Post by Admin/YBB on Feb 13, 2021 7:58:31 GMT -6
Pg M1, Trader: New highs for DJIA, SP500, Nasdaq Comp! Rising stock market provides reasons for hope and worry. In the hope column, another Stimulus3 coming; bad economic news is ignored; optimism about mass rollout of Covid-19 vaccines is high. In the worry column, pot is hot [app-traders first chased GME, then silver, now pot]; small-cap R2000 is flying; 10-yr yield rose to 1.2%. Known unknowns include course of economic recovery; are Stimiulus3 and follow-on infrastructure bill too much of good things? higher taxes; more regulations. Correlation between bond yield and stocks is +0.24 now but worry when that turns negative [that would be in hindsight].
Airline industry has been hurt badly by Covid-19. 2021 may be the start of the recovery year. Most attractive are ALK, SKYW; ETF is JETS.
COTY is now attractive after turmoil caused by Covid-19 and missed earnings expectations. Brands include Cover Girl, Kylie, Max Factor.
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 December 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +1.00%, SP500 +1.23%, Nasdaq Comp +1.73%, Russell 2000 +2.51%. DJ Transports +3.02%; DJ Utilities -1.74%. [Rotating spot MJ +5.05%] US$ index (spot) -0.65%, oil/WTI futures +4.61%, gold futures +0.59%.
YTD [index changes only], DJIA +2.78%, SP500 +4.78%, Nasdaq Comp +9.37%. [Rotating spot MJ +71.01%]
Pg M4, Europe: Royal Dutch Shell [RDS-A/B; yield 3%] is attractive among oil majors so long as Brent remains in/above 60s. It has done significant cost & debt reductions and its balance sheet is strong. Dividend may be raised, and buybacks may resume. It could be decades before renewable energy becomes a major factor and oil/energy majors will adjust too – it bought EV battery charging company Ubitricity with charging networks in the UK, Germany, France.
Pg M4, Emerging Markets: The rising US Treasury yields haven’t hurt the EMs so far. Story is healthy reflation with economic recovery [until the rates rise too much]. On the other hand, risks to the EMs are from Chinese tightening and that many EM stocks have already runup although some bargains can still be found.
Pg M6, Commodities: Demand for diesel is now at pre-pandemic levels but those for gasoline and jet fuel have catching up to do. Crude oil prices have also been strong. Economy recovery [with mass vaccination rollouts] and energy demand are highly correlated.
Pg M5, Options: Big-data analytics company Palantir/PLTR [09/2020 IPO] is among the most volatile stocks and its options are very expensive. A short-strangle is recommended [for those who cannot sleep anyway].
[SP500 VIX 19.97, SKEW 137.66] [Yahoo Finance data]
finance.yahoo.com/quotes/%5EVIX,%5ESKEW?.tsrc=fin-srch
Pg M23, M28: A good week in Europe [Netherlands +5.06%, Belgium -1.89%] and a great week in Asia [China +4.53% (New Year of Ox/Bull), New Zealand -3.62%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -5.5% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.04%, 2-yr 0.11%, 5-yr 0.50%, 10-yr 1.20%, 30-yr 2.01% [Treasury data*]. Dollar fell, DXY 90.45, -1.2% [M31]. Gold [Handy & Harman spot, Thursday] rose to $1,816 +0.7% [M34]; the gold-miners rose. [^XAU was at 141.72, +0.14% 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% [M29].
*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, “ESG Investing – The 100 Most Sustainable Companies.” Total of 1,000 largest companies were evaluated. 46 of 100 companies in 2020 ESG list outperformed SP500. A market-weighted index of top 100 ESG companies outperformed SP500 by +5.4% in 2018, +4.4% in 2019, +6.9% in 2020; equal-weight results were mixed.
Top 5: BBY, A, ECL, ADSK, VOYA
Bottom 5: KO, RF, ETSY, UNF, AMGN
Pg 7, Up and Down Wall Street: Is it like 1999? Similarities include frenzy in thin illiquid stocks; gushers of fund inflows; skeptics/doubters left way behind. Differences now include better valuations; low rates; huge monetary & fiscal stimulus. It may end badly, but in the meantime, party on!
Chinese New Year of the Ox [Bull] is considered good for slow and steady progress; CSI 300 is up +11.4% YTD and is at all-time high. Inflows into stocks and bonds [10-yr yield 3.26%] are high; yuan is stable; GDP +2.3% for 2020. Post-pandemic China looks stronger; PBOC balance sheet is flat at $5.9 trillion [while those of the Fed and ECB have ballooned]; monetary policy is tight; dollar reserves declined a bit to $1.09 trillion. China is buying undisclosed amounts of gold. Biden-Xi phone call reviewed old friction points.
Pg 9, Streetwise: Want pot? Try stocks CURLF, TCNNF, GTBIF, CRLBF; ETFs YOLO, MSOS, MJ; REIT IIPR. Canada was early in marijuana legalization and many related companies are based there. Several US states have legalized marijuana, but transporting it across state lines is illegal, so many US companies have to develop inefficient vertically integrated operations within the states. In NJ, you cannot pump your own gas but can roll your own joint. SAFE Banking Act that will allow banks to handle pot-money may be passed this year; section 280E of the tax code that prohibits some common deductions for pot-companies may also be revised. M&A are growing, JAZZ + GWPH, etc.
[Another weekend of polar vortex in the Midwest. More later….]
Airline industry has been hurt badly by Covid-19. 2021 may be the start of the recovery year. Most attractive are ALK, SKYW; ETF is JETS.
COTY is now attractive after turmoil caused by Covid-19 and missed earnings expectations. Brands include Cover Girl, Kylie, Max Factor.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
ZIRP [0-0.25% fed fund rate] through December 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +1.00%, SP500 +1.23%, Nasdaq Comp +1.73%, Russell 2000 +2.51%. DJ Transports +3.02%; DJ Utilities -1.74%. [Rotating spot MJ +5.05%] US$ index (spot) -0.65%, oil/WTI futures +4.61%, gold futures +0.59%.
YTD [index changes only], DJIA +2.78%, SP500 +4.78%, Nasdaq Comp +9.37%. [Rotating spot MJ +71.01%]
Pg M4, Europe: Royal Dutch Shell [RDS-A/B; yield 3%] is attractive among oil majors so long as Brent remains in/above 60s. It has done significant cost & debt reductions and its balance sheet is strong. Dividend may be raised, and buybacks may resume. It could be decades before renewable energy becomes a major factor and oil/energy majors will adjust too – it bought EV battery charging company Ubitricity with charging networks in the UK, Germany, France.
Pg M4, Emerging Markets: The rising US Treasury yields haven’t hurt the EMs so far. Story is healthy reflation with economic recovery [until the rates rise too much]. On the other hand, risks to the EMs are from Chinese tightening and that many EM stocks have already runup although some bargains can still be found.
Pg M6, Commodities: Demand for diesel is now at pre-pandemic levels but those for gasoline and jet fuel have catching up to do. Crude oil prices have also been strong. Economy recovery [with mass vaccination rollouts] and energy demand are highly correlated.
Pg M5, Options: Big-data analytics company Palantir/PLTR [09/2020 IPO] is among the most volatile stocks and its options are very expensive. A short-strangle is recommended [for those who cannot sleep anyway].
[SP500 VIX 19.97, SKEW 137.66] [Yahoo Finance data]
finance.yahoo.com/quotes/%5EVIX,%5ESKEW?.tsrc=fin-srch
Pg M23, M28: A good week in Europe [Netherlands +5.06%, Belgium -1.89%] and a great week in Asia [China +4.53% (New Year of Ox/Bull), New Zealand -3.62%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -5.5% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.04%, 2-yr 0.11%, 5-yr 0.50%, 10-yr 1.20%, 30-yr 2.01% [Treasury data*]. Dollar fell, DXY 90.45, -1.2% [M31]. Gold [Handy & Harman spot, Thursday] rose to $1,816 +0.7% [M34]; the gold-miners rose. [^XAU was at 141.72, +0.14% 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% [M29].
*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, “ESG Investing – The 100 Most Sustainable Companies.” Total of 1,000 largest companies were evaluated. 46 of 100 companies in 2020 ESG list outperformed SP500. A market-weighted index of top 100 ESG companies outperformed SP500 by +5.4% in 2018, +4.4% in 2019, +6.9% in 2020; equal-weight results were mixed.
Top 5: BBY, A, ECL, ADSK, VOYA
Bottom 5: KO, RF, ETSY, UNF, AMGN
Pg 7, Up and Down Wall Street: Is it like 1999? Similarities include frenzy in thin illiquid stocks; gushers of fund inflows; skeptics/doubters left way behind. Differences now include better valuations; low rates; huge monetary & fiscal stimulus. It may end badly, but in the meantime, party on!
Chinese New Year of the Ox [Bull] is considered good for slow and steady progress; CSI 300 is up +11.4% YTD and is at all-time high. Inflows into stocks and bonds [10-yr yield 3.26%] are high; yuan is stable; GDP +2.3% for 2020. Post-pandemic China looks stronger; PBOC balance sheet is flat at $5.9 trillion [while those of the Fed and ECB have ballooned]; monetary policy is tight; dollar reserves declined a bit to $1.09 trillion. China is buying undisclosed amounts of gold. Biden-Xi phone call reviewed old friction points.
Pg 9, Streetwise: Want pot? Try stocks CURLF, TCNNF, GTBIF, CRLBF; ETFs YOLO, MSOS, MJ; REIT IIPR. Canada was early in marijuana legalization and many related companies are based there. Several US states have legalized marijuana, but transporting it across state lines is illegal, so many US companies have to develop inefficient vertically integrated operations within the states. In NJ, you cannot pump your own gas but can roll your own joint. SAFE Banking Act that will allow banks to handle pot-money may be passed this year; section 280E of the tax code that prohibits some common deductions for pot-companies may also be revised. M&A are growing, JAZZ + GWPH, etc.
[Another weekend of polar vortex in the Midwest. More later….]