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First Week of April 2022 Options Trading For Spirit AeroSystems Holdings (SPR)

Stock Options Channel.....»»

Category: topSource: redinewsNov 15th, 2021

The Elon Musk Elevator Down

The Elon Musk Elevator Down Submitted by QTR's Fringe Finance “Stocks take the stairs up, and the elevator down.” Bear with me today. I know tomorrow is New Year's Eve, 2021 and I know I’ve written extensively over the last two months about the fact that Tesla (TSLA) is the only string that Cathie Wood’s flagship ARK Innovation Fund (ARKK) is hanging on by. And while I definitely don’t want to spend every day harping about the unmatched investing prowess of Ms. Wood, I do think today marks a great time to reiterate and examine this sentiment, and I’ll explain why. First, I think it’s worth noting: for all of the CNBC appearances, all of the ass-kissing by podcasters and financial media hosts, all of the touting of Cathie Wood as a “visionary”, all the magazine covers and writeups (Forbes called her “Wall Street’s Wizard” on their 50 over 50 cover), all of the conference appearances and the rest of the endless bluster we have had to endure for the last 3 years, ARKK has now officially given up all of its historical outperformance versus its benchmark as a result of the absolutely atrocious year it had in 2021. (Note: All figures used in this article were accurate to the best of my ability as of December 30, 2021 and do not include market performance for ARKK for the last trading day of the year.) This is seven or eight years worth of “work” (or at least making it look like you’re doing some work) down the drain as a result of underperforming the NASDAQ by more than 46% this year, as of 12/29/2021’s close. All of the comparisons and arguments over the last 2 years about how ARKK is such a better vehicle than the NASDAQ due to Wood’s investing acumen are officially moot and heading into 2022, Cathie Wood is going to have to put up or shut up. She may get a fresh YTD P/L figure to cling to, but “Wall Street’s Wizard” won’t just be fighting to outperform her benchmark this year, she’ll be fighting for ARKK’s performance versus its benchmark since inception and a lot of the firepower Wood needs is going to have to come from this guy: If I were an ARKK investor, this would frighten me. Meanwhile, almost every headline on Wednesday this week was about how the S&P made its 70th new all-time high day and how the year stood out as such a blockbuster one for the stock market. ARKK finished Wednesday down 1%. In fact, over the last 5 trading days, Tesla has been up 15%, the NASDAQ has been up 2.77% and ARKK is lower by -5.27%. Are you starting to understand why, exactly, it’s going to be a problem for Cathie Wood if Tesla starts to pull back? Over the last month, all of the Top 10 holdings in ARKK are lower between -2.8% and -20.9%, including Tesla. The NASDAQ is only down -0.11% over the same period. While the NASDAQ is only 1.8% off its 1 year high, ARKK’s well known/top components have fallen between 11.6% and 69.4% from their 1 year highs (Full disclosure: using % off highs is an ugly way to make a chart, no matter what you’re looking at). And for those thinking the pain could be over and there’s nowhere to go but up, here’s a gentle reminder that out of ARKK’s well known/top holdings, the lowest price to sales ratio is 4.1x and the highest is still 39.6x sales. The exercise becomes even funnier when you attempt to use a price to earnings ratio. According to YCharts, six of these 11 companies turn up a null response when asked for a forward PE, while the forward PE’s of the remaining five names, Zoom, Roku, Tesla, Twitter and Twilio, return figures of 37x, 144x, 175x, 189x and (drumroll please) 2,802x. But hey, maybe ARKK has bottomed, right? I know I’ve mentioned this before, but the portfolio of companies Wood continues to keep in her “flagship” fund are all still wildly overvalued and, in my opinion, have plenty of room to fall in a situation where high flying stocks re-rate lower. Via CathieWoodStocks.com2022 is going to be such a crucial year to watch ARKK, not only to track its performance against its benchmarks, but to see if Wood’s narrative about her “innovation” stocks (whatever that means) being in “deep value” territory (read: routinely over 100x sales) still holds water with the financial media (it will) and investors (it may not). My guess is the narrative will not hold up, and that we won’t even need a market crash to prove it - we’ll just need either a slight rotation from growth to value or a 30% drawdown in Tesla at some point. Ergo, Wood has two options as I see it at this point: Rebalance her portfolio to remove Tesla as a top weighting, which would contradict all the claims she’s made about the company over the last two years and would subject her portfolio to more exposure to the names that dragged her down in 2021 to begin with. Cling even tighter to Tesla and simply pray to god that despite volatility in the company’s most crucial market (China), the constant recalls, the amped up valuation, the psychotic CEO who has been charged with securities fraud and routinely taunts regulators in between selling $15 billion whacks of stock and massive emerging competition both domestically and abroad, shit just doesn’t go wrong. Tesla is what made Cathie Wood - but it could also be what breaks her. Things get tricky for ARKK’s balancing act heading into 2022. Look, many people have different explanations for Tesla’s historic run over the last two years. Personally, as my readers know, I still believe it was fueled by the options market. Regardless, it’s no longer about how it got here, it’s about where it is going. The stock simply can’t continue to go parabolic forever. Tesla was up 53.9% this year and ARKK plunged -24.63%. What kind of outperformance from Tesla will Wood need for ARKK to break even next year? At some point, either the options market hysteria will end, Tesla will miss operational milestones, or the reality of its valuation will simply set in. I’ll go further and say that even if Tesla winds up higher in the future, it’s may not get there fast enough to counterbalance the hand-selected portfolio of high flying names that Wood has stuffed ARKK with. For me, it’s not a question of if ARKK will bear the consequences of what I see to be poor management, it’s a question of when. A friend of mine said it best yesterday about Wood: “A market that takes Tesla down 30% will wreck the rest of her holdings even more.” And he’s right. After 6 or 7 tough years of taking the stairs up, Cathie Wood could be getting ready to take the Elon Musk elevator down. Photo graciously custom made and provided by @Keubiko-- As always, Zerohedge readers get a 20% discount to my blog at any time, that lasts forever, by clicking here: Get 20% off forever Disclaimer: Now or at the time of publishing I owned/own ARKK, QQQ, IWM, TSLA puts and am routinely short all of these names and sometimes other names that Cathie Wood has exposure to. Readers should assume I am short Cathie Wood at any given time. I may add any name mentioned in this article and sell any name mentioned in this piece at any time. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.  Tyler Durden Mon, 01/03/2022 - 06:30.....»»

Category: blogSource: zerohedgeJan 3rd, 2022

Elon Musk has now cashed out $12 billion in Tesla stock in a 5-week selling spree, as he jokes he wants to quit his jobs

The billionaire sold another 934,091 shares of the electric-vehicle maker worth $963.2 million on Thursday, a Securities and Exchange Commission filing showed. Britta Pedersen/Pool/AFP via Getty Images Elon Musk sold Tesla stock worth $963 million on Thursday, and joked he's thinking of quitting his jobs. The EV-maker's CEO has now sold nearly $12 billion of shares since asking Twitter whether to sell 10% of his holding. Tesla's stock is down 18% since Musk began to offload his shares on November 8. Elon Musk has sold another $1 billion of Tesla stock, meaning he has cashed in nearly $12 billion in shares since asking Twitter whether he should shed one-tenth of his holdings.The billionaire took to social media again overnight, this time to tweet that he was thinking of quitting his roles as CEO of Tesla and SpaceX — taken as a joke by his fans.Musk sold 934,091 shares of the electric-vehicle maker worth $963.2 million on Thursday, a Securities and Exchange Commission filing showed.But at the same time, he exercised stock options to buy 2.17 million shares in Tesla, at a price of $6.24 each. The stock sales were made to cover tax obligations around the options exercise, according to the SEC filing.In early November, the Tesla boss asked his Twitter followers whether he should shed 10% of his stock, getting a resounding "yes" in reply.In the five weeks since then, he has offloaded 11.03 million shares in a series of chunks, bringing the total divestment to $11.82 billion.The stock's price has dropped 18% since Musk began the selling spree, but is up 42% so far this year. It was down 1.2% in pre-market trading Friday, after falling 6% at Thursday's close. To hit the 10% target for cutting his holding, Musk would need to have sold about 17 million shares (without counting exercisable options.) But while the world's richest man has been culling Tesla stock, he has also picked up a hefty amount via exercising options — a total of 12.9 million shares, according to Reuters. That means his acquisitions have outstripped sales, and he has raised his overall stake in the EV-maker.Even before the Twitter poll, Musk said in September he planned to sell shares to cover the cost of taxes resulting from exercising options that were set to expire in 2022.Analysts estimated Musk would likely incur a $10 billion tax bill next year from exercising options, which gives him an incentive to liquidate some holdings. Meanwhile, the Tesla CEO  said on Twitter overnight that he's thinking of quitting his jobs to become a full-time influencer —  but didn't give any more details. As well as being CEO of the EV maker and aerospace manufacturer SpaceX, Musk is the founder of brain-chip company Neuralink and infrastructure firm The Boring Company.@elonmusk/TwitterThat meant it wasn't clear whether he was being serious, but Musk is known for his trolling on social media. His replies to comments on the tweet — suggesting he start an OnlyFans account or a YouTube channel — suggested he was joking.Read More: An exclusive look at JPMorgan Asset Management's 2022 investment outlook reveals which 4 stock sectors the firm is most bullish on — and why rich US valuations and inflation aren't worth worrying aboutRead the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 10th, 2021

Futures Rise As Usual, Approaching All Time High

Futures Rise As Usual, Approaching All Time High US equity futures resumed their upward climb (after Goldman quadrupled down on its call for a massive, year-end meltup driven by $15BN in inflows every single day) as major technology stocks advanced, and as investors awaited a slew of retail earnings and economic data this week to gauge the health of consumer spending while keeping an eye on runaway inflation. Better-than-estimated profit growth has led to a rally in markets, helping ease recent concerns over the hottest U.S. inflation in 30 years. At 730 a.m. ET, Dow e-minis were up 94 points, or 0.26%. S&P 500 e-minis were up 9 points, or 0.20% and about 20 points from their all time high around 4,711; while Nasdaq 100 e-minis were up 30.5 points, or 0.19%. The three major Wall Street indexes had fallen between 0.3% and 0.7% last week when the S&P 500 also snapped its longest winning streak since August 2020, amid concerns over high inflation and weakening consumer sentiment. Investors had begun pivoting into economically resilient sectors, mainly technology, towards the end of the week. Market-heavy GAMMA (fka FAAMG) stocks rose between 0.1% and 0.8% in premarket trade, with Meta Platforms Inc leading gains. On the other end, Tesla shares fell as much as 2.6% in U.S. premarket session after Elon Musk suggested over the weekend that he would sell even more stock after offloading almost $7 billion worth of shares over the past week. Tesla's declines follow a steep 15.4% drop last week after Musk offloaded a combined $6.9 billion worth of shares in the electric-car maker. Meanwhile, blank-check company Gores Guggenheim rose as much as 25% as the stock was touted among retail traders. Rivian shares were down about 2.7% in U.S. premarket trading after the electric-truck maker surged following its IPO last week. Dollar Tree Inc added 5.4% after activist investor Mantle Ridge LP revealed a 5.7% stake in the discount retailer. Strong corporate earnings are helping drive investors into stocks and overshadowing fears about the hottest U.S. inflation print in three decades. The sentiment found its way into calmer bond markets, where these fears had played out in the highest volatility since the onset of pandemic.   “Central banks may be becoming less accommodative, but they will be anxious not to derail the recovery or financial markets,” according to Cesar Perez Ruiz, chief investment officer at Pictet Wealth Management and head of asset alloaction Christophe Donay. “Q3 results have offered further proof of corporate strength.” Focus this week will be on earnings reports from several major retailers including Walmart Inc, Target Corp, Home Depot and Macy's. Their results will round off an upbeat third-quarter earnings season, which pushed Wall Street to new highs. Retail sales data for October is also due on Tuesday, and is expected to show the impact of inflation on consumer spending. Looking ahead not everyone is euphoria: in its 2022 forecast, Morgan Stanley strategists warn that inflationary headwinds may become a bigger force against U.S. stocks next year; they prefer peers in Europe and Japan. They forecast the S&P 500 will end 2022 at 4,400 -- some 6% below current levels. For bonds, they expect 10-year yields to rise to 2.10% by the end of next year on improving growth and higher real rates, up from 1.54% on Monday. “One reason we like equities in Europe and Japan is that we think inflationary challenges there are much less daunting than elsewhere,” strategists led by Andrew Sheets wrote Sunday. They also cited “more reasonable valuations, limited central bank tightening and less risk from higher taxes” vis-a-vis the U.S. In Europe, Stoxx 600 Index was little changed near a record high as rising earnings estimates supported the region’s stocks. Travel and leisure and retailers led the gains, while miners slumped. Here’s the latest on what analysts are saying about European equities: EasyJet cut to reduce from hold at Kepler Cheuvreux due to deteriorating traffic trends and a risk that it has to incentivize demand with fare discounts. Alfen Beheer loses its only buy rating as Berenberg downgrades to hold on limited near- term upside, even after last week’s sell-off in the shares. Direct Line cut to hold and Admiral raised to buy at Berenberg with the broker switching preferences in its U.K. non- life insurer coverage. B&M European is cut to underperform from sector perform at RBC with growth set to become harder to deliver for the discount retailer and better value seen elsewhere in the sector. Wood’s strategic review of its built environment business could unlock “meaningful value,” Citi writes in note upgrading the energy-services firm to buy. Earlier in the session, shares fluctuated in Hong Kong and dipped in China, where traders weighed stronger-than-expected retail sales and industrial output, central bank liquidity support and a drop in home prices. Beijing’s crackdown on real-estate leverage is among the headwinds for the world’s second-largest economy. That said, Asian equities rose for a third day as the strength in U.S. technology heavyweights Friday helped ease market worry over global inflation, reigniting appetite for growth stocks.  The MSCI Asia Pacific Index advanced as much as 0.6%, with TSMC, Tencent Holdings and Samsung Electronics among the largest contributors to the gauge’s rise. South Korea’s Kospi was the top performer among the region’s benchmarks, adding 1%.  Futures on the Nasdaq 100 climbed in Asia after the underlying measure added 1% on Friday. U.S. equities rose led by technology and communication services, with share prices remaining near all-time highs after a strong corporate earnings season.  Overall, the positive mood from last week is extending to today’s trading, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “Chip-related stocks are doing pretty well following the earnings season, which is also backing gains for the market.” The regional benchmark capped its second straight week of gains on Friday, helped by positive earnings readings. Price data from the U.S. and China remain in focus as traders fear elevated inflation could lead to tighter monetary policy. U.S. consumer sentiment unexpectedly collapsed in early November as Americans grew increasingly concerned about inflation. Japanese stocks rose after the Nikkei newspaper reported on Friday that the government plans to compile an economic stimulus package of more than 40 trillion yen ($351 billion) in fiscal measures. “Economic stimulus had been expected to be about 30 trillion yen, but a new figure of 40 trillion yen is likely to be cheered by investors,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co.  The Topix index rose 0.4% to close at 2,048.52 in Tokyo, while the Nikkei 225 advanced 0.6% to 29,776.80. Toyota Motor contributed the most to the Topix’s gain, increasing 1.1%. Out of 2,180 shares in the index, 1,051 rose and 1,029 fell, while 100 were unchanged. India’s benchmark index ended flat after wholesale prices surged higher-than-expected in October, weighing on metal and financial stocks. The S&P BSE Sensex was little changed at 60,718.71 in Mumbai, while the NSE Nifty 50 Index was flat at 18,109.45. Both gauges gained as much as 0.6% earlier on the back of an earnings season in which a majority of Nifty 50 companies reported results that beat expectations.  Both indexes, however, failed to hold onto their initial advance after wholesale prices rose 12.5% in October, more than economists’ consensus of a 11.1% advance, led by a rise in manufactured products as well as fuel and power prices. Nine of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by gauges of metal and basic materials companies.  India will release monthly trade figures after market hours. The corporate earnings season for the three months ended September finished last week with 29 of the Nifty 50 companies beating analyst estimates. Three companies made their trading debut on Monday, with chemical maker Sigachi Industries rising 267% over its IPO price. One97 Communications Ltd., the operator of digital payments app Paytm which raised $2.5b in India’s biggest IPO, is slated for Thursday. In FX, the Bloomberg Dollar Spot Index slipped with the greenback weaker against all of its Group-of-10 peers. Commodity currencies, led by Norway’s krone, were the best performers. The Treasury curve bull flattened, with yields falling by up to 2bps. The euro hovered around $1.1450; the French presidential election next year is the scheduled event carrying the highest risk for the common currency, according to options gauges. The pound steadied as traders await clues on monetary policy from BOE Governor Andrew Bailey during parliamentary testimony later Monday. U.K. economists expect a rate increase to 0.25% next month, according to a Bloomberg survey. U.K. economists have become more hawkish over the past month and now expect the Bank of England to increase interest rates in December as concerns about inflation intensify. Sweden’s krona inched up after inflation accelerated more than forecast in October. Meanwhile, the Australian dollar rose on data that China’s economy performed better than expected in October. The nation’s sovereign bonds also extended opening gains after China home prices fell again, sapping real-estate shares. Japan’s super-long government bonds underperformed amid concerns that supply may increase to finance government spending. The yen consolidated In rates, Treasury yields broadly within a basis point of Friday’s close, the curve fractionally steeper. The front-end and belly outperform, following bigger gains for Aussie front-end, which attracted buyers during Asia session. Stocks supported, with S&P 500 futures above Friday’s high.  Treasury yields were richer from front-end out to 10-year sector, which trades around 1.55%, outperforming gilts and bunds by ~1bp; long-end cheapens slightly on the day, steepening 5s30s by ~1bp.  Euro- area bonds gained, led by the periphery, following comments on inflation by ECB Chief Economist Philip Lane over the weekend. ECB’s Lane said recent price inflation is “really part of the pandemic” and people should not panic, in an interview with RTE on Saturday. The Fed begins tapered purchase schedule released Friday; schedule departed slightly from Nov. 3 plan by leaving target size of operations in 10- to 22.5-year sector unchanged while trimming 22.5- to 30-year more, which spurred outperfomance by 20-year sector In commodities, crude futures drifted lower with focus on U.S. energy policy and commentary from OPEC speakers. WTI is down 0.6%, trading either side of $80; Brent drops through Asia’s worst levels before running into support near $81. Spot gold fades Asia’s weakness to trade flat near $1,863/oz. Most base metals are in the red with LME nickel underperforming; copper trades flat.  Looking at today's calendar, it's quiet on the news front with just the US November Empire State manufacturing survey on deck. Biden will meet virtually with Chinese President Xi Jinping on Monday. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of U.S. technology to China. Market Snapshot S&P 500 futures up 0.1% to 4,685.00 STOXX Europe 600 little changed at 487.13 MXAP up 0.4% to 200.95 MXAPJ up 0.4% to 656.76 Nikkei up 0.6% to 29,776.80 Topix up 0.4% to 2,048.52 Hang Seng Index up 0.2% to 25,390.91 Shanghai Composite down 0.2% to 3,533.30 Sensex up 0.1% to 60,771.98 Australia S&P/ASX 200 up 0.4% to 7,470.11 Kospi up 1.0% to 2,999.52 Brent Futures down 0.9% to $81.46/bbl Gold spot down 0.2% to $1,860.89 U.S. Dollar Index little changed at 95.09 German 10Y yield little changed at -0.27% Euro little changed at $1.1447 Top Overnight News from Bloomberg  Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank shouldn’t overreact to elevated inflation even as it causes pain for Americans, because it is likely to prove temporary A reduction in China’s reserve requirement ratio looks increasingly unlikely after the authorities rolled over all policy loans coming due and data surprised on the upside, suggesting that bonds will have little room to gain China’s industrial output rose 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts Japan’s gross domestic product contracted at an annualized pace of 3% in the three months through September from the previous quarter, the Cabinet Office reported Monday. Economists had forecast a 0.7% decline Bank of Japan Governor Haruhiko Kuroda said financial stress from the pandemic is limited to certain sectors of the economy, potentially signaling the BOJ is planning to scale back its Covid-era funding program European Central Bank President Christine Lagarde doubled down on her assessment that euro-area inflation will ease as economies rebound, falling back below the 2% target in the medium term. Yet analysts see itfaster than previously thought this year and next A short-lived reprieve for emerging- market carry trades funded in dollars looks to be over, with an upsurge in U.S. inflation making the outlook increasingly treacherous The U.K. is expanding its Covid-19 booster program to younger people as the country seeks to head off another wave of infections this winter. A third vaccine dose will be available to people aged 40 to 49 starting six months after their second shot, the government said Monday Oman said there was no need for OPEC+ to accelerate oil-production increases, signaling at least some members of the group will continue to resist U.S. pressure for more crude   A more detailed look at global markets courtesy of Newsquawk Asian equity markets began the week with a lack of firm direction as the region digested varied tier-1 economic releases including better than expected Chinese activity data and miss on Japanese GDP, with attention also on a slew of earnings results and corporate updates. ASX 200 (+0.4%) and Nikkei 225 (+0.6%) both opened higher and took impetus from last Friday’s gains on Wall Street but with upside in Australia capped as financials and energy lagged, while Japanese participants weathered the weak GDP data which showed a wider than expected quarterly contraction during Q3, when the economy was still mired by widespread state of emergency declarations in key areas including Tokyo and its surrounding prefectures. Nonetheless, Japanese stocks have taken the disappointing economic growth within their strides as it justifies the incoming stimulus package which was said to have been increased to over JPY 40tln in fiscal spending and with Japan reportedly to resume its Go To Travel campaign in mid-January. Conversely, Hang Seng (+0.2%) and Shanghai Comp. (-0.2%) were initially moderately pressured despite stronger than forecast Industrial Production and Retail Sales data from China, as well as the PBoC’s CNY 1tln MLF announcement which matched this month’s expiring MLF loans and further dampened prospects of PBoC easing. Today also saw the launch of the Beijing Stock Exchange which aims to help SMEs raise capital and included 81 companies in the first batch of listings, while participants await the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia and with US Treasury Secretary Yellen and Secretary of State Blinken set to join in on the call. Finally, 10yr JGBs are higher as they tracked a marginal rebound in T-notes and following the disappointing Japanese GDP release, but with gains capped as stocks in Tokyo remained afloat and amid the absence of BoJ purchases in the market today. Top Asian News Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Duterte Runs for Philippine Senate, Avoids Clash With Daughter Greenland Jumps in Bond Market After Classification Change Chinese Startup Meicai Is Said to Pick Banks for Hong Kong IPO European equities (+0.1%) trade with minor gains which have nudged the Stoxx 600 to a high of 487.21 in what has been a quiet start to the week. The desk will continue to monitor further lockdown restrictions across the region, however, updates from the Netherlands and Austria have done little to dent sentiment thus far. The handover from the APAC region was a mixed one as the soft GDP data from Japan was overshadowed by forthcoming stimulus efforts whilst Chinese equities were unable to garner much upside from stronger than forecast Industrial Production and Retail Sales data. Participants were also awaiting the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia. Stateside, futures are trading with gains of a similar magnitude to their European counterparts (ES +0.1%) with not a great deal on the docket beyond the NY Fed Manufacturing print at 13:30GMT/08:30EST. Back to Europe, sectors are relatively mixed with Travel & Leisure top of the leaderboard amid gains in Deutsche Lufthansa (+1.7%) after the Co. was upgraded to neutral from sell at UBS. Oil & Gas names have been granted some reprieve following the selling pressure seen towards the latter half of last week. To the downside, Basic Resources is the standout laggard amid underlying price action in the metals space. In terms of individual movers, Ahold Delhaize (+2.4%) is one of the best performers in the Stoxx 600 after announcing a EUR 1bln buyback as of 2022, accelerated its growth/investment plan and will explore an IPO of Bol.com. Shell (+1.8%) is seen higher on the session after announcing that it is looking to implement a simplified structure and move its tax residency to the UK from the Netherlands. To the downside, Philips (-12.1%) sits at the foot of the Stoxx 600 as concerns continue to mount over its ventilator recall issues in the US. Finally, BBVA (-3.7%) is seen lower on the session after launching a tender offer to acquire the remaining 50.2% of Turkiye Garanti Bankasi. Top European News U.K. Expands Covid-19 Booster Program to People in Their 40s Austria Locks Down Unvaccinated as Europe Tightens Covid Curbs Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Telefonica Launches Tender Offer for Hybrid Notes In FX, the Aussie and Kiwi are outperforming their major peers, or making the most of ongoing Greenback consolidation off last week’s new y-t-d highs, with the former also gleaning encouragement from Chinese data overnight as ip and retail sales beat consensus. Aud/Usd is back above 0.7350 and Nzd/Usd has reclaimed 0.7050+ status as the Aud/Nzd cross hovers in the low 1.0400 zone and eyes an unusually large 1 bn option expiry at the round number. Similarly, the Norwegian and Swedish Krona are both firmer vs a somewhat leggy/lethargic Euro, but with assistance from macro releases in the form of trade and inflation respectively. Eur/Nok is probing 9.9200 and Eur/Sek is testing bids and support around 10.0000 compared to peaks near 9.9600 and 10.0330. CAD/DXY - No lasting support from crude prices for the Loonie as WTI retreats through Usd 80/brl from Usd 81.20 at best, but Usd/Cad has reversed from 1.2550+ ahead of Canadian manufacturing sales and wholesale trade that are out alongside the more timely Empire state survey. Meanwhile, the index is meandering either side of 95.000 within a 95.152-94.963 band having ‘topped out’ at 95.266 in wake of US CPI and a far from well received new 30 year issue. GBP/EUR/CHF/JPY - All narrowly mixed against the Buck and seemingly awaiting clearer direction from their US counterpart or independently, as Cable continues to straddle a key Fib level (1.3412) in advance of testimony from the BoE on the latest MPR and top tier UK data from tomorrow. Eur/Gbp is sitting even tighter around 0.8530 before talks intensify to try and resolve differences on NI Protocol, while Eur/Usd is pivoting 1.1450, Usd/Chf is rotating around 0.9200 and Usd/Jpy is holding mostly below 114.00. Note, the Euro has ECB speakers to digest (see Headline Feed at 10.01GMT for remarks from President Lagarde) and look forward to, while the Franc has not really responded to small rises in weekly Swiss sight deposits and the Yen has largely brushed aside much weaker than expected Japanese GDP and a draft document saying that the government and BoJ share a strong sense of urgency about supply shortages, whilst maintaining an appropriate combination of monetary and fiscal policies. In commodities, WTI and Brent are softer this morning, with losses in excess of 1.0% on the session thus far. Such pressure stems from demand-side updates in the wake of further COVID-19 measures being announced/implemented, most recently that Austria is entering a lockdown for the un-vaccinated and the Netherlands is to reimpose social distancing from Saturday. Furthermore, given the surge in cases seen in Germany in recent weeks the three-parties in coalition discussions intend to put forward proposals to Parliament on Thursday for renewed measures, which will reportedly include contact restrictions. On the other hand, the supply-side of the equation is cognisant of the looming imposition of further restrictions on Belarus by the EU, particularly as Leader Lukashenko last week said they would respond to any sanctions and suggested closing gas/goods transit through Belarus. Additional sanctions are, currently, scheduled to be announced this afternoon. Separately, and perhaps adding pressure, is commentary from various oil ministers the most pertinent of which has seen the UAE representative announce they are to increase production to over 5mln BPD from the current 4mln by 2030, alongside expecting a Q1-2022 oil surplus. Currently, the benchmarks are in proximity to the sessions trough which resides around USD 0.10/bbl below Friday’s low of USD 79.78/bbl in WTI, for instance. Moving to metals, spot gold and silver have been grinding higher throughout the European morning but are yet to retrace the downside seen overnight in-spite of the stronger Chinese data though this failed to spur regional or base-metal performance either. In terms of bank views, the Head of Energy Research at Goldman Sachs predicting the precious metal is set for a boom to the USD 2k level. US Event Calendar 8:30am: Nov. Empire Manufacturing, est. 22.0, prior 19.8 DB's Jim Reid concludes the overnight wrap This morning I’ve just put out a short note which I hope will win the catchiest research title of the year award. It’s called “If you think real yields are low, look at these charts…”. See here for the link. Regular readers will know my view that inflation will be structurally higher going forward and that for the rest of my career developed market real yields will likely stay negative even if nominal yields climb. This is because with debt so high, history suggests that heavy financial repression will be necessary to manage this. However, nothing could have prepared me for 2021 so far with US CPI at 6.2% YoY in October and 10-year US yields stuck below 1.6%. On a spot basis real yields are c.-4.6% and at around 70-year lows. If you think real yields are low, however, take a look at the 200-year graphs in the note to see that whenever debt has spiked historically, real yields have moved a lot lower than even today’s levels, albeit through inflation around or above 20%. These are extreme times but history offers even more extreme examples. Staying with inflation DB’s Francis Yared and I did a webinar on inflation last week and the recording can be viewed here. You’ll need Francis’s slides at hand on Regime Shifts in Inflation (link here) and mine (link here) on what history can tell us about inflation and what it means for asset prices in the future. I thought it was a really good webinar but I am slightly biased. Maisie and mum came back from a week in hospital at the weekend. Mum slept for 18 hours on Saturday leaving me to work out how the wheelchair folds up and reopens and delivering what I hoped was the right dose of morphine. It’s going to be tough living with a wheelchair for the next year as Maisie’s hip bone tries to regrow but after hearing many stories from my wife about children in the ward with life threatening conditions you realise that you’re actually pretty lucky. Before you think I’ve gone all zen, I did nearly throw the wheelchair across the room when it wouldn’t unfold. I’d missed a small lever under the seat. After a tiring last week at home and in the markets it’s a quieter week ahead in terms of the calendar, though market attention will continue to focus on the question of who might be appointed as the next Fed Chair, as well as the latest inflation statistics from a number of countries, including the UK (Wednesday). There is a reasonable amount of Fedspeak so it’ll be especially interesting to hear those on the transitory side to see if last week’s shocking print has impacting their thinking. Otherwise, geopolitics will be in focus, with today’s virtual meeting between US President Biden and Chinese President Xi, alongside continued speculation about whether the UK might trigger Article 16 of the Northern Ireland Protocol even if tensions have eased a touch in the last few days. Starting with today’s virtual meeting between President Biden and President Xi, it is set to take place at 7:45 PM Washington time, which will be 8:45 AM on Tuesday in Beijing. While both the presidents spoke over the phone twice this year, this is the first time it is being dubbed as a summit. There is some thought that tariff reductions could be on the agenda, especially given current US inflation levels but it might be a bit early for that in any relationship rebuild. We’ll know more in time for tomorrow’s EMR. The monthly Chinese data dump came in better than expected overnight with industrial output +3.5% yoy (vs. 3% expected), retail sales 4.9% yoy (vs 3.7% expected) but fixed-asset investment slightly missing at 6.1% (vs 6.2% expected). There is some discussion that the retail sales beat may be led by higher prices and also higher food sales as consumers prepare for the possibility of winter virus restriction. Asian stocks are trading mixed with the KOSPI (+1.04%) and the Nikkei (+0.48%) trading in the green while the Hang Seng (-0.08%), Shanghai Composite (-0.29%) and CSI (-0.29%) trading lower. In Japan GDP shrank by -0.8% from the last quarter (-0.2% consensus and +0.5% previous) augmenting expectations of a stimulus package by Prime Minister Fumio Kishida, which is expected to be announced at the end of this week. The Nikkei reported last Friday that the stimulus could top 40 trillion yen ($350 bn). Futures are pointing to a muted start in US & Europe with S&P 500 futures (-0.01%) and DAX futures (-0.08%) both fairly flat. Moving onto the rest of the week, there are a few decisions from EM central banks over the week ahead, including Turkey, South Africa and Indonesia (all Thursday). However, the main focus for investors will be the speculation about who might be the next Fed Chair, particularly in light of the news out last week that both incumbent Fed Chair Powell and Governor Brainard had been interviewed for the position. Powell’s current four-year term comes to an end in February, and whoever’s nominated would require senate confirmation for another term. At this point 4, 8 and 12 years ago, the announcement of who’d be nominated had already been made, but we still don’t have a date for when we might get the news. However, it may not be too far away, with President Biden saying in Glasgow on November 2 that it would be “fairly quickly”. On the data side, there’ll be an increasing amount of hard data out of the US for October, including retail sales, industrial production (both Tuesday) and housing starts (Wednesday). Meanwhile, there’ll also be some important UK data as the Bank of England mulls over their monetary policy settings ahead of their meeting next month. On Tuesday, there’s the latest employment report, and then on Wednesday, we’ll get the latest CPI reading for October. Turning to politics, it’s worth keeping an eye out for any developments on Brexit, with speculation rising that the UK government could trigger Article 16 of the Northern Ireland Protocol. Over the last 3 or 4 days the mood music has moved a little towards compromise so we’ll see if this gathers some momentum. Lastly on the earnings front, it’s the tail end of the season now, but there are still a few major companies left to report. Tomorrow we’ll hear from Walmart and Home Depot, before Wednesday brings reports from Nvidia, Cisco, Lowe’s and Target. Then on Thursday, we’ll hear from Intuit, Applied Materials and TJX. Recapping last week now and inflation had a strong stranglehold on the market narrative, as much higher-than-expected US CPI data drove Treasury yields higher, led by the belly of the curve. Global sovereign yields increased in sympathy. Quickly recapping the highlights from the pivotal CPI data: year-over-year headline CPI of 6.2% and core CPI of 4.6% were each the highest readings since the early 1990s and we’re generally getting to levels last seen consistently at the start of the 40yr disinflationary trend in the early 1980s. Price gains were shared across a broad range of components, which prompted some rabble rousing out of Democratic politicians, including President Biden. Five-year Treasury yields increased +13.5 bps as investors brought forward the expected timing of increases to the fed funds rate. Markets are pricing the first Fed rate hike by the July FOMC and 2.5 hikes through 2022. This compares with a September FOMC lift-off and fewer than 2 hikes in 2022 a week before. All told, 2yr, 5yr, and 10yr Treasury yields increased +11.7bps (+0.5bps Friday), +17.1bps (+1.0bps Friday), and +11.9bps (+2.1bps Friday) on the week. 10yr inflation breakevens hit their highest levels on record, finishing the week at 2.72%. Real yields were the only rates declining on the week, with 10yr real Treasury yields retreating -6.6bps (+0.8bps Friday) to end the week at -1.17%, just above all-time lows. Other developed sovereign bond yields followed Treasuries higher, with ten-year yields in Germany, UK, France, and Italy increasing +2.1bps (-2.8bps Friday), +6.9bps (-0.6bps Friday), +3.5bps (-2.8bps Friday), +7.8bps (-0.8bps Friday) on the week. The spectre of higher inflation and concomitant monetary policy tightening put an end to the recent S&P 500 win streak. After posting eight straight days of record highs by Tuesday, the S&P 500 retreated -0.31% this week, including -0.82% on Wednesday alone following the inflation data, but made a heroic effort to reclaim lost ground Friday, gaining +0.72%. Mega cap stocks were notable laggards, due to the increase in discount rates, with FANG+ stocks down -0.49% (+1.00% Friday). The index was also hit by a -15.44% collapse in Tesla stocks following news that Elon Musk would liquidate some of his holdings, which he duly did. European stocks proved more resilient, with the STOXX 600 (+0.68% on the week, +0.30% Friday), DAX (+0.25%, +0.07%), and CAC 40 (+0.72%, +0.45%), again posting new all-time highs to finish the week. On the virus front, Pfizer requested regulatory approval for all US adults to be eligible to receive the company’s Covid-19 booster shot, while climbing cases in Europe have prompted renewed lockdown measures and enhanced vaccination efforts across the continent. Federal Vice Chair for Supervision Quarles announced he would resign at the end of the year, as was widely anticipated. There was a steady leak of news on the impending nomination for Fed Chair, but neither Chair Powell nor Governor Brainard, the two favorites for the position, saw their chances much changed following the news. The Fed also released its bi-annual Financial Stability Report and concluded that asset prices remain vulnerable to deteriorating investor risk sentiment, virus progress, or economic recovery. Geopolitical tensions bubbled in Europe. Threats from Belarussian President Lukashenko to cut the transit of natural gas from Russia to Europe, and reports of potential Russian plans for further military excursions into Ukraine, drove European natural gas prices higher in the second half of the week. President Putin apparently warned the US and its allies that Moscow would not tolerate expansion of Western military influence in Ukraine. Tyler Durden Mon, 11/15/2021 - 07:59.....»»

Category: blogSource: zerohedgeNov 15th, 2021

Precarious Market Action

Precarious Market Action Dan Laboe here, Editor of the Headline Trader portfolio. I am covering for the acclaimed Jim who will be back in action tomorrow. The market is growing increasingly cautious as we enter post-earnings season action. This precarious market posture was apparent in today's dicey trade. Stocks were buoyant for most of the day (trading right around even) until the last hour of the session, where indecisiveness turned into panic, causing all the major averages to spill into the close. We are entering a seasonally weak period for the public equity market (September & October have been the worst months for stocks in the past decade), where down days are expected. Market participants are increasingly taking on the mindset that this may be as good as it gets, which could cause further short-term volatility. This is the second consecutive down day for all the major averages, with the S&P 500 and Dow Jones slipping 1.07% & 1.08%, respectively. The growth-driven Nasdaq 100 was punished marginally less because of its larger decline yesterday but still experienced a 0.97% decline. The VIX broke above its 200-day moving average for just the 3rd time since early March, and its 50-day turned into a support today. This may be an indication that volatility will remain with us for a time. Consumer discretionary, the biggest laggard yesterday following weak retail sales data, was the only market sector to close in the green today. This morning, robust earnings from Lowe's (LOW) and TJX (TJX) drove fresh hope back into the retail space. Fed Minutes July's Fed Minutes were published this afternoon, and the markets had an immediate knee-jerk reaction to the Fed's focus on the potential impact of the Delta-variant, causing the US 10 Year yield to plummet and equity indexes to jump in the 5 minutes that followed its release. This move quickly reversed with an exaggerated move in the opposite direction, which inevitably led to the end of session sell-off. Today's released Fed Minutes were stale. The Fed in last month's FOMC meeting is not the same Fed that we have today. Since the exceptional July jobs report earlier this month, members of the Fed have changed their stance on the tapering timeline. In the last couple of weeks, several Central Bankers have come out and said that it would be prudent to start paring its $120 billion in asset purchases sooner rather than later. The markets are now pricing in a September announcement (FOMC meeting September 21-22) to start tapering in October and complete its asset purchasing program in mid-2022. This morning, St. Louis Fed president James Bullard discussed the risks of delaying monetary tightening, stating that if the Fed's inflation projections are wrong, they may be forced to implement abrupt and potentially "very disruptive" policy changes. He declared that "every indication is that labor markets are about as tight as they ever get." Bullard wants the Fed to be done tapering by the first quarter of next year so that the Central Bank would have the flexibility to begin liftoff (first Fed Funds rate hike) as soon as possible. Every day it seems that the Fed gets more hawkish, but if the Delta-variant does begin to impact the economy, this narrative will quickly reverse.  Is This As Good As It Gets? Market participants are taking on a 'this is as good as it gets' mentality with peak earnings growth, ultra-low interest rates, peak consumer demand, and accommodative monetary/fiscal policies, all now ostensibly in the rearview mirror. Investors still have their mouths open as we round out a jaw-dropping Q2 earnings season. This was one of the best earnings seasons in history, with 88% of companies beating EPS estimates by an average of 17.5% while exhibiting record profit margins averaging 13.6%. Earnings and revenues are up an unprecedented 103% & 28% year-over-year, respectively. Despite the exceptionally weak Q2 2020 EPS comps, earnings are still up over 30% from pre-pandemic levels. Now investors are looking at decelerating earnings growth in the coming quarters, forcing market participants to reevaluate the market's rich valuation multiples. Since the pandemic lockdowns began, the Fed-induced ultra-low interest rate environment has provided a nice tailwind for high-growth stocks. Record low cost of capital (driven by low yields) provided nascent innovation-powered companies with an almost endless upside in the equity market. Analysts were able to catapult the value of growth businesses' projected future earnings, justifying some of the crazy valuation multiples we saw earlier this year. Most of the over euphoric valuations on unprofitable growth stocks have been compressed by the rising yields in anticipation of liftoff. Consumer spending took off in the first 4 months of 2021 as the economic reopening drove an unparalleled tidal wave of pent-up demand on Main Street. The pandemic lockdowns and resulting record levels of savings/wealth in the US ($19 trillion increase in wealth, 26% increase in net wealth) propelled our society's propensity to spend as storefronts reopened across the country. This effect has decelerated since April, causing investors to question if peak consumer spending is in the past. With back-to-school shopping and the holiday season around the corner, I find this notion unlikely. The unprecedented level of accommodation provided by record monetary (Federal Reserve) and fiscal (Federal Government) spending amid the pandemic is the only reason that our economy has been able to not only recover at such a speed but come out the other side better than ever. The PPP loans, COVID checks, and unemployment benefits provided by the Federal government provided the economy with enough liquidity to do a little better than survive last year and now thrive during the recovery. The Fed's swift action of dropping Fed Fund rates to 0-0.25% and its subsequent $120 billion monthly asset purchases (aka quantitative easing) allowed the equity market to take off after the initial pandemic sell-off. The accommodative monetary and fiscal policies are beginning to phase out. Still, I expect the aforementioned positive impacts will continue to echo in our economy for quarters to come. The best is yet to come. We are reentering the Roaring 20s with ambition. Technological advancements are accelerating faster than ever, pushing our economy to do the same. I expect to see growing annual stock market returns as prolifically advancing tech thrusts valuations to continuously new highs. A Technical Omen That Could Spell Trouble For Investors A Hindenburg Omen, a technical indicator that signals an elevated probability of a market crash, has been reached by this precarious market. This indicator looks for an elevated number of new 52-week highs and lows that surpasses 2.2% of all securities traded that day (the number of highs cannot be more than double the number of lows), along with an upward trending 50-day moving average, and negatively shifting market sentiment (indicated by the McClellan Oscillator or MCO). This indicator generally implies that market participants are tentative and uncertain. The Hindenburg Omen almost always precedes a stock market downturn but is only about 25% accurate when it is seen. Investors have been positioning themselves defensively as post-earnings price action commenced. These defensive investors are buying stocks in low beta sectors like health care, utilities, consumer staples, and real estate, which have led over the past week of trading. All of the previously mentioned sectors have lagged the broader market over the past 52-weeks, so it's only natural for weakness chasing money managers to rotate into these segments even if an index level correction (10%+ decline from recent highs) isn't coming. I'm not running for the hills quite yet, with trillions of bullish capital still waiting to be deployed on even the most immaterial dips. I am also not adding many new positions to my portfolio. I don't think we will experience a full correction, but I do believe that some consolidation may be in order over the next few months.  Cathie Wood vs. The Big Short's Michael Burry Expected interest rate growth and overzealous valuation multiples on ultra-high-growth stocks have some investors betting against Cathie Wood's Ark Innovation ETF (ARKK). 'Big Short' investor, Michael Burry, who is famous for predicting and profiting from the 2008 financial crisis, revealed a $31 million put position against ARKK, along with a $731 million bet against Tesla (TSLA), which happens to be Cathie's largest holding, in his latest 13-F filing (institutional investment managers' SEC required quarterly report). The actively traded ARKK fund has become the benchmark for high-growth 'market-disruptors,' and Cathie Wood has become an investing icon. Her innovation-driven ETF saw an impressive bull run during the pandemic, exhibiting a 384% 11-month rally from its March 2020 lows to its peak in mid-February, but has recently fallen out of market favor. Soaring yields forced investors to reevaluate the extreme growth multiples in Cathie's 4th Industrial Revolution focused holdings. Cathie Wood fired back at the press surrounding Burry's notable position against her ETF with a tweet saying, "I do not believe that he (Michael Burry) understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space." Burry doesn't have a vendetta against Cathie Wood but sees a short-term trading opportunity. He is making a relatively small bet in his over $2 billion Scion Asset Management portfolio (ARKK put up just 1.5% of total assets under management). Burry believes that the current fundamentals of ARKK's high growth holdings are out of whack in this rising interest rate environment, and he is not alone with this thinking. A record 13.5% of outstanding ARKK shares are currently held short (24.87 million shares), and a Short ARKK ETF, which will trade under the ticker SARK, is awaiting SEC approval. ARKK is looking at a days-to-cover short ratio (number of shares held short divided by daily volume) of 4.6, which isn't exactly a concerning level yet, but it is growing. I personally love how Cathie Wood views this rapidly advancing market and focuses on long-term profitability instead of short-term volatility. I perceive Cathie's pandemic success as a reflection of her savvy ability to recognize market-disrupting innovators, and it finally paid off after more than 5 years of flying under the radar (relatively speaking). That being said, I still utilize her ETF for put option opportunities when they reveal themselves because of the speed at which ARKK moves. Cathie Wood remains one of if not the most influential players in the market today. "The Cathie Wood Effect" has replaced "The Warren Buffett Effect" in this rapidly progressing and digitalizing economic/market environment. ARKK is undoubtedly a long-term hold for the commencing 4th Industrial Revolution, which is already changing the world in which we live.  Today’s Portfolio Highlights Options Trader: Following some of this week's precarious price action, Kevin is pulling profits on the September call option in Nasdaq, Inc (NDAQ), after almost two months of holding. The NDAQ September 180 call contracts crossed the 30 days till expiration threshold, and Kevin doesn't want to lose that time premium baked into these options. This exchange has been an excellent trade for the Options Trader portfolio this year, with NDAQ providing three separate profit-driving trades since April. According to Kevin: "First one was a $892 gain on 4/16. Second one was a $906 gain on 6/24. Looks like we'll get approx. $435 on this one." NDAQ has been on an absolute tear so far this year, rallying over 40% year-to-date (more than doubling the S&P 500s performance). Kevin stated that he would likely jump back into this trade as he still sees further upside potential. Stocks Under $10: The health care sector has led the broader market over the past month of trading, with Moderna (MRNA) and Pfizer (PFE) leading the pack. Brian is taking advantage of this sector's momentum with the addition of Immunovant (IMVT) on this down day for the market. IMVT and its development of monoclonal antibodies for the treatment of autoimmune diseases are developing an early treatment for those with COVID. Brian expects this stock to get a Delta-variant catalyzed boost, and most analysts seem to agree with him with every price target showing a sizable increase from current price levels. Surprise Trader:  Car manufacturers are struggling to keep up with demand as chip shortages continue to plague the space, causing used/old cars to stay on the road longer. Dave is taking advantage of this notion with a read-through trade, adding Advanced Auto Parts (AAP) to the Surprise Trader portfolio. More old cars on the road means more tune-ups and breakdowns that will require vehicle parts. The company is reporting before open next Tuesday, and Dave believes that it has some strong upside potential that the markets are yet to price in. Happy Wednesday! DanRecommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Forget a bitcoin winter — a crypto "ice age" might be coming as the Fed ends the easy-money era

Crypto prices have tumbled as bond yields have shot higher. Some investors think they might not recover for a long time. Prices have slumped, raising fears about a crypto winter.FTiare/Getty Images A crypto "ice age" might be coming as the Fed slashes its support for markets and the economy. Crypto prices have slumped, with bitcoin tumbling to a six-month low below $38,000 on Friday. With the Fed hiking interest rates, and nagging questions about regulation and the technology, the outlook could be bleak. Things are getting cold in crypto-land. Bitcoin is down dramatically from its November peak of close to $69,000, falling to a six-month low below $38,000 Friday. Trading volumes have slumped.Some investors are concerned that the market is going into a "crypto winter" — a period when prices fall sharply and fail to recover for more than a year — as the Federal Reserve abruptly tightens monetary policy.But it could be worse than that. Crypto could in fact be heading for an "ice age," where prices stay low for years and many investors lose interest, Paul Jackson, Invesco's global head of asset allocation research, told Insider recently.It's not just Fed policy. Many potential investors have niggling doubts about the robustness of cryptocurrency technology, and regulation that could stifle industry development.The Fed could put crypto in the deep freezeEarly last year, "Bond King" Jeff Gundlach said he thought bitcoin was "the stimulus asset"  boosted the most by the "torrent" of money from the Fed and US government during the coronavirus crisis.But less than a year later, the Fed is turning off its faucet as it tackles soaring inflation. Markets are now expecting four interest rate hikes in 2022.The resultant jump in bond yields has already whacked unprofitable tech stocks and cryptocurrencies. The two speculative assets look a lot less attractive when returns on risk-free bonds are higher.But more pain is likely, as bond yields have considerably further to rise, according to Invesco's Jackson."Central banks and governments have played a role in jacking up these markets, and as those policies reverse, then I think they will have a role in depressing them," he said.Read more: A 21-year veteran trader breaks down an options trade designed to help investors 'sustain risks long enough to see the light of profitability' — and explains why bitcoin could continue to move in tandem with tech stocksEven bulls such as Galaxy Digital founder Mike Novogratz have said crypto is likely to stay under pressure."I think it could be an ice age," Jackson said. "I think if you take away those conditions that have been created by the Fed ... it does change the outlook."Nagging questions about regulation and crypto technologyOf course, many cryptocurrency supporters disagree. Dan Morehead, CEO of investment firm Pantera, said in a note last week the sector should stay strong because the uses for crypto networks have ballooned.He pointed in particular to the growth in decentralized finance, or DeFi, where financial activities such as trading can be carried out without the need for intermediaries, thanks to crypto technology.But many investors are less convinced, with regulation a particular worry. The central bank of Russia, a crypto hub, this week proposed an outright ban of mining and transactions, adding to Friday's sell-off. European regulators could be about to toughen up their rules, and Spain and the UK are cracking down on crypto adverts.James Malcolm, head of foreign-exchange strategy at UBS, told Insider he thinks problems with crypto technology could be one of several factors, alongside stricter regulation, that could drag the crypto world into another winter.Malcolm cited a blog by the founder of the Signal messaging app, which concluded that blockchain technology is clunky and far from decentralized. Meanwhile, users of the ethereum crypto network have been infuriated by congestion and high transaction fees, which are proving very hard to fix."A lot of people in the technology space seem to be questioning whether or not [crypto tech] is that effective," Malcolm said. "It begs the question if it was so blatantly next-generation technology, then why aren't a lot of big tech companies all over it? Why isn't Google massively invested?"Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 22nd, 2022

Next Week"s Opportunity to Tame the Bears

Part of what's motivating the sell-off is the prospect of four interest rate hikes coming in 2022. Friday, January 21, 2022The poor showing on subscription guidance for Netflix NFLX yesterday has rippled through tech-world in Friday pre-market activity; the streaming leader, missing growth projections on net adds by a wide margin, is -20% ahead of today’s opening bell. Almost as fruit from the same blighted tree, streaming rival Disney DIS is -4% in today’s pre-market, even though the company doesn’t report earnings until February 8th.Netflix is also the first of the so-called FAANG stocks to report in this Q4 earnings season, hot on the heels of the big Wall Street banks that started last week and failed to outperform across the board, as they have in quarters past. Aside from the Netflix-specific difficulties Netflix may be facing — and content-creators naturally have plenty of discrepancies from each other, even though they compete in the same space — focus now expands to how all the other mega-tech holding are expected to do. Apple AAPL reports next week; Amazon AMZN, Alphabet GOOGL and Meta FB report the following week.Usually the heart of earnings season, which we are approaching, carries the narrative for stock market activity. But in our current circumstance, with investors continually fretting the coming interest rate hikes from the Fed, arguably next week’s press conference from Fed Chair Jay Powell may have more impact on trading than any single earnings report, FAANG or no FAANG. This presser follows the two-day meeting of the Federal Open Market Committee (FOMC).Part of what’s motivating the sell-off of growth names in the market is the prospect of four interest rate hikes coming in 2022. This is nothing Powell himself has explicitly stated, but has become a form of shorthand to forecasting Fed moves from the analyst community. After next week’s FOMC, which is expected to continue the $30 billion taper of asset purchases for the month, which will bring the program to zero in another month, Powell will address all manner of inflation in today’s economy, and what the Fed intends to do about it (and when).We’ve not heard from Powell since the minutes to the most recent FOMC meeting were released. These revealed a concentrated interest from voting members on not only bringing the taper to a close (which would then clear the way for interest rate hikes) but also working down the $9 trillion balance sheet, which will be accomplished by not renewing expired holdings. This alone will help bring the era of “cheap money” to an end, though it is not the same as raising interest rates.Powell has a golden opportunity next week to spell this all out. Of course the Fed is concerned about controlling inflation (a little late, some analysts would say), so of course rate hikes are going to be on the table. But definitely four? Based on lackluster economic data that has begun to come in since the last Fed meeting, there is plenty to draw from that indicates the economy won’t be overheating in the near-term, after all. And if the Fed finds this to be the case, they won’t be in a rush to fit in four hikes from now til December.Questions or comments about this article and/or its author? Click here>> 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Meta Platforms, Inc. (FB): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research 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.....»»

Category: topSource: zacksJan 21st, 2022

Markets Wait for Fed FOMC and Major Earnings Next Week

Markets Wait for Fed FOMC and Major Earnings Next Week The poor showing on subscription guidance for Netflix NFLX yesterday has rippled through tech-world in Friday pre-market activity; the streaming leader, missing growth projections on net adds by a wide margin, is -20% ahead of today’s opening bell. Almost as fruit from the same blighted tree, streaming rival Disney DIS is -4% in today’s pre-market, even though the company doesn’t report earnings until February 8th.Netflix is also the first of the so-called FAANG stocks to report in this Q4 earnings season, hot on the heels of the big Wall Street banks that started last week and failed to outperform across the board, as they have in quarters past. Aside from the Netflix-specific difficulties Netflix may be facing — and content-creators naturally have plenty of discrepancies from each other, even though they compete in the same space — focus now expands to how all the other mega-tech holding are expected to do. Apple AAPL reports next week; Amazon AMZN, Alphabet GOOGL and Meta FB report the following week.Usually the heart of earnings season, which we are approaching, carries the narrative for stock market activity. But in our current circumstance, with investors continually fretting the coming interest rate hikes from the Fed, arguably next week’s press conference from Fed Chair Jay Powell may have more impact on trading than any single earnings report, FAANG or no FAANG. This presser follows the two-day meeting of the Federal Open Market Committee (FOMC).Part of what’s motivating the sell-off of growth names in the market is the prospect of four interest rate hikes coming in 2022. This is nothing Powell himself has explicitly stated, but has become a form of shorthand to forecasting Fed moves from the analyst community. After next week’s FOMC, which is expected to continue the $30 billion taper of asset purchases for the month, which will bring the program to zero in another month, Powell will address all manner of inflation in today’s economy, and what the Fed intends to do about it (and when).We’ve not heard from Powell since the minutes to the most recent FOMC meeting were released. These revealed a concentrated interest from voting members on not only bringing the taper to a close (which would then clear the way for interest rate hikes) but also working down the $9 trillion balance sheet, which will be accomplished by not renewing expired holdings. This alone will help bring the era of “cheap money” to an end, though it is not the same as raising interest rates.Powell has a golden opportunity next week to spell this all out. Of course the Fed is concerned about controlling inflation (a little late, some analysts would say), so of course rate hikes are going to be on the table. But definitely four? Based on lackluster economic data that has begun to come in since the last Fed meeting, there is plenty to draw from that indicates the economy won’t be overheating in the near-term, after all. And if the Fed finds this to be the case, they won’t be in a rush to fit in four hikes from now til December. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report Meta Platforms, Inc. (FB): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 21st, 2022

Another One Bites The Dust

S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned […] S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned higher, and maintained much of their intraday gains. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2021 hedge fund letters, conferences and more And that could be a sign – in spite of the bearish onslaught driving the buyers back to the basement before the closing bell – that more buying would materialize to close this week, with consequences for S&P 500 as well. I would simply have preferred to see rising yields once again, that would be a great catalyst of further stock market selling. Now, the wisest course of action looks to be waiting for the upcoming upswing (one that didn‘t develop during the Asian session really), to get exhausted. Remember my yesterday‘s words: (…) The rising yields are all about betting on a really, really hawkish Fed – just how far are the calls for not 25, but 50bp hike this Mar? Inflation is still resilient (of course) but all it takes is some more hawkish statements that wouldn‘t venture out of the latest narrative line. Anyway, the markets aren‘t drinking the kool-aid – the yield curve continues flattening, which means the bets on Fed‘s misstep are on. True, the tightening moves have been quite finely telegraphed, but the markets didn‘t buy it, and were focused on the Santa Claus (liquidity-facilitated) rally instead – therefore, my Dec 20 warning is on. The clock to adding zero fresh liquidity, and potentially even not rolling over maturing securities (as early as Mar?) is ticking. And the run to commodities goes on, with $85 crude oil not even needing fresh conflict in Eastern Europe – the demand almost at pre-corona levels leaving supply and stockpiles in the dust, is fit for the job. With SPX short profits off the table, crude oil consolidating, and cryptos having second thoughts about the decline continuation, it‘s been precious metals that stole the spotlight yesterday – really great moves across the board to enjoy! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 buyers are nowhere to be seen – what kind of reflexive rebound would we get next? The odds aren‘t arrayed for it to be reaching very high – yields are catching up even with financials... Credit Markets HYG is likely to pause a little next, and the degree of its move relative to the quality debt instruments, would be telling. Rates are though going to keep rising, so keep looking for a temporary HYG stabilization only. Gold, Silver and Miners Gold and silver keep catching fire, and are slowly breaking out of the unpleasantly long consolidation. The strongly bullish undertones are playing out nicely – these aren‘t yet the true celebrations. Crude Oil Crude oil looks like it could pause a little here – the stellar run (by no means over yet) is attracting selling interest. The buyers are likely to pause for a moment over the next few days. Copper Copper is paring back on the missed opportunity to catch up – the red metal will be dragged higher alongside the other commodities, and isn‘t yet offering signs of true, outperforming strength. Bitcoin and Ethereum Bitcoin and Ethereum really are setting up a little breather, but I‘m not looking for bullish miracles to happen. Still, the buying interest was there yesterday, and that would influence the entry to the coming week (bullishly). Summary S&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only. Not until there is a change in the credit markets, have the stock market bulls snowball‘s chance in hell. Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously, and the time for another position opening, looks slowly but surely approaching. Let the great profits grow elsewhere in the meantime. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co 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. Updated on Jan 21, 2022, 1:29 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJan 21st, 2022

Should You Buy Payment Disruptor Stocks In 2022?

There’s a big “threat” looming over one of my favorite groups of stocks. After years of running higher, these stocks reversed course in 2021… Q4 2021 hedge fund letters, conferences and more And are now trading at a steep discount. But while most folks are getting this story completely wrong… I’ll show you why this […] There’s a big “threat” looming over one of my favorite groups of stocks. After years of running higher, these stocks reversed course in 2021… if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss 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); Q4 2021 hedge fund letters, conferences and more And are now trading at a steep discount. But while most folks are getting this story completely wrong… I’ll show you why this “threat” is presenting a great buying opportunity. Payment Disruptor Stocks Long-time readers know I’ve pounded the table on payments stocks for years… In short, payment disruptors have seized banks’ most profitable businesses one by one, leaving them with scraps. PayPal’s (NASDAQ:PYPL) app lets you buy groceries and bitcoin… receive Social Security... and even pay taxes. Credit card giants Visa (NYSE:V) and Mastercard (NYSE:MA) now handle more digital payments than big banks like JPMorgan. More than 40 million people now use Block’s (NYSE:SQ) Cash App at least once a month. That’s roughly one in eight Americans. In short, payment disruptors have turned Wall Street on its head. And it’s made them among the fastest-growing and best stocks to own from 2016–2020: But 2021 marked a big reversal for payments stocks..​ Visa and Mastercard had one of their worst years in almost a decade. PayPal, Block (formerly Square), and almost every other money disruptor slipped into the red. The Biggest Threats What’s going on with these former stock market darlings? There are a few reasons for payments stocks’ recent struggles. But one of the biggest “threats” can be summed up in four words: “Buy now, pay later.” As the name suggests, buy now, pay later lets you break up purchases into installments. Say you buy a pair of sneakers for $100. Instead of handing over 100 bucks at the cash register, you can pay in four $25 installments over a few weeks. Last year, consumers made $100 billion worth of retail purchases through BNPL companies like Affirm, Klarna, and Afterpay. That’s a huge jump up from $24 billion in 2020. Buy now, pay later is considered a threat to existing payment methods because it’s a closed-loop system. In short, BNPL firms don’t run on top of the existing payment networks that Visa and Mastercard largely own. They’ve crafted a whole new payment network, which cuts credit card firms and other players out of the picture. This closed loop allows BNPL companies to keep all the fees for themselves. The concern is BNPL firms will steal an ever-increasing share of payments for themselves, dampening growth for PayPal, Visa, and other payments stocks. But BNPL is not a real threat… it’s a massive opportunity. As I mentioned, BNPL firms like Klarna and Affirm have created their own payment networks. The thing is… roughly 85% of installment payments are made with debit cards. And guess who issues those cards? Visa and Mastercard. Afterpay, the firm that pioneered BNPL, teamed up with Mastercard for its debit card. Source: Afterpay BNPL is not a threat to these payment giants… it’s an opportunity. Long-time readers know credit card companies earn a small fee each time you swipe your card. When folks choose buy now, pay later, they’re using their card multiple times. This means Mastercard now collects fees on four installments instead of one payment. Affirm’s CFO Michael Linford agrees BNPL is an opportunity for payment networks. He recently said: “You can’t say Visa is a loser here. We ride Visa rails for a meaningful number of our transactions.” BNPL is also a moneymaker for PayPal and Block. PayPal launched its own buy now, pay later option in late 2020. This past quarter it processed $2 billion+ of installment payments. PayPal quietly built a BNPL business that’s 75% the size of Affirm. And back in June, Block acquired Afterpay. Over 100,000 businesses and 16 million customers have used Afterpay. Block now gets to collect all those fees. Closed-Loop Networks Closed-loop networks aren’t a new idea. A few years back, PayPal created a closed-loop network and tried to cut credit card giants like Visa out of the picture. It just had to convince folks not to link their cards to their PayPal accounts… and instead pay using PayPal’s digital wallet. PayPal hid card payment options and put its own wallet front and center. It was a total failure. Today, most PayPal transactions are paid for with debit cards. BNPL firms will suffer the same fate. They need to tap into the five billion or so plastic cards across the world to attract users. But Stephen… what if you’re wrong? What if BNPL firms do succeed in building a closed-loop system? Investment bank Credit Suisse ran the numbers on this potential threat. They looked at what would happen if BNPL accounted for a quarter of all digital payments and these folks chose not to pay with a card. Even in this worst-case scenario, buy now, pay later firms would steal just 2.6% of Visa and Mastercard revenues. That’s nothing for companies that grow sales roughly 15% per year. I mentioned consumers made $100 billion worth of retail purchases last year through BNPL companies. That’s a drop in the ocean compared to the volume payment giants handle. Look at this graph showing how small the buy now, pay later “threat” really is. Billions of dollars might flow through BNPL companies, but payment rails handle trillions of dollars. Even PayPal is on track to process over $1 trillion this year. Don’t be fooled: BNPL isn’t a threat to payments stocks. It’s an opportunity. That’s why I recently made PYPL, MA, and SQ all “buys” in my premium Disruption Investor portfolio. Next week, we’ll dig into another big threat weighing on payments stocks: the US Federal Reserve’s new payment system. The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money" Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here. Article By Stephen McBride, Mauldin Economics Updated on Jan 21, 2022, 3:04 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJan 21st, 2022

Leveraged Trading Is Not The Source Of Recent Crypto Weakness: So What Is?

Leveraged Trading Is Not The Source Of Recent Crypto Weakness: So What Is? By Marcel Kasumovich, One River Asset Management head of research Macro narratives are driving digital asset sentiment, from asset swings to regulatory decisions. This alone speaks to a maturing ecosystem – investors want the macro story. But digital asset volatility has been mostly uncorrelated to other macro markets in the recent past. It is more about a shift in investor behavior. 1/ As digital assets enter the mainstream, market commentary focuses on price. And in a world where exchange rate volatility is near all-time lows, attention has naturally shifted to digital assets where volatility against the US dollar is breathtaking by comparison. The megatrend towards the digitalization of finance will not be defined by the shorter-term gyrations. The innovation happening more behind the scenes will dictate the secular formations. Recent advancements in the Lightning Network illustrate the quiet determination to digitalize finance. 2/ The Lightning Network was proposed in 2015 as a way of scaling smaller payments, able to accommodate billions of transactions in a second (here). It addressed the tiring argument of Bitcoin’s inefficiency head-on. And after a slow start, user adoption surged last year with a 3-fold rise in network capacity (Figure 1). It is also integrating into the regulatory mainstream. This week, Bottlepay, a payment provider built on the Lightning Network, was approved by the UK Financial Conduct Authority. These new technologies can hold up to regulatory standards including anti-money laundering (here). It is a powerful example of technologists and regulators working together to encourage innovation in a complacent legacy system. 3/ Innovation may drive the megatrends, but investors are still left to manage and explain portfolio volatility from digital assets. And just as digital innovation is garnering more institutional attention, so too are the narratives around the volatility of digital assets. Investors are looking for macro thematic narratives, including the sharp downturn since November and the abrupt decline to start the year. Explanations center on the downturn in inflation expectations, the Fed pivot toward faster rate hikes and balance sheet normalization, as well as the decline in growth stocks tied to the rise in real interest rates. The high correlation of bitcoin returns to inflation expectations last year (56%) reinforces a desire to put a tidy macro narrative to the digital ecosystem. 4/ But the analytics tell a different story. We run a simple empirical exercise to evaluate bitcoin returns as explained by three macro factors: market-based inflation expectations (5y5y inflation swaps), the inflation-adjusted terminal policy rate (5y5y overnight interest rate swap less 5y5y inflation swaps), and Nasdaq 100 equity returns. These factors only explain 10-45% of the variation in bitcoin over the past two years and with various representations of the data. More importantly, there is almost no relevance of these factors in explaining the bitcoin downturn since November. Those factors would imply a bitcoin price of 50-60k, much higher than the current price. 5/ What does that mean for investors? Digital assets volatility has been largely independent of macro factors in the recent past. To be sure, the independent volatility that most investors hope for is skewed to the upside. But in assets where volatility expectations have ranged from 55% to 158% in the past two years, there will be plenty of periods where idiosyncratic moves detract from a portfolio. The test for any investor is asking about the structural trends. What tokens will prosper with the digitalization of finance? How broad will token pluralism extend? If the answers to the structural questions are positive, then downside volatility should be met with programmatic rebalancing into digital assets. 6/ Of course, idiosyncratic volatility is not satisfying. It is a polite way of saying we need to dig deeper for an explanation. What is behind the swings in digital assets if the macro narrative falls flat? The hunt for the explanation is partly a process of elimination and partly identifying new patterns of behavior. There are three key elements of the market microstructure of interest. 7/ First, the bitcoin forward yield curve has been stable, indicating leveraged trading is not a source of downside volatility. Figure 2 illustrates the one-month annualized yield implied by bitcoin futures on the Deribit exchange, where leverage is more readily available to traders. A rise in speculative demand leads to higher forward bitcoin prices and higher implied yields (vice versa). In periods of excess leverage, forward prices fall more than spot as speculative traders forced to close positions at unfavorable prices. Last May, one-month yields fell to an annualized –75%, reflecting a costly, steep inversion of the forward curve to speculative long traders. On this downturn, the compression in yields is barely visible. 8/ Second, option markets have decoupled from previous correlations to spot prices, with declining volatility expectations. The one-week implied volatility on Ether is 70%, near the lows of the past year (Figure 3). Ordinarily, declines in spot prices, particularly severe ones, would have seen a surge in volatility expectations. However, volatility is low despite a sharp decline in spot prices. The same pattern is evident in 25-delta put-call volatility skew. The one-week skew in Ether options is only marginally positive, near the average of the past year. This is strongly counter to past downturns in spot prices, where option skew spiked well above 40%! Again, leveraged trading is not the source of the recent price weakness. 9/ Third, a rise in the dispersion of digital asset prices hints at a change in investor behavior. We illustrate this point with a unique parsing of the data based on the last two downturns: May 8, 2021 and Nov 9, 2021. Dispersion is measured by the median difference between the individual returns on the 12 assets of our Core Index and bitcoin returns. When Index asset returns are evenly dispersed around bitcoin returns, the measure is zero. The one-month dispersion in the latest downturn measures near-zero (–0.4%). This is vastly different from May 2021, where the one-month dispersion index measured –9.1%. Index assets exhibited higher beta to the bitcoin downturn. No doubt, two cyclical periods don’t make a trend, but it does call for attention. 10/ Market behavior is bifurcating. It is evident in futures markets, where the decline in yields has been greater in regulated markets (CME) than in unregulated ones (Deribit). It is evident in active supply, where the percentage of longer-term holders has dropped alongside a more-than 20% fall in large-value bitcoin addresses (greater than $10mn). It is evident in the surge of interest in venture applications (here). Investors focused on macro narratives have mattered more than leveraged traders. And it is these ebbs and flows that should remind investors that we are at the very early stages in the digitalization of finance. It is precisely in those imperfect, inefficient early stages where megatrend assets are most additive to a portfolio. Figure 1 – Lightning Network Capacity Surge, Adoption Rising Figure 2 – Bitcoin Futures’ Yield Stable, No Sign of Speculative Excess Figure 3 – Ether Volatility Low Despite Declining Prices Tyler Durden Sun, 01/16/2022 - 22:00.....»»

Category: dealsSource: nytJan 16th, 2022

Rotate to Cyclical Sectors With These Top-Ranked ETFs

As the Federal Reserve turned more hawkish and expectations for interest rates hike rose, investors rotated out of the high-growth technology to cyclical sectors like energy, financials, materials and industrials. Rising yields have gripped Wall Street since the start of 2022, resulting in a sell-off in the tech sector. As the Federal Reserve turned more hawkish and expectations for interest rates hike rose, investors rotated out of the high-growth technology to cyclical sectors like energy, financials, materials and industrials.Investors seeking to tap the current trends could consider the ETFs form the cyclical sectors. While there are many options, Vanguard Energy ETF VDE, iShares U.S. Home Construction ETF ITB, U.S. Global Jets ETF JETS, Materials Select Sector SPDR XLB and SPDR S&P Bank ETF KBE with a Zacks Rank #1 (Strong Buy) or 2 (Buy) seem excellent choices.Why Cyclical?Prices for almost everything, from raw materials to food prices to shipping costs, soared last year at the fastest pace in nearly four decades. This is especially true as the consumer price index jumped 7% year over year in 2021, marking the largest 12-month gain since June 1982. The red-hot inflation has set the stage for the first interest rate hike as soon as in March (read: 5 ETF Plays to Make the Most of Red-Hot Inflation).The 10-year Treasury yield hit a two-year high on bets that the Federal Reserve could raise interest rates as soon as in March. The latest Fed minutes revealed policymakers’ concerns about worsening inflation and early interest rate hikes to combat rising inflation. The policymakers signaled three rate increases this year and three in the following year as inflation concerns deepened. The probabilities of a March interest rate hike of 0.25% surged to 72%, according to fed futures trading contracts.Omicron cases are also surging in the United States, with more than a million new cases in a single-day and hospitalizations hitting new highs.However, a still-improving economy backed by job growth and higher consumer confidence will likely bolster risk-on trade. Increased U.S. consumer confidence, suggests that the economy would continue to expand in 2022. Additionally, President Biden’s administration took steps to eliminate supply-chain bottlenecks, indicating that higher inflation will not last very long. Further, the wider spread of vaccinations, new vaccines as well as solid corporate earnings bode well for the economy. As the cyclical sectors are tied to economic activities, these outperform when economic growth improves.Vanguard Energy ETF (VDE)Vanguard Energy ETF is one of the popular choices in the energy space, having accumulated $6.6 billion in its asset base. It provides exposure to a basket of 104 energy stocks by tracking the MSCI US Investable Market Energy 25/50 Index (read: 5 Energy ETFs Making the Most of Oil Price Surge).Vanguard Energy ETF sees a good volume of about 1.5 million shares and charges 10 bps in annual fees. VDE has a Zacks ETF Rank #2.iShares U.S. Home Construction ETF (ITB)iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $3 billion, iShares U.S. Home Construction ETF holds a basket of 46 stocks with heavy concentration on the top two firms.iShares U.S. Home Construction ETF charges 41 bps in annual fees and trades in a heavy volume of around 3 million shares a day on average. iShares U.S. Home Construction ETF has a Zacks ETF Rank #2.U.S. Global Jets ETF (JETS)U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 51 securities and charges investors 60 bps in annual fees.U.S. Global Jets ETF has gathered $3.5 billion in its asset base while seeing solid trading volume of nearly 12.1 million shares a day. It has a Zacks ETF Rank #2.Materials Select Sector SPDR (XLB)Materials Select Sector SPDR is the most-popular material ETF that follows the Materials Select Sector Index. It manages about $8.6 billion in its asset base and trades in volumes as heavy as around 6 million shares. Materials Select Sector SPDR holds about 28 securities in its basket and charges 12 bps in fees per year from its investors (read: 5 Top-Ranked ETFs to Add to Your Portfolio for 2022).In terms of industrial exposure, chemicals dominates the portfolio with a 68.8% share, while metals & mining, and containers & packaging round off the top three positions. The product has a Zacks ETF Rank #1.SPDR S&P Bank ETF (KBE)SPDR S&P Bank ETF offers equal-weight exposure to 98 banking stocks by tracking the S&P Banks Select Industry Index. Regional banks dominate the portfolio with 74.8% share while thrifts & mortgage finance, diversified banks, other diversified financial services and asset management & custody banks take the remainder.SPDR S&P Bank ETF has amassed $8.6 billion in its asset base while trading in a heavy volume of 2.8 million shares a day, on average. The product charges 35 bps in annual fees. 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 Materials Select Sector SPDR ETF (XLB): ETF Research Reports iShares U.S. Home Construction ETF (ITB): ETF Research Reports SPDR S&P Bank ETF (KBE): ETF Research Reports Vanguard Energy ETF (VDE): ETF Research Reports U.S. Global Jets ETF (JETS): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Take Advantage Of Elevated Volatility With Covered Call Options

High volume selling since early-November has been driven up volatility premiums on options across the equity market, generating rich Theta-catching opportunities It's once again time to start thinking about covered calls as monetary uncertainty in the face of unending COVID-fueled inflation induces a market pullback. The high volume selling (specifically in high-growth equities) we've seen since before Thanksgiving has been driven up implied volatility (IV) on options across the equity market, presenting us with generous Theta-catching opportunity.Covered calls will allow you to capture returns on stocks you already own or buy new shares of enterprises you've waiting to acquire at a discount.What's A Covered Call? Implementing a covered call strategy involves selling out-of-the-money call options on a stock that you own or want to purchase and collecting the premium that each call option yields you. This means that you are effectively sell-short the options contract.Your P&L on this option play would be inverse to the call's premium because you are effectively short in the derivatives market once you enter the trade. However, the underlying shares that you own protect you from any losses (aka covered call), making these trades risk-free (if you don't account for opportunity loss if the underlying stock soars above your strike).When executing a play like this, you must remember that each option contract represents 100 shares. Meaning you should only write (or sell) call contracts for each block of 100 shares that you own or would like to own.The Greeks To Focus OnTheta represents the time-value depreciation of an option's premium each day under the assumption the underlying security does not move. Theta can be seen as the daily return on a covered call option.It represents the expected daily returns of a covered call, assuming that the strike price is not reached prior to expirations. Theta (quoted as a negative figure) and implied volatility are directly correlated on an absolute value basis (aka disregarding -/+ signs).Theta and Vega, an option's sensitivity to implied volatility, are the most meaningful metrics to focus on when implementing a covered call strategy. As an option seller, we want Theta (expected daily returns) to be high on an absolute basis, while Vega (volatility risk) remains low.When assessing opportunities for covered calls, I'm looking for options with an IV of 50% or higher in combination with a Theta to Vega ratio that exceeds 0.25. The higher the Theta Vega ratio, the better the risk/reward outlay for option sellers (no matter what your strategy).Risk Of Writing Uncovered CallSelling call options is extraordinarily dangerous if you don't own the underly security because your downside is unlimited (similar to short selling a stock except leveraged due to the nature of options nature).To help you conceptualize this, imagine you sold a 1-Year out Alphabet (GOOGL) call in September 2020 for a September 2021 monthly contract (Sept 17th Exp.) at a $2,500 strike for a quoted $20 per share premium, with zero shares held.Now, most people in their right mind would think that there is absolutely no way that GOOGL, trading at $1,450 at the time, would be able to rally over 72% in the next year. Perceptively it was a 'low-risk trade,' despite not owning the $145,000 worth of stock needed to make this trade truly risk-free (100 shares).This trade would have provided an immediate credit of $2,000 ($20 quoted per share premium x 100 shares = $2,000), but as GOOGL rallied, your position would have quickly turned against you. Since you are short the call, every dollar the premium moves up is a dollar against your position as you would have to repurchase the call at market value to flatten your trade.Let's say you held on to this until it expired, assuming you didn't have the required shares on hand, you not only would have lost the entire $2,000 premium that you were credited a year prior but would now have to pay the difference between the $2,500 strike and $2,816 spot price of the stock. This would have run you $31,600, (($2,816 – $2,500) x 100 = $31,600).This trade risked an endless amount of capital for a measly upside of $2,000. Your brokerage account would have almost certainly sent you a risk alert or a margin call before you were able to lose this much (likely requiring $50k in liquidity), but this exemplifies the outsized risks involved in selling an uncovered call option.Now let's say you did own the necessary underlying shares when you sold the 1-year call on GOOGL (covered call). The trade would have yielded you the initial $2,000 credit, and you would have been making money on the underlying shares all the way up to $2,500. The transaction would have returned you ($2,500 - $1,450) x 100 + $2,000= $107,000 or a 74% profit.Since you owned the underlying shares, you still wanted the stock to go up, and the predetermined strike price you initially sold the call at was merely your exit price.How To Take Advantage FUD-fueled (fear, uncertainty, & doubt) market selloffs like these are the best times to execute a covered call strategy because the short-term surge in volatility causes the premium of these options to spike (seen as an increase in Theta on an absolute value basis). The higher the implied volatility (IV), the more uncertain the stock's future price is, which is reflected as an increase in the option's value. This allows you to capture a larger credit on the calls you would like to write.Remember only to sell calls that are tolerably out-of-the-money (above the market price of underlying shares) to ensure that you capture both the option credit and any potential upside in the share price if the stock does end up rallying to your strike price before expiration.There are a couple of crucial judgments you need to make when trading covered calls: what price you are willing to sell your stock at and whether you believe the market's volatility?If I write longer-term covered calls (6 to 18 months till exp.), I typically choose a strike price that I have predetermined as my price target (where I am willing to let go of the stock). If I'm selling a short-term covered call (1 week to 3 months till exp.) I can take advantage of near-term volatility, with the flexibility to roll the calls over each time the prior one expires if the volatility sustains (similar to a high-yielding fixed-income security).Buy-In StrategyIf you are looking to add equities to your portfolio with a size of 100 shares or more, it may be prudent to sell a call option simultaneously. Growth-oriented tech stocks are what I am focused on because of this cohort's significant valuation compression in recent months (50%+ declines in some cases) and the volatile premium on these already naturally high IV names is creating Theta-rich environment for generous returns on cover-call options.Stocks I'm looking to add are positioned for the next generation economy like AI-power customer service automator Twilio TWLO, best-in-class cybersecurity platform CrowdStrike CRWD, and real-time machine data management powerhouse Splunk SPLK. These stocks have long-term winners but are experiencing significant short-term uncertainty in the face of an increasingly hawkish Fed and broader market pressures from the latest COVID-variant (Omicron).These nascent tech enterprises hold a leadership position in their niche operating segments and have a compelling growth narrative that shouldn't be ignored. They will undoubtedly play a vital role in the commencing 4th Industrial Revolution, which is already rapidly digitalizing our global economy.Take a look at your portfolio and examine stocks where you hold a 100+ share position (1 call per 100 share block), with the highest IVs to capture the most Theta. This call selling tactic will not make you rich quick, but it is a savvy way to capture returns in a down-trending market.Make sure you are willing to exit these covered call positions at the strike price you chose. I am looking to sell March 18th expiring calls (the most liquid short-term monthly contracts), which will allow me catch volatility in this pivotal Q4 earnings season and provide the ability to roll these calls over if FUD continues to plague the market.I remain bullish as we enter the first earnings season of 2022 and am buying this dip in public equities.Happy Trading!Dan LaboeEquity Strategist & Editor of The Headline Trader Portfolio Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Splunk Inc. (SPLK): Free Stock Analysis Report Twilio Inc. (TWLO): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Should You Invest in the iShares U.S. Utilities ETF (IDU)?

Sector ETF report for IDU Launched on 06/12/2000, the iShares U.S. Utilities ETF (IDU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.Index DetailsThe fund is sponsored by Blackrock. It has amassed assets over $852.59 million, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. IDU seeks to match the performance of the Dow Jones U.S. Utilities Index before fees and expenses.The Russell 1000 Utilities RIC 22.5/45 Capped Index measures the performance of the utilities sector of the U.S. equity market. It includes companies in the following sectors: electricity and gas, water and multi-utilities.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.41%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 2.45%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Utilities sector--about 89.90% of the portfolio, followed by Industrials.Looking at individual holdings, Nextera Energy Inc (NEE) accounts for about 14.72% of total assets, followed by Duke Energy Corp (DUK) and Waste Management Inc (WM).The top 10 holdings account for about 56.46% of total assets under management.Performance and RiskSo far this year, IDU has lost about -1.55%, and is up about 13.73% in the last one year (as of 01/14/2022). During this past 52-week period, the fund has traded between $72.46 and $88.43.The ETF has a beta of 0.45 and standard deviation of 24.36% for the trailing three-year period, making it a medium risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.AlternativesIShares U.S. Utilities ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IDU is a reasonable option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.35 billion in assets, Utilities Select Sector SPDR ETF has $12.98 billion. VPU has an expense ratio of 0.10% and XLU charges 0.12%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. 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 iShares U.S. Utilities ETF (IDU): ETF Research Reports NextEra Energy, Inc. (NEE): Free Stock Analysis Report Duke Energy Corporation (DUK): Free Stock Analysis Report Waste Management, Inc. (WM): Free Stock Analysis Report Utilities Select Sector SPDR ETF (XLU): ETF Research Reports Vanguard Utilities ETF (VPU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Should You Invest in the First Trust Energy AlphaDEX ETF (FXN)?

Sector ETF report for FXN Launched on 05/08/2007, the First Trust Energy AlphaDEX ETF (FXN) is a passively managed exchange traded fund designed to provide a broad exposure to the Energy - Broad segment of the equity market.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $487.87 million, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. FXN seeks to match the performance of the StrataQuant Energy Index before fees and expenses.The StrataQuant Energy Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.64%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.79%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Energy sector--about 91% of the portfolio.Looking at individual holdings, Diamondback Energy, Inc. (FANG) accounts for about 4.91% of total assets, followed by Cheniere Energy, Inc. (LNG) and Pioneer Natural Resources Company (PXD).The top 10 holdings account for about 45% of total assets under management.Performance and RiskSo far this year, FXN has added about 7.26%, and is up about 45.65% in the last one year (as of 01/14/2022). During this past 52-week period, the fund has traded between $8.33 and $13.26.The ETF has a beta of 2.23 and standard deviation of 47.55% for the trailing three-year period, making it a high risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust Energy AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FXN is a sufficient option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $6.63 billion in assets, Energy Select Sector SPDR ETF has $31.40 billion. VDE has an expense ratio of 0.10% and XLE charges 0.12%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. 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 First Trust Energy AlphaDEX ETF (FXN): ETF Research Reports Pioneer Natural Resources Company (PXD): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report Energy Select Sector SPDR ETF (XLE): ETF Research Reports Diamondback Energy, Inc. (FANG): Free Stock Analysis Report Vanguard Energy ETF (VDE): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Should First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?

Style Box ETF report for FVD Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the First Trust Value Line Dividend ETF (FVD), a passively managed exchange traded fund launched on 08/19/2003.The fund is sponsored by First Trust Advisors. It has amassed assets over $13.03 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueLarge cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.70%, making it one of the most expensive products in the space.It has a 12-month trailing dividend yield of 1.76%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Utilities sector--about 19.40% of the portfolio. Industrials and Financials round out the top three.Looking at individual holdings, The Bank Of New York Mellon Corporation (BK) accounts for about 0.56% of total assets, followed by Gentex Corporation (GNTX) and Newmarket Corporation (NEU).The top 10 holdings account for about 5.53% of total assets under management.Performance and RiskFVD seeks to match the performance of the Value Line Dividend Index before fees and expenses. The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.The ETF has gained about 0.30% so far this year and is up roughly 22.98% in the last one year (as of 01/14/2022). In the past 52-week period, it has traded between $34.56 and $43.09.The ETF has a beta of 0.82 and standard deviation of 21.51% for the trailing three-year period, making it a medium risk choice in the space. With about 201 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Value Line Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FVD is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $59.65 billion in assets, Vanguard Value ETF has $94.10 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.Bottom-LineAn increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. 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 First Trust Value Line Dividend ETF (FVD): ETF Research Reports The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report NewMarket Corporation (NEU): Free Stock Analysis Report Gentex Corporation (GNTX): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Is First Trust Technology AlphaDEX ETF (FXL) a Strong ETF Right Now?

Smart Beta ETF report for FXL A smart beta exchange traded fund, the First Trust Technology AlphaDEX ETF (FXL) debuted on 05/08/2007, and offers broad exposure to the Technology ETFs category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexManaged by First Trust Advisors, FXL has amassed assets over $1.73 billion, making it one of the larger ETFs in the Technology ETFs. FXL, before fees and expenses, seeks to match the performance of the StrataQuant Technology Index.The StrataQuant Technology Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.Cost & Other ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Operating expenses on an annual basis are 0.61% for this ETF, which makes it on par with most peer products in the space.FXL's 12-month trailing dividend yield is 0.12%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.For FXL, it has heaviest allocation in the Information Technology sector --about 91.70% of the portfolio.Taking into account individual holdings, Cloudflare, Inc. (class A) (NET) accounts for about 2.40% of the fund's total assets, followed by Hubspot, Inc. (HUBS) and Zscaler, Inc. (ZS).The top 10 holdings account for about 17.39% of total assets under management.Performance and RiskYear-to-date, the First Trust Technology AlphaDEX ETF has lost about -6.49% so far, and is up roughly 7.32% over the last 12 months (as of 01/14/2022). FXL has traded between $105.48 and $138.38 in this past 52-week period.The ETF has a beta of 1.16 and standard deviation of 28.52% for the trailing three-year period, making it a medium risk choice in the space. With about 110 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Technology AlphaDEX ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $49.53 billion in assets, Vanguard Information Technology ETF has $52.86 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. 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 First Trust Technology AlphaDEX ETF (FXL): ETF Research Reports Technology Select Sector SPDR ETF (XLK): ETF Research Reports HubSpot, Inc. (HUBS): Free Stock Analysis Report Vanguard Information Technology ETF (VGT): ETF Research Reports Zscaler, Inc. (ZS): Free Stock Analysis Report Cloudflare, Inc. (NET): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJan 14th, 2022

Should Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ) Be on Your Investing Radar?

Style Box ETF report for PRFZ Launched on 09/20/2006, the Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.The fund is sponsored by Invesco. It has amassed assets over $1.88 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.Why Small Cap BlendSitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.94%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Financials sector--about 19.80% of the portfolio. Industrials and Information Technology round out the top three.Looking at individual holdings, Amc Entertainment Holdings Inc (AMC) accounts for about 0.41% of total assets, followed by Herc Holdings Inc (HRI) and Continental Resources Inc/ok (CLR).The top 10 holdings account for about 3.39% of total assets under management.Performance and RiskPRFZ seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index before fees and expenses. The FTSE RAFI US 1500 Small-Mid Index is comprised of approximately 1,500 U.S. stocks. The FTSE US 1500 Small-Mid Index is designed to track the performance of small and medium-sized U.S. equity stocks selected based on the following four fundamental measures of firm size: book value, income, cash flow and dividends.The ETF has lost about -2.36% so far this year and is up about 18.24% in the last one year (as of 01/14/2022). In the past 52-week period, it has traded between $157.75 and $201.01.The ETF has a beta of 1.22 and standard deviation of 28.13% for the trailing three-year period, making it a medium risk choice in the space. With about 1459 holdings, it effectively diversifies company-specific risk.AlternativesInvesco FTSE RAFI US 1500 SmallMid ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PRFZ is a reasonable option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.The iShares Russell 2000 ETF (IWM) and the iShares Core S&P SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $65.63 billion in assets, iShares Core S&P SmallCap ETF has $74.88 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ): ETF Research Reports Continental Resources, Inc. (CLR): Free Stock Analysis Report iShares Russell 2000 ETF (IWM): ETF Research Reports AMC Entertainment Holdings, Inc. (AMC): Free Stock Analysis Report iShares Core S&P SmallCap ETF (IJR): ETF Research Reports Herc Holdings Inc. (HRI): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJan 14th, 2022

Dividend ETFs At New Peaks Amid Volatility

The appeal for dividend-focused ETFs is high at the start of 2022, given bouts of volatility triggered by a hawkish Fed, rising yields, skyrocketing inflation and of course a spike in the Omicron COVID-19 variant cases. The appeal for dividend-focused ETFs is high at the start of 2022, given bouts of volatility triggered by a hawkish Fed, rising yields, skyrocketing inflation and of course a spike in the Omicron COVID-19 variant cases. This is especially true as dividend-focused ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation.As such, many dividend ETFs have been on the rise, reaching new peaks. These include iShares Select Dividend ETF DVY, Morningstar Dividend Leaders Index Fund FDL, iShares Core High Dividend ETF HDV, SPDR Portfolio S&P 500 High Dividend ETF SPYD and Vanguard High Dividend Yield ETF VYM. These funds also have the potential to move higher given the prevailing market uncertainty (read: Buy These Dividend ETFs to Beat Inflation & Omicron in 2022).The dividend-focused products offer safety through payouts, and stability in the form of mature companies that are less volatile amid large swings in stock prices. This is because the companies that pay out dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Current Market TrendsOmicron cases are surging in the United States with more than a million new cases in a single-day and hospitalizations hitting new highs.The 10-year Treasury yield hit a two-year high on bets that the Federal Reserve could raise interest rates as soon as in March. The latest Fed minutes revealed policymakers’ concerns about worsening inflation and early interest rate hikes to combat rising inflation. The policymakers signaled three rate increases this year and three in the following year as inflation concerns deepened. The probabilities of a March interest rate hike of 0.25% surged to 72%, according to fed futures trading contracts.However, higher yields indicate investors’ optimism in the economy. A still-improving economy backed by job growth and higher consumer confidence will likely bolster risk-on trade. Increased U.S. consumer confidence, suggests that the economy would continue to expand in 2022. Additionally, President Biden’s administration took steps to eliminate supply-chain bottlenecks, indicating that higher inflation will not last very long. Further, the wider spread of vaccinations, new vaccines as well as solid corporate earnings bode well for the economy and thus the stock market (read: Higher Yields Raise Appeal for Inverse Treasury ETFs).Let’s delve deeper into the above-mentioned ETFs:iShares Select Dividend ETF (DVY)iShares Select Dividend ETF provides exposure to the high dividend-paying U.S. equities with a five-year history of dividend growth. It follows the Dow Jones U.S. Select Dividend Index and holds 101 securities in its basket with each accounting for less than 2.6% of assets.iShares Select Dividend ETF has AUM of $20.6 billion and an average daily volume of around 798,000 shares. It charges 38 bps in fees per year from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Dividend ETF Hits New 52-Week High).First Trust Morningstar Dividend Leaders Index Fund (FDL)First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks in its basket with key holdings in healthcare, communication services, consumer staples and utilities.With AUM of $1.8 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and trades in a solid volume of about 180,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.iShares Core High Dividend ETF (HDV)iShares Core High Dividend ETF offers exposure to 75 high quality and high dividend stocks. It tracks the Morningstar Dividend Yield Focus Index and is slightly concentrated on the top firms with each making up for no more than 9% share.iShares Core High Dividend ETF has AUM of $7.7 billion and trades in a solid volume of around 465,000 shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook.SPDR Portfolio S&P 500 High Dividend ETF (SPYD)SPDR Portfolio S&P 500 High Dividend ETF provides exposure to stocks with a high level of dividend income and the opportunity for capital appreciation by tracking the S&P 500 High Dividend Index. Holding 76 stocks in its basket, the fund is well diversified across securities with each making up for less than 1.8% of assets. Financials, utilities, real estate and energy are the top four sectors with double-digit exposure each.SPDR Portfolio S&P 500 High Dividend ETF has AUM of $5.5 billion and trades in volume of about 1.4 million shares. It charges 7 bps in annual fees and has a Zacks ETF Rank of #1 (Strong Buy) with a Medium risk outlook.Vanguard High Dividend Yield ETF (VYM)Vanguard High Dividend Yield ETF provides exposure to the high-yielding dividend stocks by tracking the FTSE High Dividend Yield Index. Holding 410 securities, the product is pretty well spread out across components as each holds no more than 4% of the assets. Vanguard High Dividend Yield ETF has key holdings in financials, consumer staples and healthcare with double-digit exposure each.  Vanguard High Dividend Yield ETF has amassed $43.7 billion in its asset base while trading in volume of 1.6 million shares a day on average. Expense ratio is 0.06%. VYM has a Zacks ETF Rank #1 with a Medium risk outlook. 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 iShares Select Dividend ETF (DVY): ETF Research Reports First Trust Morningstar Dividend Leaders ETF (FDL): ETF Research Reports iShares Core High Dividend ETF (HDV): ETF Research Reports SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports Vanguard High Dividend Yield ETF (VYM): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens After trading flat for much of the overnight session, S&P futures slumped to session lows shortly after JPM reported earnings that disappointed the market (see our full write up here) and were last trading down 30 points or 0.64%, with Dow futures down 0.3% and Nasdaq futures taking on even more water as the "sell tech" trade was back with a bang. Treasury yields rose 3bps to 1.74% and the dollar reversed an overnight loss. The VIX jumped above 20 and was last seen around 21. The Nasdaq 100 fell to the lowest in almost three months yesterday as tech came under pressure after Fed Governor Lael Brainard said officials could boost rates as early as March. It looks like the selling will continue today. “Market sentiment has been shaken by concerns over the prospect of imminent Fed tightening along with record global Covid-19 infection rates, but we don’t expect either of these factors to end the equity rally,” said UBS Wealth Management CIO Mark Haefele in a note. “The fourth-quarter U.S. earnings season, which started this week, could turn investor attention back to strong fundamentals.” JPMorgan shares dropped in premarket trading after revenues and EPS beat thanks to a $1.8 billion reserve release while FICC trading revenue missed expectations even as its dealmakers posted their best quarter ever and Chief Executive Officer Jamie Dimon gave an upbeat assessment of prospects for growth. Wells Fargo advanced after reporting higher-than-estimated revenue. BlackRock Inc. became the first public asset manager to hit $10 trillion in assets, propelled by a surge in fourth-quarter flows into its exchange-traded funds. Here are some of the other notable pre-movers today: U.S.-listed casino stocks with operations in Macau rise after the announcement of much-anticipated changes to the local casino law aimed at tightening government oversight on the world’s largest gaming market. Las Vegas Sands (LVS US) +6.6%; Melco Resorts (MLCO US) +5.5%; Wynn Resorts (WYNN US) +5.6%. Apple (AAPL US) shares are up in U.S. premarket trading after Piper Sandler raises its target for the stock, saying that Apple’s set-up for 2022 is favorable. Broker adds that the tech giant’s venture into health-care and automotive markets are the next catalysts to drive the stock to a $4 trillion market cap and beyond. NextPlay Technologies (NXTP US) shares jump 19% in U.S. premarket trading after giving an update for fiscal 3Q 2022 late yesterday. Domino’s Pizza (DPZ US) is cut to equal-weight from overweight at Morgan Stanley, while Chipotle is upgraded to overweight from equal-weight amid a “mixed” view on restaurant stocks into 2022. Amicus Therapeutics (FOLD US) advanced in postmarket trading after being upgraded to outperform from market perform at SVB Leerink, which cited the potential of a treatment for Pompe disease, should it be approved. Spirit Realty dropped 4% postmarket after launching a share sale via Morgan Stanley and BofA Securities. European equities traded poorly and followed the drop in Asia, with most sectors trading lower, weighed down once again by a soft tech sector. Euro Stoxx 50 is down 0.8%, most major indexes dropped over 1% before rising off the lows. Oil & gas is the best Stoxx 600 performer with crude trading well. European technology stocks as well as pandemic winners are leading declines after a U.S. selloff in tech shares resumed Thursday as Federal Reserve officials signaled their intention to combat inflation aggressively.  European chipmakers are down in early trading Friday: ASM International -3.5% at 9.17 a.m. CET, Infineon -0.9%, ASML -2.9%, STMicroelectronics -2.3%. Meanwhile, energy and automakers outperformed. Utilities were also in focus as French nuclear energy producer Electricite de France SA (EDF) plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices, a move that could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices. There was some good news: a majority of strategists still see the rally in European equities continuing this year. The Stoxx Europe 600 Index will rise about 5.2% to 511 index points by the end of 2022 from Wednesday’s close, according to the average of 19 forecasts in a Bloomberg survey. Equity funds once more led inflows among asset classes in the week through Jan. 12, as investors reduced cash holdings, according to BofA and EPFR Global data. Earlier in the session, Asian stocks slid as investors offloaded technology shares on growing speculation the Federal Reserve will raise interest rates in March.  The MSCI Asia Pacific Index fell as much as 1.3% before paring losses to 0.7% in afternoon trading. Alibaba, Keyence and Sony Group were among the largest contributors to the benchmark’s slide. The Hang Seng Tech Index, which tracks China’s biggest tech firms, closed down 0.5%. Electronics makers also dragged down indexes in Japan and South Korea, with benchmarks in both nations leading the region’s drop. China’s CSI 300 Index closed at its lowest since November 2020. Asian stocks have been whipsawed this year by remarks from Fed officials as investors try to gauge the timing and scope of the anticipated interest rate hikes. The renewed weakness on Friday was triggered by comments from Fed Governor Lael Brainard, who said officials could boost rates as early as March to ensure that price pressures are brought under control. “This kind of hawkishness and a rush for rate hikes is, of course, a minus for share prices,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo. If the Fed were to increase rates in March, “investors will want to make sure the economy remains strong despite the monetary tightening before making their move,” Sera added.  With Friday’s moves, Asia’s benchmark is set to pare its weekly gain to about 1.6%, which would still be its best weekly performance since October.    In Japan, sentiment worsened as Tokyo raised its Covid alert to the second-highest of four levels as virus cases surged. South Korea’s Kospi was also weighed down as the central bank increased its policy rate for the third time in just five months In rates, Treasuries pared declines with stock index futures under pressure as U.S. day begins. Yields beyond the 2-year reached session highs inside Thursday’s ranges amid a global government bond selloff. Treasury yields are cheaper by 3bp to 4bp across the curve with 10- year yields around 1.7274%, fading a bigger loss earlier and slightly underperforming bunds and gilts. Asia session featured speculation about tighter global monetary policy. IG dollar issuance slate empty so far and expected to remain light ahead of U.S. holiday weekend with markets closed Monday; four names priced $3.8b Thursday. In FX, the Bloomberg dollar spot is little changed around worst levels for the week, while NOK, JPY and CAD top the G-10 scoreboard. The yen advanced, and is set for its largest weekly advance in more than a year as speculation about a shift in the Bank of Japan’s policy spurred a further unwinding of dollar longs. The five-year Japanese government bond yield climbed to a six-year high. The volatility term structure in dollar-yen shifted higher Friday and inverted. The euro was little changed around $1.1460 and European sovereign bond yields rose, with the core underperforming the periphery. Norway’s krone and the Canadian dollar advanced as oil prices rose, with Brent trading above $85 per barrel, while the Australian and New Zealand dollars were the worst performers. The pound extended its longest winning streak in nearly two months as the U.K. economy surpassed its pre-pandemic size in November for the first time. Sweden’s krona inched down, shrugging off data showing that the nation’s inflation rate rose to the highest level in 28 years In commodities, crude futures rally with WTI recovering to Wednesday’s best levels near $83 and Brent putting in fresh highs near $85.40. Spot gold is little changed a brief retest of the week’s highs, trading near $1,823/oz. Base metals are mixed: LME nickel adds about 2% extending its recent surge; copper holds a narrow range in the red Looking at the day ahead now, data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Market Snapshot S&P 500 futures up 0.3% to 4,667.00 STOXX Europe 600 down 0.5% to 483.71 MXAP down 0.8% to 195.28 MXAPJ down 0.5% to 639.13 Nikkei down 1.3% to 28,124.28 Topix down 1.4% to 1,977.66 Hang Seng Index down 0.2% to 24,383.32 Shanghai Composite down 1.0% to 3,521.26 Sensex up 0.1% to 61,320.31 Australia S&P/ASX 200 down 1.1% to 7,393.86 Kospi down 1.4% to 2,921.92 German 10Y yield little changed at -0.08% Euro up 0.1% to $1.1467 Brent Futures up 0.8% to $85.16/bbl Gold spot up 0.1% to $1,823.97 U.S. Dollar Index little changed at 94.73 Top Overnight News from Bloomberg Federal Reserve Governor Christopher Waller said that three interest-rate increases this year was a “good baseline” but there may be fewer or even as many as five moves, depending on inflation The U.K. and the European Union agreed to intensify post-Brexit negotiations over Northern Ireland, as Foreign Secretary Liz Truss led the British side for the first time in a meeting at her official country residence Germany’s economy contracted by as much as 1% in the final quarter of 2021 as the emergence of the coronavirus’s omicron strain added to drags on output from supply snarls and the fastest inflation in three decades Japan’s Government Pension Investment Fund, the world’s largest, may mull investing in Chinese government bonds if the market situation improves, GPIF President Masataka Miyazono says at a press conference in Tokyo Ukraine said a cyberattack brought down the websites of several government agencies for hours. Authorities didn’t immediately comment on the source of the outage, which comes as tensions with Russia surge over its troop buildup near the border Russia won’t wait “endlessly” for a security deal with NATO and progress depends on the U.S., Foreign Minister Sergei Lavrov said Friday, keeping up pressure after a week of high-level talks with the West failed to yield noticeable progress Turkey’s newly appointed finance chief said the country’s inflation will peak months earlier and at a level far lower than predicted by top Wall Street banks The global pressures driving inflation higher represent a “major change in trends” and will keep price growth high for the foreseeable future, Bank of Russia Governor Elvira Nabiullina said North Korea appears to have fired two ballistic missiles into waters off its east coast-- in what could be its third rocket-volley test in less than 10 days -- hours after issuing a fresh warning to the Biden administration A more detailed look at global markets courtesy of Newsquawk Asian equity markets weakened amid headwinds from the US where all major indices declined led by losses in tech and consumer discretionary amid a slew of hawkish Fed speak, while mixed Chinese trade data added to the cautiousness in the region. ASX 200 (-1.1%) traded lower as tech and consumer stocks mirrored the underperformance of stateside peers and with nearly all industries on the back foot aside from utilities and gold miners. Nikkei 225 (-1.3%) briefly gave up the 28k level amid a firmer currency and source reports that BoJ policy makers are said to debate how soon they can begin signalling a rate hike. In terms of the notable movers, Fast Retailing was the biggest gainer after it reported a record Q1 net, followed by Seven & I Holdings which also benefitted post-earnings, while Hitachi Construction was at the other end of the spectrum after news that parent Hitachi will offload half its majority stake. KOSPI (-1.4%) eventually underperformed after the Bank of Korea hiked rates by 25bps for a third time in the current tightening cycle to 1.25%, as expected. BoK also noted that CPI is to stay in the 3% range for a while and BoK Governor Lee made it clear that rates will continue to be adjusted which has fuelled speculation of similar action at next month’s meeting. Hang Seng (-0.2%) and Shanghai Comp. (-1.0%) were also pressured with participants digesting the latest trade figures which showed weaker than expected Imports although Exports topped estimates. Nonetheless, the downside was somewhat limited amid ongoing expectations for PBoC easing to support the economy as the Fed moves closer towards a rate lift off and with some encouragement after Evergrande averted its first onshore debt default whereby bondholders approved a six-month postponement of bond redemption and coupon payments. Finally, 10yr JGBs retreated beneath the 151.00 level following the source report that suggested debate within the BoJ on how soon a rate increase can be signalled which could occur ahead of the 2% price target, while this coincided with an increase in the 5yr yield to a 6-year high and a weaker than previous 20yr JGB auction. Top Asian News Chinese Developer R&F Downgraded to Restricted Default by Fitch Macau Cuts Casino License Tenure, Caps Float as Controls Tighten Inflation Irks Asia as Japan Yields Hit Six-Year High, BOK Hikes China Builders’ Dollar Bonds Slump Further; Logan, KWG Lead The major cash equity indices in Europe remain subdued but off worst levels (Euro Stoxx 50 -0.7%; Stoxx 600 -0.6%) as the downbeat APAC mood reverberated into the region amid a slew of hawkish Fed speak, while the mixed Chinese trade data added to the concerns of a slowdown ahead of next week’s GDP metrics. Newsflow had overall been quiet during the European session ahead of the start of US earnings season, but geopolitical tensions remain hot on the radar after North Korea fired its third missile of the year (albeit landing outside Japan’s EEZ), whilst Russia closed all communication channels with the EU and exerted some time-pressure on Washington with regards to Moscow’s security demands. Back to trade, a divergence is seen between Europe and the US as the former catches up to the late accelerated sell-off on Wall Street yesterday; US equity futures have been consolidating with mild broad-based gains seen across the ES (+0.2%), YM (+0.2%), NQ (+0.2%) whilst the RTY (Unch) narrowly lags. Delving into Europe, the UK’s FTSE 100 (-0.1%) is cushioned by gains across its Oil & Gas and Financial sectors as crude oil prices and yields clamber off intraday lows, whilst the SMI (-0.3%) sees some losses countered by its heavyweight healthcare sector. Sectors in Europe are mostly in the red with a slight defensive tilt, although Oil & Gas stands as the top gainer and the only sector in the green. The downside meanwhile sees Tech following a similar sectorial underperformance seen on Wall Street and APAC overnight. In terms of individual movers, DAX-heavyweight SAP (-0.3%) conforms to the losses across tech after initially rising as a result of upgraded guidance and the announcement of a share buyback programme of up to EUR 1bln. The most notable mover of the day has been EDF (-17.5%) as the Co. withdrew guidance after noting the impact of new French price cap measures is forecast to be around EUR 8.4bln on FY22 EBITDA. Top European News EDF Slumps by Most on Record on Hit From Price Cap U.K. Economy Surpasses Pre-Pandemic Size With November Surge German Recovery Lags Rest of Europe on Supply Snarls, Inflation HSBC Markets Chief Georges Elhedery To Take Six-Month Sabbatical In FX, another lower low off a lower high does not bode well for the index and Buck more broadly, but some technicians will be encouraged by the fact that chart supports in the form of a Fib retracement and 100 DMA have only been breached briefly. Meanwhile, Friday may provide the Greenback with a prop via pre-weekend position squaring and US data could lend a hand if upbeat or better than expected at the very least. For now, the DXY is restrained between 94.887-626 confines, with the upside capped by a major trendline that falls just below 95.000 around 94.980, and the Dollar also hampered by pressure emanating outside the basket from the likes of the Yuan, crude oil and other commodities. CAD/JPY/GBP - The Loonie has reclaimed 1.2500+ status in line with a rebound in WTI towards Usd 83/brl, but still faces stiff trendline resistance vs its US counterpart at 1.2451 and probably conscious that several multi-billion option expiries roll off either side of the 1.2500 level today. Conversely, the Yen has cleared the psychological 114.00 hurdle with some fundamental impetus coming from hawkish BoJ source reports contending that policy-setters are contemplating how soon the Bank can telegraph a rate hike that is likely to be delivered prior to inflation reaching its 2% target. Elsewhere, Sterling remains elevated above 1.3700, though unable to scale 1.3750 even with tailwinds from stronger than forecast UK GDP and IP or a narrower than feared trade gap amidst ongoing political uncertainty. CHF/EUR/NZD/AUD - All narrowly divergent and contained against their US rival, with the Franc straddling 0.9100 and Euro holding within a 1.1483-51 range and immersed in hefty option expiry interest spanning 1.1395 to 1.1485 (see 7.01GMT post on the Headline Feed for details). On the flip-side, the Aussie and Kiwi have both lost a bit more momentum after probing 0.7300 and approaching 0.6900 respectively yesterday, and Aud/Usd appears to have shrugged off robust housing finance data in the run up to China’s trade balance revealing sub-consensus imports. SCANDI/EM - Firmer than anticipated Swedish CPI and CPIF metrics have not offered the Sek much support, as the stripped down core ex-energy print was in line and bang on the Riksbank’s own projection. However, the Huf has been underpinned by hot Hungarian inflation and the Cnh/Cny in wake of the aforementioned Chinese trade data showing a record surplus for December and 2021 overall. In Turkey, the Try is flattish following the latest CBRT survey that predicts a weaker year-end Lira from current levels, but above record lows and still well above target CPI, while in Russia the Rub is benefiting from Brent’s rise above Usd 85.50/brl (in keeping with the Nok) against the backdrop of geopolitical and diplomatic strains as the country’s Foreign Minister declares that all lines of communication with the EU have ended. In commodities, WTI and Brent front-month futures have been on an upward trajectory since the Wall Street close, with the former now above USD 83/bbl (vs 81.58/bbl low) and the latter north of USD 85.50/bbl (vs 83.99/bbl low) in European hours. Overall market sentiment has been a non-committal one amid a lack of fresh macro catalysts, however, geopolitical updates have been abundant: namely with Russia’s punchy rhetoric surrounding its security demand from NATO and Washington, whilst North Korea fired what is said to be ballistic missiles which landed just outside Japan’s Exclusive Economic Zone (EEZ). On the demand side of the equation, eyes remain on China’s economic and COVID situations, with the import figures indicating China's annual crude oil imports drop for the first time in 20 years, whilst the nation grounded further flights between the US due to its zero-COVID policy. On the supply side, reports suggested that China will release oil stockpiles in the run-up to the Lunar New Year (dubbed as the largest human migration). The release is part of a coordinated plan with the US and other major consumers, according to the reports, which cited sources suggesting China will likely ramp up its releases if prices top USD 85/bbl. Turning to metals, spot gold is trading sideways and prices waned after again hitting the resistance zone around USD 1,830/oz flagged earlier this week. LME copper meanwhile remains under USD 10,000/t – subdued by the sharp slowdown in Chinese imports suggesting weaker demand, albeit annual imports of copper concentrate hit a historic high in 2021. The trade data also indicated a fall in iron ore imports as a factor of the steel production curbs imposed last year to tackle pollution and high iron ore prices. US Event Calendar 8:30am: Dec. Import Price Index YoY, est. 10.8%, prior 11.7%; MoM, est. 0.2%, prior 0.7% Export Price Index YoY, est. 16.0%, prior 18.2%; MoM, est. 0.3%, prior 1.0% 8:30am: Dec. Retail Sales Advance MoM, est. -0.1%, prior 0.3% Dec. Retail Sales Ex Auto MoM, est. 0.1%, prior 0.3% Dec. Retail Sales Ex Auto and Gas, est. -0.2%, prior 0.2% Dec. Retail Sales Control Group, est. 0%, prior -0.1% 9:15am: Dec. Industrial Production MoM, est. 0.2%, prior 0.5% Capacity Utilization, est. 77.0%, prior 76.8% Manufacturing (SIC) Production, est. 0.3%, prior 0.7% 10am: Nov. Business Inventories, est. 1.3%, prior 1.2% 10am: Jan. U. of Mich. Sentiment, est. 70.0, prior 70.6; Expectations, est. 67.0, prior 68.3; Current Conditions, est. 73.8, prior 74.2 U. of Mich. 1 Yr Inflation, est. 4.8%, prior 4.8%; 5-10 Yr Inflation, prior 2.9% DB's Jim Reid concludes the overnight wrap There was no rest for markets either yesterday as the tech sell-off resumed in earnest, which came as fed funds futures moved to price in a 93% chance of a March rate hike, the highest closing probability to date. At the same time, however, the US dollar continued to weaken and has now put in its worst 3-day performance in over a year, having shed -1.25% in that time. And all this is coming just as earnings season is about to ramp up, with a number of US financials scheduled to report today ahead of an array of companies over the next few weeks. Starting with sovereign bonds, yields on 10yr Treasuries fell a further -3.9bps yesterday, their biggest decline since mid-December, to their lowest closing level in a week, at 1.704%, with most of the price action again happening during the New York afternoon. Lower inflation breakevens helped drive the decline, with the 10yr breakeven down -3.4bps after the producer price inflation data for December came in softer than expected. Indeed, the monthly gain of +0.2% (vs. +0.4% expected) was the slowest since November 2020, and in turn that left the year-on-year measure at +9.7% (vs. +9.8% expected), which is actually a modest decline from the upwardly revised +9.8% in November. As with the previous day’s CPI reading though, there was a more inflationary interpretation for those after one, as the core PPI measure came in at a monthly +0.5% as expected, leaving the year-on-year change at an above-expected +8.3% (vs. +8.0% expected). So something for everyone but no massive surprises either way. The latest inflation data came as numerous Fed speakers continued to match the recent hawkish tone, which helped strengthen investor conviction in the odds of a March hike as mentioned at the top. Philadelphia Fed President Harker said at an event that “My forecast is that we would have a 25 basis-point increase in March, barring any changes in the data”, and that he had 3 hikes pencilled in but “could be convinced of a fourth if inflation is not getting under control.” Separately, we heard from Governor Brainard, who appeared before the Senate Banking Committee as part of her nomination hearing to become Fed Vice Chair. She signalled that she would be open to a March hike as well, saying that they would be in a position to hike “as soon as asset purchases are terminated”, which they’re currently on course to do in March. Even President Evans, one of the most dovish members of Fed leadership, said a March rate hike and multiple hikes this year were a possibility. As it happens, today is the last we’ll hear from various Fed speakers for a while, as tomorrow they’ll be entering their blackout period ahead of the next FOMC announcement later in the month. Staying on the Fed, Bloomberg reported overnight that President Biden has picked three nominees for the vacant slots. They include Sarah Bloom Raskin, previously Deputy Secretary of the Treasury, who’s reportedly going to be nominated to become the Vice Chair of supervision, as well as Lisa Cook and Philip Jefferson, who’d become governors. Cook is an economics professor at Michigan State University, and Jefferson is an economics professor at Davidson College in North Carolina. All 3 would require Senate confirmation, and bear in mind those choices haven’t been officially confirmed as of yet. Over on the equity side, the main story was a further tech sell-off that sent both the NASDAQ (-2.51%) and the FANG+ index (-3.72%) lower for the first time this week, and taking the former to a 3-month low. That weakness dragged the S&P 500 (-1.5%) lower, though despite the stark headline numbers, it was only just over half of the shares in the index that were in the red on the day. Meanwhile in Europe, the STOXX 600 (-0.03%) also saw a modest decline, though the STOXX Banks (+1.10%) hit a fresh 3-year high after advancing for the 8th time in the last 9 sessions. Sovereign bond yields echoed the declines in the US too, with those on 10yr bunds (-3.1bps), OATs (-3.3bps) and BTPs (-4.6bps) all moving lower. Following that tech-driven fall overnight on Wall Street on the back of those hawkish comments, Asian stock markets are trading lower this morning. Japan's Nikkei (-1.42%) extended the previous session’s losses while briefly falling over -2%, as the Japanese Yen found a renewed bid amid the risk-off mood. Additionally, the Kospi (-1.37%) widened its losses, after the BOK lifted borrowing costs by 25bps to 1.25% amidst rising concerns about inflationary pressure. That takes the benchmark rate back to pre-pandemic levels after the central bank's 25bps rate increase in August and November last year. Meanwhile, the Korean government unveiled a supplementary budget worth 14 trillion won in size to continue providing support to the economy. Elsewhere, the Hang Seng index (-0.86%), CSI (-0.60%) and Shanghai Composite (-0.53%) have all moved lower as well. Data released in China showed that exports went up +20.9% y/y in December (vs +20.0% market expectations) albeit imports in December rose +19.5% y/y less than +28.5% as anticipated. That meant that they posted a trade surplus of $94.46bn last month, above the consensus forecast for a $74.50bn surplus. Looking ahead, futures on both the S&P 500 (-0.19%) and DAX (-0.79%) are pointing to further losses later on. Elsewhere in markets, yesterday saw another surge in European natural gas futures (+13.71%), albeit still at levels which are less than half of the peaks seen in mid-December. The latest moves came as Russia’s deputy foreign minister Sergei Ryabkov said that talks with the US had reached a “dead end”, amidst strong tensions between the two sides with Russia rejecting any further expansion of NATO as well as calls to pull back its forces from near Ukraine’s border. In response, the Russian ruble weakened -2.31% against the US dollar yesterday, whilst the MOEX stock index (-4.05%) suffered its worst daily performance since April 2020. Turning to the Covid-19 pandemic, the decline in UK cases continued to accelerate yesterday, with the number of cases over the past week now down -24% relative to the previous 7-day period. Looking at England specifically, the total number of Covid-19 patients in hospital is now down for a 3rd day running, and in London the total number in hospital is down to its lowest level since New Year’s Eve. To the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Tyler Durden Fri, 01/14/2022 - 08:13.....»»

Category: dealsSource: nytJan 14th, 2022

The 24 best subscription boxes for food, drink, style, beauty, hobbies, and pets in 2022

From coffee and snacks to games and books, these are the best subscription boxes you can buy as gifts for yourself and everyone else in 2022. Prices are accurate at the time of publication.When you buy through our links, Insider may earn an affiliate commission. Learn more.Birchbox Subscription box services are great for anything you love to receive on a regular basis. They can help you discover new products, develop your hobbies, or add convenience to your life. If you're looking for more great products, check out our list of the All-Time Best products we've ever tested. By now, the subscription concept has been widely applied to pretty much anything you can buy, but it's most useful for the things you actually use and enjoy regularly. Whether that's razor blades for your daily shaving routine or books to read during your commute, a subscription box helps automate the process for buying and receiving products so you have more time to use said products. Subscription boxes can help you discover new products in an arena you're already interested in or figure out if you want to pursue a hobby further. They're like trial runs for your various interests or needs and usually a lot more affordable than a full commitment. Plus, subscription boxes are great for gifting. With one fell swoop, you can gift three whole months of discovering new wine or trying out different perfumes.If you do change your mind about your subscription, all the following services make it easy to skip next month's shipment or cancel your subscription.Here are the best subscription boxes in 2022Food and drinkBest wine subscriptionConnie Chen/InsiderWinc Monthly Wine Subscription (4 bottles)$29.95 FROM WINCOriginally $52.00 | Save 42%Subscription frequency: Every monthShipping fee: $9 for orders of three bottles or fewer; free for orders of four bottles or moreA la carte shop: Yes Gifting available: YesWinc's straightforward ordering process, on-trend wine curation, and reliable shipping make it the best online wine club we've tried in the last few years. If your interest in a wine subscription stems not only from the need for convenience but also the desire to expand your wine knowledge, Winc offers informative resources, easy-to-digest bottle descriptions, and a community ratings system to help you develop your palate. Winc delivers wine every month, but it's easy to adjust your membership to skip automatic shipments. Although it matches you to wines that it thinks you'll like based on your profile of tastes and preferences, you can also customize your shipment and browse Winc's complete catalog of varietals from all over the world.Runners-up: Firstleaf, for affordable wine and big discounts ($80/month)Plonk, for natural and biodynamic wines ($110/month) Read more about the best wine subscriptions we tested in 2022. Read our reviews of Winc and Firstleaf.Best coffee subscriptionTrade/InstagramTrade Coffee Monthly Membership$14.75 FROM TRADESubscription frequency: Every 1, 2, or 4 weeksShipping fee: FreeA la carte shop: YesGifting available: YesTrade is where you can order top-quality coffee from cool roasters all over the country, like Verve (Santa Cruz, CA), Cuvee (Austin, TX), and Huckleberry (Denver, CO). If you're the type to immediately seek out the local specialty coffee shop when you travel to a new city, then Trade's the best coffee subscription for you — and you don't even have to leave your house to receive your beans. All you have to do is tell Trade about how you take your coffee and it'll show you the best coffee you should be drinking every morning. It'll also provide the roaster's schedule for roasting and when your bag was roasted.Runners-up: Driftaway, for sustainability-focused, single-origin coffee ($14.40/shipment)Atlas, for exploring the global coffee scene ($14/shipment)Read more about the best coffee subscriptions we tested in 2022. Read our reviews of Trade, Driftaway, and Atlas.Best tea subscriptionSips bySips by Monthly Tea Subscription$16.00 FROM SIPS BYSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesSips by is a personalized tea subscription that sends you four different teas (enough to make at least 16 cups) every month, so your tea rotation always stays new and exciting. You'll get to explore teas from big and familiar brands as well as local tea shops and farms and choose from loose leaf, bagged, herbal, and caffeinated teas. If you weren't already familiar with all the benefits of tea, how to steep your tea, and the differences among all the tea types, Sips by shares plenty of educational resources to strengthen your tea knowledge. Plus, the subscription considers your taste and steep preferences — we loved the personal touch. Runners-up: Atlas Tea Club Starter Pack, for single-origin and global teas ($14/shipment)David's Tea Tasting Club, for exclusive and seasonal tea blends ($35/shipment)Read our review of Sips by.Best beer subscriptionBeer of the Month ClubBeer of the Month Club Subscription$31.95 FROM BEER OF THE MONTH CLUBSubscription frequency: Every monthShipping fee: $15 A la carte shop: No Gifting available: YesChoose from five different beer memberships in this club: Microbrewed, Hop Heads, Rare Beers, International, and US and International. Each of these clubs gives you 12 12-oz beers in different styles from a few different breweries, plus brewery profiles and tasting notes. It's the most convenient way to tour breweries in the US and around the world. The original club started in 1994, and its panel of brewmasters and beer judges only pick out a mix of the most interesting and innovative craft beers every month. The diversity of options means you can stop pigeonholing yourself into drinking (and pretending to enjoy) IPAs.Runners-up: Tavour, for mobile-first beer orders (Price varies)Craft Beer Kings, for fun and creative flavors ($70/shipment)Best cocktail subscriptionCocktail Courier/InstagramCocktail Courier Classic Cocktail Kit Subscription$49.99 FROM COCKTAIL COURIERSubscription frequency: Every 1, 2, or 4 weeksShipping fee: FreeA la carte shop: YesGifting available: YesUnless you keep your bar cart fully stocked and meticulously updated, it can be a hassle to source all the ingredients for a specialty cocktail you want to make. Let's also not forget that going out for happy hour requires putting on clothes. Cocktail Courier makes kits based on recipes from top bartenders and sends you all the ingredients you need, including the spirits. Keep in mind, though, you do need your own basic equipment, like glassware and a shaker. For the subscription, just choose your favorite spirits and you'll only be sent kits with those spirits. There's also an option for just the mixers and garnishes, if you prefer to use your own alcohol. Runners-up: Shaker & Spoon, for a variety of cocktails that focus on one spirit (from $40/shipment)SaloonBox, for group cocktail parties (from $57/shipment)Best snack subscriptionSnackCrate/InstagramSnackCrate Original Snack Box Subscription$21.99 FROM SNACKCRATEOriginally $26.99 | Save 19%Subscription frequency: Every monthShipping fee: FreeA la carte shop: NoGifting available: YesOne of our favorite things to do when visiting a new country is to scour the snack aisles of the local grocery store. SnackCrate brings that same excitement and discovery process to your door. Every month's snack box focuses on a different country and includes full-sized snacks directly imported from that country. You'll also get a music playlist and booklet of games and facts related to the country. There are three box sizes available to suit everyone from occasional grazers to snack aficionados. Runners-up: Mouth, for gourmet snacks from indie makers ($60/month)Bokksu, for authentic Japanese snacks ($49.95/month)Read our review of Bokksu.Best cheese subscriptionMurray’s Cheese/InstagramMurray’s Classic Cheese of the Month Club$63.00 FROM MURRAY'SSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesNew York City institution Murray's Cheese offers a few different monthly clubs that let you get your fix for creamy, stinky, soft, smoky, and hard cheeses. It's part indulgence, part educational experience. The Classic Club is great for people who want a reliable way to enjoy cheeses you might not have heard of but still have an approachable flavor profile — think Montealva, a flaky and citrus-y goat's milk cheese from Spain or The Farm at Doe Run's butterscotch-infused cheese. If you want something more adventurous, try the Cheesemonger's Picks club instead. Runners-up: Curdbox, for cheese plates including sweet and savory pairings ($49.95/month)Jasper Hill, for special release and limited-edition cheese from Vermont ($100/month)Read our review of Murray's Cheese of the Month Club.Best meat subscriptionButcherBox/InstagramButcherBox Mixed Box$137.00 FROM BUTCHERBOXSubscription frequency: Every monthShipping fee: FreeA la carte shop: NoGifting available: YesIn addition to pre-curated boxes of grass-fed beef, free-range organic chicken, and crate-free pork, ButcherBox lets you choose from more than 25 different cuts to make your own custom box. It's an easy way to get high-quality meat (up to 14 pounds every month) without having to visit your local butcher or farmer's market. The subscription is also flexible in case you don't need that much meat every month. But if you're feeding a lot of mouths, hosting a barbeque, or just enjoy eating meat, you'll want to take advantage of ButcherBox's value every month.Runners-up: Porter Road, for underrated cuts of meat and the best variety (Price varies) Snake River Farms, for high-end meat like American Wagyu ($225/shipment)Read more about the best meat subscriptions we tested in 2022. Read our reviews of ButcherBox, Porter Road, and Snake River Farms. Best meal kit subscriptionBlue Apron/InstagramBlue Apron Meal Kits (3-meal, 2-serving)$53.94 FROM BLUE APRON Subscription frequency: Every weekShipping fee: FreeA la carte shop: NoGifting available: YesBlue Apron's flavorful, creative takes on familiar recipes and reliable, accurate delivery make it the best meal kit you can subscribe to. It's versatile and flexible, with meal options for all kinds of dietary preferences, a variety of plans for two- and four-person families, and add-ons like meat and seafood bundles, spice blends, and cookware and tools. There's even a wine add-on to complete your dining experience. The meals (like chimichurri tilapia, one-pan prosciutto gnocchi, and sambal-peanut chicken noodles) are always delicious and the portions are generous — you'll even have leftovers,  sometimes. The menu updates frequently and we rarely see the same recipe twice.Runners-up: Sunbasket, for organic ingredients and health-conscious recipes ($71.94/3-meal, 2-serving plan)Everyplate, for the most affordable yet filling meals ($39.93/3-meal, 2-serving plan)Read more about the best meal kit subscriptions we tested in 2022.Beauty, grooming, and styleBest beauty subscriptionBirchbox/InstagramBirchbox Beauty Subscription Box$13.00 FROM BIRCHBOXSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesBirchbox's mission is to make the vast world of beauty and skincare fun and less intimidating by giving you the freedom to sample tons of different products. Every month's affordable beauty box contains five samples you might like based on your Beauty Profile, featuring a variety of new and upcoming brands and products (makeup, skincare, haircare, fragrance).The brands included reflect Birchbox's core values of sustainability, inclusivity, and supporting women. For example, there's a limited edition Brown Girl Jane box which is made by and for Black women's wellness. Once you've tried a sample you really love, you can directly shop the full-sized product at Birchbox's shop. There's also a Grooming section with hair, face and body, and shaving essentials.Runners-up: Kura, for clean skincare bundles customized to your needs (from $99/shipment)Prose, for personalized haircare like shampoo and hair masks (Price varies)Read more about the best beauty subscription boxes we tested in 2022. Read our reviews of Birchbox and Prose.Best shaving subscriptionDollar Shave Club/InstagramDollar Shave Club Starter Set$10.00 FROM DOLLAR SHAVE CLUBSubscription frequency: Every 2, 3, or 4 monthsShipping fee: FreeA la carte shop: Yes Gifting available: YesThere are a variety of ways you can get sharp and budget-friendly razor shipments from Dollar Shave Club: the first is the Starter Set, which costs just $5 ($20 every two months afterward) and acts as your trial run for the shave subscription. Or, you can take the site's quiz to receive a personalized recommendation of products based on your hair type and shaving needs. Either way, this famous online shave club offers plenty of flexibility so that you'll always have a supply of razor blades and soothing post-shave essentials whenever you need it. Runners-up: Billie, for fun yet practical razors ($9/shipment)Harry's, for sleek designs and other body care products ($15/shipment)Read our reviews of Billie and Harry's.Best men's clothing subscriptionAmir Ismael/InsiderMenlo Club Subscription$20.00 FROM MENLO CLUBOriginally $60.00 | Save 67%Subscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesMenlo Club, the styling service loved by NBA stars and our own senior style reporter, curates two to three pieces for you per month based on your style preferences and clothing sizes. Brands include Five Four, Grand AC, and New Republic, and the pieces are easy to incorporate into your existing wardrobe. It's your best bet if you don't like or have time for clothing shopping because it offers high-quality clothing with plenty of variety. You can exchange sizes for free and you'll also get perks like exclusive discounts and early access to drops.Runners-up: Stitch Fix, for clothing picks made by your own personal stylist ($20/shipment)Gentleman's Box, for stylish accessories like ties and socks ($35/shipment)Read more about the best men's clothing subscriptions we tested in 2022.Read our review of Menlo Club.Best women's clothing subscriptionRent the RunwayRent the Runway 2 Swaps$85.00 FROM RENT THE RUNWAYOriginally $135.00 | Save 37%Subscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesWith over 750 designers to choose from, Rent the Runway is the closet of your dreams for special occasions like weddings, workwear essentials, or simply to add excitement to your regular wardrobe. Its most popular plan lets you rent four pieces at a time, twice a month, for just $99 a month (for the first two months). We've always found it easy to pick out, wear, and return dresses, tops, loungewear, and accessories from the service. It's all the fun and excitement of wearing designer clothing, without the exorbitant price tags or complicated dry cleaning.Runners-up: Stitch Fix, for clothing picks made by your own personal stylist ($20/shipment)Nuuly, for affordable rentals from Urban Outfitters, Anthropologie, and Free People ($88/shipment)Read our review of Rent the Runway.Best jewelry subscriptionRocksbox/InstagramRocksbox Monthly Jewelry Subscription$21.00 FROM ROCKSBOXSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesThe right jewelry can bring an outfit to the next level, and with Rocksbox, the search for the perfect ring, earring, necklace, or bracelet is easy and very affordable. The $21 monthly membership gets you three pieces of jewelry from brands like Kendra Scott, Slate, 8 Other Reasons, and more, and the best part is you can swap the pieces as many times as you want during the month. If you fall in love with a piece and decide to buy it, your membership fee turns into a credit towards your purchase, saving you even more money.Runners-up: Switch, for luxury and fine jewelry like Hermes and Chanel (from $40/shipment)Rowan, for hypoallergenic earrings and fun freebies ($35/shipment)Best underwear subscriptionMeUndies/InstagramMeUndies Monthly Subscription$14.00 FROM MEUNDIESSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesMeUndies makes incredibly soft and comfy underwear in a variety of cuts and a huge selection of fun, ever-rotating prints and patterns. Though new underwear every month may seem unnecessary, you might just change your tune once you try a pair from MeUndies. All its fabrics are breathable and stretchy and last through years of washes. The part to look forward to the most? Collecting all the unique prints, which have included sharks, a "Space Jam" collaboration, and sun-tanning alligators in the past.Runners-up: Underclub, for designer underwear in a range of styles (from $15/shipment)Savage by Fenty Xtra VIP, for access to monthly drops and exclusive deals from Rihanna's lingerie brand ($49.95/shipment)Read our review of MeUndies.Best subscription for perfume and cologneScentbird/InstagramScentbird Subscription Box$15.95 FROM SCENTBIRDSubscription frequency: Every 1, 2, or 3 monthsShipping fee: FreeA la carte shop: YesGifting available: YesFragrance is so personal to each individual person that it only makes sense to turn buying perfume or cologne into a sampling experience. Scentbird is home to over 500 fragrances from designer and indie brands, letting you discover your signature scent, add some variety to your current fragrance lineup, or simply try fragrances you wouldn't have access to otherwise. You'll be able to try perfume and cologne from Versace, D&G, Acqua di Parma and more. Each 8 mL sampler bottle holds about 140 sprays — enough to use a couple times a day, every day of the month.Runners-up: Scentbox, for an even larger variety of fragrances to choose from ($9.72/shipment)Skylar Scent Club, for limited-edition rollerballs made with clean ingredients ($20/shipment)Hobbies and interestsBest flower subscriptionLauren Savoie/InsiderBloomsyBox Flower Subscription Service$44.99 FROM BLOOMSYBOX$38.99 FROM AMAZONOriginally $44.99 | Save 13%Subscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesSome people like food or shoes or jewelry, but for us, flowers are the ultimate monthly pick-me-up. BloomsyBox's monthly flower delivery service features one unique bouquet of 22-24 stems, and though you can't pick the exact flowers you want, the ones we've received from the service have always been gorgeous. It's a lovely way to liven up your home with new and interesting arrangements and the flowers arrive fresh and undisturbed. Be on the lookout for cool, limited-time collaborations, like the current partnership with the New York Botanical Garden.Runners-up: UrbanStems, for timeless arrangements and deliveries as frequent as every week ($55/shipment)Read more about the best flower delivery services we tested in 2022. Read our reviews of Bloomsybox and UrbanStems.Best plant subscriptionHorti/InstagramHorti Month-to-Month Plant Subscription$28.00 FROM HORTISubscription frequency: Every monthShipping fee: $8-$12A la carte shop: YesGifting available: YesHorti is best for beginner plant enthusiasts who are interested in starting a plant collection but may not know where to start or how to learn the basics of plant care. Horti's subscription is strategically designed so you begin with hardy, low-maintenance plants but eventually graduate to more complex species as you develop your confidence and experience. Each one always comes in a hand-painted pot (or you can opt for just the naked plants) and sometimes you'll also receive planting tools and accessories. Runners-up: The Sill, for a robust variety of medium-sized, easy care plants ($50/shipment)The Plant Club, for unique, seasonal plants ($39/month)Read our review of The Sill. Best book subscriptionBook of the Month Club/InstagramBook of the Month Membership$9.99 FROM BOOK OF THE MONTHOriginally $15.99 | Save 38%Subscription frequency: Every monthShipping fee: YesA la carte shop: YesGifting available: YesAs the OG national book club (since 1926!), Book of the Month has book curation down to a science, with its finger on the pulse of all the books that everyone seems to be reading and talking about lately. Every month you have the opportunity to choose from five hardcover books representing a variety of genres. Whether you're trying to start up a reading habit or already a voracious reader, the consistent shipments will keep you on track and make you a more well-read citizen. It also offers a separate, formal Book Club service where you can organize your own book club with anyone in your circle.Runners-up: Owl Crate, for signed young adult books and extra freebies ($32.99/shipment)Next Big Idea Club, for nonfiction books curated by big names in business and psychology ($21/month)Read our review of Book of the Month. Best game subscriptionUnbox Boardom/FacebookUnbox Boardom Monthly Subscription$29.99 FROM UNBOX BOARDOMSubscription frequency: Every 1, 2, or 3 months Shipping fee: $5 A la carte shop: YesGifting available: YesIf you like to unplug and unwind with a board game, try the cleverly named Unbox Boardom subscription. Each month, you can either choose a new game yourself or let the gaming experts choose one for you. The membership has all kinds of unique games (strategy, family, trivia, and more) that you haven't heard of before and will keep you well occupied throughout the year. Soon enough, you'll have a healthy stack of games to choose from any time you want to exercise your brain a bit. Past games have included Photosynthesis, a strategy game where you chase the sun to grow trees and Sabordage, a mayhem-filled pirate adventure.Runners-up: Video Games Monthly, for classic and retro video games (from $34.99/shipment)Finders Seekers, for mystery and escape room games ($30/shipment)Best crafting subscriptionThe Crafter’s Box/InstagramThe Crafter's Box Monthly Membership$65.00 FROM THE CRAFTER'S BOXSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesFor people who love working with their hands, The Crafter's Box offers the convenient and affordable opportunity to try out different kinds of crafts and learn from real working crafters. In addition to the kit of materials, you'll receive access to a digital workshop and live chat with a community of fellow craft lovers. The exciting lineup of craft options include fabric weaving, leather sandal making, paper making, soap making, and contemporary quilting. Since The Crafter's Box sends you all the materials you need, you can test drive various crafting types and figure out the one you love the most before you drop an entire month's paycheck at Michael's.Runners-up: Kiwi Doodle Crate, for creative projects designed for teens ($22.95/shipment)Adults and Crafts, for small, approachable projects ($33/shipment)Read our review of KiwiCo Crates. Best subscription for kidsAlicia Betz/InsiderKiwico Crates$19.95 FROM KIWICOSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesCreated by an engineer and mother of three, KiwiCo makes kits with toys and activities for kids of every age, from newborns to 14-year-olds. The science and art projects, designed by educators and scientists including but not limited to mechanical and industrial engineers, are age-appropriate and teach kids important skills like creative problem-solving, curiosity and tinkering, and hands-on craft. The beauty of KiwiCo is it frees up time for parents: time spent researching activities to do, and time spent participating in those activities with their kids. Though parents can certainly join in on the fun, the kits work best when the child can play independently.Runners-up: Lovevery, for developmental play kits for babies and toddlers (Price varies)Baketivity, for kid-friendly baking kits ($32.95/shipment)Read our reviews of KiwiCo and Lovevery. Best subscription for dogsKate Barrington/InsiderBarkBox Single Box$35.00 FROM BARKBOXSubscription frequency: Every monthShipping fee: FreeA la carte shop: YesGifting available: YesDogs and their owners love this popular subscription box, which sends toys, treats, and chews revolving around a creative theme each month. When you sign up, you'll share info about your dog, including its breed, birthday, and dietary restrictions, so that Barkbox can send a personalized collection of items. The plush toys in particular are a pup favorite. Soft, squeaky, and durable, they're made for play. Barkbox also has the best themes and collaborations we've seen around, from movie character chews and toys to a winter cabin getaway bundle.Runners-up: Pupbox from Petco, for treats, toys, and training resources specifically for puppies ($39/shipment)Kongbox, for highly rugged Kong products and especially playful dogs ($44.95/shipment)Read our review of Barkbox.Best subscription for catsMeowboxMeowbox Monthly Subscription$22.95 FROM MEOWBOXSubscription frequency: Every 1 or 2 monthsShipping fee: FreeA la carte shop: YesGifting available: YesSometimes hair ties, lights, and cardboard boxes just won't cut it for your cat. That's where Meowbox comes in. Every box has five to six items, including high-quality toys and organic or grain-free treats that are always produced in the US or Canada. Plus, for every box sold, Meowbox donates a can of food to a cat shelter. It even provides a unique code you can use to track exactly where your donation has gone. Like Barkbox, Meowbox offers adorable themed products, like a summer fishing bucket hat or a "skippy kitty rope" and kettlebell for cat-owner workouts. The a la carte shop also features paraphernalia for the owner so you don't feel left out of the fun.Runners-up: KitNipBox, for extra treats and toys if you have more than one cat ($22.99/shipment)RescueBox, for a subscription box with high impact ($29.95/shipment)Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 13th, 2022