Post by Admin/YBB on Sept 2, 2023 7:17:38 GMT -6
Pg 8. PREVIEW & REVIEW (consolidated). Data from FlightAware showed that the average FLIGHT DELAY was 55 minutes. The best was Delta/DAL, followed by Alaska/ALK, American/AAL, United UAL, Southwest/LUV.
DATA THIS WEEK (seriously shrunk but supplemented from the link below). Durable goods orders, factory orders on TUESDAY; ISM services PMI, international trade deficit on WEDNESDAY; household net worth, wholesale inventories, consumer credit on FRIDAY.
CLOSED. The US markets on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Swiss sneaker/footwear maker On Holdings (ONON; fwd P/E 40.8; high growth; 60% sales in the US; stock ran up but then sold off on so-so Q2 report that showed high inventories; patented CloudTec cushioning and perforated-sole look; store and online sales; not much discounting; strong Swiss franc hurts the stock; pg 8).
BEARISH. Coinbase (COIN; P/S 7; losses except for 2021; US-based exchange, broker-dealer, custodian; partnerships with other firms; now rapidly expanding globally; became public in 2021, ran up hugely during the crypto boom and then crashed; ran up 2023YTD; stock very volatile; legal and regulatory issues – its approach is aggressive on both fronts (unusual); recent SEC court setbacks have provided some boost to stock; competition is growing too; short interest high at 14.5%, but it’s too risky to short as there may be short squeezes; several mainstream companies (BLK, Fidelity, IVZ, etc) have filed for spot-crypto ETFs and all were delayed last week; pg 10).
Pg 12: Tom WHEELER, former FCC Chair 2013-17. He discusses the regulatory challenges for big tech, AI, personal privacy, misinformation, etc. He compares the DIGITAL age today with the gilded INDUSTRIAL age in 1800s. He distrusts big tech now because they tend to act for their own benefits. The pace of technological change is fast, but regulations have been lagging. The AI has created some urgency. Even some major companies (GOOGL, MSFT, OpenAI, etc) are calling for better regulations. His solution is a NEW government AGENCY that may be more agile and proactive. He thinks that this can be done in a bipartisan way. His upcoming book, Techlash: Who Makes the Rules in the Gilded Digital Age, 10/2023.
Pg 18. RATES have been rising/peaking, but this confounding stock RALLY has more room to run, albeit gradually. Strategists remain mixed in their outlook and scenarios – bull, bear, sideways (although some famous bears have thrown in the towel). Lot will depend on FED’s monetary policy (higher rates for longer) and Congress’ fiscal policy. Inflation is a wild card. Expectations are that there will be a soft landing, not a recession. Bonds are attractive, especially the short and intermediate duration. Earnings growth will slow; the SP500 fwd P/E 19 is OK. Use barbell approach with AI/tech large-caps, quality-stocks along with defensive stocks; small/mid-caps may also be attractive. ETFs mentioned are IEI; QUAL; XLV, XLU; VOT. (JASINSKI wrote this long feature piece as well as the TRADER column this week, so there is a lot of overlap among them. Not a good choice by the Editor as some other interesting stuff got left out – see more EXTRAs this week).
Pg 23, FUNDS. Comanager Rich WINKOWSKI of contrarian international FGFAX likes Japan (#3 position; #1 UK, #2 France). He likes to buy stocks well below their intrinsic values. The fund is concentrated.
EXTRA, FUNDS. P&C insurers are hiking premiums and that will improve their profitability. They also have limited coverage in high-risk areas. The ETF is KBWP.
EXTRA, FUNDS. With the DC Appeals Court rejecting the SEC’s arguments against approving physical/spot-crypto ETFs, such ETFs may soon become available from established sponsors (BLK, Fidelity, IVZ, VanEck, WT, etc). Crypto firms (COIN, MARA, etc) may benefit. The SEC may also find a new way to reject such ETFs or, in extreme frustration, may even withdraw its past approvals of the futures-based crypto ETFs (the DC court said that the SEC was inconsistent in the treatments of futures-based crypto ETFs and spot-crypto ETFs).
Pg 24, INCOME. JNJ spinoff, the new Kenvue (KVUE; yield 3.5%; fwd P/E 17.9; debt/EBITDA 2) is a dividend Aristocrat right from the start; technically, the new company is 135-yr old. The Aristocrat ETFs are NOBL, KNG. (EXTRA. JNJ will also remain a dividend Aristocrat; post-spinoff, it will maintain its dividend, but this year, the combined payout from JNJ & KVUE will count).
Global dividends were at a record in Q2 (+4.9%; US +2.6%) with big contributions from banks (healthcare in the US). For 2023, global profits are expected to be flat, but dividends may rise +5.2%.
Pg 25, ECONOMY. FED rate hikes, that may be peaking, have made several winners and losers. Among the WINNERS, money-market funds, especially since their rates moved above 5%. Among the LOSERS, 12 regional Federal Reserve Banks that now have losses, so, no remittances to the Treasury until they become profitable again.
Pg 26: Charlene CHU, Autonomous Research (AllianceBernstein/AB). CHINA’s economy is faltering, debt is high, property sector is in trouble, exports are weak, consumer confidence is low. In some ways, things are the worst since the 1970s. The government isn’t using big stimulus programs. There may be a financial crisis if the institutions cannot rollover debt easily. Global financial institutions may not be affected much – they have taken protective steps since the Russia-Ukraine war. Chinese population would rather save or pay debt than invest. The rate differential between the US and China is large, and if it grows further, there may be outflows from China and yuan may weaken. This down spiral in China may last longer than many people think, and investment risks in China are high.
Pg 54, OTHER VOICES. Stephen DOVER, Franklin Templeton Institute. The FED rate hikes didn’t kill corporate PROFITS because many companies have shifted from short-term (commercial paper, bank loans) to long-term DEBT (bond issuances). Companies can also park their cash into higher rate instruments. So, many companies are less affected by the monetary policy now. These trends are more pronounced for financials, techs, energy, but less for healthcare. This may also affect the bond default rates in some sectors. But this situation is temporary. Buy the dips for bonds?
Edit/Add, Pg 55: The IRS has delayed the catchup rule for 50+ to 2026 (it would allow the catchups only in Roth 401k/403b). The current rule will remain in effect for 2024 and 2025 (i.e. the catchups can go into regular 401k/403b or Roth 401k/403b).
(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).
DATA THIS WEEK (seriously shrunk but supplemented from the link below). Durable goods orders, factory orders on TUESDAY; ISM services PMI, international trade deficit on WEDNESDAY; household net worth, wholesale inventories, consumer credit on FRIDAY.
CLOSED. The US markets on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Swiss sneaker/footwear maker On Holdings (ONON; fwd P/E 40.8; high growth; 60% sales in the US; stock ran up but then sold off on so-so Q2 report that showed high inventories; patented CloudTec cushioning and perforated-sole look; store and online sales; not much discounting; strong Swiss franc hurts the stock; pg 8).
BEARISH. Coinbase (COIN; P/S 7; losses except for 2021; US-based exchange, broker-dealer, custodian; partnerships with other firms; now rapidly expanding globally; became public in 2021, ran up hugely during the crypto boom and then crashed; ran up 2023YTD; stock very volatile; legal and regulatory issues – its approach is aggressive on both fronts (unusual); recent SEC court setbacks have provided some boost to stock; competition is growing too; short interest high at 14.5%, but it’s too risky to short as there may be short squeezes; several mainstream companies (BLK, Fidelity, IVZ, etc) have filed for spot-crypto ETFs and all were delayed last week; pg 10).
Pg 12: Tom WHEELER, former FCC Chair 2013-17. He discusses the regulatory challenges for big tech, AI, personal privacy, misinformation, etc. He compares the DIGITAL age today with the gilded INDUSTRIAL age in 1800s. He distrusts big tech now because they tend to act for their own benefits. The pace of technological change is fast, but regulations have been lagging. The AI has created some urgency. Even some major companies (GOOGL, MSFT, OpenAI, etc) are calling for better regulations. His solution is a NEW government AGENCY that may be more agile and proactive. He thinks that this can be done in a bipartisan way. His upcoming book, Techlash: Who Makes the Rules in the Gilded Digital Age, 10/2023.
Pg 18. RATES have been rising/peaking, but this confounding stock RALLY has more room to run, albeit gradually. Strategists remain mixed in their outlook and scenarios – bull, bear, sideways (although some famous bears have thrown in the towel). Lot will depend on FED’s monetary policy (higher rates for longer) and Congress’ fiscal policy. Inflation is a wild card. Expectations are that there will be a soft landing, not a recession. Bonds are attractive, especially the short and intermediate duration. Earnings growth will slow; the SP500 fwd P/E 19 is OK. Use barbell approach with AI/tech large-caps, quality-stocks along with defensive stocks; small/mid-caps may also be attractive. ETFs mentioned are IEI; QUAL; XLV, XLU; VOT. (JASINSKI wrote this long feature piece as well as the TRADER column this week, so there is a lot of overlap among them. Not a good choice by the Editor as some other interesting stuff got left out – see more EXTRAs this week).
Pg 23, FUNDS. Comanager Rich WINKOWSKI of contrarian international FGFAX likes Japan (#3 position; #1 UK, #2 France). He likes to buy stocks well below their intrinsic values. The fund is concentrated.
EXTRA, FUNDS. P&C insurers are hiking premiums and that will improve their profitability. They also have limited coverage in high-risk areas. The ETF is KBWP.
EXTRA, FUNDS. With the DC Appeals Court rejecting the SEC’s arguments against approving physical/spot-crypto ETFs, such ETFs may soon become available from established sponsors (BLK, Fidelity, IVZ, VanEck, WT, etc). Crypto firms (COIN, MARA, etc) may benefit. The SEC may also find a new way to reject such ETFs or, in extreme frustration, may even withdraw its past approvals of the futures-based crypto ETFs (the DC court said that the SEC was inconsistent in the treatments of futures-based crypto ETFs and spot-crypto ETFs).
Pg 24, INCOME. JNJ spinoff, the new Kenvue (KVUE; yield 3.5%; fwd P/E 17.9; debt/EBITDA 2) is a dividend Aristocrat right from the start; technically, the new company is 135-yr old. The Aristocrat ETFs are NOBL, KNG. (EXTRA. JNJ will also remain a dividend Aristocrat; post-spinoff, it will maintain its dividend, but this year, the combined payout from JNJ & KVUE will count).
Global dividends were at a record in Q2 (+4.9%; US +2.6%) with big contributions from banks (healthcare in the US). For 2023, global profits are expected to be flat, but dividends may rise +5.2%.
Pg 25, ECONOMY. FED rate hikes, that may be peaking, have made several winners and losers. Among the WINNERS, money-market funds, especially since their rates moved above 5%. Among the LOSERS, 12 regional Federal Reserve Banks that now have losses, so, no remittances to the Treasury until they become profitable again.
Pg 26: Charlene CHU, Autonomous Research (AllianceBernstein/AB). CHINA’s economy is faltering, debt is high, property sector is in trouble, exports are weak, consumer confidence is low. In some ways, things are the worst since the 1970s. The government isn’t using big stimulus programs. There may be a financial crisis if the institutions cannot rollover debt easily. Global financial institutions may not be affected much – they have taken protective steps since the Russia-Ukraine war. Chinese population would rather save or pay debt than invest. The rate differential between the US and China is large, and if it grows further, there may be outflows from China and yuan may weaken. This down spiral in China may last longer than many people think, and investment risks in China are high.
Pg 54, OTHER VOICES. Stephen DOVER, Franklin Templeton Institute. The FED rate hikes didn’t kill corporate PROFITS because many companies have shifted from short-term (commercial paper, bank loans) to long-term DEBT (bond issuances). Companies can also park their cash into higher rate instruments. So, many companies are less affected by the monetary policy now. These trends are more pronounced for financials, techs, energy, but less for healthcare. This may also affect the bond default rates in some sectors. But this situation is temporary. Buy the dips for bonds?
Edit/Add, Pg 55: The IRS has delayed the catchup rule for 50+ to 2026 (it would allow the catchups only in Roth 401k/403b). The current rule will remain in effect for 2024 and 2025 (i.e. the catchups can go into regular 401k/403b or Roth 401k/403b).
(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).