Post by Admin/YBB on May 25, 2024 7:18:41 GMT -6
Pg 13. PREVIEW & REVIEW (consolidated). T+1 settlements start for stocks, ETFs, CEFs on TUESDAY. (Most mutual funds already had T+1 settlements)
JP Morgan Chase/JPM strategist Marko KOLANOVIC is the lonely bear (SP500 target 4,200 in 2024) now that Mike WILSON (Morgan Stanley) has turned bullish (SP500 target 5,400 in 12 months). Follow MK at your own risk – he was bullish in 2022, bearish in 2023.
DATA THIS WEEK. Consumer confidence on TUESDAY; Q1 GDP, wholesale inventories on THURSDAY; personal income and consumption expenditures (PCE +2.7% yoy, core +2.8%) on FRIDAY.
CLOSED. US 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. AMD (fwd P/E 29.7; PEG < 1; a distant #2 to NVDA that may be a huge beneficiary of AI; it has a diverse customer base – data centers, gaming, industrial, PC manufacturers; pg 16);
Walmart (WMT; yield 1.28%; fwd P/E 26; good Q1; it started as a discount retailer but is now a powerhouse of retail, e-commerce/online, fintech; it is also benefitting from AI; there is a long Q&A online with WMT CFO John RAINEY; pg 18).
BEARISH.
Pg 14: T-Bills still remain attractive. They can be bought at Treasury Direct or at major brokerages without commissions (several offer auto-rolls); the ETFs are BIL, GBIL, SHV, SGOV. They are exempt from state and local taxes; beware Treasury money-market funds that hold lots of Treasury repos – the state/local tax exemption doesn’t apply to those, only to the Treasuries held. T-Bills may remain at 5%+ through 2024 and 4%+ in 2025. Nobody loves T-Bills more than Warren Buffett who has most of BRK’s $182 billion cash into T-Bills. They are also popular with retail investors – now $6 trillion T-Bills are outstanding. Also attractive are short-term CDs. (FRN ETFs (without duration risks) USFR, TFLO also deliver 3m T-bill yield less 15 BPS ER).
Pg 24, RETIREMENT. No-frill guaranteed-income (lifetime income) options are coming within the 401k TDFs. Secure 1.0 (2019) allowed this, but these have been slow to develop. (Guaranteed-income options within the 403b have existed for a long time) Recent studies have shown that adding guaranteed-income to portfolio mix enhances the payouts. Mentioned are BlackRock/BLK, Equitable/EQH, Brighthouse/BHF, State Street/STT, Nuveen/TIAA. Many DIY investors want to manage their retirement portfolios and withdrawals themselves. Retirement income is also tied to the decision about when to take Social Security – early at 62, at FRA (66-67), or late at 70. (Industry has learned to avoid the term “annuity”, so I didn’t use it either)
Pg 28, RETIREMENT. Teresa GHLLARDUCCI (New School for Social Research) has a new book (03/2024), Work, Retire, Repeat – The Uncertainty of Retirement in the New Economy. There are about 80 million lower/middle-income workers who don’t have retirement accounts (is that correct?). There is a bipartisan proposal in DC called “Retirement Savings for Americans” that is modeled after the Federal TSP. It will auto-enroll workers who don’t have workplace retirement plans, including the self-employed; employers will have to contribute 3%, and the federal government will provide a match of 5% (gradually phased out above national median salary); cost to the Treasury may be only $35 billion/yr (the IRAs cost $369 billion/yr in foregone taxes). (This seems less radical than some of her previous proposals to replace the current retirement system with a mandatory national retirement plan.)
Pg 30, THE BACK STORY. Elon MUSK is making the same mistake that Henry FORD made. HF overstayed with the cheap Model T – introduced in 1908, its sales and market share peaked in 1924, but it was too late by 1926 when Model A was announced; Model T production was shut down on 6/1/1927, but the launch of Model A was delayed for several months after that. EM now may overstay with mid/luxury EVs (i.e. uncertain prospects for cheaper Model 2); EM is distracted by autonomous-driving, Space X, X/Twitter, etc. Rivals caught up with HF and are now catching up fast with EM.
Pg 31, FUNDS. High-conviction mid-cap value WFPAX / WFMIX uses fundamental analysis. He also has some exposure to commercial real estate (CREs).
Pg EXTRA, FUNDS. Bitcoin and Ether had run up to the approval of spot-Ether ETPs (8 including ETHA, ETHE, ETHV, etc), so they fell on the news. Also, unlike the spot-Bitcoin ETP approvals in January 2024, things now were rushed (politics?), and the spot-Ether ETPs (except the up-listed ETHE still at an outrageous ER of 2.5%) aren’t shovel-ready to trade.
EXTRA, FUNDS. Commodities bull market is alive and well, so buy the dips. Also consider adding commodities to conventional 60-40 stock-bond allocation (i.e. multi-asset stock-bond-alternatives). Mentioned are PDBC, FTGC, BCI, COMT, BCD.
Pg 32, INCOME. Several dividend-paying stocks are beating Aristocrats (NOBL). Dividend-growth (VIG) is outperforming current-dividend (VYM) stocks. (Dividend-blend is SCHD). Stocks with good dividend-growth and free cash flow include EBAY, PHM, ST, OC, CVS.
EXTRA, INCOME. Bank preferreds are attractive – from C, MTB, CFG, etc.
Pg 32, ECONOMY. The ECB may start cutting rates in June; the inflation in the EU is +2.4%, close enough to its target of +2% (but the EU covers many countries with varying economic cycles). This will hurt the euro (good initially, but bad if it weakens too much). There are also the risks of rate flip-flop(s), oil shock(s), etc. The ECB may want the Fed to also start cutting rates, but it won’t wait for the Fed – the ECB is willing to go first with possible cuts in June, September, December.
Pg 33, TECH TRADER. Companies are accelerating capex into AI without even knowing their potential returns (ROI). Nvidia/NVDA projects lofty +50% ROI (annualized) for others who may use its expensive, high-margin chips to implement AI, but skeptics doubt that. FactSet consensus target for NVDA is modest at $1,169 after it has run up +800% already since 2022. Benefits of AI in software are hard to quantify. Eventually, AI will eliminate many routine jobs in education, services, customer support, news, etc. But as with the new technologies through the ages, different types of jobs will evolve. (Remember that its bullish trend will remain intact if it remains above the 50-dMA of $893, and then above the 200-dMA of $625, so it could be very volatile; it will split 10-for-1 on June 7; there are rumors that it may get into the DJIA and INTC may be kicked out.)
Pg 34, INTERVIEW/Q&A. Solita MARCELLI, UBS. She is bullish on US stocks (large-cap techs, AI plays, small-caps, infrastructure stocks) and gold (as a hedge for dollar); bonds may surprise on the upside. She thinks that the US will have a soft landing with growth bottoming at +2%; the Fed may cut twice, in September and December. Risks are inflation and geopolitical (Middle East, Iran, Russia-Ukraine). Trade frictions are rising globally.
Pg 62, OTHER VOICES. Christopher SMART, Arbroath Group. ELECTION risks aren’t in the market yet. Many investors believe that a dysfunctional Congress won’t let any President do or damage much. But volatility will rise as election date approach.
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.
Edit/Add, 5/28/24. Today is the day for T+1!
Stock trading in 1920s was T+1. Then, the volume rose and it was too much to handle manually. So, it became T+5. But with computers around for 60 years, it became T+3, then T+2, and now, finally, T+1 again.
When will be T+0?
www.bnnbloomberg.ca/wall-street-returns-to-t-1-stock-trading-after-a-century-1.2077882
finance.yahoo.com/news/wall-street-returns-t-1-000000851.html
Accessible from PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).
JP Morgan Chase/JPM strategist Marko KOLANOVIC is the lonely bear (SP500 target 4,200 in 2024) now that Mike WILSON (Morgan Stanley) has turned bullish (SP500 target 5,400 in 12 months). Follow MK at your own risk – he was bullish in 2022, bearish in 2023.
DATA THIS WEEK. Consumer confidence on TUESDAY; Q1 GDP, wholesale inventories on THURSDAY; personal income and consumption expenditures (PCE +2.7% yoy, core +2.8%) on FRIDAY.
CLOSED. US 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. AMD (fwd P/E 29.7; PEG < 1; a distant #2 to NVDA that may be a huge beneficiary of AI; it has a diverse customer base – data centers, gaming, industrial, PC manufacturers; pg 16);
Walmart (WMT; yield 1.28%; fwd P/E 26; good Q1; it started as a discount retailer but is now a powerhouse of retail, e-commerce/online, fintech; it is also benefitting from AI; there is a long Q&A online with WMT CFO John RAINEY; pg 18).
BEARISH.
Pg 14: T-Bills still remain attractive. They can be bought at Treasury Direct or at major brokerages without commissions (several offer auto-rolls); the ETFs are BIL, GBIL, SHV, SGOV. They are exempt from state and local taxes; beware Treasury money-market funds that hold lots of Treasury repos – the state/local tax exemption doesn’t apply to those, only to the Treasuries held. T-Bills may remain at 5%+ through 2024 and 4%+ in 2025. Nobody loves T-Bills more than Warren Buffett who has most of BRK’s $182 billion cash into T-Bills. They are also popular with retail investors – now $6 trillion T-Bills are outstanding. Also attractive are short-term CDs. (FRN ETFs (without duration risks) USFR, TFLO also deliver 3m T-bill yield less 15 BPS ER).
Pg 24, RETIREMENT. No-frill guaranteed-income (lifetime income) options are coming within the 401k TDFs. Secure 1.0 (2019) allowed this, but these have been slow to develop. (Guaranteed-income options within the 403b have existed for a long time) Recent studies have shown that adding guaranteed-income to portfolio mix enhances the payouts. Mentioned are BlackRock/BLK, Equitable/EQH, Brighthouse/BHF, State Street/STT, Nuveen/TIAA. Many DIY investors want to manage their retirement portfolios and withdrawals themselves. Retirement income is also tied to the decision about when to take Social Security – early at 62, at FRA (66-67), or late at 70. (Industry has learned to avoid the term “annuity”, so I didn’t use it either)
Pg 28, RETIREMENT. Teresa GHLLARDUCCI (New School for Social Research) has a new book (03/2024), Work, Retire, Repeat – The Uncertainty of Retirement in the New Economy. There are about 80 million lower/middle-income workers who don’t have retirement accounts (is that correct?). There is a bipartisan proposal in DC called “Retirement Savings for Americans” that is modeled after the Federal TSP. It will auto-enroll workers who don’t have workplace retirement plans, including the self-employed; employers will have to contribute 3%, and the federal government will provide a match of 5% (gradually phased out above national median salary); cost to the Treasury may be only $35 billion/yr (the IRAs cost $369 billion/yr in foregone taxes). (This seems less radical than some of her previous proposals to replace the current retirement system with a mandatory national retirement plan.)
Pg 30, THE BACK STORY. Elon MUSK is making the same mistake that Henry FORD made. HF overstayed with the cheap Model T – introduced in 1908, its sales and market share peaked in 1924, but it was too late by 1926 when Model A was announced; Model T production was shut down on 6/1/1927, but the launch of Model A was delayed for several months after that. EM now may overstay with mid/luxury EVs (i.e. uncertain prospects for cheaper Model 2); EM is distracted by autonomous-driving, Space X, X/Twitter, etc. Rivals caught up with HF and are now catching up fast with EM.
Pg 31, FUNDS. High-conviction mid-cap value WFPAX / WFMIX uses fundamental analysis. He also has some exposure to commercial real estate (CREs).
Pg EXTRA, FUNDS. Bitcoin and Ether had run up to the approval of spot-Ether ETPs (8 including ETHA, ETHE, ETHV, etc), so they fell on the news. Also, unlike the spot-Bitcoin ETP approvals in January 2024, things now were rushed (politics?), and the spot-Ether ETPs (except the up-listed ETHE still at an outrageous ER of 2.5%) aren’t shovel-ready to trade.
EXTRA, FUNDS. Commodities bull market is alive and well, so buy the dips. Also consider adding commodities to conventional 60-40 stock-bond allocation (i.e. multi-asset stock-bond-alternatives). Mentioned are PDBC, FTGC, BCI, COMT, BCD.
Pg 32, INCOME. Several dividend-paying stocks are beating Aristocrats (NOBL). Dividend-growth (VIG) is outperforming current-dividend (VYM) stocks. (Dividend-blend is SCHD). Stocks with good dividend-growth and free cash flow include EBAY, PHM, ST, OC, CVS.
EXTRA, INCOME. Bank preferreds are attractive – from C, MTB, CFG, etc.
Pg 32, ECONOMY. The ECB may start cutting rates in June; the inflation in the EU is +2.4%, close enough to its target of +2% (but the EU covers many countries with varying economic cycles). This will hurt the euro (good initially, but bad if it weakens too much). There are also the risks of rate flip-flop(s), oil shock(s), etc. The ECB may want the Fed to also start cutting rates, but it won’t wait for the Fed – the ECB is willing to go first with possible cuts in June, September, December.
Pg 33, TECH TRADER. Companies are accelerating capex into AI without even knowing their potential returns (ROI). Nvidia/NVDA projects lofty +50% ROI (annualized) for others who may use its expensive, high-margin chips to implement AI, but skeptics doubt that. FactSet consensus target for NVDA is modest at $1,169 after it has run up +800% already since 2022. Benefits of AI in software are hard to quantify. Eventually, AI will eliminate many routine jobs in education, services, customer support, news, etc. But as with the new technologies through the ages, different types of jobs will evolve. (Remember that its bullish trend will remain intact if it remains above the 50-dMA of $893, and then above the 200-dMA of $625, so it could be very volatile; it will split 10-for-1 on June 7; there are rumors that it may get into the DJIA and INTC may be kicked out.)
Pg 34, INTERVIEW/Q&A. Solita MARCELLI, UBS. She is bullish on US stocks (large-cap techs, AI plays, small-caps, infrastructure stocks) and gold (as a hedge for dollar); bonds may surprise on the upside. She thinks that the US will have a soft landing with growth bottoming at +2%; the Fed may cut twice, in September and December. Risks are inflation and geopolitical (Middle East, Iran, Russia-Ukraine). Trade frictions are rising globally.
Pg 62, OTHER VOICES. Christopher SMART, Arbroath Group. ELECTION risks aren’t in the market yet. Many investors believe that a dysfunctional Congress won’t let any President do or damage much. But volatility will rise as election date approach.
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.
Edit/Add, 5/28/24. Today is the day for T+1!
Stock trading in 1920s was T+1. Then, the volume rose and it was too much to handle manually. So, it became T+5. But with computers around for 60 years, it became T+3, then T+2, and now, finally, T+1 again.
When will be T+0?
www.bnnbloomberg.ca/wall-street-returns-to-t-1-stock-trading-after-a-century-1.2077882
finance.yahoo.com/news/wall-street-returns-t-1-000000851.html
Accessible from PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).
