Post by Admin/YBB on Aug 19, 2023 6:55:27 GMT -6
Pg 9. Fed conference in Jackson Hole THURSDAY-FRIDAY with POWELL speaking at 10:05 AM (Eastern) on Friday.
PREVIEW & REVIEW (consolidated). Due to crop production shortages for CHILLIS, hot sauce prices are, well, “hot”. Chillis need dry weather, but the crop is very sensitive to changes in weather. Much of the crop is handpicked, not by mechanized harvesting. A 28 oz bottle Sriracha sauce (from Huy Fong Foods) shot up from $10 to $70 (other brands didn’t go up as much, so may just switch). Some farmers have also switched to more stable crops.
DATA THIS WEEK (seriously shrunk but supplemented from the link below). Existing home sales on TUESDAY; new home sales on WEDNESDAY; durable goods orders THURSDAY; UM consumer sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Biotech & pharma (BNTX (& PFE), MRNA; they have had post-pandemic selloffs; Covid cases are rising in the US (& abroad); new boosters will be arriving soon and those may become annual events; as Covid vaccinations move from government programs to the commercial market, they will become more profitable; companies with lots of cash on the balance sheet should do well; they may also become acquisition targets; risk is that these companies may use/waste cash for expensive acquisitions – on RSV, Covid + flu combo (results haven’t been promising so far), cancer; pg 13);
Major credit card companies (V, MA; a duopoly exists; good profit margins; V & MA can charge merchants whatever they want; growth is in value added businesses (fraud prevention, data analytics, etc); threats are rising from fintechs (PYPL, AFRM, Klarna, etc), cryptos, Congress; even the real-time FedNow may compete with debit cards; but V & MA are also planning to grow into competing areas; pg 17).
BEARISH. VinFast (VFS; Singapore-based EV company became public via a SPAC acquisition; only 17-21 million shares trade out of 2.3 billion outstanding; stock ran up, then plunged, but is still too expensive; some EV production and sales; backed by Vietnamese Vingroup; pg 16).
Pg 10: POWELL’s speech (10:05 AM, Friday, “Structural Shifts in the Global Economy”) at the Fed conference in Jackson Hole will be a big event; hopefully, it will be longer than terse 9 minutes in 2022. The US inflation has been slashed, but not tamed to +2% average (the peak inflation reading was in July 2022). There are some sticky components of inflation. The unemployment rate remains near lows. Housing is stronger than expected but generally weak due to rising mortgage rates. Rates are now restrictive. The next FOMC is on September 19-20. The FOMC Minutes indicated more rate hike(s) may be ahead. But risks are growing in the US and abroad. Some post-pandemic changes in the economy may be permanent. Reshoring, deglobalization, energy transitions, etc will be inflationary. We may never return to the pre-pandemic economy.
Pg 14: BEST ROBO-ADVISORS, 2023: #1-Schwab/SCHW, #2-Merrill/BAC, #3-Fidelity Go, #4-Wealthfront, #5-Vanguard PAS, #6-Betterment, #7-SoFi/SOFI, #8-Empower, #9-Ally/ALLY, #10-US Bank/USB, #11-E*Trade/MS, #12-SigFig, #13-J.P. Morgan/JPM, #14-Wells Fargo/WFC, #15-Acorns.
Robo-advisor AUM is $900+ billion (by AUM, #1-Vanguard, #2-Edelman Financial Engines, #3-Morningstar, #4-Fidelity, #5-Schwab, etc). Some financial advisors/planners now just use robo-advisors (?). More robo-advisors are getting into the 401k/403b business and high-interest cash accounts. Several have added human touch for what are called hybrid robo-advisors, but some remain digital-only (Betterment, Wealthfront, etc). Only a few pure-play robo-advisors remain because the profitability has been low; many have been acquired or shut down; large established players dominate the scene now. Most of the article writeup is on Betterment.
Pg 30, FUNDS. Vanguard Global ESG Select Stock VEIGX (ER 0.57%) is outperforming in its Global LC-blend category. It considers ESG as supplemental criteria. Fund is concentrated with 35-45 stocks. It took advantage of the selloff in 2022 to buy some good stocks. (By @lewisbraham at MFO)
EXTRA, FUNDS. The new Vanguard International Dividend Growth will be managed by the VDIGX manager Peter FISHER/Wellington Management. International stocks are attractively valued (fwd P/E 13) and offer good dividends. Dollar weakness (when it comes) will be a tailwind.
Pg 31, INCOME Short-term plays are still attractive – T-Bills, money-market funds, ETFs SGOV, BIL, TBIL, SHV, etc (also look into Treasury FRNs). Strange that buying T-Bills only at “clunky” Treasury Direct is mentioned, but those can also be bought commission-free at major brokerages.
Pg 31, TECH TRADER. Cisco/CSCO is attractive (yield 3%; fwd P/E 14; fwd P/S 4; buybacks). It was hurt by pandemic/WFH that collapsed the enterprise IT capex. It also experienced supply-chain issues for parts. Things have normalized now. It is improving margins by cutting costs and jobs. It is also getting a boost from AI-related IT capex.
Pg 32, ECONOMY. RECESSION(s) abroad may disrupt the SOFT-LANDING scenario in the US. Europe, UK and China are near recession. The World Bank has warned of 2020s as the lost decade (meaning, rough going in the remaining years of 2020s). This will be a topic of discussion at the Fed conference in JACKSON HOLE, August 24-26, that will be attended by several foreign central bankers, and POWELL will speak on “Structural Shifts in the Global Economy” (Friday, 10:05 AM Eastern). The Fed funds FUTURES market expectations are for rates to peak at 5.50-5.75% and cuts around mid-2024 – but the Fed hasn’t confirmed that. India is doing well but it cannot play the role of a global engine like the US or China.
Pg 62, OTHER VOICES. Marc CHANDLER, Bannockburn Global Forex/FFBC. What anti-DOLLAR policy may emerge at the upcoming BRICS meeting? Probably NONE! There is lot of talk/hype about a new regional BRICS currency, but China and India don’t see eye-to-eye (for a while it appeared that India may not even attend but decided to attend at the last minute) and have their own agendas pushing their currencies (for bilateral or multilateral trades). China already has its Belt and Road Initiative (BRI) and Asian Infrastructure Investment Bank (AIIB); yuan isn’t ready for prime time now.
(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).
PREVIEW & REVIEW (consolidated). Due to crop production shortages for CHILLIS, hot sauce prices are, well, “hot”. Chillis need dry weather, but the crop is very sensitive to changes in weather. Much of the crop is handpicked, not by mechanized harvesting. A 28 oz bottle Sriracha sauce (from Huy Fong Foods) shot up from $10 to $70 (other brands didn’t go up as much, so may just switch). Some farmers have also switched to more stable crops.
DATA THIS WEEK (seriously shrunk but supplemented from the link below). Existing home sales on TUESDAY; new home sales on WEDNESDAY; durable goods orders THURSDAY; UM consumer sentiment on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Biotech & pharma (BNTX (& PFE), MRNA; they have had post-pandemic selloffs; Covid cases are rising in the US (& abroad); new boosters will be arriving soon and those may become annual events; as Covid vaccinations move from government programs to the commercial market, they will become more profitable; companies with lots of cash on the balance sheet should do well; they may also become acquisition targets; risk is that these companies may use/waste cash for expensive acquisitions – on RSV, Covid + flu combo (results haven’t been promising so far), cancer; pg 13);
Major credit card companies (V, MA; a duopoly exists; good profit margins; V & MA can charge merchants whatever they want; growth is in value added businesses (fraud prevention, data analytics, etc); threats are rising from fintechs (PYPL, AFRM, Klarna, etc), cryptos, Congress; even the real-time FedNow may compete with debit cards; but V & MA are also planning to grow into competing areas; pg 17).
BEARISH. VinFast (VFS; Singapore-based EV company became public via a SPAC acquisition; only 17-21 million shares trade out of 2.3 billion outstanding; stock ran up, then plunged, but is still too expensive; some EV production and sales; backed by Vietnamese Vingroup; pg 16).
Pg 10: POWELL’s speech (10:05 AM, Friday, “Structural Shifts in the Global Economy”) at the Fed conference in Jackson Hole will be a big event; hopefully, it will be longer than terse 9 minutes in 2022. The US inflation has been slashed, but not tamed to +2% average (the peak inflation reading was in July 2022). There are some sticky components of inflation. The unemployment rate remains near lows. Housing is stronger than expected but generally weak due to rising mortgage rates. Rates are now restrictive. The next FOMC is on September 19-20. The FOMC Minutes indicated more rate hike(s) may be ahead. But risks are growing in the US and abroad. Some post-pandemic changes in the economy may be permanent. Reshoring, deglobalization, energy transitions, etc will be inflationary. We may never return to the pre-pandemic economy.
Pg 14: BEST ROBO-ADVISORS, 2023: #1-Schwab/SCHW, #2-Merrill/BAC, #3-Fidelity Go, #4-Wealthfront, #5-Vanguard PAS, #6-Betterment, #7-SoFi/SOFI, #8-Empower, #9-Ally/ALLY, #10-US Bank/USB, #11-E*Trade/MS, #12-SigFig, #13-J.P. Morgan/JPM, #14-Wells Fargo/WFC, #15-Acorns.
Robo-advisor AUM is $900+ billion (by AUM, #1-Vanguard, #2-Edelman Financial Engines, #3-Morningstar, #4-Fidelity, #5-Schwab, etc). Some financial advisors/planners now just use robo-advisors (?). More robo-advisors are getting into the 401k/403b business and high-interest cash accounts. Several have added human touch for what are called hybrid robo-advisors, but some remain digital-only (Betterment, Wealthfront, etc). Only a few pure-play robo-advisors remain because the profitability has been low; many have been acquired or shut down; large established players dominate the scene now. Most of the article writeup is on Betterment.
Pg 30, FUNDS. Vanguard Global ESG Select Stock VEIGX (ER 0.57%) is outperforming in its Global LC-blend category. It considers ESG as supplemental criteria. Fund is concentrated with 35-45 stocks. It took advantage of the selloff in 2022 to buy some good stocks. (By @lewisbraham at MFO)
EXTRA, FUNDS. The new Vanguard International Dividend Growth will be managed by the VDIGX manager Peter FISHER/Wellington Management. International stocks are attractively valued (fwd P/E 13) and offer good dividends. Dollar weakness (when it comes) will be a tailwind.
Pg 31, INCOME Short-term plays are still attractive – T-Bills, money-market funds, ETFs SGOV, BIL, TBIL, SHV, etc (also look into Treasury FRNs). Strange that buying T-Bills only at “clunky” Treasury Direct is mentioned, but those can also be bought commission-free at major brokerages.
Pg 31, TECH TRADER. Cisco/CSCO is attractive (yield 3%; fwd P/E 14; fwd P/S 4; buybacks). It was hurt by pandemic/WFH that collapsed the enterprise IT capex. It also experienced supply-chain issues for parts. Things have normalized now. It is improving margins by cutting costs and jobs. It is also getting a boost from AI-related IT capex.
Pg 32, ECONOMY. RECESSION(s) abroad may disrupt the SOFT-LANDING scenario in the US. Europe, UK and China are near recession. The World Bank has warned of 2020s as the lost decade (meaning, rough going in the remaining years of 2020s). This will be a topic of discussion at the Fed conference in JACKSON HOLE, August 24-26, that will be attended by several foreign central bankers, and POWELL will speak on “Structural Shifts in the Global Economy” (Friday, 10:05 AM Eastern). The Fed funds FUTURES market expectations are for rates to peak at 5.50-5.75% and cuts around mid-2024 – but the Fed hasn’t confirmed that. India is doing well but it cannot play the role of a global engine like the US or China.
Pg 62, OTHER VOICES. Marc CHANDLER, Bannockburn Global Forex/FFBC. What anti-DOLLAR policy may emerge at the upcoming BRICS meeting? Probably NONE! There is lot of talk/hype about a new regional BRICS currency, but China and India don’t see eye-to-eye (for a while it appeared that India may not even attend but decided to attend at the last minute) and have their own agendas pushing their currencies (for bilateral or multilateral trades). China already has its Belt and Road Initiative (BRI) and Asian Infrastructure Investment Bank (AIIB); yuan isn’t ready for prime time now.
(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).