Post by Admin/YBB on Jun 24, 2023 4:56:40 GMT -6
From Barron’s, June 26, 2023 (Part 1, Market Week+)
Pg 36, TRADER. AI-RALLY has only just begun (think of Carpenters’ mega hit that started out just as a bank ad jingle and then made Rolling Stones’ 500 Greatest Songs of All Time). There is much more to AI than just AAPL, MSFT, GOOGL, AMZN, NVDA, META, TSLA (MUSK finally jumped in with @tesla_AI after saying publicly for months that AI R&D must be paused). AI will next lead to upward EARNINGS revisions in the techs. The AI-BUBBLE will be when crazy new names/tickers are top performers in the charts, new AI-metrics become commonplace, and public starts to talk about exaflops (if you have to know, it goes like giga- , tera- , peta- , EXA- , zetta- , yotta- ). Don’t forget about the FED in all this hoopla.
With several federal INFRASTRUCTURE initiatives, a new INDUSTRIAL supercycle will begin in the US. Don’t look at how the industrial XLI did last week when the best was healthcare XLV and the worst was real estate XLRE. US MANUFACTURING is finally growing. Look at the themes of reshoring, infrastructure development, electrification (EVs, alternate energy). Don’t fight the Fed (better, invest with the Fed). Attractive are URI, DE, ETN, SBGSY, PWR, JCI.
Everything seems to be working for Tesla (TSLA; fwd P/E 77) – the AI-buzz, EV batteries, EV charging stations, EVs (and Twitter now has a CEO) and it may be a good time to take some profits. Q2 sales are due in early-July; a beat may not move the stock but watch out if a miss.
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
(Cuts in 2024. Still far from what POWELL says – 2 more hikes in 2023 and no cuts in 2024.)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA -1.67%, SP500 -1.39%, Nasdaq Comp -1.44%, R2000 -2.87%. DJ Transports -0.71%; DJ Utilities -2.43%. (Rotating spot industrial XLK -2.06%) US$ index (spot) +0.61%, oil/WTI futures -3.65%, gold futures -2.01%.
YTD (index changes only), DJIA +1.75%, SP500 +13.25%, Nasdaq Comp +28.91%. (Rotating spot industrial +5.16%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE fell; ratio of winners:losers 1:2.
AAII Bull-Bear Spread +15.1% (above average).
%Above 50-dMA for NYSE-listed stocks 52.77% (positive) (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 65.8% (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 39, INTERNATIONAL TRADER. The US-INDIA relations got a huge boost from the US state visit of the Indian Prime Minister MODI. The US is hoping to influence Indian policies on Russia, China, and on human rights. India is hoping for technology transfers, the US military equipment, more trade, and improved immigration policies.
Pg 39, INCOME INVESTING. 3M (MMM; yield 6%; fwd P/E 11 only), a dividend aristocrat (ETF NOBL), may slash its dividend. It’s trying to resolve huge liabilities from faulty earplugs and forever-chemicals (PFAS, etc). It’s spinning off the healthcare business (may retain 20% interest) and that may be a good time to “adjust” the dividend too. (Note move of this column to this thinning Part 1)
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.)
EXTRA, COMMODITIES. New EPA clean-fuel standards on mixing biofuels will benefit OPAL, CLNE, BP, etc. There would be related credits using RINs.
Pg 40, OPTIONS. If stricken by FOMO despite recent cautions, use call-spreads for tech XLK.
(SP500 VIX 13.44, Nasdaq 100 VXN 19.29, options SKEW 137.85 (high), bond MOVE 105.74 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: A bad week in EUROPE (Greece -1.33%, Switzerland -1.63%, Finland -5.74%) and a bad week in ASIA (Malaysia -0.27%, China -6.13%). (Unusually, a down week for almost all global markets; only Argentina and Turkey were positive.)
TREASURY* 3-mo yield 5.41%, 1-yr 5.25%, 2-yr 4.71%, 5-yr 3.99%, 10-yr 3.74%, 30-yr 3.82%. REAL yields 5-yr 1.83%, 10-yr 1.53%, 30-yr 1.59%.
DOLLAR rose, ^DXY 102.87, +0.6% (pg 58). GOLD fell to $1,931, -1.5% (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 118.31, -4.78% 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 18, COVER STORY, “Top CEOs of 2023”. Included among 25 are Warren BUFFETT/BRK, Tim COOK/AAPL, Larry CULP/GE, Jamie DIMON/JPM, Vicki HOLLUB/OXY, Dara KHOSROWSHAHI/UBER, Satya NADELLA/MSFT, Shantanu NARAYEN/ADBE, Sunder PICHAI/GOOGL. There are brief features on each with online links.
Pg 28: The SP500 CEOs last for a median 4.8 years, an average 7.2 years. The big discrepancy is due to several forever (or almost) CEOs – Greg BROWN/MSI, Jensen Huang/NVDA, Tim COOK/AAPL, Shantanu NARAYEN/ADBE, Steve Schwarzman/BX, and of course, the legendary Warren BUFFETT/BRK. Some former forever CEOs were Bill GATES/MSFT, Larry Ellison/ORCL, Jeff BEZOS/AMZN.
Pg 6, UP AND DOWN WALL STREET. Repeat guest author SERWER (a new high-profile hire by Barron’s earlier this year) explains why there won’t be a RECESSION in 2023. There are too many “help wanted” signs, although many people are also finding it difficult to get jobs; travel, hotel, restaurant businesses are booming; estimates for Q2 GDP are positive; the stock market is up; sentiment has improved. The fiscal stimuluses for INFRASTRUCTURE from DC are continuing; the state and local government are leveraging federal funds with their own and industry funds; even the foreign companies are rushing to open factories and facilities in/around the US to tap into the federal funds. Still, optimism is in short supply; sales of luxury items aren’t doing well; even the rich are shopping more at dollar stores; the IPO market is in slumber after the hot years of 2021 and 2022 (and forget about the SPACs). So, slowdown in 2025? May be.
Pg 9, STREETWISE. Jared WOODARD/BoA didn’t get the memo that 60/40 started working again. So, he is belatedly suggesting ways to fix them by including within the 40% fixed-income the preferreds, convertibles, munis, and within the 60% stocks some nonmarket-cap funds, factor funds, natural-resources (Hardly revolutionary. Similar proposals have been made already in 2022 and a new category of multi-asset funds has already evolved).
(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 36, TRADER. AI-RALLY has only just begun (think of Carpenters’ mega hit that started out just as a bank ad jingle and then made Rolling Stones’ 500 Greatest Songs of All Time). There is much more to AI than just AAPL, MSFT, GOOGL, AMZN, NVDA, META, TSLA (MUSK finally jumped in with @tesla_AI after saying publicly for months that AI R&D must be paused). AI will next lead to upward EARNINGS revisions in the techs. The AI-BUBBLE will be when crazy new names/tickers are top performers in the charts, new AI-metrics become commonplace, and public starts to talk about exaflops (if you have to know, it goes like giga- , tera- , peta- , EXA- , zetta- , yotta- ). Don’t forget about the FED in all this hoopla.
With several federal INFRASTRUCTURE initiatives, a new INDUSTRIAL supercycle will begin in the US. Don’t look at how the industrial XLI did last week when the best was healthcare XLV and the worst was real estate XLRE. US MANUFACTURING is finally growing. Look at the themes of reshoring, infrastructure development, electrification (EVs, alternate energy). Don’t fight the Fed (better, invest with the Fed). Attractive are URI, DE, ETN, SBGSY, PWR, JCI.
Everything seems to be working for Tesla (TSLA; fwd P/E 77) – the AI-buzz, EV batteries, EV charging stations, EVs (and Twitter now has a CEO) and it may be a good time to take some profits. Q2 sales are due in early-July; a beat may not move the stock but watch out if a miss.
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
(Cuts in 2024. Still far from what POWELL says – 2 more hikes in 2023 and no cuts in 2024.)
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA -1.67%, SP500 -1.39%, Nasdaq Comp -1.44%, R2000 -2.87%. DJ Transports -0.71%; DJ Utilities -2.43%. (Rotating spot industrial XLK -2.06%) US$ index (spot) +0.61%, oil/WTI futures -3.65%, gold futures -2.01%.
YTD (index changes only), DJIA +1.75%, SP500 +13.25%, Nasdaq Comp +28.91%. (Rotating spot industrial +5.16%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE fell; ratio of winners:losers 1:2.
AAII Bull-Bear Spread +15.1% (above average).
%Above 50-dMA for NYSE-listed stocks 52.77% (positive) (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 65.8% (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 39, INTERNATIONAL TRADER. The US-INDIA relations got a huge boost from the US state visit of the Indian Prime Minister MODI. The US is hoping to influence Indian policies on Russia, China, and on human rights. India is hoping for technology transfers, the US military equipment, more trade, and improved immigration policies.
Pg 39, INCOME INVESTING. 3M (MMM; yield 6%; fwd P/E 11 only), a dividend aristocrat (ETF NOBL), may slash its dividend. It’s trying to resolve huge liabilities from faulty earplugs and forever-chemicals (PFAS, etc). It’s spinning off the healthcare business (may retain 20% interest) and that may be a good time to “adjust” the dividend too. (Note move of this column to this thinning Part 1)
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.)
EXTRA, COMMODITIES. New EPA clean-fuel standards on mixing biofuels will benefit OPAL, CLNE, BP, etc. There would be related credits using RINs.
Pg 40, OPTIONS. If stricken by FOMO despite recent cautions, use call-spreads for tech XLK.
(SP500 VIX 13.44, Nasdaq 100 VXN 19.29, options SKEW 137.85 (high), bond MOVE 105.74 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: A bad week in EUROPE (Greece -1.33%, Switzerland -1.63%, Finland -5.74%) and a bad week in ASIA (Malaysia -0.27%, China -6.13%). (Unusually, a down week for almost all global markets; only Argentina and Turkey were positive.)
TREASURY* 3-mo yield 5.41%, 1-yr 5.25%, 2-yr 4.71%, 5-yr 3.99%, 10-yr 3.74%, 30-yr 3.82%. REAL yields 5-yr 1.83%, 10-yr 1.53%, 30-yr 1.59%.
DOLLAR rose, ^DXY 102.87, +0.6% (pg 58). GOLD fell to $1,931, -1.5% (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 118.31, -4.78% 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 18, COVER STORY, “Top CEOs of 2023”. Included among 25 are Warren BUFFETT/BRK, Tim COOK/AAPL, Larry CULP/GE, Jamie DIMON/JPM, Vicki HOLLUB/OXY, Dara KHOSROWSHAHI/UBER, Satya NADELLA/MSFT, Shantanu NARAYEN/ADBE, Sunder PICHAI/GOOGL. There are brief features on each with online links.
Pg 28: The SP500 CEOs last for a median 4.8 years, an average 7.2 years. The big discrepancy is due to several forever (or almost) CEOs – Greg BROWN/MSI, Jensen Huang/NVDA, Tim COOK/AAPL, Shantanu NARAYEN/ADBE, Steve Schwarzman/BX, and of course, the legendary Warren BUFFETT/BRK. Some former forever CEOs were Bill GATES/MSFT, Larry Ellison/ORCL, Jeff BEZOS/AMZN.
Pg 6, UP AND DOWN WALL STREET. Repeat guest author SERWER (a new high-profile hire by Barron’s earlier this year) explains why there won’t be a RECESSION in 2023. There are too many “help wanted” signs, although many people are also finding it difficult to get jobs; travel, hotel, restaurant businesses are booming; estimates for Q2 GDP are positive; the stock market is up; sentiment has improved. The fiscal stimuluses for INFRASTRUCTURE from DC are continuing; the state and local government are leveraging federal funds with their own and industry funds; even the foreign companies are rushing to open factories and facilities in/around the US to tap into the federal funds. Still, optimism is in short supply; sales of luxury items aren’t doing well; even the rich are shopping more at dollar stores; the IPO market is in slumber after the hot years of 2021 and 2022 (and forget about the SPACs). So, slowdown in 2025? May be.
Pg 9, STREETWISE. Jared WOODARD/BoA didn’t get the memo that 60/40 started working again. So, he is belatedly suggesting ways to fix them by including within the 40% fixed-income the preferreds, convertibles, munis, and within the 60% stocks some nonmarket-cap funds, factor funds, natural-resources (Hardly revolutionary. Similar proposals have been made already in 2022 and a new category of multi-asset funds has already evolved).
(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).