Bull of the Day: Huron (HURN)

Huron shares have surged in 2022 even as the market tumbles and its consulting industry is poised to remain resilient during an economic downturn. Huron Consulting Group Inc. HURN is a global consulting firm that operates in an array of areas. Huron executives have set the company up for success as the U.S. and many other countries and regions around the world face economic challenges amid persistently-high inflation.HURN shares have surged in 2022 even as the market tumbles. And its highly-ranked consulting industry is poised to remain resilient during an economic downturn.Huron Basics Huron is a consulting firm that, like every company in the field, aims to help its clients optimize their performance to run stronger, more successful businesses and organizations. Huron boasts that it’s focused on thinking outside the box and challenging the status quo, with a concentration on creating sustainable long-term change, success, efficiency, and beyond.Part of Huron’s core focus is helping clients who are attempting to figure out ways to adapt and succeed when “facing disruptive and regulatory” challenges and changes. HURN works with clients across healthcare, education, life sciences, financial services, energy, manufacturing, the public sector, and other parts of the economy.Huron is designed to help its clients “accelerate their strategic, operational, digital, and cultural transformation.” The firm’s core areas of expertise includes broader concentrations such as business operations, digital, consumer transformation, research enterprise, and more.Image Source: Zacks Investment ResearchGrowth OutlookHuron posted another strong quarter at the end of July, topping our Q2 estimates. The firm has now beaten our bottom-line projections in the trailing five periods. Huron executives also felt confident enough to boost their FY22 guidance in the face of macroeconomic unknowns as its digital transformation offerings continue to attract clients. Huron’s digital segment jumped 47% in the second quarter and 42% for the first six months of the year.Huron’s positive FY22 and FY23 earnings revisions help it land a Zacks Rank #1 (Strong Buy) right now. Zacks estimates call for its revenue to jump 18% this year and another 9.4% higher in FY23 to reach $1.2 billion to outpace inflation. HURN’s bottom-line outlook is even stronger, with its adjusted earnings projected to climb 26% and 20%, respectively to hit $3.92 per share in 2023.Image Source: Zacks Investment ResearchOther Fundamentals Huron shares have climbed roughly 28% in the past 12 months. This includes a 33% run in 2022 to crush the S&P 500’s 20% downturn and the larger Zacks Business Services Sector’s 30% drop. HURN’s 95% jump in the past five years matches its Consulting Services industry.HURN shares are trading not too far off from the 52-week highs they hit in August. Plus, the current average Zacks consensus price target offers over 15% upside to the roughly $66 per share Huron trades at right now.  Despite outperforming its Zacks Econ sector, Huron trades at a discount of 18.1X forward 12-month earnings vs. 22.1X. The stock is also trading at a 30% discount to its own decade-long highs and not too far off from its median. And it offers 15% value compared to its highly-ranked industry.  Huron’s Consulting Services industry sits in the top 9% of over 250 Zacks industries. This is potentially crucial for investors looking to outperform the market in the fourth quarter and beyond because it’s proven that being part of a strong industry leads to better price performance.Bottom LineOn top of its Zacks Rank #1 (Strong Buy), all four of the brokerage recommendations Zacks has for Huron are “Strong Buys.” Huron also has a solid balance sheet and operates a business that should be able to hold up well during the current macro backdrop.It’s worth stressing once again how key it is to find companies that have been able to buck the market’s downtrend in 2022. And Huron’s ability to lift its guidance when most sectors outside of energy have lowered their outlooks is impressive. 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 Huron Consulting Group Inc. (HURN): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2022

James Gorman: The Fed’s Got A Ways To Go

Following is the unofficial transcript of a CNBC exclusive interview with Morgan Stanley (NYSE:MS) Chairman & CEO James Gorman on CNBC’s “Mad Money” (M-F, 6PM-7PM ET) today, Thursday, September 29. Interview With Morgan Stanley CEO James Gorman Part I JIM CRAMER: Ever since James Gorman took over in 2010, Morgan Stanley’s stock is up more […] Following is the unofficial transcript of a CNBC exclusive interview with Morgan Stanley (NYSE:MS) Chairman & CEO James Gorman on CNBC’s “Mad Money” (M-F, 6PM-7PM ET) today, Thursday, September 29. Interview With Morgan Stanley CEO James Gorman Part I JIM CRAMER: Ever since James Gorman took over in 2010, Morgan Stanley’s stock is up more than any of the other major banks. More importantly, Gorman knows the industry better than anyone and that’s why I’m so thrilled to speak with James Gorman, the Chairman and CEO of Morgan Stanley to get a better sense of this moment. Mr. Gorman, welcome to “Mad Money.” 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 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); Q2 2022 hedge fund letters, conferences and more   JAMES GORMAN: Hey Jim, great to be here. Thank you. CRAMER: I cannot think of someone I want more on this show than you right now James not because I want hand holding. But I'd like rationality. You lived through bull and bear markets. A lot of people feel this bear market will never end. What's your historical perspective? GORMAN: Well, firstly, I've seen a lot of markets. I think you have to look at what drives the change in sentiment. And to me, I'm just not surprised. What do we expect? We've got a war in the Ukraine. We've got inflation at the highest we've had for 40 years, we've got the Fed moving aggressively on rates having done nothing for 10 years. Rates have been zero. The market is awash with money. What did we expect? So you've had the bubbles that have been out there, the SPACs, the cryptos and so some of them are getting washed out. So it's not totally surprising where we are. That's where I start from. CRAMER: If that's the case then we hear the Fed talking tough, it should talk tough and it should take tough action. GORMAN: Listen, you can't have free money forever. Of course, you you'll end up with an imbalance. I mean, it's all about GDP growth and interest rates and the Fed tries to moderate that about I think half the times that they've tightened in the last 30, 40 years, they've overshot a little bit. But half the times they haven't so we're in we're in that zone and everybody obviously is making the bet whether they've overshooting gonna push us into a serious recession, whether we're going to have a mild recession, whether we're going to have a soft landing, or we're going to get perfection, and that remains to be seen. CRAMER: And what does James think? I like your view. You know more than almost everybody I speak to you. GORMAN: Yeah, well, I think I think it's unlikely that we're gonna have a hard landing at this point. I think the Fed will keep pushing. I mean, we're, we're at a little over 3% now. They'll probably end up at you know, 4.5, 4.75%. Listen, we’re totally in between inflation, unemployment and rates. And my sort of nirvana scenario for now would be 4, 4 and 4. Get inflation back to 4%, bring rates up to 4% and have unemployment which is slightly below four. It'll tick up a little bit. That’s nirvana. We probably won't get that. But I don't I don't think I don't see yet enough to tell me this is a real crisis. Geopolitical issues aside, that could tip things very differently. Obviously, if I'm wrong about the Fed’s ability to tame inflation, that tips things differently. So there, there are reasons to be concerned. Clearly, the market is not stupid. The market reflects that. So we've got to respect the market. But and we've got an inverted yield curve at the moment. So there's a lot going on. But I personally am not seeing the sort of very dark crisis we've seen through my career. CRAMER: Well, that's really important because I’ve studied your career and I recognize that if you felt that it wasn't worth staying the course, you would actually say it. You would say, you know what, Jim? It's actually not a bad idea to sell a lot of stock here. I'm not hearing that. GORMAN: And I'll also tell you, I’ve watched the behavior. We're dealing with 15 million clients through their places of work, through E*TRADE platform, which I'm sure we'll talk about, through our wealth management advisors, we're managing over $4 trillion. And with our asset management business, wealth and asset together, nearly 6 trillion. I'm not seeing panic in there. This is not ’87, it's not even ’91. It's not the dotcom crash, and it's certainly not the financial crisis. That doesn't mean it can't become one of those, but it's not there yet and behavior supports that. CRAMER: Well, we are going to talk about how you have really revolutionized the firm in a way that, you know, I'm, I think you’re the best at but before we get to that, it sounds like to me that if we don't get nirvana, even if we don't get nirvana. We're still not in a situation like a 2007, 2009 where Morgan Stanley was, you know, 11, 10, 9 and I was concerned about the viability of a lot of the firms. That's not going to happen. GORMAN: Well, there are two things that are very, very different from frankly, all those crisis periods I've talked about. The first is the bank's capital and balance sheet. These, the US banks and okay, I'm talking my own book but on behalf of our peers, the G-SIBs, the globally systemic banks are in the best shape financially they've been in in decades as a group, different business model issues, etc. But as a group from a capital liquidity perspective going into a crisis, you want your financial system and you want your call backs, banks to be strong and they are. Secondly, consumers, they refinance a lot of their mortgages. They had the luxury of very low rates for a long time, they saved during Covid, consumers coming into this with their personal balance sheet better. Those two things are very different from some of the other periods we've had the last 20 years. CRAMER: Now, what are you looking for to see that perhaps the Fed might be done? What has to happen? Does unemployment have to go to five? I mean you talk about 4, 4, 4 but when I listened to Loretta Mester today, very important Fed member. I felt like that a lot of the work that we've done toward slowing inflation really didn't mean much then that they're not happy at all with how this economy but wages are too high. Homes are too high. They're not happy with how they are cooling things. GORMAN: Well listen the Fed’s got a ways to go. I mean, we might have another 75. We're about you know, again, a house caller is 75 followed by 50 followed by 50. I felt for a long time the Fed was very late. I said I'd be like a squirrel. I like putting a few nuts away because you never know when you're going to need them. Right so we didn't do that. Covid obviously delayed that, the Ukrainian, Russian Ukrainian war delayed that. There are reasons why the Fed didn't act so I understand it, you know, I accept it. But now they've got to move aggressively. So they're, in my view, going to be less concerned about whether we tip into a mild recession than they are about taming inflation, which if they don't, creates all sorts of havoc. CRAMER: All right, well, what we're doing when we come back, we'll talk about your amazing wealth advisory business, what you're telling people and how you've reinvented the firm, because I can tell you that you're the largest financial wheel in my trust and there's a reason because of your leadership. GORMAN: Thank you. CRAMER: “Mad Money” will be back after the break with James Gorman, CEO of Morgan Stanley. Part II CRAMER: We’re back with James Gorman. He's the Chairman and CEO of Morgan Stanley, the investment bank I like so much that I own it for my charitable trust. Let's get right back to it. James, you have reinvented this firm. I remember the Morgan Stanley that I applied to was kind of, let's say a trade ‘em wamma jamma firm. Your company is now the premiere wealth advisor company in the world. How were you able to do that? GORMAN: Well, what firstly, we had a view. You got to start with a point of view and the view was that a separate trading banking business on its own was much less attractive because of its volatility to investors. So we needed some annuitize fee business. We had it in the old Dean Witter business and a smaller asset management, but they weren't at scale. So the view was is we knew what the answer was, but we had to get to scale. So we bought Smith Barney back in 2009. We bought E*TRADE, we bought Solium, we bought Eaton Vance, we bought Mesa West. All of these were building blocks to get us to scale so it was it was actually very simple concept. Executing it required, you know, we had to we had to make some calls and some people thought we overpaid for some of those assets. I don't think so anymore. CRAMER: But they're these are assets that are sticky. GORMAN: Yeah. CRAMER: And they go up, up, up. The old days, you were what I regard as an episodic firm. Those days are now past. GORMAN: Well, I think it's all about stability. I mean, if you look at the wealth businesses, which generate, you know, roughly $6 billion a quarter for the last couple of years, look at those businesses, they they don't move very much in their daily numbers. I mean, plus or minus 5 million on 100 million, so incredibly stable, sticky, but also stable when you've got them and we love that. But then you've got the investment bank, which is like a turbocharger. When the markets are good, the bank is doing phenomenally. CRAMER: But at the same time, people all lump these together. They say you have investment banking, investment banks doing poorly, so why don't we just sell the stock down? It's not any different from the way it used to be. That's just not a fair characterization. GORMAN: Well, it's honestly just not looking at the numbers. I mean, some people have looked at and said because of the investment banking market and capital markets market at the moment, which is tough, right? Because of that, these stocks are much less attractive. I say, seriously? Take a look at what percentage of the revenues that we're we have that are tied up in those kinds of activities that are depressed right now. By the way, they're delayed, they're not shut down. CRAMER: Right. GORMAN: They're gonna happen, companies will go public, deals will get done. So I'm not concerned about at all. I think, you know, where the stock is trading in this environment obviously I feel very good about what we're doing. CRAMER: Well obviously because you've been buying back more stock than anybody else and you've been returning nice dividend. You've got the best in the group. GORMAN: And we're retiring, we’ll retire, you know, 6, 7% of the stock this year, and we've got a dividend yield of 3.5%. So shareholders are getting a nine plus percent return without getting out of bed. It's not bad, right? So I feel very good about the position. We should bring the share count down. We started after the E*TRADE around 2 billion shares outstanding. And, you know, then you're paying smaller dividends because you're not paying dividends on the shares you retire. CRAMER: Now, there was a time when if you told me that Morgan Stanley was going to own E*TRADE, I said I would say are you kidding me? But it turns out that the wealth is in Solium and E*TRADE, that's where it starts. You are going for the long haul. These are people who if they say well, we'll become the premium wealth clients for the next 20 years. GORMAN: Well and just give a call out to E*TRADE, they just got rated the number one online brokerage business yesterday just which is great. Now listen, we we owned the financial advisor piece. Second leg, we needed to own the direct piece Schwab Ameritrade phenomenal companies Fidelity we needed to be in there we could build it or we could buy it. We bought a E*TRADE. Third leg, we want to own or at least be one of the top two competitors in the workplace with Fidelity and through Solium and E*TRADE. We’ve got that so we're now managing something like 30, 35% of S&P stock plans in this country. So if you've got all three legs, you're getting people through advisors, you're getting them through trading online, and you're getting them through their workplace, you can provide incredible capability to them because you're amortizing it across a huge, fixed costs based on revenues. CRAMER: Now, you're not getting away entirely from risk. We know it's difficult. I know you can't talk about any individual clients but you've got a big one, Elon Musk, and he may end up owning Twitter. And you could be on the hook for that. Is that true or not? GORMAN: Well, I think you said it. I can't talk about it, Jim. CRAMER: But we don't want you on the hook. The shareholder doesn’t want you on the hook. GORMAN: Do I look distressed right now. CRAMER: No. GORMAN: Okay, that's all I’ll say. We'll see how this plays out. CRAMER: Well, I like, I like that attitude. Now if you were with your wealthiest clients, what do you say that's different from the clients who aren't that wealthy, who want to be wealthy. GORMAN: Well, the clients who aren’t wealthy should you know what I've been worried about the last few years is the number of people who have been speculating in crypto, but, you know, it's fine if you bought it at 600 and it’s and it’s at 20— CRAMER: But do you believe in it? GORMAN: People are buying, listen, I think it's it's an asset. It's a speculative asset by definition. I don't think it's a new form of stored value. I think it's subject to a lot of regulatory risk— CRAMER: Do you own any? GORMAN: No, I don't own any. I wish I bought it at $60— CRAMER: Of course we all do. GORMAN: But I didn't buy it at 60,000 so what I've been worried about and what I've seen a lot of individual investors is that they got caught up in the hype. We've seen this before, the .com. We saw this in the early 90s and you know, ‘87 with a Black Monday crash and so on. So my worry for that group is listen, your job is not to speculate. It's to build long term wealth for stability. The very wealthy person completely different. They can put 1% of their money on anything. They can put on resources, put on crypto, put it on whatever they like, that's fine, that's no risk because they can afford to lose that. So completely different focus. CRAMER: How about the young, we have a lot of young watchers 25, 30. Isn't this a time to start? The market is so nowhere near its top. GORMAN: You know, Australia has a scheme called the superannuation scheme where government mandated, you save 15% of your income. Right and it's created these huge sovereign wealth fund asset pools in Australia. If there's one thing I could tell every 22-year-old person starting a job, maybe they can't save 15%, but save five and the compounding impact of putting money into the market, maybe start with an index just get in the market. It's all about duration. You're in the market for 50 years, it's better than 30, it's a whole lot better than 10. CRAMER: One last question. James Gorman is a little bit close to me in age. Can you stay longer? How much longer do you want to stay? GORMAN: Well, I I truly believe in in succession planning and I've been very clear with the board. But you know, these organizations do best when you regenerate and provide growth and part of that is giving opportunities to people. So we've got a plan. I won't give you the date right now. But no, I'll step down at the right moment. CRAMER: Alright fair enough. GORMAN: But I will step down and we’ve got a great team to follow me. CRAMER: Well, I'm sure you do— GORMAN: But it’s not today. CRAMER: But you've done the best in the group. And it's, I know you have great team, but I'm looking at the top of it. GORMAN: Thank you. Thanks man. CRAMER: Okay. That's James Gorman, Chairman and CEO of Morgan Stanley. Thank you so much, James. GORMAN: Thank you. CRAMER: Good to talk to you. "Mad Money" is after the break......»»

Category: blogSource: valuewalk4 hr. 53 min. ago

"Yes, The Market Is Categorically Unfun And Ugly" - What JPMorgan"s Traders Think Happens Next

"Yes, The Market Is Categorically Unfun And Ugly" - What JPMorgan's Traders Think Happens Next Today is the last day of Q3 2022, and so far this quarter, the S&P is down 25% from its all time highs, and down 15% from its peak of the summer rally, it is also set for a -3.8% quarterly loss - the third negative quarter in a row - the longest such stretch since 2008. "So where we go from here?" That's the question JPMorgan market intelligence trader Andrew Tyler asks this morning, and to answer it he quotes from a handful of JPM strategists and traders. We start with the JPM trading desk: Ronald Alder (TMT) Yes, the market is categorically unfun and ugly. Equities remain at the mercy of eco data and the bond market. Economic data remains solid (PCE, Jobs, etc.) albeit backwards looking and, in concert with the fed commentary, won’t allow for the market to be constructive just yet (even as high frequency data points to lower inflation). Yesterday’s Long-Only buyers in TMT (primarily the megacaps) are notably absent or more passive, while see more defensive buying in Telco, etc. AAPL breaking is making things a bit precarious for everyone and everything. The desk is 1.3:1 better for sale now with volumes down in the HSD% range. It’s early, but conversations continue to skew bearish with the challenge to find the bullish narrative. I still think the risk-reward is fairly balanced here at 3600-3700. The tape remains very choppy and macro driven. ETF volumes are currently in the high-30%s (and were >40% this am). Liquidity in S&P futures is ok while Treasuries (and from what I hear in the bond market) remains abysmal. The strength in the MOVE Index and the sustained VIX Index levels have led to risk management challenges (which typically leads to de-risking) and broad frustration. It’s hard to fight the Fed commentary (and CBs more broadly) + hot global macro data. It remains The Fed Funds ceiling – which was a tailwind for the past two days – has crept back up today to ~4.53%. We have been consolidating for a little while this am 3620-3650. Our supply is drying up a bit (we are now 1.2:1 better to buy on the desk) and there’s a lot of hope (again, per [@Jack Johnston] perhaps not the best strategy – but sometimes you must work with what you have) that we could rally post the European close Brian Heavey (Consumer) NKE: Overall the print is mixed; the top-line is very strong (NA nearly doubled our estimate at 10% FXN vs. St. 4.5%, EMEA in-line and sequential improvement in China). EPS beat JPM and missed Street by a penny (.93 vs. St. .94 and JPMe .87). Higher tax rate hurt EPS by 5 cents - so revenues and operational EPS beat vs Street. The GM was down ~220bps which offset the revenue beat and is tied to the inventory clearing actions NKE has been undertaking (recall Boss has been previewing this has seasonal inventory has being cleared). We will guide on the call which will be the main driver of the stock (as well as information on inventory clearance). The desk was very active yesterday w/ primarily LO demand in discretionary and supply in Staples (i.e. much more "risk on" in nature). Client activity is down substantially today as the daily volatility remains paralyzing. I think the magnitude of the KMX miss shows just how much downside remains in SPX earnings estimates. Yes, I think expectations were low, but KMX embodies all of the issues facing the market right now: Weakening consumer demand, higher SG&A (primarily Labor), and difficulty in forecasting given a rapidly changing macro environment. This follows an EPS cut from VFC yesterday, and while a lot of VFC's issues are company and brand specific, it was another data point that the $230 EPS estimate for the SPX that even the bulls are clinging to is probably too high. It's not all bad today... we are finally seeing the DXY stop making new highs. I think if we can move the USD into a downtrend it will provide some relief to EPS estimates (especially in the more FX sensitive staples names). Today's move lower is immaterial in the context of the last few weeks rip, but something to watch going forward Stuart Humphrey (TMT) MU | Bad Q, worse guide. Q4 revs in at $6.64B vs STe at $6.73B and JPMe at $6.56B (we lowered estimates into the print) with Q1 guide well below as revs for Q1 to be $4.25B at midpt vs STe of $5.71B came in well below expectations - GMs down below 30%, likely cutting utilization. Double ordering and supply chains are easing. Stock might be down more prob if not for positioning and the 50% capex cut vs last year. Then we move on to the JPM strategists and economists:  Nikolaos Panigirtzoglou (strategist) Nikolaos reminds us that cash allocation for non-bank investors has risen sharply this year due to simultaneous decline in both equities and bonds, and “a backdrop of high cash allocation may provide backstop for both equities and bonds likely limiting any further downside from here.” JPM still feels like a bear rally would be difficult to launch without a better CPI print to boost the market sentiment. As we are closer to Q3 earnings, a better-than-expected earnings and companies outlooks may also trigger a rally, but the margin shrinking and FX risks are still the biggest unknowns. More bullets from his note below: Following this year’s unprecedented rise in bond yields, we find that non-bank investors globally have erased 14 years of previous bond overweights and lowered their allocation to bonds to only 17% currently, even below the pre-Lehman crisis average of 18%. We see two main implications from this low bond allocation. First, going forward a sustained bull market in equities could require a bull market in bonds. Second, the pressure on multi asset investors to sell equities to offset the mechanical increase in their equity allocations stemming from bond price declines has diminished. Outside any interplay between equity and bond allocations, a backdrop of high cash allocations provides in our opinion a backstop to both equities and bonds, likely limiting any further downside from here. BoE calms concerns over collateral calls for now. Revenue has declined for ethereum block makers post merge, yet the staking yield has increased This year’s rise in bond yields is of historic proportions. The 250bp YTD rise in the Global Agg bond index yield that took place in a period of nine months, represents the steepest and largest rise in the history of the index, exceeding the bond yield rise of 1994. What is even more unprecedented is the decline in the return of the Global Agg bond index on a currency unhedged basis. Effectively more than a decade of previous returns has been unwound in a period of only nine months. Similar to previous large bond selloffs, this year’s bond selloff has been taking place against a backdrop of very low liquidity. This is shown in Figure 3, which shows that, for most of this year, the market depth for USTs has been even lower than that seen in March 2020 at the peak of the pandemic crisis. In other words, at the current juncture of very low market depth and elevated rate volatility one is feeding the other in an intense way: as rate volatility rises bond market makers step back from their market making role and raise bid offer spreads inducing low market depth and lower liquidity, which in turns creates even more rate volatility. Michael Feroli (economist, discussing net trade) So far the factory sector has held up well in the face of a surging dollar. But that’s unlikely to last, as lagged exchange rate effects and a European recession hit exporters. We expect net trade will subtract a little more than 1%-pt from GDP growth in ‘23. Fans of Kung Fu movies will be familiar with the delayed touch of death: a lethal blow whose effects are only realized after the passage of time. The closest equivalent among the various monetary transmission channels has to be the exchange rate channel. Whereas some financial conditions (e.g., mortgage rates) manifest themselves in the economy in a matter of months, historically it can take several quarters for the effect of moves in the exchange rate to play out in export and import growth. In this note we discuss what these lags—combined with the recent strength of the dollar— imply for the outlook for trade and manufacturing next year. Layered on top of the dollar appreciation is a looming recession in the Eurozone, one of the US’s largest trading partners. We also discuss why the lags from the dollar to trade may be even longer than usual now, and that when the dollar effects do hit they may hit with even more force than usual. All in, we think trade could subtract more than a percentage point from GDP growth next year, with more drag to come in ’24. Trade models are pretty simple, as far as economic models go. Demand for exports is determined by foreign income (GDP) and by the relative price of domestically-produced goods, i.e., the real exchange rate. Demand for imports is similarly a function of domestic income and the real exchange rate. Looking at the first of these, foreign income, Europe - both the Eurozone and other Europe—accounts for about a quarter of exports and appears to be heading into recession. More generally, the J.P. Morgan forecast for our trading partners next year looks for one of the slowest growth years outside of global recessions (Figure 2). The other main driver of US trade performance is the real, trade-weighted dollar. The real exchange weight is the nominal exchange weight adjusted for the price level differential between countries. Since various price indices can be used, there are various real exchange rates. The J.P. Morgan real dollar indices are up between 13% and 18% since the beginning of the year. Taking the average, and using our estimated trade elasticities, over time this should reduce the level of GDP—through both lower exports and more domestic demand shifted to imports—by over 1.5%-pts. Tyler Durden Fri, 09/30/2022 - 12:40.....»»

Category: blogSource: zerohedge6 hr. 53 min. ago

Top and Flop ETFs of Nine Months of 2022

We have highlighted the three ETFs each from the best and worst-performing zones of the nine months of 2022. The stock markets across the globe are struggling this year as consumer prices are showing no signs of easing, compelling the central banks to fight against inflation by raising interest rates once again. In fact, the Federal Reserve has been on an aggressive tightening policy to bring down inflation, which is near its highest levels since the early 1980s.In its fight, Fed Chair Jerome Powell raised interest rates by 75 bps for the fourth consecutive time that pushed the benchmark rate to 3.0-3.25%, the highest level since 2008. The rapid tightening has sparked worries over recession, leading to a sell-off in the stock markets. Additionally, Russia’s invasion of Ukraine has resulted in supply-chain issues while most of the developed and developing economies are witnessing a slowdown.Meanwhile, the hot commodity market started to cool off in recent months and the yields are hovering around their multi-year highs (read: Higher Yields to Fuel Rally in These ETFs).Given this, we have highlighted the three ETFs each from the best and worst-performing zones of the nine months of 2022:Best ZonesEnergyEnergy prices have been soaring this year, with natural gas on a tear buoyed by supply disruptions, adverse weather conditions and declining inventories. United States Natural Gas Fund UNG is the biggest winner, gaining 89.7% so far this year. United States Natural Gas Fund provides direct exposure to the price of natural gas on a daily basis through futures contracts. If the near-month contract is within two weeks of expiration, the benchmark will be the next month's contract to expire.United States Natural Gas Fund has AUM of $467.1 million and trades in a volume of around 6.3 million shares per day. The fund has 1.11% in expense ratio.Hedge FundInvestors flocked to Simplify Interest Rate Hedge ETF PFIX to combat rising rate worries. Simplify Interest Rate Hedge ETF seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases, while providing the potential for income. It buys put options on longer-term Treasury bonds to offer “the most liquid and the most cost-efficient way of getting interest rate protection.” Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge (read: 5 ETFs Up 20% or More in the First Nine Months of 2022).PFIX has accumulated $361.2 million in its asset base and trades in an average daily volume of 160,000 shares. It charges 50 bps in annual fees and has gained 78.3% so far this year.Long/ShortLong/short ETFs are less volatile, less risky and relatively stable when compared to the market-cap counterparts. These products provide hedging facilities that protect the portfolio from huge losses in turbulent times. The long/short strategy takes the best of both bull and bear prediction by involving buying and short selling of equities at the same time.KFA Mount Lucas Index Strategy ETF KMLM is leading in this space, gaining 45%. It is benchmarked to the KFA MLM Index, which consists of a portfolio of 22 liquid futures contracts traded on U.S. and foreign exchanges. The index includes futures contracts on 11 commodities, six currencies, and five global bond markets. These three baskets are weighted by their relative historical volatility, and within each basket, the constituent markets are equal-dollar weighted.KFA Mount Lucas Index Strategy ETF has amassed $275.8 million in its asset base and trades in an average daily volume of 81,000 shares. It charges 92 bps in annual fees.Worst ZonesTechnologyThe technology sector has been badly caught in a selling spree triggered by rate hikes. This is because it relies on easy borrowing for superior growth, and its value depends heavily on future earnings. A rise in long-term yields lowers the present value of companies’ future earnings, sparking fears of overvaluation. VanEck Vectors Digital Transformation ETF DAPP has tumbled 73.3% this year.VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 25 securities in its basket.VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 93,000 shares. DAPP has accumulated $28.9 million in its asset base.ShippingThough the shipping ETF performed well in September, it is among the worst performers due to declining freight rates amid waning dry bulk demand. Breakwave Dry Bulk Shipping ETF BDRY has plunged 69.6% so far this year. It is the only freight futures ETF exclusively focused on the dry bulk shipping market through a portfolio of near-dated freight futures contracts on dry bulk indices.Breakwave Dry Bulk Shipping ETF holds freight futures with a weighted average of approximately three months to expiration, using a mix of one-to-six-month freight futures based on the prevailing calendar schedule (read: 5 ETFs That Survived September Slump With Double-Digit Gains).Breakwave Dry Bulk Shipping ETF has accumulated about $44.2 million in AUM and trades in a good volume of about 334,000 shares per day on average. It charges a higher annual fee of 2.85%.CannabisBeing a high-growth sector, cannabis has been a victim of a round of broad market sell-off. AdvisorShares Pure Cannabis ETF YOLO has tumbled 67.6% so far this year. It is an actively managed fund with a dedicated cannabis investment mandate domiciled in the United States. YOLO seeks long-term capital appreciation by investing in both domestic and foreign cannabis equity securities.AdvisorShares Pure Cannabis ETF holds a basket of 24 stocks with a double-digit exposure to the top two firms. American firms make up 61.4% of the portfolio, followed by a 28.7% share of the Canadian firms.AdvisorShares Pure Cannabis ETF has gathered $57.4 million in its asset base and charges 76 bps in annual fees. YOLO trades in an average daily volume of 53,000 shares. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United States Natural Gas ETF (UNG): ETF Research Reports Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports AdvisorShares Pure Cannabis ETF (YOLO): ETF Research Reports KFA Mount Lucas Index Strategy ETF (KMLM): ETF Research Reports VanEck Digital Transformation ETF (DAPP): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacks9 hr. 37 min. ago

US stocks slip after consumer spending data as markets head for the end of brutal September

For the month, the S&P 500 and Dow Jones Industrial Average are down more than 7%, while the Nasdaq has lost more than 9%. Traders work on the floor of the New York Stock Exchange February 4, 2014. REUTERS/Brendan McDermid US stocks dropped on Friday after a sell-off a day earlier the brought the S&P 500 to a 2022 low. Data from the Commerce Department showed consumer spending picked up in August even as inflation rose.  US stocks this week were battered by turmoil in UK markets and escalating recession fears.  US stocks fell on Friday to head towards the end of a brutal month, with traders extending the week's steep losses resulting from turmoil in UK markets and fears of a recession in the face of a hawkish central bank. For the month, the S&P 500 and Dow Jones Industrial Average are down more than 7%, while the Nasdaq has lost more than 9%.Thursday's session brought the S&P 500 to a new closing low for the year, while also shaving over 450 points of the Dow and almost 3% from the Nasdaq. And a day after consumer spending woes dragged Apple shares down nearly 5%, Nike on Friday tumbled 10% after it reported a big jump in inventories. Traders on Friday morning were digesting Personal Consumption Expenditure data that showed core inflation rising year-over-year in August to 4.9%, up from 4.7% in July. The data also showed consumer spending was still steady, and up slightly even as high prices weigh on US households. Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:  S&P 500: 3,634.92, down 0.15%Dow Jones Industrial Average: 29,150.92, down 0.26% (74.69 points)Nasdaq Composite: 10,718.81, down 0.17%Here's what else is going on this morning: The pound fell further against the dollar as emergency talks in the UK over new budget and tax cut proposals failed to calm markets.Long-time bull Ed Yardeni warned that aggressive Fed moves to sharply raise interest rates could crush asset prices further and spark a deep recession. "The Big Short" investor Michael Burry sounded the alarm again on risks to the market, saying that a greater crisis than the 2008 recession could be looming. In commodities, bonds, and crypto:WTI crude was down 1.14% to $80.34. Brent, the international benchmark, fell 0.3% to $88.21Gold was up about 0.2% to $1,672 per ounce.The 10-year Treasury note fell about four basis points to 3.70%.Bitcoin was up slightly, trading at $19,292.Read the original article on Business Insider.....»»

Category: dealsSource: nyt10 hr. 9 min. ago

A "Shocked" Wall Street Reacts After Nike Plummets On "Unexpected" Inventory Surge

A "Shocked" Wall Street Reacts After Nike Plummets On "Unexpected" Inventory Surge It was all the way back in May when we first warned that a reversal of the "shortage of everything" bullwhip effect was coming, as soaring inventories (the result of covid-era overordering due to snarled supply chains) are about to hit a slowing economy brick wall, and prices are about to fall off a cliff as companies are forced to liquidate said inventories into a recession (see "Bullwhip Effect Ends With A Bang: Why Prices Are About To Fall Off A Cliff" from May 23), a point we also made repeatedly in the months that followed ("Bullwhip-Effect Reversal Is The Major Downside Growth Risk"; "The 'Bullwhip Effect' Will Frustrate The Fed"). And while the market largely ignored what was coming with the occasional exception... Reverse bull whip effect strike again this time at NVDA which takes $1.3BN inventory charge: "Second quarter results are expected to include approximately $1.32 billion of charges, primarily for inventory" — zerohedge (@zerohedge) August 8, 2022 ... it wasn't until last night's Nike earnings "shock" that the full extent of the reverse bullwhip became apparent. For those that missed it, NKE shares plunged some 10% overnight, their biggest post-earnings drop in 20 years, after the sportswear giant cut its margin outlook for the year while reporting precisely what we warned would happen as the reverse bullwhip effect kicks in, namely surging inventory, fueling worries over consumers’ ability to spend as inflation takes a toll. And even though all of this was perfectly visible for those who bother to look, the market was so shocked that Nike stock is in freefall this morning, suffering one of its biggest post-earnings drop on record. And, as they always do after the fact, analysts slashed their targets on the retailer, saying that even a big brand like Nike isn’t immune to macro pressures, even if the longer-term outlook is rosier. Here is what analysts are saying: Morgan Stanley (overweight, PT cut to $120 from $129) Analyst Alex Straton flags high macro and supply chain volatility, full- year numbers falling, and long-term targets pushed out While Nike’s discounted valuation feels fair, it also makes for a potentially attractive entry point for long-term investors Guggenheim (buy, PT cut to $135 from $155) Analyst Robert Drbul continues to believe that many of the issues Nike is facing are transitory, including “bloated” inventory levels and supply/demand imbalance, with “significant” gross margin pressure RBC (outperform, PT cut to $115 from $125) Excess inventories in North American have been the main “fear” among investors in recent weeks and months, writes analyst Piral Dadhania Nike’s results show that it too isn’t immune, with material inventory build, lower than expected gross margin and a guidance cut Keeps outperform rating on strong revenue growth and potential China recovery Stifel (buy, PT cut to $110 from $130) Nike’s demand strength was overshadowed by ballooning inventories that will weigh on margin, analyst Jim Duffy says Among positives, highlights solid back-to-school, and better-than-feared Greater China results Citi (neutral, PT $93) While the inventory buildup is mainly due to supply chain timing issues, Nike must walk a fine line between heavy liquidation sales and protecting the health of its brand near and longer-term, analyst Paul Lejuez writes Risk remains even for a strong brand like Nike, especially if macro environment weakness further BMO Capital Markets (outperform, PT cut to $110 from $128) Analyst Simeon A Siegel notes Nike beat on revenues and EPS, missed margins and lowered its guidance Jefferies (buy, PT cut to $115 from $130) Analyst Randal Konik notes Nike still has strong demand and remains attractive in the long term, but cuts its PT on near-term volatility Points to healthy top-line performance, EPS beat driven by cost discipline as positives for the quarter. Elevated inventories and below-consensus China sales were cited as negatives Wells Fargo (overweight, PT $130) Analyst Kate Fitzsimons pointed to revenue upside and cost controls, but noted gross margin missed on outsize freight and logistics costs, FX headwinds and higher markdowns Commenting on the collapsing price, Bloomberg technician William Maloney writes that NKE is in long-term downtrend from November peak; and is already well below the pre-pandemic high. Chartists will note that a potential initial support zone is $84- $86, and if $84 fails, next potential support $78, $81. While it is unclear if NKE will plunge that far, one thing is certain: get ready for a whole lot of 50%-off deals on Nike sneakers. Tyler Durden Fri, 09/30/2022 - 09:13.....»»

Category: blogSource: zerohedge10 hr. 21 min. ago

Market bull Ed Yardeni rings the alarm on further Fed rate hikes, warning they could tank asset prices and drag the US economy into a deep recession

The veteran economist argued the Fed is being too aggressive in its fight against inflation, as price increases are slowing. Ed Yardeni.Adam Jeffery/CNBC/NBCU/Getty Images Ed Yardeni warned the Federal Reserve is being too aggressive in fighting inflation. The veteran economist cautioned the central bank could drive the US economy into a deep recession. Yardeni raised the prospect of a sharp fall in house prices and further pressure on stocks. Ed Yardeni has sounded the alarm on the Federal Reserve's efforts to beat back inflation, warning the central bank's aggression is threatening to choke the US economy."I think the Fed has to be really careful here," he said on CNBC's "Squawk Box Asia" on Thursday. "If they keep going without pausing, it's really going to create a real possibility of a significant recession."Fed Chair Jerome Powell and his colleagues, in response to inflation hitting a 40-year high of 9.1% in June, have hiked interest rates from near zero in March to a range of 3% and 3.25% today. They have made three consecutive hikes of 75 basis points in recent months, and have signaled rates could climb as high as 4.6% next year.Yardeni, the president of Yardeni Research, argued the Fed was raising rates too rapidly in another CNBC interview on Thursday. He noted the central bank is also shrinking its balance sheet and taking a more hawkish stance on inflation than its global peers, which has boosted the US dollar and roiled foreign-exchange markets.The veteran economist pointed to sliding food and energy prices as evidence that the inflation threat is fading. He underscored the dire consequences of the Fed continuing to tighten its monetary policy regardless."The housing market's getting absolutely crushed," he said, noting mortgage rates have surged from 3% to nearly 7% this year. "I think you're going to see home prices falling pretty rapidly."Yardeni also said the sharp decline in stocks this year is "mostly attributable to the Fed," and predicted tough and uncertain market conditions until the central bank says it has inflation under control.On the other hand, Yardeni said the downturn in asset prices has thrown up some bargains for brave investors."When I see corrections in bear markets, I see opportunities rather than reasons to panic," he said. "And I think there's plenty of opportunities here.Read more: Former stock trader says she doesn't see 'too many opportunities where putting your money into the stock market is going to grow.' Here's where to invest your money right now instead.Read the original article on Business Insider.....»»

Category: smallbizSource: nyt14 hr. 9 min. ago

First Solar Loses Power After Analyst Upgrade: What The Stock Chart Says

In a bull market or at least a day when the market has upside potential, an upgrade to an issue may instigate an oversized move higher. Latest Ratings for FSLR DateFirmActionFromTo Mar 2022Credit SuisseMaintainsNeutral Mar 2022Goldman SachsMaintainsSell Mar 2022CitigroupMaintainsNeutral View More Analyst Ratings for FSLR View the Latest Analyst Ratings read more.....»»

Category: blogSource: benzinga21 hr. 9 min. ago

TSLA Stock Outlook: Here’s What Friday’s Tesla AI Day Could Reveal

InvestorPlace - Stock Market News, Stock Advice & Trading Tips In short, while I wouldn't count on it sparking a short-term rally, AI Day on Sep 30 could help to bolster the long-term bull case for TSLA stock. If Tesla is making real progress with its artificial intelligence projects, ample runway lies ahead for shares. The post TSLA Stock Outlook: Here’s What Friday’s Tesla AI Day Could Reveal appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” It doesn’t matter if you have $500 or $5 million. Do this now......»»

Category: topSource: investorplaceSep 29th, 2022

Top 5 Beaten-Down, Nasdaq-Listed Tech Stocks With Solid Upside

We have narrowed our search to five Nasdaq- listed technology stocks currently trading at a deep discount to their 52-week highs. These are: ABNB, FTNT, VRSN, CDW and ZS. U.S. stock markets witnessed a broad-based decline in September. Although historically September is the worst-performing month on Wall Street, this year it is likely to be the most disastrous in a decade courtesy of an ultra-hawkish Fed. The central bank has raised the benchmark lending rate by 3% year to date.As the Fed has given a clear indication of the continuation of a rigorous interest rate hike and tighter monetary control, a global financial crisis looms larger. Market participants are pricing the cost of an imminent recession in stock valuation.Currently, the Dow and the S&P 500 indexes are in bear market territory. Surprisingly, the tech-heavy Nasdaq Composite — which is most susceptible to the Fed’s higher interest rate regime — is currently outside the bear market zone.  Wall Street seems grossly oversold despite the continuation of the Fed’s tighter monetary control. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have plunged 18.3%, 22% and 29.4%, respectively.Several Nasdaq Composite listed stocks are currently available at attractive valuations. Investment in these stocks with a favorable Zacks Rank should be fruitful to gain in the near term. Here are five such stocks — Airbnb Inc. ABNB, Fortinet Inc. FTNT, VeriSign Inc. VRSN, CDW Corp. CDW and Zscaler Inc. ZS.Nasdaq Composite Exits Bear MarketIn the last two coronavirus-ridden years, the Nasdaq Composite recorded an astonishing rally of more than 140%. The tech-heavy index recorded its all-time high of 16212.23 on Nov 22, 2021. The meteoric rise of the technology stocks was the sole reason for this impressive rally. Consequently, investors started profit booking in this sector from the beginning of 2022.Moreover, mounting inflation compelled the Fed to significantly raise the benchmark interest rate from March this year. The central bank also imposed tougher monetary control sucking liquidity from the economy and raising the market’s risk-free returns.A higher interest rate is detrimental to the growth sectors like technology. Consequently, the tech-laden Nasdaq Composite entered the bear market on Mar 7, 2022 after declining more than 20% from its recent high recorded on Nov 22.After entering the bear market, the Nasdaq Composite registered its recent low of 10,565.14 on Jun 16. Finally, on Aug 4, the Nasdaq Composite exited the bear market after rallying more than 20% from its recent low.After forming the new bull market, the Nasdaq Composite reached its highest at 13,181.09 on Aug 16. Thereafter, the tech-laden index has taken a downturn once again following a tougher-than-expected monetary stance by the Fed.Despite the recent decline, the Nasdaq Composite has fallen just 16.2% from its recent high. As a result, the index is currently well outside the bear market territory.Our Top PicksWe have narrowed our search to five Nasdaq Composite listed technology stocks currently trading at a deep discount to their 52-week highs. These stocks have strong potential for the rest of 2022 and have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The chart below shows the price performance of our five picks year to date.Image Source: Zacks Investment ResearchAirbnb is riding on an improvement in the travel industry. Continued recovery in both longer-distance and cross-border travel owing to a reduction in travel restrictions is benefiting ABNB’s Nights & Experience bookings. Additionally, growth in Average Daily Rates and Gross Booking Value is acting as a tailwind.Growing active listings in Latin America, North America and EMEA are contributing well to the top line. Growing sales and marketing initiatives along with continuous efforts to upgrade various aspects of the Airbnb service are helping the company gain momentum among hosts and guests.Airbnb has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.5% over the last 30 days. ABNB is currently trading at a 47.9% discount from its 52-week high.Fortinet is benefiting from rising demand for security and networking products amid the coronavirus crisis as a huge global workforce is working remotely. FTNT is also benefiting from robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network offerings.Moreover, continued deal wins, especially those of high value, are solid drivers. Higher IT spending on cybersecurity is further expected to aid Fortinet grow faster than the security market. Also, focus on enhancing its unified threat management portfolio through product development and acquisitions is a tailwind for FTNT.Fortinet has an expected earnings growth rate of 31.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.9% over the last 60 days. FTNT is currently trading at a 32.8% discount from its 52-week high.VeriSign provides Internet infrastructure services that include domain name registry services and infrastructure assurance services. VRSN’s performance is gaining from growth in .com and .net domain name registrations. VeriSign ended second-quarter 2022 with 174.3 million .com and .net domain name registrations, up 2.2% year over year.VRSN will be hiking the annual registry-level wholesale fee for each new and renewal .net domain name registration to $9.92, from $9.02 with effect from Feb 1, 2023. VeriSign is expected to benefit from growing Internet consumption globally.VeriSign has an expected earnings growth rate of 10% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 60 days. VRSN is currently trading at a 31% discount to its 52-week high.CDW’s performance is benefiting from the digital transformation taking place globally as well as higher revenue growth in Corporate, Small Business and CDW Canada segments owing to the ongoing focus on hybrid work and return to office solutions.Higher demand for products that enable operations’ continuity plan amid the pandemic is acting as a key catalyst for CDW. Growth in the healthcare end market, a resilient business model, and a solid product and solutions portfolio are key positives. Strategic acquisitions also bode well.CDW has an expected earnings growth rate of 21.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 60 days. CDW is currently trading at a 22.6% discount to its 52-week high.Zscaler is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches. Increasing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver of ZS.Zscaler’s portfolio boosts its competitive edge and helps add users. Moreover, a strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education, is safeguarding Zscaler from the pandemic’s negative impact. Also, recent acquisitions, like Smokescreen and Trustdome, are expected to enhance ZS’ portfolio.Zscaler has an expected earnings growth rate of 69.6% for the current year (for July 2023). The Zacks Consensus Estimate for current-year earnings improved 13.6% over the last 30 days. ZS is currently trading at a 55.1% discount to its 52-week high. FREE Report: The Metaverse is Exploding! Don’t You Want to Cash In? Rising gas prices. The war in Ukraine. America's recession. Inflation. It's no wonder why the metaverse is so popular and growing every day. Becoming Spider Man and fighting Darth Vader is infinitely more appealing than spending over $5 per gallon at the pump. And that appeal is why the metaverse can provide such massive gains for investors. But do you know where to look? Do you know which metaverse stocks to buy and which to avoid? In a new FREE report from Zacks' leading stock specialist, we reveal how you could profit from the internet’s next evolution. Even though the popularity of the metaverse is spreading like wildfire, investors like you can still get in on the ground floor and cash in. Don't miss your chance to get your piece of this innovative $30 trillion opportunity - FREE.>>Yes, I want to know the top metaverse stocks for 2022>>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 VeriSign, Inc. (VRSN): Free Stock Analysis Report Fortinet, Inc. (FTNT): Free Stock Analysis Report CDW Corporation (CDW): Free Stock Analysis Report Zscaler, Inc. (ZS): Free Stock Analysis Report Airbnb, Inc. (ABNB): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 29th, 2022

Is The Market Too Pessimistic?

What if the worst-case scenario doesn't happen? Kevin Matras can help build your dream portfolio right now, so you're invested at the beginning of the next upturn while others are still sitting on the sidelines. What a year it’s been so far.The Dow, which had eluded an official bear market call all year, finally dipped into bear market territory earlier this week by closing below the -20% threshold. From their all-time high close in January to their lowest close they have fallen by -20.8%. Although, after Wednesday’s rally, they are now down ‘only’ -19.3%.The S&P has been in a bear market since June. But then it went on a 17.4% rally over the next month and a half. However, it turned around and started heading back down just as quickly. They are currently down by -22.5% from their all-time high close.The Nasdaq and the Russell 2000 were the first ones to enter a bear market (March and February respectively). But they were also the first ones to exit their bear market (first part of August), and technically enter a new bull market when they finished 20% above their bear market low close. From their lowest close, they rebounded as much as 23.3% and 22.5%.Since then, however, they’ve both fallen back down. As strange as it sounds, they are technically still in their new bull market as the Nasdaq is ‘only’ down -15.8% from their recent bull market high close, and the Russell is ‘only’ down -15.1% from their recent bull market high close. But from their all-time high closes, they are down in total by -31.2% and -29.7%. As I said, strange. And for those keeping track, they both stayed above their June lows and their June low closes.But I’m reminded of the comparison that was made between the first half of this year, and the first half of 1970.This year’s first half performance (the S&P was down nearly -21%), was strikingly similar to that of 1970 (also down -21%). And in both periods, high inflation was an issue.But in the second half of 1970, the S&P was up 27%.Of course, that doesn’t mean that’s how it’ll go for the back half of this year. But it doesn’t mean it won’t either.In either case, you should be ready. So What Changed? After Q1’s GDP shrank by -1.6%, traders were expecting the worst, predicting a deep recession was coming.But Q2 was ‘only’ down by -0.6%.All the while, consumer demand remained strong. So did corporate earnings. And the jobs market stayed sizzling hot.Suddenly, the worst-case scenario no longer looked like it was going to happen.Forecasts for the second half were calling for growth. (It’s no longer a recession when the economy starts growing again.)While Q3 GDP is only expected to eke out a 0.3% gain, Q4 is expected to be better, with full year estimates showing another year of growth. And the Fed is predicting 2023 to be even better still with a 1.8% GDP growth rate.Moreover, oil prices have fallen sharply. After trading over $130 a barrel, crude oil is now trading at $82. That’s a decline of -37% in a matter of months. And that’s helped ease inflation concerns.Peak Inflation Is Behind Us Inflation still remains near 40-year highs.But inflation has been ticking down for the last few months.Headline inflation, according to the Consumer Price Index (CPI), is at 8.3% y/y, with core inflation (less food & energy) at 6.3%. That’s down from its peak of 9.1% and 6.5%.While that dip is not a lot, and it’s a far cry from the Fed’s goal of getting it back down to 2%, the mere fact that it’s no longer making new highs, and instead is ticking lower, is a step in the right direction.A few months ago, many were expecting inflation to soar above 10% or more. Now, expectations are for it falling to 5-6% next year, with the core rate falling even lower.And that means the Fed may not have to raise rates as much as people are fearing.More . . .------------------------------------------------------------------------------------------------------Just Released: 4 Stocks for Biggest Upside in Q4 Four Zacks experts each announce their single favorite stock to gain the most in the next three months:Stock #1: Little-known but highly influential tech stock with clients like Apple and Nvidia.Stock #2: Cutting-edge streaming company ready to break out. EPS estimates are up 25% in 30 days.Stock #3: An under-the-radar alternative energy company with estimates for 70% in topline growth.Stock #4: Chemical company poised to become the dominant supplier of materials for EV batteries.Today, you are invited to download the private Ultimate Four Special Report that names these stocks and spotlights why their gain potential is so exceptional.See Stocks Now >> ------------------------------------------------------------------------------------------------------Is A “Soft Landing” Still Possible? At last week’s FOMC announcement, the Fed raised rates by another 75 basis points, as expected.What caught the market by surprise, however, was the forecast that rates might need to get as high as 4.40% by year’s end (vs. previous expectations for 3.5%). And hit 4.60% in 2023 (vs. 4.25% expected previously), before holding it there for a while.With the Fed Funds midpoint now at 3.13%, that means another 1.25% hike by the end of the year, followed by an additional 25 basis points next year.Nonetheless, the Fed said they will continue to look at the data. And will take each meeting as it comes.And while the prospect of a ‘soft landing’ becomes more difficult the longer inflation stays elevated, and the higher interest rates go, the Fed has done it before.With plenty of economic positives backstopping the economy right now, not the least of which is a strong labor market, there’s definitely the chance that the market is being too pessimistic.You can also see that in the GDI numbers (Gross Domestic Income), which measures U.S. economic activity via the income earned for these activities. Usually, the GDI and GDP (Gross Domestic Product) are statistically very similar. But this year, the GDI was positive all year with a 1.6% annualized growth rate for the first part of the year, while GDP was down an annualized -1.1%.Will these two measures converge? If so, will GDP rise to meet GDI, or will GDI fall to meet GDP? Or maybe a little bit of both? TBD. But, at the moment, GDP forecasts are pointing to plus signs for the rest of the year.And that’s bullish.Are Stocks Undervalued? Let’s also not forget that valuations are down.The P/E ratio for the S&P is at multiyear lows, and is trading below its five-year average.And that makes stocks a bargain.Of course, if earnings drift lower, valuations will creep up. But there’s plenty of room for stocks to remain relatively cheap.And the earnings outlook is still forecasting growth.Add in another trillion dollars in stimulus between the CHIPS Act and the Inflation Reduction Act, and that should extend the growth outlook even further.But, What If...?To be fair, the economy has its problems.Some are still calling for a recession (even though we already had it).And who can forget Jamie Dimon’s call for an “economic hurricane?” (Although, within weeks of that statement, stocks began their spectacular summer rebound.)But Jamie Dimon, earlier this year, also said that he thinks the U.S. is headed for the best economic growth in decades, and that the “consumer balance sheet has never been in better shape.”So, he’s definitely putting out some mixed messaging.But that’s why big announcements like this all have to be taken with a grain of salt – both the bullish ones and bearish ones.I’m not dismissing the possibility of problems down the road.But his ominous ‘hurricane’ statement instantly reminded me of the ‘irrational exuberance’ line from Fed Chair, Alan Greenspan, back on December 5th, 1996.From the time of that speech, the S&P gained over 105% before peaking on March 24th, 2000 (more than 3¼ years later).Just imagine all of the money someone would have missed out on if they had jumped ship the moment he made that comment.The point is, these kinds of big announcements have terrible track records.And I definitely wouldn’t trade on it. Watch The Jobs Numbers  One of these days, maybe next year, maybe a few years from now, the economy will crack.But one of the telltale signs will be a drop in new jobs.When that happens, you can start wondering when the other shoe will drop.Until then, there’s plenty of money to be made in the market.You just have to know what to look for to take full advantage of it.Now Is The Time To Start Building Your Dream Portfolio  With stocks near their lows, now is the time to start building your dream portfolio.As legendary investor Warren Buffett once said, “be greedy when others are fearful.”And there’s plenty of fear in the market right now.But it should also be known that a large part of any market recovery typically comes at the very beginning.Whether that’s now, next week, or next month, etc., we’re definitely much closer to the bottom than we were just a few short weeks or months ago.To increase your odds of getting in at the bottom, you should always be scanning for new stocks to get into.True, when the market is falling, and economic conditions weaken, there will be fewer stocks coming through your screens. That’s just the way it is.But there will always be great stocks coming through. And savvy investors who diligently stay engaged in the market, even when times are tougher, will find those gems when others have given up.And since you are doing this regularly, you won’t miss out when the market turns around. Of course, they won’t all be winners. You may get into a new stock that goes down. But that’s OK. If you keep your losses small, you won’t do any damage to your portfolio.But you will inevitably find yourself in some spectacular picks at precisely the right time.And if you don’t think there’s money to be made during tough times like these, just know that YTD, even though the major indexes are all down, there are 689 stocks that are by 10% or more; 495 that are up by 20% or more; 213 up by 50% or more, and 85 that are up by 100% or more.Increasing Your Odds Of Success That’s not to say picking winning stocks doesn’t require skill. Because it does.If you keep looking at the wrong things to pick stocks with, you’ll rarely if ever get into the winners.But picking winning stocks is easier than you think.For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 28 of the last 34 years with an average annual return of 25% per year? That's more than 2 x the S&P with an annual win ratio of more than 82%.That includes 3 bear markets and 4 recessions.And did you know that stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true!Those two things will give any investor a huge probability of success and put you well on your way to beating the market.But you still have to narrow that list down to the handful of stocks you can buy at any one time.And that’s where the professional expertise of our editors comes in.One of the best ways to begin picking better stocks is to see what the pros are doing – the pros who use these methods to select the best stocks to buy.Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.This applies to large-caps and small-caps, biotech and high-tech, ETFs, stocks under $10, stocks about to surprise, even options, and everything in between.Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods that work, from experts who have demonstrated their ability to beat the market.The best part about these strategies is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and start getting into better stocks on your very next trade.The Easiest, Fastest Way to Get Started Download our just-released Ultimate Four Special Report. It names and explains 4 stocks with strong fundamentals that are hand-picked by our experts to have the biggest upsides for Q4.And despite inflation there couldn’t be a better time to get aboard. Stocks are substantially undervalued, but the U.S. economy is much better than most people realize, with strong consumer demand, robust job market and solid corporate earnings.In particular, these 4 stocks are riding trends that could prove very lucrative for investors...Stock #1: It’s one of the world’s most influential tech stocks, but most investors have never heard of it. Revenue jumped 44% thanks to extreme demand for its products from other tech companies like Apple.Stock #2: This cutting-edge entertainment company is ready to break out. Shares are already climbing after a pullback earlier in the year, and with EPS estimates up 25% in the last 30 days, big gains are on the horizon.Stock #3: An under-the-radar alternative energy company is poised to leap into the headlines. Analysts are calling for a massive 70% in topline growth – and government stimulus could push revenues even higher.Stock #4: The surging electric vehicle industry will give this chemical company a major boost. With operations on 5 continents, it could become a dominant supplier of materials for a new generation of EV batteries.Don’t miss this chance to get in early on our latest Ultimate Four. We’re limiting the number of people who share that Special Report. There’s a hard deadline - the opportunity to download it ends midnight Monday, October 2nd.Look into our Ultimate Four stocks right now >> Thanks and good trading,KevinKevin Matras serves as Executive Vice President of and is responsible for all of its leading products for individual investors. He invites you to download Zacks’ newly released Ultimate Four Special Report. 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 To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 28th, 2022

Farewell, TINA

    For years, we have heard that “there is no alternative” – TINA – to equities, and that thanks to the Fed, “Cash is trash.” No longer. The Federal Reserve, in its belated attempt to fight inflation, has cranked up rates to the point where today, there is an alternative to stocks: Bonds. It’s… Read More The post Farewell, TINA appeared first on The Big Picture.     For years, we have heard that “there is no alternative” – TINA – to equities, and that thanks to the Fed, “Cash is trash.” No longer. The Federal Reserve, in its belated attempt to fight inflation, has cranked up rates to the point where today, there is an alternative to stocks: Bonds. It’s been over two decades since the Fed first began panic cutting interest rates in response to such events as the 1998 Long Term Capital Management implosion, the 2000 dotcom crash (2001-03), the September 11th terrorist attacks in 2001, the great financial crisis in 2007-08, three 25 bps cuts in 2019 for reasons unknown, and the rate slash during the pandemic in 2020. Despite what you may have heard, the Fed isn’t the only factor driving equity markets. However, they are significant — and rising rates this year have been a headwind for both equities and the economy. Market drawdowns occur on an all too regular (if not scheduled) basis. But the -23% of the SPX may not be the biggest story of 2022: The single most important change has been the end of the bond bull market that dates back to 1981. It is a one-in-a-generation, perhaps even once-in-a-lifetime event. There is no small irony that the 4-decade long bond bull market was also kicked off by a Federal Reserve responding to inflation. Alas, today’s inflation is 1) not like that of the 1970s; 2) the economy is nothing like the 1980s double-dip recession; and 3) Jerome Powell is no Paul Volcker. 1 and 2 are good, I suspect 3 is problematic. 2022 may not be 1981-82, but for the first time in several years, bonds are attractive investment options. In addition to providing diversification versus equities, and some ballast to an allocation, you now get paid for owning them. Consider: The 10 Year Treasury Bond kissed a 4% yield yesterday and is now trading just under that:   Municipal Bonds are yielding between 3 and 5% – the taxable equivalent of 4.4 to 6% yield or better (according to Bankrate’s Tax Equivalent Yield Calculator)   High-Grade Corporates are yielding over 4% (more if you go lower in quality (ill-advised) See the Moody’s Seasoned Aaa Corporate Bond Yield (AAA)   Of course, the downside to higher yields is that mortgage rates have all gone up: a 30-Year fixed mortgage spiked from under 3% to nearly 7%! Housing is typically the first place where higher rates bite into the economy.   ~~~ More irony: Now that TINA is gone, and there is an alternative to equities, we will soon reach a point where stocks become very attractive. We are getting close to that moment.       See also: Global Bonds Rally After 10-Year Treasury Yield Touches 4% (WSJ, September 28, 2022) Expected Returns For Bonds Are Finally Attractive (A Wealth of Common Sense, September 27, 2022)   The post Farewell, TINA appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureSep 28th, 2022

The Big Short Squeeze Is Coming

The Big Short Squeeze Is Coming Authored by Lance Roberts via, The latest rate hike announcement by the Fed sent stocks tumbling to the year’s lows. While last week’s market action was brutal, the good news is the markets are set up for a rather significant short squeeze higher. It is quite likely the Fed has already tightened more than the economy can withstand. However, given the lag time of policy changes to show up in the data, we won’t know for sure for several more months. However, with the Fed removing liquidity from the markets at a most aggressive pace, the risk of a policy mistake is higher than most appreciate. I added some annotations to a recent graphic from Chartr. With the Fed now hiking rates, seemingly intent on doing so at every meeting in 2022, has the correction priced in the “bad news?” The issue, of course, is that we never know where we are within the current cycle until it is often too late. An excellent example is 2008, as I discussed recently in “Recession Risk.” “The problem with making an assessment about the state of the economy today, based on current data points, is that these numbers are only ‘best guesses.’ Economic data is subject to substantive negative revisions as data gets collected and adjusted over the forthcoming 12- and 36-months. Consider for a minute that in January 2008 Chairman Bernanke stated: ‘The Federal Reserve is not currently forecasting a recession.’ In hindsight, the NBER, in December 2008, dated the start of the official recession was December 2007.” A Historical Analog I am NOT a fan of market analogs because it is simplistic to “cherry-pick” starting and ending dates to get periods to align. However, I am going to do it anyway to illustrate a point. The chart below aligns the current market to that of 2008. Notably, I am NOT suggesting we are about to enter a significant bear market. I want to point out that in the first half of 2008, despite the collapse of Bear Stearns, the mainstream media did not foresee a recession or bear market coming. The mainstream advice was to “buy the dip” based on views that there was “no recession in sight” and that “subprime debt was contained.” Unfortunately, there was a recession and a bear market, and there was NO containment of subprime mortgages. However, even if a deeper bear market is coming, a “short squeeze” can allow investors to reduce the risk more gracefully. Investor Sentiment Is So Bearish – It’s Bullish Once again, investor sentiment has become so bearish that it’s bullish. As we have often discussed, one of the investors’ most significant challenges is going “against” the prevailing market “herd bias.” However, historically speaking, contrarian investing often proves to provide an advantage. One of the most famous contrarian investors is Howard Marks, who once stated: “Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, particularly when momentum invariably makes pro-cyclical actions look correct for a while. Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.” Currently, everyone is once again bearish. CNBC is again streaming “Markets In Turmoil” banners, and individuals are running for cover. Our composite investor sentiment index is back to near “Financial Crisis” lows. We agree investors should be more cautious in their portfolio allocations. However, such is a point where investors make the most mistakes. Emotions make them want to sell. However, from a contrarian view, such is the time you need to avoid that impulse. While many investors have never witnessed a “bear market,” the current market volatility is not surprising. As we discussed previously, Hyman Minsky argued that financial markets have inherent instability. As we saw in 2020-2021, asymmetric risks rise in market speculation during an abnormally long bullish cycle. That speculation eventually results in market instability and collapse. We can visualize these periods of “instability” by examining the daily price swings of the S&P 500 index. Note that long periods of “stability” with regularity lead to “instability.” The markets could and possibly will fall further in the coming months as the Fed most likely makes a “policy mistake,” such doesn’t preclude a rather sharp “short squeeze” that investors can use to rebalance risks. Such is just part of the increased market volatility we will likely deal with for the rest of this year. A Short Squeeze Setup Currently, everybody is bearish. Not just in terms of “investor sentiment” but also in “positioning.” As shown, professional investors (as represented by the NAAIM index) are currently back to more bearish levels of exposure. Notably, when the level of exposure by professionals falls below 40, such typically denotes short-term market bottoms. Another historically good indicator of extreme bearishness is the CBOE put-call ratio. Spikes in the put-call ratio historically note a surge in bearish positioning. Previous spikes in the put-call ratio have aligned with at least short-term market lows, if not bear market bottoms. The current surge in the bearish positioning suggests the markets could be setting a short-term low, particularly when a short squeeze occurs. Lastly, the number of stocks with “bullish buy signals” is also plumbing extremely low levels. Like positioning and the put-call ratio, the bullish percent index suggests stocks have seen rather extreme liquidations. Such low levels of stocks on bullish buy signals remains a historically reliable contrarian buy signal. As shown, when levels of negativity have reached or exceeded current levels, such has historically been associated with short- to intermediate-term market bottoms. However, there are two critical points to note: During bull markets, negative sentiment was a clear buying opportunity for the ongoing bullish trend. During bear markets (2008), negative sentiment provided very small opportunities to reduce risk before further declines. Such raises the question of what to do next, assuming a bear market is in full swing. Navigating A Reflexive Rally As Bob Farrell’s rule number-9 states: “When all the experts and forecasts agree – something else is going to happen. As a contrarian investor, excesses get built when everyone is on the same side of the trade.  Everyone is so bearish that the reflexive trade will be rapid when sentiment shifts. There are plenty of reasons to be very concerned about the market over the next few months. We will use rallies to reduce equity exposure and hedge risks accordingly. Move slowly. There is no rush to make dramatic changes. Doing anything in a moment of “panic” tends to be the wrong thing. If you are overweight equities, DO NOT try and fully adjust your portfolio to your target allocation in one move. Again, after significant declines, individuals feel like they “must” do something. Think logically above where you want to be and use the rally to adjust to that level. Begin by selling laggards and losers. These positions were dragging on performance as the market rose, and they led on the way down. Add to sectors, or positions, that are performing with or outperforming the broader market if you need risk exposure. Move “stop-loss” levels up to recent lows for each position. Managing a portfolio without “stop-loss” levels is like driving with your eyes closed. Be prepared to sell into the rally and reduce overall portfolio risk. There are many positions you will sell at a loss simply because you overpaid for them to begin with. Selling at a loss DOES NOT make you a loser. It just means you made a mistake. If none of this makes sense to you, please consider hiring someone to manage your portfolio. It will be worth the additional expense over the long term. Follow your process. A “short squeeze” is coming, but we aren’t out of the woods yet. Tyler Durden Wed, 09/28/2022 - 14:25.....»»

Category: dealsSource: nytSep 28th, 2022

7 Growth Stocks to Buy Before the Bull Market Returns

InvestorPlace - Stock Market News, Stock Advice & Trading Tips Savvy investors should play contrarian and take a close look at these seven growth stocks to buy before the bull market returns. The post 7 Growth Stocks to Buy Before the Bull Market Returns appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” It doesn’t matter if you have $500 or $5 million. Do this now......»»

Category: topSource: investorplaceSep 28th, 2022

3 Cryptos to Buy to Tap Into a Hidden Bull Market

InvestorPlace - Stock Market News, Stock Advice & Trading Tips These cryptos to buy offer spectacular upside potential and a way to tap into the hidden bull market The post 3 Cryptos to Buy to Tap Into a Hidden Bull Market appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” It doesn’t matter if you have $500 or $5 million. Do this now......»»

Category: topSource: investorplaceSep 28th, 2022

7 Semiconductor Stocks to Buy Before the Bull Market Returns

InvestorPlace - Stock Market News, Stock Advice & Trading Tips If you are a fan of chip companies, these are the top semiconductor stocks to buy before the bull market returns. The post 7 Semiconductor Stocks to Buy Before the Bull Market Returns appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” It doesn’t matter if you have $500 or $5 million. Do this now......»»

Category: topSource: investorplaceSep 28th, 2022

Futures Rebound From 2022 Low After Bank Of England Panics, Restarts Unlimited QE

Futures Rebound From 2022 Low After Bank Of England Panics, Restarts Unlimited QE With everything biw breaking, including an explosive move in bond yields in the UK, 10Y yields rising above 4.00%, and Apple "suddenly" realizing there was not enough demand for the latest iteration of its iPhone 5, it was only a matter of time before some central bank somewhere capitulated and pivoted back to QE, and this morning that's precisely what happened when the BOE delayed the launch of QT and restarted QE "on whatever scale is necessary" on a "temporary and targeted" (lol) basis to restore order, which sent UK bond surging (and yields tumbling the most on record going back to 1996 erasing an earlier jump to the the highest since 1998)... ... the pound first surged before falling back as traders realized the UK now has both rate hikes and QE at the same time, the dollar sliding then spiking, the 10Y US TSY yield dipping from 4.00%, the highest level since 1998, and stock futures spiking from fresh 2022 lows, but then fizzling as traders now demand a similar end to QT/restart of QE from the Fed or else they will similarly break the market. Needless to say, the BOE has opened up the tap on coming central bank pivots, and while the market may be slow to grasp it, risk is cheap here with a similar QE restarted by the Fed just weeks if not days away. Indeed, look no further than the tumbling odds of a November 75bps rate hike as confirmation. As if the BOE's pivot wasn't enough, there was also a barrage of company specific news: in premarket trading, the world's biggest company, Apple tumbled 3.9% after a Bloomberg report said the company was likely to ditch its iPhone production boost, citing people familiar with the matter. Shares of suppliers to Apple also fell in premarket trading after the report, with Micron Technology (MU US) down -1.9%, Qualcomm (QCOM US) -1.8%, Skyworks Solutions (SWKS US) -1.6%. Other notable premarket movers: Biogen shares surged as much as 71% in US premarket trading, with the drugmaker on track for its biggest gain since its 1991 IPO if the move holds, as analysts lauded results of an Alzheimer’s drug study with partner Eisai. Lockheed drops as much as 2.3% in premarket trading as it was downgraded to underweight at Wells Fargo, which is taking a more cautious view on the defense sector on a likely difficult US budget environment into 2023. Mind Medicine slid 35% in premarket trading after an offering of shares priced at $4.25 apiece, representing a 31% discount to last close. Watch insurers, utilities and travel stocks as Hurricane Ian comes closer to making landfall on Florida’s Gulf coast. Keep an eye on southeastern US utilities including NextEra Energy (NEE US), Entergy (ETR US), Duke Energy (DUK US), insurers like AIG (AIG US), Chubb (CB US), as well as airline stocks Netflix (NFLX US) was raised to overweight from neutral at Atlantic Equities, the latest in a slew of brokers to turn bullish on the outlook for the streaming giant’s new ad- supported tier, though the stock was little changed in premarket trading In other news, Hurricane Ian became a dangerous Category 4 storm as it roars toward Florida, threatening to batter the Gulf Coast with devastating wind gusts and floods. European stocks dropped for a fifth day as Citigroup strategists said investors are abandoning the region at levels last seen during the euro area debt crisis. Miners underperformed as the strong dollar and concerns about demand for raw materials sent commodity prices to the lowest level since January. Retail stocks slumped, with the sector underperforming declines for the broader Stoxx 600, as concerns mount about a consumer spending crunch. UK retail stocks are particularly weak amid Britain’s market meltdown and after online clothing retailer Boohoo issued a profit warning. Boohoo cut its guidance for the year, with soaring energy and food bills stopping consumers from splashing out on clothes and shoes; peers including Asos (-7.5%) and Zalando (-3.5%) sank. Here are the biggest European movers: Roche gains as much as 6.5% in early trading, most since March 2020 after Eisai and partner Biogen said their drug significantly slowed Alzheimer’s disease. Roche partner MorphoSys rises as much as 22%. BioArctic jumps as much as 171% in Wednesday trading, its biggest intraday rise since 2018; the Swedish biopharma company is a partner of Eisai Sanofi shares rise as much as 2.2% after saying it sees currency impact of approximately 10%-11% on 3Q sales, according to statement. Burberry rises as much as 4.5% as analysts welcome the appointment of Daniel Lee, formerly of Bottega Veneta, to succeed Riccardo Tisci as creative director at the luxury designer. Retail stocks slide, with the sector underperforming declines for the broader Stoxx 600, as concerns mount about a consumer spending crunch. Boohoo slumped as much as 18% after cutting its guidance for the year, with soaring energy and food bills stopping consumers from splashing out on clothes and shoes; peers fell, with Asos down as much as 9.4% and Zalando -4.3%. Financial sectors including banks, real estate and insurance were the worst performers in Europe on Wednesday as hawkish comments from Fed officials stoked concerns over the economic outlook. HSBC fell as much as 5.3%, Barclays 6%, and insurer Aviva 7.9% Norway unveiled a plan to tap power and fish companies for 33 billion kroner ($3 billion) a year to cover ballooning budget expenditures, sending salmon farmers’ stocks falling. Salmar down as much as 30%, Leroy Seafood dropped as much as 26%, and Mowi slid as much as 21% Truecaller, which offers an app to block unwanted phone calls, falls as much as 23% in Stockholm after short seller Viceroy Research says it’s betting against the stock. Adding to concerns, Deutsche Bank CEO Christian Sewing predicted a severe downturn in the lender’s home region and said the volatility whipsawing markets will continue for another year as central banks tighten rates to fight inflation, while ECB President Christine Lagarde said borrowing costs will be raised at the next “several meetings,” with several Governing Council  members favoring a 75 basis point hike in October. Meanwhile, natural gas prices in Europe surged after Russia said it may cut off supplies via Ukraine and the German Navy was deployed to investigate the suspected sabotage to the Nord Stream pipelines. Putin moved to annex a large chunk of Ukrainian territory amid a string of military setbacks in its seven-month-old invasion. Asian shares also fell: Japanese equities slumped after the latest hawkish comments from Fed officials on raising interest rates in order to bring inflation down. The Topix fell 1% to close at 1,855.15, while the Nikkei declined 1.5% to 26,173.98. Toyota Motor Corp. contributed the most to the Topix decline, decreasing 1.6%. Out of 2,169 stocks in the index, 943 rose and 1,137 fell, while 89 were unchanged. “From here on, U.S. CPI inflation will be the most important factor,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management. “Now that the FOMC meeting is over, we will be getting a good amount of statements from Fed officials, and wondering what kind of statements will come out.” Key equity gauges in India posted their longest stretch of declines in more than three months, as investors continued to sell stocks across global markets on worries over economic growth.  The S&P BSE Sensex dropped 0.9% to 56,598.28 in Mumbai, while the NSE Nifty 50 Index fell by an equal measure. The indexes posted their sixth-consecutive decline, the worst losing streak since mid-June. Fourteen of the 19 sector sub-indexes compiled by BSE Ltd. declined. Metals and banking stocks were the worst performers. Healthcare and software firms gained.  Reliance Industries and HDFC Bank contributed the most to the Sensex’s decline. Reliance Industries has erased its gain for the year and is headed for its lowest close since March. Out of 30 shares in the Sensex index, 12 rose, while 18 fell In FX, the dollar’s rally brought losses to other currencies, including the euro and onshore yuan, which tumbled to its weakest level since 2008. A regulatory body guided by the People’s Bank of China urged banks to protect the authority of the yuan fixing after the onshore yuan fell to the weakest level against the dollar since the global financial crisis in 2008, amid an incessant advance in the greenback and speculation China is toning down its support for the local currency.  The yen remained near the key 145 mark versus the dollar and within sight of levels that have drawn intervention from Japan. Speculation the sliding yen will compel Japan to intervene further, potentially funded by Treasuries sales, weighed on US debt. “The fact we have such a strong increase in US yields is attracting flows into the US dollar,” said Nanette Hechler-Fayd’herbe, chief investment officer of international wealth management for Credit Suisse Group AG. “As long as monetary and fiscal policy worldwide are really not coming to strengthen their own currencies, we should be anticipating a very strong dollar.” In rates, Treasury yields fell, following a more aggressive bull flattening move across the gilt curve, after Bank of England announced it would step into the market and buy long-dated government bonds, financed with new reserves. The Treasury curve remains steeper on the day however, with front-end yields richer by 7bp and long-end slightly cheaper. US session focus on 7-year note auction and a barrage of Fed speakers scheduled.  Treasury 10-year yields around 3.93%, richer by 1.5bp on the day and underperforming gilts by around 25bp in the sector -- gilts curve richer by 3bp to 50bp on the day from front-end out to long-end following Bank of England announcement. US auctions conclude with $36b 7-year note sale at 1pm, follows soft 2- and 5-year auctions so far this week In commodities, WTI trades within Tuesday’s range, falling 0.5% to around $78.14. Spot gold falls roughly $11 to trade near $1,618/oz.  Looking to the day ahead, there are an array of central bank speakers including Fed Chair Powell, the Fed’s Bostic, Bullard, Bowman, Barkin and Evans, ECB President Lagarde, the ECB’s Kazimir, Holzmann and Elderson, as well as BoE Deputy Governor Cunliffe and the BoE’s Dhingra. In the meantime, data releases include pending home sales for August. Market Snapshot S&P 500 futures down 0.6% to 3,637 MXAP down 1.9% to 139.41 MXAPJ down 2.3% to 452.49 Nikkei down 1.5% to 26,173.98 Topix down 1.0% to 1,855.15 Hang Seng Index down 3.4% to 17,250.88 Shanghai Composite down 1.6% to 3,045.07 Sensex down 0.3% to 56,939.09 Australia S&P/ASX 200 down 0.5% to 6,462.03 Kospi down 2.5% to 2,169.29 STOXX Europe 600 down 1.4% to 382.97 German 10Y yield little changed at 2.31% Euro down 0.3% to $0.9561 Brent Futures down 0.4% to $85.94/bbl Brent Futures down 0.4% to $85.94/bbl Gold spot down 0.6% to $1,619.74 U.S. Dollar Index up 0.36% to 114.52 Top Overnight News from Bloomberg ECB President Christine Lagarde said borrowing costs will be raised at the next “several meetings” to ensure inflation expectations remain anchored and price gains return to the 2% target over the medium term The ECB is on track to take interest rates to a level that no longer stimulates the economy by December, Governing Council member Olli Rehn told Reuters Germany’s federal government will increase debt sales by €22.5 billion ($21.5 billion) in the fourth quarter compared with an original plan to help fund generous spending to offset the impact of the energy crisis The cost of protection against European corporate debt has surpassed the pandemic peak as investors fret over the effect of central bank tightening at a time of mounting recession risk The Federal Reserve’s delicate balance between curbing demand enough to slow inflation without causing a recession is a “struggle,” said San Francisco Fed President Mary Daly This week a gauge of one-month volatility in the majors hit its strongest level since the pandemic mayhem of March 2020, as wide price swings in the pound lifted hedging costs across the G-10 space Moscow declared landslide victories in the hastily organized “referendums” it held in the territories currently occupied by its forces and prepared to absorb them within days. The United Nations has condemned the voting as illegal with people at times forced at gunpoint.         US Event Calendar 07:00: Sept. MBA Mortgage Applications, prior 3.8% 08:30: Aug. Retail Inventories MoM, est. 1.0%, prior 1.1% Wholesale Inventories MoM, est. 0.4%, prior 0.6% 08:30: Aug. Advance Goods Trade Balance, est. -$89b, prior -$89.1b, revised - $90.2b 10:00: Aug. Pending Home Sales (MoM), est. -1.5%, prior -1.0% Pending Home Sales YoY, est. -24.5%, prior -22.5% Central Bank Speakers 08:35: Fed’s Bostic Takes Part in Moderated Q&A 10:10: Fed’s Bullard Makes Welcome Remarks at Community Banking... 10:15: Powell Gives Welcoming Remarks at Community Banking Conference 11:00: Fed’s Bowman Speaks at Community Banking Conference 11:30: Fed’s Barkin Speaks at Chamber of Commerce Lunch 14:00: Fed’s Evans Speaks at the London School of Economics DB's Jim Reid concludes the overnight wrap I had my worst nightmare yesterday. One of my wife's friends, who vaguely knows I work in financial markets, urgently contacted me for mortgage advise. She needed to make a decision within hours on what mortgage to take out from a selection of unpalatable options here in the UK. I'll be honest, when I speak to you dear readers and give advice I know you're all big and brave enough to either ignore it or consider it. However it felt very dangerous to be giving my wife's friend my opinion. Hopefully they'll be no fall out at the end of the period I advised on! After the tumultuous events of recent days, market volatility has remained very high over the last 24 hours, with plenty of negative headlines to keep investors alert. In Europe, we got a fresh reminder about the energy situation after leaks in the Nord Stream 1 and 2 pipelines, whilst Gazprom warned that sanctions on Ukraine’s Naftogaz could put flows from Russia at risk. In the meantime, investors’ jitters surrounding the UK showed few signs of abating, with 30yr gilt yields surpassing 5% in trading for the first time since 2002 and a level it hasn't consistently been above since 1998. And even though we got some better-than-expected data releases from the US, they were also seen as giving the Fed more space to keep hiking rates over months ahead, adding to fears that they still had plenty of hawkish medicine left to deliver. We’ll start here in the UK, since it was gilts once again that were at the epicentre of the ongoing repricing in rates, with plenty of signs that investors remain very nervous about the current economic situation. Gilt yields rose to fresh highs across the curve, with the selloff accelerating late in the session to leave the 10yr yield up by +26.1bps at a post-2008 high of 4.50%. Furthermore, the 30yr yield surged +44.8bps to a post-2007 high of 4.97%, closing just beneath the 5% mark that it had exceeded at one point right before the close. This for me is a fascinating development as recently as last December we were at 0.83% and then 2.28% in early August. For many many years the demand for long end gilts were seen as one of the most price insensitive assets in the fixed income world with huge regulatory and asset/liability buying. So the fact that even this has cracked shows the deep trouble the UK market is in at the moment. The moves have been so drastic that even the IMF announced yesterday they were closely monitoring developments in Britain and were engaged with UK authorities. Their rebuke was quite scathing. Staying in the UK, there was an even more significant repricing of real yields, with the 10yr real yield surging by another +52.9bps on the day to 0.77%, having been at -0.84% only a week earlier, so a massive turnaround. Sterling ended a run of 5 consecutive daily losses to strengthen by +0.41% against the US Dollar, taking it back up to $1.073. However it was higher before the IMF statement and is at $1.065 this morning with their rebuke reverberating around markets. Whilst UK assets continued to struggle, we did hear from BoE Chief Economist Pill yesterday, who sits on the 9-member Monetary Policy Committee. The main headline from his remarks was the comment that “this will require a significant monetary policy response”. Investors are still pricing in over +155bps worth of hikes by the next meeting on November 3, as well as a terminal rate above 6% next year. However, investors also continued to lower the chances of an emergency inter-meeting hike, particularly after Pill said that it was better to take a “considered” and “low-frequency” approach to monetary policy. Elsewhere in Europe, the question of energy remained top of the agenda yesterday, with a fresh surge in natural gas futures (+19.65%) that marked a reversal to the declines over the last month. That followed the news of leaks from the Nord Stream 1 and 2 pipelines, which officials across multiple countries said could be the result of sabotage. Danish PM Frederiksen said that it was” hard to imagine that these are coincidences” and the FT reported German officials who said there was concern that a “targeted attack” had caused the sudden loss of pressure. A real nightmare scenario is if the sabotage attempts extended to other pipelines. Indeed Bloomberg reported that Norway was looking to increase security around its own infrastructure. However these pipes are long so it would take a lot of effort to protect them all. On top of the leaks, we also heard from Gazprom, who said that there was a risk that Moscow would sanction Ukraine’s Naftogaz. That would stop them from paying transit fees, which in turn would put gas flows to Europe at risk, and led to a significant jump in prices after the news came through later in the session. Against that unfavourable backdrop, European assets continued to suffer over the last 24 hours across multiple asset classes. Sovereign bonds didn’t do quite as badly as gilts, but it was still a very poor performance by any normal day’s standards, with yields on 10yr bunds (+11.3bps) reaching a post-2010 high of 2.22%. Peripheral spreads continued to widen as well, with the gap between 10yr Italian yields over bunds closing above 250bps for the first time since April 2020. In the meantime, equities lost ground thanks to a late session reversal, leaving the STOXX 600 (-0.13%) at its lowest level since December 2020. And there was little respite for credit either, with the iTraxx Crossover widening +15.2bps to 670bps, which is a closing level we haven’t seen since March 2020. On top of sour risk sentiment, results from Russia’s referendum in four Ukrainian territories unsurprisingly revealed lopsided votes in favour of Russian annexation, topping 85% in each of the regions. That stoked fears that Russia will move to officially annex the territories as soon as this week, thereby claiming any attack on those territories is an attack on sovereign Russia itself and enabling yet further escalation. President Putin is scheduled to address both houses of the Russian Parliament this Friday, which British intelligence reports may be used as a venue to push through an official annexation ratification. Over in the US, there was some better news on the data side that helped to allay fears about an imminent slide into recession. First, the Conference Board’s consumer confidence reading for September rose to 108.0 (vs. 104.6 expected), which is its highest level since April. Second, new home sales in August unexpectedly rebounded to an annualised pace of 685k (vs. 500k expected), which is their highest level since March. Third, the preliminary durable goods orders for August were roughly in line with expectations at -0.2% (vs. -0.3% expected), and core capital goods orders exceeded them with +1.3% growth (vs. +0.2% expected) and a positive revision to the previous month. Finally, the Richmond Fed’s manufacturing index for September came in at 0 (vs. -10 expected), adding to that theme of stronger-than-expected releases. A word of caution, the housing data is typically noisy and subject to revision, so despite the bounce in sales, we don’t think this marks a sea-change in housing markets, which have been battered by tightening financial conditions to date. In the end however, those data releases didn’t manage to stop the S&P 500 (-0.21%) losing ground for a 6th consecutive session, which takes the index back to its lowest closing level since November 2020. In fact for the Dow Jones (-0.43%), yesterday’s losses left it at its lowest closing level since 6 November 2020. That was the last trading session before the news on Monday 9 November from Pfizer that their late-stage vaccine trials had been successful, thus triggering a massive global surge as the way out of the pandemic became much clearer. All-in-all though, equities were a side show to fixed income yesterday. When it came to Treasuries, there was a notable steepening in both the nominal and real yield curves yesterday, and 10yr yields ended the session up +2.1bps at 3.95%. This morning in Asia 10yr yields did trade at 4% for the first time since 2010 before dipping to around 3.98% as I type. In terms of Fed speak yesterday, we heard from Chicago Fed President Evans, who implied that the Fed might take stock of the impact of rate hikes in the spring, saying that “By spring of next year we are going to get to a funds rate that we can sort of sit and watch how things are behaving,” In the meantime, St Louis Fed President Bullard (one of the most hawkish members of the FOMC) said that inflation was a serious problem and that the credibility of the Fed’s inflation target was at risk. This morning Asian equity markets are extending their downtrend. As I type, The Kospi (-3.01%) is sharply lower in early trade with the Hang Seng (-2.40%), the Nikkei (-2.21%), the CSI (-0.77%) and the Shanghai Composite (-0.75%) all trading in negative territory. After a steady start, US stock futures got caught up in the bearish mood with contracts on the S&P 500 (-0.71%) and NASDAQ 100 (-0.98%) both moving lower.Apple reversing plans for an iPhone production boost on waning demand seemed to be a catalyst. The US dollar index (+0.43%) has hit a fresh two-decade high of 114.69 this morning. Early morning data showed that Australia’s August retail sales advanced for the eighth consecutive month, rising +0.6% m/m, faster than the +0.4% increase expected although the pace of growth slowed from the +1.3% rise seen in July. To the day ahead now, and there are an array of central bank speakers including Fed Chair Powell, the Fed’s Bostic, Bullard, Bowman, Barkin and Evans, ECB President Lagarde, the ECB’s Kazimir, Holzmann and Elderson, as well as BoE Deputy Governor Cunliffe and the BoE’s Dhingra. In the meantime, data releases include Germany’s GfK consumer confidence reading for October, and France and Italy’s consumer confidence reading for September. In the US, there’s also pending home sales data for August. Tyler Durden Wed, 09/28/2022 - 07:53.....»»

Category: personnelSource: nytSep 28th, 2022

All Eyes On Long-Dated Treasuries

S&P 500 yet again kept declining through the day, and Treasuries offered a bleak sight till shortly before the close when long-dated ones turned finally higher – and both tech and value followed suit. Nothing spectacular, Jun lows in S&P 500 were tested (and in the Russell 2000 nearly touched) – 50 points late day […] S&P 500 yet again kept declining through the day, and Treasuries offered a bleak sight till shortly before the close when long-dated ones turned finally higher – and both tech and value followed suit. Nothing spectacular, Jun lows in S&P 500 were tested (and in the Russell 2000 nearly touched) – 50 points late day reversal doesn‘t signify anything as we haven‘t reached THE low yet in my view. It‘s not about plain stock market seasonality where the very beginning of October is rife with heavy selling – it‘s that markets Friday sold off as no hint of a rescue from Powell came about during his brief speech. The Pavlovian dogs were disappointed. 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 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); Q2 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. There is further evidence that the current downleg is rather orderly, and not reaching any panicky levels whatsoever. Apart from VIX keeping even above 30 only, it‘s the relationship between stock prices and the CNN Fear and Greed Index (chart courtesy of MacroMicro): See for yourself how bullish the sentiment was while we were running to the 200-day moving average, and how complacent it is now as relates to the S&P 500 prices – remember this while hearing elsewhere about any triple digit uplegs. The bear hasn‘t run its course, and we‘ve taken the most bearish route shown in my mid Aug refutal of bull market thesis. It‘s my view that the nearest weeks won‘t be too easy, and that I don‘t see too much respite in stocks. The (comparatively shallow) rips are to be sold. As I wrote in Friday‘s concise yet important article on bonds, the question of a peak in long-dated Treasury yields is the key one. As the Fed has vacated the market and foreign buyers aren‘t exactly aggressively buying (the trade balances have reversed for both Europe and Japan, while Russia and China have their sights elsewhere), it‘s up to instituitional and retail investors to snap up any bargains. These would be of course driven by real economy evidently entering recession – we aren‘t quite there yet, but there is progress as spelled out a week ago. The idea is that deteriorating real economy prospects would not only get reflected in decrease in long-dated yields, but over time also cut short Fed tightening through providing it with cover to get at least neutral if not somewhat accommodative again, no matter the stage of its fight against the sticky inflation (which the central bank would lose after making meaningful progress throughout this winter). This ties in well with the recent question I got: Q: Monica, since the 10 yr treasury has been going up, so has Fund RRPIX (Rising Rates fund). Do you see that continuing? Thanks! A: Indeed the long end of the curve (20-30y) is the key here. FOMC - yields retreated, Thursday TLT went a lot down, and was balancing on the edge on Friday. At least it recovered, for if no fresh buyers emerge to replace the Fed and foreigners, we're in for trouble. It‘s my view that over the nearest two months, we would see the long end of the curve catching a solid bid. This is tying in well with the recent peak in goods inflation, which will be shortly followed with a peak in services inflation, and that will have consequences for both rents (owners‘ equivalent rent is a third of CPI, and its peak would help the Fed get its foot off the tightening pedal) and wage inflation (small and medium enterprises aren‘t on a hiring spree exactly). This spells a peak in inflation, and facilates a turn in Fed policy several quarters down the road. For now, I‘m looking for 75bp hike in Nov and maybe 50bp in Dec, which could very well be the end of the rate raising cycle. That would be a truly restrictive level, and they want to keep it there for quite some time to avoid the 1970s mistake. The Fed probably believes that keeping rates slighly restrictive for long enough to beat inflation, will avoid tipping the economy into a recession – it remains to be seen whether either of these two propositions work out, becase the Fed would be in a pickle if during 2024 inflation would still run above say 4%.. I‘m discussing the market impact of the above within the individual chart sections – rich annotations and comments – in place of upcoming shorter analyses. Where would I hide in the long-term – thinking this decade? This timeless mid April article sheds light on assets and sectors worth your attention. Keep enjoying the always lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there, but the analyses (whether short or long format, depending on market action) over email are the bedrock. So make sure you‘re signed up for the free newsletter and that you have Twitter notifications turned on so as not to miss any tweets or replies intraday. Let‘s move right into the charts (all courtesy of – today‘s full scale article features good 6 ones. Gold, Silver and Miners Precious metals are to sniff out the upcoming Fed turn, but their 2022 performance would continue being bleak. It‘s often the case that at the beginning of economic woes striking, both gold and silver are taking in on the chin alongise much else – just like we have seen in real assets on Friday. That‘s the result of the strong dollar upswing, and hawkish Fed (both perception and reality). Major buying opportunity approaches, but it isn‘t here quite yet – then, gold has good support at $1,610. Crude Oil Crude oil fell through the $80s floor, and has quite some crawling back to do. The physical market is to provide support, which would be met by real economy performance and demand destruction fears underpinning the dollar. Black gold still needs to consolidate before launching higher in some 5 weeks max (yes, probably shortly before midterms) – or earlier if China‘s demand destruction during lockdowns returns. Copper Copper is likewise reflecting the anticipated real economy impact, but would benefit from the coming Fed‘s focus shifting to real ecconomy support (remember how fast Powell turned in early Jan 2019?), and inflation not declining much below its persistently high 5-6% YoY CPI level of Dec 2022 (still my target). It would be real assets, the commodities and precious metals superbulls, that would benefit from the Fed turning at the very least neutral (which would support selective beaten down stock sectors as well). Bitcoin and Ethereum Cryptos are attempting to rebound today, meaning we would see retracements of Friday‘s downswings in other assets as well, accompanied by the dollar‘s intraday retreat off its daily highs, which is already playing out. Thank you for having read today‘s free analysis, which is a small part of the premium Monica's Trading Signals covering all the markets you're used to (stocks, bonds, gold, silver, oil, copper, cryptos), and of the premium Monica's Stock Signals presenting stocks and bonds only. Both publications feature real-time trade calls and intraday updates. While at my homesite, you can subscribe to the free Monica‘s Insider Club for instant publishing notifications and other content useful for making your own trade moves on top of my extra Twitter feed tips. Thanks for subscribing & all your support that makes this great ride possible! Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice......»»

Category: blogSource: valuewalkSep 27th, 2022

John Templeton’s Way

Dear fellow investors,  We marveled for years listening to Sir John Templeton talk about the stock market. His best advice was shared during the most difficult stock market environments of the 1980s, 1990s, and 2000s on “Wall Street Week” with Louis Rukeyser. Q2 2022 hedge fund letters, conferences and more   Templeton edict No. 1 […] Dear fellow investors,  We marveled for years listening to Sir John Templeton talk about the stock market. His best advice was shared during the most difficult stock market environments of the 1980s, 1990s, and 2000s on “Wall Street Week” with Louis Rukeyser. 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 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); Q2 2022 hedge fund letters, conferences and more   Templeton edict No. 1 “Bull markets follow Bear markets and Bear Markets follow Bull markets!” John was invested for decades and believed in getting rich slowly. He understood that you were going to get much better long-term performance by being optimistic in bear markets and cautious in bull markets. Templeton edict No. 2 Well-selected stocks at value prices were more interesting to Sir John than the shares of more popular securities. The Templeton Way was all about buying meritorious companies at fire-sale prices. He wrote the book on “value investing” and had the track record to show for it. Templeton edict No. 3 Buy at the point of maximum pessimism! Our favorite Sir John quote, “If you can see the light at the end of the tunnel, you are too late.” He had no inhibitions about being early and knew that was the price of admission for getting rich slowly. Templeton edict No. 4 Look for bargains where others aren’t looking. Templeton began buying Japanese shares in the 1950s and 1960s when sentiment was negative, few positive cases could be made, and little research was done. As a result, he was able to purchase shares at very depressed prices and held many of them for decades. Look at the chart below of the ten largest capitalization companies in the world in 1990: Source: @CharlieBiello, Bloomberg Sir John and his investors got gloriously rich by acquiring shares others were afraid to buy in a country that provided the most popular stocks in the world by the end of 1990! When oil prices skyrocketed in the 1970s, Datsun (Nissan) and Toyota automobiles had the gas mileage to attract budget-conscious Americans to their cars. The Japanese market and economy were the envy of the world in 1990. What does this review of the “Sir John Templeton Way” tell us about the current bear market that we are sitting through? First, shares purchased between now and the end of this bear market are likely to get rewarded in the future. Second, the shares we own today trade at very low multiples of earnings, book value, and free cash flow. It doesn’t matter in a market suffering indiscriminate selling, but it should matter a great deal over the next 5-10 years. Third, bear markets bottom on a rotational basis just like bull markets do on the upside. We like buying very depressed mall REITs like Simon Properties (NYSE:SPG), home builders like D.R. Horton (NYSE:DHI), e-commerce yard sales like eBay (NASDAQ:EBAY), and oil and gas companies like Occidental Petroleum (NYSE:OXY). Lastly, in the remainder of this bear market in stocks, there will be companies that fit our eight criteria for common stock selection which become available for purchase. We will get interested when the folks who have owned them on the way down give up and professional and amateur investors are afraid to go there. In conclusion, this is a very difficult bear market with an unknown end date. However, just like the Crash of 1987, the Dotcom Bear of 2000-2003, and the Financial Crisis Bear of 2007-2009, this too shall pass. When it does, we believe that stock selection will be at a premium and valuation will matter dearly as it did for Sir John Templeton. Fear stock market failure, William Smead The information contained in this missive represents Smead Capital Management’s opinions, and should not be construed as personalized or individualized investment advice and are subject to change. Past performance is no guarantee of future results. Bill Smead, CIO, wrote this article. It should not be assumed that investing in any securities mentioned above will or will not be profitable. Portfolio composition is subject to change at any time and references to specific securities, industries and sectors in this letter are not recommendations to purchase or sell any particular security. Current and future portfolio holdings are subject to risk. In preparing this document, SCM has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. A list of all recommendations made by Smead Capital Management within the past twelve-month period is available upon request. ©2022 Smead Capital Management, Inc. All rights reserved. This Missive and others are available at»»

Category: blogSource: valuewalkSep 27th, 2022

U.S. Housing Prices Fall for First Time in a Decade

The declines in home prices have been steepest in the most unaffordable locations, especially on the West Coast. Say goodbye to the housing bull run. U.S. home prices—for the first time in a decade—are falling. A national measure of prices in 20 large cities fell 0.44% in July, the first drop since March 2012, the S&P CoreLogic Case-Shiller index showed Tuesday. The last real estate crash ended in 2012, ushering in 10 years of price gains, capped off by the two-year pandemic buying frenzy. But the Federal Reserve has put a swift end to the party as it fights to curb inflation. Mortgage rates this year doubled, pricing out many buyers and causing sales to plunge. Now values are heading south. The biggest month-over-month declines in July were in San Francisco (-3.6%), Seattle (-2.5%) and San Diego (-2%). [time-brightcove not-tgx=”true”] Read More: Signs Are Pointing to a Slowdown in the Housing Market—At Last “The cooling has come hard and fast,” Stephen Stanley, chief economist at Amherst Pierpoint, said in a note. To be sure, prices remain high. The Case-Shiller national index jumped 15.8% year-over-year in July. But that was the smallest gain since April 2021, and the slowdown from the 18.1% jump in June was the largest deceleration in the history of the index. There are also signs that there is plenty of pent-up demand for housing. U.S. sales of new homes surged unexpectedly in August, government data showed Tuesday. It was the strongest pace of new-home sales since March, perhaps reflecting a race by buyers to beat further increases in borrowing costs and take advantage of price cuts by some builders. New-home sales rose in all regions, including a 29.4% jump in the South, where the pace was the firmest this year. The declines in home prices have been steepest in the most unaffordable locations, especially on the West Coast, where buyers were already strained early this year when rates were still near historic lows. The falloff looks extreme compared with the two-year pandemic frenzy, marked by multiple offers and a shortage of listings that drove buyers to bid high. Read More: Return to the Office? Not in This Housing Market Now listings are lingering longer because demand has collapsed, adding to the active inventory. One thing may help to keep prices elevated: fewer homes are coming on the market. Homeowners who don’t have to move are staying put. Buying a house for most requires giving up a cheaper mortgage. A recent report from Zillow Group Inc. showing that new listings slid almost 23% in August from a year earlier. Meanwhile, the Federal Reserve continues to move interest rates upward, Lazzara said. “Given the prospects for a more challenging macroeconomic environment, home prices may well continue to decelerate,” he said. —With assistance from Christopher Anstey and Vince Golle......»»

Category: topSource: timeSep 27th, 2022

3 Blue-Chip Stocks to Buy to Tap Into a Hidden Bull Market

InvestorPlace - Stock Market News, Stock Advice & Trading Tips When the bear market roars, investors respond by looking for blue-chip stocks to buy (and those that are enjoying a bull market too). The post 3 Blue-Chip Stocks to Buy to Tap Into a Hidden Bull Market appeared first on InvestorPlace. More From InvestorPlace Buy This $5 Stock BEFORE This Apple Project Goes Live The Best $1 Investment You Can Make Today Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air” It doesn’t matter if you have $500 or $5 million. Do this now......»»

Category: topSource: investorplaceSep 27th, 2022