Post by Admin/YBB on Sept 23, 2023 7:19:03 GMT -6
Pg 12, PREVIEW & REVIEW (consolidated). FALL begins on Saturday. But retail sale season has already started (TGT, TJX, SBUX, etc). Ghost-themes and pumpkin-spice are in. TikTok traffic also goes up in Fall and is correlated with retail traffic.
DATA THIS WEEK (seriously shrunk but supplemented from the link below). Consumer confidence, new home sales on TUESDAY; durable goods report on WEDNESDAY; Q2 GDP on THURSDAY; personal income and PCE (+3.4% y-o-y, core +3.9%), 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. Truist (TFC; yield 7.3% with good coverage; fwd P/E 8.2; difficult merger issues with BB&T + SunTrust may finally be behind with new restructuring steps; the regional banking crisis wasn’t kind to it; recovery by 2025, so for patient investors; pg 13);
LV Sphere Entertainment (SPHR; 17,000 seating capacity; the exterior has huge ad potential; SPHR also owns TV cable MSG Network that broadcasts NY Knicks and NY Ranger games; success of SPHR should benefit other DOLAN-family entities – MSGE, MSGS; all have Dolan discounts; pg 14).
BEARISH.
Pg 16: This isn’t time to avoid or give up on CHINA. Sure, there are issues, economic slowdown (but still +3% to +4% growth), policy missteps, the US-China tensions, China-Taiwan problems, but there is $18 trillion (#2) economy with 1.4 billion people. Despite the bad property sector, there won’t be a Lehman-moment. Expect gradual, grinding declines, not sudden crashes/collapse as in the US and elsewhere. Decoupling won’t be easy or practical – China is the top trading partner with 120 countries. Foreign direct investments have collapsed from $100 billion/quarter to $5 billion. Economy is bottoming, and if things do get worse, there may be a floor at which the government may step in reluctantly with the long-awaited massive stimulus (so far, only small, and incremental steps). Attractive sectors may be tech, clean energy, consumers.
Pg 20, COVER STORY (More). The new DIABETIC drugs that are also deployed for OBESITY and SLEEP APNEA (weight-related) may hurt the MEDTECH industry in the related areas. Mentioned (negatively) are insulin-delivery systems makers (PODD, TNDM), glucose monitoring (DXCM), sleep apnea device makers (INSP, RMD), liver-drug makers (AKRO, ETNB, MDGL), surgical equipment makers (ISRG).
Pg 22, TECH TRADER. The IPO market had a warmup (ARM, CART, KVYO), but early investor returns weren’t there. So, the expected rush of IPOs may not materialize. Based on filings, the next IPOs may be footwear Birkenstock, Vietnamese fintech VNG, ridesharing Turo. Potential IPOs may be mainframe BMC Software, electronics distributor Ingram Micro, business software Service Titan, security software Rubrik. Then there are rumors for SeatGeek, Reddit, Rokt, SpaceX, etc. ETF is IPO.
Pg 23, INCOME. As bond-proxies, UTILITIES (XLU, the worst among 11 S&P sectors) have suffered as rates have risen. But rates are peaking, and utilities should have better prospects ahead, especially growth electric utilities, those involved in renewables and improving grid infrastructure. Mentioned are AEP, CNP, NI. (This previously regular column is now ON/OFF)
Pg 25, ECONOMY. A new plan by the LA Senator CASSIDY and the ME Senator KING to fix SOCIAL SECURITY may work. It will leave the SSA Trust Fund (really, an IOU) alone, but would BORROW $1.5 trillion over 5 years to invest in STOCK index funds. The total US stock market-cap is $43.4 trillion, so this inflow shouldn’t cause much disruption (but don’t underestimate the impact of the inflow of $300 billion/yr. That would be almost double of the US IPOs in a best/hot year like 2021) (Also not mentioned is the increase in the US debt, but what is another $1.5 trillion added to $33 trillion?). This stock investment may cover 75% of the SSA shortfall with the rest coming from COST-CUTTING via increasing the FRA (well, this is the US, not France), raising salary caps, adding means test for higher income earners (so, they pay max into the SSA but may be limited in their SSA benefits). (No mention of how/if this $1.5 trillion would be repaid, but keep in mind that Social Security is a mandatory obligation of the government) (By guest author Allan Sloan)
Pg 26: Dave GOODSELL, Natixis Center for Investor Insights. Most Americans aren’t prepared for RETIREMENT and may be overly optimistic. For many, 2022 was a year when reality hit (with bad stock and bond markets). Financial advisors have been suggesting that fixed-income now has generational opportunities, yet the pain isn’t over for many sectors of fixed-income. Allocation 60-40 makes good sense now. SOCIAL SECURITY may cover only 35-40% of retirement needs, and many Americans would have difficult time covering the rest from their portfolios. LONGEVITY is an underestimated risk, higher than what investors perceive in surveys (#1-volatility, #2-risk of loss).
Pg 54, FUNDS. Mid-cap growth JAENX follows the GARP strategy. Its portfolio includes 26% techs, 24% industrials (reshoring themes), healthcare, growth utilities (renewables, grid improvements). (By @lewisbraham at MFO) (Also, a strange placement near the end of the issue)
EXTRA, FUNDS. With the NAMES-RULE, the SEC has cracked down on misleading fund names. Funds must invest 80% of the assets according to what is in their names, e.g. growth, value, big-data, green, AI, etc. When terms are vague, funds must define them along with applicable criteria in their prospectuses and those will become part of funds’ official investment policy. Fund firms with $1+ billion AUM will have 12 months to comply, smaller firms 18 months. Future flexibility will only be during fund launches when it takes some time to build portfolios, but beyond that, any deviations must be fixed within 90 days.
Pg 55, RETIREMENT. A government SHUTDOWN (federal FY24 starts October 1) won’t disrupt the monthly SSA payments (as that is mandatory spending), but other SSA services would be affected. The announcement of COLA (est +3.2%) would be delayed (without the BLS CPI data). We went through the debt-ceiling fiasco earlier this year, and now this. (This seems a new feature on the shrunk Mailbag page that I have missed several times and added later by Edit)
(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). Consumer confidence, new home sales on TUESDAY; durable goods report on WEDNESDAY; Q2 GDP on THURSDAY; personal income and PCE (+3.4% y-o-y, core +3.9%), 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. Truist (TFC; yield 7.3% with good coverage; fwd P/E 8.2; difficult merger issues with BB&T + SunTrust may finally be behind with new restructuring steps; the regional banking crisis wasn’t kind to it; recovery by 2025, so for patient investors; pg 13);
LV Sphere Entertainment (SPHR; 17,000 seating capacity; the exterior has huge ad potential; SPHR also owns TV cable MSG Network that broadcasts NY Knicks and NY Ranger games; success of SPHR should benefit other DOLAN-family entities – MSGE, MSGS; all have Dolan discounts; pg 14).
BEARISH.
Pg 16: This isn’t time to avoid or give up on CHINA. Sure, there are issues, economic slowdown (but still +3% to +4% growth), policy missteps, the US-China tensions, China-Taiwan problems, but there is $18 trillion (#2) economy with 1.4 billion people. Despite the bad property sector, there won’t be a Lehman-moment. Expect gradual, grinding declines, not sudden crashes/collapse as in the US and elsewhere. Decoupling won’t be easy or practical – China is the top trading partner with 120 countries. Foreign direct investments have collapsed from $100 billion/quarter to $5 billion. Economy is bottoming, and if things do get worse, there may be a floor at which the government may step in reluctantly with the long-awaited massive stimulus (so far, only small, and incremental steps). Attractive sectors may be tech, clean energy, consumers.
Pg 20, COVER STORY (More). The new DIABETIC drugs that are also deployed for OBESITY and SLEEP APNEA (weight-related) may hurt the MEDTECH industry in the related areas. Mentioned (negatively) are insulin-delivery systems makers (PODD, TNDM), glucose monitoring (DXCM), sleep apnea device makers (INSP, RMD), liver-drug makers (AKRO, ETNB, MDGL), surgical equipment makers (ISRG).
Pg 22, TECH TRADER. The IPO market had a warmup (ARM, CART, KVYO), but early investor returns weren’t there. So, the expected rush of IPOs may not materialize. Based on filings, the next IPOs may be footwear Birkenstock, Vietnamese fintech VNG, ridesharing Turo. Potential IPOs may be mainframe BMC Software, electronics distributor Ingram Micro, business software Service Titan, security software Rubrik. Then there are rumors for SeatGeek, Reddit, Rokt, SpaceX, etc. ETF is IPO.
Pg 23, INCOME. As bond-proxies, UTILITIES (XLU, the worst among 11 S&P sectors) have suffered as rates have risen. But rates are peaking, and utilities should have better prospects ahead, especially growth electric utilities, those involved in renewables and improving grid infrastructure. Mentioned are AEP, CNP, NI. (This previously regular column is now ON/OFF)
Pg 25, ECONOMY. A new plan by the LA Senator CASSIDY and the ME Senator KING to fix SOCIAL SECURITY may work. It will leave the SSA Trust Fund (really, an IOU) alone, but would BORROW $1.5 trillion over 5 years to invest in STOCK index funds. The total US stock market-cap is $43.4 trillion, so this inflow shouldn’t cause much disruption (but don’t underestimate the impact of the inflow of $300 billion/yr. That would be almost double of the US IPOs in a best/hot year like 2021) (Also not mentioned is the increase in the US debt, but what is another $1.5 trillion added to $33 trillion?). This stock investment may cover 75% of the SSA shortfall with the rest coming from COST-CUTTING via increasing the FRA (well, this is the US, not France), raising salary caps, adding means test for higher income earners (so, they pay max into the SSA but may be limited in their SSA benefits). (No mention of how/if this $1.5 trillion would be repaid, but keep in mind that Social Security is a mandatory obligation of the government) (By guest author Allan Sloan)
Pg 26: Dave GOODSELL, Natixis Center for Investor Insights. Most Americans aren’t prepared for RETIREMENT and may be overly optimistic. For many, 2022 was a year when reality hit (with bad stock and bond markets). Financial advisors have been suggesting that fixed-income now has generational opportunities, yet the pain isn’t over for many sectors of fixed-income. Allocation 60-40 makes good sense now. SOCIAL SECURITY may cover only 35-40% of retirement needs, and many Americans would have difficult time covering the rest from their portfolios. LONGEVITY is an underestimated risk, higher than what investors perceive in surveys (#1-volatility, #2-risk of loss).
Pg 54, FUNDS. Mid-cap growth JAENX follows the GARP strategy. Its portfolio includes 26% techs, 24% industrials (reshoring themes), healthcare, growth utilities (renewables, grid improvements). (By @lewisbraham at MFO) (Also, a strange placement near the end of the issue)
EXTRA, FUNDS. With the NAMES-RULE, the SEC has cracked down on misleading fund names. Funds must invest 80% of the assets according to what is in their names, e.g. growth, value, big-data, green, AI, etc. When terms are vague, funds must define them along with applicable criteria in their prospectuses and those will become part of funds’ official investment policy. Fund firms with $1+ billion AUM will have 12 months to comply, smaller firms 18 months. Future flexibility will only be during fund launches when it takes some time to build portfolios, but beyond that, any deviations must be fixed within 90 days.
Pg 55, RETIREMENT. A government SHUTDOWN (federal FY24 starts October 1) won’t disrupt the monthly SSA payments (as that is mandatory spending), but other SSA services would be affected. The announcement of COLA (est +3.2%) would be delayed (without the BLS CPI data). We went through the debt-ceiling fiasco earlier this year, and now this. (This seems a new feature on the shrunk Mailbag page that I have missed several times and added later by Edit)
(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).
