Post by Admin/YBB on Jan 23, 2021 11:08:07 GMT -6
[Italics within the brackets are my additions/elaborations]
Pg 10-11: FOMC Statement and Fed Chair Powell’s news conference on Wednesday.
Stellantis/STLA? That is the new name for merged Fiat Chrysler + Peugeot.
Consumers stuck at home [WFH] are ordering goods and that is causing shipping costs to spike; Baltic Dry Index is up +60% since early-December, +128% over 12 months. For now, extra shipping costs are being absorbed by wholesalers & retailers but eventually some costs will be passed on to consumers. Shipping costs are only about 5% of product costs, so consumers may see only small price rises. Shippers include AMKBY, CICOY, TRTN, etc.
$82 billion raised in 2020 via SPAC mergers – more than the total for all previous years combined.
Data this week: Chicago Fed national activity index on Monday; consumer confidence index on Tuesday; durable goods report on Wednesday; Q4 DGP growth, wholesale inventories, new home sales on Thursday; personal income & spending, UM consumer sentiment on Friday.
www.barrons.com/magazine?mod=BOL_TOPNAV
Bullish: Auto-parts supplier LKQ [gets reusable parts from used or wrecked cars it buys; has slowed growth by acquisition to focus on profitability, debt reduction, buybacks; pg 15].
Bearish: See other stories.
Pg 12: How will Biden’s China policy differ? Pressures on human rights issues and unfair & illegal business practices will continue. It will be seen as a competitor. Areas of cooperation will also be found. Boundaries between national security and business/commercial interests will be defined more clearly. Executive Orders can come-and-go and some will be reversed. Delisting of Chinese securities from US exchanges will be sorted out; institutions may hedge bets by also holding those dual-listed in HK or in Mainland. An ESG approach may work especially well for China [see pg 35 story].
Pg 13: Demand for digital infrastructure is rising due to high data usage and 5G but the related stocks remain undervalued, possibly hurt by rising rates and the recent merger of T-Mobile/TMUS and Sprint [less than 33% of Sprint cell towers may survive; most affected is AMT]. Mentioned are REITs for cell towers CCI, SBAC and data centers COR, EQIX.
Pg 19: Income with less volatility from dividend funds GSFTX, FISEX, OIEIX and dividend-growth funds PRDGX, VDIGX, ETF VIG.
Pg 21: Worry about federal deficit [$21 trillion, 100% of GDP] later in good times but do what is needed now to beat the pandemic. Countering federal deficits is rising savings that has reduced private debt to 240% of GDP, so the total federal and private debt has been flat. This is one reason that inflation has remained modest. The federal net interest payment [debt-servicing] is only 2% of GDP [peak was 4.2% in October 1991]. Much of related federal spending should go for job maintenance/creation and infrastructure.
Pg 31: ESG funds did well in 2020. Not all evaluated funds had explicit ESG mandates and the term ESG funds is used loosely here for those with $300+ million AUM and with above average M* ESG scores [quantitative] regardless of whether the funds claimed to be ESG funds. Many growth funds that have benefitted from work-from-home [WFH] trend had high ESG scores. ESG served as additional quality screens. 54% of ESG large-cap funds outperformed SP500 [vs 43% of all active LC funds]; 75% of ESG stock funds outperformed their category averages; 42% were in the top quartile and only 6% in the bottom quartile.
22 ESG funds outperformed SP500 over 1, 3, 5, 10, 15, 20 years. Top 10 of 22 [sorted by 20-year performance]: PMVAX, PRBLX, AMAGX, CMLIX, LGILX, MLAAX, CSIEX, VIGRX [indexed w/o ESG objective], BFGBX, USGLX.
Top & bottom 5 by 2020 performance: #1-MGRSX, MGRIX, PMVAX [ESG objective], UMLGX, MAFOX, , FBCVX, TRDIX [ESG objective], SPHD, SPYD, #191-DCUIX.
Pg 35: China is making progress on ESG issues [carbon neutrality goal by 2060; green transportation, regulatory push on reporting ESG risks, proxy-voting, etc] but Chinese ESG funds are tricky. “S” will remain problematic. Many companies don’t respond to ESG rating services but top-down ESG reporting push is helping. With 40% China weight in MSCI EM Index, ESG may be a good way to sort things out. Related ETFs are tiny KESG and small KGRN.
Pg 36: Netflix/NFLX skeptics, concede now! Barron’s did after 16 years!! It has 203 million in subscribers and broke even on cash flow basis in 2020. Instead of raising funds [equity or debt], it may start paying down some of its $16 billion in debt. It has promised 1 new movie per week. It raised subscription prices in a crowded streaming market. It has not been hurt by fantastic growth of Disney+, etc – it seems that the streaming market is growing; the losers are traditional cable & satellite TV bundlers. In future, NFLX may move into sports, news, music, gaming, etc.
Pg 38: Guy Platten, International Chamber of Shipping. A global disaster is unfolding in shipping as thousands of crew members are stranded on board, unable to refresh/exchange. Ships are caught by varying restrictions imposed by countries during the pandemic and crews are not recognized as key workers. Some shipping companies have stopped chartering ships that will require crew change(s). Eventually, supply-chains for essential goods would be disrupted. Government and industry leaders will sign on Tuesday the Neptune Declaration on Seafarer Well-Being and Crew Change to address these issues.
Extras from online Friday that didn’t make the weekend paper version
None
Pg 10-11: FOMC Statement and Fed Chair Powell’s news conference on Wednesday.
Stellantis/STLA? That is the new name for merged Fiat Chrysler + Peugeot.
Consumers stuck at home [WFH] are ordering goods and that is causing shipping costs to spike; Baltic Dry Index is up +60% since early-December, +128% over 12 months. For now, extra shipping costs are being absorbed by wholesalers & retailers but eventually some costs will be passed on to consumers. Shipping costs are only about 5% of product costs, so consumers may see only small price rises. Shippers include AMKBY, CICOY, TRTN, etc.
$82 billion raised in 2020 via SPAC mergers – more than the total for all previous years combined.
Data this week: Chicago Fed national activity index on Monday; consumer confidence index on Tuesday; durable goods report on Wednesday; Q4 DGP growth, wholesale inventories, new home sales on Thursday; personal income & spending, UM consumer sentiment on Friday.
www.barrons.com/magazine?mod=BOL_TOPNAV
Bullish: Auto-parts supplier LKQ [gets reusable parts from used or wrecked cars it buys; has slowed growth by acquisition to focus on profitability, debt reduction, buybacks; pg 15].
Bearish: See other stories.
Pg 12: How will Biden’s China policy differ? Pressures on human rights issues and unfair & illegal business practices will continue. It will be seen as a competitor. Areas of cooperation will also be found. Boundaries between national security and business/commercial interests will be defined more clearly. Executive Orders can come-and-go and some will be reversed. Delisting of Chinese securities from US exchanges will be sorted out; institutions may hedge bets by also holding those dual-listed in HK or in Mainland. An ESG approach may work especially well for China [see pg 35 story].
Pg 13: Demand for digital infrastructure is rising due to high data usage and 5G but the related stocks remain undervalued, possibly hurt by rising rates and the recent merger of T-Mobile/TMUS and Sprint [less than 33% of Sprint cell towers may survive; most affected is AMT]. Mentioned are REITs for cell towers CCI, SBAC and data centers COR, EQIX.
Pg 19: Income with less volatility from dividend funds GSFTX, FISEX, OIEIX and dividend-growth funds PRDGX, VDIGX, ETF VIG.
Pg 21: Worry about federal deficit [$21 trillion, 100% of GDP] later in good times but do what is needed now to beat the pandemic. Countering federal deficits is rising savings that has reduced private debt to 240% of GDP, so the total federal and private debt has been flat. This is one reason that inflation has remained modest. The federal net interest payment [debt-servicing] is only 2% of GDP [peak was 4.2% in October 1991]. Much of related federal spending should go for job maintenance/creation and infrastructure.
Pg 31: ESG funds did well in 2020. Not all evaluated funds had explicit ESG mandates and the term ESG funds is used loosely here for those with $300+ million AUM and with above average M* ESG scores [quantitative] regardless of whether the funds claimed to be ESG funds. Many growth funds that have benefitted from work-from-home [WFH] trend had high ESG scores. ESG served as additional quality screens. 54% of ESG large-cap funds outperformed SP500 [vs 43% of all active LC funds]; 75% of ESG stock funds outperformed their category averages; 42% were in the top quartile and only 6% in the bottom quartile.
22 ESG funds outperformed SP500 over 1, 3, 5, 10, 15, 20 years. Top 10 of 22 [sorted by 20-year performance]: PMVAX, PRBLX, AMAGX, CMLIX, LGILX, MLAAX, CSIEX, VIGRX [indexed w/o ESG objective], BFGBX, USGLX.
Top & bottom 5 by 2020 performance: #1-MGRSX, MGRIX, PMVAX [ESG objective], UMLGX, MAFOX, , FBCVX, TRDIX [ESG objective], SPHD, SPYD, #191-DCUIX.
Pg 35: China is making progress on ESG issues [carbon neutrality goal by 2060; green transportation, regulatory push on reporting ESG risks, proxy-voting, etc] but Chinese ESG funds are tricky. “S” will remain problematic. Many companies don’t respond to ESG rating services but top-down ESG reporting push is helping. With 40% China weight in MSCI EM Index, ESG may be a good way to sort things out. Related ETFs are tiny KESG and small KGRN.
Pg 36: Netflix/NFLX skeptics, concede now! Barron’s did after 16 years!! It has 203 million in subscribers and broke even on cash flow basis in 2020. Instead of raising funds [equity or debt], it may start paying down some of its $16 billion in debt. It has promised 1 new movie per week. It raised subscription prices in a crowded streaming market. It has not been hurt by fantastic growth of Disney+, etc – it seems that the streaming market is growing; the losers are traditional cable & satellite TV bundlers. In future, NFLX may move into sports, news, music, gaming, etc.
Pg 38: Guy Platten, International Chamber of Shipping. A global disaster is unfolding in shipping as thousands of crew members are stranded on board, unable to refresh/exchange. Ships are caught by varying restrictions imposed by countries during the pandemic and crews are not recognized as key workers. Some shipping companies have stopped chartering ships that will require crew change(s). Eventually, supply-chains for essential goods would be disrupted. Government and industry leaders will sign on Tuesday the Neptune Declaration on Seafarer Well-Being and Crew Change to address these issues.
Extras from online Friday that didn’t make the weekend paper version
None