Post by Admin/YBB on Dec 30, 2023 8:11:07 GMT -6
Pg 9. PREVIEW & REVIEW (consolidated). 2023 was a bad year for BIOTECH, but there were several M&A deals. The equal weight XBI outperformed the market-cap weight IBB. Pause in rate hikes, and prospects for rate cuts, helps companies that rely on debt. 2024 should be a better year for biotech.
DATA THIS WEEK. Construction spending on TUESDAY; FOMC Minutes, JOLTS report on WEDNESDAY; factory orders, jobs report (+150,000 to +155,000), unemployment rate 3.8% on FRIDAY.
CLOSED. US and several global markets on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. UK-based big pharma AstraZeneca (AZN; yield 2.15%; fwd P/E 16.1; strong pipeline in oncology, immunology, cardiovascular, vaccines, diabetes, obesity; recent setback in lung cancer drug trials; recent acquisition Chinese Gracell Biotechnology/GRCL; concerns about the US drug pricing policies; pg 12).
BEARISH. Fintech Tellus (Nonbank fintech with controversial history that takes deposits; FDIC has asked it to change misleading ads; otherwise, a rehash of previous article(s); pg 23).
Pg 10, ECONOMY. FOMC in 2024 will have new ROTATING voting members – Fed Prez DALY/San Francisco, BOSTIC/Atlanta, BARKIN/Richmond, MESTER/Cleveland; WILLIAMS/NY is the permanent voting member. There will be ELECTION year challenges – FED will be in limelight no matter what it does. It will also have to reset RATE EXPECTATIONS as those by the fed fund futures market are quite different from Fed’s. It wants to tame inflation without hurting economic growth and that won’t be easy, and soft-landing vs recession debate will continue.
Pg 11: CRYPTOS are back from dead (or Ice-age or Winter). US-based exchange / broker-dealer / custodian Coinbase/COIN was up +380% in 2023; Bitcoin +150%. The crypto party may continue in 2024 as expectations remain very high that the SEC approval for physical/spot-based crypto ETFs may be imminent (several crypto futures-based ETFs have already been approved). SEC has lost some court cases – the courts rejected SEC’s arguments for differences in futures-based and physical/spot-based ETFs as both kinds of ETFs exist for some commodities (gold, silver, etc). Big firms and big money are involved – BlackRock/BLK, Fidelity, ARK, Grayscale, etc. Crypto industry is also lobbying Congress for new crypto legislations – thus removing the regulatory obstacles it faces now (more from SEC, less from CFTC). There will be Bitcoin “halving” in 04/2024 – the “mining” fees are cut in half every 4 years.
Pg 13: Another memorial feature on Charlie MUNGER, Warren Buffett’s righthand man, and a businessman in his own right. His personal assistant Goerthe OBERT for 31 years recalled that by agreement at her hiring, she was allowed to visit her family in Germany every Christmas. She is a BRK shareholder also. Charlie was very focused and a perfectionist – he could revise handwritten drafts 50+ times. He was fair but tough and a realist. He wanted to get things done right, but often ASAP. He and BUFFETT were very good friends. A New Year party was planned for Charlie’s 100th birthday, but he just missed it. He was at the annual Thanksgiving family gathering in Santa Barbara and he passed away the next day. Survivors include 3 daughters, 3 sons, 2 stepsons, 15 grandchildren, 4 great grandchildren. His estate is worth about $2 billion.
Pg 18, Best INCOME investments for 2024. Bonds came through in 2023 beating their recent bear market. Who knew that Treasuries could move like this. Bond yields are higher and more normal. Cash remains appealing too. Dividend stocks lagged other stocks, but offer both current-dividends and dividend-growth. In the list below, fund types OEFs, ETFs and CEFs are mixed.
US Dividend Stocks – VYM, SCHD, NOBL
Foreign Dividend Stocks – IDV, SCHY, IEMG
Energy Pipelines – AMLP, KYN, SMLPX
Utilities – XLU, UTG, NEE
Telecoms – T, TMUS, VZ
Convertibles – CWB, ICVT
Real Estate – VNQ, RQI
MBS – MBB, VMBS, DLTNX
HY – HYG, TUHYX, JQC
Preferreds – PFF, JPC, FPEI
Munis – VWITX, NEA, MUB
Treasuries – SHY, TLT, TIP
Pg 24, FUNDS. Many investors like to buy TREASURIES at Auctions at Treasury Direct (TD; a site that isn’t very user-friendly). One has to own these to maturity at TD, or move them out of TD to brokerages for trading. But Treasuries can also be bought at major brokerages at Auctions or in the secondary market (with bid-ask spreads) with no/little commissions. Treasury funds can be used by those who don’t want to deal with individual Treasury purchases. (By @lewisbraham at MFO)
EXTRA, FUNDS. 2023 had several good bond ETF launches. A total of 500 ETFs were launched and 370 were active ETFs; there are now 1,353 active ETFs with $500 billion AUM. Many active ETFs have lower ERs than their OEF cousins. Mentioned are active multisector BINC, value TCAF, ETF of ETFs DFAW. The fee wars continued with indexed SCYB, BEMB, etc. The worst ETF offerings were AIYY, BITX, etc.
Pg 25, ECONOMY. EURO still looks attractive for 2024 as DOLLAR is expected to weaken further when the US FED starts to cut rates. Euro-zone inflation is near +2% target and Q3 GDP was -0.1% (marginally negative); Germany would be in recession soon. ECB is still cautious and may follow the US Fed. No global central banker wants to lead the parade and cause recession.
Pg 26, Q&A. Natasha KANEVA, JPM. OPEC has lost its grip on global OIL (it has 4 million barrels/day (bpd) excess capacity) and non-OPEC oil production is rising. The US now produces 13.2 million bpd vs Saudi Arabia’s 9 million bpd only (below even the pandemic levels). GASOLINE demand peaked in the US in 2019, and may peak globally in 2024. But the demand for petrochemicals remains strong. So, the global oil demand may peak only in 2031. The OPEC strategy of cutting its production to support oil prices isn’t working; it has to accept oil in $70-90 range. However, oil demand growth may start to slow in 2025 as the effects of energy transitions and decarbonization take hold. Natural gas/LNG will have a weak H1 as new LNG facilities will come on line, but demand will catch up by H2 and the price target is $4. GOLD and SILVER will also be strong in 2024; targets are for gold $2,300, silver $30; a decline in real 10-yr yield would benefit precious metals. There are 77 national elections worldwide in 2024 (including in the US) and there may be surprises. US oil production is price-sensitive and won’t be affected by the US elections, but global oil demand and supply may be affected by changes in the US policies.
Pg 54, OTHER VOICES. Gautam MUKUNDA, Yale. Generative AI (ChatGPT, Bard, Claude) will continue to require human inputs despite popular concerns about runaway AI-bots. AI will assist leaders and decision makers by tapping into its vast databases. But AI may not be able to explain its decisions well. Implementation is the next big step that requires human elements. Now there are 2 types of companies – those following Theory X (that workers are lazy and require constant monitoring and pushes) and Theory Y (that workers are productive and motivated and only need some inspirations); these will be affected by AI differently. So, AI and human leaders will coexist. A world taken over by AI-bots is just science fiction.
Pg 55, RETIREMENT. SECURE 2.0 has allowed several changes for 401k/403b, but plans have been slow to adopt OPTIONAL changes – employer contribution matching for student loan payments, emergency funds within 401k/403b (PLESAs), etc. This may be because the employers are focusing now on several MANDATORY changes for catchup provisions, auto-enrollments, RMDs, etc. (Also, because 401k/403b regulations have become very complicated)
NOTE. It’s very irritating that Barron’s has stopped mentioning TICKERS for most companies mentioned. I now have to look them up. Sometimes this takes time as there are similar names, especially for banks.
(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. Construction spending on TUESDAY; FOMC Minutes, JOLTS report on WEDNESDAY; factory orders, jobs report (+150,000 to +155,000), unemployment rate 3.8% on FRIDAY.
CLOSED. US and several global markets on MONDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. UK-based big pharma AstraZeneca (AZN; yield 2.15%; fwd P/E 16.1; strong pipeline in oncology, immunology, cardiovascular, vaccines, diabetes, obesity; recent setback in lung cancer drug trials; recent acquisition Chinese Gracell Biotechnology/GRCL; concerns about the US drug pricing policies; pg 12).
BEARISH. Fintech Tellus (Nonbank fintech with controversial history that takes deposits; FDIC has asked it to change misleading ads; otherwise, a rehash of previous article(s); pg 23).
Pg 10, ECONOMY. FOMC in 2024 will have new ROTATING voting members – Fed Prez DALY/San Francisco, BOSTIC/Atlanta, BARKIN/Richmond, MESTER/Cleveland; WILLIAMS/NY is the permanent voting member. There will be ELECTION year challenges – FED will be in limelight no matter what it does. It will also have to reset RATE EXPECTATIONS as those by the fed fund futures market are quite different from Fed’s. It wants to tame inflation without hurting economic growth and that won’t be easy, and soft-landing vs recession debate will continue.
Pg 11: CRYPTOS are back from dead (or Ice-age or Winter). US-based exchange / broker-dealer / custodian Coinbase/COIN was up +380% in 2023; Bitcoin +150%. The crypto party may continue in 2024 as expectations remain very high that the SEC approval for physical/spot-based crypto ETFs may be imminent (several crypto futures-based ETFs have already been approved). SEC has lost some court cases – the courts rejected SEC’s arguments for differences in futures-based and physical/spot-based ETFs as both kinds of ETFs exist for some commodities (gold, silver, etc). Big firms and big money are involved – BlackRock/BLK, Fidelity, ARK, Grayscale, etc. Crypto industry is also lobbying Congress for new crypto legislations – thus removing the regulatory obstacles it faces now (more from SEC, less from CFTC). There will be Bitcoin “halving” in 04/2024 – the “mining” fees are cut in half every 4 years.
Pg 13: Another memorial feature on Charlie MUNGER, Warren Buffett’s righthand man, and a businessman in his own right. His personal assistant Goerthe OBERT for 31 years recalled that by agreement at her hiring, she was allowed to visit her family in Germany every Christmas. She is a BRK shareholder also. Charlie was very focused and a perfectionist – he could revise handwritten drafts 50+ times. He was fair but tough and a realist. He wanted to get things done right, but often ASAP. He and BUFFETT were very good friends. A New Year party was planned for Charlie’s 100th birthday, but he just missed it. He was at the annual Thanksgiving family gathering in Santa Barbara and he passed away the next day. Survivors include 3 daughters, 3 sons, 2 stepsons, 15 grandchildren, 4 great grandchildren. His estate is worth about $2 billion.
Pg 18, Best INCOME investments for 2024. Bonds came through in 2023 beating their recent bear market. Who knew that Treasuries could move like this. Bond yields are higher and more normal. Cash remains appealing too. Dividend stocks lagged other stocks, but offer both current-dividends and dividend-growth. In the list below, fund types OEFs, ETFs and CEFs are mixed.
US Dividend Stocks – VYM, SCHD, NOBL
Foreign Dividend Stocks – IDV, SCHY, IEMG
Energy Pipelines – AMLP, KYN, SMLPX
Utilities – XLU, UTG, NEE
Telecoms – T, TMUS, VZ
Convertibles – CWB, ICVT
Real Estate – VNQ, RQI
MBS – MBB, VMBS, DLTNX
HY – HYG, TUHYX, JQC
Preferreds – PFF, JPC, FPEI
Munis – VWITX, NEA, MUB
Treasuries – SHY, TLT, TIP
Pg 24, FUNDS. Many investors like to buy TREASURIES at Auctions at Treasury Direct (TD; a site that isn’t very user-friendly). One has to own these to maturity at TD, or move them out of TD to brokerages for trading. But Treasuries can also be bought at major brokerages at Auctions or in the secondary market (with bid-ask spreads) with no/little commissions. Treasury funds can be used by those who don’t want to deal with individual Treasury purchases. (By @lewisbraham at MFO)
EXTRA, FUNDS. 2023 had several good bond ETF launches. A total of 500 ETFs were launched and 370 were active ETFs; there are now 1,353 active ETFs with $500 billion AUM. Many active ETFs have lower ERs than their OEF cousins. Mentioned are active multisector BINC, value TCAF, ETF of ETFs DFAW. The fee wars continued with indexed SCYB, BEMB, etc. The worst ETF offerings were AIYY, BITX, etc.
Pg 25, ECONOMY. EURO still looks attractive for 2024 as DOLLAR is expected to weaken further when the US FED starts to cut rates. Euro-zone inflation is near +2% target and Q3 GDP was -0.1% (marginally negative); Germany would be in recession soon. ECB is still cautious and may follow the US Fed. No global central banker wants to lead the parade and cause recession.
Pg 26, Q&A. Natasha KANEVA, JPM. OPEC has lost its grip on global OIL (it has 4 million barrels/day (bpd) excess capacity) and non-OPEC oil production is rising. The US now produces 13.2 million bpd vs Saudi Arabia’s 9 million bpd only (below even the pandemic levels). GASOLINE demand peaked in the US in 2019, and may peak globally in 2024. But the demand for petrochemicals remains strong. So, the global oil demand may peak only in 2031. The OPEC strategy of cutting its production to support oil prices isn’t working; it has to accept oil in $70-90 range. However, oil demand growth may start to slow in 2025 as the effects of energy transitions and decarbonization take hold. Natural gas/LNG will have a weak H1 as new LNG facilities will come on line, but demand will catch up by H2 and the price target is $4. GOLD and SILVER will also be strong in 2024; targets are for gold $2,300, silver $30; a decline in real 10-yr yield would benefit precious metals. There are 77 national elections worldwide in 2024 (including in the US) and there may be surprises. US oil production is price-sensitive and won’t be affected by the US elections, but global oil demand and supply may be affected by changes in the US policies.
Pg 54, OTHER VOICES. Gautam MUKUNDA, Yale. Generative AI (ChatGPT, Bard, Claude) will continue to require human inputs despite popular concerns about runaway AI-bots. AI will assist leaders and decision makers by tapping into its vast databases. But AI may not be able to explain its decisions well. Implementation is the next big step that requires human elements. Now there are 2 types of companies – those following Theory X (that workers are lazy and require constant monitoring and pushes) and Theory Y (that workers are productive and motivated and only need some inspirations); these will be affected by AI differently. So, AI and human leaders will coexist. A world taken over by AI-bots is just science fiction.
Pg 55, RETIREMENT. SECURE 2.0 has allowed several changes for 401k/403b, but plans have been slow to adopt OPTIONAL changes – employer contribution matching for student loan payments, emergency funds within 401k/403b (PLESAs), etc. This may be because the employers are focusing now on several MANDATORY changes for catchup provisions, auto-enrollments, RMDs, etc. (Also, because 401k/403b regulations have become very complicated)
NOTE. It’s very irritating that Barron’s has stopped mentioning TICKERS for most companies mentioned. I now have to look them up. Sometimes this takes time as there are similar names, especially for banks.
(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).