Post by Admin/YBB on Nov 11, 2023 8:17:33 GMT -6
Pg 12. President BIDEN will meet Chinese president XI at the APEC summit in San Francisco on WEDNESDAY.
PREVIEW & REVIEW (consolidated). Despite the housing slowdown, DHI and other homebuilders had strong Q3 (ETF ITB). DHI, in particular, provided mortgage rate buy-downs to first-time home buyers and also focused more on affordable homes.
DATA THIS WEEK. CPI (+3.3% yoy; core +4.1%) on TUESDAY; PPI, retail sales, business inventories on WEDNESDAY; capacity utilization on THURSDAY; housing starts 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. Citigroup (C; #3 bank in the US; yield 5%; fwd P/E 6.9; P/tBV 0.49; stock had no bounce since GFC and now at 15-yr low; job and cost cuts; downsizing – left 9 foreign markets; pg 14);
Copart (CPRT; fwd P/W 30; high margins; buys junked cars and wrecks for global trade; more auctions are going online; also operates junkyards for parts; recession resistant; pg 15);
Mobileye (MBLY; fwd P/E 50; P/S 14; 2nd IPO was in 2022 and INTC still owns a majority; Founder/CEO Shashua; autonomous-driving has been a tough area for TSLA, GM, etc, but MBLY benefits as developer and supplier of related systems and software; pg 16).
BEARISH. Koch Industries (#2 private company in the US, so cannot buy its shares; Charles Koch fought environmental regulations for years but had a short disastrous run in green energy, EVs, batteries via its unit Koch Strategic Platforms (KSP), 2021-22; most of KSP investments in startups and SPACs had huge losses – ASPN, EOSE, FREY, LIVY, MVST, QS, REE, SLI, etc; green energy has been a tough area as seen by the poor performance of the ETF ICLN; pg 21).
Pg 23: Forget NYC, LA, DC, San Francisco (the old “establishment”), the new growth-leading cities now are Dallas, Houston, Nashville, Miami. This economic power shift may have long-term implications for politics, policy, taxes, infrastructure, etc that may be beyond the rivalries. Widespread air conditioning has benefited the sunbelt for decades. Covid and related office-home work environments have accelerated this shift. There are now several tech centers/hubs beyond the IT-dominant Bay Area/Silicon Valley – Boston, Denver, Atlanta, Austin, Phoenix, etc. Digitization has hit Hollywood too and the entertainment industry isn’t confined to LA or NYC anymore. Several large companies have moved their HQs out of the old “establishment centers” or now have regional HQs/ ”campuses” elsewhere too. TX now has the most Fortune 500 HQs (55 and counting; Houston alone has 25). TX also has cheap “old” (fossil fuel) energy, but renewables are also growing fast there too. Texas Medical Center (TMC; 9,200 hospital beds) is the world’s largest with 13 teaching hospitals. An infrastructure joke is that it’s hard to find a good road in NY or bad road in TX. Financial firms are also shifting from NYC and Chicago to these new growth areas.
Pg 26, Q&A. Simeon SIEGEL, BMO Capital, reviews the RETAIL scene. AI will have an impact on retail. Black Friday is still important but isn’t what it used to be. Holiday season has started early but total holiday sales may be unchanged. However, there will be retail winners and losers. Lot of retail purchases are on impulse, so it was a mistake to cutout stores. Omnichannel retail chains are strong. Companies that have successfully converted wants into needs have done well. These include TJX (T.J. Maxx, Marshalls, Home Goods), Nike/NKE (back to omnichannel), Planet Fitness/PLNT (membership growth), etc. But others will struggle – Victoria’s Secret/VSCO (spun off from BBWI/old-L-Brands).
Pg 29, INCOME. DIVIDEND-FUTURES can be bought at multiples of expected dividends to yield 8% annualized. Dividend-growth and earnings-growth are strongly correlated. Conventional ETFs for dividend-growth are VIG, DGRO.
Pg 30, FUNDS. T Rowe Price LC-blend PRCOX (ER 0.45%) has outperformed the SP500 over 5 years. It overweights/underweights industry leaders/laggards by +/- 1% of their weights in the SP500. A better relative performance than the SP500 is its goal.
EXTRA1, FUNDS. Longer DURATION bond funds (IEF, TLT) will benefit when rates go down (2024? 2025?). They have started to attract inflows.
EXTRA2, FUNDS. Blackrock/BLK has filed for a physical/spot-Ethereum ETF. The crypto industry is hoping for the SEC approval soon for physical/spot-crypto ETFs (several futures-based ETFs have been approved already, and a court ruling recently said that the SEC arguments for physical/spot- vs futures- based crypto ETFs were faulty). A further industry expectation is that the approval may come first for big, well-established firms, or to all such crypto filers at once. Crypto prices have rallied.
EXTRA3, FUNDS. Small-caps with fwd P/E of 12 are extremely undervalued relative to large-caps with fwd P/E of 18.2. S&P SC 600 (IJR, SPSM) is a better index than R2000 (IWM).
EXTRA4, FUNDS. The FSOC has modified rules that make the SIFI designation easier for hedge-funds, private-equity, nonbank financials. However, the progress on it will be gradual. (This has been a controversial issue in the past. Companies that protested and then somehow got out of the SIFI designation were AIG, GE, MET, PRU).
Pg 32, TECH TRADER. Nintendo/NTDOY has moved beyond videogames into theme parks and movies – Mario and Zelda franchises; it has partnered with SONY for distribution. TTWO will soon release a new version of Grand Theft Auto.
Pg 33, ECONOMY. The drop in OIL prices despite Russia-Ukraine and Israel-Hamas is puzzling, and it may not last. There are worries about cooling global economies. Some of the drop in oil prices may be from the unwinding of oil inventories accumulated in anticipation of disruptions that didn’t happen. However, with a soft landing (not recession) in the US, the oil prices would rise in 2024, according to BCA and UBS. The US may also buy oil to refill its SPR. Attractive is the ETF XOP.
Pg 62, OTHER VOICES. Lauri GOODMAN, Urban Institute (a DC think tank). HOUSING AFFORDABILTY has worsened to the extent that it will negatively impact the housing industry. There are additional costs and headaches of homeownership vs renting. Many current homeowners don’t want to sell and give up their lower rate mortgages. Many are doing more repairs and remodeling. Housing sales have slowed down. But the real estate industry hasn’t started to downsize yet.
Pg 63, RETIREMENT. Couples should focus on long-term retirement goals and not be distracted by short-term disagreements on spending, life-expectancy, legacy. For ST issues, often a compromise can be found that may be facilitated by a 3rd party such as a financial advisor (or a trusted friend); also, things can vary from year-to-year.
EXTRA, RETIREMENT. Biden Administration (CMS) has proposed steps to crackdown on misleading advertising for Medicare Advantage (MA) plans/Part C. The proposals deal with insurance brokers’ compensation, disclosure of special plan requirements such as preapprovals, clarification of HMO vs PPO, etc. Popular MA plans bundle Medicare Parts A, B, D and may add eye, dental, gym and other coverages. They also have lower premiums in some areas. (Medicare Part B premiums and any IRMAA payments continue with Medicare; those are deducted from Social Security payments for those receiving Social Security.)
(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). Despite the housing slowdown, DHI and other homebuilders had strong Q3 (ETF ITB). DHI, in particular, provided mortgage rate buy-downs to first-time home buyers and also focused more on affordable homes.
DATA THIS WEEK. CPI (+3.3% yoy; core +4.1%) on TUESDAY; PPI, retail sales, business inventories on WEDNESDAY; capacity utilization on THURSDAY; housing starts 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. Citigroup (C; #3 bank in the US; yield 5%; fwd P/E 6.9; P/tBV 0.49; stock had no bounce since GFC and now at 15-yr low; job and cost cuts; downsizing – left 9 foreign markets; pg 14);
Copart (CPRT; fwd P/W 30; high margins; buys junked cars and wrecks for global trade; more auctions are going online; also operates junkyards for parts; recession resistant; pg 15);
Mobileye (MBLY; fwd P/E 50; P/S 14; 2nd IPO was in 2022 and INTC still owns a majority; Founder/CEO Shashua; autonomous-driving has been a tough area for TSLA, GM, etc, but MBLY benefits as developer and supplier of related systems and software; pg 16).
BEARISH. Koch Industries (#2 private company in the US, so cannot buy its shares; Charles Koch fought environmental regulations for years but had a short disastrous run in green energy, EVs, batteries via its unit Koch Strategic Platforms (KSP), 2021-22; most of KSP investments in startups and SPACs had huge losses – ASPN, EOSE, FREY, LIVY, MVST, QS, REE, SLI, etc; green energy has been a tough area as seen by the poor performance of the ETF ICLN; pg 21).
Pg 23: Forget NYC, LA, DC, San Francisco (the old “establishment”), the new growth-leading cities now are Dallas, Houston, Nashville, Miami. This economic power shift may have long-term implications for politics, policy, taxes, infrastructure, etc that may be beyond the rivalries. Widespread air conditioning has benefited the sunbelt for decades. Covid and related office-home work environments have accelerated this shift. There are now several tech centers/hubs beyond the IT-dominant Bay Area/Silicon Valley – Boston, Denver, Atlanta, Austin, Phoenix, etc. Digitization has hit Hollywood too and the entertainment industry isn’t confined to LA or NYC anymore. Several large companies have moved their HQs out of the old “establishment centers” or now have regional HQs/ ”campuses” elsewhere too. TX now has the most Fortune 500 HQs (55 and counting; Houston alone has 25). TX also has cheap “old” (fossil fuel) energy, but renewables are also growing fast there too. Texas Medical Center (TMC; 9,200 hospital beds) is the world’s largest with 13 teaching hospitals. An infrastructure joke is that it’s hard to find a good road in NY or bad road in TX. Financial firms are also shifting from NYC and Chicago to these new growth areas.
Pg 26, Q&A. Simeon SIEGEL, BMO Capital, reviews the RETAIL scene. AI will have an impact on retail. Black Friday is still important but isn’t what it used to be. Holiday season has started early but total holiday sales may be unchanged. However, there will be retail winners and losers. Lot of retail purchases are on impulse, so it was a mistake to cutout stores. Omnichannel retail chains are strong. Companies that have successfully converted wants into needs have done well. These include TJX (T.J. Maxx, Marshalls, Home Goods), Nike/NKE (back to omnichannel), Planet Fitness/PLNT (membership growth), etc. But others will struggle – Victoria’s Secret/VSCO (spun off from BBWI/old-L-Brands).
Pg 29, INCOME. DIVIDEND-FUTURES can be bought at multiples of expected dividends to yield 8% annualized. Dividend-growth and earnings-growth are strongly correlated. Conventional ETFs for dividend-growth are VIG, DGRO.
Pg 30, FUNDS. T Rowe Price LC-blend PRCOX (ER 0.45%) has outperformed the SP500 over 5 years. It overweights/underweights industry leaders/laggards by +/- 1% of their weights in the SP500. A better relative performance than the SP500 is its goal.
EXTRA1, FUNDS. Longer DURATION bond funds (IEF, TLT) will benefit when rates go down (2024? 2025?). They have started to attract inflows.
EXTRA2, FUNDS. Blackrock/BLK has filed for a physical/spot-Ethereum ETF. The crypto industry is hoping for the SEC approval soon for physical/spot-crypto ETFs (several futures-based ETFs have been approved already, and a court ruling recently said that the SEC arguments for physical/spot- vs futures- based crypto ETFs were faulty). A further industry expectation is that the approval may come first for big, well-established firms, or to all such crypto filers at once. Crypto prices have rallied.
EXTRA3, FUNDS. Small-caps with fwd P/E of 12 are extremely undervalued relative to large-caps with fwd P/E of 18.2. S&P SC 600 (IJR, SPSM) is a better index than R2000 (IWM).
EXTRA4, FUNDS. The FSOC has modified rules that make the SIFI designation easier for hedge-funds, private-equity, nonbank financials. However, the progress on it will be gradual. (This has been a controversial issue in the past. Companies that protested and then somehow got out of the SIFI designation were AIG, GE, MET, PRU).
Pg 32, TECH TRADER. Nintendo/NTDOY has moved beyond videogames into theme parks and movies – Mario and Zelda franchises; it has partnered with SONY for distribution. TTWO will soon release a new version of Grand Theft Auto.
Pg 33, ECONOMY. The drop in OIL prices despite Russia-Ukraine and Israel-Hamas is puzzling, and it may not last. There are worries about cooling global economies. Some of the drop in oil prices may be from the unwinding of oil inventories accumulated in anticipation of disruptions that didn’t happen. However, with a soft landing (not recession) in the US, the oil prices would rise in 2024, according to BCA and UBS. The US may also buy oil to refill its SPR. Attractive is the ETF XOP.
Pg 62, OTHER VOICES. Lauri GOODMAN, Urban Institute (a DC think tank). HOUSING AFFORDABILTY has worsened to the extent that it will negatively impact the housing industry. There are additional costs and headaches of homeownership vs renting. Many current homeowners don’t want to sell and give up their lower rate mortgages. Many are doing more repairs and remodeling. Housing sales have slowed down. But the real estate industry hasn’t started to downsize yet.
Pg 63, RETIREMENT. Couples should focus on long-term retirement goals and not be distracted by short-term disagreements on spending, life-expectancy, legacy. For ST issues, often a compromise can be found that may be facilitated by a 3rd party such as a financial advisor (or a trusted friend); also, things can vary from year-to-year.
EXTRA, RETIREMENT. Biden Administration (CMS) has proposed steps to crackdown on misleading advertising for Medicare Advantage (MA) plans/Part C. The proposals deal with insurance brokers’ compensation, disclosure of special plan requirements such as preapprovals, clarification of HMO vs PPO, etc. Popular MA plans bundle Medicare Parts A, B, D and may add eye, dental, gym and other coverages. They also have lower premiums in some areas. (Medicare Part B premiums and any IRMAA payments continue with Medicare; those are deducted from Social Security payments for those receiving Social Security.)
(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).