Advertisements


Black Stone Minerals (BSM) Dips More Than Broader Markets: What You Should Know

Black Stone Minerals (BSM) closed the most recent trading day at $16.68, moving -0.3% from the previous trading session. In the latest trading session, Black Stone Minerals (BSM) closed at $16.68, marking a -0.3% move from the previous day. This change lagged the S&P 500's daily loss of 0.07%. At the same time, the Dow added 0.31%, and the tech-heavy Nasdaq lost 3.22%.Heading into today, shares of the partnership that owns mineral and royalty interests had lost 0.71% over the past month, lagging the Oils-Energy sector's gain of 3.05% and the S&P 500's gain of 4.64% in that time.Black Stone Minerals will be looking to display strength as it nears its next earnings release. On that day, Black Stone Minerals is projected to report earnings of $0.42 per share, which would represent year-over-year growth of 61.54%. Meanwhile, our latest consensus estimate is calling for revenue of $161.52 million, down 9.98% from the prior-year quarter.Investors might also notice recent changes to analyst estimates for Black Stone Minerals. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.3% lower within the past month. Black Stone Minerals is currently sporting a Zacks Rank of #5 (Strong Sell).Valuation is also important, so investors should note that Black Stone Minerals has a Forward P/E ratio of 7.89 right now. This represents a discount compared to its industry's average Forward P/E of 11.08.The Energy and Pipeline - Master Limited Partnerships industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 244, which puts it in the bottom 4% of all 250+ industries.The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.To follow BSM in the coming trading sessions, be sure to utilize Zacks.com. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Black Stone Minerals, L.P. (BSM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 24th, 2023

What Would A Crypto Crash Mean For Markets And The Economy

What Would A Crypto Crash Mean For Markets And The Economy By Peter Tchir of Academy Securities On “bitcoin infinity” day (apparently 8/21 is symbolic of ∞ infinity, the projected value of bitcoin) divided by 21,000,000 (the total number of bitcoin that can ever be mined), it seemed like a good time to explore what a crypto crash would look like and what it would mean for markets and the economy. We all know what a mortgage bank collapse looks like (Washington Mutual). We’ve seen broker dealers collapse (Lehman), we’ve seen the stress on the system when money center banks and insurance companies come under intense pressure. Heck, we’ve even endured a sovereign default (Greece). We’ve also experienced flash crashes in equities and bond yields. In all those cases, I would argue that having a gameplan ahead of time allowed companies and investors to profit from the events (both positive and negative). I haven’t seen much on what a crypto crash would mean, so I figured we could examine that today. Jackson Hole I could have written the 900th Jackson Hole primer, but I couldn’t bring myself to do that. I’ve already covered a lot that is applicable to Jackson Hole in Taxi Strategies, Orwellian Moments, Things You Won’t See, and Inversion and Inventories. My focus right now is pretty simple: What is the real story on jobs? The weak data is a more accurate sign of the current situation. How bad is the inventory build? I think it might be the worst we’ve seen in my lifetime. Is the wealth effect a problem? I think that the concentrated nature of the wealth effect in disruptive stocks and crypto is different than anything else we’ve experienced historically, and the housing sector weakness is ominous to me. Inflation Fighting. Be careful what you wish for is all that comes to mind. Time and again, lower commodity prices have accompanied stock prices as they became much lower as well and I’m not sure why that will be different this time. Anyways, let’s get back to being off topic and discussing a crypto crash. 6 Impossible Things Before Breakfast I cannot come up with 6 impossible things before breakfast, but as the Queen suggested to Alice, you do need to practice. Let’s start with the premise of a crypto crash or crypto collapse. If it is impossible, then there is no point even thinking about it. However, not only is it possible, but I put the possibility of it occurring in the next year at 10% or higher. Still unlikely, but a high enough probability that I should think about what it would mean. Why a crypto crash or collapse seems possible: It has already happened. Luna/Terra is gone. Poof. XRP is down 80% from its highs, Cardano is down 85%, Bitcoin Cash (you got to love the name) is down 91%, and Dogecoin is down 90% as well. Dogecoin was allegedly started as a joke, which makes it all the more ironic (or moronic) that an SNL skit helped pump it to the moon. So, collapses and crashes have occurred in some segments of the market, which alone tells me that it is worth exploring more. This chart is precarious. Bitcoin continues to hover near levels that would ensure that no “hodler,” or someone who buys crypto and will never sell (diamond hands as opposed to lettuce hands), has made money on any purchase in almost two years. That is a long time to wait to make money (or to sit on large losses). FOMO is a big part of crypto trading, and we are on the precipice of declining to levels where many could decide to take their money and run. There is an ongoing theme in crypto that the “whales” keep buying dips, which might be possible, though it seems more likely to me that many have decided to lock in massive amounts of wealth into the much maligned (but useful) “fiat” currency. Crypto bounced here recently, but that was just the first test and I suspect that there were some heavily incentivized holders who went out of their way to support the price (there really are no rules in this space). This chart, by itself, doesn’t convince me that a crash is possible, but when I highlight the other issues, it certainly adds to that overall theme that a crash or collapse is a non-zero probability event. The chart isn’t much better.   The $13.5 billion trust, GBTC, is currently at a 32% discount to NAV. This isn’t an ETF, so it has the ability to trade at a discount or premium to NAV for extended periods. A 33% discount lets you buy bitcoin at the equivalent of under $14,000 ($21,000 * 67%). There is, to some extent, over $4 billion in “free” money in this stock if the discount closes to 0. It is bizarre and scary to me that the discount continues to widen. In ETF’s, I believe that discount/premium to NAV leads the way (cheapness begets lower prices and vice versa). While that view doesn’t quite translate given the nature of GBTC, it is cautionary to me. A lack of interest. Recently one of the largest asset managers on the planet announced plans to collaborate with one of the largest public companies focused on crypto to work on some crypto projects. Two years ago, I can only imagine the impact that headline would have had on bitcoin. My guess is $10k in a heartbeat, but we are already back below the price when that deal was announced. Every headline like that (a year or more ago) was met with thousands (if not millions) of social media posts touting ADOPTION! While adoption is growing and more big banks have announced crypto strategies, the response seems to be more like “well, of course they are going to see if they can make money in it” rather than “OMG, XYZ just endorsed crypto, BUY!” Subtle shift in response, but an important one (albeit subjective). The best “use” cases are diminishing. China, to me, has always been the best use case. A large population with enough money to matter. For all the talk about banking the unbanked, etc., which sounds nice, this isn’t what will drive crypto prices higher. There are stats saying that as many as 4 billion people are unbanked across the globe. According to the World Bank, about 700 million people make less than $2.15 per day. That is depressing, scary, and almost mind-boggling, but from the crypto perspective, it is not the poor that will drive prices (there just isn’t enough money). But China, where millions of “middle class” citizens exist under a regime where they may want to keep money outside of the system, it has always been a good use case. With the property market in tatters, a slowing economy, and the government continuing to crackdown on crypto (outside of the digital Yuan), that use case may be dropping rapidly. Sanction avoidance as a use case may also be diminishing. If you were illicitly trading embargoed products (like oil), crypto may have been the “currency” of choice. But with the U.S. looking to ease restrictions on places like Iran and Venezuela (hypothetically), maybe some of the alleged trade will come back onto the books. With China and India openly buying Russian oil and Chinese currency gaining in stature (at least amongst some nations), there is less reason to use crypto when the Yuan is about 10 times less volatile than bitcoin (30-day vol of 5.4 versus 53). Criminal activity still flourishes, though the ability to track and reclaim ransomware payments seems to be increasing. It’s about blockchain and blockchain technology. The number of pundits, experts, and companies that seem to be doing contortions to pitch themselves as blockchain rather than crypto is high. Again, this is subtle, but it seems that re-positioning oneself as blockchain rather than crypto is occurring, which doesn’t bode well for crypto. It’s a Ponzi scheme, but it’s our Ponzi scheme. There were always the slogans that accompanied crypto, like “have fun staying poor” but they often included passionate explanations about the greatness of crypto. The use cases would take up pages including such themes like it is banking the unbanked (already discussed), that it is an inflation hedge (hasn’t worked on that front for some time), that it is outside the reach of the government (it is being regulated more by the day, and many in crypto, after some recent highly visible failures, now seem to embrace this), that it is lower cost (costs remain high and there is little protection against mistakes or fraud, unlike with bank accounts or credit cards), or speed (but how many people really need to instantaneously shift large amounts of money, but aren’t already served by Venmo or Zell or some similar product?) I still see those arguments being made, but with far less enthusiasm. However, there is another “use case” that seems to be getting traction (at least in my social media streams). It basically amounts to the argument that convincing more people to participate will help. Kind of like “adoption” but with a more cynical tone. Basically, it is admitting that it only really works if more people get in (so get in, and get more people in). It has the advantage of being true and seems honest, but it seems like the last vestige of a pump and dump scam. I’m not sure about you, but that is enough for me to at least take a look at what a crypto collapse or crash would mean. Crypto Market Cap Let’s start with the market capitalization of crypto currencies as that is the most obvious and direct hit to investors. We will use coinmarketcap for this section (beware of using the link as it will ask to send notifications, know your location, etc., but I figured there should be a link to something to verify). Bitcoin at $21,262 has a market cap of $406 billion. Ethereum at $1,628 has a market cap of $199 billion. Binance Coin at $286 has a market cap of $46 billion. Then XRP, Cardano, and Solana come in between $13 billion and $17 billion. Dogecoin, Polkadot (love the name), and Shiba Inu are all about $7 billion, with Avalanche, Polygon, TRON, and Uniswap, all a bit over $5 billion. Let’s call it about $750 billion in total market capitalization for crypto. To make things “simple” let’s assume that after the top 3, most of the coins could disappear and people would hardly notice (I’m assuming that many of those coins are not widely held, and a few “whales” would lose a lot, but the average person wouldn’t lose much more than what they are already prepared to lose.) If you believe that this is an area where many have spent their “winnings” or took money made in bitcoin or Ethereum to really roll the dice (which I believe), that gives us further reason to argue that the hit here would be minimal on the economy (it also makes the analysis much easier as we only have to focus on a few key currencies). Stablecoin Market Cap We need to also consider the stablecoins. Terra/Luna was supposed to be a stablecoin. Stablecoins, in theory, are backed by assets of some sort, except those that were algorithmically backed (whatever that means). Tether (USDT) is still the biggest at $67 billion. I love how much everything is made to sound like dollars (USD) despite the rhetoric against fiat. This stablecoin, in particular, attracts a lot of negative posts about how it is backed. The company asserts that Tether is backed by T-bills, commercial paper, etc., but to my knowledge, it has never produced a detailed list of its holdings, let alone an audited list of its holdings. This behemoth of an account ($67 billion is large even in money markets) is unknown by any money market participant I speak to (albeit that is only a handful of people outside of Academy’s strong short-term liquidity desk). Someone recently pointed out that they apparently manage that much money without a Bloomberg terminal account (there is no Bloomberg account linked to a company called “Tether,” but they could use a different name on Bloomberg to obfuscate their existence, which isn’t unheard of). Tether has seen their market cap drop from $82 billion to $67 billion, and part of that could be that some investors, given what has gone on this year, have shied away from it. USD Coin or USDC (again, notice how much it tries to sound like the dollar) has a market cap of $52 billion. Its market cap only peaked at $55 billion, so it has gained at the expense of USDT. Circle, which is the company behind USDC, makes a big deal out of being transparent and regulated in the U.S. I’ve had brief conversations with people involved in the company and the pitch makes sense to me (though I have not yet gone through the effort of figuring out how granular that transparency is – that’s a project for another day). But they are clearly marketing themselves on the transparency issue and have surged relative to Tether over the past year or so. Binance USD (BUSD) weighs in at $18 billion and is a distant third and seems relatively tied to the Binance ecosystem. Vegan hotdogs. When I see all these names trying so hard to associate themselves with the dollar despite being part of an ecosystem designed to avoid the dollar, I can’t help thinking about vegan hotdogs and why vegans try to replicate an already weird food, when vegan food in its own right can be awesome! But I digress. My view is that stablecoins and their market caps are a function of the overall utility of cryptocurrencies. If crypto crashes, we should see a decline in the market cap of stablecoins. Two things could occur: Those backed by assets will have to sell the assets to meet redemptions. If it is a few billion and they are back by T-bills, then no sweat. Markets would digest that easily and no one would be impacted. But if the size is bigger (10s of billions) and the assets are less liquid (non-standard commercial paper programs for example) then we could see some friction in markets. Again, if we knew exactly what they held we could be more or less prepared. What they hold and the size of the selling would impact the knock-on effects of any unwind (Terra/Luna held nothing, so that didn’t spread to the greater financial system, but this could). If the stablecoins don’t truly hold sufficient assets or the assets are of low quality (there are all sorts of conspiracy theories out there on what it might be invested in that isn’t worth me repeating here, even if they intrigue me) then we could see what looks like a “bank run” occur not just in stablecoins, but ultimately in the assets they hold and asset classes that compete with what they hold. Let’s just pretend, for the moment, that they have money market lending that is off the radar screen, and presumably paid a lot, as it wasn’t standard. If they have to sell, that could cause prices to plummet, possibly to a level that more traditional players sell what they have to buy this stuff, creating that first domino effect. There is a circularity between crypto and stablecoins. They can bring each other down. While crypto losses themselves will be largely isolated to the holders (we still have to dig into that), the unravelling of stablecoins is likely to influence other markets, possibly quite negatively. Direct Losses The direct losses are relatively easy to figure out. Crypto losses. Let’s say $500 billion could be wiped out of crypto. While some evidence points to there being a small subset of “whales” that would bear the brunt of that loss, I think there is a broad enough swath of the population that would take a serious hit and it would affect spending in the near-term. Stablecoin losses. Stablecoins in theory should have an orderly unwind. If, and that remains a question, there is a disorderly unwind of one or more stablecoins, the losses would be in the 10’s of billions (which isn’t so bad). The problem is that unlike crypto losses, where investors presumably treated this as a risky portion of their portfolio, stablecoins are viewed as cash equivalents. Losing cash is always more problematic than losing risky investments. Something to watch. Public Company Losses. There are at least a couple of public companies that are linked to crypto. Then there are the miners, mostly listed on foreign exchanges. HIVE for example went from almost $2 billion to just over $400 million (higher than the recent lows of $237 million). Not a huge market cap loss, but only one of many miners out there. This would add up to more losses, some of which would hit mainstream funds. The bigger losses would likely be felt in the private domain as many of the companies in the space have not yet made the leap from private equity to public equity. The losses shouldn’t be material to the broader market, but would likely be concentrated enough to leave a mark disproportionate to the size of the losses. On the private equity side (even more than the public side) the losses will hit employees the hardest and that will hit spending. Jobs. If you consider day trading crypto and waiting for NFT drops to be a job, then there will be job losses. The companies I’ve mentioned, both the public and private ones, will be forced to let go of employees (that already will have lost significant paper wealth). These are skilled employees, so in theory, could find other jobs, but that could be more difficult to do in an environment where crypto losses cause investors (including private equity) to be more conservative across the fintech space. Domino or knock-on effects. Assuming the stablecoins hold liquid assets, that unwind should be handled easily (there is a risk that isn’t the case, at least for some stablecoins) but I won’t harp on it. There is not a lot of direct debt tied to crypto (though there are some bonds out there, but they are too small to have any material impact). I don’t see crypto being used as a major source of collateral. If bitcoin holdings, for example, were being used to leverage up stock investments, then I’d be very scared. I think some individuals may manage their personal wealth along those lines, but I don’t see it as a widespread issue (unlike housing in 2008, for example). Spending. How much spending is coming from this sector and what does that mean for us? Spurious Correlation or Real Threat You can take any two data series and potentially see a correlation. They may have nothing to do with each other, so we can stare at the “correlation” chart as long as we want, but it isn’t going to help us because there is no causation. Complicating matters further, we should be looking at correlations between the rate of change rather than correlations between asset classes themselves (I vaguely remember the reasons for this, but I will ignore that technicality for today). Here is the SOX (Philadelphia Semiconductor Index) versus bitcoin. I chose to use this index because it is more likely to be spurious and highlights how much more correlated some individual semi-conductor stocks are. Spurious correlation. The argument for “spurious correlation” is strong. It seems impossible that a small segment of the market, like crypto, could have a large effect on such a big diversified market. Many of the things that drove crypto were also driving other industries that placed huge demands on the chip industry (video conferencing, autonomous driving, big data, etc.). So crypto was just one of many things driving those industries and those industries should not be impacted by a crash in crypto. I could go on, but I can see heads nodding here, so I won’t spend any more time arguing what is a consensus (and probably correct) view. What if it is correlated? The wealth being generated by those in crypto was large. From the miners to the “exchanges,” there was a race to capture revenue and there was plenty of revenue to capture. The spending on chips (rigs to mine, servers to provide customer service, etc.) was large. Chip companies presumably saw this demand and knew that they could charge a premium to an industry where speed and timeliness meant everything. Were chips designed specifically for the crypto industry? Was production of generics shifted to higher profit margin lines? Not only were the companies (that succeeded) spending money, but many failed business ideas (or those just not yet successful) had money to spend as well. What if crypto spending went to web services (seems like it would). What if it went to advertising? (It did). What if that spending caused those companies to spend more? Maybe they needed to add systems, components, and people to keep up with the demand from the crypto industry. Did that spending then create more spending and make it very difficult (if not impossible) to figure out where crypto spending ended and where “regular” spending went? How much money was crypto spending on energy? At one time I saw stories that in terms of energy usage, crypto, if treated as a nation, would have been the 10th largest country in terms of energy use. Commodity prices are always affected by the marginal 5% or 10% of demand. Is it possible that part of energy inflation was due to crypto? Does that mean policy makers are responding to a problem (high inflation) while ignoring one of the causes (because it isn’t on their radar screen, except in China, which has been clamping down on mining in that country?) The case for crypto being a bigger driver than previously thought may seem weak, but I cannot help but believe that it is a risk we should be discussing more than I think we are. What if the correlation was a driver for exciting new technologies where enormous wealth seemed possible (to such an extent) that current spending or success was irrelevant? What if crypto’s decline and potential collapse may not be causal, but is correlated to some broader move in markets and the economy? Then in that case, it might be spurious, but is still dangerous. Impossible Things, Black Swans, and Thinking Out of the Box I do not think a crypto collapse is impossible. It isn’t my base case, but there is a real possibility that it occurs. Black swans are things that people didn’t think were possible (and turned out to be possible). We can get a pass on missing black swans, but not if we are looking at a grey swan and choose to ignore it. I’m not lying awake at night thinking about a crypto collapse because: It “probably” won’t happen. If it does happen, the damage to the economy “could” or maybe even “should” be minimal. But I am thinking more and more about it because if there is a correlation between crypto and the broader economy (and markets) or because crypto, the broader markets, and the economy are moving to the same theme, there is serious risk to the downside. Some of this risk may not be getting priced in based on some simple charts of crypto versus other asset classes. On this broader correlation theme, check out ARKK shares outstanding because something seems to have shifted in terms of the investor mentality there. For those who celebrate, enjoy bitcoin infinity day! It really seems weird that not only is that a thing, but on 8/21/21 the CEO of a public company enjoyed tweeting it out. I’m possibly too old and jaded, but stuff like that seems silly rather than compelling. Tyler Durden Sun, 08/21/2022 - 21:30.....»»

Category: blogSource: zerohedgeAug 21st, 2022

Futures Dead Cat Bounced As BTFDers Emerge On Turnaround Tuesday

Futures Dead Cat Bounced As BTFDers Emerge On Turnaround Tuesday The relentless rout that erased $3.4 trillion from the Nasdaq 100 in the past month paused on Turnaround Tuesday as battered tech valuations attracted scattered dip buyers, but nothing like the full-throttled BTFD buying parade observed in months gone by. Futures on the tech-heavy gauge advanced as much 1.4% as bargain hunters returned after the Nasdaq 100 slumped to the lowest since November 2020 on Monday, capping three days of major losses. S&P 500 futures were 0.7% higher to 4,016 after rising as much as 1.2% earlier but also after plunging to as low as 3,961. After rising as high as 3.20% on Monday, 10-year Treasury yields dropped for a second day, sliding below 3.0% and providing further relief to technology shares. The dollar erased a loss and Treasuries edged higher, signaling the return of some haven demand amid nervousness over the path of Federal Reserve policy. European bonds rallied. The Nasdaq’s 14-day relative-strength index (RSI) closed at 33 on Monday, getting closer to the level of 30, which to some analysts indicates a security is oversold and is poised to rise. Another sharp selloff “seems unlikely without an external trigger,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “Nevertheless, as long as the problems persist, we do not expect a big recovery and have used the relief rally to move our equity exposure to neutral.” Indeed, traders have been caught between stubbornly high inflation that erodes asset values and central-bank tightening that threatens to slow economic growth, or even push some nations into recession. Recent U.S. data suggesting the Federal Reserve will stay on an aggressive rate-hike path have sparked the latest bout of risk-off trades. Fresh outbreaks of Covid in China, and the nation’s stringent measures to control them, have worsened sentiment. “For now, investors need to be prepared for continued volatility,” Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management, wrote in a note. She added “sentiment is bearish” but not capitulating. In premarket trading, electric vehicle makers are up, with Tesla, Rivian and Lucid set to rebound after losing $188 billion in three days. AMC Entertainment is 6.4% higher after reporting better-than-expected quarterly results as hits like “Spider-Man: No Way Home” lured people back to movie theaters. Bank stocks edge higher in premarket trading amid a broader rebound for equity markets after Monday’s rout. S&P 500 futures are up about 0.8% this morning, while the U.S. 10-year yield retreats for a second day to sit at roughly 3%. In corporate news, BlackRock said it won’t support efforts by shareholders who try to micromanage companies on climate change. Meanwhile, Bitcoin rebounded back above $30,000 after briefly sinking below the closely watched level. Here are some of the biggest U.S. movers today: Most large cap U.S. technology and internet stocks rose in premarket trading, on course to recoup some of the heavy losses they suffered in a steep selloff over the last three sessions. Apple (AAPL US) is up 1.2%, Microsoft (MSFT US) +1.2% and Meta (FB US) +2.8%. AMC Entertainment (AMC US) is up 3.8% in premarket trading after reporting better-than-expected quarterly results as hits like “Spider-Man: No Way Home” lured people back to movie theaters. Electric vehicle makers Tesla (TSLA US), Rivian (RIVN US) and Lucid (LCID US) are rebounding after losing $188 billion in three days of heavy selling in technology and growth stocks. Shockwave Medical (SWAV US) may move after it raised its revenue guidance for the full year, with analysts saying that the company’s performance was boosted by its coronary business. Shares rose 11% in extended trading on Monday. Upstart Holdings (UPST US) shares plunge 48% in premarket trading after the cloud-based artificial intelligence lending platform cut full- year revenue guidance on macro uncertainties. Piper Sandler cut the stock to neutral. Novavax (NVAX US) is down 21% premarket, with analysts saying that the biotech firm’s revenue for the first quarter missed expectations. Plug Power (PLUG US) shares are 5.6% lower premarket after the fuel cell company reported net revenue for the first quarter that missed the average analyst estimate, with KeyBanc noting pressure on margins and higher costs. Video game stocks may move after Sony’s earnings fell short of estimates amid supply constraints and component shortages. Watch shares in Activision Blizzard (ATVI US), Electronic Arts (EA US) and Take-Two Interactive (TTWO US). U.S. stocks and particularly the Nasdaq 100 have been crushed this year (amid a tireless tirade from JPM's Marko Kolanovic to buy each and every dip) as investors fret over recession risks from the Federal Reserve embarking on aggressive monetary tightening amid surging inflation. Higher interest rates mean a bigger discount for the present value of future profits, hurting growth and in particular tech stocks with the highest valuations.  European stocks trade well, with most cash indexes gaining over 1% to recover roughly half of Monday’s losses when the index slumped to its lowest level in two months. Euro Stoxx 50 rose as much as 1.75%, FTSE MIB outperforms slightly, FTSE 100 lags but still adds 1%. Construction, banks and autos lead broad-based Stoxx 600 sectoral gains. The Stoxx 600 energy sub-index edges lower, being one of the worst-performing sectors in a rising broader market for European stocks, as oil keeps falling. Shell declines as much as 1.5%, TotalEnergies SE -1.6%, Equinor -4.5%. Here are some of the biggest European movers today: Luxury stocks such as Kering (+0.5%) and Watches of Switzerland (+4.2%) rebounded after the declines of the previous sessions, with investors hopeful that the Covid-19 situation in the key market of China may be slightly improving. Hermes rises as much as +1.6%, LVMH +2.4% Airbus gains as much as 3.7% in Paris trading after being raised to buy from hold at Societe Generale, with the broker highlighting the planned production ramp-up of the “highly profitable” A320 family. Swedish Match rises as much as 28% after Philip Morris International said it’s in talks to buy the company. While a deal would make strategic sense, a counter-bid can’t be ruled out, analysts said. Centrica climbs as much as 6.5%, the most since Feb. 25, after the company guided adjusted earnings per share to be at the top end of the consensus range. Euroapi soars as much as 9.5% after the Sanofi spinoff is initiated with a buy recommendation and EU20 price target at Deutsche Bank, which sees “good value” and an attractive business. E-commerce stocks rise in Europe, with many outperforming the benchmark Stoxx 600 Index, buoyed by dip buyers returning to growth and technology shares that have been battered this year. Zalando up as much as 4.9%, Home24 +12%, Moonpig +3.6% Earlier in the session, Asian stocks extended their decline to a seventh day as the specter of rapid credit tightening in the U.S. and protracted lockdowns in Chinese cities prompted some investors around the region to reduce holdings of riskier assets.  The MSCI Asia Pacific Index fell as much as 2.1% to its lowest level since July 2020, weighed down tech shares after a three-day selloff in the Nasdaq 100. Hong Kong’s Hang Seng Index ended 1.8% lower as the market reopened after a holiday, though benchmarks in mainland China rebounded from early-trading lows on hopes for easier monetary conditions. MSCI Asia Pacific Index down 0.7% Japan’s Topix index down 0.9%; Nikkei 225 down 0.6% Hong Kong’s Hang Seng Index down 1.8%; Hang Seng China Enterprises down 2.2%; Shanghai Composite up 1.1%; CSI 300 up 1.1% Taiwan’s Taiex index up 0.1% South Korea’s Kospi index down 0.5%; Kospi 200 down 0.5% Australia’s S&P/ASX 200 down 1%; New Zealand’s S&P/NZX 50 down 1.3% India’s S&P BSE Sensex Index down 0.2%; NSE Nifty 50 down 0.4% “There’s nowhere to escape so it’s pretty tough,” said Yuya Fukue, a trader at Rheos Capital Works. “Economic data appears to be deteriorating of late, though that has seemed to have gone little noticed while the markets were so focused on the Fed’s policy. It feels as if the game is changing.” Among Chinese tech giants, Alibaba tumbled 4.8% in Hong Kong, while Tencent dropped 2.3%. Regional declines were broad, with investors dumping even this year’s star energy shares as oil prices eased.  Singapore’s Straits Times Index and Australia’s S&P/ASX 200 both dropped about 1%. The Philippine benchmark ended 0.6% lower, recovering after skidding more than 3%, after Ferdinand Marcos Jr. won a landslide victory in the country’s presidential election. Mainland Chinese shares closed higher after the People’s Bank of China repeated a pledge to proactively address mounting economic pressure and highlighted a drop in deposit rates, which could spur banks to lower the cost of borrowing for the first time in months. “The market was a bit oversold. In addition, PBOC is also mentioning a drop in deposit rates, raising expectations of more room for banks to increase lending,” said Aw Hsi Lien, a strategist at Tokai Tokyo Research. India’s benchmark equity index slipped to a two-month low amid a weaker trend in Asia as surging oil prices and inflationary pressures weighed on investor sentiment. The S&P BSE Sensex fell 0.2% to 54,364.85 in Mumbai, after swinging between gains and losses several times during the session. The NSE Nifty 50 Index slipped 0.4% to 16,240.05. This is the third consecutive session of declines for the key indexes.  Sixteen of the 19 sector sub-indexes compiled by BSE Ltd. dropped, led by metal stocks. Reliance Industries Ltd. slipped 1.7% to a seven-week low and was the biggest drag on the Sensex, which saw 18 out of its 30 member-stocks trading lower.   In earnings, among the 27 Nifty 50 companies that have announced results so far, 10 have missed estimates while 17 either exceeded or met forecasts.  In FX, the Bloomberg Dollar Spot Index fell 0.1% after climbing to a two-year high on Monday, and the greenback was steady or weaker against all of its Group-of-10 peers. The euro consolidated and the region’s yields fell as Italian bonds led an advance. The pound was steady against both the dollar and euro while gilts outperformed peers. Domestic focus is on the Queen’s speech laying out the government’s agenda for the next parliamentary session and Brexit risks after reports the U.K. is preparing to scrap parts of the Northern Ireland protocol. U.K. retail sales are falling on an annual basis for the first time since the start of last year as the cost of living crisis crushes consumer confidence and puts the brakes on spending. Scandinavian currencies led gains among G-10 pairs after both currencies fell to the weakest level in around two years versus the dollar on Monday. The Australian and New Zealand dollars also bounced off two-year lows as stock indexes trimmed an intraday decline. Aussie’s gains were tempered as iron ore fell for a third day to bring the three-day slide to about 15%. The yen edged lower as Treasury yields recovered from a sharp overnight drop. Bonds pared earlier gain after the 10-year debt sale. Bank of Japan Executive Director Shinichi Uchida says that widening the central bank’s yield target band would be equivalent to a rate hike and wouldn’t be favorable for Japan’s economy In rates, Treasuries rose in early U.S. trading with belly leading gains and the curve flattening modestly after Monday’s bull-steepening. Yields are richer by ~4bp across in belly of the curve, steepening 5s30s spread by ~3bp as long-end yields lag; 10-year trading just around 3%, richer by ~3bp on the day, trailing gilts by ~7bp in the sector. Core European rates outperform led by gilts while stocks and U.S. futures recover a portion of Monday’s steep losses. Bunds bull-flatten, while peripheral spreads tightened to Germany with short-dated BTPs outperforming. Treasury auction cycle begins with 3-year note sale, and several Fed speakers are slated. U.S. new-issue auction cycle consists of $45b 3-year note, followed by 10- and 30-year sales Wednesday and Thursday. WI 3-year yield ~2.800% is higher than auction stops since 2018 and ~6bp cheaper than last month’s, which stopped through by 0.1bp. Three-month dollar Libor +0.13bp at 1.39986% In commodities, crude futures are choppy, WTI dips back into the red having stalled near $104. Spot gold rises ~$9 near $1,863/oz. Much of the base metals complex trades poorly. LME copper outperforms, holding in the green but off best levels after a test of $9,400/MT. Bitcoin reclaimed the $31K handle, but is yet to make a concerted move higher. Looking ahead, we get the April NFIB Small Business Optimism print (93.2, Exp. 92.9), Chinese M2, Speeches from Fed's Williams, Waller, Bostic, Barkin, Kashkari, Mester, ECB's de Guindos & BoE's Saunders, Supply from the US. Earnings from Norwegian Cruise Line & Warner Music. Biden speaks on soaring inflation at 11am EDT. Biden will also meet with Italian Prime Minister Draghi at the White House, and the UK state opening of Parliament is taking place, where the government outlines its legislative programme for the year ahead. Of course, the big event is tomorrow morning when the US CPI print comes. Market Snapshot S&P 500 futures up 1.1% to 4,031.75 STOXX Europe 600 up 1.2% to 422.32 MXAP down 0.8% to 159.98 MXAPJ down 0.8% to 523.71 Nikkei down 0.6% to 26,167.10 Topix down 0.9% to 1,862.38 Hang Seng Index down 1.8% to 19,633.69 Shanghai Composite up 1.1% to 3,035.84 Sensex up 0.4% to 54,674.30 Australia S&P/ASX 200 down 1.0% to 7,051.16 Kospi down 0.5% to 2,596.56 German 10Y yield little changed at 1.07% Euro little changed at $1.0564 Brent Futures up 0.8% to $106.83/bbl Gold spot up 0.5% to $1,862.69 U.S. Dollar Index little changed at 103.65 Top Overnight News from Bloomberg The EU is considering the issuance of joint debt to finance Ukraine’s long-term reconstruction, which may end up costing hundreds of billions of euros, according to an EU official familiar with the plan China’s provinces are set to sell a historic amount of new special bonds by the end of June as part of an infrastructure investment push intended to rescue an economy stymied by Covid outbreaks and lockdowns Hungarian Prime Minister Viktor Orban’s talks with the head of the EU about proposed sanctions on Russian oil imports made progress, but failed to reach a breakthrough, according to both sides Investor confidence in Germany’s pandemic rebound improved, but remained deeply negative as the war in Ukraine darkens the outlook for Europe’s largest economy. The ZEW institute’s gauge of expectations rose to -34.3 in May from -41 the previous month, defying expectations for a third straight deterioration. An index of current conditions worsened Saudi Arabia’s oil minister warned that spare capacity is decreasing in all sectors of the energy market, as prices of products from crude to diesel and natural gas trade at or near multi-year highs in the wake of Russia’s invasion of Ukraine A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly negative after the resumed sell-off on Wall St where the S&P 500 slipped beneath the 4,000 level for the first time since March 2021. ASX 200 briefly gave up the 7,000 status with notable underperformance in the energy and mining-related sectors. Nikkei 225 slumped from the open although moved off its lows as participants digested stronger than expected Household Spending data and after BoJ's Uchida dismissed the prospects of a tweak to the BoJ’s 50bps yield target band. Hang Seng and Shanghai Comp both initially joined in on the selling with heavy losses in the tech sector contributing to the underperformance in Hong Kong on return from the extended weekend, although the downside in the mainland was later reversed after the recent policy support efforts by China’s MIIT and CBIRC. Top Asian News China Tech Stocks Slide as Growth Woes, Global Rout Grip Traders Investor’s Guide to the 2022 Philippine Presidential Election ArcelorMittal Evaluating Bidding for ACC, Ambuja: ET Now Philippine Stocks Fall as Traders Weigh Marcos Win, Global Rout European equities feel some reprieve following the prior session’s selloff; Euro Stoxx 50 +1.2%. Relatively broad-based gains are seen across the majors with some mild underperformance in the FTSE 100. Sectors show some of the more defensive sectors at the bottom of the bunch – alongside energy – whilst Construction, Autos, Banks, and Industrial Goods reside as the current winners. US equity futures are firmer across the board, ES +1.0%, with the NQ narrowly outpacing peers after underperforming yesterday. Top European News Russian Gas Flows to Europe Remain Steady on Key Links Highest Inflation in Three Decades Boosts Czech Rate Hike Case BPER Banca Soars After Earnings Beat, With Fees as Highlight Russia’s Economy Facing Worst Contraction Since 1994 FX The Dollar retains a firm underlying bid ahead of another slew of Fed speakers; risk sentiment remains fluid and fragile. The Swiss Franc has hit a fresh 2022 peak vs the Greenback; USD/JPY is consolidating around 130.00. EUR/USD was unfazed by mixed German ZEW data but later lost ground under 1.0550. Cable rotates either side of 1.2350 awaiting Brexit/N. Ireland news, further political fallout and more comments from BoE hawk Saunders. Crude and commodity FX have gleaned a degree of traction from partial recoveries or stabilisation in underlying prices. CBRT and regulator have asked banks to undertake FX transactions with corporate clients between 10:00-16:00, when the market is liquid, via Reuters citing bankers. Fixed Income Core benchmarks bounce further after a brief breather early on, with little in way of fresh fundamentals behind the upside. Initial highs were faded pre-UK/German issuance; once this cleared, Bunds and Gilts lifted to 152.50+ and 119.00+ peaks. Stateside, USTs are bolstered but far from best, with the curve re-flattening into today's 3yr sale and yet more Fed speak. Commodities Crude futures have come under renewed pressure in recent trade after seeing some gains in the European morning.   The initial downside coincided with the mixed Germany ZEW reports alongside the downbeat commentary from Hungary regarding an imminent oil ban; albeit, benchmarks are off overnight USD 100.44/bbl and USD 103.19/bbl respective lows. Saudi Energy Minister says it is "mind-boggling" why focus is on high oil prices and not on gasoline, diesel or others. World needs to wake up to an existing reality that it is running out of energy capacity at all levels, via Reuters. UAE Energy Minister says oil prices could double or triple in "chaotic" market. US officials reportedly asked Brazil's Petrobras in March to boost output, but it the oil Co. said it could not, according to Reuters sources. China's Shenghong Petrochemical has started a trial operation at its (320k BPD) greenfield refining complex in east China, according to Reuters sources. Germany is said to be shifting away from plans for a strategic national coal reserve, according sources cited by Reuters. Spot gold holds onto mild gains as DXY pulled back from the fresh YTD highs set yesterday. LME futures post mild gains following yesterday’s downside with the market still looking somewhat fragile. DB's Jim Reid concludes the overnight wrap It's school photo day today. After discussing it with my kids last night I said to them that I'd dig out my old school photos so they could see me at school. Without hesitation and with a straight face Maisie said, "Are they in black and white Daddy?". I was half amused and half depressed. Markets are pretty black at the moment with little white on show. Actually the only bright colour is a sea of red. Indeed after a rocky few weeks in markets, there’s been a further rout over the last 24 hours as investor jitters about the global growth outlook have continued to escalate. There has been some respite in Asia but markets remain very shaky. There wasn’t really a single catalyst to yesterday’s steep declines, but ultimately there’s been a growing scepticism in markets as to whether the Fed and other central banks will actually be able to achieve a soft landing without a recession as they seek to bring down inflation. One interesting development though was that rates rallied as the equity slump intensified, rather than both selling off as has been the norm in recent weeks. Although the day lacked a single catalyst, the bond market moves seem to turn around the same time as Atlanta Fed President Bostic spoke. He picked up where Chair Powell left things after last week’s press conference. Bostic signaled that +50bp hikes were part of his core view, placing low odds on anything larger, stating +50bp hikes were “already a pretty aggressive move.” Like other Fed speakers, he signaled a desire to get policy to neutral and then assess. While he isn’t a voter this year, his voice does carry weight at the hawkish end of the committee so the price action likely reflected the market believing that a consensus continues to build for 50bps, and not 75bps, even among the hawks. Sovereign bonds were actually seeing a strong sell-off before his comments but rallied fairly fiercely from around the same time. 10yr Treasury yields hit an intraday high of 3.20% during the European morning (+7.5bps on the day) but ended up closing -9.3bps lower at 3.03%, showing that wide intraday ranges and volatility continue to grip the market. With the Fed continuing to put a perceived ceiling on the near-term pace of hikes, 2yr yields rallied -13.7bps on the day with the curve steepening another +5.3bps. The amount of Fed hikes priced in by the December meeting down by -15.5bps. As I type, 10yr US yields are fairly flat in Asia. The move echoed in Europe, where 10yr bunds rallied -3.5bps to 1.09%. The broader risk-off move meant that there was a further widening in spreads yesterday, with the gap between Italian 10yr BTPs over bunds widening by +4.9bps to 205bps, which is the widest they’ve been since May 2020. And that widening was seen on the credit side as well, where iTraxx Main moved above 100bps for the first time since April 2020 in trading, before falling back somewhat to settle at 98bps (+1.4bps). Against this backdrop, the S&P 500 fell by a sizeable -3.20% that takes the index to its lowest level in over a year. That comes on the backs of 5 consecutive weekly losses, which is already the longest run in over a decade, and given the performance yesterday it would take a strong comeback over the remaining four days this week to avoid that run extending to 6 weeks. See my Chart of the Day yesterday (link here) for more on how rare it has been to see an 11 year run without a 5 successive weekly decline. Energy was the worst performing US sector, falling an astonishing -8.30%, in its worst one-day performance since June 2020, after the fall in oil (more below). The sector is still by far the best performing S&P sector YTD, up +36.79%, with every other sector in the red. Despite the rate rally, it was a bad day for mega-cap and other growth tech stocks. Indeed, the NASDAQ fell a further -4.29% to its lowest level since November 2020, whilst the FANG+ index of 10 megacap tech stocks fell an even larger -5.48%. For reference, that now takes the FANG+ index’s decline since its all-time high in November to a massive -38.22%. Even a high quality component like Amazon is now down -35.75% since March 29th and is pretty much back to pre-covid levels. Over the other side of the pond, Europe saw some sizeable declines as well, with the STOXX 600 down -2.90% to leave the index not far away from its recent lows in early March. With the Fed set to continue their hiking cycle, just as the ECB are still pondering on when to even start hikes and China’s growth prospects are fading, the US dollar has continued to benefit. Yesterday, the Japanese Yen (+0.21% vs USD) was the top-performing G10 currency, in line with its traditional status as a safe haven, but Bitcoin continued to lose ground, falling to its lowest level since July last year, after falling to $31,562. It briefly fell below 30k this morning. It's been interesting that Bitcoin is not getting much mention with all the inflationary issues seen in recent months. It seems to be suffering from a higher dollar, higher real yields and a tech related sell-off. Markets continue to fall in Asia but US futures are up. Hang Seng (-3.06%) is the largest underperformer, but is paring its losses after falling more than -4% as the market returned after a holiday with the Chinese listed tech firms among the worst hit. Elsewhere, the Nikkei (-0.93%) and Kospi (-0.95%) are down. Meanwhile, mainland Chinese stocks are trading in positive territory with the Shanghai Composite (+0.17%) and CSI (+0.15%) somewhat recovering from opening losses. Looking ahead, S&P 500 (+0.56%), NASDAQ 100 (+0.92%) and DAX (+0.25%) futures are moving higher. Early morning data showed that Japan’s household spending declined -2.3% y/y in March, its first drop in three months albeit the fall was less than -3.3% estimated by Bloomberg and followed +1.1% growth in February. Back to inflation and one potentially problematic indicator came from the New York Fed’s latest consumer survey, which found that median inflation expectations for 3 years ahead rose to +3.9%, which is the highest since December, and up from +3.5% back in January. It’s still not as high as the +4.2% readings back in September and October, but will obviously be unwelcome news to the Fed whose path to a soft landing is in part reliant on inflation expectations remaining well anchored around target. Turning to the situation in Ukraine, a key risk event yesterday had been Russia’s Victory Day parade, where it was speculated that President Putin would move towards a general mobilisation. However, in reality it finished with surprisingly little news, and whilst not showing a path towards de-escalation, didn’t move to escalate things further. Separately, it was reported by Bloomberg that the EU would soften its proposed sanctions package on Russian oil exports, with an article saying that they would drop the proposal to ban EU-owned vessels transporting Russian oil to third countries. The sanctions package has already come under criticism from some member states, and the article said that Hungary and Slovakia had been offered a longer time period lasting until end-2024 to comply with the proposals to ban Russian oil imports, with Hungary in particular saying more talks were needed to support oil-related sanctions. So with no further escalation and a softening in sanctions, oil prices fell back significantly amidst weak risk appetite more generally. Brent crude was down -5.74%, whilst WTI fell -6.09%, which follows 2 consecutive weekly gains for both. This morning oil prices are again lower with Brent and WTI futures -1.74% and -1.68% lower respectively. To the day ahead now, and central bank speakers include the Fed’s Williams, Barkin, Waller, Kashkari and Mester, along with ECB Vice President de Guindos and Bundesbank President Nagel. Data releases include Italy’s industrial production for March and Germany’s ZEW survey for May. Finally on the political side, President Biden will meet with Italian Prime Minister Draghi at the White House, and the UK state opening of Parliament is taking place, where the government outlines its legislative programme for the year ahead. Tyler Durden Tue, 05/10/2022 - 07:57.....»»

Category: smallbizSource: nytMay 10th, 2022

Futures Recover Losses After Netflix Disaster; 10Y Real Yields Turn Positive

Futures Recover Losses After Netflix Disaster; 10Y Real Yields Turn Positive US index futures were little changed, trading in a narrow, 20-point range, and erasing earlier declines as a selloff in bonds reversed with investors also focusing on the catastrophic Q1 earnings report from Netflix. Nasdaq 100 Index futures slipped 0.2% by 7:15 a.m. in New York, recovering from an earlier drop of as much as 1.2%; the Nasdaq 100 has erased $1.3 trillion in market value since April 4 as bond yields have been surging on fears of rate hikes. S&P 500 futures also recouped losses to trade little changed around 4,460. Treasuries rallied and 10Y yields dropped to 2.86% after hitting 2.98% yesterday. The dollar dropped for the first time in 4 days after hitting the highest level since July 2020, and gold was flat while bitcoin rose again, hitting $42K. In perhaps the most notable move overnight, US 10-year real yields turned positive for the first time since March 2020, signaling a potential return to the pre-pandemic normal. But that was quickly followed by a global drop in bond yields as investors assessed growth challenges from the Ukraine war and the potential for a peak in inflation. “Real yields matter for equities,” Esty Dwek, chief investment officer at Flowbank SA, said in an interview with Bloomberg Television. “It’s another aspect for the valuation picture that isn’t helping. It shouldn’t be that much of a surprise to see real yields are back closer to zero again. We’re pricing in so much bad news already between inflation and the hikes and war and supply chains.” 10-year Treasurys yield shed 7 basis points in choppy session after as money managers from Bank of America to Nomura indicated the panic over inflation has gone too far: “Our forecasts point to inflation peaking this quarter and falling steadily into 2023,” BofA analysts including Ralph Axel wrote in a note. “We believe this will reduce the panic level around inflation and allow rates to decline.”  Bank of America also said it has turned long on 10-year Treasuries. Elsewhere, Japan's 10-year yield holds at 0.25%, the top of Bank of Japan’s trading band as the central bank resumes massive intervention. Despite the BOJ's dovish commitment to keep rates low, the Japanese yen rebounded from a 13-day slump and gold extended its decline. Going back to stocks, Netflix shares which have a 1.2% weighting in the Nasdaq, sank 27% in premarket trading after the streaming service said it lost customers for the first time in a decade and forecast that the decline will continue. The shares were downgraded at many firms including UBS Group AG, KGI Securities and Piper Sandler. Other streaming stocks including Walt Disney and Roku also slipped. IBM, on the other hand, rose 2.5% after reporting revenue that beat the average analyst estimate on demand for its hybrid-cloud offerings. Analysts acknowledged the strong quarter of revenue performance. A dimmer outlook for corporate earnings as well as the rise in yields have dented demand for risk assets, with investors preferring defensive stocks such as healthcare to growth-linked stocks, which come under greater pressure from higher interest rates. Some other notable premarket movers: Interactive Brokers (IBKR US) shares fell 1.1% in after-market trading as net income missed analysts’ consensus estimates. Still, analysts at Piper Sandler and Jefferies are positive. Omnicom (OMC US) shares jumped 3.7% in postmarket. Its cautious outlook for the rest of the year could bring some positive surprises, according to analysts, after the company’s 1Q revenue beat estimates In Europe, the Stoxx 600 rose 0.8%, led by banking and technology shares while miners underperformed as metals fell, as investors assessed a mixed bag of corporate results and the outlook for France’s presidential-election runoff on Sunday.  There’s a divergence in performance of European stocks; Euro Stoxx 50 rallies 1.2%. FTSE 100 lags, adding 0.4%. Danone SA rose after reporting its fastest sales growth in seven years, and Heineken NV advanced after sales climbed. Here are some of the biggest European movers today: ASML shares rise as much as 8% with analysts saying the semiconductor-equipment group’s earnings show demand remains strong, even if a timing issue meant its outlook missed expectations. Danone shares gain as much as 9% following a French financial newsletter report that rival Lactalis may be interested in buying its businesses and after the producer of Evian reported a surge in bottled water revenue. Just Eat Takeaway shares rise as much as 7.7% after the company gave mixed guidance and said it is considering selling Grubhub. While analysts note the growth looks weak, they highlight the focus on profitability and the strategic review of Grubhub are positives. Vopak shares rise as much as 7.2%, most since March 2020, after the tank terminal operator reported higher revenues and Ebitda for the first quarter. Heineken shares rise as much as 5% after the Dutch brewer reported 1Q organic beer volume that beat analyst expectations and said net revenue (beia) per hectolitre grew 18.3%. Analysts were impressed by the company’s price-mix during the period. Rio Tinto shares fall as much as 3.9%. A production miss for 1Q could prevent the miner’s shares from recovering after recent underperformance, RBC Capital Markets says. Credit Suisse declines as much as 2.8% after the bank said it anticipates a first-quarter loss owing to a hit to revenue from Russia invading Ukraine and an increase in legal provisions. Oxford Biomedica drops as much as 10% after reporting full-year revenue that was below consensus. RBC Capital said reasons for the revenue miss were “unclear,” adding that there was no new business development news. Asian stocks rose as Japanese equities rallied on the back of a weaker yen, which will support exports. Shares in China fell as investors were disappointed by the decision among banks to keep borrowing rates there unchanged. The MSCI Asia Pacific Index gained as much as 0.9% and was poised to snap a three-day losing streak. Japanese exporters including Toyota and Sony helped lead the way, with shares also stronger in Singapore, Malaysia and the Philippines.  “It looks like the cheap yen may continue for a longer period than originally expected,” said Bloomberg Intelligence auto analyst Tatsuo Yoshida. “The weaker yen is good for all Japanese automakers.” China’s benchmarks bucked the uptrend and dipped more than 1%, as lenders maintained their loan rates for a third month despite the central bank’s call for lower borrowing costs to help an economy hurt by Covid-19 and geopolitical headwinds.  China’s rate stall, together with last week’s smaller-than-expected cut in the reserve requirement, has led some investors to believe broad and significant policy easing is unlikely. “Doubts about access to easier funding remain a bugbear despite headline easing,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note. “Inadvertent restraints on actual lending may mute intended stimulus, revealing risks of ‘too little too late’ stimulus.” In positive news, daily covid cases in Shanghai were in downtrend in recent days and number of communities with more than 100 daily infections fell for three consecutive days, Wu Qianyu, an official with Shanghai’s health commission, says at a briefing. Financial stocks outside of China gained after U.S. 10-year Treasury real yields turned positive for the first time since 2020 as traders continue to bet on a series of aggressive Federal Reserve rate hikes. This may pose more headwinds for Asian tech stocks, which have dragged the broader market lower this year. Japanese equities rose for a second day after the yen weakened against the dollar for a record 13 straight days. Automakers were the biggest boost to the Topix, which climbed 1%. Financials advanced as yields gained. Fast Retailing and SoftBank Group were the largest contributors to a 0.9% gain in the Nikkei 225. The yen strengthened slightly after shedding nearly 6% against the dollar since the start of the month. “It looks like the cheap yen may continue for a longer period than originally expected,” said Bloomberg Intelligence auto analyst Tatsuo Yoshida. “The weaker yen is good for all Japaneseautomakers, “no one loses,” he added. Indian equities snapped their five-day drop as energy companies advanced on expectations of blockbuster earnings, driven by wider refining margins. Software exporters Infosys, Tata Consultancy and lender HDFC Bank bounced back from a slump, triggered by weaker results.  The S&P BSE Sensex gained 1% to 57,037.50 in Mumbai, while the NSE Nifty 50 Index rose 1.1%. The two gauges posted their biggest surge since April 4. Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of automobile companies. “A series of sharp negative reactions to minor misses in earnings from large caps points to a precarious state of positioning among investors,” according to S. Hariharan, head of sales trading at Emkay Global Financial. He expects corporate commentary on the margin outlook for FY23 to be key to investors’ reaction to other quarterly results, which will be released over the next couple of weeks. The benchmark Sensex lost about 5% in the five sessions through Tuesday, dragged lower by a selloff in software makers, a slump in HDFC Bank and its parent Housing Development Finance Corp. Foreign investors, who have been net sellers of Indian stocks since the start of October, have withdrawn $1.7 billion from local equities this month through April 18. The IMF slashed its world growth forecast by the most since the early months of the Covid-19 pandemic and projected even faster inflation. It expects India’s economy to grow by 8.2% in fiscal 2023 compared with an earlier estimate of 9%. Reliance Industries contributed the most to the Sensex’s gain, increasing 3%. Out of 30 shares in the Sensex index, 20 rose, while 10 fell. In FX, the Bloomberg Dollar Spot Index fell 0.4%, its first drop in four days, after yesterday reaching its highest level since July 2020, as the greenback weakened against all Group-of-10 peers. Scandinavian and Antipodean currencies led gains followed by the yen, which halted a 13-day rout. The euro advanced a second day and bunds extended gains, underperforming euro-area peers as money markets pared ECB tightening wagers. The yen snapped a historic declining streak amid short covering after the currency approached a key level of 130 per dollar. The Bank of Japan stepped in to cap 10-year yields for the first time since late March as it reiterated its ultra loose monetary policy with four days of unscheduled bond buying. The Australian and New Zealand dollars gained as risk sentiment improved after a selloff in Treasuries paused. The Aussie was supported by offshore funds buying into contracting yield spreads with the U.S. and on demand from exporters for hedging at the week’s low, according to FX traders. The pound edged higher against a broadly weaker dollar, but lagged behind the rest of its Group-of-10 peers, with focus on the risks to the U.K. economy. In rates, Treasuries advanced, reversing a portion of Tuesday’s sharp selloff which pushed the 10Y as high as 2.98%, with gains led by belly of the curve amid bull-flattening in core Focal points of U.S. session include Fed speakers and $16b 20-year bond reopening. US yields were richer by ~7bp across belly of the curve, 10-year yields around 2.87% keeping pace with gilts while outperforming bunds, Fed-dated OIS contracts price in around 222bp of rate hikes for the December FOMC meeting vs 213bp priced at Monday’s close; 49bp of hikes remain priced in for the May policy meeting. Japan 10-year yields held at 0.25%, the top of Bank of Japan’s trading band as the central bank resumes massive intervention. Australian and New Zealand bonds post back-to-back declines. Coupon issuance resumes with $16b 20-year bond sale at 1pm New York time; WI yield at around 3.10% sits ~45bp cheaper than March result, which stopped 1.4bp through.  IG dollar issuance slate includes Development Bank of Japan 5Y SOFR, Canada 3Y and ADB 3Y/10Y SOFR; six deals priced almost $19b Tuesday, headlined by financials including JPMorgan and Bank. In commodities, crude futures advance. WTI trades within Tuesday’s range, adding 1.1% to around $103. Brent rises 0.9% to around $108. Most base metals trade in the red; LME lead falls 1.6%, underperforming peers. Spot gold falls roughly $4 to trade near $1,946/oz. Looking at the day ahead now, and data releases include German PPI for March, Euro Area industrial production for February, US existing home sales for march, and Canadian CPI for March. From central banks, we’ll hear from the Fed’s Bostic, Evans and Daly, as well as the ECB’s Rehn and Nagel, whilst the Federal Reserve will be releasing their Beige Book. Earnings releases include Tesla, Procter & Gamble, and Abbott Laboratories. Finally, French President Macron and Marine Le Pen will debate tonight ahead of Sunday’s presidential election. Market Snapshot S&P 500 futures down 0.4% to 4,443.50 STOXX Europe 600 up 0.4% to 458.21 MXAP up 0.5% to 171.88 MXAPJ up 0.2% to 570.00 Nikkei up 0.9% to 27,217.85 Topix up 1.0% to 1,915.15 Hang Seng Index down 0.4% to 20,944.67 Shanghai Composite down 1.3% to 3,151.05 Sensex up 0.9% to 56,945.14 Australia S&P/ASX 200 little changed at 7,569.23 Kospi little changed at 2,718.69 German 10Y yield little changed at 0.88% Euro up 0.3% to $1.0823 Brent Futures up 1.0% to $108.27/bbl Brent Futures up 1.0% to $108.27/bbl Gold spot down 0.3% to $1,943.30 U.S. Dollar Index down 0.28% to 100.67 Top Overnight News from Bloomberg On the surface the yen looks like the perfect well for carry traders to dip into, under pressure from a Bank of Japan determined to keep local yields anchored to the floor even as interest rates around the world push higher. But despite consensus building for further losses -- peers look like better funding options on certain key metrics Almost eight weeks after Vladimir Putin sent troops into Ukraine, with military losses mounting and Russia facing unprecedented international isolation, a small but growing number of senior Kremlin insiders are quietly questioning his decision to go to war French President Emmanuel Macron and nationalist leader Marine le Pen are gearing up for their only live TV debate on Wednesday evening, a high-stakes event just days before the final ballot of the presidential election this weekend China will continue strengthening strategic ties with Russia, a senior diplomat said, showing the relationship remains solid despite growing concerns over war crimes in Vladimir Putin’s war in Ukraine A more detailed look at global markets courtesy of Newsquawk APAC stocks eventually traded mostly positive after the firm handover from the US despite continued upside in yields. ASX 200 was led by the healthcare sector as shares in Ramsay Health Care surged due to a takeover proposal from a KKR-led consortium, but with gains capped by miners after Rio Tinto's lower quarterly iron ore production and shipments. Nikkei 225 was underpinned by the initial currency depreciation and with the BoJ defending its yield cap. Hang Seng and Shanghai Comp were mixed with the mainland subdued after the PBoC defied expectations for a cut to its benchmark lending rates and instead maintained the 1yr and 5yr Loan Prime Rates at 3.70% and 4.60%, respectively. Top Asian News Fed’s Aggressive Rate Hike Plans Jolt Policy in China and Japan BOJ Further Boosts Bond Buying as Yields Advance to Policy Limit Sunac Bondholders Say They Haven’t Received Interest Due Tuesday Regulators Under Pressure to Ease Loan Curbs: Evergrande Update China Buys Cheap Russian Coal as World Shuns Moscow European bourses and US futures were choppy at the commencement of the European session, but, have since derived impetus in relatively quiet newsflow amid multiple earnings and as yields continue to ease; ES Unch. Currently, Euro Stoxx 50 +1.8%, while US futures are little changed on the session but rapidly approaching positive territory ahead of key earnings incl. TSLA. Netflix Inc (NFLX) - Q1 2022 (USD): EPS 3.53 (exp. 2.89), Revenue 7.87bln (exp. 7.93bln), Net Subscriber Additions: -0.2mln (exp. +2.5mln). Q1 UCAN streaming paid net change -640k (exp.+87.5k). Co. lost 640k subscribers in US/Canada, 300k in EMEA, and 350k in LatAm. Co. Said macro factors, including sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact, via PR Newswire. Click here for the full breakdown. -26% in the pre-market. Chinese Civil Aviation publishes prelim report looking into the China Eastern Airline crash; still recovering and analysing damaged black boxes from the plane: there was no abnormal communication between air crew and air controllers before the aircraft deviated from cruising altitude; no dangerous weather, goods or overdue maintenance. Top European News Le Pen Upset Would Be as Big a Shock to Markets as Brexit Macron and Le Pen Set for High Stakes French Debate Riksbank Governor Leaves Door Open for String of Rate Hikes Danone Gains on Lactalis Takeover Speculation, Evian Rebound Heineken Rises; MS Says Results Were Widely Expected FX: Buck concedes ground to recovering Yen as US Treasury yields recede, USD/JPY over 150 pips below new 20 year high circa 129.42. Yuan on the rocks after PBoC set a soft onshore reference rate and regardless of unchanged LPRs, USD/CNH eyes 6.4500 after breach of 200 DMA. Aussie back in pole position as high betas benefit from Greenback retreat and Kiwi in second spot ahead of NZ CPI data; AUD/USD rebounds through 0.7400 and NZD/USD from under 0.6750. Loonie also bouncing before Canadian inflation metrics, with Usd/Cad closer to 1.2550 than 1.2625, while Euro and Pound are both firmer on 1.0800 and 1.3000 handles respectively as DXY dips below 100.500. Rand shrugs aside mixed SA CPI prints as correction from bull run continues and Gold slips under Usd 1950/oz, USD/ZAR holds above 15.0000. ECB's Kazaks says a rate hike is possible as soon as July this year; ending APP early in Q3 is possible and appropriate; zero is not an a cap for the deposit rate, via Bloomberg. Adds, a gradual approach does not mean a slow approach, do not need to wait for stronger wage growth. Fixed Income: Debt redemption, as futures retrace following tests/probes of cycle lows. Lack of concession not really evident at longer-dated German and UK bond sales, but 20 year US supply may be a separate issue. BoJ ramps up intervention and aims to anchor rather than cap 10 year JGB yield around zero percent, while BoA suggests contra-trend position in 10 year UST to target 2.25% from current levels close to 3.0%. Commodities: Crude benchmarks are firmer on the session in what is more of a consolidation from yesterday's pressured settlement than a concerted effort to move higher, also benefitting from broader equity action. Currently, WTI and Brent reside at the top-end of USD 2/bbl parameters; focus very much on China-COVID, Iran, Libyan supply and Ukraine-Russia developments. US Private Energy Inventory Data (bbls): Crude -4.5mln (exp. +2.5mln), Cushing +0.1mln, Gasoline +2.9mln (exp. -1.0mln), Distillate -1.7mln (exp. -0.8mln). Spot gold/silver are contained at present but have seen bouts of modest pressure, including the loss of the USD 1946.45/oz 21-DMA at worst. US Event Calendar 07:00: April MBA Mortgage Applications, prior -1.3% 10:00: March Existing Home Sales MoM, est. -4.1%, prior -7.2% 10:00: March Home Resales with Condos, est. 5.77m, prior 6.02m 14:00: U.S. Federal Reserve Releases Beige Book Central Bank Speakers 11:25: Fed’s Daly Discusses the Outlook 11:30: Fed’s Evans Discusses the Economic and Policy Outlook 13:00: Fed’s Bostic Discusses Equity in Urban Development DB's Jim Reid concludes the overnight wrap It took me a while to adjust to being back to the office yesterday after two and a half weeks off. No screaming kids, no stealing half their food as I made their meals, and no stepping on endless lego and screaming myself. My team at work are much better behaved, protect their food, and clear up after playing with their toys. Talking of lego, the first day of the holiday was spent in a snow blizzard at LEGOLAND and the last day in shorts and t-shirt on a family bike ride on the Thames. No I haven't been off for that long just a typical April in the UK. When I left you, I was in constant agony due to sciatica in my back and a knee that was very fragile post surgery. On my last day I had a back injection that I wasn't that hopeful about as three previous ones hadn't done anything. However after a second opinion and a new consultant, this injection hit the spot and my sciatica has completely gone and I'm just back to the long-standing normal wear and tear related back stiffness. The consultant can't tell me how long it'll last so Reformer Pilates starts next week. My knee is slowly getting better via some overuse flare ups. So until the next time, I'm in as good a shape as I have been for quite some time! It's hard to guage how good a shape the market is in at the moment as there are lots of conflicting forces. Since I've been off global yields have exploded higher, the US yield curve has resteepened notably and risk is a bit softer. As regular readers know I think a late 2023/early 2024 US recession is likely in this first proper boom and bust cycle for over 40 years. However we're still in some kind of boom phase and I've been trying not to get too bearish too early. While I was off, I published our latest credit spread forecasts and having met our earlier year widening targets, we've moved more neutral for the rest of the year. However into year end 2023, we now have a very big widening of spreads in the forecasts to reflect the likely recession. See the report here. Also while I've been off, the House View is now also that we'll get a US recession at a similar point which as far as I can see is the first Wall Street bank to officially predict this. See the World Outlook here for more. On the steepening I don't have a strong view but ultimately I think 2 year yields will probably have to rise again at some point after a recent pause as the risks are skewed to the Fed having to move faster than the market expects. The long end is complicated by QT but generally I suspect the curve will be fairly flat or inverted for most of the next few months. Coming back after my holidays and the long Easter weekend, the bond market sell-off resumed yesterday with yields climbing to fresh highs. In fact, the losses for Treasuries so far in April now stand at -2.95% on a total return basis, just outperforming the -3.04% decline in March that itself was the worst monthly performance since January 2009, back when the US economy started emerging from the worst phase of the GFC. Elsewhere the US yield curve flattened for the first time in six sessions, with 2yr yields climbing +14.4bps to 2.59%, their highest level since early 2019. Yields on 10yr Treasuries rose +8.3bps to 2.94%, a level unseen since late 2018, on another day marked by heightened rates volatility. Meanwhile 30yr yields breached 3.00% intraday for the first time since early 2019, climbing +5.4bps. And what was also noticeable was the continued rise in real yields, with the 10yr real yield closing at -0.009% yesterday, and briefly trading in positive territory for the first time since March 2020 in early trading this morning. Bear in mind that the 10yr real yield has surged roughly 110bps in around 6 weeks, and since we’ve been able to calculate real yields using TIPS, the only faster moves over such a short time period have been during the GFC and a remarkable 2-week period in March 2020 around the initial Covid-19 wave. On the other hand, as I pointed out in my CoTD yesterday (link here), the 10yr real yield based on spot inflation is currently around -5.6%, so still incredibly negative. The latest moves come ahead of the Fed’s next decision two weeks from now, where futures are placing the odds of a 50bp hike at over 100% now. We’ve been talking about 50bps for some time, and we’d probably have had one last month had it not been for Russia’s invasion of Ukraine, but it would still be a historic moment if it happens, since the last 50bp hike was all the way back in 2000. Nevertheless, we could be about to see a whole run of them, with our economists pencilling in 50bp hikes at the next 3 meetings, whilst St Louis Fed President Bullard (the only dissenting vote at the last meeting who wanted 50bps) said on Monday night that he wouldn’t even rule out a 75bps hike, which probably gave some fuel to the subsequent front end selloff. The bond selloff also took hold in Europe yesterday, where yields on 10yr bunds (+6.9ps), 10yr OATs (+5.0bps) and BTPs (+6.2bps) all hit fresh multi-year highs. Indeed, those on 10yr bunds (0.91%) were at their highest level since 2015, having staged an astonishing turnaround since they closed in negative territory as recently as March 7. Rising inflation expectations have been a driving theme behind this, and yesterday we saw the 5y5y forward inflation swap for the Euro Area close above 2.4%, which is the first time that’s happened in almost a decade, and just shows how investor confidence in the idea of “transitory” inflation is becoming increasingly subdued given that metric is looking at the 5-10 year horizon. Those moves higher in inflation expectations came in spite of the fact that European natural gas prices fell to their lowest level since Russia’s invasion of Ukraine began yesterday. By the close, they’d fallen -1.94% to €93.77/MWh, whilst Brent crude oil prices were down -5.22% to $107.25/bbl. In Asia, oil prices are a touch higher, with Brent futures +0.82% higher as we go to press. Whilst bonds sold off significantly on both sides of the Atlantic, equities put in a much more divergent performance, with the US seeing significant advances just as Europe sold off. By the close of trade, the S&P 500 (+1.61%) had posted its best day in more than a month, as part of a broad-based advance that left 446 companies in the index higher on the day, the most gainers in a month. Tech stocks outperformed in spite of the rise in yields, with the NASDAQ (+2.15%) and the FANG+ index (+1.81%) posting solid advances, and the small-cap Russell 2000 (+2.04%) also outperformed. In Europe however, the STOXX 600 shed -0.77%, with others including the DAX (-0.07%), the CAC 40 (-0.83%) and the FTSE 100 (-0.20%) also losing ground. The S&P was higher despite a day of mixed earnings. Of the ten companies reporting during trading yesterday, only 4 beat both sales and earnings expectations. After hours, Netflix was the main story, losing subscribers for the first quarter in over a decade and forecasting further declines this quarter, which sent the stock as much as -24% lower in after hours trading. It’s 2 bad earnings releases in a row for the world’s largest streaming service, who saw their stock dip -21.79% the day after their fourth quarter earnings in January. Asian equity markets are mixed this morning as the People’s Bank of China (PBOC) defied market expectations by keeping its benchmark lending rates steady. In mainland China, the Shanghai Composite (-0.21%) and the CSI (-0.43%) are lagging on the news. Bucking the trend is the Nikkei (+0.57%) and the Hang Seng (+0.66%). Outside of Asia, stock futures are indicating a negative start in the US with contracts on the S&P 500 (-0.35%) and Nasdaq (-0.75%) both trading in the red partly due to the Netflix earnings miss. Separately, the Bank of Japan (BOJ) reiterated its commitment to purchase an unlimited amount of 10-yr Japanese Government Bonds (JGBs) at 0.25% to contain yields, underscoring its desire for ultra-loose monetary settings, in contrast to the global move in a more hawkish direction. The yen has moved slightly higher (+0.3%) after depreciating for 13 straight days, a streak which hasn’t been matched since the US left the gold standard in the early 70s and effectively brought the global free floating exchange rate regime into being. The pace and magnitude of the depreciation has brought some expressions of consternation from Japanese officials, but no official intervention. The reality is, it would be extraordinarily difficult to credibly support the currency at the same time as maintaining strict control of the yield curve. 10yr JGBs continue to trade just beneath the important 0.25% level. Over in France, we’re now just 4 days away from the French presidential election run-off on Sunday, and tonight will see President Macron face off against Marine Le Pen in a live TV debate. Whilst that will be an important moment, recent days have seen a slight widening in Macron’s poll lead that has also coincided with signs of an easing in market stress, with the spread of French 10yr yields over bunds coming down to its lowest level since the start of the month yesterday, at 46.7bps. In terms of yesterday’s polls, Macron was ahead of Le Pen by 56-44 (Opinionway), 56.5-43.5 (Ipsos), and 55-54 (Ifop), putting his lead beyond the margin of error in all of them. Elsewhere, the IMF released their latest World Economic Outlook yesterday, in which they downgraded their estimates for global growth in light of Russia’s invasion of Ukraine. They now see global growth in both 2022 and 2023 at +3.6%, down from estimates in January of +4.4% in 2022 and +3.8% in 2023. Unsurprisingly it was Russia that saw the biggest downgrades, but they were broadly shared across the advanced and emerging market economies, whilst inflation was revised up at the same time. Otherwise on the data side, US housing starts grew at an annualised rate of 1.793m in March (vs. 1.74m expected), which is their highest level since 2006. Building permits also rose to an annualised rate of 1.873m (vs. 1.82m expected), albeit this was still beneath its post-GFC high reached in January. To the day ahead now, and data releases include German PPI for March, Euro Area industrial production for February, US existing home sales for march, and Canadian CPI for March. From central banks, we’ll hear from the Fed’s Bostic, Evans and Daly, as well as the ECB’s Rehn and Nagel, whilst the Federal Reserve will be releasing their Beige Book. Earnings releases include Tesla, Procter & Gamble, and Abbott Laboratories. Finally, French President Macron and Marine Le Pen will debate tonight ahead of Sunday’s presidential election. Tyler Durden Wed, 04/20/2022 - 08:02.....»»

Category: blogSource: zerohedgeApr 20th, 2022

Futures Rise Boosted By Solid Tesla Earnings, Chevron"s Giant Buyback

Futures Rise Boosted By Solid Tesla Earnings, Chevron's Giant Buyback In a mirror image of Tuesday's action, when MSFT earnings hammered stocks (after first headfaking them higher) only to see the selloff reverse completely during the course of Wednesday trading, on Thursday US equity futures and tech stocks were set to gain after an upbeat earnings report from Tesla reinforced optimism about the health of Corporate America. As of 7:30am, Nasdaq 100 futures were up 0.7% while S&P 500 futures rose 0.3%. Tesla jumped about 8% in premarket trading after the electric-car maker reported better-than-expected profit and said it was on track to deliver about 1.8 million vehicles this year. Risk sentiment was boosted by news that US energy giant Chevron had authorized a massive $75 billion stock buyback, representing 22% of its outstanding shares, helping elevate energy stocks around the globe. Asia stocks jumped to 9-month highs as Hong Kong returned from break and European stocks rose by 0.4%. Meanwhile, the dollar continued to weaken as speculation continued to mount that the Fed is drawing closer to the end of its rate-hiking cycle, and would follow in the footsteps of first Canada and then Indonesia, both of which have officially paused. Bonds and gold edged lower. In premarket trading, all eyes were on Tesla which rose 7.3% after the electric-car maker reported better-than-expected profits and said it was on track to deliver about 1.8 million vehicles this year. Analysts noted that the EV market leader’s output target looks conservative as new factories in Berlin and Austin are set to add more capacity this year. Among peers: Rivian (RIVN US) +3.5%, Lucid (LCID US) +3.4%, Nikola (NKLA US) +1.9%, Nio (NIO US) +4.9%, Xpeng (XPEV US) +5.1%, Li Auto (LI US) +5%. Bank stocks traded higher in premarket trading Thursday, putting them on track to gain for a second straight day. In corporate news, a New York Stock Exchange employee failed to properly shut down a disaster-recovery system, leading to Tuesday’s chaotic opening session. Meanwhile, Cboe Global Markets wants to list more tokens on its crypto exchange, as established firms from traditional finance seek to capitalize on demand for reliable counterparties following the collapse of FTX. Here are some other notable premarket movers: Chevron (CVX US) gains 2.5% after it announced plans to buy back $75 billion of shares and increase dividend payouts after a year of record profits that evoked angry denunciations from politicians around the world as soaring energy prices squeezed consumers. Pfizer (PFE US) drops 1.8% in premarket trading as UBS downgrades the stock to neutral, saying estimates for the pharma giant’s Covid-19 franchise still look too high. IBM (IBM US) shares slip 2% after the tech infrastructure and IT services company’s free cash flow for 4Q fell short of estimates, which Morgan Stanley analysts say was a “significant blemish” in the quarter. That overshadowed IBM’s estimate-beating revenue and profit for the fourth- quarter. BuzzFeed (BZFD US) shares were indicated up about 35% following a Wall Street Journal report that the company reached a content creation deal with Meta. The deal was agreed last year and is worth nearly $10 million, WSJ cites people familiar with the matter as saying. Seagate (STX US) shares rise 7.6% as its quarterly update was better than expected and the computer- hardware firm’s guidance underpins a positive view on the stock, analysts say. Teradyne (TER US) falls 3% after its 1Q earnings forecast missed the average analyst expectation, on lower demand for semiconductors and storage tests. Fourth-quarter earnings beat analysts’ estimates. Las Vegas Sands (LVS US) shares gain 2.1% as analysts raise their price targets on the stock. They said better-than-expected results despite travel restrictions boded well for a recovery. US stocks have kicked off 2023 with a rally that has set the S&P 500 on course for its best January since 2019, as investors bet that the Federal Reserve will slow the pace of rate hikes in time to avert a recession. Deutsche Bank AG strategists said this week they expect further gains in the first quarter as an economic contraction is “running late.” Commenting on yesterday's dramatic market reversal, Goldman trader John Flood writes that "when the market/stocks dont go down on bad news (MSFT guide) typically a bullish signal. I think we learned a lot from this price action today: this mkt is more resilient than most of us are giving it credit for (be very thoughtful/selective with your short positions as squeezes will be common this Q). Worth noting CVX raised the dividend by 6% and authorized a monster $75B buyback...energy complex will outperform on this tomorrow. Reminder buyback blackout period ends post close this Friday." Today all eyes will be on US GDP figures due later today, with economists expecting the data to show a slowdown in growth at the end of the year. Focus has also been on the fourth-quarter earnings season for signs of how companies plan to navigate slowing demand and elevated inflation. Analysts are projecting the first quarterly decline in US profits since 2020, but some market strategists have warned profit margin estimates for 2023 are still too high. “Earnings have not been great but they are not disastrous either,’ said Rupert Thompson, chief economist at asset manager Kingswood Holdings Ltd. “Institutional investors have been short equities so you are seeing some of those positions being covered.”  Thompson sees the January stock surge as overdone, given recession risks ahead, but did not discount further short-term gains because “if you do get a 5% pullback, people who missed the rally may think ‘shall we just bite the bullet now rather than wait for another 5% fall?” "Sentiment remains fixated on the path of inflation, and where the Fed will go with interest-rate policy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Today’s economic data will be crucial to see “whether demand is being squeezed out of the economy and whether more storm clouds are gathering on the horizon,” she said. Soft-landing bets for the US economy and expectations the Federal Reserve is nearing the end of its rate-hiking cycle have lifted stock markets and put the dollar on course for its worst monthly performance since last May. On Thursday, it held around flat against its Group-of-10 peers as investors awaited economic growth and jobs data as well as a core price index that could determine the Fed’s policy path. In Europe, the Stoxx 600 was higher by 0.5% with outperformance in the tech sector after Nokia and STMicroelectronics posted better-than-expected numbers. Results from telecoms group Nokia Oyj and chipmaker STMicroelectronics NV were applauded by investors, helping to lift the Stoxx 600 index by half a percent. Here are some of the biggest European movers on Wednesday: Sabadell shares soar as much as 10% after the Spanish lender reported 4Q net profit that beat estimates and gave above- consensus estimates guidance Sartorius AG rises as much as 8.3% after the laboratory equipment firm reassured the market with an update to its financial targets; its subsidiary Sartorius Stedim Biotech rises, too STMicro jumps as much 9.3% after the chipmaker projected first-quarter and full-year sales ahead of consensus estimates, defying a slowdown in the broader semiconductor industry Nokia shares gain as much as 7.2%, the biggest intraday climb since July, after the telecom equipment maker outlined full-year outlook that met expectations Diageo falls as much as 7.4%, weighing on peers in the alcohol and beverages sector, after the Johnnie Walker maker’s results disappointed in North America and delivered an uncertain outlook Volvo shares slide as much as 4.9% in early trading after the Swedish truck producer reported 4Q22 earnings that came in below consensus SEB falls as much as 4.8%, the most since October, after the Swedish lender reported 4Q figures that beat expectations but were of a low quality, according to Citi Novartis falls as much as 2.4% on being cut to neutral from buy at Citi on a more cautious outlook for the Swiss pharma group’s cholesterol drug Leqvio and prostate cancer drug Pluvicto SAP shares fall as much as 4.1% after it’s free cash flow outlook for 2023 missed estimates, even though the firm still projected at least a double-digit growth for operating profits Earlier in the session, stocks in Asia Pacific rose for a fifth straight day as investors in Hong Kong returned from Lunar New Year holidays that delivered a boost to consumption. The MSCI Asia Pacific Index climbed as much as 0.8% to the highest since April 22. Hong Kong-listed stocks rallied as data on spending and tourism during the three-day break signaled a recovery in demand is gaining traction in China. The Hang Seng Index closed at its highest since March. “Stocks in Hong Kong would probably remain on the stronger side,” Chetan Seth, an Asia Pacific equity strategist at Nomura, told Bloomberg Television. “What we might see in the months ahead is improvement in activity indicators.”  Benchmarks in South Korea, Indonesia and Singapore also rose as traders assessed the global economy’s prospects. China’s reopening has triggered a rebound across Asia, with investors now looking beyond Covid infection figures to evaluate how a recovery in the region’s largest economy will impact earnings. The MSCI Asia gauge is outperforming the S&P 500 by more than four percentage points so far in 2023 Japanese stocks fell, while markets in Australia, China, India, Taiwan and Vietnam were closed. Japanese stocks closed slightly lower, erasing early gains and halting a four-day winning streak, as investors assessed prospects for corporate earnings and the global economy. The Topix fell 0.1% to close at 1,978.40, while the Nikkei declined 0.1% to 27,362.75. Sony contributed the most to the Topix decline, decreasing 1.3%. Out of 2,161 stocks in the index, 893 rose and 1,116 fell, while 152 were unchanged. “There is a continued wait-and-see mood as there are two important indicators, the FOMC meeting and ISM employment reports coming up next week,” said Shogo Maekawa a global market strategist at JP Morgan Asset Management In FX, the Bloomberg Dollar Index swung between moderate gains and losses. The Norwegian krone and Australian dollar led gains, while Sweden’s krona lagged.  The euro retreated after six days of gains versus the greenback, though it is likely to enjoy continued monetary policy support, as several European Central Bank rate-setters spoke in favor of further hefty policy-tightening over coming months.  Traders are likely to parse reports on US economic growth, initial jobless claims and a core price index due Thursday to gauge if the Fed will opt for a smaller rate hike on Feb. 1. Recent commentary from some central bank officials has backed the case for a quarter point increase In rates, treasuries were lower after following gilts and, to a lesser extent, bunds during European morning. US yields cheaper by up to 4bp across long-end of the curve which leads losses on the day; 10-year yields back up to around 3.48% with gilts underperforming by additional 2bp in the sector and bunds trading broadly in line. UK and German 10-year yields rise by 4bps and 2bps respectively. A raft of US economic data is set to be released, and auction cycle concludes with 7-year notes following strong demand for 5- and 2-year sales. $35b 7-year notes at 1pm New York time is final coupon auction of the November-to-February financing quarter; all previous coupon auctions during January have stopped through. The WI 7-year around 3.525% is ~40bp richer than January’s stop-out and below auction stops since August. Saira Malik, chief investment officer of Nuveen, said earnings risk in a consumer-led slowdown will act as a headwind to equities, with a shift into bonds underscoring the fragile sentiment. “You can start to increase your duration in fixed-income and get strong total returns in it without a lot of these heavy macro risks that are going to hit equities,” Malik said in an interview with Bloomberg TV. “Equities considering their valuation are less attractive.” Elsewhere, oil prices rose for a second day, lifted by expectations of demand recovery in China. Crude future advance with WTI gaining 0.9% to trade near $80.90. Spot gold falls roughly 0.5% to trade near $1,937/oz. Bitcoin fell more than 2%, reversing much of Wednesday’s gain. Looking to the busy day ahead now, data releases from the US include the advance estimate of Q4 GDP, preliminary durable goods orders for December, new home sales for December and the weekly initial jobless claims. Otherwise, earnings releases include Visa, Mastercard, Intel, American Airlines and Comcast. Market Snapshot S&P 500 futures up 0.2% to 4,038.75 MXAP up 0.6% to 170.22 MXAPJ up 1.1% to 558.68 Nikkei down 0.1% to 27,362.75 Topix down 0.1% to 1,978.40 Hang Seng Index up 2.4% to 22,566.78 Shanghai Composite up 0.8% to 3,264.81 Sensex down 1.3% to 60,205.06 Australia S&P/ASX 200 down 0.3% to 7,468.30 Kospi up 1.7% to 2,468.65 STOXX Europe 600 up 0.5% to 454.33 German 10Y yield little changed at 2.19% Euro down 0.1% to $1.0900 Brent Futures up 0.4% to $86.50/bbl Gold spot down 0.5% to $1,937.17 U.S. Dollar Index up 0.17% to 101.81 Top Overnight Stories BOJ members were divided over whether the 2% inflation goal could be sustainably achieved and felt the extreme level of accommodation should be sustained. Also, The IMF suggested that the BOJ could allow more flexibility in 10-year bond yields, a move that would involve policy changes for the central bank. RTRS / Nikkei China’s most scenic destinations have been inundated during the Spring Festival holiday, as Beijing’s shift away from Covid Zero spurred a travel frenzy despite the country’s ongoing omicron outbreak. BBG Bank of Indonesia has delivered enough interest-rate increases, according to Governor Perry Warjiyo, who signaled that this round of tightening is coming to an end as the Federal Reserve also winds down. This is the second central bank in as many days (after the Bank of Canada yesterday) to signal an end to rate hikes. BBG Pakistan’s economy is at risk of collapse, with rolling blackouts and a severe foreign currency shortage leaving businesses struggling to operate as authorities attempt to revive an IMF bailout to relieve the deepening crisis. FT Adani Group may take legal action against Hindenburg Research after the US short seller alleged "brazen" market manipulation and accounting fraud. Shares of Adani-related entities slumped yesterday, shaving $12 billion off the empire of Asia's richest man, and a raft of its companies' dollar bonds fell further today. BBG Eurozone officials start talks on creating a huge multibillion-euro fund to compete w/the US green energy subsidies. London Times The NYSE mayhem earlier this week was due to simple human error, people familiar said — an exchange employee didn't correctly shut down a backup system running overnight so heading into Tuesday, the NYSE's computers treated the 9:30 a.m. bell as a continuation of trading, skipping the opening auctions. No word yet on the cost of the chaos. BBG Donald Trump's back. Meta will reinstate the former president's social media accounts "in the coming weeks" following a two-year suspension. He had 34 million followers on Facebook and 23 million on Instagram back in 2021 but, more important, his re-election campaign will now be able to buy ads to raise money via direct appeals or by capturing users' contact info to solicit them directly. BBG Tesla jumped as much as 8% premarket after profit beat, though there were mixed signals on the outlook. Elon Musk said production may top 1.8 million vehicles this year. BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks traded somewhat mixed amid key holiday closures and after the flat handover from Wall St where the major indices recouped most of their initial losses after the BoC’s dovish hike. Nikkei 225 was subdued amid a firmer currency and upside in yields, while the government also lowered its overall economic assessment for the first time in 11 months. KOSPI gained despite the weaker-than-expected GDP data although the finance minister flagged the likelihood of a return to growth for the current quarter. Hang Seng outperformed as participants in Hong Kong returned from the Lunar New Year holiday and were greeted by strength in tech, property and autos, although trade across the rest of the region remained relatively quiet owing to the closures in Australia, China, Taiwan, India and Vietnam. Top Asian News BoJ Summary of Opinions from the January meeting stated it is appropriate to maintain current monetary easing including YCC and that the BoJ must keep yields from rising across the curve while being mindful of the bond market function. Furthermore, they must spend more time to gauge the impact of the December decision and must conduct a review of policy at some point although it is appropriate to maintain easy policy for now, while they still see some distance in achieving the price goal and noted it will take some time to achieve sustained wage growth. IMF (policy proposal on Japan) says the BoJ should allow bond yields to move in a more flexible manner; If significant upside inflation risks materialise, BoJ needs to be ready to withdraw stimulus strong, e.g. by increasing interest rates; possible options for the BoJ include widening the yield bank, increasing the yield target, targeting shorter yields and shifting to a quantity target; BoJ policy is appropriate as inflation is likely to ease but risks are becoming more pronounced; FX intervention should be limited to special circumstances such as disorderly market conditions. Japan is to downgraded its COVID classification on May 8th, via NHK. European bourses are firmer across the board, Euro Stoxx 50 +0.6%, with a busy morning for earnings dictating the state of play before Stoxx 600 heavyweight LVMH's (MC FP) earnings, due after-market on Thursday. Stateside, futures are firmer across the board, ES Mar'23 +0.2% and comfortably above the 4k mark and as such the 10- and 200-DMAs which reside on either side of the figure. NDX +0.6% is the incremental outperformer after a well received update from Tesla (TSLA) +7% pre-market while IBM (IBM) slips -1.6% after its Q4 report. Top European News US and EU are reportedly discussing a potential deal regarding critical raw materials and minerals, to enable the EU to benefit from the US' Inflation Reduction Act/green investment plan, via Bloomberg citing sources. UK 2022 car production fell 9.8% Y/Y to 775k units, while car and light van production for 2023 is expected to increase 15% Y/Y to 984k units, according to SMMT. UK ONS says consumer behaviour indicators were broadly similar to the prior week. Irish Finance Minister McGrath says Brexit talks have reached a new level. Italian Economy Minister says before April they intend to extend relief measures to assist families and firms with energy costs, could alter regulations on capital gains tax. Denmark Calls for Mandatory Military Service for Women Europe Gas Prices Rebound After Slump With Asia Demand in Focus Diageo Drops as Sales Growth Slows in Crucial US Market Saipem Top Oil Services Pick at JPMorgan, Subsea 7 Cut FX DXY slips to a minor new 101.500 y-t-d low, but holds in and pares some losses pre-US data raft. Aussie and Kiwi remain underpinned on inflation grounds, but AUD/USD heavy on 0.7100 handle and NZD/USD clipped around 0.6500. Yen recoils between 129.00-130.00 range vs Buck as Japan's top currency diplomat warns that sharp moves will not be tolerated, CNH bid as HK markets return from holiday with COVID reopening optimism. Euro and Pound wobble above 1.0900 and 1.2400 vs Dollar and ahead of technical resistance. Morgan Stanley's month-end USD rebalancing model: expects the USD to underperform in January, with weakness expected vs all G10 currencies ex-NOK. CBRT announced support for the conversion of firms' foreign exchange obtained from abroad into Turkish liras to support 'liraization' in commercial activities, with firms to be provided with FX conversion support corresponding to 2% of the amount converted. Fixed Income Core benchmarks have continued to ease from best levels with the IMF's BoJ/Japan policy proposal adding to the pressure. Bunds holding just above 138.00 within 138.62-137.91 parameters while Gilts are just below 105.00 towards the mid-point of a 105.66-104.72 range. USTs are similarly contained around the 115.00 handle as participants await US data and a subsequent 7yr auction. Commodities WTI and Brent March futures remain underpinned by the China-demand narrative, though are relatively rangebound overall and spent much of the morning trading with no firm direction with focus on geopols and French strike action. US and European gas futures are experiencing a modest divergence, with ING suggesting the US Nat Gas pressure is due to milder weather. TotalEnergies (TTE FP) says pension reforms strike action is interrupting shipments at French production sites, except for the Feyzin refinery (119k BPD). Continue to ensure petrol stations are supplied, no shortage. 24-hours strike declared at the 140k BPD Fos-Sur-Mer oil refinery in France, according to BFM TV citing an Esso Union official. German energy regulator says there is not enough gas saving in the third calendar week; household, business and industry consumption down 9%in total in that week (vs 20% target). Spot gold has been dipping from best levels amid seemingly yield-driven USD upside while LME copper is relatively resilient but has slipped from best levels. Geopolitics Russian Kremlin says it sees the sending of Western tanks to Ukraine as direct and growing involvement in the conflict. Russian Security Council's Secretary Patrushev says the US and NATO are participating in the Ukrainian conflict and want to prolong it. US Event Calendar 08:30: 4Q GDP Annualized QoQ, est. 2.6%, prior 3.2% 4Q GDP Price Index, est. 3.2%, prior 4.4% 4Q PCE Core QoQ, est. 3.9%, prior 4.7% 4Q Personal Consumption, est. 2.8%, prior 2.3% 08:30: Dec. Durable Goods Orders, est. 2.5%, prior -2.1% Dec. -Less Transportation, est. -0.2%, prior 0.1% Dec. Cap Goods Orders Nondef Ex Air, est. -0.2%, prior 0.1% Dec. Cap Goods Ship Nondef Ex Air, est. -0.4%, prior -0.1% 08:30: Jan. Initial Jobless Claims, est. 205,000, prior 190,000 Continuing Claims, est. 1.66m, prior 1.65m 08:30: Dec. Advance Goods Trade Balance, est. -$88.1b, prior -$83.3b, revised -$82.9b 08:30: Dec. Retail Inventories MoM, est. 0.2%, prior 0.1% Wholesale Inventories MoM, est. 0.5%, prior 1.0% 08:30: Dec. Chicago Fed Nat Activity Index 10:00: Dec. New Home Sales MoM, est. -4.4%, prior 5.8% New Home Sales, est. 612,000, prior 640,000 11:00: Jan. Kansas City Fed Manf. Activity, est. -8, prior -9 DB's Jim Reid concludes the overnight wrap Morning from Milan. Yet another first time since the pandemic started trip. Always nice to be back. I’d almost forgotten how good the food is here! It was a fairly positive macro dinner with clients generally constructive. It was unique to be in Italy and see no-one really too concerned about Italy credit quality which is testimony to the various EU/ECB packages both pre and post the pandemic and also impressive given how far the ECB has come on rates and how far it still has to go. With markets overall on the calm side too at the moment we're getting our mini vol from entering earnings crossfire season where a big name’s quarterly report can pick you off. Indeed, sentiment yesterday was heavily influenced at first by Microsoft’s disappointing cloud sales outlook from after the bell on Tuesday night. The company’s shares were down around -4.5% soon after the open, before sentiment steadily improved as the day progressed. By the end of the day, it had clawed its way back up to have only lost -0.59%. More broadly, the Nasdaq and S&P 500 hit intraday lows of -2.34% and -1.69%, respectively, before closing at -0.18% and -0.02%. So a decent recovery. After the close, we then heard from Tesla and IBM. Tesla reported adjusted earnings of $1.19 EPS ($1.12 EPS expected) as it sought to boost output quickly to achieve its previous guidance of 1.8mn vehicles delivered this year. In after-market trading it then advanced +5.5%, especially after Elon Musk said that he expected demand would remain strong despite an expected contraction and that there was a new “next-generation” vehicle that would be announced in March. IBM (-2.0% after-market) also beat earning expectations at $3.60 EPS (consensus was $3.58), and increased its sales forecast whilst announcing they would be cutting headcount by 1.5%. Against this backdrop, US equity futures are looking more positive this morning, with those on the S&P 500 (+0.12%) and the NASDAQ 100 (+0.35%) both higher. With the S&P 500 finishing the day largely unchanged, 12 of 24 industry groups were in positive territory for the day. Telecoms (+2.50%), banks (+1.17%), insurance (+0.78%), and food & beverage (+0.73%) outperformed, whereas transports (-1.43%) and utilities (-1.36%) were the biggest laggards. Europe closed before the last of the rally in the US, with the STOXX 600 finishing down -0.29%. The STOXX Technology index was similarly down -1.66% at the lows before staging a late recovery itself that only left it down -0.13%. Much like US equities, US bonds saw a decent range and by the close yields on 10yr Treasuries were down -1.1bps on the day to 3.44% (range 3.42-3.49%). By contrast in Europe, yields on 10yr bunds (+0.3bps), OATs (+1.1bps) and BTPs (+3.3bps) all moved higher to varying degrees. That followed fresh comments from ECB speakers, with Slovenia’s Vasle saying that rates should go up by 50bps at the next two meetings. Ireland’s Makhlouf also endorsed continuing with 50bps into March, saying that “We need to continue to increase rates at our meeting next week – by taking a similar step to our December decisions – and also at our March meeting.” Ahead of the Fed and ECB decisions next week, we did get a decision yesterday from the Bank of Canada. They hiked by 25bps as expected, but said in their statement that they expect “to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.” Governor Macklem did make clear in his press conference statement that this was “a conditional pause”, and said they were willing to do more if needed to get inflation back to target. However, it’s still an important milestone after a series of 8 hikes at consecutive meetings, particularly given speculation about when the Fed might reach a similar point in their own hiking cycle. Speaking of the Fed, they’re currently in their blackout period, but the Washington Post reported yesterday that Vice Chair Brainard was a top contender to become the next head of the National Economic Council at the White House. If that happened, that would open up a space on the board as well as the Vice Chair position, although as it stands Brainard’s position as both a Governor and Vice Chair currently last until H1 2026. Nevertheless, there is a precedent for such a move from the Fed to the White House, such as when former Chair Bernanke went from being a Fed Governor to Chair of the Council of Economic Advisers in 2005, before going back to the Fed as Chair the following year. Similarly, Janet Yellen made the same move from Fed Governor to CEA Chair in 1997. Staying with the White House, the Biden administration announced that the US would be sending 31 M1 Abrams tanks to Ukraine, adding on to those confirmed by Germany. Delivery of the US tanks could take months but training would begin soon. The German tanks are expected to be sent to Ukraine within three months. Overnight in Asia, equities have posted advances for the most part, with the Hang Seng up +1.89% as it resumed trading following a holiday. That leaves the index on track for its highest closing level since April last year, and brings its gains since the end of October to +53% now. In the meantime, the KOSPI was also up +1.44%, but the Nikkei is down -0.20% this morning amidst a further strengthening in the Japanese Yen, which stands at 129.36 per US Dollar this morning. Looking at yesterday’s other data, the Ifo business climate indicator from Germany rose to a 7-month high of 90.2 in January (vs. 90.3 expected). And the expectations component rose to an 8-month high of 83.2 (vs. 82.0 expected). To the day ahead now, and data releases from the US include the advance estimate of Q4 GDP, preliminary durable goods orders for December, new home sales for December and the weekly initial jobless claims. Otherwise, earnings releases include Visa, Mastercard, Intel, American Airlines and Comcast. Tyler Durden Thu, 01/26/2023 - 08:06.....»»

Category: personnelSource: nytJan 26th, 2023

Escobar: Gold-Backed Currencies To Replace US Dollar In Global South

Escobar: Gold-Backed Currencies To Replace US Dollar In Global South Authored by Pepe Escobar via The Cradle, The adoption of commodity-backed currencies by the Global South could upend the US dollar’s dominance and level the playing field in international trade... Let’s start with three interconnected multipolar-driven facts. First: One of the key take-aways from the World Economic Forum annual shindig in Davos, Switzerland is when Saudi Finance Minister Mohammed al-Jadaan, on a panel on “Saudi Arabia’s Transformation,” made it clear that Riyadh “will consider trading in currencies other than the US dollar.” So is the petroyuan finally at hand? Possibly, but Al-Jadaan wisely opted for careful hedging: “We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries.” Second: The Central Banks of Iran and Russia are studying the adoption of a “stable coin” for foreign trade settlements, replacing the US dollar, the ruble and the rial. The crypto crowd is already up in arms, mulling the pros and cons of a gold-backed central bank digital currency (CBDC) for trade that will be in fact impervious to the weaponized US dollar. A gold-backed digital currency The really attractive issue here is that this gold-backed digital currency would be particularly effective in the Special Economic Zone (SEZ) of Astrakhan, in the Caspian Sea. Astrakhan is the key Russian port participating in the International North South Transportation Corridor (INTSC), with Russia processing cargo travelling across Iran in merchant ships all the way to West Asia, Africa, the Indian Ocean and South Asia. The success of the INSTC – progressively tied to a gold-backed CBDC – will largely hinge on whether scores of Asian, West Asian and African nations refuse to apply US-dictated sanctions on both Russia and Iran. As it stands, exports are mostly energy and agricultural products; Iranian companies are the third largest importer of Russian grain. Next will be turbines, polymers, medical equipment, and car parts. Only the Russia-Iran section of the INSTC represents a $25 billion business. And then there’s the crucial energy angle of INSTC – whose main players are the Russia-Iran-India triad. India’s purchases of Russian crude have increased year-by-year by a whopping factor of 33. India is the world’s third largest importer of oil; in December, it received 1.2 million barrels from Russia, which for several months now is positioned ahead of Iraq and Saudi Arabia as Delhi’s top supplier. ‘A fairer payment system’ Third: South Africa holds this year’s rotating BRICS presidency. And this year will mark the start of BRICS+ expansion, with candidates ranging from Algeria, Iran and Argentina to Turkey, Saudi Arabia and the UAE. South African Foreign Minister Naledi Pandor has just confirmed that the BRICS do want to find a way to bypass the US dollar and thus create “a fairer payment system not skewed toward wealthier countries.” For years now, Yaroslav Lissovolik, head of the analytical department of Russian Sberbank’s corporate and investment business has been a proponent of closer BRICS integration and the adoption of a BRICS reserve currency. Lissovolik reminds us that the first proposal “to create a new reserve currency based on a basket of currencies of BRICS countries was formulated by the Valdai Club back in 2018.” Are you ready for the R5? The original idea revolved around a currency basket similar to the Special Drawing Rights (SDR) model, composed of the national currencies of BRICS members – and then, further on down the road, other currencies of the expanded BRICS+ circle. Lissovolik explains that choosing BRICS national currencies made sense because “these were among the most liquid currencies across emerging markets. The name for the new reserve currency — R5 or R5+ — was based on the first letters of the BRICS currencies all of which begin with the letter R (real, ruble, rupee, renminbi, rand).” So BRICS already have a platform for their in-depth deliberations in 2023. As Lissovolik notes, “in the longer run, the R5 BRICS currency could start to perform the role of settlements/payments as well as the store of value/reserves for the central banks of emerging market economies.” It is virtually certain that the Chinese yuan will be prominent right from the start, taking advantage of its “already advanced reserve status.” Potential candidates that could become part of the R5+ currency basket include the Singapore dollar and the UAE’s dirham. Quite diplomatically, Lissovolik maintains that, “the R5 project can thus become one of the most important contributions of emerging markets to building a more secure international financial system.” The R5, or R5+ project does intersect with what is being designed at the Eurasia Economic Union (EAEU), led by the Macro-Economics Minister of the Eurasia Economic Commission, Sergey Glazyev. A new gold standard In Golden Ruble 3.0 , his most recent paper, Glazyev makes a direct reference to two by now notorious reports by Credit Suisse strategist Zoltan Pozsar, formerly of the IMF, US Department of Treasury, and New York Federal Reserve: War and Commodity Encumbrance (December 27) and War and Currency Statecraft (December 29). Pozsar is a staunch supporter of a Bretton Woods III – an idea that has been getting enormous traction among the Fed-skeptical crowd. What’s quite intriguing is that the American Pozsar now directly quotes Russia’s Glazyev, and vice-versa, implying a fascinating convergence of their ideas. Let’s start with Glazyev’s emphasis on the importance of gold. He notes the current accumulation of multibillion-dollar cash balances on the accounts of Russian exporters in “soft” currencies in the banks of Russia’s main foreign economic partners: EAEU nations, China, India, Iran, Turkey, and the UAE. He then proceeds to explain how gold can be a unique tool to fight western sanctions if prices of oil and gas, food and fertilizers, metals and solid minerals are recalculated: “Fixing the price of oil in gold at the level of 2 barrels per 1g will give a second increase in the price of gold in dollars, calculated Credit Suisse strategist Zoltan Pozsar. This would be an adequate response to the ‘price ceilings’ introduced by the west – a kind of ‘floor,’ a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.” So here we see Glazyev and Pozsar converging. Quite a few major players in New York will be amazed. Glazyev then lays down the road toward Gold Ruble 3.0. The first gold standard was lobbied by the Rothschilds in the 19th century, which “gave them the opportunity to subordinate continental Europe to the British financial system through gold loans.” Golden Ruble 1.0, writes Glazyev, “provided the process of capitalist accumulation.” Golden Ruble 2.0, after Bretton Woods, “ensured a rapid economic recovery after the war.” But then the “reformer Khrushchev canceled the peg of the ruble to gold, carrying out monetary reform in 1961 with the actual devaluation of the ruble by 2.5 times, forming conditions for the subsequent transformation of the country [Russia] into a “raw material appendage of the Western financial system.” What Glazyev proposes now is for Russia to boost gold mining to as much as 3 percent of GDP: the basis for fast growth of the entire commodity sector (30 percent of Russian GDP). With the country becoming a world leader in gold production, it gets “a strong ruble, a strong budget and a strong economy.” All Global South eggs in one basket Meanwhile, at the heart of the EAEU discussions, Glazyev seems to be designing a new currency not only based on gold, but partly based on the oil and natural gas reserves of participating countries. Pozsar seems to consider this potentially inflationary: it could be if it results in some excesses, considering the new currency would be linked to such a large base. Off the record, New York banking sources admit the US dollar would be “wiped out, since it is a valueless fiat currency, should Sergey Glazyev link the new currency to gold. The reason is that the Bretton Woods system no longer has a gold base and has no intrinsic value, like the FTX crypto currency. Sergey’s plan also linking the currency to oil and natural gas seems to be a winner.” So in fact Glazyev may be creating the whole currency structure for what Pozsar called, half in jest, the “G7 of the East”: the current 5 BRICS plus the next 2 which will be the first new members of BRICS+. Both Glazyev and Pozsar know better than anyone that when Bretton Woods was created the US possessed most of Central Bank gold and controlled half the world’s GDP. This was the basis for the US to take over the whole global financial system. Now vast swathes of the non-western world are paying close attention to Glazyev and the drive towards a new non-US dollar currency, complete with a new gold standard which would in time totally replace the US dollar. Pozsar completely understood how Glazyev is pursuing a formula featuring a basket of currencies (as Lissovolik suggested). As much as he understood the groundbreaking drive towards the petroyuan. He describes the industrial ramifications thus: “Since as we have just said Russia, Iran, and Venezuela account for about 40 percent of the world’s proven oil reserves, and each of them are currently selling oil to China for renminbi at a steep discount, we find BASF’s decision to permanently downsize its operations at its main plant in Ludwigshafen and instead shift its chemical operations to China was motivated by the fact that China is securing energy at discounts, not markups like Europe.” The race to replace the dollar One key takeaway is that energy-intensive major industries are going to be moving to China. Beijing has become a big exporter of Russian liquified natural gas (LNG) to Europe, while India has become a big exporter of Russian oil and refined products such as diesel – also to Europe. Both China and India – BRICS members – buy below market price from fellow BRICS member Russia and resell to Europe with a hefty profit. Sanctions? What sanctions? Meanwhile, the race to constitute the new currency basket for a new monetary unit is on. This long-distance dialogue between Glazyev and Pozsar will become even more fascinating, as Glazyev will be trying to find a solution to what Pozsar has stated: tapping of natural resources for the creation of the new currency could be inflationary if money supply is increased too quickly. All that is happening as Ukraine – a huge chasm at a critical junction of the New Silk Road blocking off Europe from Russia/China – slowly but surely disappears into a black void. The Empire may have gobbled up Europe for now, but what really matters geoeconomically, is how the absolute majority of the Global South is deciding to commit to the Russia/China-led block. Economic dominance of BRICS+ may be no more than 7 years away – whatever toxicities may be concocted by that large, dysfunctional nuclear rogue state on the other side of the Atlantic. But first, let’s get that new currency going. Tyler Durden Fri, 01/20/2023 - 23:00.....»»

Category: blogSource: zerohedgeJan 21st, 2023

4 Stocks to Watch From the Promising Construction & Mining Equipment Industry

Easing supply-chain disruptions and solid demand in the end markets will aid the Zacks Manufacturing - Construction and Mining industry. Caterpillar (CAT), Komatsu (KMTUY), Terex (TEX) and H&E Equipment Services (HEES) are worth keeping an eye on, backed by their solid growth prospects. The Zacks Manufacturing - Construction and Mining industry is poised well to gain on solid demand from the mining sector fueled by the energy-transition trend and stepped-up infrastructure investment in the United States. Indications of easing supply-chain issues add to the optimism.Players like Caterpillar Inc. CAT, Komatsu KMTUY, Terex Corporation TEX, and H&E Equipment Services, Inc. HEES are likely to ride on these demand trends. They would benefit from their efforts to bring technologically advanced products to the market. They have also been focusing on improving productivity and efficiency to counter the cost pressures.About the IndustryThe Zacks Manufacturing - Construction and Mining industry comprises companies that manufacture and sell construction, mining and utility equipment. They support customers using machinery in the construction of commercial, institutional and residential buildings, and infrastructure projects. Their equipment is also utilized in underground mining, drilling and mineral processing, and surface mining to extract and haul copper, iron ore, coal, oil sands, aggregates, gold, and other minerals and ores. Their products are varied, including loaders, pavers, dozers, excavators, concrete mixer trucks, crushing, pulverizing & screening equipment, tractors and cranes. The industry participants support oil and gas, power generation, marine, rail, and industrial applications through their reciprocating engines, generator sets, gas turbines and turbine-related services.4 Trends Shaping the Future of Manufacturing - Construction and Mining IndustryEasing Supply-Chain Disruptions: Per the Federal Reserve, industrial production decreased 0.2% in November 2022. Manufacturing output dipped 0.6% but remained 1.2% above last year. Overall, industrial production gained 2.5% over the 12-month period ended November 2022. In December, the Institute for Supply Management’s (ISM)  manufacturing index touched 48.9%, contracting for the second month in a row. The average for the past 12 months (ended December 2022), however, stood at 53.5. Amid the ongoing uncertainty in the global economy and persisting inflationary trends, customers have been curbing spending. The manufacturing sector has also been bearing the brunt of the supply-chain issues. On a positive note, some of the industry players recently noted that supply-chain situation is improving. The delivery performance of suppliers to manufacturing organizations was reported to be faster for the third straight month in December. Once the situation normalizes, strong demand in the end markets would drive the industry’s growth.Demand Strength in Mining & Construction: The intensifying global focus on shifting from fossil fuels to zero emissions will require a large number of commodities, which in turn, will support demand for mining equipment in the years to come. The U.S. government's plans to increase investment in infrastructure construction — particularly in critical subsectors, such as transportation, water and sewerage, and telecommunications — shoukd support demand in the coming years.Higher Pricing, Costs Cuts to Boost Margins: The industry is currently facing input cost inflation, transport and logistic costs. The industry players are focusing on pricing actions and efforts to improve productivity and efficiency. They are constantly implementing cost-reduction actions, which are likely to help sustain margins in this scenario. The companies are focused on streamlining their operations and realigning around high-growth key markets or customer segments to enhance their performances.Investment in Digital Initiatives a Key Catalyst: The industry participants are investing in digital initiatives like AI, cloud computing, advanced analytics and robotics. Digital transformation aids organizations in boosting productivity and increasing efficiency, reliability and safety, thereby enriching customer satisfaction. With the pressing need to cut carbon emissions, companies worldwide are relying more on autonomous machinery. Thus, the players in the Manufacturing - Construction and Mining industry are stepping up their research and technological capabilities to bring products into the market equipped with the latest technology.Zacks Industry Rank Indicates Upbeat ProspectsThe group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Manufacturing - Construction and Mining industry, a seven-stock group within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #34, which places it at the top 14% of 251 Zacks industries.Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. In the past six months, the industry’s earnings estimates for the current year have been revised upward by 9%.Before we present a few stocks that you may want to consider for your portfolio, let’s look at the industry’s recent stock-market performance and the valuation picture. Industry Versus Broader MarketThe Manufacturing - Construction and Mining industry has outperformed its sector and the Zacks S&P 500 composite over the past year. Over this period, the industry has gained 15% compared with the sector’s decrease of 3.8%. The Zacks S&P 500 composite has fallen 13.2% in the same time frame.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing Manufacturing - Construction and Mining companies, we see that the industry is currently trading at 10.98 compared with the S&P 500’s 10.26 and the Industrial Products sector’s trailing 12-month EV/EBITDA of 15.34. This is shown in the charts below.Enterprise Value/EBITDA (EV/EBITDA) F12M RatioEnterprise Value/EBITDA (EV/EBITDA) F12M RatioOver the last five years, the industry has traded as high as 14.83 and as low as 7.04, with the median being at 10.19. 5 Manufacturing - Construction & Mining Stocks to WatchKomatsu: The company has been witnessing strong demand for construction, mining and utility equipment over the past few quarters. This has been instrumental in the 30% climb in its share price over the past three months. It is anticipated to gain from robust demand for its equipment. In North America, demand should remain steady in residential and non-residential as well as road and traffic infrastructure. For industrial machinery, sales are likely to be supported by strong sales of the Excimer laser-related business for the semiconductor manufacturing industry. Its efforts to provide zero-emissions solutions for its global customers will likely be a growth driver. KMTUY will also benefit from its cost-reduction efforts.Headquartered in Tokyo, Japan, Komatsu manufactures and sells construction, mining, and utility equipment; and forest and industrial machinery worldwide. The Zacks Consensus Estimate for the company’s current-year earnings has been revised upward by 1% over the past 60 days. The consensus estimate indicates 9.4% year-over-year growth. The company has a trailing four-quarter earnings surprise of 30%, on average. KMTUY has an estimated long-term earnings growth rate of 7%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Price & Consensus: KMTUYCaterpillar: CAT’s revenues and earnings have been growing year over year for seven straight quarters, thanks to its cost-saving actions, strong end-market demand and pricing actions. Its backlog was a solid $30 billion at the end of the third quarter of 2022, which will support its top line in the upcoming quarters. CAT is anticipated to gain from strength in residential construction and non-residential construction in the United States, and robust demand for mining equipment. It continues to invest in enhancing its digital capabilities, connecting assets and job sites, and developing the next generation of more productive and efficient products. The company recently announced that it is investing in Lithos Energy, Inc., which produces lithium-ion battery packs. This is in sync with its commitment to support customers in their energy transition journey with lower-carbon advanced power technologies. The stock has gained 39% in the past three months aided by these tailwinds.Known for its iconic yellow machines, Caterpillar is the largest global construction and mining equipment manufacturer. The Zacks Consensus Estimate for CAT’s 2023 earnings indicates year-over-year growth of 10%. The estimate has moved up 2% over the past 60 days. CAT has a trailing four-quarter earnings surprise of 14.7%, on average. CAT has an estimated long-term earnings growth rate of 12%. The stock currently carries a Zacks Rank #3 (Hold).Price & Consensus: CAT H&E Equipment Services: The company recently signed an agreement to sell its Komatsu earthmoving distribution business, which combined with the sale of its crane business completed in 2021, makes it a pure-play rental business. HEES can focus on growing in the high-margin equipment rental business. Backed by these developments, shares of HEES have gained 57% over the past three months. Its acquisition strategy, which focuses on identifying and acquiring rental companies to complement its existing business, broaden its geographic footprint and increase density in the existing markets, bodes well. At the end of the third quarter of 2022, the company had recorded fleet original equipment cost at $2.1 billion. Efforts to grow its Parts and Services operations will yield results, as it is a relatively stable high-margin revenue source. It also aids in developing customer relationships, attracting customers and maintaining a high-quality rental fleet. The company also continues to fervently expand its branch network.Baton Rouge, LA-based H&E Equipment Services is one of the largest integrated equipment services companies in the United States. The Zacks Consensus Estimate for this year’s earnings indicates year-over-year growth of 17.6%. The consensus mark has moved up 2.7% over the past 60 days. HEES has a trailing four-quarter earnings surprise of 41.7%, on average. H&E Equipment Services has an estimated long-term earnings growth rate of 31.5%. The stock currently carries a Zacks Rank of 3.Price & Consensus: HEESTerex: The company’s backlog has been on an uptrend over the past eight quarters and was at $3.9 billion at the end of the third quarter of 2022. Compared to last year’s levels, backlog improved 33% aided by improvement in both segments. This, along with solid demand, pricing and cost-saving actions, positions the company well for improved results. TEX is progressing well on its “Execute, Innovate, Grow" strategy that should drive growth. In sync with this, it is investing in innovative products, digital innovation, expansion of manufacturing facilities and acquisitions. Terex is focused on aligning production and cost structure across its segments in response to the customer demand environment while also aggressively managing cost and working capital. Shares of TEX have gained 41% over the past three months.Norwalk, CT-based Terex manufactures and sells aerial work platforms and materials processing machinery worldwide. The Zacks Consensus Estimate for 2023 earnings indicates year-over-year growth of 15.5%. The estimate has moved north 3.7% over the past 90 days. TEX has a trailing four-quarter earnings surprise of 35.7%, on average, and an estimated long-term earnings growth rate of 18.4%. The stock carries a Zacks Rank #3 at present.Price & Consensus: TEX  5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Caterpillar Inc. (CAT): Free Stock Analysis Report Terex Corporation (TEX): Free Stock Analysis Report Komatsu Ltd. (KMTUY): Free Stock Analysis Report H&E Equipment Services, Inc. (HEES): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 18th, 2023

Luongo On 2023: Biden Impeached, Riyal De-Pegged, & Fed Terminal Rate Closer To 7%

Luongo On 2023: Biden Impeached, Riyal De-Pegged, & Fed Terminal Rate Closer To 7% Authored by Tom Luongo via Gold, Goats, 'n Guns blog, Consider this, Consider this the hint of the century Consider this, the slip, that dropped me to my knees, failed. What if all these fantasies come flailing around? And now, I’ve said…. too much - R.E.M. – Losing My Religion I probably should have codified these before the turn of the new year but I didn’t even think of doing one of these lists until someone mentioned it on Twitter a few days ago. So, here it goes.   My predictions for 2023 and all center around the big theme of 2023, the loss of confidence in the world we’ve always known. In other words 2023 will embody the phrase we use down here in the South, “Losing my Religion.” 1)  Inflation will return with a vengeance.  What we’ve experienced so far came from the big commodity pump-and-dump post-COVID.  Commodities went through a massive run as more money chased broken supply chains in 2020-21. Then in 2022 the inevitable bust happened, but left us with commodity prices across the board at levels which used to be resistance on the long-term price charts which has now become support. The next round of commodity-based cost-push inflation will mix dangerously with the growing realization that we can’t avoid things breaking.  There will be no ‘soft landing.’ The hard landing may not happen in 2023, but the set up for it will certainly take place.  Cost-push will mix with Loss of Institutional Confidence to light the fire of real inflation versus tangible assets in a way we haven’t seen since the late-1970’s.  We should see a return to increasing YoY CPI levels beginning in Q2 after the baseline effects are past and China’s reopening keeps a bid under commodities. January will not set the tone for commodities in 2023, but more likely be a ‘false move’ overcorrecting against the primary trend, which is clearly higher. 2) The Fed’s terminal rate is closer to 7% than the ~5% the markets are handicapping. The Fed hiked by 50 bps in Dec.  The markets are signaling 25 bps on Feb. 1st.  I think it will be another 50.  In fact, my base case now is four 50 bp hikes followed by four 25’s by December for a terminal rate of 7% by this time next year.   Even I was surprised by the violence of Powell’s hawkishness in 2022.  He did what I wanted him to do, be aggressive and attack the source of Davos’ power, the leveraged offshore dollar markets.  He forced out into the open the unsustainability of a weaker dollar based on the clown show on Capitol Hill being worse than the real collapsing governments across Europe. Powell’s plan has worked so far, forcing everyone to climb the wall of worry that The Fed Put is dead. That so many refuse to accept this is why markets this January, like last January, are completely mispriced. Until this is accepted, Powell will use every excuse to keep raising rates as fast as he can to ‘finish the job.’ Today’s job’s number and unemployment rate support this. Revised Q3 2022 GDP at +2.6% is another. The market keeps wanting to believe in a 5.25% to 5.50% terminal rate for this move. But if I’m right about #1 and structural inflation returns in Q2, the Fed will not slow down until we reach near parity with, of all people, the Bank of Russia. Rising inflation makes this prediction a slam dunk 3) The Euro will collapse to $0.80 or lower The ECB is trapped.  It can’t accept higher rates but it can’t afford for the euro to collapse either.  A falling euro means energy input costs skyrocket in real terms.  While a zombie banking system and Sovereigns in debt to someone else’s eyeballs (e.g. $1.1+ trillion in TARGET2 liabilities) see budgets blow out with higher debt servicing costs. ECB Chair Christine Lagarde bought herself some time in 2022 with the TPI — Transmission Protection Instrument — and some big moves to subvert the UK government, putting Brexit on the ropes.  She’s behind the inflation curve worse than Powell is.  But she can’t attract capital today without big rate moves, Powell’s beat her to that punch. Ultimately, Lagarde will protect credit spreads while letting the euro go. The EU still believes it can bolt on more problems like the UK and now Croatia (#20 in the euro-zone) to stave off the collapse of the euro by expanding its reach. We ended 2022 with the euro ‘painting the tape’ at $1.07. It’s already given us a preview of the volatility we should expect in this first week of trading. The Eurocrats in Brussels still believe in the EU’s inevitability, not because it is true, because they have to. The EU is a religion to the political class of Europe and its Davos paymasters.  They, like real communists, see this period as the end-state of capitalism and that the dialectic is true.  History was written, as it were. They are wrong.  And the beginning of the end of the European Union starts in 2023 with another 20% to 25% collapse of the euro. 4) The War in Ukraine Will Continue Dangerously The West is suffering under many illusions about what’s going on in Russia and, by extension, its war in Ukraine.  The UK/US neocons believe, like the EU, that history is already written about Russia’s future –balkanization and collapse. All pressure that the West places on Russia only exacerbates their demographic time bomb.  China’s as well.  And in that sense this is the race they are running.  Can they grind up enough Russians to ensure that even if Russia wins the war in Ukraine the West wins because the long-sought breakup of the USSR/Tsarist Empire will be achieved. For this reason neither the UK/US Neocons nor Davos believe having a reverse gear vis a vis Russia is the right play.  This is their strategic vision, regardless of the costs to the West itself. For Russia there is no other play for them but to continue increasing the costs on the West.  The longer the war goes on the deeper divisions within the EU get.  Those divisions then drive even more animosity within the Eurocracy towards the Brits and the Yanks, who some feel are taking advantage of the situation. When as ardent an Eurocrat as Guy Ver Hofstadt is now frothing at the mouth about the costs of sanctions, you know the Mafiosi in Brussels are getting nervous. They are beginning to crack under the strain of this war of financial and political attrition Russia is so good at playing against its European partners. Even though I’ve argued strenuously that the EU leadership walked into Ukraine with its eyes open, the 2nd tier of the Eurocracy did not.  And those are the ones having cold feet now and who the Russians are hoping will drive a pivot from Davos off Ukraine.   At the same time, expect Putin to keep opening up new fronts for the US/UK to deal with, see my next point. The UK/US Neocons’ only play, then, on the battlefield then is further escalation to the brink of a nuclear exchange, which these insane people think they can win. The other option is assassinating Putin in the hopes that Russia goes mad, nukes someone and that justifies the unthinkable. Either way we’re inching way too close to midnight for my tastes. 5) The US Will Leave Syria in 2023 The recent meeting between Russian, Syrian and Turkish Defense Ministers paves the way for a similar upcoming meeting between the three countries’ Foreign Ministers.   Once that happens, Syrian President Assad and Turkish President Erdogan will presumably sit down with Russian President Putin and end Turkiye’s involvement in Syria.  This will hang their pet jihadists in Idlib out to dry and leave the US forces there heavily exposed.  We’re already seeing them come under rocket fire though you’d never hear about this in the Western press.  I went over this in grave detail in a recent post. By making the deals with Erdogan over becoming the new “Gas Hub” into Europe, Putin has effectively done to the US and UK what they always try to do to Russia, open up another front to distract it from the main problem, i.e. Ukraine. Now Syria becomes the 2nd battleground for the US to decide if it will defend or will it suffer another ignominious retreat like Afghanistan?   6) De-Dollarization Will Accelerate / USDX Will Rise. Along with the collapse of the euro, the US dollar will lose more ground in the global payment system for international commodities and trade.   These two dynamics will create a very weird moment where the USDX — the US Dollar Index — will rise but the US dollar will be under sincere pressure vs. gold, commodities, and other rising emerging/developed market currencies. The USDX is heavily weighted towards the euro and the British pound but the Chinese yuan is not represented at all.  So, from one perspective the US dollar could be in a bull market but from another be in a bear market. The one thing holding gold back has been its lack of bull market versus the dollar. It’s not a ‘secular’ bull market in gold until it’s rising versus all currencies. Even if the USDX does nothing but hold its ground in 2023 versus the rest of its fiat competition, a rally in gold will still be fed by people the world over ‘losing their religion’ with respect to the dollar. That said, that fall in faith will likely not outpace the fall in faith of the “Fed Put.” I expect the ‘religion’ of the Fed Put is still stronger than the dollar itself which should put upward pressure on the US dollar overall. Because, let’s not forget that overseas US dollar synthetic short positions, known as US dollar-denominated debt, are still pretty biblical in size, keeping a strong bid under the dollar globally even as its position as a reserve and trade settlement currency erodes. Because of all of these competing forces — inflation, de-dollarization, war, etc. — the last US dollar bull market for the foreseeable future should be on tap in 2023.  For how long? It’s a good question, I can’t answer.   But I do know that it’s tied to #7 and to the Fed’s need to keep raising rates… 7) Saudi Arabia will de-peg the Riyal  In fact, I also expect the Hong Kong Dollar peg to fall, but maybe not in 2023.  It depends on the strength and rate of internationalization of the Chinese yuan this year. Oil prices are going higher once China’s economy is past the Omicron 2.0 wave crashing over it right now. The Saudis have been tendered the offer by China’s Xi to begin weaning itself off the US dollar.  Crown Prince Mohammed bin Salman seems agreeable to this.   When (not if) the Saudis put their first oil tender up for bid in Shanghai, that will signal the end of the currency peg that created the petrodollar.  It will be a subtle thing that will gain steam over time, just like Russia and China diversifying their holdings into each other’s debt and currencies has taken years to develop. So, the petrodollar will continue to die by a thousand cuts.  The Saudis will lead OPEC+ out of the US dollar arena, validating both China’s onshore futures markets while also moving a significant amount of the gold trade away from London to Hong Kong. By hedging their oil profits in gold on China’s international exchange they strengthen both the onshore (CNY) and offshore (CNH) yuan markets and laying the foundation for a much different financial future, including one where the Hong Kong dollar either floats or re-pegs itself to the yuan, likely the former. 8) Oil will Open 2023 Near the Yearly Low The fundamentals for oil are truly bullish.  China ending Zero-COVID just after the EU put its idiotic price cap on seaborne Russian oil was a strategic move to subvert “Biden’s” wish to refill the now nearly depleted US Strategic Petroleum Reserve at or below $70 per barrel.   He may get that from domestic producers for a while.  But Brent ended 2022 at $86 and a little downside momentum may be in place with early US dollar strength, but then fundamentals easily overcome this. “Biden” will not refill the SPR at $70 per barrel now that China just blew up the entire “deflation through higher rates” narrative.  The US economy has held up better to the Fed than expected.  Even Q3 GDP wasn’t uniquely terrible. The jobs report and low unemployment rate, while possibly artifacts of a changing labor market, still give us signals that the US economy isn’t as bad as many want it to be at 4.5% Fed Funds Rate to validate their place in the commentariat. Europe is getting a small reprieve with the extremely mild winter so far, pushing energy prices down, especially natural gas, for now. The global recession talk is vastly overblown until something fundamentally breaks. Anyone looking at the end of the year book squaring in things like the Reverse Repo balance (+$300b in one week) is overthinking the problem. The banks are allowed to tailor their reserves to present whatever quarterly numbers they want. It’s been going on since the Bernanke Era. As such, I see a kind of perfect storm for oil here.  Russia will pull production off the market and shift exports from St. Petersburg (Urals grade) to Kosmino, near Vladivostok (ESPO grade), nabbing higher prices in the long run. Arab OPEC can’t hit its production quotas as it is and China’s reopening its entire economy. The Davos demanded ESG investment protocols have the oil industry anywhere from $600b to $1trillion underinvested in exploration and production and that number is rising. Increased demand, tight supply, low replenishment investment and WAR.  Even a moron or Joe Biden can see that $70 per barrel Brent is out of the question for any significant period of time. 9) Dow Jones 40,000+ As we enter 2023 the Dow Jones Industrials sit right around 33,000.  It was a tumultuous 2022. After hitting a new all-time high a year ago at 36952.53 it was all downhill for most equity indices. The stronger USD fueled a lot of capital reorganization, interest rates were finally forced higher by the Fed and incessant talk of recession kept everyone selling first and asking questions later. But in this ‘pivot-obsessed,’ low pain environment, relief rally after relief rally was snuffed out until finally in Q4 the Dow made everyone stand up and take a little notice as to what was happening… flight to quality into tangible assets with deep liquidity pools. The Dow lost 8.7% in 2022.  The S&P 500?  15.8%.  The NASDAQ?  27.7% For all of the bitching gold bugs did in 2022, gold was up 1.6%  If we begin to move into the next stage of stagflation (#1) then the Dow will continue to outperform the broader US equity markets as well as major foreign equity markets. 2022 Foreign Performance: German DAX in 2022: -9.2% Euro Stoxxx 50: -7.2% FTSE 100: 1.2% Are those indexes sustainable given the economic outlook for Europe and the ECB following the Fed up the rate curve lest everyone ‘lose their religion’ in it? Or will the still weakly expanding US economy look more tasty to global investors and the hopeless Brits look insanely overvalued? If we have another year like we did in 2022 where high inflation outpacing nominal growth drives tangible asset investment we should see an outperformance from the US vs. Europe as the currencies collapse and the ECB’s tools prove inadequate. Emerging Markets, depending on their proximity to China and the US may have banner years, especially those that underperformed in 2022. 10) Biden is Impeached This looks like the long-shot of 2023, but I think we are very close to the moment where Sen. Joe Manchin (D-WV) goes one step further than Kyrsten Sinema (I-AZ) and not only leaves the Democrats but flips to the GOP, giving them the outright majority in the Senate (50-49-1) Even though Kevin McCarthy didn’t lose his bid for re-election as House Speaker, which has turned CSPAN into must-see TV these past few days, the fight itself is indicative of serious change coming to Capitol Hill. This is the essence of the ‘counter-revolution’ in the US I wrote about a few weeks ago. The soft underbelly for Biden at this point is FTX and divulsions of the US Gov’t’s censorship activities on Twitter.  All of these things, along with corruption in Ukraine, can easily be tied back to Biden.   The majority of people are so black-pilled at this point that they believe nothing will ever change on Capitol Hill.  But the first rule of good investing is remembering that the majority is almost always wrong. And it is the sudden realization of their real power by a critical mass of people that alter the landscape literally overnight. So, while it looks like Matt Gaetz (R-FL) and Lauren Boebert (R-CO) tilted at windmills against a terminally corrupt Uniparty, they are simply fanning the smoldering embers of long-thought-dead principles on Capitol Hill. This was the subject of my latest podcast with Bill Fawell, the state of the revolution in the US. {N.B. Bill and I discussed his Cycle of Revolutions in Episode #110 last summer} And when you read the rules deal that McCarthy signed to get elected, this is a recipe for the weakest Speaker from a Uniparty perspective we’ve had in decades. It’s a win. A small win but a win nonetheless. Since the mid-terms, this transition period has exposed yet even more malfeasance by GOP leadership and the natives are more than restless.  They are angry.  There is no appetite for what the GOPe is selling (out) anymore.   The façade of the two-party system is over.  The 2024 election cycle begins in a few months and the mood of the country will tell you which of those up for re-election that will happily cross party lines to save their skins. It still leaves open the idea of Donald Trump swooping in after McCarthy tries to betray this deal. Matt Gaetz told you the plan when he nominated Trump from the floor. Embedded in the deal crafted are sincere nods to exactly the kind of signals to fiscal conservatism – halting the budget at FY 2022 levels, balanced budget in 10 years, 3/5ths vote on tax increases, etc. — that I’ve argued is needed to back up Powell and the Fed’s monetary tightening. Congress has a bigger wall of worry to climb to regain its credibility than the Fed does, but this is a good first step. It’s the step the world wants as well. Whether it will hold together or not is absolutely up for grabs. But more weakening of the Uniparty in the coming weeks sets the stage for getting rid of Biden and the rest of the vandals on Capitol Hill. There are a ton of ‘manilla envelopes’ being passed out right now. There is a lot of arm-twisting and overt threats happening. The Davos Mafiosi on The Hill will call in every marker.  We will see a lot of surprising behavior from unlikely sources in 2023.  The energy is there for something big and the incentives are lining up. Sacrificing “Biden” on this altar may be a small price to pay. In closing I want you to remember that few of America’s “enemies” want the US to collapse in a disorderly manner, not even China.   Davos is the only one with that agenda in mind because it fuels their megalomania. The strident anti-US commentariat is a curious mix at this point of shills for foreign powers, egoists who can’t bare to be wrong, and anti-capitalist ideologues talking their book.  The thoughtful are few and far between and I fear they’ve been gaslit into making huge analytic errors about what’s really going on. But when you think through what’s happening right now, everyone wants a rational, less arrogant US to settle down, accept a smaller piece of the future pie, and get back to business.  Our criticisms leveled at both Europe and the US is their colonial behavior and their imperial attitude.   So many will ‘lose their religions’ in 2023 that the changes which come will blindside people, including me.  Honestly, looking at this list, I think many of these predictions err on the side of caution. That’s the core issue driving all of these trends and my predictions stem from it. *  *  * Join my Patreon if you are the change you want to believe in. Tyler Durden Sun, 01/08/2023 - 11:30.....»»

Category: blogSource: zerohedgeJan 8th, 2023

An Age Of Decay

An Age Of Decay Authored by Chris Buskirk via AmGreatness.com, This essay is adapted from "America and the Art of the Possible: Restoring National Vitality in an Age of Decay," by Chris Buskirk (Encounter, 192 pages, $28.99) The fact that American living standards have broadly stagnated, and for some segments of the population have declined, should be cause for real concern to the ruling class... America ran out of frontier when we hit the Pacific Ocean. And that changed things. Alaska and Hawaii were too far away to figure in most people’s aspirations, so for decades, it was the West Coast states and especially California that represented dreams and possibilities in the national imagination. The American dream reached its apotheosis in California. After World War II, the state became our collective tomorrow. But today, it looks more like a future that the rest of the country should avoid—a place where a few coastal enclaves have grown fabulously wealthy while everyone else falls further and further behind. After World War II, California led the way on every front. The population was growing quickly as people moved to the state in search of opportunity and young families had children. The economy was vibrant and diverse. Southern California benefited from the presence of defense contractors. San Diego was a Navy town, and demobilized GIs returning from the Pacific Front decided to stay and put down roots. Between 1950 and 1960, the population of the Los Angeles metropolitan area swelled from 4,046,000 to 6,530,000. The Jet Propulsion Laboratory was inaugurated in the 1930s by researchers at the California Institute of Technology. One of the founders, Jack Parsons, became a prominent member of an occult sect in the late 1940s based in Pasadena that practiced “Thelemic Magick” in ceremonies called the “Babalon Working.” L. Ron Hubbard, the founder of Scientology (1950), was an associate of Parsons and rented rooms in his home. The counterculture, or rather, countercultures, had deep roots in the state. Youth culture was born in California, arising out of a combination of rapid growth, the Baby Boom, the general absence of extended families, plentiful sunshine, the car culture, and the space afforded by newly built suburbs where teenagers could be relatively free from adult supervision. Tom Wolfe memorably described this era in his 1963 essay “The Kandy-Colored Tangerine Flake Streamline, Baby.” The student protest movement began in California too. In 1960, hundreds of protesters, many from the University of California at Berkeley, sought to disrupt a hearing of the House Un-American Activities Committee at the San Francisco City Hall. The police turned fire hoses on the crowd and arrested over thirty students. The Baby Boomers may have inherited the protest movement, but they didn’t create it. Its founders were part of the Silent Generation. Clark Kerr, the president of the UC system who earned a reputation for giving student protesters what they wanted, was from the Greatest Generation. Something in California, and in America, had already changed. California was a sea of ferment during the 1960s—a turbulent brew of contrasting trends, as Tom O’Neill described it:  The state was the epicenter of the summer of love, but it had also seen the ascent of Reagan and Nixon. It had seen the Watts riots, the birth of the antiwar movement, and the Altamont concert disaster, the Free Speech movement and the Hells Angels. Here, defense contractors, Cold Warriors, and nascent tech companies lived just down the road from hippie communes, love-ins, and surf shops. Hollywood was the entertainment capital of the world, producing a vision of peace and prosperity that it sold to interior America—and to the world as the beau ideal of the American experiment. It was a prosperous life centered around the nuclear family living in a single-family home in the burgeoning suburbs. Doris Day became America’s sweetheart through a series of romantic comedies, but the turbulence in her own life foreshadowed America’s turn from vitality to decay. She was married three times, and her first husband either embezzled or mismanaged her substantial fortune. Her son, Terry Melcher, was closely associated with Charles Manson and the Family, along with Dennis Wilson of the Beach Boys—avatars of the California lifestyle that epitomized the American dream.  The Manson Family spent the summer of 1968 living and partying with Wilson in his Malibu mansion. The Cielo Drive home in the Hollywood Hills where Sharon Tate and four others were murdered in August 1969 had been Melcher’s home and the site of parties that Manson attended. The connections between Doris Day’s son, the Beach Boys, and the Manson Family have a darkly prophetic valence in retrospect. They were young, good-looking, and carefree. But behind the clean-cut image of wholesome American youth was a desperate decadence fueled by titanic drug abuse, sexual outrages that were absurd even by the standards of Hollywood in the 60s, and self-destructiveness clothed in the language of pseudo-spirituality. The California culture of the 1960s now looks like a fin-de-siècle blow-off top. The promise, fulfillment, and destruction of the American dream appears distilled in the Golden State, like an epic tragedy played out against a sunny landscape where the frontier ended. Around 1970, America entered into an age of decay, and California was in the vanguard.   H. Abernathy/ClassicStock/Getty Images Up, Up, and Away The expectation of constant progress is deeply ingrained in our understanding of the world, and of America in particular. Some metrics do generally keep rising: gross domestic product mostly goes up, and so does the stock market. According to those barometers, things must be headed mostly in the right direction. Sure there are temporary setbacks—the economy has recessions, the stock market has corrections—but the long-term trajectory is upward. Are those metrics telling us that the country is growing more prosperous? Are they signals, or noise? There is much that GDP and the stock market don’t tell us about, such as public and private debt levels, wage trends, and wealth concentration. In fact, during a half-century in which reported GDP grew consistently and the stock market reached the stratosphere, real wages have crept up very slowly, and living standards have flatlined or even declined for the middle and working classes. Many Americans have a feeling that things aren’t going in the right direction or that the country has lost its societal health and vigor, but aren’t sure how to describe or measure the problem. We need broader metrics of national prosperity and vitality, including measures of noneconomic values like family stability or social trust. There are many different criteria for national vitality. First, is the country guarded against foreign aggression and at peace with itself? Are people secure in their homes, free from government harassment, and safe from violent crime? Is prosperity broadly shared? Can the average person get a good job, buy a house, and support a family without doing anything extraordinary? Are families growing? Are people generally healthy, and is life span increasing or at least not decreasing? Is social trust high? Do people have a sense of unity in a common destiny and purpose? Is there a high capacity for collective action? Are people happy? We can sort quantifiable metrics of vitality into three main categories: social, economic, and political. There is a spiritual element too, which for my purposes falls under the social category. The social factors that can readily be measured include things like age at first marriage (an indicator of optimism about the future), median adult stature (is it rising or declining?), life expectancy, and prevalence of disease. Economic measures include real wage trends, wealth concentration, and social mobility. Political metrics relate to polarization and acts of political violence.  Many of these tend to move together over long periods of time. It’s easy to look at an individual metric and miss the forest for the trees, not seeing how it’s one manifestation of a larger problem in a dynamic system. Solutions proposed to deal with one concern may cause unexpected new problems in another part of the system. It’s a society-wide game of whack-a-mole. What’s needed is a more comprehensive understanding of structural trends and what lies behind them. From the founding period in America until about 1830, those factors were generally improving. Life expectancy and median height were increasing, both indicating a society that was mostly at peace and had plentiful food. Real wages roughly tripled during this period as labor supply growth was slow. There was some political violence. But for decades after independence, the country was largely at peace and citizens were secure in their homes. There was an overarching sense of shared purpose in building a new nation.  Those indicators of vitality are no longer trending upward. Let’s start with life expectancy. There is a general impression that up until the last century, people died very young. There’s an element of truth to this: we are now less susceptible to death from infectious disease, especially in early childhood, than were our ancestors before the 20th century. Childhood mortality rates were appalling in the past, but burying a young child is now a rare tragedy. This is a very real form of progress, resulting from more reliable food supplies as a result of improvements in agriculture, better sanitation in cities, and medical advances, particularly the antibiotics and certain vaccines introduced in the first half of the 20th century. A period of rapid progress was then followed by a long period of slow, expensive improvement at the margins. When you factor out childhood mortality, life spans have not grown by much in the past century or two. A study in the Journal of the Royal Society of Medicine says that in mid-Victorian England, life expectancy at age five was 75 for men and 73 for women. In 2016, according to the Social Security Administration, the American male life expectancy at age five was 71.53 (which means living to age 76.53). Once you’ve made it to five years, your life expectancy is not much different from your great-grandfather’s. Moreover, Pliny tells us that Cicero’s wife, Terentia, lived to 103. Eleanor of Aquitaine, queen of both France and England at different times in the 12th century, died a week shy of her 82nd birthday. A study of 298 famous men born before 100 B.C. who were not murdered, killed in battle, or died by suicide found that their average age at death was 71. More striking is that people who live completely outside of modern civilization without Western medicine today have life expectancies roughly comparable to our own. Daniel Lieberman, a biological anthropologist at Harvard, notes that “foragers who survive the precarious first few years of infancy are most likely to live to be 68 to 78 years old.”  In some ways, they are healthier in old age than the average American, with lower incidences of inflammatory diseases like diabetes and atherosclerosis. It should be no surprise that an active life spent outside in the sun, eating wild game and foraged plants, produces good health. Recent research shows that not only are we not living longer, we are less healthy and less mobile during the last decades of our lives than our great-grandfathers were. This points to a decline in overall health. We have new drugs to treat Type I diabetes, but there is more Type I diabetes than in the past. We have new treatments for cancer, but there is more cancer. Something has gone very wrong. What’s more, between 2014 and 2017, median American life expectancy declined every year. In 2017 it was 78.6 years, then it decreased again between 2018 and 2020 to 76.87. The figure for 2020 includes COVID deaths, of course, but the trend was already heading downward for several years, mostly from deaths of despair: diseases associated with chronic alcoholism, drug overdoses, and suicide. The reasons for the increase in deaths of despair are complex, but a major contributing factor is economic: people without good prospects over an extended period of time are more prone to self-destructive behavior. This decline is in contrast to the experience of peer countries. In addition to life expectancy, other upward trends have stalled or reversed in the past few decades. Family formation has slowed. The total fertility rate has dropped to well below replacement level. Real wages have stagnated. Debt levels have soared. Social mobility has stalled and income inequality has grown. Material conditions for most people have improved little except in narrow parts of life such as entertainment. Spencer Platt/Getty Images Trends, Aggregate, and Individuals  The last several decades have been a story of losing ground for much of middle America, away from a handful of wealthy cities on the coasts. The optimistic story that’s been told is that both income and wealth have been rising. That’s true in the aggregate, but when those numbers are broken down the picture is one of a rising gap between a small group of winners and a larger group of losers. Real wages have remained essentially flat over the past 50 years, and the growth in national wealth has been heavily concentrated at the top. The chart below represents the share of national income that went to the top 10 percent of earners in the United States. In 1970 it was 33.3 percent; in 2019 the figure was 45.4 percent. Disparities in wealth have become more closely tied to educational attainment. Between 1989 and 2019, household wealth grew the most for those with the highest level of education. For households with a graduate degree, the increase was 31 percent; with a college degree, it was 17 percent; with a high school degree, about 4 percent. Meanwhile, household wealth declined by a precipitous 60 percent for high school dropouts, including those with a GED. In 1989, households with a college degree had 2.74 times the wealth of those with only a high school diploma; in 2012 it was 3.08 times as much. In 1989, households with a graduate degree had 4.85 times the wealth of the high school group; in 2019, it was 6.12 times as much. The gap between the graduate degree group and the college group increased by 12 percent. The high school group’s wealth grew about 4 percent from 1989 to 2019, the college group’s wealth grew about 17 percent, and the wealth of the graduate degree group increased 31 percent. The gaps between the groups are growing in real dollars. It’s true that people have some control over the level of education they attain, but college has become costlier, and it’s fundamentally unnecessary for many jobs, so the growing wealth disparity by education is a worrying trend. Wealth is relative: if your wealth grew by 4 percent while that of another group increased by 17 percent, then you are poorer. What’s more crucial, however, is purchasing power. If the costs of middle-class staples like healthcare, housing, and college tuition are climbing sharply while wages stagnate, then living standards will decline. More problematic than growing wealth disparity in itself is diminishing economic mobility. A big part of the American story from the beginning has been that children tend to end up better off than their parents were. By most measures, that hasn’t been true for decades. The chart below compares the birth cohorts of 1940 and 1980 in terms of earning more than parents did. The horizontal axis indicates the relative income level of the parents. Among the older generation, over 90 percent earned more than their parents, except for those whose parents were at the very high end of the income scale. Among the younger generation, the percentages were much lower, and also more variable. For those whose parents had a median income, only about 40 percent would do better. In this analysis, low growth and high inequality both suppress mobility. Over time, declining economic mobility becomes an intergenerational problem, as younger people fall behind the preceding generation in wealth accumulation. The graph below illustrates the proportion of the national wealth held by successive generations at the same stage of life, with the horizontal axis indicating the median age for the group. Baby Boomers (birth years 1946–1964) owned a much larger percentage of the national wealth than the two succeeding generations at every point. At a median age of 45, for example, the Boomers owned approximately 40 percent of the national wealth. At the same median age, Generation X (1965–1980) owned about 15 percent. The Boomer generation was 15–18 percent larger than Gen X and it had 2.67 times as much of the national wealth. The Millennial generation (1981–1996) is bigger than Gen X though a little smaller than the Boomers, and it has owned about half of what Gen X did at the same median age. Those are some measurable indicators of the nation’s vitality, and they tell us that something is going wrong. A key reason for stagnant wages, declining mobility, and growing disparities of wealth is that economic growth overall has been sluggish since around 1970. And the main reason for slower growth is that the long-term growth in productivity that created so much wealth for America and the world over the prior two centuries slowed down. Wealth and the New Frontier There are other ways to increase the overall national wealth. One is by acquiring new resources, which has been done in various ways: through territorial conquest, or the incorporation of unsettled frontier lands, or the discovery of valuable resources already in a nation’s territory, such as petroleum reserves in recent history. Getting an advantageous trade agreement can also be a way of increasing resources.  Through much of American history, the frontier was a great source of new wealth. The vast supply of mostly free land, along with the other resources it held, was not just an economic boon; it also shaped American culture and politics in ways that were distinct from the long-settled countries of Europe where the frontier had been closed for centuries and all the land was owned space.  But there can be a downside to becoming overly dependent on any one resource. Aside from gaining new resources, real economic growth comes from either population growth or productivity growth. Population growth can add to the national wealth, but it can also put strain on supplies of essential resources. What elevates living standards broadly is productivity growth, making more out of available resources. A farmer who tills his fields with a steel plough pulled by a horse can cultivate more land than a farmer doing it by hand. It allows him to produce more food that can be consumed by a bigger family, or the surplus can be sold or traded for other goods. A farmer driving a plough with an engine and reaping with a mechanical combine can produce even more.  But productivity growth is driven by innovation. In the example above, there is a progression from farming by hand with a simple tool, to the use of metal tools and animal power, to the use of complicated machinery, each of which greatly increases the amount of food produced per farmer. This illustrates the basic truth that technology is a means of reducing scarcity and generating surpluses of essential goods, so labor and resources can be put toward other purposes, and the whole population will be better off. Total factor productivity (TFP) refers to economic output relative to the size of all primary inputs, namely labor and capital. Over time, a nation’s economic output tends to grow faster than its labor force and capital stock. This might owe to better labor skills or capital management, but it is primarily the result of new technology. In economics, productivity growth is used as a proxy for the application of innovation. If productivity is rising, it is understood to mean that applied science is working to reduce scarcity. The countries that lead in technological innovation naturally reap the benefits first and most broadly, and therefore have the highest living standards. Developing countries eventually get the technology too, and then enjoy the benefits in what is called catch-up growth. For example, China first began its national electrification program in the 1950s, when electricity was nearly ubiquitous in the United States. The project took a few decades to complete, and China saw rapid growth as wide access to electric power increased productivity. The United States still leads the way in innovation—though now with more competition than at any time since World War II. But the development of productivity-enhancing new technologies has been slower over the past few decades than in any comparable span of time since the beginning of the Industrial Revolution in the early 18th century. The obvious advances in a few specific areas, particularly digital technology, are exceptions that prove the rule. The social technologies of recent years facilitate consumption rather than production.As a result, growth in total factor productivity has been slow for a long time. According to a report from Rabobank, “TFP growth deteriorated from an average annual growth of 1.1% over the period 1969–2010 to 0.4% in 2010 to 2018.”  In The Great Stagnation, Tyler Cowen suggested that the conventional productivity measures may be misleading. For example, he noted that productivity growth through 2000–2004 averaged 3.8 percent, a very high figure and an outlier relative to most of the last half-century. Surely some of that growth was real owing to the growth of the internet at the time, but it also coincided with robust growth in the financial sector, which ended very badly in 2008.  “What we measured as value creation actually may have been value destruction, namely too many homes and too much financial innovation of the wrong kind.” Then, productivity shot up by over 5 percent in 2009–2010, but Cohen found that it was mostly the result of firms firing the least productive people. That may have been good business, but it’s not the same as productivity rising because innovation is reducing scarcity and thus leading to better living standards. Over the long term, when productivity growth slows or stalls, overall economic growth is sluggish. Median real wage growth is slow. For most people, living standards don’t just stagnate but decline. Spencer Platt/Getty Images You Owe Me Money As productivity growth has slowed, the economy has become more financialized, which means that resources are increasingly channeled into means of extracting wealth from the productive economy instead of producing goods and services. Peter Thiel said that a simple way to understand financialization is that it represents the increasing influence of companies whose main business or source of value is producing little pieces of paper that essentially say, you owe me money. Wall Street and the companies that make up the financial sector have never been larger or more powerful. Since the early 1970s, financial firms’ share of all corporate earnings has roughly doubled to nearly 25 percent. As a share of real GDP, it grew from 13–15 percent in the early 1970s to nearly 22 percent in 2020.  The profits of financial firms have grown faster than their share of the economy over the past half-century. The examples are everywhere. Many companies that were built to produce real-world, nondigital goods and services have become stealth finance companies, too. General Electric, the manufacturing giant founded by Thomas Edison, transformed itself into a black box of finance businesses, dragging itself down as a result. The total market value of major airlines like American, United, and Delta is less than the value of their loyalty programs, in which people get miles by flying and by spending with airline-branded credit cards. In 2020, American Airlines’ loyalty program was valued at $18–$30 billion while the market capitalization of the entire company was $14 billion. This suggests that the actual airline business—flying people from one place to another—is valuable only insofar as it gets people to participate in a loyalty program. The main result of financialization is best explained by the “Cantillon effect,” which means that money creation, over a long period of time, redistributes wealth upward to the already rich. This effect was first described in the 18th century by Richard Cantillon after he observed the results of introducing a paper money system. He noted that the first people to receive the new money saw their incomes rise, while the last to receive it saw a decline in their purchasing power because of consumer price inflation. The first to receive newly created money are banks and other financial institutions. They are called “Cantillon insiders,” a term coined by Nick Szabo, and they get the most benefit. But all owners of assets—including stocks, real estate, even a home—are enriched to some extent by the Cantillon effect. Those who own a lot of assets benefit the most, and financial assets tend to increase in value faster than other types, but all gain value. This is a version of the Matthew Principle, taken from Jesus’ Parable of the Sower: to those who have, more will be given. The more assets you own, the faster your wealth will increase. Meanwhile, the people without assets fall behind as asset prices rise faster than incomes. Inflation hawks have long worried that America’s decades-long policy of running large government deficits combined with easy money from the Fed will lead to runaway inflation that beggars average Americans. This was seen clearly in 2022 after the massive increase in dollars created by the Fed in 2020 and 2021.  Even so, they’ve mostly been looking for inflation in the wrong place. It’s true that the prices of many raw materials, such as lumber and corn, have soared recently, followed by much more broad-based inflation in everything from food to rent, but inflation in the form of asset price bubbles has been with us for much longer. Those bubbles pop and prices drop, but the next bubble raises them even higher. Asset price inflation benefits asset owners, but not the people with few or no assets, like young people just starting out and finding themselves unable to afford to buy a home. The Cantillon effect has been one of the main vectors of increased wealth concentration over the last 40 years. One way that the large banks use their insider status is by getting short-term loans from the Federal Reserve and lending the money back to the government by buying longer-term treasuries at a slightly higher interest rate and locking in a profit.  Their position in the economy essentially guarantees them profits, and their size and political influence protect them from losses. We’ve seen the pattern of private profits and public losses clearly in the savings and loan crisis of the 1980s, and in the financial crisis of 2008. Banks and speculators made a lot of money in the years leading up to the crisis, and when the losses on their bad loans came due, they got bailouts. Moral Hazard The Cantillon economy creates moral hazard in that large companies, especially financial institutions, can privatize profits and socialize losses. Insiders, and shareholders more broadly, can reap massive gains when the bets they make with the company’s capital pay off. When the bets go bad, the company gets bailed out. Alan Krueger, the chief economist at theTreasury Department in the Obama Administration, explained years later why banks and not homeowners were rescued from the fallout of the mortgage crisis: “It would have been extremely unfair, and created problems down the road to bail out homeowners who were irresponsible and took on homes they couldn’t afford.” Krueger glossed over the fact that the banks had used predatory and deceptive practices to initiate risky loans, and when they lost hundreds of billions of dollars—or trillions by some estimates—they were bailed out while homeowners were kicked out. That callous indifference alienates and radicalizes the forgotten men and women who have been losing ground. Most people know about the big bailouts in 2008, but the system that joins private profit with socialized losses regularly creates incentives for sloppiness and corruption. The greed sometimes takes ridiculous forms. But once that culture takes over, it poisons everything it touches. Starting in 2002, for example, Wells Fargo began a scam in which it paid employees to open more than 3.5 million unauthorized checking accounts, savings accounts, and credit cards for retail customers. By exaggerating growth in the number of active retail accounts, the bank could give investors a false picture of the health of its retail business. It also charged those customers monthly service fees, which contributed to the bottom line and bolstered the numbers in quarterly earnings reports to Wall Street. Bigger profits led to higher stock prices, enriching senior executives whose compensation packages included large options grants.  John Stumpf, the company’s CEO from 2007 to 2016, was forced to resign and disgorge around $40 million in repayments to Wells Fargo and fines to the federal government. Bloomberg estimates that he retained more than $100 million. Wells Fargo paid a $3 billion fine, which amounted to less than two months’ profit, as the bank’s annual profits averaged around $19.7 billion from 2017 to 2019. And this was for a scam that lasted nearly 15 years. What is perhaps most absurd and despicable about this scheme is that Wells Fargo was conducting it during and even after the credit bubble, when the bank received billions of dollars in bailouts from the government. The alliance between the largest corporations and the state leads to corrupt and abusive practices. This is one of the second-order effects of the Cantillon economy. Another effect is that managers respond to short-term financial incentives in a way that undermines the long-term vitality of their own company. An excessive focus on quarterly earnings is sometimes referred to as short-termism. Senior managers, especially at the C-suite level of public companies, are largely compensated with stock options, so they have a strong incentive to see the stock rise. In principle, a rising stock price should reflect a healthy, growing, profitable company. But managers figured out how to game the system: with the Fed keeping long-term rates low, corporations can borrow money at a much lower rate than the expected return in the stock market. Many companies have taken on long-term debt to finance stock repurchases, which helps inflate the stock price. This practice is one reason that corporate debt has soared since 1980. The Cantillon effect distorts resource allocation, incentivizing rent-seeking in the financial industry and rewarding nonfinancial companies for becoming stealth financial firms. Profits are quicker and easier in finance than in other industries. As a result, many smart, ambitious people go to Wall Street instead of trying to invent useful products or seeking a new source of abundant power—endeavors that don’t have as much assurance of a payoff. How different might America be if the incentives were structured to reward the people who put their brain power and energy into those sorts of projects rather than into quantitative trading algorithms and financial derivatives of home mortgages. While the financial industry does well, the manufacturing sector lags. Because of COVID-19, Americans discovered that the United States has very limited capacity to make the personal protective equipment that was in such urgent demand in 2020. We do not manufacture any of the most widely prescribed antibiotics, or drugs for heart disease or diabetes, nor any of the chemical precursors required to make them. A close look at other vital industries reveals the same penury. The rare earth minerals necessary for batteries and electronic screens mostly come from China because we have intentionally shuttered domestic sources or failed to develop them. We’re dependent on Taiwan for the computer chips that go into everything from phones to cars to appliances, and broken supply chains in 2021 led to widespread shortages. The list of necessities we import because we have exported our manufacturing base goes on. Financialization of the economy amplifies the resource curse that has come with dollar supremacy. Richard Cantillon described a similar effect when he observed what happened to Spain and Portugal when they acquired large amounts of silver and gold from the New World. The new wealth raised prices, but it went largely into purchasing imported goods, which ruined the manufactures of the state and led to general impoverishment. In America today, a fiat currency that serves as the world’s reserve is the resource curse that erodes the manufacturing base while the financial sector flourishes. Since the dollar’s value was formally dissociated from gold in 1976, it now rests on American economic prosperity, political stability, and military supremacy. If these advantages diminish relative to competitors, so will the value of the dollar. Dollar supremacy has also encouraged a debt-based economy. Federal debt as a share of GDP has risen from around 38 percent in 1970 to nearly 140 percent in 2020. Corporate debt has had peaks and troughs over those decades, but each new peak is higher than the last. In the 1970s, total nonfinancial corporate debt in the United States ranged between 30 and 35 percent of GDP. It peaked at about 43 percent in 1990, then at 45 percent with the dot-com bubble in 2001, then at slightly higher with the housing bubble in 2008, and now it’s approximately 47 percent. As asset prices have climbed faster than wages, consumer debt has soared from 43.2 percent of GDP in 1970 to over 75 percent in 2020.  Student loan debt has soared even faster in recent years: in 2003, it totaled $240 billion—basically a rounding error—but by 2020, the sum had ballooned to six times as large, at $1.68 trillion, which amounts to around 8 percent of GDP. Increases in aggregate debt throughout society are a predictable result of the Cantillon effect in a financialized economy. The Rise of the Two-Income Family The Cantillon effect generates big gains for those closest to the money spigot, and especially those at the top of the financial industry, while the people furthest away fall behind. Average families find it more difficult to buy a home and maintain a middle-class life. In 90 percent of U.S. counties today, the median-priced single-family home is unaffordable on the median wage. One of the ways that families try to make ends meet is with the promiscuous use of credit. It’s one of the reasons that personal and household debt levels have risen across the board. People borrow money to cover the gap between expectations and reality, hoping that economic growth will soon pull them out of debt. But for many, it’s a trap they can never escape. Another way that families have tried to keep up is by adding a second income. In 2018, over 60 percent of families were two-income households, up from about 30 percent in 1970. This change is not a result of a simple desire to do wage work outside the home or of “increased opportunities,” as we are often told. The reason is that it now takes two incomes to support the needs of a middle-class family, whereas 50 years ago, it required only one. As more people entered the labor market, the value of labor declined, setting up a vicious cycle in which a second income came to be more necessary. China’s entry into the World Trade Organization in 2001 put more downward pressure on the value of labor. When people laud the fact that we have so many more two-income families—generally meaning more women working outside the home—as evidence that there are so many great opportunities, what they’re really doing is retconning something usually done out of economic necessity. Needing twice as much labor to get the same result is the opposite of what happens when productivity growth is robust. It also means that the raising of children is increasingly outsourced. That’s not an improvement. Another response to stagnant wages is to delay family formation and have fewer children. In 1960, the median age of a first marriage was about 20.5 years. In 2010, it was approximately 27, and in 2020 it was an all-time high of over 29.18  At the same time, the total fertility rate of American women was dropping: from 3.65 in 1960 down to 2.1, a little below replacement level, in the early 1970s. Currently, it hovers around 1.8. Some people may look on this approvingly, worried as they are about overpopulation and the impact of humans on the environment. But when people choose to have few or no children, it is usually not a political choice. That doesn’t mean it is simply a “revealed preference,” a lower desire for a family and children, rather than a reflection of personal challenges or how people view their prospects for the future. Surely it’s no coincidence that the shrinking of families has happened at the same time that real wages have stagnated or grown very slowly, while the costs of housing, health care, and higher education have soared. The fact that American living standards have broadly stagnated, and for some segments of the population have declined, should be cause for real concern to the ruling class. Americans expect economic mobility and a chance for prosperity. Without it, many will believe that the government has failed to deliver on its promises. The Chinese Communist Party is regarded as legitimate by the Chinese people because it has presided over a large, broad, multigenerational rise in living standards. If stagnation or decline in the United States is not addressed effectively, it will threaten the legitimacy of the governing institutions.  But instead of meeting the challenge head-on, America’s political and business leaders have pursued policies and strategies that exacerbate the problem. Woke policies in academia, government, and big business have created a stultifying environment that is openly hostile to heterodox views. Witness the response to views on COVID that contradicted official opinion. And all this happens against a backdrop of destructive fiscal and monetary policies. Low growth and low mobility tend to increase political instability when the legitimacy of the political order is predicated upon opportunity and egalitarianism. One source of national unity has been the understanding that every individual has an equal right to pursue happiness, that a dignified life is well within reach of the average person, and that the possibility of rising higher is open to all. When too many people feel they cannot rise, and when even the basics of a middle-class life are difficult to secure, disappointment can breed a sense of injustice that leads to social and political conflict. At first, that conflict acts as a drag on what American society can accomplish. Left unchecked, it will consume energy and resources that could otherwise be put into more productive activities. Thwarted personal aspirations are often channeled into politics and zero-sum factional conflict. The rise of identity politics represents a redirection of the frustrations born of broken dreams. But identity politics further divides us into hostile camps. We’ve already seen increased social unrest lately, and more is likely to follow. High levels of social and political conflict are dangerous for a country that hopes to maintain a popular form of government. Not so long ago, we could find unity in civic rituals and were encouraged to be proud of our country. Now our history is denigrated in schools and by other sensemaking institutions, leading to cultural dysphoria, social atomization, and alienation. In exchange, you can choose your pronouns, which doesn’t seem like such a great trade. Just as important as regaining broad-based material prosperity and rising standards of living—perhaps more important—is unifying the nation around a common understanding of who we Americans are and why we’re here. Tyler Durden Sat, 01/07/2023 - 23:30.....»»

Category: blogSource: zerohedgeJan 8th, 2023

Will Growth Efforts Aid Church & Dwight (CHD) Amid Inflation?

Despite inflation concerns, Church & Dwight's (CHD) pricing efforts, buyouts and favorable demand act as upsides. Church & Dwight Co. Inc. CHD has been benefiting from a strong brand portfolio, a solid online show, pricing actions and strategic buyouts.This led to third-quarter 2022 results, wherein the bottom and top lines beat the Zacks Consensus Estimate. Net sales of $1,317.3 million inched up 0.4% year over year. The company’s U.S. portfolio saw consumption growth in 11 of 17 categories.Management expects 2022 reported sales growth of 3%, the mid-point of its previous range (2-4%). For the fourth quarter of 2022, the company expects a 2% increase in reported sales.In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 14.6% compared with the industry's 16.2% growth. Image Source: Zacks Investment Research That said, let’s delve deeper into the factors aiding the stock.Factors Narrating CHD’s Growth StoryThe company’s aggressive pricing efforts bode well. Although third-quarter 2022 organic sales fell 0.7%, owing to a volume decline of 8.5%, the metric was somewhat offset by favorable pricing of 7.8%.The company anticipates 2022 organic sales growth of 1%. Management stated that solid consumption in several businesses in 2022 offset the slowdown across discretionary brands, including Waterpik and Flawless.Another factor working for Church & Dwight is the online channel. During the third quarter, the company’s online sales, as a percentage of total sales, were 15%. Management expects online sales for 2022 to be more than 15% as a percentage of total sales.Church & Dwight is on track with its acquisition spree. The company recently completed its buyout of the Hero Mighty Patch brand (or Hero) and other acne treatment products. It also concluded the integration of the Therabreath buyout, which marks the company's 14th power brand.We note that the buyouts of FLAWLESS and WATERPIK were other prudent additions to Church & Dwight’s portfolio. Another noteworthy acquisition is Batiste.In December 2020, the company took over Matrixx Initiatives, which owns the ZICAM brand. Zicam is a leading zinc supplement in the United States in the vitamins, minerals, and supplements cough/cold shortening category. In the third quarter of 2022, contributions from Therabreath, Zicam and Hero buyouts aided the top line, with a double-digit consumption increase across all three businesses.The company is focused on product innovation for further growth. It launched the VITAFUSION brand’s 2-in-1 Bi-Layer Gummies. The ZICAM brand is on track with the launch of the first immune supplement gummies for both day and night, which come with the benefits of Zinc + Vitamins C&D.The TROJAN brand is likely to introduce two condoms, TROJAN ULTRAFIT and TROJAN BARESKIN RAW. Another notable launch is THERABREATH’s Whitening Rinse. The company also announced a new segment with ARM & HAMMER Baby Hypoallergenic Detergent.In another development, the company is expanding ARM & HAMMER Forever Fresh Clumping Cat Litter to include the use of Essential Oils to provide long-lasting odor control and freshness.Headwinds to OvercomeThe company has been witnessing increased raw material, manufacturing and distribution expenses, as well as increased promotional spending, which dented margins in the third quarter of 2022. In the quarter, Church & Dwight’s gross margin shrunk 250 basis points (bps) to 41.7%. SG&A expenses, as a percentage of sales, expanded 280 bps to 11.7%. Consequently, earnings of 76 cents per share declined 5% year over year.For 2022, management expects the reported gross margin to contract year over year, as it envisions inflation to outpace pricing and productivity. The company anticipates adjusted EPS of $2.93-$2.97, down 2-3% from that reported in 2021. Earlier, the company expected an adjusted EPS of $2.97 for 2022.For the fourth quarter of 2022, CHD expects to witness gross margin contraction due to an unfavorable mix within the portfolio. It expects adjusted EPS of 58-62 cents per share, down 3-9% from the year-ago quarter’s reported figure. The downside can be attributed to a major rise in quarterly tax rates and acquisition-related costs.The company expects a 2% increase in reported sales. Organic sales are estimated to fall 1%.Wrapping UpCHD’s strong brand portfolio, online strength, pricing actions and strategic buyouts are likely to offset the hurdles stemming from cost inflation in the near term. A long-term earnings growth rate of 6.7% raises optimism in the stock.Stocks to ConsiderHere are some better-ranked stocks from the broader Consumer Staples space, namely e.l.f. Beauty ELF, Conagra Brands CAG and Campbell Soup CPBe.l.f. Beauty currently sports a Zacks Rank of 1 (Strong Buy). ELF has a trailing four-quarter earnings surprise of 77%, on average. The stock has rallied 29% in the past three months.You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for e.l.f. Beauty’s fiscal 2022 sales and earnings suggests growth of 17.6% and 8.3%, respectively, from the prior-year reported numbers. The consensus mark for ELF’s earnings per share has moved up by a penny in the past seven days.Conagra Brands, a consumer-packaged goods food company, currently carries a Zacks Rank of 2 (Buy). CAG has a trailing four-quarter earnings surprise of 1.8% on average.The Zacks Consensus Estimate for Conagra Brands’ fiscal 2022 sales and earnings suggests growth of 5.2% and 3.4%, respectively, from the year-ago reported figures.Campbell Soup, which manufactures and markets food and beverage products, currently carries a Zacks Rank of 2. CPB has a trailing four-quarter earnings surprise of 8.7%, on average.The Zacks Consensus Estimate for Campbell Soup’s fiscal 2022 sales and earnings suggests growth of 8.2% and 4.9%, respectively, from the year-ago reported figures. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant 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 Conagra Brands (CAG): Free Stock Analysis Report Campbell Soup Company (CPB): Free Stock Analysis Report Church & Dwight Co., Inc. (CHD): Free Stock Analysis Report e.l.f. Beauty (ELF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 5th, 2023

3 Wood Stocks Worth Watching Despite a Challenging Industry

The Zacks Building Products - Wood industry is expected to gain from home improvement activities and the export market as well as focus on cost controls amid continuous supply woes. Industry players EVA, BCC and DOOR are set to gain the most from the tailwinds. Continuous supply-chain woes, inflationary pressure mainly for material and labor, high fuel-related costs and lower homes sales have been impacting the Zacks Building Products – Wood industry. However, the industry players are expected to benefit from higher demand across export markets, repair and remodel (R&R) activity and more funding for infrastructure and carbon/ESG-related projects despite macro-economic headwinds. In addition, inorganic and prudent cost-containment moves should lend support to industry players like Enviva Inc. EVA, Boise Cascade Company BCC and Masonite International Corporation DOOR.Industry DescriptionThe Zacks Building Products – Wood industry includes forest product companies and manufacturers of lumber as well as other wood products that are used in home construction, repair and remodeling along with the development of outdoor structures. Companies in the industry design, manufacture, source, and sell flooring products like tile, wood, laminate, vinyl, and natural stone flooring products as well as decorative and installation accessories. The industry players are also involved in the manufacturing and distribution of wood and plastic composite products along with related accessories, mainly for residential decking and railing applications. The industry also includes timberland real estate investment trusts or REITs.4 Trends Shaping the Future of Building Products - Wood IndustryLower Demand: The recent slowdown in the U.S. housing market and continued headwinds in China have been impacting the demand for industry players’ products. Industry players’ businesses are directly influenced by the U.S. housing market. Any untoward situation will have an unfavorable impact on the company’s operations. Presently, the outlook for housing industry remains less favorable compared to the last couple of years due to several ongoing headwinds, such as a rapid increase in mortgage rates, housing affordability challenges, high inflation and growing concerns about the economy.Rapid Lumber Market Swings & Supply Chain-Related Challenges Weigh on Margins: Historically, volatility in lumber prices has been a major concern for the wood industry. Any unusual rise in the cost of lumber products sold by primary producers increases the cost of inventory and limits margins on fixed-priced lumber products. Yet, a decline in costs eats into profits as products sold are indexed to the current lumber market. Meanwhile, the timberland business is governed by federal rules and state forestry commissions, which are subject to frequent changes, thereby affecting businesses. Further, due to the very nature of their properties, timberland REITs are required to follow eco-friendly mandates in their trade. Furthermore, the companies have been experiencing supply chain challenges and higher freight and transport costs. For example, resin unavailability is posing quite a challenge. The industry participants use a significant quantity of various resins in the manufacturing processes. Resin product costs are influenced by changes in prices or availability of raw materials used to produce resins, primarily petroleum products, and the demand and availability of resin products.Higher Export Market Demand, More Spending on Carbon/ESG Projects & Repair & Remodeling Markets: The industry participants have been experiencing higher demand across export markets owing to the combination of diverse factors. For example, shipping and logistics challenges are pushing up the demand for North American logs in Japan. Again, trade limitations have impacted the import of Australian logs into China. Meanwhile, the Russia-Ukraine war has led to the ban of log exports from Russia. Overall, this tightening global wood market is proving conducive for some of the industry participants. Meanwhile, the companies are experiencing higher funding for carbon/ESG-related projects to pursue carbon capture and storage work. The industry’s prospects are highly correlated with the U.S. housing market conditions. Although the slowing housing market and the pandemic-related challenges are creating hurdles, the R&R market (considered one of the largest in terms of lumber demand) has been going impressively. Currently, lower lumber prices are creating an opportunity to perform renovations or DIY projects, thereby aiding wood industry participants. Also, increased government spending on infrastructure projects bodes well. Acquisitions, Product Innovation & Efficient Cost-Reduction Strategies: The companies also bank on acquisitions and divestitures to expand as well as improve portfolio quality. New products continue to be an important top-line driver for the industry players. Also, efforts to introduce products are likely to have helped the players. Again, in a bid to reduce costs, companies have been reducing the cost structure of their facilities through Lean Six Sigma efforts, the sale or shutdown of underperforming units and manufacturing facilities as well as investments in technology. Also, the industry players have been focusing on operational excellence, comprising merchandising for value, harvest, and transportation efficiencies, and flexing harvest to capture seasonal and short-term opportunities.Zacks Industry Rank Indicates Dull ProspectsThe Zacks Building Products – Wood industry is a 12-stock group within the broader Construction sector. The Zacks Wood industry currently carries a Zacks Industry Rank #168, which places it in the bottom 33% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the bleak earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since October 2022, the industry’s earnings estimates for 2023 have decreased to $2.11 per share from $2.38.Despite the industry’s blurred near-term view, we will present a few stocks that one may consider adding to their portfolio. Before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.Industry Lags Sector & S&P 500The Zacks Building Products – Wood industry has underperformed the broader Zacks Construction sector and the Zacks S&P 500 composite over the past year.Over this period, the industry has lost 34.3% compared with the S&P 500 and the broader sector’s 21.2% and 22.5% decline, respectively.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing wood stocks, the industry trades at 19.02X versus the S&P 500’s 17.2X and the sector’s 12.3X.Over the last five years, the industry has traded as high as 39.5X, as low as 12.2X and at a median of 21.5X, as the chart below shows.Industry’s P/E Ratio (Forward 12-Month) Versus S&P 5003 Wood Stocks to Keep a Close Eye OnWe have selected one stock from the Zacks universe of wood stocks that currently carries a Zacks Rank #1 (Strong Buy). We have also highlighted two stocks currently carrying a Zacks Rank #3 (Hold) and have been capitalizing on fundamental strengths. You can see the complete list of today’s Zacks #1 Rank stocks here. Boise Cascade Company: Based in Boise, ID, this Zacks Rank #1 company makes wood products and distributes building materials in the United States as well as Canada. Boise Cascade’s Building Materials Distribution and Wood Products segments are gaining strength from strong end-product demand (particularly for EWP) as well as higher commodity product prices. It has also been increasing commodity offerings that will instill growth in the existing markets, underserved markets and across its entire national footprint.Importantly, Boise Cascade — which has declined 0.1% in the past year — has seen a 5% upward estimate revision for 2023 earnings over the past 30 days.Price and Consensus: BCCMasonite International: This Tampa, FL-based company manufactures, and distributes interior as well as exterior doors. The company is expected to generate higher EBITDA owing to the pricing strategy adopted in the North American Residential segment. Product introduction and marketing initiatives aimed at supporting growth and a favorable mix have been benefiting the company. These initiatives, combined with prudent price-cost management, will allow DOOR to navigate near-term macroeconomic headwinds well and make continued progress toward the 2025 Centennial Plan.This Zacks Rank #3 company has lost 29.2% over the past year. Yet, DOOR has seen an upward estimate revision for 2023 earnings to $9.71 per share from $9.62 over the past 30 days. The positive estimate revisions depict analysts' optimism over the company’s prospects.Price and Consensus: DOOREnviva: Headquartered in Bethesda, MA, Enviva makes and sells utility-grade wood pellets. The company has been gaining from a very constructive pricing environment for wood pellets both for the near term and for long-term contracted deliveries. This is helping EVA to boost margins, with the continued expectation of further improvements in the near term. Productivity improvements across its manufacturing facilities, improving supply chain conditions and the constructive pricing environment, particularly in Europe, bode well for future growth.This Zacks Rank #3 stock has lost 34.4% in the past year. That said, EVA’s 2023 earnings are expected to grow 317.7% from the 2022 level.Price and Consensus: EVA Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Enviva Inc. (EVA): Free Stock Analysis Report Boise Cascade, L.L.C. (BCC): Free Stock Analysis Report Masonite International Corporation (DOOR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2023

Three Paths For 2023

Three Paths For 2023 Authored by Michael Lebowitz via RealInvestmentAdvice.com, As we anticipate what 2023 might have in store for investors, we must first consider what the Fed may or may not do. We think there are three potential paths the Fed might follow in 2023. The three paths determine the level of overnight interest rates and, more importantly, liquidity for the financial markets. Liquidity has a heavy influence on stock returns. Let’s examine the three paths and consider what they might mean for stock prices. The Road Map for 2023 The graph below compares the three most probable paths for Fed Funds in 2023. The green line tracks the Federal Reserve’s guidance for the Fed Funds rate. The black line charts investor projections as implied by Fed Funds futures. Lastly, the “something breaks” alternative in red is based on prior easing cycles. Scenario 1 The Fed’s Expectations To provide investors transparency into Fed members’ economic and policy outlooks, the Fed publishes a summary of each voting member’s economic and Fed Funds expectations for the next few years. The latest quarterly guidance on the Fed Funds rate, as shown below, is from December 14, 2022 (LINK). The dots represent where each member expects the Fed Funds rate to be in the future. The range of Fed Funds expectations for 2023 is between 4.875% and 5.625%. Most FOMC members expect Fed Funds to end the year somewhere between 5.125% to 5.375%. Based on comments from Jerome Powell, the Fed seems to think Fed Funds will increase in 25bps increments to 5.25%. While investors place a lot of weight on the Fed projections, it’s worth reminding you they do not have a crystal ball. For evidence, we only need to look back a year ago to its 2022 projections from December 2021. Their misguided transitory inflation forecast grossly underestimated inflation’s lasting power and how much they would have to raise rates. The point of sharing the graph is not to belittle the Fed but to highlight its poor ability to predict the future. Scenario 2 Implied Market Expectations Fed Funds futures are monthly contracts traded on the CME. Each contract price denotes what the collective market implies the daily Fed Funds rate will average each month. For example, when writing the article, the June 2023 contract traded at 95.05. 100 less 95.05 produces an implied rate of 4.95%. We can arrive at an implied path for Fed Funds by stringing the monthly implied rates together.   The market thinks the Fed will raise rates to just shy of 5% in May and hold them there through July. After that, the market implies increasing odds of a Fed pivot. By December, the market believes the Fed will have cut interest rates by about 40bps. Like the Fed, the Fed Funds market can also be a poor predictor of Fed Funds. In late 2019 we wrote an article studying how well the Fed Funds futures market predicts Fed rate hikes and cuts. Per Investors are Grossly Underestimating the Fed: As shown in the graphs, the market underestimated the Fed’s intent to raise and lower rates every time it changed monetary policy meaningfully. The dotted lines highlight that the market has underestimated rate cuts by 1% on average, but at times during the last three rate-cutting cycles, market expectations were short by over 2%. During the last three recessions, excluding the brief downturn in 2020, the Fed Funds market misjudged how far Fed Funds would fall by roughly 2.5%. Implied Fed Funds of 4.6% today may be 2% by December if the market similarly underestimates the Fed and the economic and financial environment. Scenario 3 Something Breaks The first two alternatives assume the Fed will tread lightly, be it raising rates a little more or a slight pivot in 2023. The third path is the outlier “something breaks” forecast. There is a significant lag between when the Fed raises rates and when the effect is fully felt. Economists believe the lag can take between nine months and, at times, over a year. In March 2022, the Fed raised rates by 25bps from zero percent. Since then, they have increased rates by an additional 4%. If the lag is a year, the first interest rate hike will not be fully absorbed into the economy until March 2023. The third path, in which the Fed aggressively lowers rates, would be a response to a significantly weakening economy, inflation falling much more rapidly than expected, or financial instability. It could also be a combination of any or all three factors.   In The Foghorn is Blowing, we discuss how an inverted Treasury yield curve that un-inverts has been a great predictor of recessions, stock market drawdowns, and corporate earnings declines. The re-steepening of the yield curve is almost always the result of the Fed lowering interest rates. The yield curve is currently inverted to a level not seen in over 40 years. It will un-invert; the only question is when and how quickly. As we wrote: The financial foghorn is blowing. Historical odds greatly favor a recession, stock market drawdown, and a much lower Fed Funds rate. If it un-inverts as violently as it has in the past, the 2% Fed Funds for the year-end scenario may prove too high! Asset Performance in The Three Paths Stock investors expect the second path with a slight pivot during the summer. Currently, corporate earnings are expected to grow by 8% in 2023. Such implies economic growth. Therefore, it also intones the Fed will not over-tighten and cause a recession. This goldilocks scenario may provide investors with a positive return. The first alternative, the FOMC’s expected path, may entail more pain for stock investors as it implies rates will rise higher than market expectations with no pivot in sight. The third “something breaks” scenario is the potential nightmare scenario. While investors will receive the pivot they have been desperately seeking, they will not like it. Historically, rapidly declining economic activity and financial instability do not bode well for stocks, even if the Fed adopts a more accommodative policy stance. The graph below shows that the yield curve steepens well before the market bottoms. Likely, the steepening will result from the Fed quickly slashing interest rates in response to “something breaking.” Don’t Forget About QT Another Fed policy facet to consider is QT. The Fed is removing liquidity at a sizeable clip. Like interest rates, QT has a lag effect. In time, economic and financial market liquidity diminishes with QT. Leveraged investors must often reduce exposure as liquidity becomes harder to obtain and more expensive. Usually, the deleveraging process starts slowly with fringe assets and overly leveraged investors feeling pain. However, deleveraging can spread quickly to the well-followed broader markets. The U.K. pension fund bailouts and failing crypto exchanges like FTX are likely signs of liquidity exiting the system. Even if the Fed stops raising rates or marginally lowers them, QT will present headwinds for stock prices. Summary The unprecedented influx of liquidity that drove asset prices higher in 2020 and 2021 is quickly leaving the market. The lag effect of higher interest rates and fading liquidity will likely play a prominent role in determining stock prices in 2023. Based on the Fed’s determination to quash inflation via higher interest rates and QT, we think the “something breaks” scenario is the likely path ahead. World renown investor Stanley Druckenmiller seems to agree with us per a recent quote- “I would be stunned if we didn’t have a recession in 2023.” Given the dynamic nature of economic and financial market activity and the difficulty of predicting the economic future, the Fed’s projections and the other two paths we discuss should be monitored closely throughout the year. Expect the unexpected in 2023 and keep the Fed’s path top of mind. Tyler Durden Wed, 01/04/2023 - 08:15.....»»

Category: blogSource: zerohedgeJan 4th, 2023

Bull Of The Day: CECO Environmental (CECO)

This stock has seen a dramatic run while the broader market was declining doe most of the last year CECO Environmental (CECO) is a Zacks Rank #1 (Strong Buy) and it sports a C for Value and a A for Growth.  This company helps protect people from industrial exposures and that in turn, helps keep the environment safe.  This stock has bucked the system, seeing a dramatic run since May while the broader market tumbled.  Let’s explore more about this company in this Bull of The Day article.DescriptionCECO Environmental Corp. provides industrial air quality and fluid handling systems worldwide. It operates in two segments: Engineered Systems Segment and Industrial Process Solutions Segment. The company markets its products and services to natural gas processors, transmission and distribution companies, refineries, power generators, industrial manufacturing, engineering and construction companies, semiconductor manufacturers, compressor manufacturers, beverage can manufacturers, metals and minerals, and electric vehicle producer companies. CECO Environmental Corp. was incorporated in 1966 and is headquartered in Dallas, Texas.Earnings HistoryWhen I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.For CECO, I see four straight beats of the Zacks Consensus Estimate.  That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).The average positive earnings surprise over the course of the last year works out to be 62%.Earnings Estimates RevisionsThe Zacks Rank tells us which stocks are seeing earnings estimates move higher. Over the last 60 days, earning estimates have moved up for CECO.This quarter has moved up from $0.17 to $0.20.The full fiscal year 2022 has increased from $0.63 to $0.73.Next fiscal year has seen the estimate move from $0.77 to $0.92.Positive movement in earnings help move this stock to a Zacks Rank #1 (Strong Buy).ValuationThe valuation for this name is low even with the solid growth.  I see a forward PE of 16x which is a little low given the company is coming off a quarter that saw topline growth of more than 35%.  The price to book multiple is 2x. Price to sales comes in a 1x while the stock carries operating margins of roughly 4%.   One Tiny Company Could Shake the EV Industry Zacks Aggressive Growth expert Brian Bolan has pinpointed a U.S. manufacturer with an under-$5 stock price that's gearing for a monster ride. It's ramping up production of an affordable, "working man's" rival to Tesla just as soaring gas prices and desire for energy independence are set to drive the EV market to $1 trillion in 5 years.See This Stock 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 CECO Environmental Corp. (CECO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2023

Should You Buy the Dip in These 2 Manufacturing Tools Stocks Amid Industry Challenges?

The Zacks Manufacturing-Tools & Related Products industry is grappling with supply chain and cost woes. Amid a slowdown in manufacturing activities, SWK and KMT are likely to struggle in the near term. The Zacks Manufacturing-Tools & Related Products industry is plagued by persistent supply chain disruptions and raw material cost inflation. Investments in product upgrades, though augur well for the industry’s long-term prospects, often weigh on margins and profitability in the near term. The recent slowdown in manufacturing activities, thanks to rising interest rates, implies that the industry is likely to experience lower demand in the near term.Amid the prevalent headwinds in the industry, Stanley Black & Decker SWK and Kennametal KMT are likely to struggle in the near future.About the IndustryThe Zacks Manufacturing-Tools & Related Products industry comprises companies that develop and distribute hand and mechanics tools, hydraulic tools, engineered fastening systems, and heavy-lifting technology solutions. Arc-welding products, robotic-welding packages, fume-extraction equipment, oxy-fuel cutting equipment, plasma cutters, healthcare solutions, electronic security solutions and other products are also produced by some tool-makers. The highly advanced tools are used in industrial, commercial, oil & gas, mining, automotive and other industries. The providers of electronic security solutions cater to commercial, retailers, government, financial and healthcare markets. Talking about international operations, some industry players provide products and services to customers in North and South America, Japan, Europe, Canada, Asia and the Middle East.3 Trends Shaping the Future of the Manufacturing Tools IndustryWeakness in the Manufacturing Sector: Amid the Federal Reserve’s aggressive monetary policy tightening, the recent slowdown in manufacturing activities points to a lower output scenario for the industry participants at least in the near term. Per the Institute for Supply Management’s (ISM) latest report, the manufacturing index touched 49% in November 2022, contracting for the first time since May 2020. A figure below 50 indicates a contraction in manufacturing activity. With the reduction in new order rates, the index was 1.2 percentage points lower than that recorded in October. Industrial production declined 0.2% in November, with a 0.6% decrease in manufacturing output.Supply Chain & Cost Woes: Despite the situation improving, supply chain constraints, mainly related to the availability of semiconductor chips, and cost inflation continue to be major headwinds for the industry at least in the first half of 2023. Raw material, freight and logistics cost inflation are hurting the margins and profitability of industry participants. A dearth of skilled workers in the United States has been a perennial problem for the industry participants.Hefty Investments in Product Development: The industry participants often make significant investments to upgrade products and services to stay competitive in the market. While these bode well for long-term prospects, frequent investments hurt the margins and profitability of these companies. Successive acquisitions to expand product portfolio, boost technological capabilities and extend geographical presence often leave these companies with a highly leveraged balance sheet.Zacks Industry Rank Suggests Bleak ProspectsThe Manufacturing-Tools & Related Products industry is a six-stock group within the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #236, which places it in the bottom 6% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the bottom 50% of the Zacks-ranked industries resulted from weak earnings prospects for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in the group’s earnings growth potential. The industry’s earnings estimates for 2023 have been revised downward by 51.9% over the past year.Now, let’s take a look at the industry’s shareholder returns and current valuation.Industry Underperforms S&P 500 & SectorThe Zacks Manufacturing-Tools & Related Products industry has underperformed both the S&P 500 composite index and the sector in the past year.Over this period, the industry has declined approximately 45%, compared with the sector and the S&P 500 index’s decrease of 13.9% and 21.2%, respectively.One-Year Price PerformanceIndustry's Current ValuationOn the basis of forward P/E (F12M), which is a commonly used multiple for valuing manufacturing tools and related product stocks, the industry is currently trading at 14.58X compared with the S&P 500’s 17.68X. It is also below the sector’s P/E (F12M) ratio of 17.64X.Over the past five years, the industry has traded as high as 22.49X, as low as 10.87X and at the median of 15.62X, as the chart below shows:Price-to-Earnings Ratio Price-to-Earnings Ratio Should You Buy the Dips?Below we mention two stocks from the industry that are reeling under the effects of supply chain woes and high raw material costs. These stocks carry a Zacks Rank #4 (Sell) or #5 (Strong Sell). So, it’s not wise to buy the dips in these stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Kennametal: Based in Latrobe, PA, Kennametal is a manufacturer, marketer and distributor of high-speed metal cutting tools, tooling systems and wear-resistant parts. Weakness in the transportation market due to supply-chain restrictions, mainly related to chip availability, is a major challenge for the company. Escalating raw material costs are denting KMT’s earnings, while foreign currency headwinds are hurting its top line.The Zacks Consensus Estimate for Kennametal’s fiscal 2023 earnings (ended Jun 30, 2023) has been revised southward by 13.3% in the past 60 days. Shares of this Zacks Rank #4 company have declined 36.4% in the past year.Price and Consensus: KMT Stanley Black: Headquartered in New Britain, CT, Stanley Black manufactures and provides tools and related accessories and engineered fastening systems. Weakness in the Tools & Outdoor segment due to reduced retail and consumer demand, thanks to an increase in interest rates, is weighing on the company’s performance. Supply-chain restrictions, primarily semiconductor constraints, and logistics and input cost increases are likely to continue to hurt SWK’s operations.The Zacks Consensus Estimate for Stanley Black’s 2023 earnings has been revised downward by 18.6% in the past 60 days. Shares of this Zacks Rank #5 company have plunged 60.9% over the past year. Price and Consensus: SWK Zacks Top 10 Stocks for 2023 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2023? From inception in 2012 through November, the Zacks Top 10 Stocks portfolio has tripled the market, gaining an impressive +884.5% versus the S&P 500’s +287.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>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 Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report Kennametal Inc. (KMT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2023

Investing Mistakes During A Recession

As worries grew about the Federal Reserve and other central banks being willing to bring on a recession to control inflation, stock prices plunged on December 16, 2022. This is the second straight week that the Standard & Poor’s 500 has lost 1.4%. It fell by 407 points, or 1.2%, on the Dow Jones industrial […] As worries grew about the Federal Reserve and other central banks being willing to bring on a recession to control inflation, stock prices plunged on December 16, 2022. This is the second straight week that the Standard & Poor’s 500 has lost 1.4%. It fell by 407 points, or 1.2%, on the Dow Jones industrial average to 32,796 points and by 1% on the Nasdaq composite. Investors’ hopes for interest rate cuts next year were dashed as well when the Fed raised its forecast for how high interest rates will ultimately go. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. Inflation, while down from its highest levels in decades, remains painfully high. As a result, the Fed has kept raising interest rates to slow economic growth to maintain its aggressive attack on prices. The danger, however, is that too much braking could send an already sluggish economy into recession. The risk was highlighted by S&P Global. According to the report, inflation slowed business activity this month. Even with the sharp drop, inflation pressures have eased. But, if history is any indication, the future isn’t looking too bright. According to Fed forecasts, inflation will slow next year due to rising unemployment. Despite this, the Fed’s own projections show prices still rising at an unacceptable rate by year-end 2023, with inflation at 3.5%. Why’s that concerning? Inflation has been running at 3.7% or higher during every recession since 1960 except the pandemic-induced downturn of 2020. It was only in 1974 that inflation was higher than 2.7% when the recession ended. While we don’t have a crystal ball to predict the future, it wouldn’t hurt to prepare for a possible downturn. And, one area to focus on is avoiding the following investing mistakes during a recession. Immediately selling your holdings when they begin to fall. When the economy is in recession, the stock market becomes highly volatile. As a result, you might be tempted to cut your losses when you see all your investments tank on the trading screen. However, when investments fail, you should not unload them. Why? Well, here are three reasons why you should hold onto your investments. If you sell during a downturn, you could lose money. As a result of a market downturn, stock prices decline. The prices of investments were likely higher when the market was booming, so you likely paid more for them. In other words, if you sell during a downturn, you might end up losing money on your investments. Remember that you will never lose money unless you sell, no matter what the market does. The only way to lock in your losses is to sell when prices are lower, even if your investments decrease in value. In short, a good way to avoid losing money is to hold onto your stocks until the price recovers. There is no way to predict the market. If you want to maximize your returns, you should buy stocks at their lowest prices when the market bottoms out, and sell when the market peaks. The strategy is called timing the market, and while it sounds smart, executing it successfully is extremely challenging. There is no way that anyone can accurately predict what will happen in the stock market, not even the best investors. Even a small error in timing can result in a lot of losses in the stock market. As an example, consider the 2020 market crash during the early stages of the COVID-19 pandemic. In just a few weeks, the S&P 500 lost more than one-third of its value. By selling your investments shortly after prices started to fall, you would have not only locked in your losses but also locked in higher profits. Also, you could have missed the near-immediate recovery of the market. By timing the market, you might buy during high prices, sell during their lowest, and rebuy during high prices. When you hold onto your investments through the rough patches, though, you’re more likely to come out on top. A healthy company should see its price rebound. Stock markets are volatile, but companies with strong, healthy balance sheets have a better chance of bouncing back. It is important to understand a company’s underlying business fundamentals in order to determine its strength. Asking the following questions can help you determine this: In its industry, does it have a competitive advantage? Are its leaders capable of making good business decisions during challenging times? Is it financially healthy? In the long run, your investments should rebound after periods of volatility if you invest in solid companies. In times of market turmoil, it’s best to hold onto your investments and ride out the storm. Strictly limiting investing amid volatility. While some investors sell when the market dips, others don’t invest at all. In fact, according to a recent survey from Allianz Life, 65% of investors keep “more money than they should” out of the stock market. “We’re more fixated on what we could potentially lose on paper than what opportunities pass us by that we never capitalize upon,” said Josh Reidinger, CEO of Waverly Advisors in Birmingham, Alabama, which ranked No. 59 on the FA 100 list. If you stay away from the stock market, you might miss out on some of the best returns. As a matter of fact, over the past 20 years, the top 10 performing days occurred after big stock market declines in 2008 and 2020, during the beginning of the Covid-19 pandemic, according to Morgan Asset Management. “History does not repeat itself,” Reidinger said. “But it’s a pretty good indicator of where we are going.” Buying stocks at their lowest points Stocks might be at their absolute lowest when you’re investing during a period of economic instability. Again, it’s possible to miss out on some profitable opportunities if you try to time the market that way. In a recession, it’s best to invest consistently at regular intervals. The only thing that matters is if that stock goes up in value eventually, not if you buy it at its lowest point. A recession can present a number of challenges when it comes to investing. However, knowing what mistakes to avoid can save you from having to live with regrets in the future. Not understanding what you are investing in. During recessions, Pamela Capalad, a financial planner at Brunch & Budget, says investors are tempted to invest in new, trendy investments. “Avoid anything that you didn’t understand before the recession,” she says. For instance, if you are unfamiliar with cryptocurrency and desperate to invest in it, now might be a bad time. Capalad says, “Ultimately, it goes back to: Do you understand what you’re investing in? Do you understand why you’re investing in crypto? Do you understand how crypto works?” “Crypto was one of the first things to take a dive when there was any hint of recession because crypto is currently all speculation,” she adds. “It’s really easy to ride a trend, especially when it’s going up.” Investing without diversification. Putting all your eggs in one basket isn’t a good idea. In general, investing in only a handful of stocks can be risky. The risk is even higher during a recession. However, by diversifying your capital across several assets, you’ll be able to mitigate losses if one or a few of your bets don’t work. In a recession, exchange-traded funds (ETFs) give you exposure to a diverse group of high-quality stocks through index-tracking ETFs, helping you avoid these mistakes. There are 2 basic types of indexes: A market index such as the S&P 500 is a measure of the overall market. An index which tracks a much more targeted subset of the overall market, such as small-cap growth stocks or large-cap value stocks. A bond index, a commodity index, and a currency index are also available. ETFs based on indexes seek to replicate the return of the market or subset of the market they aim to replicate, less their fees. The ETF market price will differ from the fund’s net asset value, so index ETFs do not track the underlying index perfectly. Generally, indexes based on subsets of the market compete with broader indexes based on the entire market. A small-cap index, for example, is typically compared to a broader index on the entire market by investors. What are the best ETFs to buy for a recession? Some suggestions include: Schwab U.S. Dividend Equity ETF (SCHD) SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) iShares 0-3 Month Treasury Bond (SGOV) Vanguard Consumer Staples ETF (VDC) Vanguard Utilities Index Fund ETF (VPU) Health Care Select Sector SPDR Fund (XLV) Vanguard S&P 500 ETF (VOO) Checking your portfolio 24/7. Making investment decisions based on the market’s movements and constantly fretting over your portfolio’s value during a downturn is unlikely to be profitable. Continually checking indicates worry, which could lead to emotional decisions. You should check your portfolio once a week if you can. Occasionally, big down days follow big up days. In addition, if you participate in a workplace retirement plan like a 401(k), you’re likely adopting the practice of dollar-cost averaging. In this method, investments (typically mutual funds) are consistently purchased over time. With this strategy, you buy fewer shares when prices are high and more shares when prices are low. You listen to the “experts.” There’s no way Mad Money, Squawk Box, and Closing Bell along with their panel of supposedly “expert” money managers are going to predict when this recession will end. No offense. But, it’s all for entertainment. You may think that I’m being too harsh here. However, lead author Nicola Gennaioli examined stock prices, dividends, and data over the past 35 years to compare them with recommendations made by market experts. In his study, his team found that investing in the 10 percent of stocks most recommended by experts yielded, on average, a three percent return. In contrast, investors who invested in the ten percent of stocks least recommended by experts earned 15 percent returns on average! Not safeguarding your retirement. “Building an investment plan is like formulating a diet plan – totally dependent on your goal,” writes Sanjay Sehgal in a previous Due article. “When you visit your dietician for instance, one of the first questions asked is about your goal – Do you want to lose weight, build muscle, or you wish to celebrate food?” “But moderation, as any good dietician will tell you is the key; it’s only when everything you need is in your plate, in the right quantities, that you can achieve your goal, as well as enjoy each bite and every taste,” he adds. “A dietician’s plan begins from this understanding. “Investments also need planning, and this planning should be based upon your risk-taking ability and your life goals.” Consequently, we should plan our investments based on a post-pandemic financial horizon that will differ from anything we know. This now involves recession-proofing your retirement investments by following these steps: Take care of your health. Occasionally, there are pandemics, recessions, depressions, or high inflation rates. As a result, during a crisis, you would have a better chance of thinking clearly, taking action, and even protecting yourself against other risks. Have an emergency fund. An emergency fund should be equal to 6 months’ worth of income. In the event that you lose your job and unemployment is high, that is not going to save your life. But you will have some options and options for adjusting. Live within your means. Adapt your living expenses to match your retirement income. By living within your means during the good times, you will be less likely to go into debt when gas prices go up and more able to adjust spending in other areas. Stay in the market. There is always a risk associated with investing in the stock market. In exchange, you typically get higher returns over time than you would from savings accounts, fixed deposits, etc. Occasionally, the market dips, and your portfolio may suffer, but it will pass. Invest for the long term. What if your investments drop 15% as a result of a drop in the market? You won’t lose anything if you don’t sell. You will have plenty of opportunities to sell high in the long run, since the market is cyclical. Buying during a down market may end up paying off later on. Diversify your investments. Diversification reduces your portfolio’s market risk. Regardless of what the market does, diversification keeps a portfolio healthy. The market may fluctuate, but a portion of your portfolio may respond positively and offset some negative effects. Cash is where you stay. As a result of this mistake, panic selling is compounded. After a market downturn, stock prices often rebound strongly, showing how bailing out can cost you when the market turns around. To be fair, holding cash makes sense if you have short-term spending needs or are building an emergency fund. When your long-term financial goals are decades away, it makes no sense to hold a large position in it as part of your investment portfolio. It is advisable for investors who have excess cash because they sold during the market slide, or for any other reason, to close the gap and invest. It is possible to get back into the market gradually by buying set amounts of stock at regular intervals (say, monthly) using dollar-cost averaging. In many cases, dollar-cost averaging can make it easier for fearful investors to move out of cash, since they won’t have to worry about putting lots of money into the market, only to see it sell off again. As a result, if the market recovers, they will be glad they already put some of their money back to work rather than leaving all of it on the bench. You don’t consult an investment professional before making a large investment. As humans, we all make mistakes. And, occasionally, we make these mistakes because we all let our emotions get the best of us. In the end, though, you’ll get into trouble when you make decisions based on feelings rather than facts. How can you keep things in perspective and make sure your investments are on track? Consult a professional for investment advice. When you have a pro on your side, you’re more likely to stay focused on your long-term goals and stay as cool as a cucumber. FAQs What is a recession? After a period of growth, a recession is typically defined as two consecutive quarters of declining GDP (gross domestic product). According to the National Bureau of Economic Research (NBER), a recession is “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales.” What causes recessions? Many things have led to recessions in the past, but economic imbalances are typically the cause. For instance, the 2008 recession was caused by excess debt in the housing market. Unexpected shocks can also lead to job cuts, like the COVID-19 pandemic. Economic growth, earnings and stock prices are all put under pressure when unemployment rises. An economy can be thrown into a vicious cycle by these factors. In the long run, recessions are necessary to clear out excesses before the next boom. How does a recession affect the stock market? Although recessions are hard to predict, it’s still smart to think about how they might affect your portfolio. Historically, bear markets (market declines of 20% or more) and recessions (economic declines) have often overlapped, with equity markets leading the economic cycle by 6 to 7 months on the way down and back up. Even so, market timing moves can backfire, like moving an entire portfolio to cash. It’s often the late stages of an economic cycle or right after a market bottom that yield the best returns. In down markets, dollar cost averaging, where investors invest equal amounts at regular intervals, can help. Investors can buy more shares at lower prices while staying positioned for when the market recovers. How long do recessions last? Since 1854, the average recession has lasted 17 months, according to the NBER. Generally, recessions in the U.S. have lasted about 10 months since World War II, with recessions typically lasting much shorter. However, a recession can last much longer than that. For example, the Great Recession of 2007 – 2009 lasted 18 months. Conversely, it can last only a short time. The COVID-19 recession of 2020, for instance, lasted for only two months.. What should you do to prepare for a recession? Before and during a recession, investors should remain calm. It’s especially true during times of economic and market stress that emotions can sabotage investment returns. Although recessions can’t be predicted, it’s important to maintain a long-term mindset. Ensure your portfolio is designed to be balanced so that you can take advantage of growth periods before they happen while remaining resilient during volatile periods. Article by Albert Costill, Due About the Author Albert Costill graduated from Rowan University with a History degree. He has been a senior finance writer for Due since 2015. His financial advice has been featured in Money Magazine, Fool, The Street, Forbes, CNBC and MarketWatch. He loves to give personal finance advice to millennials......»»

Category: blogSource: valuewalkJan 3rd, 2023

Vishay"s (VSH) Launch of New Modules Expands Diodes Offerings

Vishay (VSH) introduces three new series of 130 A to 300 A three-phase bridge power modules in the ultra-compact MTC package, which are likely to drive its momentum across industrial applications. Vishay Intertechnology, Inc. VSH is leaving no stone unturned to expand its discrete offerings to bolster its presence in the booming semiconductor industry.The unveiling of three new series of 130 A to 300 A three-phase bridge power modules in the ultra-compact MTC package by the company is a testament to the same.New power modules — 130 A VS-131MT…C, 160 A VS-161MT…C and 300 A VS-301MT…C — feature blocking voltages of 1600 V and 1800 V. They also offer 3600 VRMS isolation voltage and low forward voltages down to 1.54 V.Further, these modules offer rugged design while their highly conductive MTC package delivers excellent thermal behavior, which makes them ideal for line-frequency input rectification in welding machines, switch mode power supplies, plasma cutting, battery chargers and motor control.With all these features and benefits, Vishay is likely to gain strong traction in heavy-duty industrial applications.Also, the latest move adds strength to the company’s diodes product line.Vishay Intertechnology, Inc. Price and Consensus  Vishay Intertechnology, Inc. price-consensus-chart | Vishay Intertechnology, Inc. Quote Growth ProspectsThe latest move expands Vishay’s diode offerings, which have become an integral part of its discrete semiconductor business.In third-quarter 2022, diodes generated revenues of $209 million (23% of total revenues), up 12.8% from the year-ago quarter’s level.The company’s deepening focus on its semiconductor business as well as its strong product line is likely to continue aiding its financial performance in the days ahead.This in turn is likely to aid it in winning investors’ confidence in the near term.Vishay has gained 1% on a year-to-date basis compared with the industry’s decline of 20.6%.Moreover, we believe that expanding diodes offerings would continue to aid Vishay in expanding its presence in the global diodes market, which, per a report from Mordor Intelligence, is expected to witness a CAGR of 2.5% between 2020 and 2027.Expanding Product PortfolioThe latest launch added strength to its overall product portfolio.Apart from the latest move, Vishay recently introduced a linear optocoupler - VOA300, which is an automotive-grade device offering an industry-high isolation voltage of 5300 Vrms.Further, Vishay recently acquired MaxPower Semiconductor, a fabless power semiconductor provider. The acquisition helped Vishay enhance its MOSFET product offerings.Vishay also launched four FRED Pt Gen 5 600 V Hyperfast rectifiers to strengthen its discrete semiconductor portfolio.VSH also unveiled three inductors designed to save board space and increase efficiency in IoT devices and portable electronics.Additionally, Vishay’s launch of 15 Hyperfast and Ultrafast rectifiers remains noteworthy. Also, the introduction of its two short-wavelength ultraviolet-emitting diodes, namely VLMU35CR40-275-120 and VLMU35CR41-275-120, in a ceramic and quartz-based package is a positive.We believe that these endeavors will continue to shape Vishay’s growth trajectory and sustain momentum in its various end markets.Zacks Rank & Stocks to ConsiderCurrently, Vishay carries a Zacks Rank #3 (Hold).Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Asure Software ASUR, Agilent Technologies A and AMETEK AME. While Asure Software sports a Zacks Rank #1 (Strong Buy), Agilent Technologies and AMETEK carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Asure Software has lost 10.9% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 23%.Agilent Technologies has lost 7.8% in the year-to-date period. The long-term earnings growth rate for A is currently projected at 10%.AMETEK has lost 5.7% in the year-to-date period. The long-term earnings growth rate for AME is currently projected at 9.7%. Zacks Top 10 Stocks for 2023 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2023? From inception in 2012 through November, the Zacks Top 10 Stocks portfolio has tripled the market, gaining an impressive +884.5% versus the S&P 500’s +287.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>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 Agilent Technologies, Inc. (A): Free Stock Analysis Report AMETEK, Inc. (AME): Free Stock Analysis Report Asure Software Inc (ASUR): Free Stock Analysis Report Vishay Intertechnology, Inc. (VSH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksDec 12th, 2022

86 thoughtful gifts for every kind of mom

If you're looking for a thoughtful gift for Mom, we put together a list for all budgets and interests. When you buy through our links, Insider may earn an affiliate commission. Learn more.Tiny Tags; Urban OutfittersFinding the perfect holiday gifts for a mom — be it for your own mother, grandmother, mother-in-law, aunt, or a new parent on your list —  can be tricky. She might claim she doesn't want anything or have very specific tastes, so finding a thoughtful gift might require some extra thought.  Even if they don't give you much to go off of directly, the key to shopping for moms is simply to pay attention to their likes (and dislikes). Whether she's a minimalist, bookworm, foodie, nature lover, techie, or fitness fanatic, we've rounded up a selection of gifts below, guaranteed to bring a smile to every mom's face.  A luxury set of maternity essentialsHatchHatch To Hospital X Jenni Kayne, available at Hatch, $398Best for: The expectant motherExpecting mamas with no clue what they should be packing for the hospital will love this pre-made kit designed by maternity brand, Hatch in collaboration with California lifestyle brand, Jenni Kayne. The limited-edition box is a bundle of joy all its own, as it consists of luxury essentials that will help make Mom feel supported but pampered, too, including a matching nightgown, robe, and cozy cashmere socks.A subscription specifically for petite clothingShort StoryShort Story Petite Styling Subscription Box, available at Short Story, from $50Best for: The petite fashionistaIf the mom on your list is a fashionista standing at or under 5'4", a Short Story Subscription is the perfect gift. Each box is curated by a professional stylist tapped into petite fashion and caters to the subscriber's preferences and needs. From tops to dresses to accessories, outfits are handpicked and boast brand names from Vince Camuto to Blank NYC, because no one should have to sacrifice style to accommodate their height.A silky slipNordstromLUNYA Washable Silk Slipdress Nightgown, available at Nordstrom, Saks Fifth Avenue, and LUNYA, $198                                         Best for: The slip loverDo you know what pairs exceptionally well with holiday cheer? Anything cozy. Enter this silky slipdress from LUNYA that is breathable, thermoregulating, and machine washable. It comes in three colors (Immersed Black, Meditative Grey, and Otium Tan) and is designed to be a bit oversized for optimal comfort.A personalized gold bar necklaceTiny TagsTiny Tags Gold Skinny Bar Necklace, available at Tiny Tags, from $145Best for: The minimalistThis Skinny Bar Necklace from Tiny Tags is about to be their new favorite accessory. Available in either yellow, white, or rose gold, and three length options (choker, STD, or 18 inches), the necklace is a personalized accessory that can fit up to 25 characters of text. Whether you engrave the piece with the names of their children, birthdates, or a sweet quote, the sentiment is sure to warm their heart.A crossbody phone case and walletCrystal Cox/InsiderKimberly Leather Crossbody, available at Bandolier, $128Best for: The mom who hates bulky bagsIf all they need is something to store their phone and wallet, this stylish crossbody case was invented for them. It accommodates a wide range of smartphones and features card slots and a snap pocket to keep their essentials all in one tiny, easy-to-access place.The gift of comfortable loungewearTommy JohnWomen's loungewear and sleepwear, available at Tommy John, $48Tommy John E-Gift Card, available at Tommy John, from $25Best for: The mom who loves to loungeThe Insider Reviews team is positively smitten with Tommy John's loungewear and underwear — so much so, we named the latter one of the best women's underwear brands in our buying guide, so you can be sure Mom will love it too.A diamond charm of her initialsMejuriDiamond Letter Charm, available at Mejuri, $225Best for: The mom who loves personalized giftsQuite a few mothers rock necklaces with their initials — or, sometimes, even their children's or spouse's. It's sweet and sentimental, but also really chic, especially when the charms are these diamond ones from Mejuri. Pair it with one of Mejuri's dainty chains so it's ready to wear or let Mom add the charms onto one of her own necklaces. You can also browse more jewelry gifts for mom here.An ultra-comfy loungewear set that's one of Oprah's Favorite ThingsSpanxAirEssentials Wide Leg Pant, available at Spanx, $118AirEssentials Half Zip, available at Spanx, $118This AirEssentials set from Spanx is one of the comfiest sets we've ever tested. Sally Kaplan, the executive editor of Insider Reviews, says it's her go-to travel outfit and all-around favorite sweatsuit. The material is lightweight and buttery, not too hot but not too light, and the pieces are easy to mix and match with other wardrobe staples.The pants are available in petite, regular, and tall sizes, and each set comes in a few neutral colors. The sweatshirts come in several styles — a cropped pullover, regular pullover, and half-zip — and if you don't think the wide leg pant isn't quite right for your giftee, you can also buy a tapered jogger-style pant in the same material for $110.Popular leggings with a no-slip fitVuoriDaily Legging, available at Vuori, $89Best for: The mom who prioritizes comfortVuori is well-known for its super-soft fabrics and flattering cuts, and the Daily Leggings are just another example. This style looks like a pair of joggers but fits like a pair of leggings. The high waistband and drawstring allow for a snug feel while the brand's smoothing technology gives an airbrushed appearance.Read more about the Daily Legging here.A pair of cozy, eco-friendly slip-on shoesAllbirdsWomen's Wool Lounger Fluffs, available at Allbirds, $89Best for: The mom who loves sneakersKeep mom looking cool and feeling comfy every time she leaves the house with these slip-on sneakers. Made with cozy soft merino wool inside and out, these shearling shoes are ideal for cool fall days running errands or meeting up with friends for lunch. The best part: The entire shoe is machine washable.A luxurious bathrobeParachuteClassic Bathrobe, available at Parachute, $109Best for: The mom who takes self-care seriouslyA plush bathrobe will make every shower feel like a trip to the spa. Parachute's soft Turkish cotton robe comes in four great colors: white, mineral, blush, and stone. This cozy gift for Mom will become her go-to pick. Read our full review of the Parachute Classic Bathrobe here.A pendant necklaceSet & StonesSet & Stones Cheyenne Mama Necklace, available at Nordstrom, $232Best for: The proud mamaYour mom will want to keep this pendant necklace very close to her heart. It'll sit lightly around her neck and be a subtle reminder of her special bond with you. If this is quite her style, you can browse more jewelry gifts for mom here.A roomy work bag with tons of pocketsDagne DoverDagne Dover Allyn Tote, available at Dagne Dover, from $340Best for: The mom who's picky about bagsDagne Dover's Allyn Tote is a sophisticated and spacious work bag with a padded laptop sleeve, water bottle holder, and other thoughtful interior pockets that will keep Mom organized and always ready to go. A comfortable, ethical sandalNisoloGo-To Flatform Sandal, available at Nisolo, $117Best for: The mom in search for a good summer sandalNisolo is known for its ethically and sustainably made footwear. The aptly named Go-To Flatform Sandal is a basic summer staple that can be dressed up or dressed down — a practical wardrobe necessity.  Pearl hoop earringsMejuriMejuri Pearl Hoops, available at Mejuri, $78Best for: The mom who loves minimalist jewelryGet your mom a beautiful pair of earrings or a necklace with her zodiac sign that she can wear every day. Mejuri is a favorite jewelry startup of ours, so your Mom will likely enjoy this Canadian company's delicate jewelry, too. You can also browse more jewelry gifts for mom here.Read our full review of Mejuri here.A pair of sunglasses to block the sun in styleGlassesUSACheck out GlassesUSA's selection of sunglasses, from $29Best for: The mom who loves the sunSunglasses are spring and summer essentials and a perfect gift for Mom. GlassesUSA carries a wide variety of popular brands, including Ray-Ban, Oakley, Muse, Prada, and more. If you want a pair for yourself too, you can buy one and get one free with the code BOGOFREE at checkout.Read our full review of GlassesUSA here.A gold square watch to keep track of timeNordstromMVMT Signature Square Bracelet Watch, available at Nordstrom and Macy's, from $102.40Best for: The mom who hates using her phone for a watchThis elegant square watch bears a minimalist and luxurious design that elevates any look. The gold watch is so impossible to miss that she'll now be on time for every occasion with it as a reminder.A beautiful scarf with her birth-month flowerUncommon GoodsBirth Month Flower Scarf, available at Uncommon Goods, $48Best for: The mom who likes sentimental giftsGive her something beautiful to wear that will remind her how thoughtful you are every time she wraps it. This scarf is patterned with the flower of her birth month, a nice touch of under-the-radar personalization.A chic purse that can turn into a backpackSenreveAlunna, available at Senreve, from $595Best for: The mom who hates lugging stuff on her shoulderA purse is an obvious gift for Mom if she has an eye for handbags, but you can mix things up by giving her one that's both a purse and a backpack. The Alunna by Senreve is versatile and stylish, and it can be worn on her back, hand, over the shoulder, or across the body. Plus, it can organize all of Mom's essentials with its two interior pockets and exterior cardholder.Luxe slippers with a cozy cashmere blendMargauxSlippers, available at Margaux, $248Best for: The mom who refuses to walk barefoot on hardwood floorsMade from a soft wool-cashmere blend and cushiony foam padding, Margaux slippers feel like stepping into a cloud. Mom will enjoy wearing any of the three styles — Slide, Ballet, or Cozy — around the house.A leather wallet that can be monogrammed with Mom's initialsLeatherologyKlyde Continental Wallet, available at Leatherology, from $140Best for: The mom with the wallet that's falling apartA sophisticated leather wallet instantly elevates a busy mother's everyday style and keeps her organized when she's constantly moving from place to place. You can get this leather wallet from Leatherology in 11 colors and three different personalization options. A personalized T-shirtKnown SupplyPersonalized Women's Fitted Crew, available at Known Supply, $32Best for: The new mom beaming with prideYou can personalize this comfortable Pima cotton tee with "mom" or "mama" — or any other name that's under nine characters — in cute, loopy cursive. A crossbody bag with a hand-painted monogramClare V.Midi Sac, avaliable at Claire V., starting at $335Best for: The practical yet stylish momThis leather crossbody bag comes in tons of colors and is great for travel and daytime outings — for an extra $50, you can customize it with a gold foil or hand-painted monogram. A passport cover and luggage tagLeatherologyDeluxe Passport Cover + Luggage Tag Set, available at Leatherology, starting at $75Best for: The mom who travels more than you doMom might be planning her next trip out of town, and what better travel accessory to have than a personalized passport cover and luggage tag? She'll be less likely to lose her passport or suitcase thanks to these colorful accessories that also sport her initials. A dish purely for melting cheeseAmazonEmile Henry Cheese Baker, available at Amazon and Emily Henry USA, from $50Best for: The cheese loverAs far as we're concerned, cheese lovers and entertainers need this stunning glazed baker from Emile Henry. It's both a heavy-duty pot and a stylish serving dish that melts and keeps cheese melted for deliciously decadent dips and fondue. Don't be surprised when night outs become nights in, because who needs takeout when there's ooey, gooey cheese to enjoy? An impressive electric kettleWalmartBeautiful by Drew Barrymore 1.7L One-Touch Electric Kettle, available at Walmart, $39.96Best for: The tea drinkerWhile there's nothing quite like a stovetop-boiled cup of tea, electric kettles are also beloved by tea drinkers for their speed and efficiency. This programmable model from Beautiful by Drew Barrymore, for example, can boil up to seven cups of water in under seven minutes. What's more, the touch-activated appliance features four preset options for white, green, oolong, and black teas, to ensure every cup is brewed to perfection. It also comes in six beautiful colors, including Merlot and Sage Green, so you can easily match the kettle to their kitchen decor.A box of beautiful holiday chocolatesCompartésCompartés Holiday Chocolate Truffles, available at Compartés, $39.95Best for: The chocolgate loverIf they have a sweet tooth, Compartés Holiday Truffles are sure to curb their craving. But this is no average box of chocolates; each treat boasts a uniquely festive flavor, from gingerbread and decadent butter pecan to pumpkin, sticky toffee, and more. You won't be just gifting them dessert; you'll be gifting an experience any candy connoisseur won't want to miss this season.A gift card to buy whatever food they're cravingGoldbellyGoldbelly Gift Card, available at Goldbelly, from $25Best for: The homesick foodieIf your mom has a favorite city or place that she misses (or just craves a food she can't easily get where she is), a Goldbelly gift card goes a long way. Goldbelly is one of our favorite services when it comes to delivering regional meals, meal kits, and desserts, be it Maine lobster rolls, Southern BBQ, or NYC bagels. A delicious treat from Milk BarMilk Bar/Alyssa Powell/InsiderMilk Bar Treats, available at Milk Bar, from $27Best for: The mom with the sweet toothMilk bar cakes topped our list of the All-Time Best things we've tested and these treats will definitely satisfy Mom's sweet tooth. Choose from a limited-edition Strawberry Shortcake Cake, the bestselling B'Day Truffles, and plenty more. We break down how to shop for Milk Bar online, here. Read our full review of Milk Bar.A cocktail maker that mixes drinks in secondsBartesianBartesian Premium Cocktail and Margarita Machine, available at Amazon and Williams Sonoma, from $299.99Best for: The bartender momSummer's almost here, which, for some moms, means it's time to break out refreshing cocktails. This cocktail maker will make Mom's life a whole lot easier, since all she has to do is pop in a cocktail capsule, choose her preferred strength, and press mix. She'll be sipping a margarita, cosmopolitan, or gin martini in seconds.Read our full review of the Bartesian Premium Cocktail and Margarita Machine here.  A wooden gift crate with 2 pounds of cheese insideMurray's CheeseMurray's Cheese Greatest Hits Gift Box, available at Murray's Cheese, $108Best for: The mom who *always* says yes to cheese on her pastaCheese lovers will find a lot to like in this wooden gift crate (yes, crate) from Murray's Cheese, which includes two mouthwatering pounds of English cheddar, brie, cave-aged Gruyere, and one-year-aged Manchego along with snacks to pair with each cheese: spiced cherry preserves, sea salt crackers, and Marcona almonds.For more of the best from Murray's Cheese, check out our guide to the best cheeses you can buy online.Read our review of Murray's Cheese gift boxes.A cookbook focused entirely on vegetablesMilk StreetMilk Street Vegetables Cookbook, available at Amazon and Bookshop, from $26.35Best for: The vegetarian chef If your mom is a vegetarian (or just trying to do more Meatless Mondays), this cookbook takes inspiration from the many ways in which vegetables are celebrated by different cultures around the world.A Le Creuset dutch ovenAmazonLe Creuset Round Dutch Oven, available at Williams-Sonoma and Crate & Barrel, from $260Best for: The mom with chipped potsAt $160, this Le Creuset dutch oven might be the most expensive piece of cookware in Mom's kitchen, but it'll also be the most used. It comes in tons of colors, so you can choose Mom's favorite. We've even ranked it as the best overall in our guide to the best dutch ovens. It's one of the best products we've ever tested.Read our full review of the Le Creuset Round Dutch Oven here.A cutting board in the shape of the state Mom calls homeAmazonTotally Bamboo State Cutting & Serving Board, available at Amazon and Totally Bamboo, from $14.99Best for: The mom full of state prideAvailable for all 50 states as well British Columbia, Puerto Rico, Long Island, and Ontario, this uniquely shaped cutting and serving board doubles as kitchen decor. An indoor herb garden that requires zero effortClick & GrowSmart Garden 3 Indoor Gardening Kit, available at Click & Grow and Amazon, $74.96Best for: The mom who loves a fresh garnishEvery chef knows that cooking with fresh ingredients like basil can make a big difference. The Click & Grow Smart Garden is a self-watering system that allows even the most amateur gardeners to quickly and effortlessly grow herbs and vegetables. We tried it and were impressed with how well it worked, as well as the truly effortless process. Read our full review of the Click & Grow Smart Garden 3 Indoor Gardening Kit here.A tasty baking cookbookAmazon"Dessert Person" by Claire Saffitz, available at Amazon and Bookshop, from $21.11Best for: The mom who bakes all the timeFor the mom who adores baking, this dessert cookbook has plenty of baking recipes to satisfy the family's sweet tooth. It offers recipes and guidance on how to bake sweet and savory treats whether it's a caramelized honey pumpkin pie or English muffins.  If she already has it, here are some of the best baking books recommended by professional bakers.A water bottle that solves all pain pointsHydro Flask/Alyssa Powell/InsiderHydro Flask Wide Mouth Water Bottle (32 oz), available at REI and Amazon, from $37.92Best for: The mom who needs to hydrateHydro Flask water bottles are one of the All-Time Best products we've ever tested and have a cult following for a number of reasons: The double-walled vacuum seal keeps hot drinks hot and cold drinks cold for hours on end, many products come with a lifetime warranty, and the bright colors add a bit of fun to something that's otherwise thought of as ordinary. You can hear more about why we love this water bottle in our guide to the best travel mugs. A delicious wine-mimic for healthy nights offJukes CordialitiesJukes 6, available at Jukes Cordialities, $55Best for: The sober momIf mom loves vino, she'll love this tasty non-alcoholic substitute for nights where she's craving a glass but wants to stay sober. Created by a British wine critic, Jukes Cordialities are thoughtful and complex — the closest to the real stuff we've tried.We personally love the full red mimic, Jukes 6, which is deep and spicy like a glass of Rioja, and pairs well with food in the same way wine does — all without the buzz and with the added health benefits of organic apple cider vinegar (the base).A voice-assisted remote for all Mom's streaming needsAmazonFire TV Stick with Alexa Voice Remote, available at Amazon and Target, from $24.99Best for: The mom who watches everythingShe can access hundreds of streaming services, including Hulu, Netflix, Disney Plus, HBO Max, and more, with this affordable entertainment hub. Plus, Amazon Prime members get unlimited access to thousands of movies and TV episodes with Amazon Prime Video. This model supports up to 4K Ultra HD. You can read more in our guide to the best streaming devices.The Amazon EchoAmazonAmazon Echo (4th Generation), available at Amazon and Target,  $59.99Best for: The mom who wants some hands-off helpThere's an ever-so-slight learning curve in figuring out what Amazon's Alexa can and can't do, but once that's passed, the Echo can forecast the weather, read an audiobook, order a pizza, tell jokes, or any number of things Mom should find charming. Read our full review of the Amazon Echo (4th Generation) here.A step tracker to keep her movingFitbitFitbit Charge 5, available at Best Buy and Amazon, $99.95Best for: The fitness enthusiastIf your mom's looking to stay on top of their health, we highly recommend gifting a very practical Fitbit. The Charge is one of our top picks for covering all the basics — counting steps, tracking sleep, 24/7 heart rate monitoring, tracking 20 different exercises — without breaking the bank, and all with an easy-to-read display and sleek design on the wrist.(If she'd want smartphone notifications on her wrist, too, we recommend the Versa 2, which has a bigger display but is still reasonably priced.)Alexa-enabled glassesAmazonEcho Frames Smart Glasses, available at Amazon, $269.99Best for: The mom who wants the glasses of the futureIf your mom loves tech, they'll think these smart glasses are from the future. Amazon's Echo Frames allow for open-ear audio, hands-free calling, and access to thousands of Alexa's skills.Read our full review of the Amazon Echo Frames.A cuter way to send mom "love you" messagesUncommon GoodsLovebox Spinning Heart Messenger, available at Uncommon Goods, from $30Best for: The mom who loves being reminded of how much you love herMoms love nothing more than being randomly told their kids love them, and this creative box lets you do it in a way more special than just a text. When you send a message, the heart on the box will spin and she can open it up to read the digital display of your loving words.A digital picture frame for remembering the good timesAuraCarver Digital Picture Frame, available at Aura, $149Best for: The mom who can't decide on one photo to frameIt's hard to find a mom who isn't obsessed with taking photos and displaying them all around the house. But instead of buying tons of picture frames, she can show off all her family photos using this digital picture frame. You can upload an unlimited amount of pictures to the Aura app, connect the frame to Wi-Fi, and she's all set. Read our full review of Aura here.A waterproof Kindle PaperwhiteAmazonAmazon Kindle Paperwhite, available at Amazon, $129.99Best for: The avid readerIf your mom's tired of lugging around heavy hardcovers, the Kindle Paperwhite is an extremely thoughtful and practical gift. The latest version is waterproof, too, which is a huge bonus.Read our full review of the Amazon Kindle Paperwhite here.A rejuvenating, at-home foot massagerRENPHORENPHO Foot Massager Machine, available at Amazon and Walmart, from $102.38Best for: The mom who loves an at-home spa dayTreat her to a spa day any (and every) day she wants with this at-home foot massager. It's a full-service Shiatsu device that offers kneading, compression, and heat therapy. We love that it encompasses your ankles too for extra relief, all of which is why it's our top pick.An alarm clock that uses light to wake her up gentlyAmazonPhilips Light Alarm Clock, available at Amazon and Philips, from $99.95Best for: The mom who struggles waking up in the morningJust because Mom has to wake up before the sun rises doesn't mean they have to awaken to the blaring of an obnoxious alarm clock.Philips makes a lovely alarm clock that gradually lights up to mimic the sunrise. The light alarm clock also displays the time and has customizable sounds, so Mom can wake up feeling rested and ready for the day. You can find out why we recommend this alarm clock in our guide to the best sunrise alarm clocks. Read our full review of the Philips Wake-Up Light.A mini massage gunTherabodyTheragun Mini, available at Therabody and Amazon, from $149Best for: The mom who's always working outIf she's achy from regular exercise or a pulled muscle, every type of person will see benefit from using a massage gun. We love the Theragun Mini because it'll work out kinks and aches anywhere you place it with a powerful motor and easy-to-hold grip.A soothing, interactive sand sculptureBest BuyHoMedics Drift Sandscape, available at Best Buy, Walmart, and Bed Bath & Beyond, from $319.99 Best for: The mom who appreciates sand artWhether they're a new or seasoned mama, anything that can serve as an element of calm in their chaos is going to be appreciated. We love the HoMedics Drift Sandscape because it does exactly that, but subtly, and it doubles as decor. The shifting sand, illuminated with soft LED lighting, changes shape based on the movements of the metal sphere, and just watching these shapely creations come to life can promote a sense of relaxation and calm they may not have even realized they needed. Plus, the sculpture is small enough that it can fit on a side table or desk, and is automated via a smartphone app. Fresh flowers every monthBloomsyBoxBloomsyBox Subscription, available at BloomsyBox, from $44.99 per monthKeep the bouquets coming with a subscription to BloomsyBox. With options from monthly to weekly deliveries, the BloomsyBox flower subscription service ships gorgeously crafted collections of stems from eco-friendly farms straight to your lucky recipient's door. From roses to more exotic, tropical blooms, the plant-loving mom on your list will look forward to displaying their new arrangement each month.A fresh flower bouquetUrbanStemsFresh flower bouquets, available at UrbanStems, from $35Best for: The mom who loves the classicsWe've ordered bouquets from UrbanStems and it offers gorgeous flower arrangements, potted plants, and even dried bouquets, and they're delivered quickly, too. A bouquet of flowers is a classic gift for Mom that she'll love on any given day. Its bouquets are one of the best things we've ever tested. Read our full review of UrbanStems.A candle for your favorite spot togetherHomesick, Rachael Schultz/InsiderMemory Candles, available at Homesick and Amazon, from $21.28Best for: The mom who loves reminiscing Whether your best memories are childhood ski trips, your annual beach vacation, or just baking in the kitchen together, share the sentiment with mom. Homesick makes a deliciously-scented candle for nearly every memory — and if that doesn't work, it also has a candle for every state and city, astrology sign, and even one that simply says, "Thank you, Mom."Soft, crisp sheets and beddingBrooklinenBrooklinen Queen Classic Hardcore Sheet Bundle, available at Brooklinen, $195.71Brooklinen Queen Luxe Hardcore Sheet Bundle, available at Brooklinen, $272.25Best for: The mom who needs to be comfierBrooklinen's luxe sheets are the ones we always recommend to friends, family, and readers, for their affordable price, sophisticated look, and comfort.The Hardcore Sheet Bundles have everything she needs to completely makeover your mom's bed — and stay nice and cozy all year long. Each bundle includes a flat sheet, fitted sheet, duvet cover, and four pillowcases. Brooklinen also sells comforters, pillows, candles, and blankets. This is another item that features in our list of the All-Time Best products we've tested.Read our full review of Brooklinen sheets here.A custom map posterGrafomap InstagramCustom Map Poster, available at Grafomap, from $19Best for: The mom who misses her favorite placeGrafomap is a website that lets you design map posters of any place in the world. You can make one of your mom's hometown, college town, favorite travel destination, or the place she got engaged or married — you're only limited by your imagination.Read our full review of the Grafomap Custom Map Poster here.A hardcover photo book for any mother figureArtifact UprisingHardcover Photo Book, available at Artifact Uprising, starting at $61.20Best for: The mom with 17 old photo albumsHonor any mother figure with a custom hardcover photo album that commemorates their best life moments. You can tie in her life story with a display-worthy dust jacket that puts her front and center. Choose from 11 fabric binding colors to complement her bookshelf or coffee table.A cute potted plant instead of flowersThe SillShop The Sill's selection of plants, starting at $20Best for: The mom who prefers long-lasting plantsThe Sill is a relatively new startup that's making the process of choosing and buying house plants much easier. This gift set is just one of many options you can choose from — you can even shop based on which plants are pet-safe. Read our full review of The Sill here.A weighted blanket to help her sleep betterBearabyBearaby 15-pound Cotton Napper, available at Bearaby, $249Best for: The mom who cherishes being cozyMade of soft organic cotton just like her favorite T-shirt, this weighted blanket can help Mom fall asleep faster and its buttery softness is perfect for wrapping up in. We ranked it as the best weighted throw blanket in our guide to the best weighted blankets. A jewelry holderCatbirdSwan Ring Holder, available at Catbird, $38Best for: The mom who always loses her ringsThis ornate swan is a subtle jewelry holder that'll dress up any bathroom countertop or nightstand.A personalized photo calendar for her deskArtifact UprisingWalnut Desktop Photo Calendar, available at Artifact Uprising, starting at $35Best for: The mom who loves physical calendarsA desk calendar can add a decorative touch to her desk, but one that displays photos of family makes for an even better gift for Mom. She'll love glancing at her calendar and being reminded of her favorite memories with you.A coffee table book for the mom who loves photographyAmazon"Women: The National Geographic Image Collection," available at Amazon and Bookshop, from $26.49Best for: The mom who loves a good coffee table bookYou can't go wrong with a coffee table book gift for Mom, and this one is a true standout. The photography is sure to be top-notch, since National Geographic created this book. Moms often serve as constant sources of inspiration, so why not pass along this book of powerful women?A postpartum self-care kitHonestHonest Mama Beyond the Bump Kit, available at Honest, $55.95Best for: The new mom in need of a breakIf the mom on your list is new to the parenting life, treat her to the Honest Company's Beyond the Bump Kit that will give her body the TLC it deserves. The four-piece set includes body oil and lotion, bath salts, and nipple balm, all of which have been formulated to soothe and support the body in this crucial time of healing.A skincare regimen that worksSephoraThe Outset Daily Essentials Starter Set, available at Sephora and The Outset, from $25Best for: The mom who wants to nail down a skincare routineTo make the self-care practice a bit easier to implement into their daily routine, surprise them with this essentials kit from The Outset. The skincare brand was founded by Scarlett Johansson and is one of the best celebrity beauty brands on the market by far. The set includes a trifecta of basic products that make up a complete regimen (a gentle micellar cleanser, a firming prep serum, and a daily moisturizer). Though only three simple steps, regular use is sure to offer quality results.A sampler of eco-friendly cleansersUltaBanila Co. Clean it Zero Pink Wonderland Cleansing Balm Mini Set, available at Ulta, $12Best for: The mom in search of a good cleanserArguably, one of the worst and most tedious parts of a nightly skincare regimen is taking off makeup. Wipes aren't super effective, plus they're not great for the environment. Banila Co.'s Clean it Zero set is perfect for the eco-conscious mom on your list who loves getting all dolled up but loathes getting un-ready at the end of the day. Whether they're dealing with acne or dryness, there's a formula in this set to remedy it. A comfier lactation setFourth PhaseFourth Phase Mylk Box, available at Fourth Phase, $88Best for: The mom currently breastfeedingFor new moms who've decided to breastfeed their children, Mylk Box by Fourth Phase can offer some support in this stage of motherhood. The lactation-supporting kit includes MylkBlend lactation tea, a hot and cold compress enhanced with lavender and flaxseed, a Rose Quartz GuaSha stone to massage the breast area and release milk engorgement, and a coconut oil-based salve for dry nipples. It's everything breastfeeding mamas need to stay lactating, and, even more importantly, stay comfortable through the process.A robust bath bomb setLushLUSH USA Sleepy Bus Gift Set, available at LUSH USA, $50Best for: The bath loverMoms require optimal rest to be the superhumans that they are, so if you're stuck on what to gift the mom on your list, you can't go wrong with treating them to the tools they need to clock in some quality snooze time. This aromatic gift set from LUSH includes six items meticulously crafted to promote high-quality sleep, including three bath bombs, one bubble bar, a shower gel, and a body lotion formulated with ingredients sure to lull them to sleep.A fancy candle setOtherland/Alyssa Powell/InsiderOtherland Candles The Threesome, available at Otherland, $89Best for: The mom who loves quality candlesCandles make any home smell great, and this fancy candle set from Otherland will look gorgeous in any room in her house. It includes three coconut and soy wax blend candles in beautiful glass vessels. Each candle burns for 55 hours — that's a lot of time that your mom can spend enjoying this gift. We named candles by Otherland one of the All-Time Best products we've tested.Read our full review of Otherland candles here.Laneige Lip Sleeping MaskAmazonLaneige Lip Sleeping Mask, available at Amazon and Walmart, from $12.99Best for: The mom with chapped lipsIf Mom is always complaining of rough or chapped lips in the winter, introduce her to her new favorite product: Laneige's lip sleeping mask. All she has to do is apply it at night before going to bed, and she'll wake up with smoother, softer lips.A silk pillowcase to upgrade her beauty sleepAmazonSlip Silk Queen Pillowcase, available at Amazon and Anthropologie, from $62.30Best for: The mom who appreciates luxuryUpgrade Mom's beauty sleep with a pillowcase or two from Slip. Not only do silk pillowcases look and feel luxurious, but because they're made of a material that's not too absorbent, they're great for keeping skin and hair moisturized. A face mask set for at-home spa daysfreshMini Loves Mini Masks Set, available at Walmart, $49.99Best for: The mom who never passes on a face maskMoms need time to themselves, too, and these face mask minis will have her and her skin feeling rejuvenated. She can kick back and relax with one of the black tea masks, the clay mask, the rose mask, or even the sugar exfoliator.A two-in-one hair dryer brush for easy at-home blowoutsAmazonRevlon 1 Step 2-in-1 Hair Dryer Volumizer Styling Brush, available at Amazon and Target, from $32.49Best for: The mom who wants a salon blowout at homeIf your mom has been eyeing the $600 Dyson Airwrap, this is a more affordable alternative that produces similarly easy blowouts at home. It's our favorite blow dryer brush if you're on a budget.A luxurious facial treatment deviceZIIPZIIP GX Series, available at ZIIP Beauty, $495Best for: The mom who cares about her skinSwitch up her facial appointments with the ZIIP experience that beautifully improves your skin beyond your imagination with every use. The ZIIP devices employ energy from tiny electrical currents with a conductive gel to sculpt and tighten the skin for a radiant glow. The weighted sleep mask that's the ticket to instant sleepAnthropologieNodpod Weighted Eye Mask, available at Anthropologie and Nordstrom, from $23.80Best for: The mom who prioritizes beauty sleepMove over, weighted blankets. These eye masks have gentle weights with just the right amount of pressure to lull her to sleep. The four equally weighted pods let her rest easy no matter her sleep position. A floral fragrance with a pear and white freesia scentJo MaloneEnglish Pear & Freesia Cologne, available at Jo Malone and Macy's, from $155Best for: The mom who collects perfumeIf she prefers a light yet luscious fragrance, this Jo Malone perfume makes for a lovely layer. This floral perfume accentuates her style with a smell of autumn from the freshness of the pear and freesias along with the subtle woodsy scents.A subscription to a great workoutThe Sculpt SocietyThe Sculpt Society Subscription, available at The Sculpt Society, $19.99/MonthBest for: The fitness fanAdult responsibilities can make it hard to find the time (let alone the motivation) to exercise. Add motherhood into the mix, and it can feel almost near impossible. For the fitness enthusiast on your list, there's The Sculpt Society, an app and workout regimen founded by celebrity trainer, Meagan Roup. Exercises within the program include a mix of strength training circuits and dance cardio, so there's something for everyone, and routines are customizable, so they can follow along with a class that best speaks to their body's needs on a given day.An adorable reading lightUrban OutfittersIcon Book Light, available at Urban Outfitters, $20Best for: The night readerIf the mom you're shopping for is big on night reading, this adorable clip-on light can help her stay cozy without needing to turn on additional lamps. It comes in three styles — a cute cloud, flower, or frog — and just needs separate batteries.A calming meditation subscriptionHeadspaceHeadspace Subscription, available at Headspace, $69.99/YearBest for: The mom who needs to clear her headMom or not, taking care of our mental health is an act of self-care that should not be skipped, and the Headspace app is an excellent gift for moms to help them stay on top of it. The app includes a library of guided meditations that cater to a variety of needs, like general mindfulness, stress relief, and better sleep.A 101 online course on starting motherhoodPsyched MommyPsyched Mommy Keeping Mommy in Mind Course, available at Psyched Mommy, $79Best for: The mom in search of guidanceMotherhood is magical, but it's also life-altering, and many mothers feel as though they don't have the tools to stay healthy and grounded in all aspects of life outside of caring for their child. This course from Psyched Mommy would make an excellent gift for a new parent or mom-to-be who's obsessed with self-improvement and being prepared for anything and everything. It's split into seven modules that cover the essentials (i.e. how to make sure they're getting enough sleep and ways to better improve their communication with their partner) and, hopefully, leave them better equipped for this beautifully complicated season of life. A pass to access almost all the National ParksREIAmerica the Beautiful Pass, available at REI, $79.99Best for: The road trip loverFor the mom who loves nature and road trips, it's hard to find a better gift than an annual pass to most of the US's national parks. It provides free admission to a car of up to four people to all participating parks and overall makes it so much easier to park-hop. It's the best nudge to get your mom to finally plan that Zion and Bryce Canyon vacation.A vibrating foam rollerCrystal Cox/InsiderVibrating Pliability Roller, available at TB12, $160Best for: The mom in need of a good stretchIf she's very physically active, a foam roller is a nice gift to aid in her workout recovery and soreness. This one is our favorite because it has four levels of vibration, a pattern that targets muscle groups, and a durable exterior. But, if your budget doesn't fit a $160 foam roller, never fear — we like some under-$50 options too. A 'book of the month' membershipBook of the MonthBook of the Month Membership, available at Book of the Month, from $49.99 for 3 monthsBest for: The book loverIf she loves to read and isn't ready to go 100% digital, a Book of the Month membership is the perfect gift. This gift subscription gets Mom her pick of the best new books for $12.50-$15 a month, depending on the length of subscription you choose to give. She can also request extra books if she reads more than one book a month. You can learn more about Book of the Month here.A yoga mat for the fitness enthusiastMandukaProLite Yoga Mat, available at Manduka and Amazon, $95Best for: The yoga enthusiastFor the mom who starts every morning with yoga, this mat has just the right amount of padding, is made of eco-friendly materials, and has a no-slip grip texture. It has even earned the title of best yoga mat overall in our guide to the best yoga mats.A year-long MasterClass membership to learn new thingsMasterClassAnnual Membership, available at MasterClass, $180/yearBest for: The lifelong studentMasterClass, unlike many competitors, follows a format that feels like a one-sided conversation with your favorite icons rather than a traditional academic setting. You can get into the supplementary reading materials or just listen to their insight while running errands. An Unlimited Membership grants access to all the site's online courses for the year.Some popular courses include Neil deGrasse Tyson on Scientific Thinking and Communication, Malcolm Gladwell on Writing, Shonda Rhimes on Writing for Television, and Bob Iger on Business Strategy and Leadership.Read our full review of MasterClass here.A jigsaw puzzle featuring a family photoZazzleMemorable Family Jigsaw Puzzle, available at Zazzle, starting at $23.96Best for: The mom who loves a good puzzleIf your mom loves puzzles (and has finished practically all of them), this custom one featuring a cherished family photo will earn a spot on the wall when it's done.A daily planner for the busy momAmazonPanda Planner Daily Planner, available at Amazon and Panda, from $19.97 Best for: The journalerEven the most organized mom could use the help of a trusty planner. This one from Panda Planner has monthly, weekly, and daily sections for all of her needs. She'll have her schedule, tasks, goals, and projects all in one place. We like the layout of this planner so much that we include it in our guide to the best planners.A DNA test kit23andme23andMe Health + Ancestry DNA Test, available at 23andMe, $129Best for: The mom interested in her family treeThis genetic test kit from 23andMe is a unique and cool gift idea for any mom who's interested in learning more about her family history.A personalized video message from her favorite celebrityCameoPersonalized video message, available at Cameo, from $1Best for: The celeb-obsessed momWhen trying to think of a unique gift for Mom, one that might not immediately come to mind is Cameo. The online service has tons of famous people she might want a personalized video message from, like her favorite actor from "The Office." Whether it's for her birthday, Mother's Day, or a different milestone, there's something for everyone on Cameo, with all types of categories and price points to choose from.Read more about Cameo and how to use Cameo. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 12th, 2022

Vishay (VSH) Unveils an Optocoupler, Expands Portfolio

Vishay (VSH) introduces an optocoupler, VOA300, which is likely to aid its momentum among applications on tough industrial landscapes. Vishay Intertechnology, Inc. VSH is leaving no stone unturned to expand its discrete offerings to bolster its presence in the booming semiconductor industry.The unveiling of the linear optocoupler VOA300 is a testament to the same. VOA300 is an automotive-grade device offering an industry-high isolation voltage of 5300 Vrms.Additionally, VOA300 offers low-power consumption of < 15 mW, high-gain linearity of ± 0.25 % and low input-output capacitance of 1 pF typical.It also provides a fast response time, increased transfer gain stability of ± 0.005 %/°C typical and a single-ended output for design flexibility.We note that Vishay is likely to gain momentum among applications in harsh industrial environments with the latest optocoupler, as it features an operating temperature range of up to +125 °C.Moreover, it offers reliable and fast data transfers at the rate of 1.4 MHz, making it ideal for galvanically-isolated current and voltage measurement in electric vehicles, such as on-board chargers, traction inverters and DC/DC converters.Vishay Intertechnology, Inc. Price and Consensus Vishay Intertechnology, Inc. price-consensus-chart | Vishay Intertechnology, Inc. QuoteKey ProspectsAll the above-mentioned features of VCNT2025X01 make Vishay well-positioned to gain solid momentum among automotive, smart home, industrial and office applications.With these various use cases, the launch of VOA300 is expected to strengthen Vishay’s presence in the growing optocoupler market.Per a Mordor Intelligence report, this market is anticipated to hit $4.26 billion by 2026, seeing a CAGR of 8.8% between 2021 and 2026.Moreover, the latest move bodes well for VSH’s deepening focus on expanding its optoelectronics portfolio.Hence, an expanding optoelectronics portfolio will aid Vishay in capitalizing on the growth opportunities in the booming optoelectronics market. Per a Research and Markets report, the market size is expected to see a CAGR of 10.2% between 2021 and 2026, and reach $9.8 billion by 2026.We believe, Vishay’s growing prospects in this promising market are likely to aid it in winning investors’ confidence in the days ahead.Vishay has lost 14.2% on a year-to-date basis compared with the industry’s decline of 4.1%.Expanding Product PortfolioThe latest launch added strength to its overall product portfolio.Apart from the latest move, Vishay recently acquired MaxPower Semiconductor, a fabless power semiconductor provider. The acquisition helped Vishay enhance its MOSFET product offerings.Vishay also launched four FRED Pt Gen 5 600 V Hyperfast rectifiers to strengthen its discrete semiconductor portfolio.VSH also unveiled three inductors designed to save board space and increase efficiency in IoT devices and portable electronics.Additionally, Vishay’s launch of 15 Hyperfast and Ultrafast rectifiers remains noteworthy. Also, the introduction of its two short-wavelength ultraviolet-emitting diodes, namely VLMU35CR40-275-120 and VLMU35CR41-275-120, in a ceramic and quartz-based package is a positive.We believe that these endeavors will continue to shape Vishay’s growth trajectory and sustain momentum in its various end markets.Zacks Rank & Stocks to ConsiderCurrently, Vishay carries a Zacks Rank #3 (Hold).Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Asure Software ASUR, Agilent Technologies A and AMETEK AME. While Asure Software sports a Zacks Rank #1 (Strong Buy), Agilent Technologies and AMETEK carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Asure Software has lost 10.9% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.Agilent Technologies has lost 7.8% in the year-to-date period. The long-term earnings growth rate for A is currently projected at 10%.AMETEK has lost 5.7% in the year-to-date period. The long-term earnings growth rate for AME is currently projected at 9.7%. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Agilent Technologies, Inc. (A): Free Stock Analysis Report AMETEK, Inc. (AME): Free Stock Analysis Report Asure Software Inc (ASUR): Free Stock Analysis Report Vishay Intertechnology, Inc. (VSH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Category: topSource: zacksNov 29th, 2022

Could Bitcoin’s Movements Indicate the Fall of Junior Gold Stocks?

While comparing gold and bitcoin gives some idea of the patterns in the market, can the slide of junior miners be predicted by the same method? Those of you who have been following my analyses for a while may be expecting me to write that it is based on the stock market’s rally and thus […] While comparing gold and bitcoin gives some idea of the patterns in the market, can the slide of junior miners be predicted by the same method? Those of you who have been following my analyses for a while may be expecting me to write that it is based on the stock market’s rally and thus only temporary, as miners will follow gold sooner rather than later. That’s their ultimate source of revenue (current or expected). While that’s true, right now there is another huge factor that’s likely contributing to the situation. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   It's most likely the unfolding crypto-drama. Remember when I previously commented on the link between juniors and cryptocurrencies? What I wrote back then was particularly important with regard to the less known (obscure?) ones with a shady background. In fact, some even call them “shitcoins.” I wrote that for many individual investors, cryptocurrencies became the “new precious metals market.” Alternative payment system? Just like gold, right? There’s a flagship asset (gold, Bitcoin). There’s a less expensive but obviously more useful asset (silver, Ethereum). There are a number of little-known assets that are risky but have the potential to provide massive returns (high-quality mining stocks, low-quality mining stocks, especially low-quality junior mining stocks, altcoins, "shitcoins"). While gold was not doing much, the wild rallies in cryptos got much more attention. That was finally exciting! So, individual investors flocked from the precious metals market to cryptos. Not all investors, of course, but many. While cryptos were on the rise and the overall sentiment was positive, investors dropped their PM holdings to buy cryptos as they forecasted that the latter would continue to rally “to the moon.” And while it didn’t matter that much for gold, as the yellow metal has powerful buyers and sellers that are not interested in cryptos, it mattered a lot to the junior mining stock sector as the buying power waned. Fast-forward to the current situation, every other day we hear or read about yet another crypto scandal, while prices of cryptocurrencies are declining sharply. Comparing Bitcoin And Gold Prices This means that the above-mentioned effect could have been reversed. The investors who moved out of the junior mining stock sector in order to get into cryptos (in particular altcoins) could now be aiming to get out of that market (people tend to sell on declines, in fact, that’s why declines happen in the first place) and get back to what they “had liked” before – junior miners. This specific phenomenon can be seen from a broader point of view when one compares the prices of gold and bitcoin. As I wrote, the link is likely stronger in the case of altcoins and juniors, but gold and bitcoin have price data that’s more comparable, so that’s what I’m going to analyze. Even though both gold and bitcoin moved higher between 2014 and now, they quite often moved in opposite directions in the short run. Short-term bottoms in gold, in particular, were usually followed by (larger or smaller) declines in bitcoin. Interestingly, I originally featured the above chart many months ago, and please note that this tendency worked like a charm recently. Gold formed a short-term bottom, rallied, and now Bitcoin slides. Why? Probably because people were fed up with Bitcoin’s inability to hold its ground, while gold soared. So they flocked to gold, silver, and - probably most intensely so - to junior mining stocks. All right, so does this mean that as Bitcoin slides into the abyss, junior miners are now going to soar? No. No market moves up or down in a straight line, right? Well, neither does Bitcoin. How low is too low, then? That’s where technicals come in. Remember when I wrote that Bitcoin was topping at about $50,000? Well, it did move a bit above that, but it didn’t trade there for long. The flagship crypto fell like a stone in water, and it did so in tune with the technical principles. Bitcoin formed a bearish head and shoulders top pattern, and after breaking below the neck level earlier this year, it then corrected a bit, and then it plunged below $20,000. All this is a textbook-example of how a head and shoulders pattern should work. Now, the size of the decline based on this pattern is likely to be equal to the size of its head. I marked that with dashed lines. Guess what – Bitcoin just moved to this target level (marked with green) recently. That is a strong indication that the bottom has been reached. The second indication comes from the huge volume that just accompanied the decline and the fact that the decline was quite sharp. The ROC (rate of change) indicator at the top of the above chart is close to -25 and when this happened and bitcoin was after a huge-volume decline, it then rallied. What is even more interesting is that those were also the times when gold declined. The sentiment itself is the final indicator that a short-term (!) bottom for bitcoin is in or near. Just go to any news website and look at what is being written about Bitcoin – it’s all scary and bearish. Or at least the majority of news/articles. That's what happens when prices fall to their lowest point. Remember what was written on those same pages when bitcoin was trading above $50,000? It was all sunshine and rainbows. All this time, I warned about the incoming slide. Very few listened then, just as very few want to hear about the upcoming slide in junior mining stocks. Anyway, here’s how frequently people search for “crypto scam” on Google (chart courtesy of Google Trends). The other distinctive peaks in those searches were in May 2021 (a major top and major decline in Bitcoin), early November 2021 (a major top in Bitcoin), and the end of January 2022 (a major bottom in Bitcoin). The interest was this high only when there were major turnarounds in Bitcoin. And since it’s crystal clear that the previous move in Bitcoin was to the downside, it can’t be a top. Therefore, it’s likely that there’s a major bottom in Bitcoin. Not necessarily the final one, but a major one for some time. A bottom that’s big enough to trigger a sizable rally in Bitcoin… And a sizable decline in the precious metals sector! It’s easy to follow the herd. “Miners good, Bitcoin bad” is the current word out there. It’s also easy to repeat this mantra. But what’s easy and what’s profitable are rarely the same thing, which is why many tend to lose money over time. I’m not saying that each and every price move can be predicted – it can’t. However, as time goes on, following logical analysis and paying attention not to follow the herd often pays huge dividends. My responsibility is to keep you up to date on my market views, which I strive base on logical analyses free of bias. Whether it’s possible for a human to achieve this kind of objectivity is another question, but, as much as I can, I aim to deliver analysis that’s as objective as possible. Right now, the way I see it, Bitcoin appears to have formed a short-term bottom, and mining stocks have either formed a short-term top or are about to do so soon. Of course, I can’t make any guarantees, but in my view, the next move lower in the precious metals sector – especially in the junior mining stocks – is likely to be something epic. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFA Founder, Editor-in-chief Sunshine Profits: Effective Investment through Diligence & Care All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice......»»

Category: blogSource: valuewalkNov 23rd, 2022

5 Stocks to Watch in a Prospering Retail Building Products Industry

Continued strong demand for home renovation and remodeling, as well as growth of digital and omni-channel businesses, has been benefiting the Retail Building Products industry players. HD, LOW, BLDR, GMS and TGLS look well-poised for growth. The Zacks Building Products – Retail industry is expected to continue benefiting from strong consumer demand trends for home renovation projects and maintenance activities as consumers continue to spend more time at home. The industry players are expected to gain from investments in digital and omni-channel capabilities for demand fulfillment, strategy executions and acquisitions. Companies are also ramping up their delivery operations in order to provide safe and swift services, especially to Pro customers.Continued innovation and e-commerce expansion, and strong demand are likely to benefit industry participants like The Home Depot Inc. HD, Lowe’s Companies Inc. LOW, Builders FirstSource, Inc. BLDR, GMS Inc. GMS and Tecnoglass TGLS.About the Industry The Zacks Building Products – Retail industry mainly comprises U.S. home improvement retailers, manufacturers of industrial and construction materials, and distributors of wallboard and ceiling systems. Some industry participants offer products and services for home decoration, repair and remodeling, and in-home delivery and installation services. A few industry players provide construction products, ranging from cement or concrete foundation materials to roofing boards and shingles. The companies also sell lumber, insulation materials, drywall, plumbing fixtures, hard-surface flooring, and lawn and garden decor products. Some players also deal in threaded fastener products, and manufactured and natural stone tiles. In addition to general consumers, the industry players cater to professional builders, sub-contractors, remodelers and retailers.3 Trends Shaping the Future of Building Products - Retail IndustryAdherence to Home Refurbishing Activities: With rising inflation, interest rates, and increased construction costs and home prices, consumers are inclined toward renovating their homes instead of buying new ones. Consumers continue to invest in making homes cozy and comfortable. Industry experts opine that consumers’ discretionary spending on homes will continue, as interests in keeping houses well-maintained are here to stay. Revamping interiors to facilitate work-from-home and entertainment needs continues to remain a major trend. Do-it-yourself (DIY) projects for decorating and maintaining furniture and fixtures are widely undertaken. There is a higher demand for gardening tools, as well as products related to at-home activities, such as paint and tool kits. This, along with rapid urbanization, should keep aiding the top-line performances of the industry participants. Additionally, consumers are open to hiring Professional (Pro) help to complete their home renovations, resulting in rising demand for Pro projects. This is likely to aid companies in the home improvement space, with a focus on building Pro offerings.Digitization in Focus: Retail Building Products industry participants have been witnessing a surge in online business transactions, owing to consumers’ growing digital dependency. Companies have, therefore, been bolstering their digital presence by expanding the availability of online assortments and bolstering omni-channel capabilities. Such prudent measures have been aiding the companies to meet the accelerated demand. Companies are also ramping up their delivery operations in order to provide safe and swift services, especially to Pro customers. The digital transaction boom should continue to drive the top lines of the key industry players.Rising Costs: Some home improvement retailers have been incurring additional costs to provide enhanced payments and other employee benefits amid the pandemic. A few players have been witnessing inflationary pressure across product categories, as well as higher transportation costs. Such increased costs are likely to put pressure on margins. Nevertheless, companies are adopting prudent saving measures to cushion the impacts of such costs.Zacks Industry Rank Indicates Solid ProspectsThe Building Products – Retail industry is housed within the broader Zacks Retail-Wholesale sector. The industry currently carries a Zacks Industry Rank #54, which places it in the top 21% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. In the past year, the industry’s earnings estimates for the current year have increased 12.3%.Given the industry’s encouraging prospects, we present a few stocks that you may want to buy for your portfolio. But before that, it is worth taking a look at the industry’s stock-market performance and current valuation.Industry Vs. Broader MarketThe Zacks Building Products – Retail industry has outperformed the broader Zacks Retail-Wholesale sector but lagged the Zacks S&P 500 over the past year.The industry declined 19.3% in the past year, whereas the broader sector declined 30.8%. Meanwhile, the S&P 500 has registered a fall of 17.2% in the past year.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E) ratio, which is the commonly used multiple for valuing Retail-Wholesale stocks, the industry is currently trading at 16.01X compared with the S&P 500’s 17.5X. Further, the sector’s forward-12-month P/E stands at 21.31X.Over the last five years, the industry traded as high as 23.43X and as low as 14.25X, with the median at 19.54X, as the chart below shows.Price-to-Earnings Ratio (Past 5 Years)5 Building Products Stocks to BuyTecnoglass: The Colombia-based company is a leading manufacturer of architectural glass, windows, and associated aluminum products, serving the global residential and commercial end markets. Tecnoglass has been gaining from its ability to capitalize on strong residential demand, investments in automation and capacity enhancements, and focus on execution. It has been delivering strong results for its single-family residential business, which has a shorter cash cycle.Tecnoglass is poised to benefit from its business momentum, particularly strong single-family residential revenues. The Zacks Rank #1 (Strong Buy) company remains committed to leveraging its vertically integrated structure and innovative product development to boost shareholder value. The TGLS stock has declined 25.5% in a year. The Zacks Consensus Estimate for TGLS’ current fiscal-year sales and earnings indicates year-over-year growth of 40.5% and 76.4%, respectively. The consensus estimate for the current fiscal-year earnings has improved 19.5% in the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here. Price and Consensus: TGLSGMS: The Tucker, GA-based leading North American specialty building product distributor has been gaining from robust customer service in a solid residential market, coupled with an inflationary pricing environment and successful platform expansion activities. Inflationary pricing, healthy residential end markets, strong performance from complementary products and the recent acquisitions have been sales drivers for GMS.The Zacks Rank #2 (Buy) company has declined 13.6% in a year. The Zacks Consensus Estimate for GMS’ current fiscal year’s sales and earnings indicates year-over-year growth of 10.8% and 10.2%, respectively. The consensus estimate for current fiscal-year earnings has been unchanged in the past 30 days. Price and Consensus: GMSHome Depot: The Atlanta, GA-based company is the world’s largest home improvement specialty retailer based on net sales. Home Depot has been benefiting from strong demand for home improvement projects, robust housing market trends and ongoing investments. Continued strength in both Pro and DIY categories, and digital momentum have been key drivers. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.Home Depot is witnessing significant benefits from the execution of its One Home Depot plan, which focuses on supply-chain expansion, technology investments and digital enhancements. The company has created the fastest, most efficient delivery network in home improvement through options like buy online pick up in store with convenient pickup lockers, buy online deliver from store with express car and van delivery, and curbside pickup. The Zacks Rank #3 stock has declined 20.9% in a year. The Zacks Consensus Estimate for HD’s current fiscal-year sales and earnings indicates year-over-year growth of 3.6% and 7.2%, respectively. The consensus estimate for current fiscal-year earnings has been unchanged in the past 30 days.Price and Consensus: HDLowe’s Companies: The Mooresville, NC-based leading home improvements retailer has been gaining from strong growth in its Pro business. The company has been enhancing the experience of its pro customers by upgrading pro-focused brands and revamping the pro-service business website. The company also remains well-positioned to capitalize on the demand for home improvement, backed by investments in the technology and merchandise category. Gains from the Total Home strategy and the execution of the Perpetual Productivity Improvement initiative are likely to drive the company’s results in the near and long terms. The Total Home strategy has been resonating well with Pro and DIY customers for a while.Lowe’s has been progressing well with advancements in the digital channel. The company is investing in enhancing omni-channel retailing capabilities. Management is also committed to enhancing its Pro offerings, expanding the company’s market share and driving the operating margin. Shares of the Zacks Rank #3 company have declined 15% in a year. The Zacks Consensus Estimate for LOW’s current fiscal year’s sales and earnings indicates year-over-year growth of 0.8% and 12.5%, respectively. The consensus estimate for current fiscal-year earnings has improved 0.1% in the past seven days.Price and Consensus: LOWBuilders FirstSource: The Dallas, TX-based company manufactures and supplies building materials. The company has been benefiting from its focus on cost synergies, strategic acquisition, and robust demand from solid housing and repair and remodeling activities. Robust demand for single-family housing, R&R and other activities have been tailwinds for the company’s products and services. Builders FirstSource continues to invest in innovations and enhance digital solutions for its customers.Acquisitions are important for Builders FirstSource’s growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. The company has been active on the acquisition front, which is supporting the top line. It is also focusing on cost-management practices. The Zacks Rank #3 (Hold) stock has declined 7.4% in a year. The Zacks Consensus Estimate for BLDR’s current fiscal-year sales and earnings indicates growth of 14.2% and 68.5%, respectively, from the prior-year period’s reported figures. The consensus estimate for the current fiscal-year earnings has moved up 10.5% in the past seven days.Price and Consensus: BLDR Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 The Home Depot, Inc. (HD): Free Stock Analysis Report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report Tecnoglass Inc. (TGLS): Free Stock Analysis Report GMS Inc. (GMS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 16th, 2022

US Mid-Terms At A Stalemate While Crypto Empire In Crisis

Inconclusive mid-term results leave Wall Street unsettled, with Dow Jones down 1.95%, S&P 500 down 2.08%, NASDAQ down 2.48% and Japan Nikkei down 0.98% Sam Bankman-Fried’s crypto empire is hit by a liquidity crisis Futures markets suggest a weak start for UK and European trading with losses of up to half a percent indicated. Sterling […] Inconclusive mid-term results leave Wall Street unsettled, with Dow Jones down 1.95%, S&P 500 down 2.08%, NASDAQ down 2.48% and Japan Nikkei down 0.98% Sam Bankman-Fried’s crypto empire is hit by a liquidity crisis Futures markets suggest a weak start for UK and European trading with losses of up to half a percent indicated. Sterling is almost unchanged versus the dollar at $1.138 and the euro at €1.136 Inconclusive Mid-Term Election Results Wall Street took a bath last night as the US wrestled with the inconclusive mid-term election results whilst the world of cryptocurrencies was rocked by the apparent collapse of Sam Bankman-Freid’s business empire. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   It has been a wild week in Cryptoland, with the implosion of the FTX crypto exchange, which is now reported to have an $8bn black hole at the heart of it. At the beginning of the week its founder Sam Bankman-Freid was reportedly worth $16bn, Bloomberg reckon 95% of that disappeared in a single day, the fastest pace of one person losing money in history. The events sent the wider crypto sector into a spin. Bitcoin lost a quarter of its “value” between the start of trading on Tuesday and midnight last night. It has rallied slightly since the $15,617 low of the wee hours, but remains under pressure. Other crypto “assets” also saw significant falls. Bank stocks could be a bright spot in an otherwise gloomy market today after overnight reports that the government is going to cut the bank levy to try and preserve competitiveness for what remains a key contributor to the UK economy. Cutting the levy from 8% to 3% will leave banks facing an overall tax take of 28% when corporation tax rises to 25% from April. Currently, the industry is paying 27% in total. It’s a busy day for company reporting in the UK today. British Gas owner, Centrica, who recently reopened the rough gas storage facility announced that trading has been strong and the company steered analysts toward upgrading their numbers. The strength is coming from their upstream oil and gas production operations, whilst retail profitability is struggling. The company announced a further £25m of funding for customer assistance as people struggle with their rising energy bills. The group also announced a £20m share buy-back programme and investors responded by pushing the stock 9% higher at the open. Fellow utility, National Grid, also reported solid trading, with underlying earnings 42% ahead at the half year stage. The group raised its interim dividend by 4% and raised its expected levels of future revenue growth and capital investment as the company funds the transformation of the UK’s energy networks toward a more renewable future. The shares rose 1.7% on the news. Haleon's Earnings Consumer healthcare giant, Haleon PLC (LON:HLN), recently spun out of GSK plc has reported strong growth in their third quarter trading update and raised their guidance for the full year slightly. They now see organic revenue growth of 8.0-8.5%% for the full year and for margins to be slightly improved, despite some additional currency impacts. Haleon saw improved trading in their Oral Health category, where their Sensodyne brand has a leading position. Respiratory health products have benefited from the seasonal bugs that are going around. Their only weak spot was vitamins, minerals and supplements which was up against tough prior year comparables. Haleon shares opened 1% higher. AstraZeneca plc have guided profits higher after releasing a Q3 trading report that revealed revenues 19% ahead at constant dollar rates and earnings per share growth of 70% (do not adjust your set. 70% really). Growth was driven by all disease areas and the addition of Alexion’s revenues after its acquisition in July. AstraZeneca’s portfolio of new generation cancer treatments grew overall oncology product revenues by 20%, whilst cardiovascular revenues came in close behind at 19% growth. AstraZeneca have guided to full year earnings growth of around 30%, before a mid-to-high single digit impact from currencies. Much of this was already factored into market views and the stock opened 1.4% higher. Once investors have digested the company news, attention will turn to the U.S. futures markets suggest Wall Street could claw back some of the overnight losses, but that will likely depend on the outcome of the inflation data due out at 13:30 hrs. Economists are forecasting that the rate will drop from last month’s 8.2% print to 7.9%. If the actual number is much different from that, we could see fireworks from bonds, stocks and currencies. Article by Steve Clayton, Head of Equity Funds, Hargreaves Lansdown.....»»

Category: blogSource: valuewalkNov 10th, 2022