Post by Admin/YBB on Jun 1, 2024 5:55:34 GMT -6
Pg 9. PREVIEW & REVIEW (consolidated). ECB is expected to cut rates on TUESDAY.
Good times are ahead for CRUISE companies – CCL, NCLH, RCL, VK (new). The cruise industry has gone through a lot during and after the pandemic. But values offered by cruise packages are attracting new and repeat travelers.
DATA THIS WEEK. ISM manufacturing PMI, ISM services PMI, construction spending on MONDAY; durable goods orders, factory orders on TUESDAY; international trade deficit on THURSDAY; consumer credit, jobs report (+180,000 to +207,500), unemployment rate (3.9%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. INDIA infrastructure stocks (construction is booming – roads, railroads, ports, power; 75% of the funding has been from the Government, 25% from domestic and foreign private capital; several related Indian stocks are mentioned; pg 10);
WD-40 (WDFC; yield 1.6%; fwd P/E 38.1; buybacks; low debt; stock sold off after Q2 report that was so-so; main business is low-viscosity multipurpose lubricant & related specialized products; it’s spinning off low-margin homecare and cleaning business; it’s among the most popular/familiar global brands; wonder what’s 40 for? Its original formula was perfected in the 40th iteration; pg 11).
BEARISH.
Pg 12: Rules for buying HOMES are changing. The old real estate commission structure propagated by the NAR will be replaced (now, the RE commissions are paid to sellers’ agents who may split those with buyers’ agents, if any). After 8/17/24, both sellers and buyers will need formal contracts that include fees/commissions (negotiable) and specific services. Some RE brokers may offer lite-contracts with lower flat fees, but limited services. DIY home selling and buying will become more tricky. Homes not listed on NAR-MLS can have their own rules. VA is evaluating its rules that currently forbid paying RE commissions.
Pg 13, THE BACK STORY (PRINGLE). The M&A in ENERGY are rebuilding what was broken up in 1911 (John D Rockefeller’s Standard Oil) with some recent mergers being COP + Marathon/MRO, XOM + Pioneer, CVX + Hess/HES.
Pg 16, FUNDS. Value manager Bill NYGREN (65) of OAKMX (ER 0.91%) / OANMX (ER 0.68%) holds GOOGL, C, COP, GM, etc. He owns both GARP and traditional low-P/E stocks. There are opportunities in value now – R1000 Value ^RLV fwd P/E 15.8 vs R1000 Growth ^RLG fwd P/E 27.9.
EXTRA, FUNDS. GMO quality ETF QLTY owns 5 of Magnificent 7 with the exceptions being NVDA and TSLA – those don’t meet its GARP criteria. It’s a cousin of the OEF GQLIX. Top sectors are tech, financials, healthcare, and its stocks are a blend of growth and cyclicals/value.
EXTRA, FUNDS. Fund diversification rules are holding back some sector funds. (Poor writing by Barron’s because the examples provided, XLC, XLK, XLE, are nondiversified. So, the real problem is that they, or their benchmark indexes, hold too much of what isn’t hot right now.)
Pg 17, INCOME. Income from tech stocks also has potential for dividend-growth: MSFT, AAPL, META, GOOGL. It’s suggested that AMZN should start paying dividends, while NVDA should boost its tiny dividend.
Pg 17, TECH TRADER. The US chips industry is benefitting from $53 billion incentives under the Chips and Science Act (CHIPS). Now, the most advanced chips (including Nvidia’s) are made by TSM in Taiwan that is vulnerable to China-Taiwan frictions. The CHIPS Act is promoting chips production in/near the US. China has just started a $48 billion fund to boost its own chips capabilities.
Pg 18, INTERVIEW/Q&A. James ROSSITER, TD Securities/TD. Several EUROPEAN markets are attractive with the ECB cutting rates soon; some are at their highs already. Europe has weathered the ENERGY shock. Growth will rebound from expected soft landing (while the US may have a soft or hard landing). The US, Europe and Asia are in different cycles; they had different pandemic policies – the US focused on liquidity and distributing cash, Europe on jobs (and China didn’t do much). The EU-China relations are much better than the US-China relations, so Europe would benefit more from Chinese rebound. Service and consumer sectors are growing in Europe vs the traditional (German) manufacturing sector. The US elections are more of interest to Europeans than the European elections – the US rhetoric and policies may change pre- and post- elections. The euro and UK pound may remain weak due to the US Fed keeping rates higher for longer because inflation is more sticky in the US.
Pg 20, ECONOMY. 30-yr Treasury yields peaked at 15% in 09/1981 and were still at 14% in 05/1984 as inflation started to retreat. Then, the great bond bull market began, and yields bottomed around 1%+ in 2020. But with rates now at modest levels historically, inflationary policies continue, and the Fed’s independence is in doubt. At some point, debt service will become the most pressing US budget issue; the dollar will weaken. Budget cuts with higher taxes may be required. Some say that instead of rising to historic highs, rates may just become rangebound at higher levels. Don’t fall into the bond trap now, they say. Bond bears cited include Gundlach, Rosenberg, Hyman, Paulsen, etc. (Bond managers are pessimists by nature, so it’s never a good idea to talk to several at once (-😊.)
Pg 46, OTHER VOICES. Joseph QUINLAN, ML/BoA. Despite occasional hot spots, the past 80 years have been the best in history for peace, prosperity, and profits. There were benefits of new technologies and globalization. Superpowers avoided confrontations. The US, being the undisputed leader, benefitted the most from these; the dollar still remains the global reserve currency. But now, geopolitics and national security have trumped economy and profits. Old localization/regionalization and inefficiencies are back. Inflation is rising. The peace dividend went up in smoke. The world is facing coordinated actions from Russia, China, N Korea, Iran who want nothing that is US-aligned. Investors should prefer active management; defense, cybersecurity and inflation-sensitive sectors; income-related investments, hard assets (commodities), and countries that are agile and nimble.
Pg 47, RETIREMENT. Secure 2.0 has made Roth 401k/403b more attractive. The RMDs are no longer required from Roth 401k/403b. Also, there are no income limits as there are for Roth IRA. Of course, the old stretch is gone except for spouses and minors. Re-evaluate the old Rule of Thumb that Roth 401k/403b are good only at low tax brackets.
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.
Accessible from PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).
Good times are ahead for CRUISE companies – CCL, NCLH, RCL, VK (new). The cruise industry has gone through a lot during and after the pandemic. But values offered by cruise packages are attracting new and repeat travelers.
DATA THIS WEEK. ISM manufacturing PMI, ISM services PMI, construction spending on MONDAY; durable goods orders, factory orders on TUESDAY; international trade deficit on THURSDAY; consumer credit, jobs report (+180,000 to +207,500), unemployment rate (3.9%) on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
Data This Week Link,
www.barrons.com/market-data/market-lab?mod=md_subnav#consensus-estimate
BULLISH. INDIA infrastructure stocks (construction is booming – roads, railroads, ports, power; 75% of the funding has been from the Government, 25% from domestic and foreign private capital; several related Indian stocks are mentioned; pg 10);
WD-40 (WDFC; yield 1.6%; fwd P/E 38.1; buybacks; low debt; stock sold off after Q2 report that was so-so; main business is low-viscosity multipurpose lubricant & related specialized products; it’s spinning off low-margin homecare and cleaning business; it’s among the most popular/familiar global brands; wonder what’s 40 for? Its original formula was perfected in the 40th iteration; pg 11).
BEARISH.
Pg 12: Rules for buying HOMES are changing. The old real estate commission structure propagated by the NAR will be replaced (now, the RE commissions are paid to sellers’ agents who may split those with buyers’ agents, if any). After 8/17/24, both sellers and buyers will need formal contracts that include fees/commissions (negotiable) and specific services. Some RE brokers may offer lite-contracts with lower flat fees, but limited services. DIY home selling and buying will become more tricky. Homes not listed on NAR-MLS can have their own rules. VA is evaluating its rules that currently forbid paying RE commissions.
Pg 13, THE BACK STORY (PRINGLE). The M&A in ENERGY are rebuilding what was broken up in 1911 (John D Rockefeller’s Standard Oil) with some recent mergers being COP + Marathon/MRO, XOM + Pioneer, CVX + Hess/HES.
Pg 16, FUNDS. Value manager Bill NYGREN (65) of OAKMX (ER 0.91%) / OANMX (ER 0.68%) holds GOOGL, C, COP, GM, etc. He owns both GARP and traditional low-P/E stocks. There are opportunities in value now – R1000 Value ^RLV fwd P/E 15.8 vs R1000 Growth ^RLG fwd P/E 27.9.
EXTRA, FUNDS. GMO quality ETF QLTY owns 5 of Magnificent 7 with the exceptions being NVDA and TSLA – those don’t meet its GARP criteria. It’s a cousin of the OEF GQLIX. Top sectors are tech, financials, healthcare, and its stocks are a blend of growth and cyclicals/value.
EXTRA, FUNDS. Fund diversification rules are holding back some sector funds. (Poor writing by Barron’s because the examples provided, XLC, XLK, XLE, are nondiversified. So, the real problem is that they, or their benchmark indexes, hold too much of what isn’t hot right now.)
Pg 17, INCOME. Income from tech stocks also has potential for dividend-growth: MSFT, AAPL, META, GOOGL. It’s suggested that AMZN should start paying dividends, while NVDA should boost its tiny dividend.
Pg 17, TECH TRADER. The US chips industry is benefitting from $53 billion incentives under the Chips and Science Act (CHIPS). Now, the most advanced chips (including Nvidia’s) are made by TSM in Taiwan that is vulnerable to China-Taiwan frictions. The CHIPS Act is promoting chips production in/near the US. China has just started a $48 billion fund to boost its own chips capabilities.
Pg 18, INTERVIEW/Q&A. James ROSSITER, TD Securities/TD. Several EUROPEAN markets are attractive with the ECB cutting rates soon; some are at their highs already. Europe has weathered the ENERGY shock. Growth will rebound from expected soft landing (while the US may have a soft or hard landing). The US, Europe and Asia are in different cycles; they had different pandemic policies – the US focused on liquidity and distributing cash, Europe on jobs (and China didn’t do much). The EU-China relations are much better than the US-China relations, so Europe would benefit more from Chinese rebound. Service and consumer sectors are growing in Europe vs the traditional (German) manufacturing sector. The US elections are more of interest to Europeans than the European elections – the US rhetoric and policies may change pre- and post- elections. The euro and UK pound may remain weak due to the US Fed keeping rates higher for longer because inflation is more sticky in the US.
Pg 20, ECONOMY. 30-yr Treasury yields peaked at 15% in 09/1981 and were still at 14% in 05/1984 as inflation started to retreat. Then, the great bond bull market began, and yields bottomed around 1%+ in 2020. But with rates now at modest levels historically, inflationary policies continue, and the Fed’s independence is in doubt. At some point, debt service will become the most pressing US budget issue; the dollar will weaken. Budget cuts with higher taxes may be required. Some say that instead of rising to historic highs, rates may just become rangebound at higher levels. Don’t fall into the bond trap now, they say. Bond bears cited include Gundlach, Rosenberg, Hyman, Paulsen, etc. (Bond managers are pessimists by nature, so it’s never a good idea to talk to several at once (-😊.)
Pg 46, OTHER VOICES. Joseph QUINLAN, ML/BoA. Despite occasional hot spots, the past 80 years have been the best in history for peace, prosperity, and profits. There were benefits of new technologies and globalization. Superpowers avoided confrontations. The US, being the undisputed leader, benefitted the most from these; the dollar still remains the global reserve currency. But now, geopolitics and national security have trumped economy and profits. Old localization/regionalization and inefficiencies are back. Inflation is rising. The peace dividend went up in smoke. The world is facing coordinated actions from Russia, China, N Korea, Iran who want nothing that is US-aligned. Investors should prefer active management; defense, cybersecurity and inflation-sensitive sectors; income-related investments, hard assets (commodities), and countries that are agile and nimble.
Pg 47, RETIREMENT. Secure 2.0 has made Roth 401k/403b more attractive. The RMDs are no longer required from Roth 401k/403b. Also, there are no income limits as there are for Roth IRA. Of course, the old stretch is gone except for spouses and minors. Re-evaluate the old Rule of Thumb that Roth 401k/403b are good only at low tax brackets.
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.
Accessible from PB-Big Bang, Facebook + Threads (“at”yogibearbull), Twitter (“at”YBB_Finance).
