Core & Main, Caleres And 3 Stocks To Watch Heading Into Tuesday
With U.S. stock futures trading lower this morning on Tuesday, some of the stocks that may grab investor focus today are as follows: read more.....»»
"We"re One Event Away From A 1970s-Style Stagflation Explosion..."
"We're One Event Away From A 1970s-Style Stagflation Explosion..." Excerpted from 'The Turning Point' report via Larry MacDonald's TheBearTrapsReport.com, We hear the comparisons more and more; they are growing louder by the week. “The years 2023-2024 look a lot like 1973-1974.” The history books remind us,1973’s oil embargo shook the global energy market. It also reset geopolitics, reordered the global economy, and a multipolar world saw energy weaponized. After kissing 6% in 1970, in Q1 of 1973, inflation as measured by CPI danced just below 4%, much like today, central bankers were doing the Michael Jackson moonwalk in celebratory form. Then, in bloodcurdling fashion in late 1974, CPI breached 12%. “Don’t be silly, 1973 was a far different set up,” we are told. When it comes to demand on a global stage, 2024 is 2x 1973. Above all, the U.S. is the largest producer of oil in 2024, not as was the case in 1973, when she was the world’s largest petroleum importer. At the time, oil was 50% of world energy consumption vs. 1/3 today. There is just one overwhelming difference today. In the last 8 weeks, we have seen drone technology knock out a) parts of Russia’s second largest airport, b) at least three of Putin’s prize oil refineries, and c) countless ships in the Suez Canal. Weaponizing oil in a multipolar world is exponentially more uncertain with James Cameron calling the shots. In October of 1984, he brought us the “Terminator” and opened the world’s eyes to the future of AI and the weaponization of robots. If Vladimir Putin, on the eve of an election, cannot protect his second-largest airport, how can the Saudi’s protect their own crown jewel. Measuring 280 by 30 km (170 by 19 mi) (some 8,400 square kilometres (3,200 sq mi)), it is by far the largest conventional oil field in the world. That’s a lot of ground to protect. We are one event away from a 1970s-style stagflation explosion. More often than not, recency bias is an investor’s foe. The 2008 and 2020 recessions were similar in that a shock triggered a colossal bond rally along with plunging PMI, ISM and LEI data. It’s more and more apparent by the minute. What we are experiencing today is much more of a 1970s – 1980s recession vintage. An inflation-driven slowdown hits the bottom 60% first, but this time around after the Fed suppressed rates for so, so, so long, higher net worth consumers feel like they died and went to heaven. Revenge consumption has been the economy’s tailwind from those with $1m ($50k annual income vs. $8k in 2021) to $10m ($500k annual income vs. $80k in 2021) in a money market fund. This, plus trillions of fiscal overdosing coming out of Washington have prevented the recession so far, but they have also made inflation’s second act far more certain in a multipolar world. In this note we breakdown the increasing stagflationary landscape. By our count, $500B has moved into Oil & Gas and Metals in recent months. Likewise, oil’s risk to inflation expectations, rates and the -- CRE wounded -- super regional banks is accelerating. What does the world look like if the Fed is forced to ease to protect the banks and the bottom 60% of consumers in an election year -- while inflation is heading north for the summer? Sticky Inflation Both CPI on Tuesday and PPI on Thursday came in hotter than expected. Core CPI rose 3.8% y/y vs +3.7% expected and PPI rose 2% y/y vs 1.9% expected. At the same time, several data points show a slowing economy as well. Retail sales, which were reported simultaneous with the PPI on Thursday, rose 0.6% m/m, which was less than the 0.8% forecast. The prior month was revised lower as well, from -0.8% to -1.1%. In ANOTHER stagflationary turn, the Empire State manufacturing survey for March also came in well below expectations at -21 vs -7 expected. The report noted that “Demand softened as new orders declined significantly, and shipments were lower. Unfilled orders continued to shrink. Labor market indicators weakened, as employment and hours worked both decreased. The pace of input price increases moderated somewhat, while the pace of selling price increases held steady”. BofA in its monthly consumer spending report on Monday said that” consumer spending momentum appears soft, Credit card and debit card spending rose 0.4% m/m, after a 0.3% drop in January.” Oil – High Impact Far and Wide The oil heavy CRB touched its highest level since November Friday. Every day the super-regional banks go without rate cuts, the day of reckoning on market-tomarket losses grows closer to a reality. The Fed opened the door to a softer path, just an inch – that has fueled inflation’s Act II. This has LARGE implications for the banks. Since January 2023; Zions ZION, Comerica CMA and Truist TFC are underperforming the S&P 500 by close to 50%. The NYCB failure has regulators at the OCC and FDIC on the lookout for other Mark-to-Market cheaters. In recent days, we have multiple Ukraine drone attacks on Russian oil refineries, another over the weekend. A multipolar world takes some of the steering wheel away from the Fed with large implications for the banks. Multipolar World - Drone Strikes with High Impact By some estimates, in 2023 the EU imported 130 million barrels of seaborne refined products – mostly diesel – from refineries processing Russian crude. These purchases were worth an estimated €1.1 billion. With some Russian refineries down, Europe must draw more supply from the West, WTI is more than +13% off February levels, +20% off the December lows. The refineries that are processing Russian crude oil and exporting to the EU are largely the same ones sending laundered Russian fuel to the UK and US. The seven largest refineries collectively processed 390 million barrels of Russian crude oil in 2023, valued at an estimated €23 billion. (Global Witness). Connecting the Dots Higher rates + higher inflation expectations are leaving a stain here. Some banks desperately need rate cuts. Where does that leave us? The anxious bond market is now pricing in just 60% odds a rate cut in June and 72bp of rate cuts in 2024. In the upcoming FOMC meeting, some economists are now forecasting the DOT plot to move from 3 to 2 cuts this year. It only takes two Committee members to raise their dot for the median dot to go from 3 cuts to 2 cuts for the year. Odds of Rate Cut The higher the white line above the lower the June rate cut probability. We are back where we were in late February, with June rate hike odds at 60%. (The market prices these odds as an expected move in the Fed Fund futures. So -15bp is a 15bp/25bp=60% chance of a 25bp drop in Fed Funds.) ... "Funny how Nicky-Leaks only mentions the dovish data, failed to mention the Atlanta Fed sticky CPI data out yesterday which showed nice reacceleration" -- Dallas PM. * * * Subscribers can read the full 'Turning Point' report from Larry MacDonald's Bear Traps Report here... Tyler Durden Mon, 03/18/2024 - 15:25.....»»
Pre-Markets Up Ahead of FOMC, Housing Data and Jensen Huang
Apparently, market participants are expecting good things for the tech sector this week. Monday, March 18th, 2024Pre-market futures are into the green (a day after St. Patrick’s Day) considerably at this hour, following a week of trading that was rather atypically erratic — at or near all-time highs one day, down to multi-week lows another, finishing down to the second-worst trading week of the year. Currently, the Dow is +98 points, the S&P 500 is +43 and the Nasdaq +226 points. Apparently, market participants are expecting good things for the tech sector this week.The biggest news we expect is a new report from the Federal Open Market Committee (FOMC), beginning Tuesday and finishing up Wednesday — after which we will head from Fed Chair Jerome Powell at a press conference. No one is expecting the Fed to move from its current 5.25-5.50% interest rate level, but we do expect a new “dot-plot,” which will be used as a sort of road map for potential cuts throughout the remainder of 2024. Currently, the first rate cut is expected at the June meeting, which is two meetings from now.Bond yields are up on both the 2-year and 10-year — 4.726% and 4.320%, respectively — keeping the roughly 40-basis-point (bps) inversion, where we’ve been for most of the past couple years. These days, the inversion itself is not the big story (even though yield-curve inversions do tend to pre-date recessions, lest we forget), it’s the rate of change on both. Previously, with expectations of Fed rate cuts coming as soon as this week’s meeting (which they won’t), bind yields had been recessing notably — certainly from the 5% range, which correlated with the last time a bear market had taken hold of equities (last fall).Aside from the FOMC meeting, we get some housing data this week: the Homebuilder Confidence Survey for February after the opening bell today, Housing Starts and Building Permits tomorrow, and Existing Home Dales for February on Thursday. In the grand scheme of things, it’s not a hugely consequential week for economic data, but every little drib and drab helps us prepare for the immediate future.Also, although Q4 earnings season has been exhausted — and once again better than expected, overall, which has helped markets progress thus far year to date (last week notwithstanding), we do see some companies reporting this week of some note: FedEx FDX — not only a major transportation and logistics firm, but a gauge on global consumption; it’s our first look at Q1 consumer appetite — NIKE NKE and Micron MU. The Q1 earnings season doesn’t really ramp up for another four weeks.Later today, NVIDIA NVDA co-founder and CEO Jensen Huang will deliver a keynote address on A.I. technology at this year’s GTC summit (GTC stands for GPU [which stands for Graphics Processing Unit, used in everything from crypto to video games] Technology Conference) in San Jose, CA. Huang is one of the most important innovators of this century, so when he offers his views on artificial intelligence, it will be of high importance for investors, particularly those in the tech space.Questions or comments about this article and/or author? Click here>> Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Wall Street Awaits FOMC Report
Wall Street Awaits FOMC Report Pre-market futures are into the green (a day after St. Patrick’s Day) considerably at this hour, following a week of trading that was rather atypically erratic — at or near all-time highs one day, down to multi-week lows another, finishing down to the second-worst trading week of the year. Currently, the Dow is +98 points, the S&P 500 is +43 and the Nasdaq +226 points. Apparently, market participants are expecting good things for the tech sector this week.The biggest news we expect is a new report from the Federal Open Market Committee (FOMC), beginning Tuesday and finishing up Wednesday — after which we will head from Fed Chair Jerome Powell at a press conference. No one is expecting the Fed to move from its current 5.25-5.50% interest rate level, but we do expect a new “dot-plot,” which will be used as a sort of road map for potential cuts throughout the remainder of 2024. Currently, the first rate cut is expected at the June meeting, which is two meetings from now.Bond yields are up on both the 2-year and 10-year — 4.726% and 4.320%, respectively — keeping the roughly 40-basis-point (bps) inversion, where we’ve been for most of the past couple years. These days, the inversion itself is not the big story (even though yield-curve inversions do tend to pre-date recessions, lest we forget), it’s the rate of change on both. Previously, with expectations of Fed rate cuts coming as soon as this week’s meeting (which they won’t), bind yields had been recessing notably — certainly from the 5% range, which correlated with the last time a bear market had taken hold of equities (last fall).Aside from the FOMC meeting, we get some housing data this week: the Homebuilder Confidence Survey for February after the opening bell today, Housing Starts and Building Permits tomorrow, and Existing Home Dales for February on Thursday. In the grand scheme of things, it’s not a hugely consequential week for economic data, but every little drib and drab helps us prepare for the immediate future.Also, although Q4 earnings season has been exhausted — and once again better than expected, overall, which has helped markets progress thus far year to date (last week notwithstanding), we do see some companies reporting this week of some note: FedEx FDX — not only a major transportation and logistics firm, but a gauge on global consumption; it’s our first look at Q1 consumer appetite — NIKE NKE and Micron MU. The Q1 earnings season doesn’t really ramp up for another four weeks.Later today, NVIDIA NVDA co-founder and CEO Jensen Huang will deliver a keynote address on A.I. technology at this year’s GTC summit (GTC stands for GPU [which stands for Graphics Processing Unit, used in everything from crypto to video games] Technology Conference) in San Jose, CA. Huang is one of the most important innovators of this century, so when he offers his views on artificial intelligence, it will be of high importance for investors, particularly those in the tech space. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
The cocoa market is so hot that the commodity has crushed bitcoin"s 150% gain in the last year
In the last 12 months, prices for the commodity have surged more than 200%, and it's hovering near record highs. Chocolate bar.Capelle.r/Getty Images Cocoa prices are hovering near historic highs around $8,000 per metric ton. The chocolate commodity has outperformed bitcoin in the last year, gaining more than 200%. A bad harvest and lack of investment have sent cocoa prices higher over recent months. Bitcoin isn't the only asset that's been breaking records with triple-digit gains over recent months — cocoa's 186% gain over the last 12 months has eclipsed bitcoin's roughly 150% climb in the same stretch. At the end of last week, cocoa futures touched a record $8,018 per metric ton. The commodity has pared gains since, but it remains near all-time highs due to weaker crop yields in West Africa, political instability in some of the top-producing countries, lack of investment in new cocoa plants, and imbalanced supply and demand.The S&P GSCI Cocoa index is up 206% over the last 12 months, and up more than 90% year-to-date.Roughly three-fourths of the world's cocoa, per Bloomberg, comes from four countries in West Africa: Ivory Coast, Ghana, Cameroon, and Nigeria. Processors in the region have had to halt or slash production because beans have become so expensive, Reuters reported. As a result, cocoa markets this season face a supply shortfall of about 374,000 tons, data from the International Cocoa Organization shows. The group estimates global cocoa production could decline by 10.9% to 4.45 million metric tons during this crop season. Commercial chocolate prices have increased in kind. In 2023, US retail stores charged 11.6% more for chocolate products than the prior year, Circana data cited by Reuters shows.Last month, chocolate giants Hershey and Cadbury both warned of potential price hikes for consumers in light of the cocoa supply shortage. The cocoa craze has pushed the commodity to outpace the bull run in the world's biggest crypto, though bitcoin's rally is still impressive.The token has long been touted by some as an inflation hedge similar to gold, making it attractive to some investors who fear the debasement of fiat currencies like the dollar. More importantly for the crypto this year, though, has been the approval of spot ETFs that have unleashed a burst of new demand. That comes at a time when the market is also gearing up for the supply shock delivered by next month's halving. Read the original article on Business Insider.....»»
Nasdaq, S&P 500 Set For Strong Open As Nvidia AI Conference Buzz Eclipses Fed Jitters: Analyst Tells Why Investors Should Shrug Off March Slackness
Traders seem poised to overlook their inflation concerns as they anticipate the Federal Open Market Committee meeting scheduled for the week with optimism. Early Monday, stock futures showed mostly upward movement, with the tech sector potentially leading the way. Nvidia Corp.’s (NASDAQ:NVDA) GTC 2024, featuring CEO Jensen Huang‘s keynote, and the possibility of a partnership between Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Apple, Inc. (NASDAQ:AAPL), are expected to boost sentiment. However, bond yields are on the rise, reflecting lingering concerns about a hawkish message from the upcoming Federal Reserve meeting. Cues From Last Week’s Trading: Higher-than-expected consumer and producer price inflation data led to the major indices posting their second consecutive weekly losses. Small-cap and tech stocks were particularly affected, with all three major indices closing lower in the week ending March 15. The broader S&P 500 Index reached intra-day and closing highs on Tuesday before retracing following the release of the inflation data. The week also witnessed a spike in bond yields due to tempered expectations of rate cuts, accompanied by a sharp increase in the CBOE Volatility Index (VIX). Fund manager Louis Navellier commented on the week’s developments, stating, “The strong rally in equities since the end of October is finally showing some fatigue.” He noted that gains have slowed as expectations for Fed rate cuts are being pushed back, with June now the expected timeframe for the first rate cut, reflecting a 60% probability. Index Performance (+/-) Value Nasdaq Composite -0.70% 15,973.17 S&P 500 Index -0.13% 5,117.09 Dow Industrials -0.02% 38,714.77 Russell 2000 -2.08% 2,039.32 Analyst Color: Weighing in on the market weakness, Carson Group’s Ryan Detrick highlighted historical data that should ...Full story available on Benzinga.com.....»»
Strength Seen in Southern Copper (SCCO): Can Its 6.0% Jump Turn into More Strength?
Southern Copper (SCCO) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term. Southern Copper (SCCO) shares ended the last trading session 6% higher at $103. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.1% gain over the past four weeks.Southern Copper's shares have surged alongside the uptick in copper prices. On Mar 15, 2024, copper futures for May delivery rose 1.95% to settle at $4.12 per pound, levels not seen since April 2023. This rally follows the announcement that China’s leading copper smelters have collectively agreed to scale back production at unprofitable facilities due to shortages of raw materials. This decision was prompted by the drastic fall in copper concentrate prices to their lowest point in a decade, impacting the profitability of smelting operations. No specific production limits have been stipulated. Each smelter will assess its operations and make necessary adjustments.This miner is expected to post quarterly earnings of $0.86 per share in its upcoming report, which represents a year-over-year change of -18.1%. Revenues are expected to be $2.5 billion, down 10.6% from the year-ago quarter.While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.For Southern Copper, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SCCO going forward to see if this recent jump can turn into more strength down the road.The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Southern Copper belongs to the Zacks Mining - Non Ferrous industry. Another stock from the same industry, Freeport-McMoRan (FCX), closed the last trading session 3% higher at $44.61. Over the past month, FCX has returned 13.3%.For Freeport-McMoRan, the consensus EPS estimate for the upcoming report has changed -2.9% over the past month to $0.36. This represents a change of -30.8% from what the company reported a year ago. Freeport-McMoRan currently has a Zacks Rank of #3 (Hold). Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Southern Copper Corporation (SCCO): Free Stock Analysis Report Freeport-McMoRan Inc. (FCX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Natural Gas Market Struggles Amid Oversupply, Price Declines
The natural gas space is currently quite unpredictable and spooked by sudden changes in weather and production patterns. We advise focusing on fundamentally solid companies such as CTRA and LNG. The U.S. Energy Department's weekly inventory release showed that natural gas supplies decreased more than expected. The positive inventory numbers notwithstanding, futures settled with another loss week over week — sixth in the last seven — overwhelmed by excessive supply and insipid weather-related demand.In fact, the market hasn't been kind to natural gas, with the commodity recently hitting fresh three-and-a-half-year lows due to worries about record output and concerns about a growing glut. At this time, we advise investors to focus on stocks like Coterra Energy CTRA and Cheniere Energy LNG.EIA Reports a Withdrawal Bigger Than Market ExpectationsStockpiles held in underground storage in the lower 48 states fell 9 billion cubic feet (Bcf) for the week ended Mar 8, above the guidance of a 3 Bcf withdrawal, per a survey conducted by S&P Global Commodity Insights. The decrease compared with the five-year (2019-2023) average net shrinkage of 87 Bcf and last year’s decline of 65 Bcf for the reported week.The latest draw puts total natural gas stocks at 2,325 Bcf, which is 336 Bcf (16.9%) above the 2023 level and 629 Bcf (37.1%) higher than the five-year average.The total supply of natural gas averaged 105.7 Bcf per day, down a marginal 0.1 Bcf per day on a weekly basis due to lower dry production.Meanwhile, daily consumption fell to 106.5 Bcf from 108.5 Bcf in the previous week, mainly reflecting weakness in residential/commercial usage and a lower power burn triggered by a dip in heating demand.Natural Gas Prices Still Finish LowerNatural gas prices trended southward last week despite the higher-than-expected inventory decrease. Futures for April delivery ended Friday at $1.655 on the New York Mercantile Exchange, some 8.3% lower than the previous week’s closing. The fuel has declined about 34% this year, after tumbling 44% in 2023.Investors should know that natural gas realization has been under pressure from strong production, an elevated level of stockpiles and tepid weather-related demand. It's worth mentioning that the current inventory levels are well above the year-ago figure and the five-year average. The bearish sentiment surrounding the commodity even prompted shale producers Chesapeake Energy CHK and EQT Corporation EQT to hit the brakes on new drilling.CHK announced a reduction in its drilling rigs so as to lower volume. The company has decided to cut this year’s gas production expectations by around 20%. Chesapeake’s plans rippled through the market, with Appalachian Basin-focused EQT following on. The explorer and producer of natural gas said that it will lower its daily output by 1 Bcf to combat the supply glut in the U.S. market. According to EQT, the revised plan took effect in late February and will continue at least through March. This will likely reduce net production by 30-40 Bcf, per the company. While these production cut announcements temporarily sent natural gas prices higher, they have failed to galvanize the market.As is the norm with natural gas, changes in temperature and weather can lead to price swings. With a seasonally warm winter so far and forecasts turning warmer, usage of the commodity to generate electricity has taken a hit.Having said that, there are signs of curtailment in U.S. production. According to energy services provider Baker Hughes, the U.S. natural gas rig count — a pointer to where production is headed — is down more than 28% from last year. Industry observers believe this could set the stage for a pullback in near-term drilling and supplies.Meanwhile, a stable demand catalyst in the form of continued strong LNG feedgas deliveries is supporting natural gas. As a matter of fact, LNG shipments for export from the United States have been elevated for months, reaching record levels due to environmental reasons and Europe’s endeavor to move away from its dependence on Russian natural gas supplies due to the war in Ukraine. Final ThoughtsThe upshot of all of these factors — the natural gas market — remains an oversupplied one. As mentioned above, it endured a torrid year in 2023, briefly breaking below the $2 threshold for the first time since 2020. The situation is not much different in 2024, with the fuel reaching a multi-year low near $1.511 in late February and struggling to hold above the psychological mark of $2. Based on several factors, the space is currently quite unpredictable and spooked by sudden changes in weather and production patterns. As such, investors are clueless about what to do. As of now, the lingering uncertainty over the fuel means that they should preferably hold on to fundamentally strong stocks like Coterra Energy and Cheniere Energy.Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #3 (Hold) company churned out an average of 2,262.7 million cubic feet on a daily basis from these assets in 2023.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Coterra beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 9.3%. Valued at around $19.9 billion, CTRA has risen 12% in a year.Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy enjoys a distinct competitive advantage.Cheniere Energy’s expected EPS growth rate for three to five years is currently 25.8%, which compares favorably with the industry's growth rate of 22.1%. This #3 Ranked natural gas exporter has a trailing four-quarter earnings surprise of roughly 64.7%, on average. LNG shares have moved up 10.5% in a year. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chesapeake Energy Corporation (CHK): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report Coterra Energy Inc. (CTRA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Futures Surge Led By Tech Meltup Ahead Of Fed, BOJ Decisions
Futures Surge Led By Tech Meltup Ahead Of Fed, BOJ Decisions US stock futures and global markets are higher led by Tech with the Mag7 and semis higher pre-mkt while small-caps underperform ahead of two key central bank decisions - by the Fed, BOJ and BOE - while Nvidia has two key events this week which may be even more market-moving. As of 8:00am, S&P futures were 0.73% higher while Nasdaq futures gained 1.1%. Tech was boosted by news from Bloomberg that Apple may use Google's woke AI chatbot Gemini to power the iPhone's AI features. Bond yields and USD are flat, while commodity strength is seen in both Ags and Energy, where oil hit a fresh four-month high as macro-economic data from China came in ahead of expectations, and Ukrainian attacks on Russian refineries heightened geopolitical risks. According to JPM's weekly preview, this is a catalyst-heavy week as the markets may be approaching an inflection point with Mag7 appearing extended, positioning getting stretched, and the potential for bond yields to reprice higher as economic growth is elevated amid above-target inflation. Today's US data calendar is light and keeps focus on Tuesday’s Bank of Japan meeting, where first rate hike in 17 years is expected, as well as Wednesday’s Fed policy announcement. In premarket trading, Google parent company Alphabet rallied almost 4% in premarket trading after Bloomberg reported that Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone; Nvidia and Tesla added more than 2%. Here are some other notable premarket movers: B. Riley Financial (RILY US) fell 12% after the boutique investment bank failed to file its audited results after an extension period ended. Nvidia (NVDA US) rose 2.3% after HSBC raised it price target on the chip giant. The bank says the company’s 2025 AI road map provides more pricing power and will help overcome 2H24 product transition risks. PepsiCo (PEP US) advanced 1.7% after the beverage and snack company was upgraded to overweight from equal-weight at Morgan Stanley, which said the issues driving their downgrade of the stock last year have now played out. Shift4 Payments (FOUR US) fell 9.0% after CEO Jared Isaacman said bids from potential suitors have failed to value firm adequately. The Federal Reserve’s meeting on Wednesday is set to dictate the direction of global stocks for the next quarter, with policymakers likely to stick to forecasts for three interest-rate cuts in 2024. Meanwhile, the Bank of Japan is widely expected to hike interest rates tomorrow, potentially ending the world’s last negative interest rate regime. In the US, the main focus comes Wednesday, when Fed policy makers gather for a meeting that has the potential to set the tone for global stocks for the next quarter. While Fed Chairman Jerome Powell indicated the central bank was close to having the confidence to cut, bond traders appear to have painfully surrendered to a higher-for-longer reality. The 10-year Treasury yield held near a three-week high on Monday, having risen more than 20 basis points last week. A gauge of the dollar was steady. “The recent market repricing has put policy expectations essentially at Fed estimates,” said Anthi Tsouvali, multi asset strategist at State Street Global Markets. The decision will likely provide “another signal that easing of economic conditions is coming, pushing equity markets higher,” Tsouvali said. European stocks hover near record levels ahead of rate decisions from the US Federal Reserve and Bank of England later this week. The Stoxx 600 Index was largely unchanged, with autos, real estate and the energy sector among top gainers. Among individual stocks, Haleon falls after Pfizer said it plans to sell about £2 billion of its shares. Here are some of the biggest movers Monday: Aston Martin gains as much as 11% in early trading as Bank of America upgrades the stock to buy from neutral, saying the British carmaker will turn the corner after a trough in 1Q24. Reckitt Benckiser advances as much as 5.9%, rallying from Friday’s record drop triggered by a US verdict related to baby formula. Barclays says the move was a “substantial over-reaction.” LPP gains as much a 11% after plunging 36% on Friday following a report by activist short-seller Hindenburg Research that said the company’s withdrawal from Russia was a “sham.” Alstom gains as much as 10% after the French rail systems firm saw its rating upgraded to buy from hold at Deutsche Bank, which bets that the “worst is now behind the group.” Signify gains as much as 8.5%, the most in almost five months, after Barclays double-upgrades the lighting manufacturer to overweight, citing a “compelling” risk-reward. Discovery shares rise as much as 3.8% before turning negative, after the financial services company said it expects normalized profit from operations to increase by between 10% and 15% y/y. Chemring rises as much as 5.9% after the defense market supplier won new work in Europe worth just under £90m, partly thanks to the EU’s efforts to boost supplies of ammunition to Ukraine. Richemont shares fall as much as 2%, after ZKB cut its recommendation on the luxury firm to market perform from outperform, seeing risks from the high prior-year baseline. Haleon shares fall as much as 3.2%, the most since Nov. 2, as biggest shareholder Pfizer plans to reduce its stake in the UK consumer health company to about 24% from 32%. Logitech shares fall as much as 8.2% after the Swiss manufacturer of computer peripherals said CFO Chuck Boynton will step down after just 13 months in the role. Meyer Burger shares fall as much as 18% after the solar panel maker announced a CHF200m rights issue, which is larger than the company’s market cap. Hannover Re shares rose, recouping earlier losses, following a stronger-than-expected dividend and in-line results. Earlier in the session, Asian stocks climbed, led by Japan and China, as investors brace for an event-heavy week that includes monetary policy outcomes in Japan and the US. The MSCI Asia Pacific Index gained as much as 0.8%, the most since March 8, with technology and industrial stocks contributing the most. In Japan, the Nikkei 225 index climbed the most in a month and the yen traded weaker against the dollar, amid signs markets have priced in the potential for an interest-rate increase. “Japanese stocks are rising, driven by weakness of the yen, and expectations that the currency won’t strengthen even if the central bank hikes,” said Charu Chanana, a strategist at Saxo Capital Markets based in Singapore. “The weaker yen from widening US-Japan rates and reduced uncertainty for the BOJ meeting should push Japanese stocks higher today,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Laboratory. US yields have been gaining amid bets on fewer rate cuts this year. “Defensives are likely to rise, including electric power and gas, land transportation, materials, non-ferrous metals and steel.” Mainland China pared early gains as data released on Monday pointed to continued troubles for the property sector and weakness consumer spending. Property development investments slid 9% from last year in February, while retail sales missed expectations. In FX, the Bloomberg Dollar Spot Index is also little changed. The yen falls 0.1% even as speculation mounts the Bank of Japan will raise interest rates on Tuesday. In rates, treasuries are steady ahead of the Fed decision on Wednesday. US 10-year yields are flat at 4.3% with front-end outperforming, steepening the curve. US front-end yields richer by 1.3bp on the day with intermediate and long-end little changed, steepening 2s10s and 5s30s by 1bp-2bp; Bunds are underperforming by 2bp in the sector. Germany’s bond market sees bigger bear-steepening move, with long-end around 3bp cheaper on the day after erasing gains. Treasury auctions this week include $13b 20-year bond reopening Tuesday and $16b 10-year TIPS reopening Thursday. In commodities, oil hit a fresh four-month high as macro-economic data from China came in ahead of expectations, and Ukrainian attacks on Russian refineries heightened geopolitical risks. Morgan Stanley increased its Brent crude price forecast to $90 a barrel by 3Q, citing tightening supply-demand balances. Over the weekend, BHP is reported to have stood down around a quarter of the workers constructing its West Musgrave nickel and copper project in Western Australia, according to the Australian Financial Review. Spot gold is unchanged at $2,156/oz. Bitcoin holds just above $68k after volatile price action over the weekend; Ethereum is also lower trading around $3,500. The US economic data calendar includes March New York Fed services business activity (8:30am) and NAHB housing market index (10am); later this week are housing starts/building permits, manufacturing PMI and new home sales. Nvidia CEO Huang is set to speak on AI at 4pm ET. There are no Fed speakers scheduled before March 20 policy decision. Market Snapshot S&P 500 futures up 0.2% to 5,193.25 STOXX Europe 600 little changed at 504.60 MXAP up 0.9% to 176.23 MXAPJ up 0.3% to 534.99 Nikkei up 2.7% to 39,740.44 Topix up 1.9% to 2,721.99 Hang Seng Index little changed at 16,737.12 Shanghai Composite up 1.0% to 3,084.93 Sensex up 0.2% to 72,815.76 Australia S&P/ASX 200 little changed at 7,675.85 Kospi up 0.7% to 2,685.84 German 10Y yield little changed at 2.45% Euro little changed at $1.0896 Brent Futures up 0.9% to $86.10/bbl Gold spot down 0.2% to $2,152.61 US Dollar Index little changed at 103.39 Top Overnight News China’s YTD (Jan/Feb) industrial production came in solidly ahead of plan (+7% vs. the Street +5.2%), and fixed asset investment beat expectations too, while retail sales were essentially inline (+5.5% vs. the Street +5.6%) and property investment remained in the doldrums. RTRS China’s marriage rate rose in 2023, the first increase in nine years. SCMP Brazil launches a slew of anti-dumping investigations into Chinese products (this is the latest sign of pushback by a government concerned about China responding to slow domestic growth by flooding the world with imports). FT South Ossetia, a region that broke away from Georgia and calls itself an independent state, has discussed becoming part of Russia with Moscow officials, Russian news agency RIA cited the head of South Ossetia's parliament as saying on Sunday. RTRS Trump advisors presented him with three names to become Fed chair: Kevin Hassett, Arthur Laffer, and Kevin Warsh. WSJ Mike Pence said he will not endorse Trump, reflecting the deep divisions between the two men. The Hill Evidence is mounting that many Americans have reached their limit for tolerating higher prices, raising questions about how much consumer expenditures will continue to power US economic growth this year. FT One of the most pressing issues facing Donald Trump is the financial disparity he and allied groups now face with Mr. Biden and the Democratic Party. Democrats have boasted of entering February with $130 million. The Trump operation did not release a full total, but his campaign account and the Republican National Committee had around $40 million. NYT GOOGL is in talks to license its Gemini AI technology to Apple for use in the iPhone (Apple will incorporate some of its own AI technology in the next iPhone, but lacks the powerful generative AI models of Google and OpenAI). BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks were somewhat mixed after quiet weekend newsflow and as participants brace for this week's busy slate of central bank announcements including tomorrow's crucial BoJ decision, while better-than-expected Chinese activity data had little lasting effect. ASX 200 traded cautiously with the index contained by underperformance in real estate and energy. Nikkei 225 outperformed despite weak Machinery Orders and with many anticipating a policy shift at tomorrow's BoJ announcement, while momentum in the index was helped by currency weakness and softer yields. Hang Seng and Shanghai Comp. were both ultimately positive after the Hang Seng pared earlier losses with the help of tech strength but with gains capped by weakness in property, while the mainland was gradually underpinned following better-than-expected Chinese Industrial Production and Retail Sales data. Top Asian News China's NBS said with macro policy, the economy continued to recover but noted that the property market is still in the process of adjustment and stated that China can achieve this year's growth target. China’s Vice Commerce Minister said they are studying cutting new energy vehicle insurance premium rates and improving NEV maintenance service capabilities to reduce buyer worries, according to Yicai. China’s air passenger numbers rose 44.6% Y/Y to 62.48mln trips in February with international passenger traffic up 593.4% Y/Y to 81.8% of 2019 levels and domestic air passenger traffic up 35.5% Y/Y in February. India is to begin voting in the national elections on April 19th which will end on June 1st and India will count the votes in the national elections on June 4th. China’s strong factory output and investment growth at the start of the year raised doubts over how soon policymakers will step up support still needed to boost demand and reach an ambitious growth target, according to Bloomberg European bourses are mostly firmer, though with clear underperformance in the SMI (-0.6%), which is hampered by losses in Logitech (-7.5%). European sectors are mixed; Real Estate takes the top spot, whilst Telecoms is found at the foot of the pile. US equity futures (ES +0.3%, NQ +0.6%, RTY +0.2%) are entirely in the green, with clear outperformance in the NQ; Google (+2.5%) benefits from Apple/Gemini related news and Nvidia (+2.1%) gains ahead of its GTC Top European News EU is reportedly mulling joining the US in reviewing risks of Chinese legacy chips, according to Bloomberg sources; flagging potential risks to national security and supply chains. UK PM Sunak’s strategists are planning another tax-cutting budget in September ahead of an election in October or November if he can survive amid doubts about his leadership spreading in the Conservative Party, while Sunak’s government is said to be facing the same levels of economic misery that led to the Conservative Party’s defeat in 1997, according to Bloomberg citing the Misery Index. ECB’s de Cos said it is normal that they should begin cutting rates if their macroeconomic forecasts are met in the coming months and that June would be a good date to start, while he believes the current degree of consensus is very high and he hopes this will continue, according to an interview with Spanish newspaper El Periodico. ECB's Knot said the eurozone has avoided a recession and that he has pencilled in June to start cutting rates, while he added that where they take it from there will be data dependent. Fitch affirmed Germany at AAA; Outlook Stable and affirmed Malta at A+; Outlook Stable, while S&P affirmed Spain at A; Outlook Stable. FX Contained trade for DXY within tight parameters of 103.36-51 with markets in "wait-and-see" mode ahead of a slew of risk-events (Fed, BoJ, RBA, BoE, PMIs). EUR is touch firmer vs. the USD but in quiet newsflow with the pair running out of steam ahead ahead of Friday's 1.0899 peak and the psych 1.09 mark. GBP is flat vs. the Dollar and marginally softer vs. the EUR. UK newsflow over the weekend has been non-incremental ahead of a busy week of UK updates including, CPI, PMIs, Retail Sales and the BoE policy announcement. For now, Cable is stuck within Friday's 1.2725-59 range. JPY is a touch softer vs. the USD with USD/JPY back on a 149 handle. However, conviction in price action is likely to be limited ahead of the BoJ tomorrow, trading within a 149.32-148.92 range. Antipodeans are both firmer vs. the USD alongside the favourable risk environment. AUD/USD went as high as 0.6574 but unable to test Friday's peak of 0.6582. NZD/USD also edging higher but still shy of the 0.61 mark. PBoC sets USD/CNY mid-point at 7.0943 vs exp. 7.1995 (prev. 7.0975) Fixed Income USTs are incrementally softer given the modestly constructive risk tone after China's activity data while the US looks to the Nvidia keynote this evening and then the FOMC on Wednesday. A contained start for Bunds ahead of a blockbuster week, including policy announcements from the Fed, BoJ and the BoE. Currently holds around 131.70 and garners support at 131.60 (1st March) and resistance at 132.78. Gilts are similarly contained and slightly closer to the unchanged mark than EGB peers, perhaps given the relative underperformance seen in Gilts during the second half of last week; currently holds around 98.30. Commodities A firm session for the crude complex following constructive Chinese activity data coupled with a weekend of geopolitical headlines, including Ukraine ramping up its targeting of Russian oil facilities; Brent currently holds just above USD 86.00/bbl. Subdued trade for precious metals with the market on standby ahead of this week's major risk events; XAU trades within a tight range (2,146.15-2,157.60/oz). Base metals are mostly subdued despite the constructive Chinese activity data overnight but following the notable run higher in prices last week. Ukraine’s SBU security service attacked three Rosneft oil refineries in Russia’s Samara region with drones. It was separately reported that a fire broke out at the Slavyansk refinery in the Krasnodar region following a drone attack, while the Syzran oil refinery reportedly experienced a fire which was put out. BHP said 30% of Australian nickel mines have shut and 30% more are under pressure on low prices, according to Reuters. China's NDRC maintained retail gasoline and diesel prices as of March 19th. Geopolitics: Middle East Israeli official says they will offer in Qatar a truce for 6 weeks in exchange for the release of 40 detainees, according to Reuters; the official estimated that negotiations could take at least two weeks Israeli PM Netanyahu said US Senate Majority Leader Schumer’s speech commenting on Israeli elections was inappropriate and they will continue military pressure on Hamas. Netanyahu said Israel’s goal of eliminating Hamas battalions goes hand in hand with enabling civilians to leave Rafah. Israel’s Mossad chief Barnea was expected to resume Gaza ceasefire talks with Qatar’s PM and Egyptian officials on Sunday with the meeting a direct response to the latest proposal from Hamas and talks will focus on the remaining gaps between Israel and Hamas, according to a source briefed on the talks cited by Reuters. Israel is to send a delegation to Qatar for talks on achieving a hostage deal after Israeli security cabinet approval, according to Kann correspondent Amichai Stein. Egyptian President El-Sisi said Egypt and EU leaders agreed on rejecting any Israeli military operation in Rafah, while EU’s von der Leyen said it is critical to achieve an agreement on a ceasefire in Gaza rapidly now and that Gaza is facing famine which they cannot accept. German Chancellor Scholz said they cannot stand by and watch Palestinians starve, while he added that lasting security for Israel lies in a solution with Palestinians, meaning a two-state solution. A Syrian soldier was injured in an Israeli strike on the southern region, according to Syrian state TV. Iran and the US held secret talks on proxy attacks and a ceasefire, according to the New York Times. UKMTO noted an incident off Yemen’s Aden where an explosion was reported near the Master of Merchant vessel although there was no damage to the vessel and the crew were reported safe. US offical says Houthis are unable to continue escalation, US can always escalate against the Houthis OTHER Russian President Putin won 88% of the votes in the Russian election where the opposition was banned, according to FT. Russian President Putin said Russia should be stronger and more effective and his win will allow Russia to consolidate society and shows how Russia was right to choose its current path. Russian President Putin commented on the French proposal for a ceasefire during the Olympics in which he stated that they are ready for talks and will proceed from Russia's interests on the front line, while he added they will think about with whom they can talk with about peace in Ukraine and he doesn't rule out setting up a 'sanitary zone' in Ukraine-controlled territories amid Ukraine attacks. White House commented the Russian election was not free nor fair given how Putin has imprisoned opponents and prevented others from running against him, while Ukrainian President Zelensky said there is no legitimacy in Russian imitation of elections and that Putin seeks to rule forever, according to Reuters. Russian air defence systems downed 35 Ukraine-launched drones over eight regions, while Russia launched 14 drones against Ukraine’s Odesa which damaged agricultural enterprises and infrastructure. Russia’s Foreign Ministry accused Ukraine of stepping up ‘terrorist activities’ during the Russian election to attract more aid and weapons from the West, while Russia said Ukraine dropped a shell from a drone on a polling station in the Zaporizhzhia region. Russian Foreign Ministry spokeswoman commented on French President Macron’s idea of a ceasefire in Ukraine during the Olympics and proposed for him to stop weapons supplies to Ukraine, according to TASS. Head of parliament in the breakaway Georgian region of South Ossetia said a possible inclusion into Russia is being discussed with Moscow, according to RIA. SpaceX is building hundreds of spy satellites under a classified contract with the US National Reconnaissance Office, according to Reuters sources. North Korea fired projectiles believed to be ballistic missiles which landed shortly after their firing outside of Japan’s exclusive economic zone. In relevant news, - North Korea’s leader Kim oversaw warfare drills and urged realistic preparation for combat, according to KCNA. US Secretary of State Blinken told South Korean President Yoon that the two countries are to consult to upgrade extended deterrence and work together on the North Korean threat, according to Yonhap. Japanese PM Kishida said North Korea's missile launch threatens not only the peace and stability of the region but also of the international community and Japan strongly condemns North Korea’s actions. Kishida stated that Japan lodged a stern protest against North Korea and will further advance close trilateral cooperation with the US and South Korea. US Event Calendar 08:30: March New York Fed Services Business, prior -7.3 10:00: March NAHB Housing Market Index, est. 48, prior 48 DB's Jim Reid concludes the overnight wrap This could be a landmark week in markets as the last global holdout on negative rates looks set to be removed as the BoJ likely hikes rates from -0.1% tomorrow. That could slightly overshadow the FOMC that concludes on Wednesday that will have its own signalling intrigue given recent strong inflation. We also have the RBA meeting tomorrow (DB preview here) and the SNB and BoE (DB preview here) meetings on Thursday to close out a big week for global central bankers with many EM countries also deciding on policy. We’ll preview the main meetings in more depth below but outside of this we have the global flash PMIs on Thursday as well as inflation reports in Japan (Thursday) and the UK (Wednesday). US housing data also permeates through the week as you'll see in the full global day-by-day week ahead at the end as usual. Let’s go into detail now, starting with the BoJ tomorrow. We’ve had negative base rates now for 8 years which if I have my history correct is the longest run ever seen for any country in the history of mankind. In fact I doubt pre-historic man was as generous as to charge negative interest rates on lending money prior to this! It also might be one of the longest global runs without any interest rate hikes given the 17 year run that could end tomorrow. So a landmark event. Our Chief Japan economist previews the meeting here and e xpects the central bank to revise its policy and abandon both NIRP and the multi-tiered current account structure and set rates on all excess reserves at 0.1%. He also sees both the yield curve control (YCC) and the inflation-overshooting commitment ending, replaced by a benchmark for the pace of the bank’s JGB purchasing activity. Our house view forecast of 50bps of hikes through 2025 is more hawkish than the market but risks are still tilted to the upside. On Friday, the Japan Trade Union Confederation (Rengo) announced the first tally of the results of this year's shunto spring wage negotiation. The wage increase rate, including the seniority-based wage hike, is 5.28%, which was significantly higher than expected. This year will probably see the highest wage settlements since 1991 which given Japan’s recent history is an incredible turnaround. This wage data news has firmed up expectations for tomorrow. See our economists’ piece on it here. With regards to the FOMC which concludes on Wednesday, our economists (see their preview here) expect only minor revisions to the meeting statement that saw an overhaul last meeting. With regards to the SEP, the growth and unemployment forecasts are unlikely to change but the 2024 inflation forecasts potentially could. DB expect the Fed to revise up their 2024 core PCE inflation forecast by a tenth to 2.5%, although they see meaningful risks that it gets revised up even higher to 2.6%. In our economists' view, a 2.5% core PCE reading would allow just enough wiggle room to keep the 2024 fed funds rate at 4.6% (75bps of cuts). However, if core PCE inflation were revised up to 2.6%, it would likely entail the Fed moving their base case back to 50bps of cuts, as this would essentially reflect the same forecasts as the September 2023 SEP. Beyond 2024, DB expect officials to build in less policy easing due to a higher r-star. If two of the eight officials currently at 2.5% move up by 25bps, then the long-run median forecast would edge up to 2.6%. This could be justified by a one-tenth upgrade to the long-run growth forecast. After all this information is released the presser from Powell will of course be heavily scrutinised, especially on how Powell sees recent inflation data. Powell should also provide an update on discussions around QT but it is unlikely they are ready yet to release updated guidance. One additional global highlight this week might be a big fall in UK inflation on Wednesday with our economists' preview here suggesting that headline CPI will slow to 3.4% (vs 4% in January) and core to 4.5% (5.1%). Elsewhere there is plenty of ECB speaker appearances including President Lagarde on Wednesday. They are all highlighted in the day-by-day guide at the end. Asian equity markets are climbing this morning with the Nikkei (+2.13%) rising sharply ahead of what could be the first baby step towards normalising policy tomorrow. Elsewhere, the CSI (+0.51%) and Shanghai Composite (+0.49%) are also moving higher after data showed that the world’s second biggest economy kicked off the year on a stronger note (more below). Meanwhile, the KOSPI (+0.60%) is also up while the Hang Seng is struggling to gain traction this morning. S&P 500 (+0.26%) and Nasdaq (+0.45%) futures are higher. US Treasury yields are fairly stable. . Coming back to China, industrial production grew +7.0% in the first two months of 2024, well above Bloomberg’s forecast of +5.2% with businesses continuing to engage in strong capital spending as fixed asset investment grew +4.2% in the two-month period, more than the +3.2% expected. Meanwhile, retail sales advanced +5.5% YTD y/y, v/s +5.2% expected, indicating that the Chinese economy is performing better than expected helped by extra demand during the Lunar New Year period. Elsewhere, in one of the more predictable electoral events of 2024, Vladimir Putin secured another term as Russia’s president. Peter Sidorov has published a short reaction on the result and on things to watch in its aftermath, here. Recapping last week now, concerns about stubborn inflation proved to be at the forefront of investors’ minds. The main drivers of these renewed inflation worries were the stronger than expected US CPI and PPI reports, which showed that both consumer and producer prices were rising faster than expected. And markets found little relief in Friday’s data, with the University of Michigan’s preliminary consumer sentiment index falling to 76.5 in March (vs 77.1 expected), while the 5-10yr inflation expectations were unchanged at 2.9% as expected. Adding to the inflation fears, oil prices surged last week. Brent crude rose +3.97% (-0.09% on Friday) to $85.34/bbl, its highest weekly close since late October, and WTI crude jumped +3.88% ( -0.27% on Friday) to $81.04/bbl. Off the back of this, markets revisited their expected timing of Fed cuts. For example, futures are now pricing only a 61% chance that the Fed will cut by June. At the start of March, markets had seen a 96% chance of a cut by June. The number of cuts expected by the December meeting were dialled back by -23.1bps last week (and -4.8bps on Friday), with just 72bps of cuts priced in for the year, the lowest this has been in four months. The prospect of fewer rate cuts led to a strong upward move in global yields. US 2yr Treasury yields surged +25.3bps last week (and +3.4bps on Friday). Longer dated Treasuries also jumped. For example, 10yr yields rose +23.1bps to 4.31% (+1.6bps on Friday), bringing them back to their February levels. European fixed income was far from immune to these moves, as 10yr bunds gained +17.5bps (and +1.6bps on Friday). Increasing expectations that the BoJ was looking to cut at this week’s meeting also added to this upward pressure on global yields, with 10yr Japanese bond yields up +5.1bps (and +0.9bps on Friday). The equity reaction was not as negative but they also struggled after last week’s hot inflation prints, as well as with the softer US retail data. The S&P 500 was down -0.13% last week, and fell -0.65% on Friday against a risk-off backdrop. The small cap Russell 2000 struggled the most, down -2.08% over the week, despite a +0.40% rise on Friday. Technology also underperformed on the week, as the NASDAQ fell -0.70% (and -0.96% on Friday). The Magnificent 7 were down -1.04% on Friday (-0.30% on the week), though Nvidia (+0.35% on the week) managed to narrowly secure 10 weeks of consecutive gains. Equity markets were more optimistic in Europe, with the STOXX 600 up +0.31% (-0.32% on Friday). The German DAX and French CAC outperformed, up +0.69% and +1.70% on the week, respectively. Tyler Durden Mon, 03/18/2024 - 08:18.....»»
Rates Markets Are At A Hawkish Tipping-Point
Rates Markets Are At A Hawkish Tipping-Point Authored by Simon White, Bloomberg macro strategist, The rates market in the US is once again on the threshold of expecting rates to peak at a higher level than the Federal Reserve. If the central bank does not raise its projections next week, the market may take the initiative and price higher rates. Traders have been consistently clear for most of this cycle that Fed rate rises will eventually have to be met with swift cuts to restabilize the economy. Only on a few, fairly brief occasions did pricing get ahead of the Fed and rates were expected to peak at a higher level than the central bank’s projections. We could be knocking on the door of another of these episodes. The peak expected rate as inferred from fed funds futures has been moored almost identically at the peak rate expected by the Fed itself, based on the FOMC’s dots. The chart below shows the previous times pricing exceeded the Fed’s projections. There are four distinct episodes, all of them driven by a sell-off in rates markets rather than a move lower in the dots. As shown in the chart, the first two were when CPI was rising and had not yet peaked. The third was a higher-than-expected CPI print, while the fourth was January 2023’s monster payrolls number. None lasted long, with the previous episode being curtailed by the SVB crisis, but the move higher in rates on each occasion was rapid and brutal if you were on the wrong side of it. Speculation is mounting that the Fed at its meeting might reduce the number of cuts expected. All else equal, that would take the market back below the dots. But traders are beginning to get uneasy about “sticky” inflation. Sticky might not be the problem - there are multiple signs that inflation will start rising again, as discussed here and here. Moreover, it’s not just a US phenomenon: globally there are signs that the disinflation trend is ending. The market may well get impatient and move rate expectations higher if the Fed does not move the dots higher next week, sensing a policy mistake is in the offing. And if inflation keeps rising, then this latest episode where the market out-hawks the Fed may not be so brief. Tyler Durden Mon, 03/18/2024 - 08:51.....»»
SAIC, StoneCo And 3 Stocks To Watch Heading Into Monday
With U.S. stock futures trading higher this morning on Monday, some of the stocks that may grab investor focus today are as follows: Wall Street expects Science Applications International Corporation (NASDAQ: SAIC) to report quarterly earnings at $1.43 per share on revenue of $1.64 billion before the opening bell, according to data from Benzinga Pro. SAIC shares rose 0.6% to $143.48 in after-hours trading. Analysts are expecting Comtech Telecommunications Corp. (NASDAQ: CMTL) to have ...Full story available on Benzinga.com.....»»
SAIC, StoneCo And 3 Stocks To Watch Heading Into Monday
With U.S. stock futures trading higher this morning on Monday, some of the stocks that may grab investor focus today are as follows: read more.....»»
This Week Seemed Like A Crazy Market, On Steroids
This Week Seemed Like A Crazy Market, On Steroids By Peter Tchir of Academy Securities What’s the Record for Shortest Time from All-Time Highs to Bear Market? That seems like such a strange question. If all you did was read the headlines, you would think that things were great (if not spectacular) in markets. If you say you are bearish, people will look at you with sympathy, wondering if you are going to be able to feed your family with such a disastrous call. Yet, the reality of the situation is quite different from what the headlines seem to be trying to spoon feed us on a daily basis. The Nasdaq 100, which was down on the week, is down 1% since February 9th. Yes, it had its closing high on March 1st, and its intraday high of 18,417 on March 8th. But 5 weeks, with a lot of hype and cheerleading, has amounted to a loss of 1%. Since the highs, we are down 3%, which is one of many things that have me wondering how quickly we’ve fallen from “all-time highs” to bear market? While 20% is a tad more bearish than I am, it sounded better than using a “correction” of 10% in the title. The S&P 500 has performed more steadily than the Nasdaq 100, but at the other end of the spectrum, despite begging people to Stop Using the Magnificent 7 Moniker, we still hear that term quite frequently. Yes, some people have started talking about the Fab 4 or some other catchy phrase, but that makes sense when at least a couple of the so-called Mag 7 are back to levels from October, before the big bull market started (a time when we were quite bullish, possibly fighting consensus back then too). Where We’ve Been Recently We’ve been bearish, but with an emphasis that we felt the risk of a 5% to 10% rapid move to the downside was far more likely than a sharp rally. We’ve discussed aspects of this in: Trillion Dollar Mistakes. Highlighting some big mistakes made in the overall market, while questioning if Wall Street, for all its foibles, was really likely to have been that wrong? The Time to Retire report, referenced earlier, highlighted a series of market behaviors and charts that were making us increasingly nervous about the risk/reward of the market and forcing us to lean to the “cautious and need to hedge” side of things. It’s Friday, I’m in Love examined the week ending March 1st, highlighting some of the things that helped propel stocks higher that Friday. As I re-read that, many of the positives have dissipated, been priced in, or in the case of AI “deputization,” are starting to be questioned. If it hadn’t been for the SOX Index (semiconductors) we wouldn’t have achieved these all-time highs, and that index has started to roll over. In a market with limited leadership, that could be problematic. While more of a “longer-term” trade, everything about Made By China is likely to be negative for our markets and economy. While those have helped articulate and explain our bearish view, they are all relatively recent (the oldest was published on February 27th). We should go back to one more article to express why the view has changed from a DEFCON 3 or 4 sort of bearishness, to a more dangerous and urgent DEFCON 2 level of bearishness. Back on February 9th we published A Market Only a Mother or AI Could Love. That chart showed the “crazy” trading pattern of the week. So many wild swings. Gyrations, some of which could be attributed to news, but some of which seemed inexplicable. This week seemed like that, on steroids! I think I actually physically poked my screen once to make sure it was working. I swear, the market was up almost 1%, I glanced away, it was down 1%, and then a few minutes later it was back to flat. I’m not sure what tapping my screen would do, but I could remember doing that when a thermometer didn’t seem to be working, so it seemed appropriate. But no, my screen was working just fine – it was the markets that weren’t functioning “normally” in my opinion. It seemed that every “big” order just caused the market to gap higher or lower while the order was being filled. It did work in both directions, but I’m increasingly convinced the risk is that the market will need to find some serious bidside liquidity, when it may be non-existent. Where We’ve Been In the Past All of this is forcing me to think about some things we’ve discussed in the past, which are rapidly rising to the forefront of my thoughts again. While aging myself, yet again, I cannot help but think about the Tacoma Narrows Bridge. A fun “movie” many of us got to watch in school. This was back when someone had to bring in a projector and seeing a video in class was a “cool” thing (though not as cool as getting the whole school to watch the Canada Cup in the gym). But anyways, that video shows a bridge oscillating. That oscillation increases until, ultimately, it collapses! The movie was all about resonance frequency, but all I remember is seeing a structure, so seemingly sturdy, start to bend and twist before collapsing. The first time that hit me was back in 2007 and it is the main image I have in my mind right now. It also made me think about pendulums. In Dredging Up Pendulums, we focused primarily on the complexity of a simple pendulum versus a double pendulum, and how important even tiny changes in starting conditions could be. We also discussed Machine Learning Triple Pendulums. This YouTube video shows how a computer is able to manipulate a “cart” to get a triple pendulum to stand upright for a period of time. For about a decade, I’ve been using that when discussing market mechanics. It is difficult to tell what exactly happens day by day, or even minute by minute, when so much of the trading is driven by algorithms. The algorithms link not just “vehicles” (like stocks, ETFs, and futures), but also asset classes as correlations are traded rapidly. The reason thinking about market structure in terms of a machine learning triple pendulum cart is so important (if it is a correct interpretation) is that “functioning” or holding it upright is very unstable and takes more computing power and skill than a human possesses. Yet, it can be accomplished. The problem is that when it fails, it tends to result in an “epic” failure where the “natural” position of the pendulums (all pulled by gravity) is to be facing down rather than standing upright. Sure, maybe a bit alarmist, but we’ve seen it in the past. A VIX related ETF Went Poof. What Changed This Week One thing that changed is the “randomness” of trading seemed to accelerate, forcing me to think about bridges and pendulums. I also cannot stop thinking about some of the charts we included in A Retrospective of All-Time Highs. While many of the bears (and doomers) want to talk about “tech bubbles,” I’m more fixated on 2007. To me, the 2007 “all-time high” was one of the strangest ones. All the problems were known. None had been fixed, but we hit an all-time high, based largely on the Fed. We bounced hard again after JPM bought Bear, only to sink to new lows a week or so after Lehman. Those “lows” seemed tame compared to where the market finally bottomed in 2009, but it was the almost “hubris” of all-time highs in the autumn of 2007 that I think about more than the tech bubble, as I don’t think that is the right metric. Though as a bear, who is increasingly worried about a 10% pullback, I shouldn’t look a gift horse in the mouth. But here are things that have made me increasingly nervous: Bond yields. I’ll start with longer dated bond yields as they are more fun. The 10-year Treasury yield got back to 4.31% on Friday. Treasuries rallied, much to my chagrin, last time we got here, but they seem susceptible to moving higher again. China will NOT be buying Treasuries as they are raising their own debt to figure out how to spend their way out of their economic problems. FXI, a China ETF, did finish higher on the week, in a story that remains poorly covered, and is why I continue to like – for a trade – long FXI, short QQQ. I’ve been expecting to see another march to higher yields like we saw last fall. The 10-year yield moved higher each and every day last week – a sign of things to come? The Fed is getting pushed out of the picture. The first cut is expected in June, with a chance of it getting pushed to July. The market is still pricing in cuts at the September and November meetings (which I think is insane given how every issue, including monetary policy, is fodder for campaigns that seem as much about generating anger as hope). We are still at 3 cuts for the year, but I think there is a chance that the Fed changes the dots just a smidge (given all the inflation data) to show fewer than 3 cuts. That, or a change in next year’s expected end rate, could be punishing. The move in yields, at the longer end, has not reflected increased term premium. Minimal (if any) concerns about the never-ending growth of federal debt, as the spread between 2s and 10s closed at -42 bps. I see no reason why this doesn’t get back to recent “best” levels of -20 or so, with my target for the summer being flat yield curves as risk premium returns and we see an end to the era of inversion everywhere you look. Inflation and oil. It is clear that inflation, by a variety of measures, is “sticky.” A couple of things, actually a few things, bother me most. Lots of “apologizing” about Owners Equivalent Rent. If you’ve read the T-Report for long, you know how much I hate how we calculated shelter. So yes, right now, it is overstating the current rise in shelter – BUT IT IS DOING THAT BECAUSE THE RISE WAS NEVER FULLY PRICED IN! Sorry for the “all caps” but yes, today’s inflation is likely overstated, but only because officially we under-reported it. Yes, this is a rant, but it probably goes beyond those dismissing rent. Beyond dismissing rent. Most consumers think in terms of dollars. We live in a “nominal world.” So something that rose 10% a few years ago went from say $100 to $110. Now it “only” rose 3%, but it is 3% on a much larger starting point, creating a much higher dollar increase than it would have a few years ago. Add to that all the people who have been arguing that the prices they see in stores don’t seem to get used in official calculations and all the “substitutions” incorporated into the calculations artificially kept inflation lower. Basically, the real-world level of current inflation may never have been captured by the official data, leaving more room to catch up. Oil. Energy prices contributed to recent rises in inflation. Apparently, many seem confident they will go back down. With no end in sight to the war in Ukraine and the Middle East edging closer and closer to direct involvement with Iran, that does not seem like a bet I’d be comfortable with. I do like the energy sector, so I’m biased, but I think it is too early to dismiss the geopolitical risks associated with oil. The U.S. consumer has been like a zombie for anyone betting against the U.S. economy. They just keep coming back to life. No matter what you think you’ve done, they seem to come back! Well, I think the consumer is rolling over. Debt is mounting. The job market is far from robust and has lost all of the momentum it had. It is at best “normal” like the years before COVID, and that might be a stretch. While I don’t see “stagflation as a risk,” I think we are entering a period where we could see: Higher yields coupled with a weakening economy and a Fed that is handcuffed by persistent inflation. Not a good mix. In addition to a market positioned too aggressively that cannot expect much help from short covering. While I don’t want to get into detail today, I think people staring at the VIX are looking in the wrong direction. This is a world of daily and weekly option flows that don’t show up in the VIX calculation. Unlike other strategies that have been difficult to understand (meme stocks for example), the 0DTE options market seems perfectly capable of trading from the call side of the market to the put side of the market. Many other strategies, like blindly selling vol, have tended to work in one direction and could really only be traded consistently from that direction. The 0DTE can work both ways and that could be the “shock” we need that disrupts this market. For credit, look for CDX IG to go back above 60, maybe to 65. Not because of any serious problems in credit, but because spreads will be forced wider if I’m right on stocks. So, instead of thinking about a 5% to 10% pullback in stocks, I’m much more concerned about a 10% or higher pullback along with 10-year yields breaking through 4.5%. We didn’t answer the question posed at the start of the title, but I’m increasingly worried that we might be forced to find out what the competition is if markets start rolling over and lose the support of bonds, the Fed, and the few sectors that have done the heavy lifting. On that note, I do promise to write “Up in Smoke” as a title of a T-Report (I couldn’t end this report without at least trying to get you to smile!) Finally, Happy St. Patrick’s Day to those who celebrate! Tyler Durden Sun, 03/17/2024 - 12:50.....»»
Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) Q4 2023 Earnings Call Transcript
Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) Q4 2023 Earnings Call Transcript March 15, 2024 Seanergy Maritime Holdings Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime Holdings […] Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) Q4 2023 Earnings Call Transcript March 15, 2024 Seanergy Maritime Holdings Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime Holdings Corp. Conference Call on the Fourth Quarter and Year Ended December 31, 2023 Financial Results. We have with us today Mr. Stamatis Tsantanis, Chairman and CEO; and Mr. Stavros Gyftakis, Chief Financial Officer of Seanergy Maritime Holdings Corp. [Operator Instructions] Please be advised that this conference call is being recorded today, Friday, March 14, 2024. The archived webcast of the conference call will soon be made available on the Seanergy website, www.seanergymaritime.com. To access today’s presentation and listen to the archive audio file visit the seanergy website following the webcast and presentation section and on the investor relations page. Please now turn to slide two of the presentation. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statements is contained in the fourth quarter and year ended December 31, 2023 earnings release, which is available on the Seanergy website again, www.seanergymaritime.com. I would now like to turn the conference over to one of your speakers today, the Chairman and CEO of the company, Mr. Stamatis Tsantanis. Please go ahead, sir. Stamatis Tsantanis: Thank you, operator. Hello. I would like to welcome everyone to our conference call. Today, we are presenting the financial results for the fourth quarter and full year period of 2023, together with an update on our main corporate developments. Let’s move into slide number three. 2023 was one of the most volatile year for the Capesize market. We experienced a wild range of freight rates that bottomed at 2,200 per day in Q1 and peaked at almost $55,000 a day in Q4. Despite this extreme volatility Seanergy was very well placed to take advantage of a stronger rebound in the Capesize market that transpired in the fourth quarter of 2023. As a result, we delivered another profitable year building on our robust commercial performance, our hedging activities and the investments we have made in improving our vessels efficiency over the years. In doing so, we have successfully navigated the extreme freight rate and stability and achieved a healthy mix of fleet growth, accretion and cash dividends. We ended the fourth quarter of 2023 with a net income of approximately $10.8 million, which compares very favorably with a net income of $0.5 million reported in the fourth quarter of 2022. Following a strong 2023 fourth quarter, the Capesize market is currently undergoing the best first quarter since 2011. This is a result of higher raw material trade flows, limited fleet growth over the past year, as well as disruptions in key areas. Consistent with our commitment to reward our shareholders, our board of directors declared a total cash dividend of $0.10 per share consisting of a special dividend of $0.075 on top of the $0.025 regular dividend for the quarter. This results in a dividend payout ratio exceeding 100% for the full year period of 2023. While we’re currently evaluating our options to further increase capital returns to our shareholders, provided that the underlying conditions allow. In addition to our cash dividend distributions, since 2023, we have completed 2.5 million in share buybacks, or about 2% of our shares outstanding at an average price of $5.12, which is about 44% lower than the current market price. Additionally, in December we repaid the 3.2 million outstanding balance under our convertible note, addressing a long-standing legacy overhang over our share price while simplifying our capital structure. Apart from this, during 2023 we refinanced approximately 53.8 million of indebtedness and following these transactions, there are no other debt maturities until the second quarter of 2025. See also 7 Command Economy Countries and 7 Others with Big Government Presence and Top 20 Marketing Trends of 2024. Q&A Session Follow Seanergy Maritime Holdings Corp Follow Seanergy Maritime Holdings Corp or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. We are pleased to see Seanergy making parallel progress in our strategic objectives of rewarding shareholders, taking advantage of growth opportunities and maintaining a strong balance sheet. I would like to add that we view our balanced capital allocation as the best way to serve the long-term interests of our shareholders. Moving on to slide number four, here we illustrate our priority in capital returns to our shareholders. Since March 2022, we have declared a total of approximately $26.4 million, or $1.45 per share, through a mix of regular and special cash dividend distributions that represents about 16% of our current share price. In terms of buybacks, the total securities repurchased, including common stock, convertible notes and warrants, amount to approximately $41 million. Moving on to slide number five, here we review the commercial performance of our fleet. First, I would like to point out that we generally overperform the BCI index in a highly volatile cape size market our 2023 TCE performance of $17,500 exceeded about the Capesize index average of $16,400 approximately. This makes two consecutive years of us overperforming the BCI index. In addition, we have focused on acquiring high quality vessels to our fleet comprised of Japanese vessels from the most reputable yards with significantly improved fuel efficiency characteristics. The qualitative improvement of our fleet that leads to increased earnings capacity is a continuous priority for us. Looking ahead to 2024 against the promising backdrop of the first quarter, we believe that our performance will remain solid. Assuming current FFAs, we expect our first quarter 2024 daily time charter equivalent to be equal to approximately $23,200. We have also taken advantage of the recent upswing in freight futures and hedged approximately 58% of our second quarter ownership days at a fixed gross rate of approximately $28,300. Concerning our fleet growth initiatives, during the fourth quarter, we took delivery of a first Newcastlemax vessel, vessel, which we had agreed to charter in on a bareboat basis. The underlying acquisition price is well in the money, and since its delivery, the vessel commenced employment under an index link time charter at a significant premium to the BCI. Furthermore, in the first quarter we agreed to acquire a Capesize built in 2013 in Japan and we expect to take delivery by the end of the second quarter. Both transactions have been very well timed. This concludes my recap of our developments in the fourth quarter and to date, and I’m now passing the floor to Stavros before returning to discuss the outlook of the Capesize market. Stavros, please go ahead. Stavros Gyftakis: Thank you, Stamatis. Welcome everyone to our earnings call. Let us start with slide six by reviewing the main highlights of our financial statements for the fourth quarter and the twelve months period that ended on December 31, 2023. We actually had a great fourth quarter on the back of a very robust Capesize freight market and our effective operating platform. Our net revenues was equal to $39.4 million, 38% higher than the respective period last year based on a time charter equivalent of 24,900. Our adjusted EBITDA and our net income were also significantly improved year-on-year, amounting to $23.9 million and $10.8 million, respectively. On an annual basis, our net revenues was equal to $110.2 million, slightly lower than last year due to the slower than expected Capesize market recovery in the first nine months of 2023, however, we recorded an average time charter equivalent of $17,500 outpaying once again, the BCI by approximately 7%. Our adjusted EBITDA was equal to $53 million and our net income reached $2.3 million, reflecting the challenges faced earlier in the year. Moving on to our balance sheet, our cash position remains strong in 2023 at $24.9 million, or approximately $1.5 million per vessel. This is despite consistent dividend payments, securities buybacks and hefty data monetization schedule. In slide seven, it is evident that despite the weaker than expected Capesize market during the first nine months of the year, we achieved another profitable year with an adjusted EBITDA of $53 million. This can be attributed to our effective hedging strategy throughout the year, which helped us hedge against some of the downward market pressures. Additionally, our solid operating leverage allowed us to capitalize on the strength of the market in the fourth quarter. On the expense side, we retain our daily OpEx per vessel at practically the same levels with the previous year, despite the inflationary pressures. This reflects our strategic decision to increase the number of vessels managed on our in-house management platform. With all these actions, our adjusted EBITDA margin for the year remains strong at 48%, closely aligning with the previous year’s performance. Moving on to slide eight, we discussed our debt optimization and overall leveraging efforts throughout 2023. Starting with our debt structure, our debt outstanding at the end of 2023 was equal to $235 million. This includes loans, finance, leases and remaining payments under our bareboat in vessels, including respective purchase options, and corresponds to approximately 13.9 million per vessel, almost half of the average market value of our vessels as per the end of last year. Our debt repayments reduced our corporate leverage to 47% during 2023, with more than 90% of our debt covered by the scrap value of the fleet based on current scrap prices. Here, it is worth mentioning that Seanergy achieved another significant milestone this year by fully repaying the last outstanding convertible note totaling $11.2 million. During the year, we successfully concluded $53.8 million of refinancing’s, reducing the underlying pricing in overall terms while also adding $15 million in liquidity at that time. Equally importantly, we have now addressed all loan maturities until the second quarter of 2025. Meanwhile, we are in advanced discussions with a potential lender for the financing of our latest Capesize acquisition as Stamatis mentioned earlier......»»
5 Low-Risk ETFs to Play Now as Inflation Ticks Up
After a sturdy run so far this year, Wall Street started to waver in mid-March, following the release of hot U.S. inflation data and the rise in bond yields. After a sturdy run so far this year, Wall Street started to waver in mid-March, following the release of hot U.S. inflation data. Hot inflation readings for the first two months of 2024 aren’t going to prompt the Fed to lower rates quickly, per some market watchers. Hence, cues of higher-for-longer rates have weighed on the broader market this week.The consumer price index, a broad measure of goods and services costs, rose 0.4% sequentially in February and 3.2% year over year. The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.Barring volatile food and energy prices, the core CPI ticked up 0.4% month over month and was up 3.8% year over year. Both were one-tenth of a percentage point higher than the forecast, per CNBC. If this was not enough, U.S. Treasury Secretary Janet Yellen said that it's “unlikely” that interest rates will return to the pre-pandemic levels.No wonder the benchmark 10-year U.S. treasury yield jumped to 4.29% on Mar 14, 2024, from 4.09% recorded on Mar 8, 2024. The two-year U.S. treasury yield, too, jumped by 20 bps to 4.68% during this timeframe. The Fed is due to meet on Mar 20, 2024, and the rates are likely to remain the same this month.At the current level, there is a 54.5% chance (down from 58.2% recorded a day ago) of a 25-bp rate cut in June, per the CME FedWatch Tool. Meanwhile, retail sales rose 0.6%, coming in short of estimates for a rise of 0.8% but still marking a rebound from a decline in January.In commodities, the oil rally continued after the IEA warned that supply would lag this year and U.S. stockpiles fell. WTI crude futures traded just above $81 per barrel and touched their highest levels since November, while Brent crude futures rose to above $85. If oil prices remain steady, this will add to the already hot inflation print.To add to the negative sentiments, U.S. household debt and delinquency rates have been rising. Total household debt increased by $212 billion to hit $17.5 trillion in the fourth quarter of 2023, according to data from the Federal Reserve Bank of New York.The key selling season for homebuyers – Spring – may freeze out this year as higher mortgage rates, lack of affordability and higher home prices may retard would-be buyers from entering the housing market. Mortgage rates have largely been on the rise this year, peaking around 7% in mid-February.Low-Risk ETFs to PlayAgainst this backdrop, below we highlight a few low-risk ETFs that could be tapped at the current level.Cambria Tail Risk ETF (TAIL)The Cambria Tail Risk ETF seeks to mitigate significant downside market risk. The fund intends to invest in a portfolio of out-of-the-money put options purchased in the U.S. stock market. The fund charges 59 bps in fees and yields 3.90% annually.AGF U.S. Market Neutral Anti-Beta Fund (BTAL)The underlying Dow Jones U.S. Thematic Market Neutral Anti-Beta Index is a long/short market neutral index that is dollar-neutral. The expense ratio of the fund is 1.43% and the annual yield is 5.71%.Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)The underlying S&P 500 Low Volatility High Dividend Index comprises 50 securities traded on the S&P 500 Index that have historically provided high dividend yields and low volatility. The fund charges 30 bps in fees and yields 4.38% annually.KFA Mount Lucas Managed Future (KMLM)The underlying KFA MLM Index consists of a portfolio of 22 liquid futures contracts traded on U.S. and foreign exchanges. The fund charges 90 bps in fees.Simplify Multi-Qis Alternative ETF (QIS)The fund looks to provide positive absolute returns and income. The fund will invest in a diversified portfolio of third-party quantitative investment strategies across equities, interest rates, commodities, currencies, and credit. Each systematic strategy is designed to capture the proven market return premia.By using a multi-strategy approach, Simplify looks to identify the optimal allocation among 10-20 strategies to achieve positive returns and mitigate asset-class and single-strategy risks. The expense ratio of the fund is 1.00% and the annual yield of the fund is 3.23%. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports AGF U.S. Market Neutral Anti-Beta Fund (BTAL): ETF Research Reports Cambria Tail Risk ETF (TAIL): ETF Research Reports KFA Mount Lucas Managed Future (KMLM): ETF Research Reports Simplify Multi-Qis Alternative ETF (QIS): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment Research.....»»
U.S. Equities: Does a Pullback Loom?
Thus far, 2024 equity markets have overwhelmingly favored the bulls. However, even the strongest bull markets endure pullbacks and consolidations. Thus far, 2024 equity markets have overwhelmingly favored the bulls. However, even the strongest bull markets endure pullbacks and consolidations. Below are some reasons stocks are due for a pullback:GravityThe S&P 500 Index has gone an incredible 19 weeks without tagging the 10-week moving average. Such a strong rally is incredibly rare. However, even the strongest rallies must eventually correct through time or price. Investors should think of the 10-week moving average as a bungee cord – the further and longer price goes without tagging it, the more likely price will snap back to it.Image Source: TradingViewFurthermore, the S&P 500 Index is struggling at the 4.326 Fib extension, a technical zone that typically aligns with corrective moves.Reddit IPO LoomsSocial media giant Reddit is set to go public soon under the ticker symbol RDDT. Reddit is one of the most anticipated IPOs in recent memory. However, highly anticipated IPOs can be a short-term hurdle for markets because they can add to frothiness and supply in the equities market. For example, Coinbase’s (COIN) IPO marked a multi-year top for crypto-related stocks and Bitcoin. While I don’t think RDDT will be as impactful, it’s something to watch for.Quad Witching“Quad witching” refers to the simultaneous expiration of four different types of financial derivatives contracts: stock index futures, stock index options, stock options, and single stock futures. This phenomenon occurs on the third Friday of March, June, September, and December (one occurs today).Quad witching can lead to increased trading activity and volatility in the markets as traders and investors adjust their positions or execute arbitrage strategies.VIX SeasonalityHistorically, the month of March tends to be the most volatile month. Over the past few sessions, we have seen volatility creep in. This trend may continue as volatility tends to be mean-reverting and it has been dormant for so long.Image Source: Equity ClockEarnings Season is OverWith earnings season in the rear-view mirror, it would be perfectly normal and expected for earnings winners to digest their gains over the next few weeks.NAAIM Points to Overwhelming Bullish ExposureNAAAIM (National Association of Active Investment Managers) measures the level of equity exposure among its members, who are typically active investment managers managing portfolios of stocks. The NAAIM Exposure Index reflects the average exposure to the market by these active investment managers.Image Source: NAAIMThis week, NAAIM flashed its highest bull reading in two years. This can be considered bearish because it suggests that a large portion of active managers have already allocated a significant portion of their portfolios to stocks, leaving fewer investors available to drive further buying pressure.Bottom LineInvestors should be cautious for the above reasons but also remain flexible and open-minded. The data suggests a multi-week pullback is likely in U.S. equities. Such a pullback would be welcome and would likely provide low risk long entry points to reemerge. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Coinbase Global, Inc. (COIN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Copper Soars, Iron Ore Tumbles As Goldman Says "Copper"s Time Is Now"
Copper Soars, Iron Ore Tumbles As Goldman Says "Copper's Time Is Now" After languishing for the past two years in a tight range despite recurring speculation about declining global supply, copper has finally broken out, surging to the highest price in the past year, just shy of $9,000 a ton as supply cuts hit the market; At the same time the price of the world's "other" most important mined commodity has diverged, as iron ore has tumbled amid growing demand headwinds out of China's comatose housing sector where not even ghost cities are being built any more. Copper surged almost 5% this week, ending a months-long spell of inertia, as investors focused on risks to supply at various global mines and smelters. As Bloomberg adds, traders also warmed to the idea that the worst of a global downturn is in the past, particularly for metals like copper that are increasingly used in electric vehicles and renewables. Yet the commodity crash of recent years is hardly over, as signs of the headwinds in traditional industrial sectors are still all too obvious in the iron ore market, where futures fell below $100 a ton for the first time in seven months on Friday as investors bet that China’s years-long property crisis will run through 2024, keeping a lid on demand. Indeed, while the mood surrounding copper has turned almost euphoric, sentiment on iron ore has soured since the conclusion of the latest National People’s Congress in Beijing, where the CCP set a 5% goal for economic growth, but offered few new measures that would boost infrastructure or other construction-intensive sectors. As a result, the main steelmaking ingredient has shed more than 30% since early January as hopes of a meaningful revival in construction activity faded. Loss-making steel mills are buying less ore, and stockpiles are piling up at Chinese ports. The latest drop will embolden those who believe that the effects of President Xi Jinping’s property crackdown still have significant room to run, and that last year’s rally in iron ore may have been a false dawn. Meanwhile, as Bloomberg notes, on Friday there were fresh signs that weakness in China’s industrial economy is hitting the copper market too, with stockpiles tracked by the Shanghai Futures Exchange surging to the highest level since the early days of the pandemic. The hope is that headwinds in traditional industrial areas will be offset by an ongoing surge in usage in electric vehicles and renewables. And while industrial conditions in Europe and the US also look soft, there’s growing optimism about copper usage in India, where rising investment has helped fuel blowout growth rates of more than 8% — making it the fastest-growing major economy. In any case, with the demand side of the equation still questionable, the main catalyst behind copper’s powerful rally is an unexpected tightening in global mine supplies, driven mainly by last year’s closure of a giant mine in Panama (discussed here), but there are also growing worries about output in Zambia, which is facing an El Niño-induced power crisis. On Wednesday, copper prices jumped on huge volumes after smelters in China held a crisis meeting on how to cope with a sharp drop in processing fees following disruptions to supplies of mined ore. The group stopped short of coordinated production cuts, but pledged to re-arrange maintenance work, reduce runs and delay the startup of new projects. In the coming weeks investors will be watching Shanghai exchange inventories closely to gauge both the strength of demand and the extent of any capacity curtailments. “The increase in SHFE stockpiles has been bigger than we’d anticipated, but we expect to see them coming down over the next few weeks,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone. “If the pace of the inventory builds doesn’t start to slow, investors will start to question whether smelters are actually cutting and whether the impact of weak construction activity is starting to weigh more heavily on the market.” * * * Few have been as happy with the recent surge in copper prices as Goldman's commodity team, where copper has long been a preferred trade (even if it may have cost the former team head Jeff Currie his job due to his unbridled enthusiasm for copper in the past two years which saw many hedge fund clients suffer major losses). As Goldman's Nicholas Snowdon writes in a note titled "Copper's time is now" (available to pro subscribers in the usual place)... ... there has been a "turn in the industrial cycle." Specifically according to the Goldman analyst, after a prolonged downturn, "incremental evidence now points to a bottoming out in the industrial cycle, with the global manufacturing PMI in expansion for the first time since September 2022." As a result, Goldman now expects copper to rise to $10,000/t by year-end and then $12,000/t by end of Q1-25.’ Here are the details: Previous inflexions in global manufacturing cycles have been associated with subsequent sustained industrial metals upside, with copper and aluminium rising on average 25% and 9% over the next 12 months. Whilst seasonal surpluses have so far limited a tightening alignment at a micro level, we expect deficit inflexions to play out from quarter end, particularly for metals with severe supply binds. Supplemented by the influence of anticipated Fed easing ahead in a non-recessionary growth setting, another historically positive performance factor for metals, this should support further upside ahead with copper the headline act in this regard. Goldman then turns to what it calls China's "green policy put": Much of the recent focus on the “Two Sessions” event centred on the lack of significant broad stimulus, and in particular the limited property support. In our view it would be wrong – just as in 2022 and 2023 – to assume that this will result in weak onshore metals demand. Beijing’s emphasis on rapid growth in the metals intensive green economy, as an offset to property declines, continues to act as a policy put for green metals demand. After last year’s strong trends, evidence year-to-date is again supportive with aluminium and copper apparent demand rising 17% and 12% y/y respectively. Moreover, the potential for a ‘cash for clunkers’ initiative could provide meaningful right tail risk to that healthy demand base case. Yet there are also clear metal losers in this divergent policy setting, with ongoing pressure on property related steel demand generating recent sharp iron ore downside. Meanwhile, Snowdon believes that the driver behind Goldman's long-running bullish view on copper - a global supply shock - continues: Copper’s supply shock progresses. The metal with most significant upside potential is copper, in our view. The supply shock which began with aggressive concentrate destocking and then sharp mine supply downgrades last year, has now advanced to an increasing bind on metal production, as reflected in this week's China smelter supply rationing signal. With continued positive momentum in China's copper demand, a healthy refined import trend should generate a substantial ex-China refined deficit this year. With LME stocks having halved from Q4 peak, China’s imminent seasonal demand inflection should accelerate a path into extreme tightness by H2. Structural supply underinvestment, best reflected in peak mine supply we expect next year, implies that demand destruction will need to be the persistent solver on scarcity, an effect requiring substantially higher pricing than current, in our view. In this context, we maintain our view that the copper price will surge into next year (GSe 2025 $15,000/t average), expecting copper to rise to $10,000/t by year-end and then $12,000/t by end of Q1-25’ Another reason why Goldman is doubling down on its bullish copper outlook: gold. The sharp rally in gold price since the beginning of March has ended the period of consolidation that had been present since late December. Whilst the initial catalyst for the break higher came from a (gold) supportive turn in US data and real rates, the move has been significantly amplified by short term systematic buying, which suggests less sticky upside. In this context, we expect gold to consolidate for now, with our economists near term view on rates and the dollar suggesting limited near-term catalysts for further upside momentum. Yet, a substantive retracement lower will also likely be limited by resilience in physical buying channels. Nonetheless, in the midterm we continue to hold a constructive view on gold underpinned by persistent strength in EM demand as well as eventual Fed easing, which should crucially reactivate the largely for now dormant ETF buying channel. In this context, we increase our average gold price forecast for 2024 from $2,090/toz to $2,180/toz, targeting a move to $2,300/toz by year-end. Much more in the full Goldman note available to pro subs. Tyler Durden Fri, 03/15/2024 - 14:25.....»»
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