Post by yogibearbull on Sept 11, 2021 12:27:44 GMT
Pg M1, TRADER. What could be a trigger for the much-awaited correction? Market is at DEFCON Level 2 (Red Alert) now. SP500 market-cap is at record 175% of the US GDP; the FED is super easy; rates are low; vaccination levels are moving higher. Stocks fell every day of the holiday shortened week. Is this the start of something big? Or a trigger is needed such as Covid-19 resurgence in the Norther States or just that it is September/October or that it is time. (OK, so nobody knows)
Take some profits from Rocket Lab USA (RKLB; public via SPAC merger in 03/2021) that has run up on lots of good news.
Boston Beer’s/SAM hard-seltzer has fizzled and the stock is down 60% from its April peak. The investor base may be changing. The depressed stock may attract a takeover. But it may be attractive now for patient investors.
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.
NO-CHANGE (for the current ZIRP of 0-0.25%) through May 2022 FOMC. Beyond, the probabilities of rate rise are in double-digit %; more than 50% for December 2022 FOMC and later.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA -2.15%, SP500 -1.69%, Nasdaq Comp -1.61%, R2000 -2.81%. DJ Transports -2.61%; DJ Utilities -1.67%. (Rotating spot healthcare XLV -2.67%) US$ index (spot) +0.65%, oil/WTI futures +0.62%, gold futures -2.26%.
YTD (index changes only), DJIA +13.07%, SP500 +18.70%, Nasdaq Comp +17.28%. (Rotating spot healthcare XLV +17.41%)
Pg M4, EUROPE. UK-based media group Future has transitioned from print (only 30% revenue now) to digital (70% revenue); US revenues 50%. It is growing via M&A (TI Media, US Dennis Publishing) and is now also a big player in e-commerce. Stock has run up +110% YTD, +3,000% over 5 years, but has further upside due to transformational changes. Brands/titles include Marie Claire, Mac Life, Music Week, Wallpaper, Kiplinger’s, The Week, MoneyWeek, GoCompare, etc.
Pg M4, EMERGING MARKETS. The worst may be over for THAILAND. It is a good recovery play and THD is up +8% in just a month. In 2019, tourism accounted for 20% of GDP and that collapsed in 2020; many tourists were from China, and they won’t be returning soon. Full travel recovery may take 3-4 years. The previously vibrant export sector was hurt by Covid-19. Military dominates the local politics. Refugee problems are growing on the Western border with Myanmar and that is not helping with Covid-19. Attractive sectors for turnaround include travel/tourism, consumer and exports.
Pg M6, COMMODITIES. Green energy is providing a boost to NUCLEAR energy. The Fukushima, Japan (3-11) disaster was 10 years ago and nuclear power generation in 2019 was back to the pre-Fukushima level. China has a strong commitment to nuclear energy. Globally, there are about 440 nuclear reactors that will keep URANIUM demand strong for years. Uranium is at 6-yr high, +30% YTD. The ETF is URA and a new Canada-based CEF is SRUUF.
Pg M5, OPTIONS. Play controversial Robinhood/HOOD by near-OTM call-writing. A SEC ban on payments for order flow (PFOF) is unlikely; HOOD gets 80% of its revenues from PFOF and that may change in future.
(SP500 VIX 20.95, Nasdaq 100 VXN 22.75, SKEW 151.16 (high)) (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW?.tsrc=fin-srch
Pg M27, M32: A bad week in EUROPE (Netherlands -0.19%, Belgium -2.63%) and a good week (again) in ASIA (Japan +3.60%, Singapore -2.62%) (Japan was at 30-yr high but not all-time high). The equity CEF index (data to Thursday) outperformed the DJIA and its discount was -3%.
TREASURY* 3-mo yield 0.05%, 2-yr 0.23%, 5-yr 0.82%, 10-yr 1.35%, 30-yr 1.94%. DOLLAR rose, DXY 92.64, +0.7% (M35). GOLD (Handy & Harman spot, Thursday) fell to $1,795, -1.6% (M38); the gold-miners tanked. (^XAU was at 128.42, -5.60% 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 0.35%, 1-yr CDs 0.60%; 5-yr CDs 1.10% (M33).
*For local rates www.depositaccounts.com/banks/rates-map/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16: COVER STORY, “REMOTE WORKERS Are on the Move. What It Means for the HOUSING Market”. Remote working is making moves to dream locations possible. This is causing disruptions in several housing markets, pushing prices and rents up unexpectedly in several previously sleepy markets. Article mentions one example of a Silicon Valley IT executive working remotely from FL and ID. Less adventurous are moving away from city centers to far out suburbs. Many people are making offers for homes out of town just by looking at pictures and videos as homes are sold within hours of new listings. COMPANY policies may become factors as some may be completely flexible, but others may make geographical adjustments to salaries and benefits (e.g. Google, etc). HOMEBUILDERS are facing challenges of higher materials and labor costs and also the risk that the housing market may change in months required to build new houses. The federal GOVERNMENT is considering housing incentives.
Pg 20: Attractive HOMEBUILDERS include DHI, MDC, MTH. Their valuations are cheap based on fwd P/E and EV/EBITDA but expensive on P/B. Current issues related to supply-chain disruptions and higher costs of materials and labor will work out for strong players.
Pg 6, UP & DOWN WALL STREET. What were those Fed Presidents (KAPLAN/Dallas, ROSENGREN/Boston) thinking when actively trading stocks? They said that their actions were legal, but they will stop and sell those stocks to avoid bad appearances. As for investors with less expert and inside information, forget guesses/projections, but just be ready for +/- 10% market swings. Watch September 21-22 FOMC meeting (FOMC Statement and POWELL’s press conference on Wednesday, September 22) for hints on TAPERING. Consumer SENTIMENT is deteriorating. VOLATILITY may be up in Q4 with wide/wild SP500 swings in 4,000-5,000 range (and that may meet all predictions). Use options (strangles, etc). Remember favorable SEASONALITY from November 1-April 30. (Fasten your seatbelts)
Deep wounds remain 2 decades after 9/11. Beyond thousands of lives lost, and property and infrastructure damage, related events have been Iraq war, Afghanistan war (concluded only recently and abruptly). Early estimates of the costs of 9/11 at $100-200 billion are laughable now – make that several trillions. MONETARY and FISCAL policies have been distorted since 9/11/01 due to a stream of once-in-a-lifetime crises (2008-09, 2020). The FED balance sheet has ballooned to an incredible $8.3 trillion.
Pg 9, STREETWISE. SP500 has had a good run with +376% over 10 years, or +17% annualized. But opinions are mixed going forward. Among the nervous strategists are Morgan Stanley and ML/BoA that are looking for corrections (but are not bearish).
There isn’t much excitement for the launch of the new AAPL iPhone 13 but strong sales and profits are expected anyway.
(More later….)
LINK
Take some profits from Rocket Lab USA (RKLB; public via SPAC merger in 03/2021) that has run up on lots of good news.
Boston Beer’s/SAM hard-seltzer has fizzled and the stock is down 60% from its April peak. The investor base may be changing. The depressed stock may attract a takeover. But it may be attractive now for patient investors.
www.barrons.com/magazine?mod=BOL_TOPNAV
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
NO-CHANGE (for the current ZIRP of 0-0.25%) through May 2022 FOMC. Beyond, the probabilities of rate rise are in double-digit %; more than 50% for December 2022 FOMC and later.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
FOR THE WEEK (index changes only), DJIA -2.15%, SP500 -1.69%, Nasdaq Comp -1.61%, R2000 -2.81%. DJ Transports -2.61%; DJ Utilities -1.67%. (Rotating spot healthcare XLV -2.67%) US$ index (spot) +0.65%, oil/WTI futures +0.62%, gold futures -2.26%.
YTD (index changes only), DJIA +13.07%, SP500 +18.70%, Nasdaq Comp +17.28%. (Rotating spot healthcare XLV +17.41%)
Pg M4, EUROPE. UK-based media group Future has transitioned from print (only 30% revenue now) to digital (70% revenue); US revenues 50%. It is growing via M&A (TI Media, US Dennis Publishing) and is now also a big player in e-commerce. Stock has run up +110% YTD, +3,000% over 5 years, but has further upside due to transformational changes. Brands/titles include Marie Claire, Mac Life, Music Week, Wallpaper, Kiplinger’s, The Week, MoneyWeek, GoCompare, etc.
Pg M4, EMERGING MARKETS. The worst may be over for THAILAND. It is a good recovery play and THD is up +8% in just a month. In 2019, tourism accounted for 20% of GDP and that collapsed in 2020; many tourists were from China, and they won’t be returning soon. Full travel recovery may take 3-4 years. The previously vibrant export sector was hurt by Covid-19. Military dominates the local politics. Refugee problems are growing on the Western border with Myanmar and that is not helping with Covid-19. Attractive sectors for turnaround include travel/tourism, consumer and exports.
Pg M6, COMMODITIES. Green energy is providing a boost to NUCLEAR energy. The Fukushima, Japan (3-11) disaster was 10 years ago and nuclear power generation in 2019 was back to the pre-Fukushima level. China has a strong commitment to nuclear energy. Globally, there are about 440 nuclear reactors that will keep URANIUM demand strong for years. Uranium is at 6-yr high, +30% YTD. The ETF is URA and a new Canada-based CEF is SRUUF.
Pg M5, OPTIONS. Play controversial Robinhood/HOOD by near-OTM call-writing. A SEC ban on payments for order flow (PFOF) is unlikely; HOOD gets 80% of its revenues from PFOF and that may change in future.
(SP500 VIX 20.95, Nasdaq 100 VXN 22.75, SKEW 151.16 (high)) (Yahoo Finance data)
finance.yahoo.com/quotes/%5EVIX,%5EVXN,%5ESKEW?.tsrc=fin-srch
Pg M27, M32: A bad week in EUROPE (Netherlands -0.19%, Belgium -2.63%) and a good week (again) in ASIA (Japan +3.60%, Singapore -2.62%) (Japan was at 30-yr high but not all-time high). The equity CEF index (data to Thursday) outperformed the DJIA and its discount was -3%.
TREASURY* 3-mo yield 0.05%, 2-yr 0.23%, 5-yr 0.82%, 10-yr 1.35%, 30-yr 1.94%. DOLLAR rose, DXY 92.64, +0.7% (M35). GOLD (Handy & Harman spot, Thursday) fell to $1,795, -1.6% (M38); the gold-miners tanked. (^XAU was at 128.42, -5.60% 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 0.35%, 1-yr CDs 0.60%; 5-yr CDs 1.10% (M33).
*For local rates www.depositaccounts.com/banks/rates-map/
(BONUS from Part 2 include Cover Story, Up and Down Wall Street, Streetwise and these won’t be repeated in Part 2)
Pg 16: COVER STORY, “REMOTE WORKERS Are on the Move. What It Means for the HOUSING Market”. Remote working is making moves to dream locations possible. This is causing disruptions in several housing markets, pushing prices and rents up unexpectedly in several previously sleepy markets. Article mentions one example of a Silicon Valley IT executive working remotely from FL and ID. Less adventurous are moving away from city centers to far out suburbs. Many people are making offers for homes out of town just by looking at pictures and videos as homes are sold within hours of new listings. COMPANY policies may become factors as some may be completely flexible, but others may make geographical adjustments to salaries and benefits (e.g. Google, etc). HOMEBUILDERS are facing challenges of higher materials and labor costs and also the risk that the housing market may change in months required to build new houses. The federal GOVERNMENT is considering housing incentives.
Pg 20: Attractive HOMEBUILDERS include DHI, MDC, MTH. Their valuations are cheap based on fwd P/E and EV/EBITDA but expensive on P/B. Current issues related to supply-chain disruptions and higher costs of materials and labor will work out for strong players.
Pg 6, UP & DOWN WALL STREET. What were those Fed Presidents (KAPLAN/Dallas, ROSENGREN/Boston) thinking when actively trading stocks? They said that their actions were legal, but they will stop and sell those stocks to avoid bad appearances. As for investors with less expert and inside information, forget guesses/projections, but just be ready for +/- 10% market swings. Watch September 21-22 FOMC meeting (FOMC Statement and POWELL’s press conference on Wednesday, September 22) for hints on TAPERING. Consumer SENTIMENT is deteriorating. VOLATILITY may be up in Q4 with wide/wild SP500 swings in 4,000-5,000 range (and that may meet all predictions). Use options (strangles, etc). Remember favorable SEASONALITY from November 1-April 30. (Fasten your seatbelts)
Deep wounds remain 2 decades after 9/11. Beyond thousands of lives lost, and property and infrastructure damage, related events have been Iraq war, Afghanistan war (concluded only recently and abruptly). Early estimates of the costs of 9/11 at $100-200 billion are laughable now – make that several trillions. MONETARY and FISCAL policies have been distorted since 9/11/01 due to a stream of once-in-a-lifetime crises (2008-09, 2020). The FED balance sheet has ballooned to an incredible $8.3 trillion.
Pg 9, STREETWISE. SP500 has had a good run with +376% over 10 years, or +17% annualized. But opinions are mixed going forward. Among the nervous strategists are Morgan Stanley and ML/BoA that are looking for corrections (but are not bearish).
There isn’t much excitement for the launch of the new AAPL iPhone 13 but strong sales and profits are expected anyway.
(More later….)
LINK
