From Barron’s, June 12, 2023 (Part 1, Market Week+)
Jun 10, 2023 11:16:45 GMT
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Post by yogibearbull on Jun 10, 2023 11:16:45 GMT
From Barron’s, June 12, 2023 (Part 1, Market Week+)
Pg 26, TRADER. Stocks rose as the wall of worry faded away. The RALLY broadened beyond large-caps to small/mid-caps and cyclicals (financials, industrials). The SP500 was in a bear market for 248 days and it may reach a new high that is +10% away. Of course, there are economic data, the FOMC meeting(s), and a possible recession along the way. Enjoy the rally while it lasts.
SHAREHOLDER YIELD (% dividend yield + %buyback) is a better reflection of shareholder return than dividend yield alone. Mentioned are MO, VTRS, MPC, VLO, DD, HUM, CNC and ETF SYLD. (But many buybacks have been wasted money)
Lower OIL prices (even as the OPEC has cut production) aren’t helping the energy stocks (XLE). The global markets are well supplied with Russian oil (that is going to Asia and some of that is refined and is flowing back to the West) and the Chinese demand is sputtering. But efficient oil producers (DVN, MRO) can benefit even if oil stays in a trading range.
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 (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
FOMC 6/14/23+ hold
FOMC 7/26/23+ hike +25 bps (cycle peak 5.25-5.50%)
FOMC 9/20/23+ hold
FOMC 11/1/23+ cut -25 bps
FOMC 12/13/23+ hold
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +0.34%, SP500 +0.39%, Nasdaq Comp +0.14%, R2000 +1.90%. DJ Transports +0.66%; DJ Utilities +1.69%. (Rotating spot SP SC 600 +1.67%) US$ index (spot) -0.44%, oil/WTI futures -2.19%, gold futures +0.50%.
YTD (index changes only), DJIA +2.20%, SP500 +11.96%, Nasdaq Comp +26.68%. (Rotating spot SP SC 600 +3.79%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE rose; ratio of winners:losers 2:1.
AAII Bull-Bear Spread +24.3% (above average) (vs-7.7% in previous week).
%Above 50-dMA for NYSE-listed stocks 63.82% (good) (StockCharts $NYA50R; $SPXA50R for the SP500 is also included in the bottom panel),
stockcharts.com/h-sc/ui?s=%24NYA50R&p=D&b=5&g=0&id=p91704957718 .
Delta MSI 51.2% (good) (a proprietary index for %Above 75-dMA for selected 1,800 stocks). The all-cap $NYA50R is typically closer to it than the large-cap $SPXA50R.
Pg 31, INTERNATIONAL TRADER. The US CalPERS and the NYC Comptroller are pressuring Toyota/TM to embrace EVs. But Toyota management’s current priorities are ICEs, hybrids, EVs (in that order). Toyota even sold a small stake in Tesla/TM years ago (that would have been worth 10.4% of its market-cap now). Chairman Toyoda’s (67) grandfather founded the company in 1937 and the family has controlling interest with just 1% economic interest. CEO SATO took over from TOYODA in April. Japan is also pushing to improve governance at underperforming companies. Many Japanese companies now have dividends and buybacks.
EMERGING MARKETS. (Place holder)
COMMODITIES. (Place holder)
(It looks like these columns are gone. Barron’s page count is lower too, but it still costs $5 per issue. Long-term subscription prices may be lower with promos.)
EXTRA. Strong El Nino, warmer surface temperatures for the Pacific Ocean, may have related climate effects – extreme weathers (heavy rains or drought) in the crop growing areas in the US, South America, Asia, and that may lead to higher COMMODITY prices. OIL prices may also go up to replace power lost from hydroelectric generation (if water levels are low).
Pg 32, OPTIONS. Last week’s bullish call options strategy for Nvidia/NVDA is followed up by a bearish put-spread this week. (So, he has both the upside and downside covered)
(SP500 VIX 13.89, Nasdaq 100 VXN 18.89, options SKEW 152.78 (high), bond MOVE 115.77 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: A down week in EUROPE (Greece +3.57%, Denmark +1.06%, Switzerland -1.20%) and an up week in ASIA (HK +2.27%, New Zealand -1.97%).
TREASURY* 3-mo yield 5.37%, 1-yr 5.17%, 2-yr 4.59%, 5-yr 3.92%, 10-yr 3.75%, 30-yr 3.89%. REAL yields 5-yr 1.79%, 10-yr 1.55%, 30-yr 1.65%.
DOLLAR rose, ^DXY 103.55, +0.50% (pg 50). GOLD flat at $1,960, UNCH (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 123.89, -1.16% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, NEW rate from May 1, 2023, is 4.30%; the fixed rate is +0.90%, the semiannual inflation is +1.69%.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) www.treasurydirect.gov/marketable-securities/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 14, COVER STORY, “Don’t Fear the BULL MARKET. Why Stocks are Headed Higher”. This market may keep climbing the wall(s) of worry (it has made through them so far), drawing in gobbles of cash sitting on the sidelines, and decimating the bears. Did we just have a bear market? The SP500 broke through 4,200 and is now in the bullish territory (as is Nasdaq Comp; the DJIA may catch up soon); earnings may be bottoming. Big risks include recession (leading only to low-test?), inflation, the Fed (hold in June?).
Cover image this week is a “Bull”, images.barrons.com/im-796382?width=500&height=333&pixel_ratio=1.5
Pg 5, UP AND DOWN WALL STREET. FED’s June skip (on Wednesday) may be followed by a July hike (so, a hawkish-pause). Watch the new FOMC economic projections and POWELL’s presser for clues and guidance. Ahead will be the CPI (Tuesday). The core PCE hasn’t made much progress. The market isn’t ready for a 6% fed fund rate and unemployment rate above 4% that some say will be needed to bring down inflation to +3% (and more would be needed for average +2% target if the Fed is in a rush).
BONDs are undergoing a generational change due to rising and higher rates in an environment of persistent inflation and higher deficits. Recommended are dividend-paying stocks, shorter-term bonds and Treasuries (intermediate-term for those not bothered by yield fluctuations).
Pg 7, STREETWISE. AI has worked like magic on the stock market, but its effects elsewhere (earnings, etc) aren’t noticeable yet. AI is benefiting large companies, tech or non-tech; sectors benefiting are software, media, semi chips, financials, medical services, but not so much the food and paper industries. But there is no lack of trying – Campbell (CPB) Chunky Ghost Pepper Chicken Soup was an AI-generated idea; next may be red hot Goldfish Crackers. KHC, LW, MKC, etc are using AI to generate new food and spice mixes (all interesting but they don’t move the needle). Did you miss the April Fool’s joke on a new CharminGPT from P&G? False!
Look at mid-caps (MDY) that are more reasonably valued than large-caps (SPY).
(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.
(More later….)
LINK
Pg 26, TRADER. Stocks rose as the wall of worry faded away. The RALLY broadened beyond large-caps to small/mid-caps and cyclicals (financials, industrials). The SP500 was in a bear market for 248 days and it may reach a new high that is +10% away. Of course, there are economic data, the FOMC meeting(s), and a possible recession along the way. Enjoy the rally while it lasts.
SHAREHOLDER YIELD (% dividend yield + %buyback) is a better reflection of shareholder return than dividend yield alone. Mentioned are MO, VTRS, MPC, VLO, DD, HUM, CNC and ETF SYLD. (But many buybacks have been wasted money)
Lower OIL prices (even as the OPEC has cut production) aren’t helping the energy stocks (XLE). The global markets are well supplied with Russian oil (that is going to Asia and some of that is refined and is flowing back to the West) and the Chinese demand is sputtering. But efficient oil producers (DVN, MRO) can benefit even if oil stays in a trading range.
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 (+/- 0.25%). In the list below, more than 50% probability is used to indicate rate hike; “+” is shown after the FOMC date to indicate that rate hike can be at that or a later FOMC.
FOMC 6/14/23+ hold
FOMC 7/26/23+ hike +25 bps (cycle peak 5.25-5.50%)
FOMC 9/20/23+ hold
FOMC 11/1/23+ cut -25 bps
FOMC 12/13/23+ hold
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA +0.34%, SP500 +0.39%, Nasdaq Comp +0.14%, R2000 +1.90%. DJ Transports +0.66%; DJ Utilities +1.69%. (Rotating spot SP SC 600 +1.67%) US$ index (spot) -0.44%, oil/WTI futures -2.19%, gold futures +0.50%.
YTD (index changes only), DJIA +2.20%, SP500 +11.96%, Nasdaq Comp +26.68%. (Rotating spot SP SC 600 +3.79%)
SENTIMENTS
NYSE cumulative (5-day) A/D LINE rose; ratio of winners:losers 2:1.
AAII Bull-Bear Spread +24.3% (above average) (vs-7.7% in previous week).
%Above 50-dMA for NYSE-listed stocks 63.82% (good) (StockCharts $NYA50R; $SPXA50R for the SP500 is also included in the bottom panel),
stockcharts.com/h-sc/ui?s=%24NYA50R&p=D&b=5&g=0&id=p91704957718 .
Delta MSI 51.2% (good) (a proprietary index for %Above 75-dMA for selected 1,800 stocks). The all-cap $NYA50R is typically closer to it than the large-cap $SPXA50R.
Pg 31, INTERNATIONAL TRADER. The US CalPERS and the NYC Comptroller are pressuring Toyota/TM to embrace EVs. But Toyota management’s current priorities are ICEs, hybrids, EVs (in that order). Toyota even sold a small stake in Tesla/TM years ago (that would have been worth 10.4% of its market-cap now). Chairman Toyoda’s (67) grandfather founded the company in 1937 and the family has controlling interest with just 1% economic interest. CEO SATO took over from TOYODA in April. Japan is also pushing to improve governance at underperforming companies. Many Japanese companies now have dividends and buybacks.
EMERGING MARKETS. (Place holder)
COMMODITIES. (Place holder)
(It looks like these columns are gone. Barron’s page count is lower too, but it still costs $5 per issue. Long-term subscription prices may be lower with promos.)
EXTRA. Strong El Nino, warmer surface temperatures for the Pacific Ocean, may have related climate effects – extreme weathers (heavy rains or drought) in the crop growing areas in the US, South America, Asia, and that may lead to higher COMMODITY prices. OIL prices may also go up to replace power lost from hydroelectric generation (if water levels are low).
Pg 32, OPTIONS. Last week’s bullish call options strategy for Nvidia/NVDA is followed up by a bearish put-spread this week. (So, he has both the upside and downside covered)
(SP500 VIX 13.89, Nasdaq 100 VXN 18.89, options SKEW 152.78 (high), bond MOVE 115.77 (Yahoo Finance data).
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW,%5EMOVE,%5EXAU/view/v1
Pg 45: A down week in EUROPE (Greece +3.57%, Denmark +1.06%, Switzerland -1.20%) and an up week in ASIA (HK +2.27%, New Zealand -1.97%).
TREASURY* 3-mo yield 5.37%, 1-yr 5.17%, 2-yr 4.59%, 5-yr 3.92%, 10-yr 3.75%, 30-yr 3.89%. REAL yields 5-yr 1.79%, 10-yr 1.55%, 30-yr 1.65%.
DOLLAR rose, ^DXY 103.55, +0.50% (pg 50). GOLD flat at $1,960, UNCH (Handy & Harman spot, Thursday; pg 52); the gold-miners fell. (^XAU was at 123.89, -1.16% for the week)
Top FDIC insured savings deposit rates** (This feature has been discontinued)
US SAVINGS I-Bonds^, NEW rate from May 1, 2023, is 4.30%; the fixed rate is +0.90%, the semiannual inflation is +1.69%.
*Treasury Yield-Curve home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics?data=yield
**For local rates www.depositaccounts.com/banks/rates-map/
^Treasury Direct (I-Bonds + T-Bills/Notes/Bonds, FRNs, TIPS) www.treasurydirect.gov/marketable-securities/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 14, COVER STORY, “Don’t Fear the BULL MARKET. Why Stocks are Headed Higher”. This market may keep climbing the wall(s) of worry (it has made through them so far), drawing in gobbles of cash sitting on the sidelines, and decimating the bears. Did we just have a bear market? The SP500 broke through 4,200 and is now in the bullish territory (as is Nasdaq Comp; the DJIA may catch up soon); earnings may be bottoming. Big risks include recession (leading only to low-test?), inflation, the Fed (hold in June?).
Cover image this week is a “Bull”, images.barrons.com/im-796382?width=500&height=333&pixel_ratio=1.5
Pg 5, UP AND DOWN WALL STREET. FED’s June skip (on Wednesday) may be followed by a July hike (so, a hawkish-pause). Watch the new FOMC economic projections and POWELL’s presser for clues and guidance. Ahead will be the CPI (Tuesday). The core PCE hasn’t made much progress. The market isn’t ready for a 6% fed fund rate and unemployment rate above 4% that some say will be needed to bring down inflation to +3% (and more would be needed for average +2% target if the Fed is in a rush).
BONDs are undergoing a generational change due to rising and higher rates in an environment of persistent inflation and higher deficits. Recommended are dividend-paying stocks, shorter-term bonds and Treasuries (intermediate-term for those not bothered by yield fluctuations).
Pg 7, STREETWISE. AI has worked like magic on the stock market, but its effects elsewhere (earnings, etc) aren’t noticeable yet. AI is benefiting large companies, tech or non-tech; sectors benefiting are software, media, semi chips, financials, medical services, but not so much the food and paper industries. But there is no lack of trying – Campbell (CPB) Chunky Ghost Pepper Chicken Soup was an AI-generated idea; next may be red hot Goldfish Crackers. KHC, LW, MKC, etc are using AI to generate new food and spice mixes (all interesting but they don’t move the needle). Did you miss the April Fool’s joke on a new CharminGPT from P&G? False!
Look at mid-caps (MDY) that are more reasonably valued than large-caps (SPY).
(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.
(More later….)
LINK
