Post by Admin/YBB on Jul 22, 2023 5:06:05 GMT -6
Pg 12. FOMC Statement and Powell’s presser on WEDNESDAY.
REVIEW & PREVIEW. Lilly’s/LLY donanemab will soon join Biogen’s/BIIB + Eisai (Japan) Leqembi. Medicare is expected to cover both these drugs (an issue that killed the greedy 1st entry from BIIB in 2022). Another drug from Irish Prothena/PRTA will be coming soon and BMY has options for it.
PREVIEW. (Note consolidation of Review + Preview on a single page)
DATA THIS WEEK (to be gone?). Q2 GDP on THURSDAY; personal income and consumption (core PCE +4.2% yoy). (This section is now gone from the paper-copy. It still appears online for now. Barron’s saved 1 print-page here.)
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Insurance broker Arthur J Gallagher (AJG; serves as broker/intermediary, underwriter, claims administrator for various P&C and healthcare insurers; capital-lite model; growth by acquisition; next report 7/27/23; based in Rolling Meadows/Chicago; pg 15).
BEARISH.
Pg 13: Many fund companies (BLK, IVZ, WT, Fidelity, etc) are flooding the SEC with new SPOT-CRYPTO ETFs and daring it to reject them all – while there are noises in the DC about GENSLER’s/SEC approach, and in a recent ongoing court case SEC vs XRP/Ripple, the judge wasn’t very sympathetic to the SEC arguments or its general approach to securities regulations. BlackRock’s/BLK spot-crypto approach is novel in that it will use Coinbase/COIN trading platform, but the Nasdaq/NDAQ exchange will provide assistance for detecting fraud, manipulation, etc. BlackRock has had 576 ETFs approved with only 1 rejection, so, will its spot-crypto ETFs be its 2nd rejection, or does it know something that others don’t? Anyway, several other filers have also adjusted their spot-crypto ETF filings in a way similar to BlackRock. On another front, Fidelity, Schwab, etc are developing an alternate crypto exchange that is modelled after traditional US exchanges. (One thought is that the SEC suddenly throws in the towel by saying that this crypto stuff has now sufficiently matured, or Gensler is just dumped).
Pg 20-26: The 100 Best ANNUITIES. Annuities are selling like hot cakes. These are combo investments and insurance contracts backed by insurers. There are fees involved, and most have high sales commissions, but there is also some risk transfer from individuals to insurers. There are tables with sample vendors for fixed-term annuities, tax-deferred annuities (within 401k/403b, taxable), single-premium immediate annuities (SPIAs; most basic, low-cost), deferred-income annuities (DIAs), QLACs (from tax-deferred plans), indexed-annuities, variable-annuities (VAs), GMWB/GLWB riders (very expensive, but access to principal is retained), upside or downside protected annuities, buffered annuities. (People interested should check Barron’s online or at local libraries or just skip Starbucks and pay $5 at a newsstand).
Pg 27, FUNDS. Many STAR MANAGERS who leave for other firms, or form their own firms, don’t succeed as well (JUCAX with Bill Gross was a classic disaster). The reason may be the vast analyst, research and data support systems that they relied on at their old firms. Almost 42% of these managers didn’t even last 5 years at their new firms; the startup costs at their own firms may be high. Many firms now use multi-manager team model that reduces the impact of anyone leaving. Notable exceptions/successes include GQGPX with Rajiv Jain (and Jefferey Gundlach who succeeded with DoubleLine against all odds; notably, Howard Marks underwrote most of the initial setup costs). (By @lewisbraham at MFO)
Pg 28, ECONOMY. CHINA and the WEST found common ground over ZAMBIA sovereign debt restructuring, a rare feat in these times of the US-China tensions. Zambia is a small country that is among the top COPPER producers. It got into trouble when copper prices plunged during the pandemic and it defaulted on Chinese, European and Paris Club loans. Lot of that debt was held by the US institutions (BlackRock, Fidelity, etc). The Paris Club had transparent debt and restructuring procedures, but China had operated quite opaquely, and unevenly on case-by-case basis. But this time, the cooperation between China and the West on Zambia may become a model for future restructuring of the debt of 73 EMs/FMs that are in poor financial shape.
Pg 29, TECH TRADER. The generative AI frenzy has reached a crescendo when companies are rushing to boost software capex (strong orders for MSFT, etc) but cutting chips/servers/hardware capex (weak orders for TSM, etc). (OK, so what will all this AI run on?)
Pg 30: Louis-Vincent GAVE, Gavekal Research. There are huge GEOPOLITICAL shifts going on in Europe, Asia, Middle East. It’s astounding that the peace deal between SAUDI ARABIA and IRAN has been brokered by CHINA (!) – this is like the peace between France and Germany after WWII, and possibly, a future peace between China and India. For China, an immense benefit will be a land pipeline from Saudi Arabia to Iran to ? to China. The possibility of a US/Western oil shipment embargo for China during any conflict with the US has spooked China. Then, there is this new DOLLAR DIPLOMACY that is causing gradual but steady shift away from dollar-trading and dollar-reserves into local/regional currencies. The dollar index (based on a fixed currency basket) is outdated – many already use trade-weighted dollar. The EMs ex-China are actually booming now, but the EM indexes are held back by the heavy weight from lagging China. Forget AI and Nasdaq, the markets in Argentina, Brazil, India, Indonesia, Mexico have outperformed. It still isn’t too late to participate as the EMs are under-owned and most US investors have sworn off the non-US markets. Nothing against AI, but AI will also be huge in EMs, and people would find better/cheaper alternatives to overpriced MSFT, NVDA, etc.
JAPAN is finally changing – it has inflation and rising rates and there will be a massive shift from bonds to equities. But it will be very volatile near-term (it is said that Japan is the most cyclical among the global markets). CHINA has lagged because it didn’t have huge stimuluses during the pandemic and its Covid problems are hardly over. But that is changing. Soon, the world may wake up to the day when Chinese global auto exports will exceed those by Japan. President Xi Jinping has to realize that China’s future lies in the tech sector and everything else will be secondary (economic growth, domestic consumption, etc) (with his power assured, he may flip on policy easily). Many Chinese stocks have sold off sharply, are under-owned, but have huge future potential.
Pg 32, INCOME. Telecoms T (yield 8.3%) and VZ (yield 8.1%) sold off after WSJ reports that old telecom cables were wrapped in lead; estimates of the liabilities vary. But their dividends should be safe; both have good cash flows to cover dividends even after accounting for lead liabilities spread over multiple years. (Barron’s may regret saying that now lower is even better for T and VZ)
Pg 62, OTHER VOICES. Dave JONES, UC-Berkeley and formerly, CA insurance commissioner 2011-18. Major insurers have been hit hard by natural or climatic DISASTERS and are refusing to write new policies in several states (CA, FL, LA, etc). Many insurers first try to raise premiums (but are frustrated by the state insurance commissioners), then write new policies with many exclusions, and finally quit writing new policies. A coordinated national action is needed to address disasters (wherever possible), discourage people and business from disaster-prone areas, establish reinsurance programs, promote policies that adjust premiums for disaster mitigations, setup federal or state high-risk insurance pools when private insurance isn’t available.
(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 & PREVIEW. Lilly’s/LLY donanemab will soon join Biogen’s/BIIB + Eisai (Japan) Leqembi. Medicare is expected to cover both these drugs (an issue that killed the greedy 1st entry from BIIB in 2022). Another drug from Irish Prothena/PRTA will be coming soon and BMY has options for it.
PREVIEW. (Note consolidation of Review + Preview on a single page)
DATA THIS WEEK (to be gone?). Q2 GDP on THURSDAY; personal income and consumption (core PCE +4.2% yoy). (This section is now gone from the paper-copy. It still appears online for now. Barron’s saved 1 print-page here.)
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. Insurance broker Arthur J Gallagher (AJG; serves as broker/intermediary, underwriter, claims administrator for various P&C and healthcare insurers; capital-lite model; growth by acquisition; next report 7/27/23; based in Rolling Meadows/Chicago; pg 15).
BEARISH.
Pg 13: Many fund companies (BLK, IVZ, WT, Fidelity, etc) are flooding the SEC with new SPOT-CRYPTO ETFs and daring it to reject them all – while there are noises in the DC about GENSLER’s/SEC approach, and in a recent ongoing court case SEC vs XRP/Ripple, the judge wasn’t very sympathetic to the SEC arguments or its general approach to securities regulations. BlackRock’s/BLK spot-crypto approach is novel in that it will use Coinbase/COIN trading platform, but the Nasdaq/NDAQ exchange will provide assistance for detecting fraud, manipulation, etc. BlackRock has had 576 ETFs approved with only 1 rejection, so, will its spot-crypto ETFs be its 2nd rejection, or does it know something that others don’t? Anyway, several other filers have also adjusted their spot-crypto ETF filings in a way similar to BlackRock. On another front, Fidelity, Schwab, etc are developing an alternate crypto exchange that is modelled after traditional US exchanges. (One thought is that the SEC suddenly throws in the towel by saying that this crypto stuff has now sufficiently matured, or Gensler is just dumped).
Pg 20-26: The 100 Best ANNUITIES. Annuities are selling like hot cakes. These are combo investments and insurance contracts backed by insurers. There are fees involved, and most have high sales commissions, but there is also some risk transfer from individuals to insurers. There are tables with sample vendors for fixed-term annuities, tax-deferred annuities (within 401k/403b, taxable), single-premium immediate annuities (SPIAs; most basic, low-cost), deferred-income annuities (DIAs), QLACs (from tax-deferred plans), indexed-annuities, variable-annuities (VAs), GMWB/GLWB riders (very expensive, but access to principal is retained), upside or downside protected annuities, buffered annuities. (People interested should check Barron’s online or at local libraries or just skip Starbucks and pay $5 at a newsstand).
Pg 27, FUNDS. Many STAR MANAGERS who leave for other firms, or form their own firms, don’t succeed as well (JUCAX with Bill Gross was a classic disaster). The reason may be the vast analyst, research and data support systems that they relied on at their old firms. Almost 42% of these managers didn’t even last 5 years at their new firms; the startup costs at their own firms may be high. Many firms now use multi-manager team model that reduces the impact of anyone leaving. Notable exceptions/successes include GQGPX with Rajiv Jain (and Jefferey Gundlach who succeeded with DoubleLine against all odds; notably, Howard Marks underwrote most of the initial setup costs). (By @lewisbraham at MFO)
Pg 28, ECONOMY. CHINA and the WEST found common ground over ZAMBIA sovereign debt restructuring, a rare feat in these times of the US-China tensions. Zambia is a small country that is among the top COPPER producers. It got into trouble when copper prices plunged during the pandemic and it defaulted on Chinese, European and Paris Club loans. Lot of that debt was held by the US institutions (BlackRock, Fidelity, etc). The Paris Club had transparent debt and restructuring procedures, but China had operated quite opaquely, and unevenly on case-by-case basis. But this time, the cooperation between China and the West on Zambia may become a model for future restructuring of the debt of 73 EMs/FMs that are in poor financial shape.
Pg 29, TECH TRADER. The generative AI frenzy has reached a crescendo when companies are rushing to boost software capex (strong orders for MSFT, etc) but cutting chips/servers/hardware capex (weak orders for TSM, etc). (OK, so what will all this AI run on?)
Pg 30: Louis-Vincent GAVE, Gavekal Research. There are huge GEOPOLITICAL shifts going on in Europe, Asia, Middle East. It’s astounding that the peace deal between SAUDI ARABIA and IRAN has been brokered by CHINA (!) – this is like the peace between France and Germany after WWII, and possibly, a future peace between China and India. For China, an immense benefit will be a land pipeline from Saudi Arabia to Iran to ? to China. The possibility of a US/Western oil shipment embargo for China during any conflict with the US has spooked China. Then, there is this new DOLLAR DIPLOMACY that is causing gradual but steady shift away from dollar-trading and dollar-reserves into local/regional currencies. The dollar index (based on a fixed currency basket) is outdated – many already use trade-weighted dollar. The EMs ex-China are actually booming now, but the EM indexes are held back by the heavy weight from lagging China. Forget AI and Nasdaq, the markets in Argentina, Brazil, India, Indonesia, Mexico have outperformed. It still isn’t too late to participate as the EMs are under-owned and most US investors have sworn off the non-US markets. Nothing against AI, but AI will also be huge in EMs, and people would find better/cheaper alternatives to overpriced MSFT, NVDA, etc.
JAPAN is finally changing – it has inflation and rising rates and there will be a massive shift from bonds to equities. But it will be very volatile near-term (it is said that Japan is the most cyclical among the global markets). CHINA has lagged because it didn’t have huge stimuluses during the pandemic and its Covid problems are hardly over. But that is changing. Soon, the world may wake up to the day when Chinese global auto exports will exceed those by Japan. President Xi Jinping has to realize that China’s future lies in the tech sector and everything else will be secondary (economic growth, domestic consumption, etc) (with his power assured, he may flip on policy easily). Many Chinese stocks have sold off sharply, are under-owned, but have huge future potential.
Pg 32, INCOME. Telecoms T (yield 8.3%) and VZ (yield 8.1%) sold off after WSJ reports that old telecom cables were wrapped in lead; estimates of the liabilities vary. But their dividends should be safe; both have good cash flows to cover dividends even after accounting for lead liabilities spread over multiple years. (Barron’s may regret saying that now lower is even better for T and VZ)
Pg 62, OTHER VOICES. Dave JONES, UC-Berkeley and formerly, CA insurance commissioner 2011-18. Major insurers have been hit hard by natural or climatic DISASTERS and are refusing to write new policies in several states (CA, FL, LA, etc). Many insurers first try to raise premiums (but are frustrated by the state insurance commissioners), then write new policies with many exclusions, and finally quit writing new policies. A coordinated national action is needed to address disasters (wherever possible), discourage people and business from disaster-prone areas, establish reinsurance programs, promote policies that adjust premiums for disaster mitigations, setup federal or state high-risk insurance pools when private insurance isn’t available.
(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).