Post by Admin/YBB on Jan 23, 2021 8:00:40 GMT -6
[Italics within the brackets are my additions/elaborations]
Pg M1, Trader: Big techs [FAAMNG] are leading again – so what happened to that rotation? Small-cap R2000 has also been strong. Watch the FOMC Statement and Powell’s press conference on Wednesday for signals. Don’t be surprised by a correction in this multistage recovery. However, a double-dip recession is not expected. So, may be hedge a little and buy some lagging defensive stocks, and be ready to buy dips.
Some Tesla/TSLA magic rubbed off GM and Ford/F as investors focused on their electric-vehicle [EV] and autonomous-vehicle [AV] projects.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
ZIRP [0-0.25% fed fund rate] through September 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +0.59%, SP500 +1.94%, Nasdaq Comp +4.19%, Russell 2000 +2.15%. DJ Transports -0.69%; DJ Utilities -0.37%. [Rotating spot FANG +7.37%] US$ index (spot) -0.62%, oil/WTI futures -0.17%, gold futures +1.44%.
52-weeks [index changes only], DJIA +8.92%, SP500 +16.57%, Nasdaq Comp +45.39%. [Rotating spot FANG +98.93%]
Pg M4, Europe: St Petersburg, Russia based, UK-listed Anglo-Russian Polymetal International [POLY.uk/AUCOY; yield 3.5%] is #10 gold and #5 silver producer. It also owns platinum and palladium mines. Founder Alexander Nesis owns 28%.
Pg M4, Emerging Markets: India’s mass vaccination campaign launched on January 16 had a rocky start. India has approved vaccines from Oxford+AstraZeneca [being manufactured in India] and local Bharat Biotech [still in phase 3 trials] and that has created problems as the former is more popular and many are avoiding the latter. Pandemic seems under control [some say that conclusion may be premature], economy is rebounding, and stock market has rallied. The IT sector is seeing higher demand from global outsourcing. Government is planning for production-linked incentives to promote substitutions for Chinese and other imports. Market trend is bullish, but some stocks and sectors are now expensive.
Pg M6, Commodities: After more than doubling to a new high in September 2020, lumber is down [-20% YTD!] and may stabilize at still lower levels. Beware that lumber is very volatile and may have a wide trading range. The shifts in living and working patterns due to pandemic are driving a boom in housing but those factors should moderate with vaccinations and reopening of economy.
Pg M5, Options: For very volatile Tesla/TSLA [+21% YTD, +709% over 52 weeks], pair selling-puts with buying-calls – a bet on stock rising with mild pullbacks. It reports on January 27.
[SP500 VIX 21.91, SKEW 145.55 (high)] [Yahoo Finance data]
finance.yahoo.com/quotes/%5EVIX,%5ESKEW?.tsrc=fin-srch
Pg M27, M32: An up week in Europe [Netherlands +3.02%, Spain -2.18%] and a good week in Asia [China +5.90%, Philippines -2.70%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -5% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.08%, 2-yr 0.13%, 5-yr 0.44%, 10-yr 1.10%, 30-yr 1.85% [Treasury data*]. Dollar fell, DXY 90.21, -0.6% [M35]. Gold [Handy & Harman spot, Thursday] rose to $1,853 +0.7% [M38]; the gold-miners rose. [^XAU was at 140.15, +1.92% for the week]
*Treasury Yield-Curve www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Top FDIC insured savings deposit rates*: Money-market accounts 0.61%; 3-mo Jumbo CD 0.40% [most are 0.25% or below], 1-yr CDs 0.70%; 5-yr CDs 1.00% [M33].
*For local rates www.depositaccounts.com/banks/rates-map/
Bonus from Part 2 include Cover Story (now only in online designation), Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2.
Pg 22: Cover Story “Roundtable: 28 Investment Picks to Beat the Market”. 2nd of 3 installments.
Rupal Bhansali/Ariel: VIV, PM, MSFT, Munich Re [Germany], Snam/SNMRY [Italy]; defensive picks due to negative market outlook.
Scott Black/Delphi: ASIX, KE, WLKP, DHI, MGA, NOC
Mario Gabelli/Gamco: NEP, AGR, GCP, HY, GPC, MSGS, BATRA, FOX, SBGI, GAN, DTEGY
Sonal Desai/Franklin Templeton: MPACX, GLD, PYEWX, FVHIX, FAFTX, FHYVX
Pg 6, Up and Down Wall Street: A classic short-squeeze is on for GameStop [GME]. More signs of speculative frenzy include Bitcoin/cryptocurrencies and options on high-priced megatechs [FAANG]. Huge retail volume in these options is distorting implied volatility that may turn out to be much higher than actual realized volatility and that is also distorting the fear gauge VIX.
This bull market has ignored potential tax hikes so far. It is driven by huge monetary & fiscal stimulus and hopes of post-pandemic economic recovery. Money supply [M2] is rising rapidly; total unemployment [U6] remains high at 11.7%; fiscal budget deficit is 15.2% of GDP. The Fed has changed policy to average PCE inflation of 2%; ZIRP may remain through 2023. Stimulus2 [approved] & Stimulus3 [pending] are coming. Keep an eye on inflation and be prepared for bumps ahead in the market. How much tax hike? Corporate tax rate may go to 28% [from 21%]. Dividend & capital gains rate for high-income earners [$1+ million/yr] may go to 43.4%. There may be some restrictions on stock buybacks.
Pg 9, Streetwise: Parents can have peace at home during pandemic by letting kids play videogames. This is not lost on videogame startups and Unicorns who are rushing to go public. The next is Roblox [RBLX; market-cap $30 billion; est P/S 51; no profits] via direct-listing; its games are free but in-game accessories cost Robux [its name for money]. Upcoming IPOs include AppLovin, Scopely, Epic Games, etc. Existing players include ATVI, EA, TTWO, PLTK [became public just a few days ago]. Beware that this pandemic duration may be as good as it gets for videogames.
More later….
Pg M1, Trader: Big techs [FAAMNG] are leading again – so what happened to that rotation? Small-cap R2000 has also been strong. Watch the FOMC Statement and Powell’s press conference on Wednesday for signals. Don’t be surprised by a correction in this multistage recovery. However, a double-dip recession is not expected. So, may be hedge a little and buy some lagging defensive stocks, and be ready to buy dips.
Some Tesla/TSLA magic rubbed off GM and Ford/F as investors focused on their electric-vehicle [EV] and autonomous-vehicle [AV] projects.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
ZIRP [0-0.25% fed fund rate] through September 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +0.59%, SP500 +1.94%, Nasdaq Comp +4.19%, Russell 2000 +2.15%. DJ Transports -0.69%; DJ Utilities -0.37%. [Rotating spot FANG +7.37%] US$ index (spot) -0.62%, oil/WTI futures -0.17%, gold futures +1.44%.
52-weeks [index changes only], DJIA +8.92%, SP500 +16.57%, Nasdaq Comp +45.39%. [Rotating spot FANG +98.93%]
Pg M4, Europe: St Petersburg, Russia based, UK-listed Anglo-Russian Polymetal International [POLY.uk/AUCOY; yield 3.5%] is #10 gold and #5 silver producer. It also owns platinum and palladium mines. Founder Alexander Nesis owns 28%.
Pg M4, Emerging Markets: India’s mass vaccination campaign launched on January 16 had a rocky start. India has approved vaccines from Oxford+AstraZeneca [being manufactured in India] and local Bharat Biotech [still in phase 3 trials] and that has created problems as the former is more popular and many are avoiding the latter. Pandemic seems under control [some say that conclusion may be premature], economy is rebounding, and stock market has rallied. The IT sector is seeing higher demand from global outsourcing. Government is planning for production-linked incentives to promote substitutions for Chinese and other imports. Market trend is bullish, but some stocks and sectors are now expensive.
Pg M6, Commodities: After more than doubling to a new high in September 2020, lumber is down [-20% YTD!] and may stabilize at still lower levels. Beware that lumber is very volatile and may have a wide trading range. The shifts in living and working patterns due to pandemic are driving a boom in housing but those factors should moderate with vaccinations and reopening of economy.
Pg M5, Options: For very volatile Tesla/TSLA [+21% YTD, +709% over 52 weeks], pair selling-puts with buying-calls – a bet on stock rising with mild pullbacks. It reports on January 27.
[SP500 VIX 21.91, SKEW 145.55 (high)] [Yahoo Finance data]
finance.yahoo.com/quotes/%5EVIX,%5ESKEW?.tsrc=fin-srch
Pg M27, M32: An up week in Europe [Netherlands +3.02%, Spain -2.18%] and a good week in Asia [China +5.90%, Philippines -2.70%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -5% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.08%, 2-yr 0.13%, 5-yr 0.44%, 10-yr 1.10%, 30-yr 1.85% [Treasury data*]. Dollar fell, DXY 90.21, -0.6% [M35]. Gold [Handy & Harman spot, Thursday] rose to $1,853 +0.7% [M38]; the gold-miners rose. [^XAU was at 140.15, +1.92% for the week]
*Treasury Yield-Curve www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Top FDIC insured savings deposit rates*: Money-market accounts 0.61%; 3-mo Jumbo CD 0.40% [most are 0.25% or below], 1-yr CDs 0.70%; 5-yr CDs 1.00% [M33].
*For local rates www.depositaccounts.com/banks/rates-map/
Bonus from Part 2 include Cover Story (now only in online designation), Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2.
Pg 22: Cover Story “Roundtable: 28 Investment Picks to Beat the Market”. 2nd of 3 installments.
Rupal Bhansali/Ariel: VIV, PM, MSFT, Munich Re [Germany], Snam/SNMRY [Italy]; defensive picks due to negative market outlook.
Scott Black/Delphi: ASIX, KE, WLKP, DHI, MGA, NOC
Mario Gabelli/Gamco: NEP, AGR, GCP, HY, GPC, MSGS, BATRA, FOX, SBGI, GAN, DTEGY
Sonal Desai/Franklin Templeton: MPACX, GLD, PYEWX, FVHIX, FAFTX, FHYVX
Pg 6, Up and Down Wall Street: A classic short-squeeze is on for GameStop [GME]. More signs of speculative frenzy include Bitcoin/cryptocurrencies and options on high-priced megatechs [FAANG]. Huge retail volume in these options is distorting implied volatility that may turn out to be much higher than actual realized volatility and that is also distorting the fear gauge VIX.
This bull market has ignored potential tax hikes so far. It is driven by huge monetary & fiscal stimulus and hopes of post-pandemic economic recovery. Money supply [M2] is rising rapidly; total unemployment [U6] remains high at 11.7%; fiscal budget deficit is 15.2% of GDP. The Fed has changed policy to average PCE inflation of 2%; ZIRP may remain through 2023. Stimulus2 [approved] & Stimulus3 [pending] are coming. Keep an eye on inflation and be prepared for bumps ahead in the market. How much tax hike? Corporate tax rate may go to 28% [from 21%]. Dividend & capital gains rate for high-income earners [$1+ million/yr] may go to 43.4%. There may be some restrictions on stock buybacks.
Pg 9, Streetwise: Parents can have peace at home during pandemic by letting kids play videogames. This is not lost on videogame startups and Unicorns who are rushing to go public. The next is Roblox [RBLX; market-cap $30 billion; est P/S 51; no profits] via direct-listing; its games are free but in-game accessories cost Robux [its name for money]. Upcoming IPOs include AppLovin, Scopely, Epic Games, etc. Existing players include ATVI, EA, TTWO, PLTK [became public just a few days ago]. Beware that this pandemic duration may be as good as it gets for videogames.
More later….