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Category: topSource: redinewsNov 15th, 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

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

Nomura Fears "Fatigued" Bond Bears Face Imminent Squeeze As The Fed Is "Generally Priced-In"

Nomura Fears "Fatigued" Bond Bears Face Imminent Squeeze As The Fed Is "Generally Priced-In" The "bearish US Rates / USTs" trade is locally feeling quite "fatigued" and Nomura's Charlie McElligott warns that the extreme-positioned market is susceptible to further monetization from the payers/shorts. Source: Bloomberg Specifically, McElligott warns 'bears' that we'd need to see fresh +++ data surprises to see the market able to price-in additional hawkish tightening at this juncture - or a stickier (and more dangerous) scenario being the much-discussed  "Wage/Price-Spiral" kicking-off. Source: Bloomberg The Nomura strategist confirms this view even as more Fed speakers (now Daly and Harker) join the ranks of officials signaling March liftoff, and most communicating comfort with 3-4 hikes this year. A quick glimpse at the STIRs shows the last few days have seen March rate-hike odds hit a new cycle-high but the Dec 2022 expectations are fading very modestly (and are below the prevoious peak earlier in the week)... Source: Bloomberg "Think about it," says McElligott, in the past week, we have seen: 1) the Fed Minutes (and speakers thereafter) confirm Balance Sheet run-off beginning mid-year and alongside simultaneous hikes; 2) US Unemployment dipping below 4%; and 3) US CPI YoY at 7% Yet, EDM3 (June ’23 Eurodollar) is unchanged week-to-date and TY has RALLIED, which is telling us that the Fed, at this juncture, is generally “priced-in." Furthermore, the chief strategist notes with the near-certainty too that “the longer the trade sits and stops working,” that Shorts / downside trades in UST futs and ED$ will be incentivized to "profit-take," as the following table shows, CTAs are 'all-in' short... Specifically, McElligott points out the following key levels to watch in rates/bonds.. ED4, currently -100.0% short, [99.395], buying over 99.52 (+0.12) to get to -83%, more buying over 99.53 (+0.14) to get to -66% , flip to long over 99.55 (+0.16), max long over 99.56 (+0.17) JPY_10Y, currently -100.0% short, [151.05], buying over 151.21 (+0.16) to get to -83%, more buying over 151.22 (+0.17) to get to -66%, flip to long over 151.34 (+0.29), max long over 152.27 (+1.22) GBP_10Y, currently -66.1% short, [123.35], more selling under 123.8 (+0.45) to get to -83%, max short under 123.79 (+0.44), buying over 126.6 (+3.25) to get to -62% , more buying over 126.61 (+3.26) to get to -57% , flip to long over 130.4 (+7.05), max long over 130.41 (+7.06) EUR_10Y, currently -100.0% short, [170.22], buying over 170.86 (+0.64) to get to -83%, more buying over 170.87 (+0.65) to get to -66% , flip to long over 175.67 (+5.45), max long over 175.68 (+5.46) USD_10Y, currently -100.0% short, [128.578125], buying over 130.45 (+1.87) to get to -83%, more buying over 130.46 (+1.88) to get to - 66% , flip to long over 133.2 (+4.62), max long over 133.21 (+4.63) And if rates reverse lower, that will lift some of the feet on the throat of 'long-duration', hyper-growth stocks, which are trading at the range lows in Nomura's Tech Sentiment Index... And while we have seen US Equities Indices kinda "stall-out" here in the absence of Tech leadership, due to the recent "Secular Growth" revaluation shock over the past month or so, but, in recent days, Nomura notes that there has been a transition from Equities folks being “concerned about downside risk” to now, a more front-footed one, even somewhat more “offensive” dynamic playing-out yday a few different ways: Sellers of IWM “crashy” downside (Jan 198P sold 20k, Jan 200P sold 26k, Jan 195P sold 77k!) VIX Jan20C sold 30k to close (1mm in Vega, 25k in vVol), while separately seeing a client buyer of Feb 21P Overall US Equities Options market yday saw $13.5B of Call premium trade vs $7.5B of Put premium More broadly, Nomura is also seeing this “pivot from left to right tail” focus in SPX Jan Skew, where so far YTD, the dynamic is clearly “downside offered, upside bid”: So McElligott concludes there is then scope for a constructive scenario which could play out for Large Cap US Tech Equities—and with it, help lift broad US Eq Index—from the recent malaise: Macro-wise, the aforementioned “fatigue” being seen in the “bearish Rates” trade on hawkish Fed being “priced-to-perfection” at this point—which means US Treasury Yields now may be able to consolidate and help pause pain from the “(cheap) Value / (expensive) Growth” rotation bleed, ESPECIALLY as you see Tech / NDX / SPX rally here on this morning’s PPI marginal “disappointment” vs heady expectations Locally as noted, Dealers are now back in “stable regime” of “+ Gamma vs spot” territory in QQQ options (flip line down at 386.50), while Delta is pushing ever-nearer to “neutral” up at 390.07 in QQQs, with almost +$17B of $Delta picked-up in recent days off the lows Tech positioning locally  is much cleaner now, as per flows and PB data—hence the prior Vol metric “extremes” in QQQ options are coming off the boil (Skew, Put Skew, Term Structure) Also, from a much longer-horizon—but the “pull forward” of this potential catalyst can matter in the shorter-term…US Mega / Large Cap Tech historically derive a substantial portion of their Revenues from overseas—where currently, we see Nasdaq 100 @ ~40% of all Revs from outside US; so this “Weaker USD” trade which is brewing can help act as a tailwind for the largest Tech players, particularly under the guise that R.O.W. growth can also begin to pick-up again The net of all this, as SpotGamma notes, is that we have a fairly defined upside range, capped by 4800 for the next week. As long as the S&P500 holds >4700 its likely gamma builds around current prices, and this leads to a pin in the ~4750 area. Currently SpotGamma's EquityHub snapshot shows a gamma “node” at 4670. The indication here is that if the S&P breaks 4700 it could lead to a quick test of 4670, then we see hedging flows changing which could lead to support at the 4670 line. This pinning leads to a decline in realized volatility, which should drag implied volatility. This adds some supportive flow to market prices. Tyler Durden Thu, 01/13/2022 - 12:51.....»»

Category: dealsSource: nytJan 13th, 2022

SMART Global (SGH): The Next-Gen Options Trade You Don"t Want To Miss

SGH is roaring out of the shadows with an ambitious growth strategy that won't remain under the investors' radars for much longer SMART Global Holdings SGH is the under-the-radar semiconductor stock you've been looking for, with its broadening portfolio of cutting-edge chips that are poised to take flight in this commencing technological Renaissance.SGH is roaring out of the shadows with an ambitious growth strategy that won't remain under the investors' radars for much longer. New CEO Mark Adams is transforming this once complacent memory-focused legacy tech business into a motivated leader in niche innovations.The company released a record quarterly report at the start of 2022, blowing analysts' estimates out of the water and raising forward guidance. However, SGH's undiscovered attributes appear to have both positive and negative consequences, which we saw in its (unwarranted) post-earnings capitulation. This drop-off is a technical retreat catalyzed by the overbought RSI levels it had reached in recent weeks after an over 100% 52-week run into this year opening earnings report (confusion about the upcoming stock split may also be playing a role).The good news is that it presents us with an excellent trading opportunity as the stock picks up support at its 50-day moving average (which you can see below).Image Source: TradingViewSMART Global shares' exceedingly thin trading volumes (low liquidity due to its under-the-radar quality) allowed a small group of controlling institutional shareholders to direct its post-earnings narrative. They pulled profits from this recent winner (up 70% since mid-October), and the downward momentum catalyzed a fear-fueled domino sell-off.The TradeDon't let these big-shot Wall Street firms scare you away from this clear-cut winner. SGH's post-earnings capitulation is extraordinarily overdone and with the recent shareholder shuffle.Silver Lake, a nearly $100 billion tech-focus private equity fund, had been the primary shareholders of SGH since it went public in 2017 until this past fall when the global investment group completely exited the trade (with public returns of nearly 400% in just a few years), leaving $10s of millions in stock value up for grabs.SMART Global's ownership has since been erratic, with most of the investing world still unaware of this small-cap stock's existence. SGH's ownership is almost entirely institutional at this point, and with the already thin volumes, its vulnerability to short-term price manipulation is high.Nevertheless, those analysts covering SGH are more bullish than ever after its most recent quarterly release. SGH is lining up perfectly for an ideal options trade as it capitulates out of overbought RSI territory, and these fear-induced publicly-traded contracts maintain a muted implied volatility (meaning relatively cheap calls).I am looking at SGH March 18 $70 calls between $1.50 and $2.00 a contract. $75 is my short-term target price for SGH as today's elevated volumes, coupled with an early February stock split, bring a new slate of investors to the table. I'm projecting 200% to 300% returns on this trade but will begin pulling profits on my options once SGH breaks above $68 (Fibonacci retracement derived price target).The Earnings ReportSMART Global (SGH) reported its November quarter results (fiscal Q1 2022) after the closing bell Tuesday afternoon (1/4), beating analysts' estimates and raising guidance, yet SGH fell off a cliff. SMART Global achieved record revenues and margins that flowed down to an incredible 177% increase in per-share profits, with its top-of-the-line intelligence platforms (AI, HPC, & other cloud-functionality) being this next-generation innovator's primary growth driver.SGH was down as much as 18% in its post-earnings price action, but I remain unconvinced that it will stay below $70 a share for long. This knee-jerk sell-off reaction resulted from its small market cap (less than $1.5 billion), concentrated ownership, and overbought RSI levels, which SGH had floated up into following its sizable 25% end-of-year rally.SGH also announced that it would be initiating a 2-for-1 stock split, which would go into effect at the beginning of February. This is a clear signal from SMART Global's new CEO, Mark Adams, whose savvy ambition for innovative growth is the primary reason we are in SGH, that this stock is headed much higher. Either way, I'm more bullish on SGH post-earnings than ever before.The TransformationNow is the time to add this hidden gem to your portfolio before the broader investing world catches wind of this discounted chip winner.SMART Global has been around since the late 80s, but it wasn't until Mark Adams took the helm amid the pandemic last year that this chipmaker's upside potential went through the roof. Adams is transforming this once complacent memory-focused legacy tech company into an energized visionary.Adams was the leading force behind SGH's quick strategic acquisition of Cree's niche LED chip business at the peak of pandemic fear for a steal at $300 million. Cree LED's synergies are already paying dividends as it drives margin expansion, improves the firm's capital & operational efficiency, and provides critical industry relationships.Smart Global's new forward-thinking chief has already vastly improved its operational performance and is ramping up R&D spending to ensure that the enterprise remains ahead of the innovative curve.Analysts are getting increasingly bullish on this under-the-radar transformation play as SGH flips the switch on accelerating profitable growth, knocking estimates out of the park by an expanding percentage over the past 3 quarters. Zacks Consensus EPS Estimates for SGH's have been soaring across all time horizons after this most recent quarterly report driving the stock into a Zacks Rank #2 (Buy), and all 6 covering analysts agree on a buy rating for the unique value opportunity here.The BusinessSMART Global Holdings had been a reliable pure-play memory leader in the chip space for over 30 years before deciding to broaden its product portfolio, which appeared to be catalyzed by activist investors following SGH's 2017 IPO. The company has since executed 4 strategic acquisitions.Penguin Computing was SGH's first vital acquisition ($85 million price tag) back in 2018, adding a broad portfolio of leading next-generation products, including high-performance computing (HPC), cloud computing, hyperscale data centers, and the development of artificial intelligence (AI). This segment has exploded since its acquisition as its AI-focused products experience budding demand. In the summer of 2019, this resourceful chip giant acquired Artesyn Embedded Computing and Inforce Computing for $80 million and $12 million, respectively. Artesyn (which is now called Smart Embedded Computing) provides critical data center architecture used in "industries such as telecom, military and aerospace, medical, and diverse automation and industrial markets," according to its website.SMART Wireless Computing (formerly known as Inforce Computing) exposes the enterprise to cutting-edge technologies like "medical imaging, collaboration/videoconferencing, wearable hands-free computing, and robotics/unmanned aerial vehicles," according to its investor relations page.SMART's diverse set of growing end-market demands provides the company with an enormous total addressable market (TAM), significant upside potential, and not to mention an excellent hedge against the cyclical nature of the semiconductor market.Image Source: SGH IRThe 11x forward P/E that SGH is currently trading at is a remarkably underappreciated valuation multiple for a high-growth tech business that is expected to exhibit consistent 20%+ earnings growth in the years to come.Final ThoughtsWith its fresh innovation-oriented operational outlay, Mark Adams at the helm (with a now proven track record of skilled management), and an industry-wide outlook of accelerating growth, the future SGH has never been brighter. I would recommend that you purchase some shares for a long-term hold along with these monthly March calls in SMART Global before its takes flight. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. 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Category: topSource: zacksJan 5th, 2022

What"s Behind The Surge In Yields That Sent Tech Stocks Tumbling, And What Happens Next

What's Behind The Surge In Yields That Sent Tech Stocks Tumbling, And What Happens Next For a while it appeared that stocks, and especially giga-techs, were willing to ignore the plungefest in Treasuries and were riding the wave of new capital (some $125 billion according to Goldman) allocated to stocks of all stripes to start the new year. However, it wasn't meant to last, and with yields suffering their biggest 2-day surge since the chaos in March 2020... ... high-duration names, which just happen to be the market's all-important generals, are finally sliding which in a market with as little breadth as this one... ... is a very big problem because as Goldman warned a few weeks ago, a crack in the largest market leaders (the FAAMGs of course) could result in major pain: for those who forgot, the five most popular tech names - AAPL, MSFT, NVDA, TSLA, GOOGL - have contributed 51% of S&P 500 returns since April. And what goes up can just as easily go down if rates rise high - and fast - enough. Which brings us to the big question: what's behind the puke in Treasuries and will it persist? From 30,000 feet, the catalyst for the selling in Treasuries is hardly a surprise: the Fed is all hawked up and with the accelerated taper, rate hikes are scheduled to take place potentially as soon as April, with some speculating that the Fed may hike more than 25bps at a time (we seriously doubt it absent inflation truly spiraling out of control in the coming weeks). More likely, however, the recent yield spike is tactical (flow/positioning/liquidity-driven), and so we go to one of the most fastidious market tacticians, Nomura's Charlie McElligott who in his morning notes today does a post-mortem of the selloff that started yesterday and has continued for much of Tuesday. According to Charlie, the selloff in US Rates and Treasuries turned violent by the US midday on the first day of the new PNL year as bearish bets were re-engaged (with UST 10Y Yields now cleanly through 50, 100 and 200 DMA’s to the upside, while 30Y Yields are nearing a test of the 200 DMA themselves), and shares the following thesis checklist as a list of the drivers behind the move: Inflation “stuck” and currently unrelenting at multi-decade highs, with more Omicron supply-chain snarls further squeezing prices Still above multi-year trend growth in US (Atlanta Fed GDPNow @ 7.641% last) US Employment pushing “near full” again (4.2% U-Rate back to levels last seen pre-COVID) Imminent (obvious) Fed tapering commencement, but now, with actual balance-sheet runoff (QT) potential thereafter in UST and MBS being socialized by some Fed members, all of which would mean the need for actual (gasp) price-discovery for “private side” buyers--including convexity hedgers in Mortgages. Translation: we may very soon discover what the true yield of TSYs should be. Start-of-year resumption of heavy Corp debt issuance calendar @ ~ $11.25B of paper (Street expectations of ~$140B for the full-month of January), with a particularly duration-heavy (> 10 years) WAM seen in yesterday’s paper (note: more of the same today, with another 7 deals early, mostly Financials) Last but not least, we have seen the shift to the market not just pricing-in 3 full FOMC hikes this year, but pulling the liftoff forward almost every day, with the March meeting now ~ 72% “priced” These key drivers behind persistent Treasury weakness were not lost on the market, and as Charlie writes, there was lumpy Duration selling in both Cash and Futs on Monday (especially a notable late-day WN block seller ~ $1.1mm in DV01), which was matched by "particularly aggressive options flows", including what McElligott calls "an eye-wateringly ENORMOUS buyer of TY downside, where HUGE prem was spent on 71k of the TYH2 127 Puts (~1.95% yield target by mid-Feb exp) at nearly ~$5.5mm bp dv01" (here he notes that this was an ADD to a view, with OI on Dec 31st at 161k, but now 231k as of Jan 3rd). The move has led to Treasuries posting their worst start to the year since 2009, sending ripples through markets from Australia to the U.K. Adding to this, and in agreement with point 1 above, Bloomberg adds that Treasury traders "are betting the rapid spread of the omicron variant will increase inflationary pressures in the U.S. economy, rather than weaken them." Specifically, the article looks at 10-year breakeven rates which climbed to as high as 2.66% on Tuesday, the most since November, and up from as low as 2.36% on Dec. 14. Even real rates jumped from as low as -1.13% at the end of 2021 to -0.96% today. “Inflation continues to be the major theme of the market given life with the coronavirus,” said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities Inc. in Tokyo. There is speculation that “the widening spread of the virus will lead to a decline in labor participation and supply constraints,” he wrote in a research note. So how has this rate puke impacted stocks? Well, as McElligott continues, yesterday there was an outright “Momentum Shock” in the US Equities factor space, with the “Long-Term Momentum” factor absolutely "rekt" -3.5%, a 1d -3.1 std dev move over the past 1Y window and the largest drawdown in the factor since the peak of the meme stock / HF unwind on 1/27/21! Furthermore, the Nomura quant writes that the rally/short-squeeze in “Low Quality/High Vol” stocks seen yesterday - i.e. “Leverage” and “Short Interest” factors booming - was a stark contrast to the recent theme of the grab into “Quality” (high over low), “Size” (large over small), “Low Risk” (over high vol). Putting this together, this end-of-’21 “up in Quality” dynamic noted above was a large part of the blow-up in “Unprofitable Tech/Highly Speculatives” trade seen since the start of Nov ’21 into year-end (as the “short” leg of the trade), but yesterday, all of that “high spec” stuff really squeezed higher again, according to McElligott, as it looks like short books were de-grossed in a major way, while some too simply were taking discretionary punts on “high beta” to play for the January effect raising all boats, but particularly in the stuff which has just been the most beaten-down and ripe for O/P. Of course, this “Momentum shock” reversal (lower in Size, Quality, Low Risk “longs” vs the squeeze in “junk” Leverage / High Vol / Cyclical Value) also meant a frustrating day for hedge fund long & short “Crowding” proxies on the first day of the year, as both suffered outsized losses: Hedge Fund Crowding Factor -0.8% (-1.3 z-score) Hedge Fund L/S Proxy -1.5% (-1.8 z-score) Adding to the confusion, while hedge funds were clearing out their 2021 short-book leftovers, CTA/vol control funds were mechanistically rushing back into stocks, leading to the overall market ramp. According to McElligott's calculations, the Nomura QIS CTA model showed +$16.4B of fresh buying in Global Equities on the day (particularly focused in Asia with the Nikkei signal flipping from “-49% Short” to “+100% Long”—notionally buying +$15.6B, on top of +$800mm in US and and +$100mm in European equity futs). In the US, Nomura's Vol Control model estimated another +$3.8B of S&P futures buying as 1-month Realized Vol continued its collapse with a 6th straight day of buying, and now +$23.3B over the past 2 weeks (take a look at where the VIX is and compare it a month ago (spoiler alert: it has been cut in half). So what happens next? Well, as the Nomura strategist reminds us, next week should see the concentration of the forward buying - with particular focus on tomorrow (he is projecting a 1.0% chg = +$7.8B buying; 0.5% chg = +$14.5B buying; 0.0% chg = +$16.9 buying). Yet mechanistic buying aside, the risk is that with Index Options Gamma- and Delta getting longer/more positive, McElligott warns that we are slowly inching nearer towards “potential for a pullback” territory, and as usual Nomura's clients are urged again to focus on the monthly Op-Ex as the “unclench” catalyst there later mid-month January QQQ $Delta back to $13.2B, 94.9%ile SPX / SPY $Delta back to $291.6B, 80.1%ile In conclusion, the Op-Ex tied “window for a pullback” also corresponds with again “stress-y” vol signals as spot indices trade to new highs, and with “Skew” and “Put Skew” flashing again - but particularly noting that “Term Structure” is screening “extreme” and to the point made at the top of the note on the heavy selling of Vol / optionality.  Translated to plain English, what all of the above means is that instead of waiting until Friday to see where this week's op-ex chips may fall, the market is trading more or less as it should, and high duration giga-techs are dumping as yields are spiking... just as one would expect. The only question is whether this "logical" behavior will continue - one look at the chart below shows that the Nasdaq has a ways to drop if indeed it is allowed - or alternatively, if the remarkable bounceback from every op-ex makes another appearance, and spoos trade solidly back over 4,800 on their way to fresh all-time highs. Tyler Durden Tue, 01/04/2022 - 15:01.....»»

Category: blogSource: zerohedgeJan 4th, 2022

Beneath The Surface, Rally

Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to […] Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to reach even 19, and instead is attacking 16.50. This is not complacency – the bulls were thoroughly shaken at the entry to the session yesterday – but a buying interest that convincingly turned the tide during the day. 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 Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more As I wrote yesterday: (…) thanks to the credit markets message, I‘m not reading into Friday‘s weakness much. There is still more in this rally – value held better than tech, and high yield corporate bonds didn‘t really slide. The year end rebalancing will likely give way to solid Monday‘s performance. While VIX appears to want to move up from the 17 level, it would probably take more than one day to play out. As the Santa Claus rally draws to its close, the nearest data point worth looking forward for, is Tuesday‘s ISM Manufacturing PMI. It‘ll likely show still expanding manufacturing (however challenged GDP growth is on a quarterly basis), and that would help commodities deal with the preceding downswing driven by energy and agrifoods. Both of these sectors are likely to return to gains, and especially oil is. The only sector taking a beating yesterday, were precious metals. While inflation expectations were little changed (don‘t look for inflation to go away any time soon as I‘ve been making the case repeatedly), the daily rise in yields propelled the dollar to reverse Friday‘s decline, and that knocked both gold and silver off the high perch they closed at last week. Still, none of the fundamental or monetary with fiscal policy originating reasoning has been invalidated – not even the charts were damaged badly by Monday‘s weakness. As economic growth gets questioned while fiscal policy remains expansive unlike the monetary one, volatily in the stock market together with persistent inflation would be putting a nice floor beneath the metals. Even cryptos are refusing to yield much ground, the Ethereum to Bitcoin ratio keeps trading positively, and I‘m not even talking the rubber band that commodities (crude oil and copper) are. Very good for our open positions there, as much as in the S&P 500 – let them keep bringing profits. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Really bullish price action in both S&P 500 and Nasdaq – that was the entry to 2022 I was looking for. Embellished with prior downswing that lends more credibility to the intraday reversal. Credit Markets HYG refusing to decline more, is the most bullish sign for today imaginable – let it hold, for junk bonds now hold the key, especially if quality debt instruments keep declining steeply. Gold, Silver and Miners Gold and silver look to have reversed, but reaching such a conclusion would be premature. The long basing pattern goes on, and breakout higher would follow once the Fed‘s attempting to take the punch bowl away inflicts damage on the real economy (and markets), which is what the yield curve compression depicts. Crude Oil Crude oil is about to launch higher – and it‘s not a matter of solid oil stocks performance only. Just look at the volume – it didn‘t disappoint, and in the risk-on revival that I expect for today, black gold would benefit. Copper Copper swooned, but regained composure – the stop run is over, and we‘re back to base building for the coming upswing. Broader commodities certainly agree. Bitcoin and Ethereum Bitcoin and Ethereum are very gently leaning bullish, but I‘m not sounding the all clear there yet thanks to how long Bitcoin is dillydallying. Cryptos aren‘t yet out of the woods, but their posture has improved thus far noticeably. Summary First trading day of 2022 extended prior S&P 500 gains, and the risk-on appetite is improving as we speak. Commodities are reaping the rewards, and we‘re looking at another good day ahead, including in precious metals taking a bite at yesterday‘s inordinately large downswing. Nothing of the big factors ahead for Q1 2022 as described in today‘s analysis (I wholeheartedly recommend reading it in full for the greatest benefits – there is only so much / little that I can fit into a one paragraph summary), and that means we‘re looking at further stock market gains as the bull runs (including in commodities and precious metals, yes precious metals), aren‘t over in the least. 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 4, 2022, 10:47 am (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 4th, 2022

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

As Good As It Gets

S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields […] S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields rose, is but one albeit short-term sign. The Fed is still accomodative (just see the balance sheet expansion for Dec – this is really tapering), didn‘t get into the headlines with fresh hawkish statements, and inflation expectations keep rising from subdued levels. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Importantly, bonds prices aren‘t taking it on the chin, and the dollar hasn‘t made much progress since late Nov. Both tech and value are challenging their recent highs, and the ratio of stocks trading above their 200-day moving average, is improving. The same for new highs new lows – the market breadth indicators are picking up. We haven‘t seen the stock market top yet – the rickety ride higher isn‘t over, Santa Claus rally goes on, and my 2022 outlook with targets discussed that a week ago. Precious metals are extending gains, and aren‘t yet raging ahead – the picture is one of welcome strength returning across the board. The same goes for crude oil finally rising solidly above $72 as the omicron fears are receding in light of fresh incoming data including South African policies. It‘s only copper that‘s now reflecting the prospects of real economy slowdown. At the same time, the crypto rebound last week served as a confirmation of broad risk-on advance. Still more to come, as per Thursday‘s article title. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is within spitting distance of ATHs, and the bulls haven‘t said the last word in spite of the approaching need to take a rest. It‘s rally on, for now. Credit Markets HYG has finally overcome the Sep highs, but its vulnerability at current levels is best viewed from the point of view of LQD underperformance. Investment grade corporate bonds could have been trading higher compared to the progress made by TLT. Gold, Silver and Miners Gold and silver are looking up, and so are miners – the upswing isn‘t overheated one bit, and can go on as we keep consolidating with an increasingly bullish bias. Crude Oil Crude oil once again extended gains, and even if oil stocks are a little lagging, the medium-term bullish bias in black gold remains. The path of least resistance is once again up. Copper Copper at least closed unchanged – the fresh steep rally indeed seems more than quite a few weeks ahead. But the table for further gains is set. Bitcoin and Ethereum Bitcoin and Ethereum are entering the final trading week of 2021 in good shape. The rising tide of liquidity is still lifting all boats in a rather orderly way. Summary Thursday brought a proper finish to the Christmas week, and we‘re not staring at a disastrous finish to 2021 across the board. Short-term extended, but overall very positive bond market performance is aligned, and we can look for positive entry to 2022 in stocks, precious metals, oil, copper and cryptos alike. Shrinking global liquidity, no infrastructure bill, and consolidating dollar complete the backdrop of challenges that would make themselves heard well before Q2 2022 arrives. I hope you had Merry Christmas once again, and will also enjoy the relatively smooth ride while it lasts – 2022 will be still a good year, but with its fair share of corrections. 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 Dec 27, 2021, 2:09 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: valuewalkDec 27th, 2021

Pharma Stock Roundup: FDA Approves PFE & MRK"s Oral Pills for COVID & Other Drugs

FDA approves Pfizer's (PFE) and Merck's (MRK) oral COVID antiviral pills and AstraZeneca's (AZN) asthma medicine, Tezspire (tezepelumab). This week, the FDA granted emergency approval to Pfizer PFE and Merck’s MRK oral COVID antiviral pills, Paxlovid and molnupiravir, respectively. The regulatory agency also approved AstraZeneca’s AZN asthma medicine, Tezspire (tezepelumab), Novartis’ NVS LDL-C–lowering siRNA-based therapy, Leqvio (inclisiran) and Glaxo’s GSK long-acting injectable therapy, Apretudefor HIV prevention.Recap of the Week’s Most Important StoriesFDA Approves Pfizer and Merck’s Oral COVID Pills: The FDA granted Emergency Use Authorization (EUA) to Pfizer’s promising oral antiviral candidate, Paxlovid in combination with low-dose ritonavir to treat mild-to-moderate COVID-19 in adult and pediatric patients at increased risk of hospitalizations or death. Pfizer expects to begin delivering Paxlovid immediately. Paxlovid’s approval was based on clinical data from an interim analysis of a phase II/III study, EPIC-HR study. Data from the study showed that Paxlovid (administered) reduced the risk of hospitalization or death by 89% in non-hospitalized adult patients with COVID-19 at high risk of progressing to severe illness compared to placebo within three days of symptom onset. Similar benefits were observed in patients treated within five days of symptom onset.The FDA also granted EUA to Merck and partner Ridgeback Biotherapeutics’ similar oral antiviral pill, molnupiravir for treating high-risk adults with mild-to-moderate COVID-19. However, Merck’s pill can only be prescribed for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate. It cannot also be prescribed as the first treatment for patients hospitalized due to COVID-19 or for pregnant women. The authorization of molnupiravir was based on data from the phase III MOVe-OUT study. Data from the final analysis of the MOVe-OUT study showed that the medicine reduced the risk of hospitalization or death by approximately 30% in non-hospitalized at-risk adult patients with mild-or-moderate COVID-19, which was less than 50% as previously reported, per interim data announced in October.Paxlovid and molnupiravir are antiviral medicines, which can be prescribed as at-home treatments to help fight mild-to-moderate COVID-19 infection. It can help prevent hospitalization in patients with a mild-to-moderate form of the disease but at high risk of severe COVID-19 and thus lower some of the pressure facing the healthcare and hospital systems.FDA Approves AstraZeneca and Amgen’s Tezepelumab: The FDA approved Amgen and AstraZeneca’s monoclonal antibody, Tezspire (tezepelumab), for the treatment of severe asthma. The approval for Tezspire was based on data from the PATHFINDER clinical program and included the pivotal phase III NAVIGATOR study. Regulatory applications seeking approval of Tezspire are under regulatory review in the EU and Japan.The European Medicine Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) gave a positive opinion recommending the approval of AstraZeneca’s drug Saphnelo to treat moderate-to-severe active autoantibody-positive systemic lupus erythematosus (SLE), the most common form of lupus. The drug was approved in the United States and Japan in August and September this year, respectively.The FDA accepted and granted priority review to AstraZeneca’s supplemental biologics license application (sBLA) seeking approval of rare disease drug Ultomiris for generalized myasthenia gravis (gMG). The FDA will give its decision in the second quarter of 2022. Ultomiris, a long-acting C5 complement inhibitor, was added to AstraZeneca’s portfolio with this year’s acquisition of Alexion and is already approved to treat paroxysmal nocturnal haemoglobinuria and atypical haemolytic uraemic syndrome.FDA Approves Glaxo’s HIV Injection for PrEP: The FDA approved Glaxo’s long-acting injectable form of cabotegravir drug for the prevention of HIV infection, also called pre-exposure prophylaxis or PrEP. The drug, to be marketed as Apretude in the United States, is the first and only long-acting injectable therapy approved for HIV prevention.  It will reduce the daily administration of currently available oral pills for PrEP to as few as six injections a year. An oral formulation of cabotegravir, with the trade name of Vocabria, is already approved in combination with J&J’s Edurant (oral rilpivirine) for the short-term treatment of HIV-1 infection. A combination of long-acting injectable cabotegravir and Edurant is approved as Cabenuva for the treatment of HIV-1 infection in virologically suppressed adults.Novartis to Buy Gene Therapy Company: Novartis announced a definitive agreement to acquire London, U.K.-based gene therapy company Gyroscope Therapeutics for an upfront payment of $800 million. The acquisition will add Gyroscope Therapeutics’ one-time gene therapy candidate, GT005, to Novartis’ pipeline. GT005 is being developed in phase II to treat geographic atrophy, a leading cause of blindness, for which there are no approved treatments. In addition to the upfront payment, Gyroscope Therapeutics will be entitled to potential additional milestone payments of up to $700 million.The FDA granted approval to Novartis’ small interfering RNA (siRNA) therapy, Leqvio (inclisiran), to lower LDL-C or “bad” cholesterol. The injection is to be given as an initial dose and then two maintenance doses a year. With the approval, Leqvio becomes the first LDL-C–lowering siRNA-based therapy approved for treating atherosclerotic cardiovascular disease (ASCVD). Novartis received marketing authorization for Leqvio from the European Commission in December 2020.Novartis signed an option, collaboration and license agreement with BeiGene, per which it will obtain the development and commercialization rights to the latter’s late-stage cancer candidate, ociperlimab, if the option is exercised. Per the terms, Novartis will make an upfront payment of $300 million to BeiGene while the latter will also be entitled to earn a fee of $700 million if the option is exercised before late 2023.Novartis also announced disappointing top-line results from phase III studies, PEARL 1 and PEARL 2, on ligelizumab in chronic spontaneous urticaria (CSU). Data showed that the studies met their primary endpoints of superiority for ligelizumab versus placebo at week 12 but not versus Xolair (omalizumab).Pfizer to Test 3-Dose COVID-19 Vaccine Regimen in Kids: Pfizer and BioNTech are planning to test a third 3 µg of their COVID-19 vaccine, at least two months after the second dose of Comirnaty in children aged six months to five years for better protection against COVID-19. The decision was taken after a routine review of an ongoing clinical study by the external independent data monitoring committee (DMC). A pre-specified immunogenicity analysis of the data by the DMC from a subset of a phase II/III study population showed that the COVID-19 vaccine failed to demonstrate non-inferior immunogenicity levels in two to five years age group compared to 16 to 25 years aged individuals.The CHMP recommended approval for Pfizer’s three drugs — somatrogon for pediatric growth hormone deficiency, Prevnar-20, its pneumococcal 20-valent conjugate vaccine, and Lorviqua as a first-line treatment for ALK-positive advanced non-small-cell lung cancer. A decision related to the potential approval of these drugs from the European Commission is expected next year.Pfizer & BioNTech announced an agreement with the European Commission (EC) to supply more than 200 million additional doses of their COVID-19 vaccine, Comirnaty. The additional doses will be delivered in 2022. With the latest option exercise, the companies now have agreements to supply more than 650 million doses to EC member states in 2022.The NYSE ARCA Pharmaceutical Index declined 0.9% in the last five trading sessions.Large Cap Pharmaceuticals Industry 5YR % Return Large Cap Pharmaceuticals Industry 5YR % ReturnHere’s how the eight major stocks performed in the last five trading sessions.Image Source: Zacks Investment ResearchIn the last five trading sessions, AbbVie rose the most (1%) while Pfizer declined the most (4.2%).In the past six months, Pfizer has recorded the maximum gain (53.4%) while Novartis has declined the most (6.3%)(See the last pharma stock roundup here: PFE Announces Arena Buyout, LLY Ups 2021 View & More)What's Next in the Pharma World?Watch out for regular pipeline and regulatory updates next week. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>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 AstraZeneca PLC (AZN): Free Stock Analysis Report GlaxoSmithKline plc (GSK): Free Stock Analysis Report Novartis AG (NVS): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 24th, 2021

Still More To Come

S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: Q3 2021 hedge fund letters, conferences and more (…) The VIX is […] S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: 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); Q3 2021 hedge fund letters, conferences and more (…) The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. We got the lower values, and today is shaping up to look likewise constructively for the bulls across both paper and real assets. Yesterday‘s dollar decline has helped as much as well bid bonds. Inflation expectations aren‘t yet doubting the Fed, there is no more compressing the yield curve at the moment, so it‘s all quiet on the central bank front. That‘s good, the Santa rally can go on unimpeded. Precious metals are peeking higher in what looks to be adjustment to the lower yields and dollar, and commodities upswing remains driven by energy, base metals and agrifoods. Cryptos hesitation may hint at slimmer gains today than was the case yesterday when instead of a brief consolidation, we were treated to improving returns. Merry Christmas if you‘re celebrating – and if not, happy holidays spent with your closest ones. Let the festive season and message of the Prince of Peace permeate our hearts and inspire the best in mankind. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rally goes on, and the 4,720s are again approaching. Market breadth isn‘t miserable in the least, and the riskier end of the bond spectrum looks positive even if larger time frame worries haven‘t gone away. Classic Santa Claus rally. Credit Markets HYG keeps jumping higher – the risk-on sentiment is winning this week. A bit more strength from LQD would be welcome, but isn‘t an obstacle to further stock market gains. Gold, Silver and Miners Gold downswing indeed weren‘t to be taken at all seriously – solid gains across precious metals followed. I‘m expecting a not too rickety ride ahead as the metals keep appreciating at relatively slow pace. Crude Oil Crude oil extended gains, and even if oil stocks paused, downswing in black gold isn‘t looming. Importantly, the $72 area has been overcome – the bulls should be able to hold ground gained. Copper Copper keeps tracking the broader commodities rally, and isn‘t outperforming yet. The red metal‘s long consolidation goes on, and a breakout attempt on par with early Oct seems to be a question of quite a few weeks (not days) ahead. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating Tuesday‘s gains – the performance is neither disappointing nor stellar. Both cryptos don‘t look to be in the mood for a break below Dec lows. Summary If not yesterday, then probably today we‘ll get a little consolidation of prior two day‘s steep S&P 500 and commodity gains (copper says) – the positive seasonality hasn‘t spoken its last word. HYG posture has significantly improved, and that bodes well for short-term gains still ahead before we dive into market circumstances turning increasingly volatile towards the end of Q1 2022. For now, let‘s keep celebrating – Merry Christmas once again – and enjoying the relatively smooth ride. 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 Dec 23, 2021, 10:33 am (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: valuewalkDec 23rd, 2021

Fading The Rally

S&P 500 made intraday ATHs, but the upswing was sold into heavily – pre-FOMC positioning raising its head? Bonds didn‘t crater, and the risk-off move wasn‘t all too pronounced. Tech weakness was the key culprit, with value barely hanging onto opening gains. Russell 2000 breaking below its Wednesday‘s open nicely illustrates how late in the […] S&P 500 made intraday ATHs, but the upswing was sold into heavily – pre-FOMC positioning raising its head? Bonds didn‘t crater, and the risk-off move wasn‘t all too pronounced. Tech weakness was the key culprit, with value barely hanging onto opening gains. Russell 2000 breaking below its Wednesday‘s open nicely illustrates how late in the topping process we are. What is needed for the upswing to go on, is tech leading the daily charge once again – and it remains to be seen for how long and to what degree would value be able to participate. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more I‘m taking today‘s S&P 500 weakness as squaring the prior quick long gains, which felt practically as a short squeeze. Now, we‘re working through the faster taper impact, not having shaken the news off yet. We‘re though getting there, if precious metals seeing through the fresh policy move inadequacy, and commodities likewise, are any clue. As I wrote yesterday: (…) pretty much everything else surged as the Fed didn‘t turn too hawkish. Predictably. The day of reckoning is again postponed as the central bank effectively kicked the can down the road by not getting ahead of inflation. Taper done by Mar 2022, and three rate hikes then, doesn‘t cut it. This illustrates my doubts about serious inflation figures to still keep hitting (hello latest PPI), and above all, their ability to execute this 1-year plan. If you look under the hood, they don‘t even expect GDP to materially slow down – 4.0% growth in 2022 with three hikes against 3.8% actual in Q3 2021 on no hikes. Something doesn‘t add up, and just as the Bank of England raising rates to 0.25% now, the Fed would be forced to hastily retreat from the just projected course. Markets are interpreting yesterday as the punch bowl effectively remaining in place, and crucially, copper is participating after the preceding weakness. The metal with PhD in economics has been hesitating due to the darkening real economy prospects even though manufacturing data aren‘t a disaster. Consumer sentiment isn‘t though positive, and inflation expectations among the people aren‘t retreating as much as bond spreads would show. The red metals is balancing out the economic prospects in favor of participating in the renewed rush into commodities – the super (let alone secular) bull run isn‘t over by a long shot. Stockpiles are tight, and whatever the odds of the infrastructure bill being passed any time soon, copper isn‘t budging. That‘s great for real assets across the board. The reason I quoted the above copper part, is the importance of its yesterday‘s move – not too hot, not too cold in pursuing the broader commodities. Keeping above $4.28 with ease today, would be an important signal that the bears aren‘t able to step in convincingly, including in stocks. Oil would sort itself out above $71 while gold and silver would extend their preceding gains today. All in all, stocks would join early next week, and apart from bonds not going more risk-off, Ethereum outperformance would be another confirmation of a broader risk-on upswing to happen. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 downside reversal isn‘t to be trusted on a medium-term basis – but the downswing hasn‘t run its course, looking at volume. Good Nasdaq showing is sorely missing. Credit Markets HYG retreat while the quality debt instruments stayed more or less flat, is concerning for today – and for Monday, should we get follow through in bonds later on. Given the volume comparison, it‘s not certain in the least, which would set up conditions for a broader rally early next week. Gold, Silver and Miners Precious metals downside is clearly over, and a fresh upswing well underway. Correction in equities is marginally helping, and the reaction of Fed‘s underwhelming move with more inflation news, would be the juiciest catalyst. Crude Oil Crude oil is building up the springboard once again – the current consolidation including in oil stocks, would be resolved to the upside next week. We haven‘t seen a genuine trend change in Nov. Copper Key vote of confidence has come from copper – more willing participation from the red metal is called for next (as a minimum, not losing momentum vs. CRB Index). Bitcoin and Ethereum Bitcoin and Ethereum haven‘t kept Wednesday‘s gains, and could very well provide an early sign of buying appetite more broadly returning. Summary Bonds remain in wait and see mode, and aren‘t as bearishly positioned as stocks at the moment. Neither are precious metals or commodities, raising the odds of a bullish resolution to the S&P 500 rally that‘s been faded. The usual constellation is what‘s required – recovering bonds taking the pressure off tech, mainly. Ideally accompanied by solid HYG outperformance, value rising, copper extending gains, and Ethereum doing better than Bitcoin. Tall order, especially for today – but nothing unsurmountable for say Monday-Tuesday as argued for in detail in today‘s report. 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 Dec 17, 2021, 10:27 am (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: valuewalkDec 17th, 2021

Elon Musk offloaded more Tesla shares for $884 million as the stock slid, bringing his selling spree to $14 billion

Musk sold 934,091 shares for $884.1 million, according to securities filings, to pay for taxes on the exercise of options. Musk has been on a stock-selling spree since November 8.Filip Singer-Pool/Getty Images Tesla CEO Elon Musk on Thursday dumped another chunk of the EV maker's shares, worth $884 million. He's now sold nearly $14 billion of Tesla stock since November 8, to pay for taxes on the exercise of options. Tesla stock has been on the decline recently, and is down 13% in the last month. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Elon Musk offloaded more Tesla shares on Thursday worth $884.1 million, bringing sales by the electric-vehicle maker's CEO to a total of nearly $14 billion since early November.In his second round of sales this week, the billionaire disposed of 934,091 Tesla shares, regulatory filings showed. That's the same amount Musk sold on Monday, pulling in $906 million — about $22 million more than the haul four days later.Tesla's stock has tumbled in recent weeks, and on Thursday, it slid alongside high-growth tech stocks, as investors weighed the Federal Reserve speeding up cutbacks in stimulus and its potential three interest-rate hikes in 2022. Musk has been on a stock-selling spree since November 8, after polling his Twitter fans about whether to dump 10% of his Tesla holding. He got an overwhelming "yes" in response.The EV maker's boss — recently named "Person of the Year" by Time Magazine and the Financial Times — appears on pace to reach that 10% target in coming days, according to analysts. To hit it, Musk would need to sell another 4.1 million shares, they estimate, though Musk has not made the threshold clear.But even before the poll, Musk's comments suggested he was already planning to sell large chunks of stock to cover tax obligations for exercising options that expire in August next year. At the same time he has been offloading shares, he has been tapping those options, granted in 2012.Thursday's divestment was part of a prearranged plan, known as a 10b5-1, to cover tax costs on the exercise of 2.2 million options the same day, according to the filing.He's now tapped 17 million of the 22.9 million stock options with the August deadline, while selling 12.9 million shares for $13.6 billion. That option grant gives Musk the right to buy Tesla shares at a strike price of $6.24 — less than 1% of its current value.Shares in Tesla fell into a bear market this week, down more than 20% from a recent high. The stock is down 12% in the past month, and was 5% lower at Thursday's close.It was last trading 1.5% lower in Friday's premarket session. However, the world's most valuable carmaker is still up 31% for the year so far.Below is a table detailing Musk's transactions since November 8, from Reuters:DATESHARES ACQUIREDSHARES SOLDGROSS PROCEEDSNOV. 82.2 mln  NOV. 8 934,091$1.10 blnNOV. 9 3.1 mln$3.35 blnNOV. 10 500,000$527.3 mlnNOV. 11 639,737$687.3 mlnNOV. 12 1.2 mln$1.24 blnNOV. 152.1 mln  NOV. 15 934,091$930.7 mlnNOV. 162.1 mln  NOV. 16 934,091$973.4 mlnNOV. 232.2 mln    934,091$1.05 blnDEC. 22.1 mln    934,091$1.01 blnDec.92.2 mln    934,091$963.2 mlnDec.132.1 mln    934,091$906.5 mlnDec. 162.2 mln    934,091$884.1 mlnTotal17.2 mln12.9 mln$13.62 blnRead More: A top Macquarie fund manager shares 3 pockets of the market to target as inflation fears calm and digitalization trends define multiple industriesRead the original article on Business Insider.....»»

Category: smallbizSource: nytDec 17th, 2021

Pfizer (PFE) COVID Pill Maintains Strong Efficacy, Stock Up

Pfizer's (PFE) COVID-19 pill maintains a substantial reduction in hospitalizations and deaths observed during interim analysis last month in the final analysis of the study data. Pfizer PFE announced data from the final analysis of the phase II/III study — EPIC-HR — evaluating its oral antiviral candidate for COVID-19, Paxlovid. The final data demonstrated that Paxlovid reduces the risk of hospitalization or death by 89% compared to placebo in patients treated within three days of symptom onset. The results were consistent with the interim data from the study announced last month.The study, EPIC-HR, was conducted on non-hospitalized adult patients with COVID-19 who were at high risk of progressing to severe illness. A secondary endpoint data demonstrated that treatment with Paxlovid within five days of symptom onset reduced the risk of hospitalization or death for any cause by 88% versus placeboThe study data showed that 0.7% of the patients treated with Paxlovid within three days of symptom onset were hospitalized and no one died through Day 28, following randomization compared to 6.5% of the patients in the placebo arm who were hospitalized or died. Similarly, in patients treated within five days of symptom onset, 1% of those treated with Paxlovid were hospitalized through Day 28, following randomization compared to 16.3% of the patients in the placebo arm.We note that Pfizer has already initiated the rolling submission of a regulatory application seeking emergency use authorization (“EUA”) for Paxlovid in the United States. The final data from the EPIC-HR will be shared with the FDA as part of the rolling submission.Pfizer’s Paxlovid treatment course includes its SARS-CoV-2 3CL protease inhibitor, PF-07321332, co-administered with a low dose of AbbVie’s ABBV antiviral drug, ritonavir that is available under the trade name of Norvir. While Pfizer’s PF-07321332 helps in inhibiting the replication of coronavirus, AbbVie’s Norvir helps slow the breakdown of PF-07321332. Co-administration of PF-07321332 with Norvir allows the latter to remain active in the body for longer periods of time at higher concentrations.AbbVie received first approval for Norvir in 1996 for treating HIV-1 infection in combination with other antiretroviral agents. AbbVie’s Norvir is available in two options — oral solution and oral powder.Shares of Pfizer gained 0.6% on Dec 14, following the final update from the COVID pill study, followed by further gains of 0.7% during after-hours trading. Pfizer’s shares have gained 50.9% so far this year compared with the industry’s increase of 16.4%.Image Source: Zacks Investment ResearchWe note that another U.S.-based pharma giant, Merck MRK is also developing an oral COVID-19 pill, molnupiravir, for high-risk, non-hospitalized patients. Merck also filed an EUA application for a COVID pill in November. Last month, the FDA’s Antimicrobial Drugs Advisory Committee also voted in favor of authorizing Merck’s molnupiravir.However, Merck’s COVID-19 pill may have lower efficacy compared to Paxlovid. Final data from Merck’s late-stage study showed that molnupiravir reduced the risk of hospitalization or death by approximately 30% in non-hospitalized at-risk adult patients with mild or moderate COVID-19.In a separate press release, Pfizer announced that the FDA granted approval to its supplemental new drug application (sNDA) for its JAK inhibitor drug, Xeljanz, seeking label expansion to include adults with active ankylosing spondylitis (AS). The drug will be available to treat AS patients who have had an inadequate response or intolerance to one or more tumor necrosis factor ("TNF") blockers. The approval was based on data from a phase III study, which showed that the twice-daily dose of Xeljanz achieved significantly greater improvement in patients compared to placebo at week 16.The FDA had extended the review period for the sNDA in April this year as the regulatory authority was reviewing the safety profile of JAK inhibitors using data from the post-marketing safety study of Xeljanz as a treatment for rheumatoid arthritis (“RA”) patients. The FDA observed that RA patients treated with both low as well as high doses of Xeljanz experienced a higher rate of serious heart-related events such as heart attack and stroke, cancer, blood clots, and death compared to those treated with TNF inhibitors. In September, the FDA asked to add warnings about an increased risk of these serious side-effects to Xeljanz’s label and a few other JAK inhibitors.Pfizer Inc. Price Pfizer Inc. price | Pfizer Inc. QuoteZacks Rank & Key PickPfizer currently carries a Zacks Rank #2 (Buy).Roche RHHBY is another top-ranked stock from the pharma sector, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Estimates for Roche have improved from earnings per share of $2.78 to $2.80 for 2021 and from $2.82 to $2.87 for 2022.Shares of Roche have gained 12.6% so far this year. 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 Roche Holding AG (RHHBY): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 15th, 2021

Biotech Stock Roundup: BMY Increases Dividend, MRNA"s Study Results & More

Moderna's (MRNA) vaccine study results and other pipeline updates have been the biotech sector???s few key highlights during the past week. The biotech sector has been in focus over the past week with regular pipeline and regulatory updates. Strategic collaborations were also in the spotlight.Recap of the Week’s Most Important Stories:Bristol Myers Ups Dividend: Bristol-Myers Squibb Company’s BMY board of directors has declared a quarterly dividend of 54 cents per share, up 10.2% over last year’s rate of 49 cents per share.  The dividend will be paid out on Feb 1, 2022, to stockholders of record at the close of business on Jan 7, 2022. The annual dividend rate for fiscal 2022 is $2.16 per share on this rate.  Concurrently, the board also authorized the repurchase of an additional $15 billion of common stock. As a result, the company’s total outstanding share repurchase authorization is approximately $15.2 billion. Shares gained on the same.Bristol-Myers also entered into a license, development and commercialization agreement with Immatics whereby the former will secure global exclusive license to Immatics’ TCR bispecific program IMA401.  Per the terms, Immatics will receive an upfront payment of $150 million as well as up to $770 million in development, regulatory and commercial milestone payments, in addition to tiered double-digit royalty payments on net sales of IMA401. Immatics retains the options to co-fund U.S. development in exchange for enhanced U.S. royalty payments and/or to co-promote IMA401 in the United States.Bristol-Myers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Foghorn Gains on Lilly Collaboration:  Shares of Foghorn Therapeutics Inc. FHTX surged 54.96% after the company announced a collaboration with Loxo Oncology at Lilly, a research and development group of pharma giant Eli Lilly and Company LLY.Both the companies announced a collaboration to create novel oncology medicines by applying Foghorn's proprietary Gene Traffic Control platform. The partnership includes a co-development and co-commercialization agreement for Foghorn's selective BRM oncology program and an additional undisclosed oncology target. The collaboration includes three additional discovery programs using Foghorn's proprietary Gene Traffic Control platform. Per the terms, Foghorn will receive an upfront consideration of $300 million in cash for the agreement. Lilly will also make an equity investment of $80 million in FHTX’s common shares at a price of $20 per share.Foghorn will lead discovery and early research activities. Lilly will lead development and commercialization activities with participation from FHTX in operational activities and cost-sharing for the BRM-selective program and the additional undisclosed target program. Foghorn and Lilly will share equally in the U.S. economics.Pipeline Update From Moderna: Moderna MRNA shares were down after the company reported data from the phase I study of its quadrivalent seasonal flu vaccine candidate, mRNA-1010. mRNA-1010 successfully boosted hemagglutination inhibition (HAI) assay geometric mean titers against all strains 29 days after vaccination at all doses tested in both younger and older adults. In the phase I study, mRNA-1010 was evaluated at 50 µg, 100 µg and 200 µg dose levels in younger adult (age 18-49) and older adult (age 50+) cohorts. However, investors were mostly likely disappointed as it reportedly failed to show superiority compared to a popular flu vaccine and others in the pipeline.Moderna also reported that the phase II study of mRNA-1010 is now fully enrolled and preparation for the phase III study is underway. Moderna has initiated a phase II study to evaluate three dose levels — 25 µg, 50 µg and 100 µg — of mRNA-1010 in November.Regulatory Update From Aprea:  Aprea Therapeutics, Inc. APRE announced that the FDA has removed the full clinical hold on its study evaluating the combination of its lead compound, eprenetapopt, with acalabrutinib or with venetoclax and rituximab in lymphoid malignancies.The FDA had placed a clinical hold on the lymphoid malignancy program in August 2021 owing to concerns over the safety and efficacy data from the phase III frontline study in myelodysplastic syndromes (MDS). The FDA’s concerns referred to the safety and efficacy data from the company’s phase III frontline clinical trial in MDS.  The regulatory body also placed a partial clinical hold on several studies evaluating eprenetapopt in combination with azacitidine, including a phase III frontline MDS. All these studies were put on clinical hold due to concerns about the safety and efficacy data from the frontline MDS study.PerformanceMedical - Biomedical and Genetics Industry 5YR % Return Medical - Biomedical and Genetics Industry 5YR % ReturnThe Nasdaq Biotechnology Index has lost 1.24% in the past five trading sessions. Among the biotech giants, Regeneron has gained 5.65% during the period. Over the past six months, shares of Moderna have soared 33.8%. (See the last biotech stock roundup here: Biotech Stock Roundup: ACAD Up on Study Results, BHVNs Pipeline Update & More)Image Source: Zacks Investment ResearchWhat's Next in Biotech?Stay tuned for more pipeline and regulatory updates.  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 Bristol Myers Squibb Company (BMY): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Moderna, Inc. (MRNA): Free Stock Analysis Report Aprea Therapeutics, Inc. (APRE): Free Stock Analysis Report Foghorn Therapeutics Inc. (FHTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 15th, 2021

A Puzzled Wall Street Reacts To Powell, And The Market"s Furious Melt Up

A Puzzled Wall Street Reacts To Powell, And The Market's Furious Melt Up Heading into today's FOMC, consensus was clear: anything more than 2 rates hikes in 2022, a year-end core PCE above 2.5%, and an upward shift in the 2024 dot (from 1.75%) would be viewed as clearly hawkish and would spark concern in the markets that the Fed is tightening too fast. And yet, despite the Fed clearly hawkish pivot which among other things, also saw the retirement of the word "transitory", stocks initially sank only to soar, before closing at session highs, just above 4,700 and not too far from all time highs. Time having second thoughts pic.twitter.com/suRlUpSzJC — ForexLive (@ForexLive) December 15, 2021 Of course, for those who have seen enough Fed days in their time, nothing that happened today was unexpected, because with sentiment heading into the 2pm announcement at rock bottom, there was only one that the market could respond: up. Everyone expecting stocks to tumble after the FOMC. You know what that means — zerohedge (@zerohedge) December 15, 2021 And more to the point, while the market reaction was clearly downbeat after the hawkish statement, it was Powell's dovish press conference that was the real trigger... ... just as we expected it would be. The usual good cop/bad cop combo - hawkish statement, means now Powell will be dovish during the presser — zerohedge (@zerohedge) December 15, 2021 There are of course other explanations: one is that having hedged aggressively into the FOMC, with bearish sentiment soaring, the only possible trade was to unwind hedges, triggering a massive gamma squeeze higher, just as Nomura's Charlie McElligott predicted earlier today. “It seemed like there was some hedging demand into the event, perhaps relief that the event has happened, regardless of outcome,” said Danny Kirsch, head of options at Cornerstone Macro LLC. “The event is gone, sell your hedge and move on.” Yet others, those who goalseek narratives for a living, such as former NY Fed BIll Dudley, saw a hidden message in Powell's remarks: “What I took away from the press conference was Powell is pretty upbeat about the economy,” Dudley said on Bloomberg TV. What Dudley did not say is how it is possible that the Fed sees stronger GDP, a higher inflation and lower unemployment when predicting 3 hikes today, compared to September when every economic parameter was weaker yet when the Fed forecast just one rate hike. Does the Fed even know what "tightening" means? (If not, it very soon will...) And while in retrospect, trading the Fed today was especially easy if one ignores all fundamental and analytical insight and just focuses on positioning, flows and historical precedent, many financial professionals were confused as their kneejerk commentary following the Fed revealed. Below we present some of the more notable hot takes from around Wall Street. Mohamed A. El-Erian, Advisor to Allianz: "A notable shift in #Fed policy that’s slightly more hawkish than consensus expectations (though somewhat less than what I think is needed). The doubling of the taper comes with an increase in the #inflation forecast and more aggressive signaling of rate hikes. Press conference key" Sam Stovall, chief investment strategist at CFRA Research: “The assumption is that this outcome was largely built into equity expectations. Because the FOMC was not more hawkish, equities are breathing a sigh of relief and reversing course -- at least for now.” Brian Coulton, chief economist at Fitch Ratings: “This is a major pivot from the Fed, prompted by clearer evidence that inflation is broadening. ... Most significantly, inflation is described as having already exceeded 2 per cent ‘for some time’, so it looks like the Fed feels enough progress has now been made in compensating for earlier shortfalls in inflation.” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance: “Although the stock market moved higher during the press-conference, the sectors leading the market higher (e.g. Utilities and Healthcare) are both very defensive sectors and indicate some concern about the future path of the economy.” Matt Maley of Miller Tabak & Co. says this about the positive market reaction: “It seems like people are playing ‘buy the news,’ but when the Fed gets more hawkish at a time when the stock market is as expensive as it is today, investors are playing with fire. I’d also say that some investors are taking the comment that the Fed can adjust policy further if it is warranted as saying they can become more dovish if the economy slows too quickly.” Chris Harvey, head of equity strategy at Wells Fargo: “We believe the initial positive equity market reaction is due to investors gaining confidence in the Fed’s willingness and ability to fight inflation. As a result they are decreasing the odds of stagflation and policy error.” Bill Northey, U.S. Bank Wealth Management: “It’s not uncommon following a monetary policy announcement to have some volatility. In fact, the initial direction following the announcement oftentimes is not the direction that we conclude the day with. " Sylvia Jablonski, chief investment officer at Defiance ETFs: “It gives me more confidence to buy on these dips off of 52 week highs. We shouldn’t forget that the economy is actually expanding, and less stimulus is needed. None of this is bad news for the market.” Cheryl Smith, economist and portfolio manager at Trillium Asset Management “There is still a significant difference between the unemployment rates for White and Black Americans at all levels of education and age. Further, participation rates are still well below the pre-pandemic level.” Ian Shepherdson, chief economist at Pantheon Macroeconomics: “The upshot of these new forecasts is that the Fed has moved into line with market thinking. The key question now is the timing of the first hike. If it weren’t for Omicron, we’d expect it in March, but experience elsewhere signals that the U.S. is about to see a massive, unprecedented surge in Covid cases, with unknowable -- but likely temporary -- consequences for the economy. We think this will delay the first hike until May, with the next moves in September and December.” Here’s Bankrate.com chief financial analyst Greg McBride: “The Fed retired the word ‘transitory’ from their statement and gave strong indications that they’re poised to hike interest rates once they deem the labor  market to be at full employment. Definitely a more hawkish tone, and the most we have seen in some time -- similar to inflation.” Jan Hatzius, chief economist at Goldman Sachs "The FOMC revised the statement to acknowledge that inflation has “exceeded 2% for some time” and removed language in the previous statement that said that “with inflation having run persistently below” 2%, it would aim to achieve inflation “moderately above 2 percent for some time” and expected to maintain an accommodative stance until that goal is achieved." At the end of the day, the simplest explanation is probably the right one, and it is the one we showed two weeks ago, namely that the forward yield curve has already inverted (rates in 2025 are seen as lower than 2023)... ... suggesting that the market is delighted by the Fed's aggressive tightening plans because they will crash and burn and force Powell to end tightening in the near future and then immediately start the next easing cycle. In other words, the Fed's tightening cycle is over before it has even begun, and yes that means the time to frontrun the next mega bubble has arrived. Tyler Durden Wed, 12/15/2021 - 17:23.....»»

Category: dealsSource: nytDec 15th, 2021

Pfizer Buys Pharma Rival Arena In All-Cash Deal Worth $6.7 Billion

Pfizer Buys Pharma Rival Arena In All-Cash Deal Worth $6.7 Billion Shares of Arena Pharmaceuticals have doubled in price in premarket trading after Pfizer announced that it had struck a deal to acquire its smaller rival for $100/share in a deal that values the San Deigo-based Arena at $6.7 billion. Pfizer believes it can finance the deal with cash on hand, and thanks to covid, it sure can. Fattened up with its vaccine profits, Pfizer is clearly seizing the opportunity to put some of that money to work by diversifying and paying growth. Investors in both companies should keep in mind that, as part of the deal, warrants will immediately cease to be outstanding and instead will be converted into the right to receive an amount in cash equal to the product of the excess, if any, of the Merger Consideration over the per-share exercise price of such of the options, multiplied by the number of shares then subject to such Company Option. In the press release, Pfizer's Mike Gladstone said buying Arena would complement Pfizer's expertise in immunology, specifically allowing it to better serve patients with immuno-inflammatory diseases. "The proposed acquisition of Arena complements our capabilities and expertise in Inflammation and Immunology, a Pfizer innovation engine developing potential therapies for patients with debilitating immuno-inflammatory diseases with a need for more effective treatment options," said Pfizer's Mike Gladstone. "Utilizing Pfizer's leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases." Read the press release below: Pfizer and Arena Pharmaceuticals, Inc.(Nasdaq: ARNA) today announced that the companies have entered into a definitive agreement under which Pfizer will acquire Arena, a clinical stage company developing innovative potential therapies for the treatment of several immuno-inflammatory diseases. Under the terms of the agreement, Pfizer will acquire all the outstanding shares of Arena for $100 per share in an all-cash transaction for a total equity value of approximately $6.7 billion. The boards of directors of both companies have unanimously approved the transaction. Arena's portfolio includes diverse and promising development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including gastrointestinal and dermatological diseases. "The proposed acquisition of Arena complements our capabilities and expertise in Inflammation and Immunology, a Pfizer innovation engine developing potential therapies for patients with debilitating immuno-inflammatory diseases with a need for more effective treatment options," said Mike Gladstone, Global President & General Manager, Pfizer Inflammation and Immunology. "Utilizing Pfizer's leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases." Arena has built a robust development program for etrasimod, including two Phase 3 studies in ulcerative colitis (UC), a Phase 2/3 program in Crohn's Disease, a planned Phase 3 program in atopic dermatitis, and ongoing Phase 2 studies in eosinophilic esophagitis and alopecia areata. In UC, the randomized, placebo-controlled, dose-ranging, Phase 2 study (OASIS) evaluated the efficacy and safety of etrasimod in moderate to severe UC patients over 12 weeks versus placebo. In the study, most patients who achieved clinical response, clinical remission, or endoscopic improvement at week 12 experienced sustained or improved effects up to week 46 with etrasimod 2 mg in the open-label extension. Etrasimod also demonstrated a favorable benefit/risk profile, consistent with safety findings reported in the double-blind portion of OASIS. The findings are encouraging as there remains significant unmet need for safe and effective oral therapies in UC for patients with inadequate response, loss of response, or intolerance to conventional or advanced therapies. The OASIS trial supported the advancement of the ELEVATE UC 52 and UC 12 trials, which are currently fully enrolled, and for which data are expected in 2022. In addition, Arena's pipeline includes two development-stage cardiovascular assets, temanogrel and APD418. Temanogrel is currently in Phase 2 for the treatment of microvascular obstruction and Raynaud's phenomenon secondary to systemic sclerosis. APD418 is currently in Phase 2 for acute heart failure. "We're delighted to announce Pfizer's proposed acquisition of Arena, recognizing Arena's potentially best in class S1P molecule and our contribution to addressing unmet needs in immune-mediated inflammatory diseases," said Amit D. Munshi, President and Chief Executive Officer of Arena. "Pfizer's capabilities will accelerate our mission to deliver our important medicines to patients. We believe this transaction represents the best next step for both patients and shareholders." Pfizer expects to finance the transaction with existing cash on hand. Under the terms of the merger agreement, Pfizer will acquire all of the outstanding shares of Arena common stock for $100 per share in cash. The proposed transaction is subject to customary closing conditions, including receipt of regulatory approvals and approval by Arena's stockholders. Pfizer's financial advisors for the transaction are BofA Securities and Centerview Partners LLC, with Ropes & Gray and Arnold & Porter Kaye Scholer LLP acting as its legal advisors. Guggenheim Securities, LLC and Evercore Group LLC served as Arena's financial advisors, while Cooley LLP served as its legal advisor. Pfizer Conference Call. Pfizer Inc. invites Pfizer investors and the general public to view and listen to a webcast of a live conference call with investment analysts at 10am. EST on December 13. Tyler Durden Mon, 12/13/2021 - 07:02.....»»

Category: blogSource: zerohedgeDec 13th, 2021