Post by Admin/YBB on Oct 28, 2023 6:08:35 GMT -6
Pg 12. FOMC Statement and Powell’s presser on WEDNESDAY.
PREVIEW & REVIEW (consolidated). BITCOIN rallied briefly to $35,000+. There were market expectations that the SEC may soon approve physical/spot-crypto ETFs. Coinbase/COIN (US-based exchange, broker-dealer, custodian) lagged. Gold was above $2,000 on conflict in Middle East.
DATA THIS WEEK. Consumer confidence on TUESDAY; JOLTS report, construction spending on WEDNESDAY; factory orders on THURSDAY; jobs report (+155,000 to +175,000), unemployment rate (3.8%) on FRIDAY. (Seriously shrunk but supplemented from the link below).
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Casino stocks (BYD, CZR, PENN, WYNN; post-pandemic business is soft; possible recession is a concern; regional casinos are doing better than LV casinos; pg 15).
BEARISH.
Pg 13, TECH TRADER. Tech earnings have been fine, but investors hate them still. GOOGL sold off on earnings and revenue beat but soft cloud business. MSFT was up on great report including for its cloud business. AMZN was OK. For all, the ad business segments were good. AI was a lot of hype but less of a factor for earnings except for IBM; AI is also costly (capex, labor). Chip maker INTC benefitted from PC sales bounce; AMD reports on Tuesday. AAPL has the product launch day on Monday, then the earnings report on Thursday.
Pg 19, FUNDS. Ouch! If you own bond index funds, then you are suffering from a 3rd bad year. Indexing is difficult for bonds. Many issues are illiquid and may not trade often. Active bond funds may be desirable in specialized FI areas.
Core – Indexed AGG, BND
Core – Active VCORX
Multisector PONAX (these combine sovereigns, corporates, HYs, EMs)
HY – Indexed HYG
HY – Active BHYAX, RSIVX, VWEHX
Munis – Indexed MUB
Munis – Active HMOP, MDNLX, VWAHX
(by @lewisbraham at MFO)
Pg 21: Byron WIEN passed away at 90 (1933-2023). He was well-known for his annual lists of 10 Surprises, 20 Life Lessons, Summer Lunches in Hamptons, etc. His philosophy on predictions (and he made many) was that they were meant to be thought-provoking contemporaneously and it didn’t matter whether they turned out to be right or wrong (and he didn’t keep score himself, but others did). A world traveler, his mobility recently was limited by a hip injury, and he relied on Zoom. A nerdy Chicago kid, he was lucky to get into Harvard. His long career was at Morgan Stanley/MS (retired in 2001), Pequot, Blackstone/BX (2009- ). He was quoted often in the media and in Barron’s which did a Cover on him in 2016. He noted that sleep is more critical than diet or exercise. A multimillionaire, he lived modestly – he flew commercial; brought leftover restaurant food home; didn’t move from NYC to FL “because” he wasn’t a billionaire to avoid taxes. His philanthropy was for people who needed help and support rather than for arts and museums. He did endow 2 professorships at Harvard and also funded several scholarships there. He was married twice but didn’t have children and had many godchildren.
Pg 22: BIG MONEY POLL.
Stock Market 38% bullish (tie), 38% neutral (tie), 24% bearish
Stock Valuations 48% overvalued, 38% fairly valued, 19% undervalued
SP500 Targets (6/30/24) 3,949-4,583
Market Risks 28% economy, 26% rates, 16% inflation
Favored Asset Classes (12 months) 53% stocks, 47% bonds
Favored Global Markets (12 months) 46% US, 23% Japan, 14% Europe
Favored Approach (12 months) 64% value, 36% growth
Favored Equity Category (12 months) 39% LC, 32% SC, 29% MC
Favored Equity Sectors 33% energy, 24% tech, 13% healthcare
Worst Equity Sectors 24% real estate, 17% tech, 16% consumer-discretionary
Favored FI Categories 40% Treasuries, 24% investment-grade corps, 9% muni, 7% FR/BL
Favored for Cash 40% ST government bonds, 39% money-market, 8% Treasuries
Oil/WTI (12 months) $91
Gold (12 months) $1,960
Bitcoin $24,682
Economic Outlook 46% recession, 33% soft landing, 20% no landing
US GDP Growth (2024) +2% by 33%, +1% by 25%
US Inflation (2024) +4% by 57%, +3% by 36%
Fed Funds (2024) 4.75-5.00% by 28%, 5.00-5.25% by 21%
Treasury 2-Yr Yield (12 months) 4.5% by 20%, 4% by 15%, 4,75% by 14%
Treasury 10-Yr Yield (12 months) 4.5% by 26%, 4.00% or 4.75% or 5.00% by 14% (each)
US Dollar 51% weaken, 25% no change, 24% strengthen
Pg 28, FUNDS. BERKOWITZ’ LC value FAIRX is doing well YTD due to its 82% of assets in FL real estate developer St Joe/JOE (extreme concentration). Almost 33% of the $340 million AUM fund is held by Berkowitz’s family members and they don’t mind paying 1% ER. The AUM peaked after Berkowitz was named Manager of the Decade by M* in 2010, but there have been persistent outflows since then. Institutional holders may redeem the fund for JOE stock. Investor/personal returns (M* statistic on asset-weighted returns) have been poor. (by @lewisbraham at MFO)
Pg 29, INCOME. Attractive consumer-staples include CLX, HLN, KVUE (JNJ spinoff), LW, PG; ETF XLP.
Pg 30, Q&A. David BLANCHFLOWER, Dartmouth College, discusses worsening MENTAL HEALTH and general UNHAPPINESS among the young. In general, the younger generations have been happier (typically, worry-free years) with the discontent and unhappiness growing by the middle-ages, but things have suddenly changed for the younger generation. Factors may include Covid (disruptions, isolation), social-media (addictive content and/or online bullying/shaming), tougher job markets (2010- ), the GFC 2008-09 (and seeing how it affected their parents and families), broken homes, etc. The result is higher mortality due to drug abuse, drinking, suicide. There are negative implications for the economy through reduced family formations, housing, consumer expenditures. The government needs to recognize the issues and spend more on mental health programs (general programs as well as medical facilities). He is also studying the role that adverse childhood experiences (ACEs) may play.
Pg 32, ECONOMY. Q3 GDP growth (real) at +4.9% was good. But it may have included several one-time boosts for consumer spending – expenses related to Taylor SWIFT and BEYONCE concerts (maybe Powell is cheering/encouraging all these Swift + Kelce sightings and news). The FOMC next week is expected to hold rates despite inflation well above +2% average target and hot nominal Q3 GDP growth. But Q4 GDP growth may be only +1.5% (real). The Fed’s forecast of soft landing may also be a fairy tale unless it ditches its +2% average inflation target to between +3% to +4% temporarily.
Pg 62, OTHER VOICES. Casey BURGAT, GWU. Mike JOHNSON (R-LA) finally got the House Speaker’s gavel. But he will face similar issues with the GOP having 220 votes, a slim majority, that would require unanimity within the GOP (when there is none) to bring and pass legislations in the House. There is little bipartisanship in DC. He has to soon address the FY 2024 budget (10/1/23-9/30/24) that was delayed to November 17, the aid packages for Ukraine and Israel, and lot of other pending stuff that has accumulated.
Pg 63, RETIREMENT. According to a study by MetLife/MET, 75% of employees could benefit from high-deductible health plans (that is poor naming/framing) and HSAs. But only 45% of employers offer HSAs and only 29% of employees use HSAs. The employee benefits are from lower plan premiums and because the HSA funds can be used tax-free for qualified medical expenses and in retirement (so, it’s like a super-401k/403b). HSAs are also portable. But HSA contribution must stop when Medicare begins; however, the HSA funds can still be used for medical expenses. (This is a new feature on the shrunk Mailbag page)
(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). BITCOIN rallied briefly to $35,000+. There were market expectations that the SEC may soon approve physical/spot-crypto ETFs. Coinbase/COIN (US-based exchange, broker-dealer, custodian) lagged. Gold was above $2,000 on conflict in Middle East.
DATA THIS WEEK. Consumer confidence on TUESDAY; JOLTS report, construction spending on WEDNESDAY; factory orders on THURSDAY; jobs report (+155,000 to +175,000), unemployment rate (3.8%) on FRIDAY. (Seriously shrunk but supplemented from the link below).
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. Casino stocks (BYD, CZR, PENN, WYNN; post-pandemic business is soft; possible recession is a concern; regional casinos are doing better than LV casinos; pg 15).
BEARISH.
Pg 13, TECH TRADER. Tech earnings have been fine, but investors hate them still. GOOGL sold off on earnings and revenue beat but soft cloud business. MSFT was up on great report including for its cloud business. AMZN was OK. For all, the ad business segments were good. AI was a lot of hype but less of a factor for earnings except for IBM; AI is also costly (capex, labor). Chip maker INTC benefitted from PC sales bounce; AMD reports on Tuesday. AAPL has the product launch day on Monday, then the earnings report on Thursday.
Pg 19, FUNDS. Ouch! If you own bond index funds, then you are suffering from a 3rd bad year. Indexing is difficult for bonds. Many issues are illiquid and may not trade often. Active bond funds may be desirable in specialized FI areas.
Core – Indexed AGG, BND
Core – Active VCORX
Multisector PONAX (these combine sovereigns, corporates, HYs, EMs)
HY – Indexed HYG
HY – Active BHYAX, RSIVX, VWEHX
Munis – Indexed MUB
Munis – Active HMOP, MDNLX, VWAHX
(by @lewisbraham at MFO)
Pg 21: Byron WIEN passed away at 90 (1933-2023). He was well-known for his annual lists of 10 Surprises, 20 Life Lessons, Summer Lunches in Hamptons, etc. His philosophy on predictions (and he made many) was that they were meant to be thought-provoking contemporaneously and it didn’t matter whether they turned out to be right or wrong (and he didn’t keep score himself, but others did). A world traveler, his mobility recently was limited by a hip injury, and he relied on Zoom. A nerdy Chicago kid, he was lucky to get into Harvard. His long career was at Morgan Stanley/MS (retired in 2001), Pequot, Blackstone/BX (2009- ). He was quoted often in the media and in Barron’s which did a Cover on him in 2016. He noted that sleep is more critical than diet or exercise. A multimillionaire, he lived modestly – he flew commercial; brought leftover restaurant food home; didn’t move from NYC to FL “because” he wasn’t a billionaire to avoid taxes. His philanthropy was for people who needed help and support rather than for arts and museums. He did endow 2 professorships at Harvard and also funded several scholarships there. He was married twice but didn’t have children and had many godchildren.
Pg 22: BIG MONEY POLL.
Stock Market 38% bullish (tie), 38% neutral (tie), 24% bearish
Stock Valuations 48% overvalued, 38% fairly valued, 19% undervalued
SP500 Targets (6/30/24) 3,949-4,583
Market Risks 28% economy, 26% rates, 16% inflation
Favored Asset Classes (12 months) 53% stocks, 47% bonds
Favored Global Markets (12 months) 46% US, 23% Japan, 14% Europe
Favored Approach (12 months) 64% value, 36% growth
Favored Equity Category (12 months) 39% LC, 32% SC, 29% MC
Favored Equity Sectors 33% energy, 24% tech, 13% healthcare
Worst Equity Sectors 24% real estate, 17% tech, 16% consumer-discretionary
Favored FI Categories 40% Treasuries, 24% investment-grade corps, 9% muni, 7% FR/BL
Favored for Cash 40% ST government bonds, 39% money-market, 8% Treasuries
Oil/WTI (12 months) $91
Gold (12 months) $1,960
Bitcoin $24,682
Economic Outlook 46% recession, 33% soft landing, 20% no landing
US GDP Growth (2024) +2% by 33%, +1% by 25%
US Inflation (2024) +4% by 57%, +3% by 36%
Fed Funds (2024) 4.75-5.00% by 28%, 5.00-5.25% by 21%
Treasury 2-Yr Yield (12 months) 4.5% by 20%, 4% by 15%, 4,75% by 14%
Treasury 10-Yr Yield (12 months) 4.5% by 26%, 4.00% or 4.75% or 5.00% by 14% (each)
US Dollar 51% weaken, 25% no change, 24% strengthen
Pg 28, FUNDS. BERKOWITZ’ LC value FAIRX is doing well YTD due to its 82% of assets in FL real estate developer St Joe/JOE (extreme concentration). Almost 33% of the $340 million AUM fund is held by Berkowitz’s family members and they don’t mind paying 1% ER. The AUM peaked after Berkowitz was named Manager of the Decade by M* in 2010, but there have been persistent outflows since then. Institutional holders may redeem the fund for JOE stock. Investor/personal returns (M* statistic on asset-weighted returns) have been poor. (by @lewisbraham at MFO)
Pg 29, INCOME. Attractive consumer-staples include CLX, HLN, KVUE (JNJ spinoff), LW, PG; ETF XLP.
Pg 30, Q&A. David BLANCHFLOWER, Dartmouth College, discusses worsening MENTAL HEALTH and general UNHAPPINESS among the young. In general, the younger generations have been happier (typically, worry-free years) with the discontent and unhappiness growing by the middle-ages, but things have suddenly changed for the younger generation. Factors may include Covid (disruptions, isolation), social-media (addictive content and/or online bullying/shaming), tougher job markets (2010- ), the GFC 2008-09 (and seeing how it affected their parents and families), broken homes, etc. The result is higher mortality due to drug abuse, drinking, suicide. There are negative implications for the economy through reduced family formations, housing, consumer expenditures. The government needs to recognize the issues and spend more on mental health programs (general programs as well as medical facilities). He is also studying the role that adverse childhood experiences (ACEs) may play.
Pg 32, ECONOMY. Q3 GDP growth (real) at +4.9% was good. But it may have included several one-time boosts for consumer spending – expenses related to Taylor SWIFT and BEYONCE concerts (maybe Powell is cheering/encouraging all these Swift + Kelce sightings and news). The FOMC next week is expected to hold rates despite inflation well above +2% average target and hot nominal Q3 GDP growth. But Q4 GDP growth may be only +1.5% (real). The Fed’s forecast of soft landing may also be a fairy tale unless it ditches its +2% average inflation target to between +3% to +4% temporarily.
Pg 62, OTHER VOICES. Casey BURGAT, GWU. Mike JOHNSON (R-LA) finally got the House Speaker’s gavel. But he will face similar issues with the GOP having 220 votes, a slim majority, that would require unanimity within the GOP (when there is none) to bring and pass legislations in the House. There is little bipartisanship in DC. He has to soon address the FY 2024 budget (10/1/23-9/30/24) that was delayed to November 17, the aid packages for Ukraine and Israel, and lot of other pending stuff that has accumulated.
Pg 63, RETIREMENT. According to a study by MetLife/MET, 75% of employees could benefit from high-deductible health plans (that is poor naming/framing) and HSAs. But only 45% of employers offer HSAs and only 29% of employees use HSAs. The employee benefits are from lower plan premiums and because the HSA funds can be used tax-free for qualified medical expenses and in retirement (so, it’s like a super-401k/403b). HSAs are also portable. But HSA contribution must stop when Medicare begins; however, the HSA funds can still be used for medical expenses. (This is a new feature on the shrunk Mailbag page)
(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).