Post by yogibearbull on Jan 2, 2021 14:50:46 GMT
[Italics within the brackets are my additions/elaborations]
Pg 6-7: FOMC Minutes on Wednesday. Georgia runoff elections for 2 Senate seats on Tuesday.
Nikkei 225 is at 30-yr high but is still far from all-time high [38,957 in December 1989]. Japan wasn’t hit badly by Covid-19 and it is benefitting from global Covid-19 stimulus. Japan is the most cyclical among global indexes. It also has stimulative monetary and fiscal policies. Japan bear Jim Rogers says that Japan will reach all-time highs [so, he is buying] and then it will collapse again.
Holiday retail season [data for November 1 – December 24] had winner and losers. Overall sales rose +2.4%, but online sales rose +49% while department store sales sank -10%. Furniture was the best category, apparel the worst. Soppers bought early and there was less discounting. In-store sales may recover post-pandemic.
Data this week: Construction spending [near all-time high in February 2020] on Monday; ISM manufacturing PMI on Tuesday; ADP employment report, durable goods orders, factory orders on Wednesday; ISM services PMI, international trade deficit on Thursday; consumer credit, jobs report [+114,000], unemployment rate [6.7-6.8%].
Bullish: Nordstrom [JWN; survivor/winner in depressed in-store retail sector; potential to reach new all-time high; growing online business; reduced store count to 308; smaller new stores offer perks such as free tailoring modifications; discount version is Nordstrom Rack; pg 9].
Bearish: See other stories.
Pg 10: Economic and political changes will cause shifts in the markets. Cyclicals and value may benefit from Covid-19 recovery. But stick will high-quality stocks as not everything will bounce back, i.e. avoid bottom of the barrel stuff. Selected cyclicals/value include BAC, KO, CVS, BATRK, MSGS, SYY, DIS.
Pg 12: Happy centennial/centenary, Barron’s! The 1st weekly issue on 5/9/1921 sold for 20c. Dominant in Roaring 1920s were telecom, oil, railroads. Clarence Barron [founder of Barron’s; owner of Dow Jones (WSJ)] then brought down Charles Ponzi. Things have changed a lot since, but not Barron’s investors’ perspective. [OK, but will all this be repeated in May 2021?]
Pg 13: Analogy is drawn between the railroads in late-1800s to early-1900s and Internet and FAANG stocks now. Railroad industry peaked in 1913, and by 1930s, automobiles were becoming prominent, and by 1950s, the airplanes. Interestingly, railroads are getting 2nd chance now through efficient “precision scheduled railroading” as a part of modern multimodal transportation.
Pg 21: Brooks Taylor and Kevin Schmitz of mid-cap value MVCAX remain fully invested. About 67% of the fund is high-quality companies, 33% opportunistic plays [turnarounds, event-triggers, etc]; top 10 account for only 11.6%. In 2020, they created a matrix of Covid-19 and secular winners and losers. They like to pick companies that are winners for both [COPE, etc], that are secular winners but hurt by Covid-19 [WH, SKX, etc], but are very selective among the secular losers that became Covid-19 winners or losers.
Pg 22: Pandemic accelerated several trends and those for ETFs included active [due to SEC rule changes on portfolio transparency in 2019], ESG [ESGU, etc], thematic [ARKG, LIT, BATT, etc].
Pg 23: Loeb [Third Point] with $1 billion stake became more involved with badly lagging Intel/INTC. Reasons may go back years such as when INTC ignored the mobile-chips market, etc.
Pg 24: Liz Ann Sonders, Chief Investment Strategist & Economist, Schwab/SCHW. She tailers her commentaries to individual investors, not institutional and professional investors. 2020 was a very unusual year with rapid market decline and recovery, but economy continuing to struggle. There were elements 1929, 1987, 9-11/2001. The cycles happened in compressed timeframe. She sees K-type recovery for economy with huge gaps between winners and losers, haves and have nots, and some permanent shifts in work and leisure habits. Big 5 FAAMG stocks representing 25% of SP500 have been driving this market, but the remaining 495 are almost flat, and 36% are still in bear market. Covid-19 laggards [small-caps, cyclicals, value] may do better in recovery but not all areas will return to pre-pandemic levels. Individual investors’ trading patterns changed with more trading options [when there is surge in, say, call buying, dealers are forced to hedge with buying stock or index] and using apps; it is unclear whether these trends are sustainable. Inflation remains muted even with unprecedented monetary and fiscal stimulus, but there is inflation in asset prices [stocks, bonds, real estate, cryptos]. Savings rate went up as there wasn’t much to spend on. Recovery may cause some inflation, but the Fed will let it run over 2% with its new average 2% target. Investors should remain diversified and rebalance as needed, instead on some fixed schedule.
Pg 26: Housing affordability [income vs prices] will determine how high home prices [already 25% above 2006 peak] can go in 2021. This while unemployment remains high. Supply of entry-level homes is low. Pandemic is driving the housing boom as more people move to suburbs or look for bigger spaces with separate Zoom-rooms for all. But prices may stall [but not crash] at some point.
Extras from online Friday that didn’t make the paper version.
None
Link
Pg 6-7: FOMC Minutes on Wednesday. Georgia runoff elections for 2 Senate seats on Tuesday.
Nikkei 225 is at 30-yr high but is still far from all-time high [38,957 in December 1989]. Japan wasn’t hit badly by Covid-19 and it is benefitting from global Covid-19 stimulus. Japan is the most cyclical among global indexes. It also has stimulative monetary and fiscal policies. Japan bear Jim Rogers says that Japan will reach all-time highs [so, he is buying] and then it will collapse again.
Holiday retail season [data for November 1 – December 24] had winner and losers. Overall sales rose +2.4%, but online sales rose +49% while department store sales sank -10%. Furniture was the best category, apparel the worst. Soppers bought early and there was less discounting. In-store sales may recover post-pandemic.
Data this week: Construction spending [near all-time high in February 2020] on Monday; ISM manufacturing PMI on Tuesday; ADP employment report, durable goods orders, factory orders on Wednesday; ISM services PMI, international trade deficit on Thursday; consumer credit, jobs report [+114,000], unemployment rate [6.7-6.8%].
Bullish: Nordstrom [JWN; survivor/winner in depressed in-store retail sector; potential to reach new all-time high; growing online business; reduced store count to 308; smaller new stores offer perks such as free tailoring modifications; discount version is Nordstrom Rack; pg 9].
Bearish: See other stories.
Pg 10: Economic and political changes will cause shifts in the markets. Cyclicals and value may benefit from Covid-19 recovery. But stick will high-quality stocks as not everything will bounce back, i.e. avoid bottom of the barrel stuff. Selected cyclicals/value include BAC, KO, CVS, BATRK, MSGS, SYY, DIS.
Pg 12: Happy centennial/centenary, Barron’s! The 1st weekly issue on 5/9/1921 sold for 20c. Dominant in Roaring 1920s were telecom, oil, railroads. Clarence Barron [founder of Barron’s; owner of Dow Jones (WSJ)] then brought down Charles Ponzi. Things have changed a lot since, but not Barron’s investors’ perspective. [OK, but will all this be repeated in May 2021?]
Pg 13: Analogy is drawn between the railroads in late-1800s to early-1900s and Internet and FAANG stocks now. Railroad industry peaked in 1913, and by 1930s, automobiles were becoming prominent, and by 1950s, the airplanes. Interestingly, railroads are getting 2nd chance now through efficient “precision scheduled railroading” as a part of modern multimodal transportation.
Pg 21: Brooks Taylor and Kevin Schmitz of mid-cap value MVCAX remain fully invested. About 67% of the fund is high-quality companies, 33% opportunistic plays [turnarounds, event-triggers, etc]; top 10 account for only 11.6%. In 2020, they created a matrix of Covid-19 and secular winners and losers. They like to pick companies that are winners for both [COPE, etc], that are secular winners but hurt by Covid-19 [WH, SKX, etc], but are very selective among the secular losers that became Covid-19 winners or losers.
Pg 22: Pandemic accelerated several trends and those for ETFs included active [due to SEC rule changes on portfolio transparency in 2019], ESG [ESGU, etc], thematic [ARKG, LIT, BATT, etc].
Pg 23: Loeb [Third Point] with $1 billion stake became more involved with badly lagging Intel/INTC. Reasons may go back years such as when INTC ignored the mobile-chips market, etc.
Pg 24: Liz Ann Sonders, Chief Investment Strategist & Economist, Schwab/SCHW. She tailers her commentaries to individual investors, not institutional and professional investors. 2020 was a very unusual year with rapid market decline and recovery, but economy continuing to struggle. There were elements 1929, 1987, 9-11/2001. The cycles happened in compressed timeframe. She sees K-type recovery for economy with huge gaps between winners and losers, haves and have nots, and some permanent shifts in work and leisure habits. Big 5 FAAMG stocks representing 25% of SP500 have been driving this market, but the remaining 495 are almost flat, and 36% are still in bear market. Covid-19 laggards [small-caps, cyclicals, value] may do better in recovery but not all areas will return to pre-pandemic levels. Individual investors’ trading patterns changed with more trading options [when there is surge in, say, call buying, dealers are forced to hedge with buying stock or index] and using apps; it is unclear whether these trends are sustainable. Inflation remains muted even with unprecedented monetary and fiscal stimulus, but there is inflation in asset prices [stocks, bonds, real estate, cryptos]. Savings rate went up as there wasn’t much to spend on. Recovery may cause some inflation, but the Fed will let it run over 2% with its new average 2% target. Investors should remain diversified and rebalance as needed, instead on some fixed schedule.
Pg 26: Housing affordability [income vs prices] will determine how high home prices [already 25% above 2006 peak] can go in 2021. This while unemployment remains high. Supply of entry-level homes is low. Pandemic is driving the housing boom as more people move to suburbs or look for bigger spaces with separate Zoom-rooms for all. But prices may stall [but not crash] at some point.
Extras from online Friday that didn’t make the paper version.
None
Link