, jobs, unemployment rate, labor force participation rate, employment cost index, housing, consumer confidence.
Pg 22, FUNDS. ALL-WEATHER funds with decent upside/downside or good performance in both 2022 and 2023 include AVALX, PVCMX, HFMDX, FBBYX, EBSAX, RYMFX, MCTOX. (By MFO @lewisbraham)
EXTRA, FUNDS: This market has bad BREADTH and that makes it difficult for stockpickers to beat the indexes. In May, only 23% of the SP500 stocks outperformed the index; it was better for large-caps (LC) where 54% of active LC funds outperformed the LC R1000. For many LCs, 2023 has been the flipside of 2022. Mentioned are ZVNBX, FBGRX, BIOPX.
Pg 23, INCOME INVESTING. MBS funds with 4-5% yields are attractive (some listed funds have high exposures to MBS) – DLTNX, MFAAX, PMZIX; ETFs MBB, SPMB, VMBS. Mortgage spreads are 175 bps (high). Headwinds include the Fed QT (includes -$35 billion/mo for MBS) and slowdown in housing.
Pg 24, TECH TRADER. Oracle/ORCL has caught up in CLOUD-computing and may soon be a force in AI. It has partnered with (private) Cohere on generative AI and has a good business relationship with the advanced chipmaker Nvidia/NVDA. Its 3-prong AI strategy includes generative AI, expert databases, and AI enhancements to its enterprise software.
Pg 25, ECONOMY. Why the FED’s hawkish-pause now? It was telegraphed well by the Fed Vice-Chair nominee JEFFERSON; and the FOMC vote was unanimous. The Fed Chair POWELL testifies before House (Wednesday) and Senate (Thursday) subcommittees this week. Speculations as to why the skip now and hike(s) later are the large Treasury issuances now to fill Treasury coffers and political considerations (2 and done in 2023, before the election year 2024).
Pg 26: Joyce CHANG, JPM. The DISCONNECT between the stock market and economy is from analysts’/strategists’ belief that less painful soft-landing will be achieved. Many investors are holding lot of “CASH” and may be missing opportunities in stocks (best – Japan, Europe, US) and bonds. There is more fallout to come yet from REGIONAL BANKS; many have high CRE exposures. The US stock market has a narrow LEAD; #11-#50 in SP500may be more attractive. The 60-40 hybrids look attractive for many investors. The AGING demographics will lead to higher savings and higher rates. The 10-yr may be 2.5% in 2030s (vs 1% by Blue Chip Economists, 1.8% by the CBO, 0.50% by the IMF). The real rates may be +2.5% (based on the forward-looking inflation-expectations, not the backward-looking CPI or PCE). The CLIMATE issues may cause severe weather (droughts, storms, floods, forest fires) and pandemics that may lead to higher inflation. TECH TRANSFORMATIONS are occurring at rapid pace (digitization, AI, etc) and these will lead to tradeoffs between productivity and unemployment.
CHINA looks different to businesses and investors – the latter can decouple easily, but not so the former. The US-China issues will affect the supply-chains. China is also changing internally from investments and exports driven to consumer driven; its long-term growth will slow to +2.5% to +3.0% (vs +5.9% now). The developed and EM countries are facing similar issues (debts, deficits, inflation, central bank policies) but the former have more tools available. The GLOBAL investors have to worry about volatility, economic growth, consumer spending, political and geopolitical risks. Due to DOLLAR diplomacy, several countries may be forced to shift to other currencies (Euro, yuan, EMs – yuan, etc).
Pg 54, OTHER VOICES. Stephen MIRAN, Amberwave Partners; formerly at the US Treasury 2021-22. The Fed’s hawkish-pause may become permanent. The real yield for 1-yr T-Bill is 3% over inflation-expectations. Strong economy has confounded its doubters so far. But now, of the 4 pillars supporting the economy, 3 are giving way. First, the excess SAVINGS have almost disappeared. Second, FISCAL policy has been stimulative, but will be restrained by the debt-ceiling agreements. Third, the YIELD-CURVE is inverted and banks’ borrowing costs have gone up. Deposits are also fleeing banks for higher yielding T-Bills and money-market funds. Finally, HOUSING acts with a lag, and it remains healthy even in the face of higher mortgage rates, but for how long?
SUPPLEMENT, “The Top 100 Women Financial Advisors” includes several features and a listing.
(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).