Post by Admin/YBB on Jul 8, 2023 5:03:02 GMT -6
Pg 8-9. President BIDEN is at NATO summit in Lithuania on TUESDAY-WEDNESDAY. 2023/Q2 earnings season starts with several big banks reporting on FRIDAY.
REVIEW. Recent Summer MOVIE debuts have been disappointing. Disney/DIS says that many just want to watch movies at home. Big budget Summer movies may be gone.
PREVIEW. High demand for NEW HOMES is providing a boost to homebuilders and the rally may continue – DHI, LEN, NUR, GRBK. Sales of existing homes aren’t doing well as many with low-rate mortgages don’t want to move.
DATA THIS WEEK. Consumer credit, wholesale inventories on MONDAY; small business optimism index on TUESDAY; CPI (+3.1% yoy; core +5%) on WEDNESDAY; PPI (core +2.5%); weekly initial jobless claims on THURSDAY; UM consumer sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. 6 attractive small banks (AX, BFH, FFBC, OFG, PFBC, STBA; regional bank ETF KRE has been hit hard by the regional banking crisis but valuations are now attractive; pg 10;
Travel boom (cruises RCL, CCL, NCLH; airlines UAL, DAL, AAL; hotel H; pg 11);
Pharma (SNY, ZTS, ABBV, GILD, BIIB, ESAIY; R&D, trials, the FDA approvals are expensive and time consuming, but drug pricing is out of control; PBMs and Medicare are pushing back; but why does eczema medicine with the same ingredient is cheaper for dogs than for humans?; pg 12).
BEARISH.
Pg 18: Lori CALVASINA, RBC Capital Markets. She is an observer of market cycles. She thinks that the market now parallels that in 1945 – the stocks rallied then through recession (02/1945-10/1945) on the expectations of post-WWII economic growth. But 1946 was a bad year; inflation was high in 1944, moderated in 1945, but spiked again in 1946. Stocks typically bottom in recessions and October 2022 lows aren’t the final ones for this cycle. Now, we are in post-pandemic recovery period; there are several infrastructure and reshoring initiatives; many sectors are/have been in technical recessions. Her most bearish models project SP500 in range 3,800-4,100; most bullish 4,650; but her current projections are modest at 4,250. Bonds are relatively more attractive than stocks. She isn’t too concerned about the narrow market breadth, but either the rest of SP500 will catchup with the big 7 or will pull them down. Her recommendation is to mix defensive (already expensive), value/cyclicals and growth. She favors old techs, energy, small-caps (recovery plays) but is avoiding consumer-discretionary (except the SCs).
Pg 20, INCOME. Don’t stay in T-Bills and money-market funds for too long. Use a barbell to mix short-term and intermediate/long-term bond funds including the MBS. Eventually, when the rates fall, these would have capital gains. Mentioned are preferreds PFLD, PSK, PFF.
Pg 20, TECH TRADER. “Threads” from Facebook/Instagram/META may be a huge success at launch, and it may hurt Twitter, but it won’t move the bottom line for META. Facebook has a history of copying/following others but there are several differences now between Twitter and Threads; more features may be added later. There are no ads at Threads yet but those will come later. (Find me as “at”yogibearbull at Threads)
Pg 21, ECONOMY. For rolling/trailing 12 month returns, the 2023/Q2 was good (2023/Q1 not so). However, the quarterly data fluctuates widely, and trailing numbers don’t tell much about going forward.
Pg 46, OTHER VOICES. Brian GRAHAM, Klaros Group (an advisory and investment firm). There are too many US banks (4,600) and many smaller banks will consolidate or be bought by bigger banks. But smaller community- and regional- banks are important for local businesses. Smaller US banks have 50% of the US banking business (this isn’t reflected in deposit bases and fund flows). A good compromise between scale and local banking services may be medium-size banks. The banking industry needs recapitalization after the rate shocks and underwater HTM portfolios. Unfortunately, the bank M&A are down and applications for pending mergers are taking longer. So, there is room for reforms to shape the future banking consolidations.
Excerpts from the FUNDS QUARTERLY supplement will be presented separately.
(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.
None
Accessible from Morningstar (M*), PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).
REVIEW. Recent Summer MOVIE debuts have been disappointing. Disney/DIS says that many just want to watch movies at home. Big budget Summer movies may be gone.
PREVIEW. High demand for NEW HOMES is providing a boost to homebuilders and the rally may continue – DHI, LEN, NUR, GRBK. Sales of existing homes aren’t doing well as many with low-rate mortgages don’t want to move.
DATA THIS WEEK. Consumer credit, wholesale inventories on MONDAY; small business optimism index on TUESDAY; CPI (+3.1% yoy; core +5%) on WEDNESDAY; PPI (core +2.5%); weekly initial jobless claims on THURSDAY; UM consumer sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. 6 attractive small banks (AX, BFH, FFBC, OFG, PFBC, STBA; regional bank ETF KRE has been hit hard by the regional banking crisis but valuations are now attractive; pg 10;
Travel boom (cruises RCL, CCL, NCLH; airlines UAL, DAL, AAL; hotel H; pg 11);
Pharma (SNY, ZTS, ABBV, GILD, BIIB, ESAIY; R&D, trials, the FDA approvals are expensive and time consuming, but drug pricing is out of control; PBMs and Medicare are pushing back; but why does eczema medicine with the same ingredient is cheaper for dogs than for humans?; pg 12).
BEARISH.
Pg 18: Lori CALVASINA, RBC Capital Markets. She is an observer of market cycles. She thinks that the market now parallels that in 1945 – the stocks rallied then through recession (02/1945-10/1945) on the expectations of post-WWII economic growth. But 1946 was a bad year; inflation was high in 1944, moderated in 1945, but spiked again in 1946. Stocks typically bottom in recessions and October 2022 lows aren’t the final ones for this cycle. Now, we are in post-pandemic recovery period; there are several infrastructure and reshoring initiatives; many sectors are/have been in technical recessions. Her most bearish models project SP500 in range 3,800-4,100; most bullish 4,650; but her current projections are modest at 4,250. Bonds are relatively more attractive than stocks. She isn’t too concerned about the narrow market breadth, but either the rest of SP500 will catchup with the big 7 or will pull them down. Her recommendation is to mix defensive (already expensive), value/cyclicals and growth. She favors old techs, energy, small-caps (recovery plays) but is avoiding consumer-discretionary (except the SCs).
Pg 20, INCOME. Don’t stay in T-Bills and money-market funds for too long. Use a barbell to mix short-term and intermediate/long-term bond funds including the MBS. Eventually, when the rates fall, these would have capital gains. Mentioned are preferreds PFLD, PSK, PFF.
Pg 20, TECH TRADER. “Threads” from Facebook/Instagram/META may be a huge success at launch, and it may hurt Twitter, but it won’t move the bottom line for META. Facebook has a history of copying/following others but there are several differences now between Twitter and Threads; more features may be added later. There are no ads at Threads yet but those will come later. (Find me as “at”yogibearbull at Threads)
Pg 21, ECONOMY. For rolling/trailing 12 month returns, the 2023/Q2 was good (2023/Q1 not so). However, the quarterly data fluctuates widely, and trailing numbers don’t tell much about going forward.
Pg 46, OTHER VOICES. Brian GRAHAM, Klaros Group (an advisory and investment firm). There are too many US banks (4,600) and many smaller banks will consolidate or be bought by bigger banks. But smaller community- and regional- banks are important for local businesses. Smaller US banks have 50% of the US banking business (this isn’t reflected in deposit bases and fund flows). A good compromise between scale and local banking services may be medium-size banks. The banking industry needs recapitalization after the rate shocks and underwater HTM portfolios. Unfortunately, the bank M&A are down and applications for pending mergers are taking longer. So, there is room for reforms to shape the future banking consolidations.
Excerpts from the FUNDS QUARTERLY supplement will be presented separately.
(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.
None
Accessible from Morningstar (M*), PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).