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Category: topSource: bizjournalsMay 18th, 2021

The "Great Game" Moves On

The 'Great Game' Moves On Authored by Alasdair Macleod via GoldMoney.com, Following America’s withdrawal from Afghanistan, her focus has switched to the Pacific with the establishment of a joint Australian and UK naval partnership. The founder of modern geopolitical theory, Halford Mackinder, had something to say about this in his last paper, written for the Council on Foreign Relations in 1943. Mackinder anticipated this development, though the actors and their roles at that time were different. In particular, he foresaw the economic emergence of China and India and the importance of the Pacific region. This article discusses the current situation in Mackinder’s context, taking in the consequences of green energy, the importance of trade in the Pacific region, and China’s current deflationary strategy relative to that of declining western powers aggressively pursuing asset inflation. There is little doubt that the world is rebalancing as Mackinder described nearly eighty years ago. To appreciate it we must look beyond the West’s current economic and monetary difficulties and the loss of its hegemony over Asia, and particularly note the improving conditions of the Asia’s most populous nations. Introduction Following NATO’s defeat in the heart of Asia, and with Afghanistan now under the Taliban’s rule, the Chinese/Russian axis now controls the Asian continental mass. Asian nations not directly related to its joint hegemony (not being members, associates, or dialog partners of the Shanghai Cooperation Organisation) are increasingly dependent upon it for trade and technology. Sub-Saharan Africa is in its sphere of influence. The reality for America is that the total population in or associated with the SCO is 57% of the world population. And America’s grip on its European allies is slipping. NATO itself has become less relevant, with Turkey drawn towards the rival Asian axis, and its EU members are compromised through trading and energy links with Russia and China. Furthermore, France is pushing the EU towards establishing its own army independent of US-led NATO — quite what its role will be, other than political puffery for France is a mystery. It is against this background that three of the Five Eyes intelligence partnership have formed AUKUS – standing for Australia, UK, and US — and its first agreement is to give Australia a nuclear submarine capability to strengthen the partnership’s naval power in the Pacific. Other capabilities, chiefly aimed at containing the Chinese threat to Taiwan and other allies in the Pacific Ocean, will surely emerge in due course. The other two Five Eyes, Canada and New Zealand, appear to be less keen to confront China. But perhaps they will also have less obvious roles in due course beyond pure intelligence gathering. The US, under President Trump, had failed to contain China’s increasing economic dominance and its rapidly developing technological challenge to American supremacy. Trump’s one success was to peel off the UK from its Cameron/Osbourne policy of strengthening trade and financial ties with China by threatening the UK’s important role in its intelligence partnership with the US. For the UK, the challenge came at a critical time. Brexit had happened, and the UK needed global partners for its future trade and geopolitical strategies, the latter needed to cement its re-emergence onto the world stage following Brexit. Trump held out the carrot of a fast-tracked US/UK trade deal. The Swiss alternative of neutrality in international affairs is not in the UK’s DNA, so realistically the decision was a no-brainer: the UK had to recommit itself entirely to the Anglo-Saxon Five-Eyes partnership with the US, Canada, Australia, and New Zealand and turn its back on China. But gathering intelligence and building naval power in the Pacific won’t defeat the Chinese. All simulations show that the US, with or without AUKUS, cannot win a military conflict against China. But AUKUS is not a formal model on NATO lines which commits its members by treaty to aggression against a common enemy. While Taiwan remains a specific problem, the objective is almost certainly to discourage China from territorial expansion and protect and give other Pacific nations on the Asian periphery the security to be independent from the SCO behemoth. The trade benefits of closer relationships with these independent nations are also an additional reason for the UK to join the CPTPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It qualifies for membership through its sovereignty over the Pitcairn Islands. And that is why China has also applied to join. Therefore, AUKUS’s importance is in the signal sent to China and the whole Pacific region, following the abandonment of land-based operations in the Middle East and Afghanistan. The maritime threat to China is a line which must not be crossed. We are entering a new era in the Great Game, where the objective has changed from dominance to containment. Having lost its position of ultimate control in the Eurasian land mass America has selected its partners to retain control over the high seas. And the UK has found a new geopolitical purpose, re-establishing a global role now that it is independent from the EU. The French cannot join the CPTPP being bound into the common trade policies of the EU. Seeing the British escape the strictures of the EU and rapidly obtain more global influence than France could dream of has touched a raw nerve. Mackinder vindicated The father of geopolitics, Halford Mackinder, is frequently quoted and his theories are still relevant to the current situation. Much has been written about Mackinder’s prophecies. His concept of the World Island was first mentioned in his 1904 presentation to the Royal Geographic Society in London: “a pivot state, resulting in its expansion over the marginal lands of Euro-Asia”. In 1943 he updated his views in an article for the Council on Foreign Relations, adding to his heartland theory. Written during the Second World War, his commentary reflected the combatants and their positions at that time. But despite this, he made a perceptive comment relative to the situation today and AUKUS: “Were the Chinese for instance organised by the Japanese to overthrow the Russian Empire and conquer its territory they might constitute the yellow peril to the world’s freedom just because they would add an oceanic frontage to the resources of the great continent.” When Mackinder wrote his article the Japanese had already invaded Manchuria, but their subsequent defeat removed them from an active geopolitical role, and in place of a Soviet defeat China has entered a peaceful partnership with Russia that extends to all its old Central Asian soviet satellites. It is the focus on the ocean frontage that matters, upon which the maritime silk road depends. The article brings into play another aspect mentioned by Mackinder, and that is the Heartland’s tremendous natural resources, “…including enough coal in the Kuznetsk and Krasnoyarsk basins capable of supplying the requirements of the whole world for 300 years”. And: “In 1938 Russia produced more of the following food stuffs than any other country in the world: wheat, barley, oats, rye, and sugar beets. More manganese was produced in Russia than in any other country. It was bracketed with United States in the first place as regards iron and it stood second place in production of petroleum”. Through its partnership with Russia all these latent resources are available to the Chinese and Russian partnership. And the real potential for industrialisation, held back by communism and now by Russian corruption, has barely commenced. After presciently noting that one day the Sahara may become the trap for capturing direct power from the sun (foreseeing solar panels), Mackinder’s article ended on an optimistic note: “A thousand million people of ancient oriental civilisation inhabit the monsoon lands of India and China [today 3 billion, including Pakistan]. They must grow to prosperity in the same years in which Germany and Japan are being tamed to civilisation. They will then balance that other thousand million who live between the Missouri and the Yenisei [i.e., Central and Eastern America, Britain, Europe and Russia beyond the Urals]. A balanced globe of human beings and happy because balanced and thus free.” Both China and now India are rapidly industrialising, becoming part of a balanced globe of humanity. While the West tries to hang on to what it has got rather than progressing, China and India along with all of under-developed Asia are moving rapidly in the direction of individual freedom of economic choice and improvements in living conditions, to which Mackinder was referring. Obviously, there is some way for this process yet to go, displacing western hegemony in the process. America particularly has found the political challenges of change difficult, with its deep state unable to come to terms easily with the implications for its military and economic power. We must hope that Mackinder was right, and the shift of economic power is best to be regarded as the pains of geopolitical evolution rather than conditions for escalating conflict. But in pursuing its green agenda and eschewing carbon fuels, the West is unwittingly handing a gift to Mackinder’s Heartland, because despite diplomatic noises to the contrary China, India and all the SCO membership will continue to use cheap coal, gas, and oil which Asia has in abundance while Western manufacturers are forced by their governments to use expensive and less reliable green energy. Green obsessions and global trade Meanwhile, the West has gone green-crazy. Banning fossil fuels without there being adequate replacements must be a new definition of insanity, for which the current fuel crises in Europe attest. With over 95% of European logistics currently being shifted by diesel power, switching to battery power or hydrogen by 2030 by banning sales of new internal combustion engine vehicles is a hostage to fortune. While it is hardly mentioned, presumably the Western powers think that by banning carbon fuels they will take the wind out of Russia’s energy quasi-monopoly, because including gas Russia is the largest exporter of fossil fuels in the world. Instead, the West is creating an energy shortage for itself, a point driven home by Gazprom withholding gas flows through its pipelines to Europe, thereby driving up Europe’s energy costs sharply and ensuring a far more severe energy crisis this winter. Even if Russia turns on the taps tomorrow, there is insufficient gas storage in reserve for the winter months. And Europe and the UK have got ahead of themselves by decommissioning coal and gas-fired electricity. In the UK, a massive undersea gas storage facility off the Yorkshire coast has been closed, leaving precious little national storage capacity. As we have seen with the post-covid supply chain chaos, energy problems will not only become acute this winter, but are likely to persist through much of next year. And even that assumes Russia relents and moderates its energy stance to European customers. By way of contrast, though its partnership with Russia China is gifted unlimited access to all carbon fuels. She is still building coal-fired electricity power stations at an extraordinary rate — according to a BBC report there are 61 new ones being commissioned. A further 51 outside China are planned. As a sop to the West China has only said she won’t finance any more outside her territory. And India relies on coal for over two-thirds of its electrical energy. While Europe and America through their green obsessions are denying themselves the availability and technologies that go with carbon fuels, the Russian/Chinese axis will continue to reap the full benefits. The West’s response is likely to be to decry Chinese pollution and its contribution to global warming, but realistically there is little it can do. Demand for Chinese-manufactured goods will continue because China now has a quasi-monopoly on global manufacturing for export. In the unlikely event western consumers become avid savers while their governments continue to run massive budget deficits, their trade deficits will rise even more, allowing Chinese exporters to increase prices for consumers and intermediate goods without losing export sales. While there is nothing it can do about China’s production methods, AUKUS members will undoubtedly lean on other exporting CPTPP members to comply with global green policies. But they will be competing with China, and while they may pay lip service to the climate change agenda, in practice they are unlikely to implement it without holding out for unrealistic subsidies from the western nations driving the climate change agenda. Under current circumstances, it seems unlikely that China’s CPTPP application will lead to membership, given the CPTPP requirement for China’s central government to relinquish ownership of its SOEs and to permit the free flow of data across its borders. In any event, China is focused on developing its Regional Comprehensive Economic Partnership (RCEP), a free trade agreement with ratification signed so far by China, Japan, South Korea, Australia, and New Zealand. It will come into effect when ratified by ten out of the fifteen signatories, likely to be in the first half of 2022, and in terms of population will be two and a half times the size of the EU and the US/Mexico/Canada (USMCA) trade agreements combined. With four out of five of the signatories being American allies, RCEP demonstrates that the AUKUS defence partnership is an entirely separate issue from trade. While the US may not like it, if RCEP goes ahead freer trade will almost certainly undermine a belligerent stance in due course. Despite hiccups, the progression of trade dealing in the Pacific region promises to prove Mackinder right about the prospect of a more balanced world. All being well and guaranteed by a balance of naval capabilities between AUKUS and China, a free-trading Pacific region will render the European and American trade protectionist policies an anachronism. But the threat is now from another direction: financial instability, with western nations pulling in one direction and China in another. Since the Lehman collapse and the ensuing financial crisis, China has been careful to prevent financial bubbles. Figure 1 shows that the Shanghai Composite Index has risen 82% since 2008, while the S&P500 rose 430%. While the US has seen financial asset values driven by a combination of QE and investor speculation, these factors are absent and discouraged in China. Government debt to GDP is about half that of the US. It is true that industrial debt is high, like that of the US. But the difference is that in China debt is more productive while in America there has been a growing preponderance of debt zombies, only kept solvent by zero interest rate policies. China’s policy of ensuring that the expansion of bank credit is invested in production and not speculation differs fundamentally from the US approach, which is to deliberately inflate financial assets to perpetuate a wealth effect. China avoids the destabilising potential of speculative flows unwinding because it lays the economy open to the possibility that America will use financial instability to undermine China’s economy. In a speech to the Chinese Communist Party’s Central Committee in April 2015, Major-General Qiao Liang, the People’s Liberation Army strategist, identified a cycle of dollar weakness against other currencies followed by strength, which first inflated debt in foreign countries and then bankrupted them. Qiao argued it was a deliberate American policy and would be used against China. In his words, it was time for America to “harvest” China. Drawing on Chinese intelligence reports, in early 2014 he was made aware of American involvement in the “Occupy Central” movement in Hong Kong. After several delays, the Fed announced the end of QE the following September which drove the dollar higher, and “Occupy Central” protests broke out the following month. To Qiao the two events were connected. By undermining the dollar/yuan rate and provoking riots, the Americans had tried to crash China’s economy. Within six months the Shanghai stock market began to collapse with the SSE Composite Index falling from 5,160 to 3,050 between June and September 2015. One cannot know for certain if Qiao’s analysis was correct, but one can understand the Chinese leadership’s continued caution based upon it. For this and other reasons, the Chinese leadership is extremely wary of having dollar liabilities and the accumulation of unproductive, speculative money in the economy. It justifies their strict exchange control regime, whereby dollars are not permitted to circulate in China, and all inward capital flows are turned into yuan by the PBOC. Furthermore, domestic monetary policy appears deliberately different from that of America and other western nations. While everyone else has been inflating their way through covid, China has been restricting domestic credit expansion and curtailing shadow banking. The discount rate is held up at 2.9% with market rates slightly lower at 2.2%, and the only reason it is that low is because alternative dollar rates are at zero and EU and Japanese rates are negative. It is this restrictive monetary policy that has led to the current crisis in property developers, with the very public difficulties of Evergrande. Far from being a surprise event, with cautious monetary policies it could have been easily foreseen. Moreover, the government has a sensible policy of not rescuing private sector businesses in trouble, though it is likely to take steps to limit financial contagion. In their glass houses, Western critics continually throw stones at China. But at least her policy makers have attempted to avoid contributing to the global inflation cycle. With prices beginning to rise at an accelerating pace in western currencies, a new global financial crash is in the making. China and her SCO cohort would be adversely affected, but not to the same extent. The fruits of China’s policies of restricting credit expansion are showing in the commodity prices she pays, which in her own currency have increased by ten per cent less than for dollar-based competition, judging by the exchange rate movements since the Fed reduced its funds rate to the zero bound and instigated monthly QE of $120bn on 19-23 March 2020 (see Figure 2). And while both currencies have moved broadly sideways since January, there is little doubt that the fundamentals point to an even stronger yuan and weaker dollar. The domestic benefits of a relatively stronger yuan outweigh the margin compression suffered by China’s exporters. It is worth noting that as well as moderating credit demand, China is attempting to increase domestic consumer spending at the expense of the savings rate, so consumer demand will begin to matter more than exports to producers. It is in line with a long-term objective of China becoming less dependent on exports, and exporters will benefit from domestic sales growth instead. Furthermore, with China dominating global exports of intermediate and consumer goods and while western budget deficits are increasing and leading to yet greater trade deficits, Chinese exporters should be able to secure higher prices anyway. There can be little doubt that the budget deficits financed by monetary inflation in America, the EU, Japan and the UK, plus central bank stimulus packages are now undermining the purchasing power of all the major currencies. The consequences for their purchasing powers are now becoming apparent and attempts to calm markets and consumers by describing them as transient cuts little ice. In terms of their purchasing powers, these currencies are now in a race to the bottom. Not only are the costs of production rising sharply, but following a brief pause of three months, commodity and energy prices look set to rise sharply. Figure 3 shows the Invesco commodity tracker, which having almost doubled since March 2020 now appears to be attempting a break out on the upside. Since global competitiveness is no longer a priority, China would be sensible to let its yuan exchange rate rise against western currencies to help keep a lid on domestic prices and costs. It is, after all, a savings driven economy, with the sustainable characteristics of a strong currency relative to the dollar. Conclusions Having failed in their land-based military objectives, America’s undeclared tariff and financial wars against China are also coming to an end, to be replaced by a policy of maritime containment through the AUKUS partnership. Attempts to stem strategic losses in Asia have now ended with the withdrawal from Afghanistan and from other interventions.The change in geopolitical policy is not yet widely appreciated. But the parlous state of US finances, dollar market bubbles, persistent and increasing price inflation and the inevitability of interest rate increases will make a policy backstop of maritime containment the only geostrategic option left to America. By pursuing more cautious monetary policies, China is less exposed to the inevitable consequences of global monetary inflation. While yuan currency rates are managed instead of set by markets, it is now in China’s interest to see a stronger yuan to contain domestic price and cost inflation. Even though fiat currencies could be destroyed by imploding asset bubbles, these factors contribute to a set of circumstances that appear to lead to a more peaceable outcome for the world than appeared likely before America and NATO withdrew from Afghanistan. There’s many a slip between cup and lip; but it was an outcome forecast by Halford Mackinder nearly eighty years ago. Let us hope he was right. Tyler Durden Sun, 09/26/2021 - 08:10.....»»

Category: personnelSource: nyt18 hr. 21 min. ago

Why Is Gold Not Rising?

Why Is Gold Not Rising? Authored by Matthew Piepenburg via GoldSwitzerland.com, Many are asking why gold is not rising, as just about every other commodity makes new highs in the backdrop of inflationary tailwinds. That’s a very fair question. Some are even saying gold is dead, a silly and “barbarous” old relic of ancient times, ancient math and ancient common sense. Needless to say, we beg to differ, not because we are Swiss-based gold bugs, but simply…well… let’s explain. Current Price vs. Current and Future Roles For those who see history and math as guides rather than “barbarous” and outdated disciplines, their convictions regarding gold’s role, and even price trajectory, do not wane or rise simply due to the paper price of gold. To some extent, and despite Basel 3, gold remains openly manipulated by a handful of central and bullion banks who are terrified of gold’s shine for no other reason than it embarrasses currencies (and mad monetary experiments) falling deeper into discredit. But we track the movement of physical gold every day, and can say with blunt clarity that the paper trade in gold has zero to do with the those otherwise “barbarous” forces of the actual supply and demand of this precious metal. Zero. In short, the paper price of gold has become a fiction accepted as reality, which is not surprising in a financial landscape (i.e., historically over-valued stocks, negative yielding bonds and central bankers allergic to transparency) which defies every measure of honest price discovery or basic capitalism. As for the never-ending gold vs. BTC debate, it would be wrong to say Bitcoin hasn’t taken (or continue to take) some market share away from gold, but at less than $1 trillion, BTC is not going to destroy gold’s $10T market share. In short, the current gold price is a less important topic than its current and future role as historical insurance against mathematically-failing financial and economic systems around the globe. That said, we are not apologists for the falling gold prices, nor do we doubt that by the end of this decade, gold will price well above $4000 per ounce and greatly reward informed investors playing the long game rather than putting green. More on that later. Gold’s Three Roles For now, let’s consider gold’s historical role as a hedge against: 1) recession risk; 2) market volatility risk; and 3) inflation/currency risk. 1. Recession Hedging As for recessions, gold is like an emotional and mathematical barometer testing the temperature of over-heated monetary expansion. As such, it moves higher even before policy makers add more inevitable “stimulus” (i.e., mouse-click fiat currencies) into the system. By the time policy makers officially announce a recession, it’s far too late for most investors to react. Fortunately, gold acts more quickly, anticipating monetary expansion even before the money printers start churning. Long before the “COVID recession” of 2020, for example, the writing was already on the wall that markets and central bankers were getting desperate. By late 2019, debt levels were off the charts, liquidity was drying up, the repo markets were drinking hundreds of billions of Fed dollars per month and an un-official QE to the tune of $60 billion per month was in full-swing. Then came COVID in March. Markets and GDP were tanking and gold was already on course to see (in dollar terms) a 25% rise in 2020, after a 19% rise in 2019. In short, as a recession hedge, gold was ahead of the central bankers in protecting investors. By the way, the Fed’s record for calling recessions and warning investors is 0 for 10… 2. Hedging Market Volatility We all remember March of 2020, when markets puked and gold fell along with it, primarily sold-off as a liquidity source for players facing margin costs which they were forced to pay off with gold holdings. As in 2008 and 2009, gold initially followed the stock ship below the waterline—though not nearly as far as BTC… But as mentioned above, gold reacted quickly, anticipating the money printing (and hence dollar debasement) to come, rising steadily for the rest of that fiscal year. Of course, stocks rose as well, thanks to the unbelievable and historically unprecedented money creation witnessed in 2020—more QE in less than a year than all of the combined QE1-QE4 and “Operation Twist” which we saw from 2009-2015. But thankfully, gold doesn’t just follow stock markets, it hedges them, as the past shows and the future will once again confirm. Such monetary stimulus creates what von Mises would call a “crack-up boom,” and near-term such liquidity is just wonderful for stocks and bonds. As we’ve written elsewhere, COVID—and the policy measures which followed– literally saved the securities bubble and made this “boom” even bigger. But the “boom”-to-volatility to sequence to come from such risk assets reaching price levels which have absolutely nothing to do with valuation will be infinitely more painful (“crack-up”) down the road for those assets than for gold the moment when, not if, this horrific financial system implodes under its own and historically un-matched weight. In short, gold will zig when the markets zag. The anti-gold crowd, of course, will smirk and hug their bonds, reminding us all that gold is a yield-less relic while forgetting to confess that the “no yield” of gold is ironically preferrable to over $19 trillion worth of negative yielding sovereign bonds… 3. Hedging Inflation & Currency Risk Which brings us to the big question of the day, why is gold not rising when it should be ripping as a hedge against what is clearly an inflationary new normal? Fair question. We are asking this ourselves, as real rates (the ideal setting for gold) fall deeper into negative depths with each new day… …as inflation, as well as inflation expectations, are on the objective rise: Last year, for example, gold saw this inflation coming and thus its rising, double-digit price moves reflected the same. But this year, with real rates still diving and inflation rising, gold is showing single single-digit losses rather than gains. What gives? The Market Still Believes the “Transitory” Meme Our ultimate opinion boils down to this: We think the market still believes the central bank myth (i.e., propaganda) that the current inflation is indeed, only “transitory.” We’ve written ad nauseum as to why inflation is anything but “transitory,” yet we can nevertheless respect the deflationists’ argument. The Deflationists The deflation camp, for example, rightly argues that recessionary forces, if left alone, are inherently deflationist, and the signs of economic (rather than market) declines are everywhere. But the key mistake which such deflation (or dis-inflation) narratives make is that these natural forces have not, nor will be, “left alone.” In other words, deflationists are somehow ignoring the monetary and fiscal elephant in the room. That is, more, not less, unnatural monetary and fiscal liquidity is entering the system at historically unprecedented levels, levels that are more than enough to quash such otherwise natural deflationary forces. Stated even more plainly, moderation at the fiscal and monetary level died long ago. Simple Realism—Inflation as Necessity Rather than Debate Central banks are desperate to reach higher inflation to inflate their way out of debt without admitting the same. This is nothing new for fork-tongued policy makers who once “targeted” 2% inflation as a ceiling, but are now effectively “allowing” 2% inflation as the new floor. Just as Nixon said the closing of the gold window was “transitory” in 1971, or as Bernanke promised that QE would be transitory in 2009, the current lie from on high about “transitory inflation” is no less a lie in 2021 as those other lies were in 1971 or 2009. Again, we all just kina know this, right? Furthermore, we just need to be realists rather than dreamers to see the inflation reality now and ahead. Central bankers, for example, may be dishonest, but they aren’t entirely stupid, just desperate and realistic. In the U.S., for example, a staggering as well as openly embarrassing $28.5 trillion public (i.e., national) debt level quickly limits one’s options at the White House or the Eccles Building. Not Many Options Other than Inflation In this realistic light, let’s consider their options. Policy makers have four tools to address such debt, namely: raise taxes, cut spending, declare bankruptcy, or devalue their currencies through inflation. The first two are already in play in the U.S., namely political efforts to raise taxes and ‘talk’ of cutting spending, both politically difficult options. Taking bankruptcy off the table, leaves devaluing the U.S. Dollar as the favored option, which is achieved by deliberately taking real interest rates to extreme negative levels. Allowing inflation to run while keeping rates low reduces the number of dollars needed to repay the debt. This hurts regular folks, but as we’ve said so many times, the Fed is not interested in regular folks. In other words, by decreasing the value of the U.S. Dollar, the U.S. is effectively paying off its current debt with devalued money. There are no permission slips needed from Congress, nor taxpayers. Given such realism, let us be repeatedly blunt and clear: Unlike gold not rising, inflation is not, nor will it be, “transitory.” Instead, deliberate inflation is an inherently and deliberately necessary tool used by the same anti-heroes who put us in this debt hole. More Fed-Speak, Less Honesty This means the Fed will come up with whatever excuses, words, phrases and lies to justify being more dovish despite publicly flirting with hawkish talk about a Fed taper. Already, Powell is taking the Fed way beyond its mandate and talking about social and environmental activism, as these are nice phrases to justify, you guessed it: More money creation and more (not “transitory”) inflation. As for me, hearing Powell talk about “labor market inequality” after the Fed has spent years making the top 1% richer at the expense of an increasingly poorer bottom-90% is so rich in hypocrisy that it makes the eyes water. In this opaque light, the notion of “Fed independence” is a complete and utter fiction. Instead, the Fed is slowly crossing the line into becoming the direct financier to the entire nation—and the only way it can do this is via monetary expansion and deliberate (as well as much higher) inflation, which is a tax on the poor and bullet to the heart of the U.S. Dollar. Period. Full stop. It’s All About Debt Again, this all comes realistically back to debt. When there’s too much unpayable debt (be it at the zombified corporate level or the embarrassed national level), rising rates becomes fatal. The Fed has learned since 2018 that even a slight rise in rates kills the debt-saturated markets whose capital gains taxes are about all that Uncle Sam can declare as income in a nation whose GDP was sold to China years ago. And yet… and yet… the markets somehow wish to believe the fantasy (and Fed-speak) that inflation is only “transitory.” What’s Ahead? We strongly think differently. As blunt realists, we see the Fed perhaps raising rates nominally, but when adjusted by openly deliberate (yet openly denied) inflation, real rates will fall deeper as inflation rises higher. This is because the simple reality (and choice) of nations with their backs against a debt wall is always the pursuit of inflation by design, not deflation. As I recently wrote, nothing is real anymore, and all taboos are broken. The Fed, through QE and/or the Repurchase Program, will print more money as fiscal policy rises alongside—a veritable double-whammy for more “liquidity” to come. This, of course, is crazy and ends badly. The Fed, along with the White House, have tried since Greenspan to outlaw natural market forces and needed austerity in order to bloat markets, keep their jobs or win re-election. Since we can never grow or default (?) our way out of the greatest debt hole in our history, the realistic playbook ahead is negative real rates—i.e., inflation rising higher and faster than repressed Treasury yields. Once this becomes obvious rather than “debated,” gold will rise along side the money supply to levels well above it’s current, yet admittedly, low price. Slowly, but surely, the $19 trillion in negative-yielding sovereign bonds will see outflows from that discredited asset and hence inflows into the “barbarous” asset: Gold. For now, we are patient realists rather than apologists, as the market seemingly continues to price gold for only “transitory” inflation. But once inflationary reality rises above the current “transitory” fantasy, gold will not only surge in price, but serve its far more important role of hedging against undeniable inflation and the equally undeniable (i.e., destructive) impact such inflation will have on global currencies in general and the U.S. Dollar in particular. Gold: Biding Its Time Despite such signposts from math, history and Real Politik, gold is currently under attack for not “doing enough,” despite two years of double-digit rises. Gold investors, however, are not greedy, they are patient, and they hold this physical rather than paper asset for the long game, as previously described. And as for that long game, the inflation ahead, as well destruction of the currency in your pocket today and tomorrow, means today’s gold price is not nearly as relevant an issue as gold’s role in protecting far-sighted investors from what’s ahead. In the end, gold’s primary role is acting as insurance for a global financial and currency system already burning to the ground. But for those naturally asking about price, forecasting and models, as any who worked in a bank know, such models are as complex as they are useless. We keep things simpler and humbler. By just tracking monetary growth rates with certain regressions, a realistic price target for gold based upon inevitable monetary expansion suggests gold at well past $4000 by the end of this decade. That may or may not seem sexy enough for those chasing returns today, but when those returns convert into losses too hard to imagine as markets reach new highs, we must genuinely remind you that even with Fed “support,” all bubbles do the same thing: “Pop.” We are not here to tell you when, as no one can. We are simply suggesting you prepare, rather than react. Tyler Durden Sat, 09/25/2021 - 10:30.....»»

Category: blogSource: zerohedgeSep 25th, 2021

The 22 best board games to bring to game night, from beloved classics to new favorites

Playing a good board game is a great way to bring friends and family together. Here are the 22 best board games to try at your next game night. When you buy through our links, Insider may earn an affiliate commission. Learn more. The classic Clue is one of our favorite board games to play in 2021. Amazon Playing board games is a fun activity that brings family and friends together. The best board games range from silly party tricks to brain crunchers that require strategy. These 22 popular board games guarantee a great bonding experience with new friends and old. Board games have evolved over the years, but the best usually all share the same attributes - bringing out your competitiveness and strategic side while creating memorable bonding experiences. By no means is this list definitive, but through our research, crowdsourcing with colleagues, and personal experience, we've narrowed down the 22 best board games, from turn-based strategies to laugh-out-loud party games.We took some liberty with the term "board game" since some of these are card games or don't involve physical boards. Some can even be played virtually over the computer or by phone, so even those who can't join at the dining room table can still partake.Here are the 22 best board games to try with friends and family: Updated on 9/24/2021. This guide was originally published 10/24/2017. We chose new options based on experience playing them in addition to researching what's popular and crowdsourcing Insider Reviews team. This list is not definitive, so expect new options to be added. Monopoly Ariel Tilayoff/Business Insider Available at Amazon, $20.99Players: 2- 8 "One reason for Monopoly's staying power is because it has the elements of what makes a great board game: It involves strategy, negotiation, secrecy, manipulation. My family loves to play the game a lot. In fact, our version at home is from my mom's college days. It's missing one card, which my mom had replaced with a piece of cardboard and wrote the information on by hand. It's one part game, one part heirloom.This game has also evolved into numerous modern remakes, like the Disney edition, Cheaters edition, and Voice Banking Edition (currently sold out), which put a spin on the classic gameplay. My family also owns these, but it's mom's original that we still go to." — Ariel Tilayoff, Former Story Production Fellow Clue Amazon Available at Amazon, $9.84Players: 3-6 "Another classic alongside Monopoly, Clue uses your investigative and memory skills, as well as abilities to read other players' expressions to figure out that Mrs. Peacock did it with the wrench. Or, was it Colonel Mustard and the candlestick? Like Monopoly, this game also has different editions, such as the Las Vegas version seen here with my dad and me.Some of my have friends tried to use a mathematical formula to solve the mystery, but it never works. I find just looking at people's expressions can give certain things away. To make it more personal, you can create your own version of the gameplay with your friends as the suspects." — Ariel Tilayoff, Story Production Fellow Pictionary Amazon Available on Amazon, $19.99Players: 2 or more"Pictionary is another classic game that can get wildly competitive. If you're good at drawing under a time crunch, then this is the game for you. And if you can't draw very well, that makes this game all the more fun." — Anna Popp, Home and Kitchen Fellow Sorry! Amazon Available at Amazon, $9.84Players: 2-4"I never knew how competitive Sorry! could be until I played with several of my friends. An oldie but a goodie, Sorry! is a game everyone should have in their home." — Anna Popp, Home and Kitchen Fellow  Catch Phrase Anna Popp/Insider Players: 2- 8 "One reason for Monopoly's staying power is because it has the elements of what makes a great board game: It involves strategy, negotiation, secrecy, manipulation. My family loves to play the game a lot. In fact, our version at home is from my mom's college days. It's missing one card, which my mom had replaced with a piece of cardboard and wrote the information on by hand. It's one part game, one part heirloom.This game has also evolved into numerous modern remakes, like the Disney edition, Cheaters edition, and Voice Banking Edition, which put a spin on the classic gameplay. My family also owns these, but it's mom's original that we still go to." — Ariel Ti layoff, Story Production Fellow  Codenames Ariel Tilayoff/Business Insider Available at Amazon, $11.41Players:  4-8 "If you haven't guessed, my friends and I love game nights, preferably played alongside some wine and cheese. Codenames is a guessing game that revolves around two teams, and the goal is to guess all the words they were given based on word association clues given by each team's "spymaster."Our description is a bit simplistic but it's far more challenging when played. It's a game for wordsmiths — besides that other game." — Ariel Tilayoff, Story Production Fellow Exploding Kittens Party Amazon Available on Amazon, $24.99Players: 2-10"The most important rule of the game Exploding Kittens is that you want to be prepared for getting an Exploding Kitten card which can terminate your part in the game if you are prepared. This game can get pretty competitive, especially when you can sabotage other players with Exploding Kitten cards." — Anna Popp, Home and Kitchen Fellow Hearing Things Amazon Available at Amazon, $11.48Players: 2-4 "This game is about reading lips. Each player puts on a pair of noise-isolation headphones and tries to guess what someone is saying. As you would expect, there's a lot of wrong answers while hilarity ensues. My friends and I would forego the included headphones — we could still hear each other with them — and, instead, use Beats wireless headphones while playing some music to drown out the noise. The person or team that guesses the most phrases within a certain time frame wins. This game is good to play with family or a small group of friends but it can't be pushed beyond four people due to its setup." — Ariel Tilayoff, Story Production Fellow Goat on a Boat Amazon Available at Amazon, $18.36Players: 2-20"A game of rhyming, charades, and decoding phrases, Goat on a Boat is a hilarious team card game where you have to guess the rhyme or clues to a full phrase before the time runs out." — Anna Popp, Home and Kitchen Fellow  Anomia Party Edition Amazon Available at Amazon, $21.93Players: 3-6"If you enjoy word games, I'd recommend trying Anomia. Cards have symbols and words on them, and you have to race an opponent to name things that fall into the card's category — for example, categories could be rodent, dinosaur, male tennis player, etc." — Mara Leighton, Senior Education and Personal Development Reporter Heads Up! Amazon Available at Amazon, $18.18Players: 2- 6 "Also known as the "Ellen Degeneres game," Heads Up! originally started as a popular smartphone app. The board game version follows the same tactics: The player has to guess what's on the card hidden from their view (it's on their head), based on clues given by other players. There is a time limit and it moves fast.Watching people attempt to act out some of the clues is hilarious and what makes it enjoyable. The game also has different expansion packs to keep things fresh." — Ariel Tilayoff, Story Production Fellow Midnight Taboo: Ariel Tilayoff/Business Insider Available at Amazon, $19.99Players: 4-8 "This is the after-dark version of the classic game Taboo. Like the original, one player is the clue giver and the others have to guess the word. The person giving clues is only given a minute to explain the words — like "booze," "lick," and "suck" — while someone hovers over with a buzzer in case they say the forbidden word. In this adults-only version, the descriptions are hilarious and risque. If you want to play with family or kids, stick with the regular Taboo game." — Ariel Tilayoff, Story Production Fellow Pandemic Sarah Saril/Insider Available at Amazon, $43.58Players: 2-4"For groups with stellar teamwork, Pandemic is for you. It can be played with two to four players, all of whom must collaborate to quash the spread of a virus. My friends and I have never beaten this game, but it's so fun, we will not stop trying." — Sarah Saril, Tech Deals and Streaming Reporter Ticket to Ride Ariel Tilayoff/Business Insider Available at Amazon, $43.99Players: Up to 5 "Ticket to Ride is an award-winning European-style board game that requires you to think ahead before you make a move. The point of the game is to run trains and decide routes between iconic cities — the longer the route, the more points you gain, but it is more complex when played. A fun feature this game has is you can include your Amazon Alexa device. If you tell Alexa, "Play Ticket to Ride," it will start up the game, teach you how to play, add fun sound effects, and keep track of your scores. It is extremely fun for all ages and does not take much time to learn." — Ariel Tilayoff, Story Production Fellow Catan Amazon Available at Amazon, $43.67Players: 3-4 "Catan is a strategy game and the goal is to collect resources to expand your settlement. You'll have to barter with other players, strategize the best way to gain points, and fight off thievery. The game is so popular that there are Catan tournaments around the world.The classic version Catan is the favorite although there are also Seafarers, Junior, and even a Game of Thrones version. This game is suitable for players ages 10 or older, but plan to dedicate a few hours." — Ariel Tilayoff, Story Production Fellow  Trivial Pursuit Amazon Available at Amazon, $17.76Players:  2- 6 "If you like trivia, you'll love this game. Another classic that remains popular, Trivial Pursuit tests your knowledge in a variety of categories, including sports, entertainment, and history. You have to answer a question right in each category to win; it's simple if you know your obscure facts.There are also special editions that focus on specific topics, like US history and "Star Wars" movies. Even if you lose, you'll gain some new insights." — Ariel Tilayoff, Story Production Fellow  Wingspan Amazon Available at Amazon, $50.50Players: 1-5"Nature lovers and bird watchers will enjoy playing Wingspan. From the Mountain Chickadee to the Western Meadowlark, you collect unique bird cards and try to lay as many eggs as possible. Wingspan has a solo mode and can be played by up to five people." — Reece Rogers, Streaming Fellow Mastermind for Kids Macy's Available at Macy's, $12.99Players: 2 "My brother and I used to play this game on long family road trips. Taking turns, one player would set up a code while the other tries to solve it, and vice versa. This kids' version teaches problem-solving skills, which they can then apply to the adult version of the game or their studies." — Ariel Tilayoff, Story Production Fellow All Bad Cards Jake Lauer Available for free at All Bad CardsPlayers: 1-12 "Inspired by the popular Cards Against Humanity, All Bad Cards is the online card game not for prudes. Like CAH, ABC involves a deck of (virtual) cards and from those cards, players fill in the blanks to create hilarious, highly NSFW sentences. It's Mad Libs for adults.I recently played with friends from my study-abroad program — all you need is a computer or phone and then create a shareable link to send to your friends. We spent about two hours playing and laughing, and it was a great way for us to reconnect after not seeing each other for a while. There is also a family-friendly version called (Not) All Bad Cards that's more appropriate to play with kids. Another fun game for the family is the classic Apples to Apples." — Ariel Tilayoff, Former Story Production FellowHere's how to play All Bad Cards Sequence Amazon Available at Amazon, $17.97Players: 2-12 "This game is all about the luck of the draw. The point is to be the first to make a sequence — having five of the same color marker chip in a line, whether it be vertical, horizontal, or diagonal — and the number of sequences will depend on how many teams are playing.This game requires strategy, speed, and teamwork to win. It's a great game to play either with a friend or a large group of people." — Ariel Tilayoff, Story Production Fellow  Disney Sketchy Tales Walmart Available at Walmart, $20Players: 4-8 "The one thing my friends and family will never outgrow is our love of all things Disney, which is why this drawing game is a perfect way to channel our fandom. Sadly, our attempts at drawing Disney characters won't get us jobs as animators, but they are fine for a good laugh." — Ariel Tilayoff, Story Production Fellow   Peppa Pig Chutes and Ladders Anna Popp/Insider Available at Amazon, $10.99Players: 2-4"Chutes and Ladders is always a fun game of chance and hoping to avoid the chutes. This Peppa Pig addition is not only adorable for kids, but adults can enjoy the board game as well." — Anna Popp, Home and Kitchen Fellow  Read the original article on Business Insider.....»»

Category: worldSource: nytSep 24th, 2021

Charging Up Your Portfolio with Electric Vehicles

Whether its the government, Wall Street investors or even traditional automakers; everybody is seeing tremendous potential in EVs. Ben Rains will show you how to capitalize on this burgeoning space, which grew over 160% worldwide in the first half of 2021. The U.S. Senate passed a $1 trillion bipartisan infrastructure bill in early August, with billions set to flow into various sectors, from more traditional areas such as roads to modern green energy initiatives. The clean energy efforts are part of a larger push within the U.S and other wealthy nations to speed up the transition away from fossil fuels throughout every corner of the economy.The green energy age isn’t complete without electric vehicles (EVs) dominating streets and highways, and the U.S. still has miles of road to travel in order to get there.Washington’s Focus on EVs The White House and Washington have put a spotlight on electric vehicles as part of a longer-term greener movement. President Biden signed an EV-focused executive order in August that hopes to spur rapid adoption. The non-binding goal aims to have all-electric, hydrogen-fuel cell, and plug-in hybrid vehicles make up 50% of U.S. sales by 2030.In order to reach this voluntary benchmark, automakers called for federal support for EV charging stations, various consumer tax incentives, and other pro-electric initiatives. Elsewhere, the Senate’s $1 trillion bill allots $7.5 billion for states and municipalities to build EV charging stations. The legislative effort also includes over $6 billion in grants for battery production, development, and recycling.The projected funding is less than President Biden called for in March when his administration set a goal of building 500,000 public chargers by 2030. There are currently roughly 48,000 public EV charging stations and over 120,000 charging ports in the U.S., according to U.S. Department of Energy data.These levels don’t come close to supporting rapid EV adoption. Federal, state, and local governments must work with automakers, charger technology companies, and various other stakeholders in order for EVs to start driving American automotive sales anytime soon.Despite all of the hype, the U.S. and the world has barely scratched the EV surface. The nascent nature provides plenty of profitable investment opportunities if you know where to look...Continued . . .------------------------------------------------------------------------------------------------------Zacks’ Top Infrastructure Picks (Grab These for Q4 and Beyond)Our research has identified 5 stocks that are set to surge due to the massive new infrastructure bill. This is the largest bill of its kind in decades, giving investors a chance at tremendous gains.Zacks’s just-updated special report, How to Profit from Trillions in Spending for Infrastructure, is designed to help you profit from the most promising “American Upgrade” stocks. Some infrastructure stocks have recently soared as much as +81%... +150%... even +248%.¹ The stocks in this report could be just as lucrative. Don't delay: this Special Report is only available until Sunday, September 26.See 5 Top Infrastructure Stocks Now >>------------------------------------------------------------------------------------------------------The Current EV Market Gasoline-powered vehicles remain by far the most popular means of transportation. Electric vehicles made up only 2% of U.S. sales last year and expanded to a little over 3% in recent months. Limited market share is part of the reason why Wall Street is excited even if the electric/hybrid space doesn’t get close to 50% market share by 2030.Tesla proved there’s demand for EVs in the U.S. and its success on the road and in the stock market forced every established auto company to go all-in on electric. Plus, plenty of newcomers, some of which are publicly traded, are ramping up production on sleek new EVs of all shapes and sizes. It will be difficult to recreate Tesla’s meteoric run, but a few standout startups are starting to make their case.Most major automakers plan to offer many of their current models as EVs within the next decade, while rolling out EV-only cars, SUVs, and trucks. Established auto titans, perhaps ambitiously, aim to generate upwards of 50% of global sales from EVs by 2030.One historic firm is revamping its entire business around EVs. The company said earlier this year it aims to have 40% of its global volume be all electric by 2030 and it expects to spend more than $30 billion on electrification during this stretch. The firm’s early efforts have already paid off in terms of actual sales and its surging stock price.Auto giants in both luxury and mass markets will start eating away at Tesla’s current dominance. There are plenty of reasons to believe this could happen somewhat quickly. A few select stocks will capture a budding corner of the EV market Tesla has little chance of controlling. The ability to meet the coming demand from commercial customers such as contractors, construction companies, police departments, and other government fleets is set to boost a few well-known companies in particular.Where’s the Money  New light-vehicle sales in the U.S. are set to climb around 13% to reach 16.3 million in 2021. EV sales are projected to blow away the broader industry-wide expansion. For instance, global EV sales already skyrocketed over 160% in the first half of 2021 against a pandemic-hit period.Tesla led the charge, accounting for about 14% of the global market during this stretch, but its share slipped compared to last year. A few global automakers are already in Elon Musk’s rearview mirror despite the huge head start, while smaller, highly affordable brands are dominating EV sales in China and other Asian nations.Along with investing in pure-play electric vehicle companies, Wall Street and the industry are pouring money into the technology side of the business. This is vital since EVs rely heavily on interconnected technology, remote software updates, high-tech touch screens, and much more. One firm in September poached a former Tesla executive from Apple—which has its own EV aspirations—because EVs are closer to supercomputers on wheels than traditional cars.EVs will also provide automakers with more consistent revenue streams, via remote monitoring, constant software updates, and other futuristic maintenance necessities. And it’s hardly just the automakers who stand to benefit. Smaller tech companies are already profiting from advanced radar navigation and more, and many are hot acquisition targets. Batteries and Chargers  EV motors are clearly essential cogs, but high-tech batteries are perhaps the most vital components. Continued progress on the energy storage and range fronts will help determine how quickly the market can grow.Wall Street is also laser-focused on lithium, with the commodity making a case to become a “new oil.” Lithium-ion batteries are already used in most portable consumer electronics such as smartphones, and nearly all electric vehicles run on rechargeable lithium-ion batteries.From startups to Tesla, companies are working on next-generation battery technologies, including solid-state batteries and new cell formats. Like many cutting-edge industries, there are likely game-changing batteries coming down the pike soon that few will have imagined possible.Alongside batteries, an EV-heavy future is only possible if consumers can drive anywhere they normally would or make that same big road trip, without needing to plan their route around chargers. EV chargers are often classified in three categories: Level 1, Level 2, and Level 3 or DC fast chargers. The first two are common for home-based charging, while the fittingly named Level 3 fast chargers require as much as $100,000 or more per station in upfront capital.There are over 100 EV charging companies in North America alone. Firms able to create faster chargers that mimic speeds closer to filling up a tank of gas will be surefire superstars, while companies able to roll out the most chargers, akin to gas stations, could become stable green energy players for decades.5 Stocks to Electrify Your Portfolio Electric vehicles and EV-related technologies are some of the most promising spaces investors can target for long-term gains. Consumers are demanding more electric options and manufacturers are rising to the occasion.And as discussed above, the government is driving hard toward a clean energy future. The infrastructure bill passed by the Senate last month could earmark billions of dollars to make EVs even more accessible – and you might be surprised at which stocks might benefit most.To help you make the most of this opportunity, Zacks has just updated our special report, How to Profit from Trillions in Spending for Infrastructure.The report reveals 5 stocks primed for big price moves, including an EV stock no one is thinking about. The company has a new CEO, a new focus on cutting edge tech and earnings that are projected to skyrocket 300%.I encourage you to check out the 5 stocks right away. The infrastructure bill could be a powerful catalyst, but these companies are strong enough to deliver significant gains on their own.Don’t delay. This Special Report is only available until Sunday, September 26.Click here to claim your copy of How to Profit from Trillions in Spending for Infrastructure >>Good Investing,Ben RainsStock Strategist¹ The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position.  Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 24th, 2021

Will Biden’s Neo-Populist Economic Doctrine Support Gold?

Biden scaled back on his infrastructure bill. However, with all the remaining cards still in play, his economic agenda should be positive for gold. Q2 2021 hedge fund letters, conferences and more Trends In The Gold Inflation, bond yields, monetary policy… that’s all interesting and crucial to understand trends in the gold markets – but, […] Biden scaled back on his infrastructure bill. However, with all the remaining cards still in play, his economic agenda should be positive for gold. 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); Q2 2021 hedge fund letters, conferences and more Trends In The Gold Inflation, bond yields, monetary policy… that’s all interesting and crucial to understand trends in the gold markets – but, hey, what’s up in politics? A lot has happened recently on this front. In particular, last month, the world was shocked by the chaotic withdrawal of US troops from Afghanistan. The messy pullover and the quick takeover of the country by the Taliban is not only the end of Biden’s honeymoon but also America’s great failure. Some analysts even say that the fall of Kabul is another Saigon time for the US. Indeed, it goes without saying that the collapse in Afghanistan is a huge blow to America’s reputation. So, it could weaken the faith in Uncle Sam and its currency, which could be positive for gold in the long run. However, the end of the US mission in Afghanistan doesn’t pose any direct threats to America (although terrorism could thrive under the Taliban regime) or to the greenback. So, I don’t expect any substantial, long-lasting moves in gold prices (always remember that geopolitical events cause only short-lived fluctuations, if any). Another recent important development in the US policy was that the Senate passed a $1 trillion bipartisan infrastructure bill, which is a big step in pushing Biden’s economic agenda through Congress. The economic effect will probably be smaller than expected, as public stimulus rarely works as intended. So, I don’t expect any material impact on gold prices, especially given that this additional government spending has already been priced in. However, I would like to point out that Biden has scaled back his infrastructure plans from $2.2 trillion and agreed to spend these funds over a longer period. It means that the US fiscal policy, although still unprecedentedly easy, is normalizing somewhat (see the chart below), at least compared to Democrats’ initial huge plans (however, they are still working on a budget resolution that would allow them to approve a complementary $3.5 trillion spending plan). A normalization of the fiscal policy is bad for gold prices, especially when coupled with the Fed’s tightening cycle. Biden’s Economic Agenda Let’s step back — it turns out that it’s quite fruitful to look at Biden’s economic agenda from a bit broader perspective. It becomes clear that Biden – despite his hatred for Trump – actually continues Trumponomics. Nouriel Roubini calls Biden’s doctrine “neo-populist” and sees the paradox in the fact that it “has more in common with Trump’s policies than with those of Barack Obama’s administration, in which the current president previously served”. Indeed, every president from Bill Clinton to Obama favored trade liberalization and a strong dollar while respecting the Fed’s independence. They were also understanding the importance of the moderate fiscal policy (although the practice differed, especially after the financial crisis of 2007-9). They were far from being laissez-faire advocates, but at least they didn’t question the economic orthodoxy. Then Trump stepped in, inaugurating a trade war with China, and imposing tariffs on goods from other countries as well. He also questioned the Fed’s actions, which supported a weak greenback and ballooned fiscal deficits even before the epidemic started. Biden’s rhetoric is softer and his actions less erratic, but he has maintained Trump’s tariffs, pursuing similar nationalist and protectionist trade policy. He even widened the already large budget deficit, continuing the spending spree financed by public debt. Although Biden doesn’t openly favor a weak dollar, the current administration is far from pursuing a strong-dollar policy. He also supported large direct cash transfers to citizens that Trump started in response to the pandemic. Last but not least, Biden fights with Big Business, introducing some anti-monopoly policies. Implications For The Gold Market What does it all mean for the gold market? Well, the continuation of neo-populist economic doctrine and shifting away from sound economics (I wrote about this earlier this year) implies generally looser monetary and fiscal policies. Larger debts create a risk of a debt crisis, while downplaying the inflationary pressures (as for populists, price stability is less important than employment gains, rising wages, or reducing inequalities) increases the odds of inflation crisis or even stagflation (big government and huge indebtedness could hamper the pace of GDP growth). As we know from Latin America, the rules of populists and MMT-like policies never end well. And, as we know from the 1970s, constant stimulation of the economy (because there is still some slack) and neglecting the dangers of inflation could be disastrous. So, Bidenomics should be generally supportive of gold. Having said that, investors should remember that many more factors influence gold prices than just the President’s actions. A part of Biden’s presidency will coincide with the economic expansion from the pandemic recession and normalization of the interest rates that will likely create downward pressure on the yellow metal. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care. Updated on Sep 24, 2021, 11:07 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: valuewalkSep 24th, 2021

Make the Most of Soaring Natural Gas Prices with These 5 Plays

Soaring energy prices and cheap valuations make this group attractive. Natural gas prices have been rising this year. The reason, according to the U.S. Energy Information Administration (EIA) is a warmer-than-usual summer that boosted electricity consumption for air conditioning, increased liquid natural gas (LNG) exports and flat production, which in combination led to a lower inventory build for the winter. The fact that hurricane Ida disrupted production in August also didn’t help.The other contributing factor was that natural gas prices typically rise in times of economic expansion, because of its use in the commercial sector, as well as processing in several industrial segments like chemicals, fertilizers, paper and glass. And we know how rapidly the economy has turned around.It’s now expected that prices will remain elevated through the winter because of the low inventories and increased demand from consumer, commercial and industrial users. And that is despite electric power consumption dropping an estimated 8.3% this year as the sector shifts some consumption to coal (the usual fallback when prices continue to rise). The electric power sector is the largest end-use case for natural gas, and it’s highly sensitive to prices. Less elastic demand comes from things like lease and plant fuel, pipeline and distribution use, and vehicle use and these segments are likely to see steady growth through 2022.The EIA estimates that despite increased production, natural gas inventories will be 5% below the 5-year average at the end of the 2021 injection season (October-end). Next year, demand from electricity suppliers will fall further, as additional clean energy sources come online.Important NumbersHenry Hub spot prices in August were $1.77 per million British thermal units (MMBtu) higher than in August 2020.U.S. consumption of natural gas will average 82.5 billion cubic feet per day (Bcf/d) in 2021, down 0.9% from 2020, remaining more or less steady at 82.6 Bcf/d in 2022.Residential and commercial natural gas consumption combined will rise by 1.2 Bcf/d, industrial consumption will rise by 0.6 Bcf/d and the electric power sector’s consumption will drop by 2.7 Bcf/d, or 8.3% in 2021.Dry natural gas production will average 92.7 Bcf/d in the U.S. during 2H21—up from 91.7 Bcf/d in 1H21—and then rise to 95.4 Bcf/d in 2022.U.S. natural gas inventories ended August 2021 at about 2.9 trillion cubic feet (Tcf); inventories will end the 2021 injection season (end of October) at almost 3.6 Tcf, which would be 5% below the five-year average.LNG ExportsSince the U.S. is more or less replete in natural gas resource, the domestic market is well-developed with consumption balancing production more often than not, leading to low and steady prices. But the last few years have seen increased recognition across the world of LNG as a clean fuel and countries like China have made it part of their clean energy strategy. The high demand in Europe and Asia has sent global prices soaring, which in turn has encouraged U.S. manufacturers to export. The expansion of the domestic LNG market is changing the operating dynamics with the potential for prices to rise and stay higher in the future (because of increased international demand).Most players are involved in both natural gas and crude operations, although there’s an increased focus on natural gas of late.Let’s consider a few cases-Cheniere Energy, Inc. LNGHouston, TX-based Cheniere Energy is primarily engaged in businesses related to liquefied natural gas (or LNG) through its two business segments: LNG terminal and LNG and natural gas marketing. The company, through its controlling interest in Cheniere Energy Partners L.P., owns and operates the Sabine Pass LNG terminal in Louisiana – North America’s first large-scale liquefied gas export facility. Furthermore, Cheniere Energy owns and operates the 94-mile Creole Trail Pipeline – an interconnect between the Sabine Pass receiving terminal and the downstream markets – through its subsidiary.Cheniere Energy intends to construct up to six trains at Sabine Pass with each train expected to have a capacity of about 4.5 million tons per annum. While Trains 1, 2, 3 and 4 are functional; Train 5 is undergoing commissioning. Train 6 is being commercialized and has secured the necessary regulatory approvals.Cheniere Energy Partners is also developing a liquefaction and export terminal in Corpus Christi, TX. Train 1 commissioning is complete, Train 2 is under construction and Train 3 is commercialised with necessary approvals in place. The facility came online in 2019. Cheniere Energy intends to develop seven midscale liquefaction trains adjacent to the Corpus Christi Liquefaction facility (CCL). The company has initiated the regulatory approval process. The total production capacities for these trains are expected to be approximately 9.5 Mtpa.Additionally, Cheniere Energy is involved in LNG and natural gas marketing activities through its subsidiary, Cheniere Marketing LLC.Global LNG demand is likely to continue growing for the next few years. Cheniere Energy, the U.S.’s only listed LNG export pure play, foresees the fundamentals of LNG to be favorable in the long run, considering the secular shift to the cleaner burning fuel for power generation worldwide and in the Asia-Pacific region in particular. While the increasing demand for gas in the European power sector will be a key factor driving near-term LNG supply, longer-term consumption is set to come from Asian importers like China, India, South Korea and Pakistan.Being in the expansion phase of a capital-intensive business isn’t easy and the company has acquired a significant amount of debt. At the same time, its long-term contracts ensure steady cash flow and provide excellent visibility into the future.It’s therefore particularly encouraging that Cheniere’s expected earnings growth of 976.5% this year and 119.7% next year are significantly higher than its expected revenue growth of 46.4% and 13.6%. After a correction 30 days ago, its estimates are again on the rise.The shares carry a Zacks Rank #2 (Buy) and at 16.1X P/E, they’re trading below their median level over the past year. Definitely worth considering.Range Resources Corp. RRCBased in Fort Worth, TX, Range Resources is an independent oil and gas company engaged in the exploration, development and acquisition of oil and gas properties, primarily in the Appalachian Basin and North Louisiana. It is among the top 10 natural gas producers in the U.S. and is among the top NGL producers in the domestic market.The Appalachian Basin incorporates prolific acreages in Marcellus, Utica and Upper Devonian shale formations. In the Marcellus formation of the basin, it has a multi-decade inventory of premium drilling locations. Of the 3,100 undrilled wells in the region, 2,600 wells are liquids-rich and the rest have a natural gas predominance. Following the merger with Memorial Resource Development Corporation a few years back, Range Resources created a core acreage position in North Louisiana comprising 140,000 net acers with multiple formations of productive oil and natural gas.The company primarily sells its produced natural gas to midstream firms, utilities, marketing companies and industrial users. It also sells natural gas liquids (NGLs) and crude oil.As of Dec 31, 2020, total proved reserves were 17.2 trillion cubic feet equivalent (Tcfe), almost flat year over year. Around 95% of the company’s total proved reserves are located in the Marcellus region. Of the total proved reserves, roughly 57% was developed.Despite its considerable liquid resources, the company has been focusing on natural gas production because of growing global demand for clean energy. In 2020, its total production averaged 2.23 million cubic feet equivalent per day, of which 69.4% was natural gas. A similar trend is seen this year.Range Resources’ revenue is expected to grow 38.9% in 2021 and 3.6% in 2022. Earnings are expected to increase 2000% and 45.5%, respectively in the two years. Estimates for both years have been rising steadily: the 2021 estimate increased 47.4% in the last 90 days while the 2022 estimate increased 93.0%.The shares carry a Zacks Rank #1 (Strong Buy). At 8.7X P/E, they’re trading below their median level over the past year, making them really cheap at these levels.Continental Resources, Inc. CLROklahoma City, OK-based Continental Resources is an explorer and producer of oil and natural gas. The company operates premium resources in the North Dakota Bakken and Montana Bakken (among the country’s largest onshore oilfields) in northern U.S., the SCOOP and STACK plays of Oklahoma in southern U.S. and undeveloped leasehold acreage in eastern U.S. It also has strategic water assets in Bakken and Oklahoma.Given its presence in prolific regions, the company expects oil equivalent production growth of 8-10% CAGR from 2019 to 2023 which is expected to translate to average annual free cash flow of $3.5-$4 billion over the five-year period.At the end of 2020, the company’s estimated proved reserves were 1,103.8 MMBoe. During 2020, the company produced 300,090 barrels of oil equivalent per day (Boe/d), lower than 340,395 Boe/d in the year-ago quarter. Of the total production, oil accounted for nearly 58.2%.The company’s 2021 revenue and earnings are currently expected to grow 101.9% and 436.8%, respectively. While analysts still expect 2022 growth to be negative, estimates for both years continue to increase substantially (from $2.35 to $3.94 in 2021 and from $1.97 to $3.68 in 2022). The stronger pricing this year is clearly driving the numbers.The shares of this Zacks Rank #1 company are currently trading at a P/S of 2.99X, which is between their median and high values over the past year, although much lower than the S&P 500. While not cheap, they can’t be considered expensive either.Goodrich Petroleum Corp. GDPHouston, Texas-based Goodrich Petroleum is an exploration and production company. It primarily holds interests in the Haynesville Shale Trend in northwest Louisiana and East Texas; Tuscaloosa Marine Shale Trend located in southwest Mississippi and southeast Louisiana; and the Eagle Ford Shale Trend in South Texas. The company owns interests in 189 producing oil and natural gas wells located in 37 fields in six states of the United States.As of December 31, 2020, it had estimated proved reserves of approximately 543 billion cubic feet equivalent, which included 540 billion cubic feet of natural gas and 0.5 million barrels of crude oil or other liquid hydrocarbons of oil and condensate.The company’s revenues are expected to grow 60.5% this year and another 22.4% in the next. Its earnings are expected to grow 1676.2% this year followed by 25.3% growth in the next. Estimates for both years are galloping ahead. In the past 90 days, they’ve gone from $2.17 to 3.73 for 2021 and from 2.74 to 4.67 for 2022.Shares of this Zacks Rank #1 stock currently trade at 4.9X P/E, which is below their median level over the past year, and of course much lower than the S&P. They’re a steal at these levels.Magnolia Oil & Gas Corp. MGYMagnolia Oil & Gas is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Headquartered in Houston, TX, the firm is focused on the high-quality Eagle Ford Shale and Austin Chalk formations in South Texas.In South Texas, Magnolia’s position consists of more than 460,000 net acres, of which around 23,500 net acres are located in the highly productive Karnes County and nearly 440,000 net acres in the re-emerging Giddings Field.At Dec 31, 2020, Magnolia's total estimated proved reserves were 49.3 million barrels ((MMBbls) of oil, 28.5 MMBbls of natural gas liquids (“NGL”) and 207.6 billion cubic feet (Bcf) of natural gas, totaling 112.3 million barrels of oil-equivalent (MMboe) — 69% liquids, 76% developed.The company focuses on growth through a combination of acquisitions and active drilling. Since its inception in 2018, Magnolia has spent around 60% of operating cash flow on capital expenditures, 26% on acquisitions, 8% on stock buybacks, while preserving the remaining 6% as cash. In particular, Magnolia is focused on returning significant cash to its shareholders: it aims to repurchase 1% of its total scrips outstanding each quarter and introduce a semi-annual cash dividend in 2021.Given the COVID-related disruption in 2020, it’s understandable that revenue and earnings are expected to jump 88.7% and 10050% this year. But the 6.7% revenue growth and flattish earnings slated for the following year are particularly encouraging.The Zacks Rank #1 shares are trading cheap at 8.23X earnings (below median level of 12.09X over the past year). One-Month Price PerformanceImage Source: Zacks Investment Research 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 Range Resources Corporation (RRC): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report Continental Resources, Inc. (CLR): Free Stock Analysis Report Goodrich Petroleum Corporation (GDP): Free Stock Analysis Report Magnolia Oil & Gas Corp (MGY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

NATO is still living with the consequences of a historic decision it made hours after 9/11

After 20 years of fighting in Afghanistan, NATO members face hard questions about their commitment to the alliance. NATO Secretary General Lord George Robertson speaks to reporters after a meeting of NATO's Permanent Council, in Brussels, October 8, 2001. OLIVIER HOSLET/BELGA/AFP via Getty Images NATO's collective-defense provision, Article 5, is the alliance's backbone. Article 5 has only been invoked once, after the September 11 attacks, which led the alliance into Afghanistan. After 20 years of fighting there, NATO members face hard questions about their commitment to the alliance. See more stories on Insider's business page. A few weeks after the September 11 attacks, NATO made a decision that would shape its future for the next two decades when it invoked its most important weapon: Article 5.Article 5, NATO's collective-defense provision, is the alliance's backbone. According to it, an attack against one NATO member is an attack against all.The article was included in the Washington Treaty, NATO's founding document, to deter the Soviet Union amid the emerging Cold War. The idea was, essentially, that if the Soviet Union attacked a European NATO member the US would intervene on its behalf.However, the US was wary of an automatic military commitment. So, despite pressure from European allies, the article did not specify the type of assistance the members would offer to the attacked party. This would play out in unforeseen ways in the future. President George W. Bush and Robertson at the White House, October 10, 2001. TIM SLOAN/AFP via Getty Images The article was never invoked during the Cold War. The first and so far only time it was invoked was not to defend a small NATO member from Soviet encroachment but the muscle of the alliance, the US itself, from Middle Eastern terrorists.The day after the September 11 attacks, most NATO countries called for the invocation of Article 5. This did not immediately happen since the origin of the attacks had yet to be determined to the satisfaction of some members.It took until October 2, 2001 - when then-NATO Secretary General Lord George Robertson announced that the attacks had indeed been directed from abroad - for Article 5 to be invoked.This was a watershed moment for the alliance. Failure to invoke Article 5 would have rendered NATO obsolete. Instead, the alliance, which had struggled to find its raison d'être following the collapse of the Soviet Union, was propelled into Afghanistan and the fight against terrorism.NATO's most important mission Members of France's 13th Paratrooper Dragoon Regiment during training at a military airport in eastern France, October 9, 2001. DAMIEN MEYER/AFP via Getty Images A number of NATO allies were involved in the war from the very beginning.The UK participated in the first airstrikes against Taliban and Al Qaeda targets. German and British special-operations units took part in the Battle of Tora Bora. A number of NATO countries contributed personnel, aircraft, and logistical support during 2002's Operation Anaconda, the successful mission to rout out Al Qaeda from Afghanistan's Shahi Kot valley.After dismantling the Taliban and Al Qaeda networks in Afghanistan, NATO's role there only grew.In 2003, at the request of the UN and the Afghan government, NATO took charge of the International Security Assistance Force. This was a landmark moment for the alliance.ISAF would be NATO's first deployment outside of Europe and North America. All NATO members would contribute personnel to ISAF - some contributed more per capita than the US.Eventually, the ISAF mandate would expand from securing Kabul to the whole country. This nominally transferred control of the war to NATO.The war exposes NATO's weaknesses A man with a sign reading "War is Murder-War is Terror" outside the German parliament as it debates sending troops to Afghanistan, November 16, 2001. Sean Gallup/Getty Images Assuming control of such a high-stakes mission provided significant operational and organizational experience to NATO. However, as the war's toll increased, weaknesses within the alliance were exposed.Participation in the war in Afghanistan had been a contentious issue in many European countries from the beginning.In some, like Spain, parliamentary approval had not been obtained to dispatch troops to Afghanistan. In others, like Germany and Italy, the deployed troops were limited by legal constraints, which in some cases prevented them from actually fighting the Taliban.Most NATO members had not fought a war in decades, so even limited combat casualties caused significant backlash at home. The 2004 Madrid train bombings and the 2005 London bombings - which brought Islamist terror to Europe in two of the continent's worst attacks in decades - further increased the war's unpopularity.As a result, many NATO members only contributed a few support troops and tried to sidle away from combat operations and troubled areas. France even withdrew its combat forces in 2012. The lack of specificity in Article 5 meant members could abide by their NATO commitment without totally participating in the war effort.In 2015, ISAF became the Resolute Support Mission. A non-combat mission, RSM significantly scaled down the number of NATO troops in Afghanistan as it focused on supporting and advising Afghan security forces.At its peak in 2019, the RSM fielded 17,000 troops, half of whom came from America's allies. Nevertheless, many countries' troop contributions were in the double or even single digits, highlighting NATO's participation problems.The few thousand non-US NATO troops still involved in Afghanistan in 2021 followed the US out of the country, evacuating Kabul in late August.A warning sign American bombs are dropped on an Al Qaeda position in Tora Bora, Afghanistan, December 15, 2001. Robert Nickelsberg/Getty Images The alliance emerges from Afghanistan with a mixed record.On the one hand, it undertook its largest mission ever and the first outside its normal area of operations, learning valuable lessons about organization and interoperability that will be useful for future deployments.On the other hand, the intractable problem at the alliance's core was exposed: the near-impossibility of getting all 30 members to agree on and commit to military and political priorities.To apply those lessons and stay relevant, the alliance will need to ensure that alignment.As NATO Secretary General Jens Stoltenberg wrote on the 20th anniversary of the September 11 attacks, "Afghanistan will not be the last crisis for which North America and Europe need to act together through NATO."Constantine Atlamazoglou works on transatlantic and European security. He holds a Master's degree on security studies and European affairs from the Fletcher School of Law and Diplomacy.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

Scholastic Reports Fiscal 2022 First Quarter Results

NEW YORK, Sept. 23, 2021 /PRNewswire/ -- Scholastic Corporation (NASDAQ:SCHL), the global children's publishing, education and media company, today reported financial results for the Company's fiscal first quarter ended August 31, 2021. Scholastic typically reports an operating loss and high cash utilization in its first fiscal quarter when most U.S. schools are not in session, however the Company recorded positive net operating cash flow in the current quarter. Fiscal First Quarter 2022 Review (In $ Millions) First Quarter $ % Fiscal 2022 Fiscal 2021 Change Change Revenues $ 259.8 $ 215.2 $ 44.6 21 % Operating income (loss) $ (32.0) $ (57.0) $ 25.0 44 % One-time items (4.2) 12.0 Operating income (loss), ex. one-time items* $ (36.2) $ (45.0) * Please refer to the non-GAAP financial tables attached Company Commentary "We executed successfully against our annual operating plan in the first fiscal quarter of 2022, leveraging the momentum and strong results achieved in the last three months of the prior fiscal year, with our strategic growth platforms in Trade and Education Solutions performing ahead of plan," said Peter Warwick, President and Chief Executive Officer. "Although the first quarter is typically a quiet quarter with most schools closed for summer recess, all of the Company's major domestic businesses realized solid double-digit top-line growth year-over-year, while the international businesses, primarily Australia and New Zealand, were adversely affected by new COVID restrictions." "We are seeing increased bookings of our premium case book fairs when compared to both prior year and this past spring season. Although still well below pre-COVID levels, the current back-to-school period looks favorable as students return to in-classroom instruction this fall. With schools re-opening their doors, we also saw higher sales of both curriculum and supplemental reading materials, such as our classroom libraries and leveled bookrooms. Subscriptions to the Company's education digital programs, including BookFlix®, Scholastic Literacy Pro®, and Scholastic F.I.R.S.T.® also continued to grow in the period. In trade publishing, we ended the quarter with 16 of the top 25 children's fiction books on the Publishers' Weekly Bestseller List — a testament to the deep commitment we have to creating titles and series that resonate with children and parents from all backgrounds and with varied interests. And, we are excited about our new fall frontlist that includes Cat Kid Comic Club®: Perspectives, the second title in the bestselling series by Dav Pilkey, as well as J.K. Rowling's The Christmas Pig." Mr. Warwick concluded, "We remain optimistic for continued growth through the post-COVID recovery and expect strong operating leverage and free cash flow generation given the success of our recent cost savings initiatives and solid execution, even as we are seeing inflationary pressures in our supply chain and labor pools. I am confident that we remain on a path to generate sustainable value for all of our stakeholders in the current fiscal year and beyond." Revenues Consolidated revenues increased 21% to $259.8 million in the first quarter versus the prior year period, primarily driven by the U.S. trade and education channels. Trade publishing revenues grew on the strength of the Company's series publishing and strong backlist titles. Higher sales in the education channels were driven by the Company's new early childhood program, PreK On My Way™, and summer learning product offerings bolstered by federal government funding for K-12 schools in the U.S. Partially offsetting the revenue improvements was a reduction in sales in the International segment as certain countries around the world continue to struggle with the pandemic-related disruptions in their local markets.  Operating Profit / Loss First quarter operating loss improved 44% to $32.0 million versus the prior year period. The first quarter's improved operating loss was directly attributable to the higher sales volume as the Company is beginning to recover from the pandemic, coupled with the continued benefits of the restructuring program executed in the prior fiscal year, as well as the proceeds from first tier insurance coverage related to the settlement of an intellectual property legal matter, partially offset by the prior period employee furlough and reduced work week programs which did not reoccur in the current period. Excluding one-time items in both periods, the Company had operating loss of $36.2 million in the first quarter of 2022, versus $45.0 million in the first quarter of 2021. Capital Position and Liquidity Net cash provided by operating activities was $63.6 million in the first quarter compared to net cash used in operating activities of $26.0 million in the prior year period, an increase of $89.6 million. The Company had free cash flow (a non-GAAP liquidity measure defined in the accompanying tables and reconciled to net cash provided) of $49.1 million in the first quarter compared to a free cash use of $34.9 million in the prior year period. As of August 31, 2021, the Company's cash and cash equivalents exceeded total debt by $219.1 million, compared to $135.6 million a year ago. The higher net cash position and the $84.0 million increase in free cash flow was primarily driven by the receipt of a $63.1 million federal income tax refund, higher customer remittances, and a $6.6 million insurance reimbursement related to the settlement of an intellectual property matter. The $20.0 million settlement was accrued for in the prior fiscal year and paid in September 2021. The Company is still in the process of filing claims with secondary and tertiary insurance carriers for the remaining settlement amount. During the quarter, the Company paid down $100.0 million of the outstanding borrowings under its domestic revolving credit facility, resulting in $75.0 million in outstanding revolving credit loans at quarter-end. The Company will continue to evaluate its borrowing position and capital allocations based on the performance of the school-based channels during the course of the current fiscal year.  The Company is also in dialogue with its banks on the renewal of its multi-year domestic committed credit facility, which is scheduled to mature on January 5, 2022. Overall Results In $ millions First Quarter Fiscal 2022 Fiscal 2021 Earnings (loss) before taxes $ (33.3) $ (51.8) One-time items* (4.2) 12.0 Earnings (loss) ex. one-times $ (37.5) $ (39.8) Interest (income) expense 1.3 1.2 Depreciation and amortization 16.4 16.4 Prepublication amortization 6.8 6.3 Adjusted EBITDA* $ (13.0) $ (15.9) * Please refer to the non-GAAP financial tables attached Loss before taxes for the first quarter was $33.3 million, compared to a loss before taxes of $51.8 million in the prior year period, an $18.5 million improvement. Adjusted EBITDA (a non-GAAP performance measure defined in the accompanying tables and reconciled to earnings (loss) before taxes) for the first quarter was a loss of $13.0 million, compared to a loss of $15.9 million in the prior year period. Adjusted EBITDA improved over the prior period due to the increase in revenues, which was partially offset by a $6.6 million benefit from the sale of the Danbury, CT facility in the prior year period. Fiscal 2022 Outlook  The Company is currently experiencing strong demand for its products and programs as schools begin to re-open this fall with rising book club sponsorship and increased book fair bookings and expects  sequential improvements in its school-based distribution channels in each quarter of the current fiscal year. The Company is well-positioned to meet expected demand in these channels, especially in its book fairs businesses in the U.S., Canada and UK. Scholastic's properties and titles continue to lead the market and occupy spots on the New York Times bestsellers list and are being leveraged for streaming services such as the recent announcement of Puppy Place, a live-action series based on the Company's best-selling books, premiering on October 15th on AppleTV+. In the education solutions channel, the Company continues to closely monitor how federal stimulus funds will impact the overall K‒12 education landscape and expects to benefit from a portion of this new spending. Internationally, the Company expects the lockdowns in Australia to lift and continues to explore growth through the expansion of Scholastic's range of English language learning digital product offerings in Asia. The Company faces certain headwinds in fiscal 2022 with higher labor costs, the discontinuation of certain COVID-related government subsidies and inflationary pressures that could impact paper, freight and other operating costs. Supply chain issues and potential labor shortages could adversely impact operating income through higher costs and/or revenue shortfalls. The Company is taking actions, when available, to help mitigate these potential increases and still expects stronger operating leverage and positive free cash flows. Additionally, the Company continues to identify further opportunities for incremental cost savings through process improvements and automation, consolidation of functions, and increased utilization of the Company's international shared services resources. Segment Results All comparisons detailed in this section refer to operating results for the first quarter ended August 31, 2021 versus the first quarter ended August 31, 2020.  Children's Book Publishing and Distribution (CBP&D) In $ millions First Quarter $ % Fiscal 2022 Fiscal 2021 Change Change Revenues Books Clubs $ 6.8 $ 5.8 $ 1.0 17 % Book Fairs 16.0 13.2 2.8 21 % Trade 93.0 73.3 19.7 27 % Total Revenue $ 115.8 $ 92.3 $ 23.5 25 % Operating income (loss) (21.7) (29.0) 7.3 25 % Operating income (loss) ex. one-time items* (21.7) (29.0) * Please refer to the non-GAAP financial tables attached First quarter segment revenues were $115.8 million, an increase of $23.5 million, or 25%, versus the prior year period primarily driven by trade channel sales. Marketing and publicity activities drove higher sales of Harry Potter® box sets and limited edition foil covers for Dog Man®. New releases from the Company's popular series, The Baby-sitters Club® Graphix™ and Baby-sitters Little Sisters® Graphix, Five Nights at Freddy's™, The Bad Guys™, and Nat Enough™ coupled with the continued success of Alan Gratz's Refugee and Ground Zero and Pam Munoz Ryan's Esperanza Rising also resulted in increased sales. The Company's specialty products performed well both from the Klutz® division and the Make Believe Ideas™ business, which included the launch of a plush product line, Sensory Snuggables™. The fully illustrated MinaLima edition of Harry Potter continued to perform well with the second book to be released at the end of October and The Official Harry Potter Baking book was a bestseller. While the first quarter is not traditionally a significant quarter for the Company's school-based distribution channels, the book clubs channel experienced an increase in the number of teacher sponsors and the book fairs channel had higher revenue per fair when compared to the prior period. Education Solutions In $ millions First Quarter $ % Fiscal 2022 Fiscal 2021 Change Change Revenue $ 80.1 $ 53.6 $ 26.5 49 % Operating income (loss) 7.3 (2.4) 9.7 NM Operating income (loss) ex. one-time items* 7.3 (2.4) * Please refer to the non-GAAP financial tables attached NM - Not meaningful First quarter segment revenues were $80.1 million, an increase of $26.5 million, or 49%, versus the prior year period. Demand for the Company's summer learning product offerings drove an increase in revenues as educators tried to help students recover lost ground before starting the new school year. In addition, the Company experienced higher sales for its supplemental and core instruction products, especially in the new early childhood program, PreK On My Way, as more schools began to open for in-classroom learning. Digital product subscriptions increased when compared to the prior year period, continuing to support the trend digital solutions will play in the education market. Although not yet at pre-COVID levels, the Company's classroom magazine products experienced improvement with a 13% increase in subscriptions which will benefit the Company in future quarters. The first quarter was also positively impacted by the consolidation of the multiple education channels into a single Education Solutions segment allowing the Company to be well positioned to meet the needs of an ever changing market. International In $ millions First Quarter $ % Fiscal 2022 Fiscal 2021 Change Change Revenue $ 63.9 $ 69.3 $ (5.4) (8) % Operating income (loss) (1.7) 4.8 (6.5).....»»

Category: earningsSource: benzingaSep 23rd, 2021

South African Airways is flying again after its government cut funding last year. Here"s a look at the collapse and revival of the 87-year-old national airline.

The airline has served South Africa since before the country became truly independent from the UK and has a history largely molded by its country's laws. SAA relaunches flights after a year of inactivity Reuters South African Airways relaunched operations with a flight from Johannesburg to Cape Town after a year of inactivity. Though not involved in the relaunch, the airline has likely secured a new investor, Takatso Consortium. SAA said it's optimistic about its revival, but it's not without its skeptics. See more stories on Insider's business page. South African Airways was on the brink of disappearance after years of financial struggles, but it may have received a lifeline.On Thursday, the carrier relaunched operations on a flight from Johannesburg to Cape Town using money it received from the South African government. After getting in millions from the state, the long-suffering carrier was denied further funding last year, and, as FlightGlobal reported, business rescuers entrusted with the difficult task of rescuing the 87-year-old airline had given it two options: liquidation or a wind-down and sale process.However, SAA has likely secured a private investor, Takatso Consortium, in June 2021, which agreed to funnel up to $243 million into the crippled airline over the next three years. Takatso Consortium CEO Gidon Novick said the relaunch is independent of the negotiations between the consortium and the carrier.Take a look at South African Airways' collapse and rebirth. The airline itself dates back to 1934 when South Africa's Union Airways was nationalized to form the new South African Airways. The state-owned airline would become the flag carrier of South Africa, which was still part of the British Empire at the time. A South African Airways Junkers aircraft. The Print Collector/Print Collector/Getty Source: South African Airways Initial operations for South African included regional flights within Africa. Intra-African and domestic flights were operated by aircraft including the Junkers Ju 52, Douglas DC-3, and Junkers Ju 86. A Douglas DC-3 painted in South African Airways former colors. Simon_g / Shutterstock.com Source: South African Airways Once World War II ended, South African expanded beyond the shores of its home continent with a multi-stop flight to the heart of the British Empire. The route was known as the "Springbok" service, after the national animal of South Africa. An Avro York aircraft similar to the one used by South African Airways. The Montifraulo Collection/Getty Source: South African Airways The 34-hour, three-day service initially flown by an Avro York aircraft, stopped in Nairobi, Kenya; Khartoum, Sudan; Cairo, Egypt; and Castel Benito, Libya, before arriving in Bournemouth, England. An Avro York aircraft similar to the one used by South African Airways. The Montifraulo Collection/Getty Source: South African Airways Springbok would also become the radio callsign for South African Airways flights. A Douglas DC-3 painted in South African Airways former colors. Simon_g / Shutterstock.com More modern aircraft from Western manufacturers including the Lockheed Constellation L-749 and Douglas DC-4 were later added, helping fuel international expansion. A Douglas DC-4 painted in South African Airways former colors. Simon_g / Shutterstock.com Source: South African Airways The airline added flight attendants on its services in 1946 and later added in-flight movies to some of its flights in the same decade. A Douglas DC-3 painted in South African Airways former colors. Simon_g / Shutterstock.com Source: South African Airways South Africa entered the jet age in 1953 with a British Overseas Airways Corporation de Havilland Comet operated by South African Airways that flew from Johannesburg to London. A BOAC de Havilland Comet aircraft. PA Images/Getty Source: South African Airways Intercontinental expansion continued with South African Airways later growing its route network to Australia in 1957 with "Wallaby" service. A Douglas DC-4 painted in South African Airways former colors. Simon_g / Shutterstock.com Source: South African Airways The 1960s then saw further expansion to South America, with flights to Rio de Janeiro, and then North America, with flights to New York, using the Boeing 707. A South African Airways Boeing 707 aircraft. Antony Matheus Linsen/Fairfax Media/Getty Source: South African Airways South African hit a milestone in the 1970s with its first Boeing 747 aircraft, an aircraft that had begun flying passengers only at the beginning of the decade. The quad engine aircraft quickly became a status symbol for the world's airlines. A South African Airways Boeing 747 aircraft. Rolls Press/Popperfoto/Getty Source: South African Airways Other new arrivals included the Boeing 737… A South African Airways Boeing 737-800 aircraft. JOKER/Hady Khandani/ullstein bild/Getty Source: South African Airways And Airbus A300. A South African Airways Airbus A300 aircraft. STR New/Reuters Source: South African Airways South African was also one of the first commercial operators of a unique Boeing product, the 747SP. A South African Airways Boeing 747SP aircraft. EQRoy / Shutterstock.com Source: South African Airways A shortened version of the popular Jumbo Jet but with the same four engines, the 747SP offering extended ranges unmatched by most aircraft of the time. The range of the 747SP was so great that South African flew it from Seattle to Cape Town nonstop, a distance of over 8,800 nautical miles, on its delivery flight. A South African Airways Boeing 747SP aircraft. EQRoy / Shutterstock.com Source: South African Airways While airlines liked the 747SP for its performance capabilities, South African had a different reason involving the country's apartheid policy. A Boeing 747SP aircraft. Mo Azizi / Shutterstock.com Due to the discriminatory policy, some African countries had restricted South African Airways flights from entering their airspaces and the airline would often have to fly indirect routes to get to Europe. A South African Airways Boeing 747SP aircraft. EQRoy / Shutterstock.com Source: New York Times The Boeing 747SP allowed for South African to go around the countries without having to stop for fuel on the way to Europe. Other aircraft frequently used Cape Verde as a refueling stop for flights to Europe, despite the archipelago's location off the coast of West Africa. A South African Airways Boeing 747SP aircraft. EQRoy / Shutterstock.com Source: New York Times A route from Johannesburg to Athens on the 747SP, for example, stopped in Lisbon and Rome along the way. The flight flew direct or with one stop to Lisbon, and then headed into the continent. A South African Airways Boeing 747SP aircraft. EQRoy / Shutterstock.com Source: South African Airways The 1980s then saw turbulence for the carrier as Western nations adopted sanctions against South Africa for its apartheid policies. Flights to the US and Australia were revoked in addition to the countries that had barred South African's flights. Australian protests against South Africa's apartheid policy. Robert Pearce/Fairfax Media/Getty Source: South African Airways When apartheid ended in the 1990s, South African was allowed to grow its route network once again and the airline no longer needed to fly the long, costly routes to avoid some nations. A South African Airways Airbus A320 aircraft. Rogan Ward/Reuters Source: South African Airways One of the most notable displays of the new airline came in 1995 during the Rugby World Cups when a South African Airways Boeing 747 did a flyover of the stadium with "Good Luck Bokke," a nickname for the South African team, painted on the belly. The feat was repeated multiple times in later years by other airlines. An aircraft flyover at a 2013 Springboks vs All Blacks rugby match, David Rogers/Getty Source: South African Airways and Safair The decade also saw the airline win the title of Africa's leading airline from 1994 on to 2015. The 1990s, however, also saw the airline begin its financial losing streak. South African Airways aircraft. William F. Campbell/The LIFE Images Collection/Getty Source: QZ The 2000s saw South African undergo a fleet renewal where most of its long-haul Boeing jets were retired in favor of European-built Airbus planes. The new long-haul flagships became the Airbus A330… A South African Airways Airbus A330 aircraft. SUMAYA HISHAM/Reuters Source: Planespotters.net And A340-600. A South African Airways Airbus A340-600 aircraft. Bruce Bennett/Getty Source: Planespotters.net South African was later brought into organizations to which it had been denied including the International Civil Aviation Organization and joined the Star Alliance. South African Airways joined Star Alliance in 2006. SIPHIWE SIBEKO/Reuters Source: South African Airways Its new-found praise and acceptance, however, couldn't replace the financial woes of the airline. In 2019, South African entered the equivalent of bankruptcy protection and began restructuring after racking up nearly $3 billion in debt. South African Airways employees protest during the airline's bankruptcy. Siyabonga Sishi/Reuters Source: QZ Despite being in the midst of restructuring, South African leased a new aircraft, the Airbus A350-900 XWB, which ultimately launched on the Johannesburg-New York route in January 2020. A South African Airways Airbus A350-900 XWB. South African Airways Read More: Bankrupt South African Airways just debuted its newest plane, the Airbus A350, weeks early despite verging on the brink of collapse The swanky new aircraft would be ideal for the ultra-long-haul routes that South African planned to use them for. A South African Airways Airbus A350-900 XWB. South African Airways With the new aircraft in the air and flying passengers, the hope was that South African might have a plan to save itself from collapse. A South African Airways Airbus A350-900 XWB. South African Airways South Africa's government, which has been incrementally providing relief, however, ultimately pulled the plug in April 2020. A South African Airways Airbus A340-600. Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Source: FlightGlobal Without intervention from either the government or a private buyer willing to keep the airline going, South African Airways looked like it was going to disappear from the skies for good. A South African Airways Airbus A350-900 XWB. Sumaya Hisham/Reuters However, the airline is back up and running after over a year of inactivity. SAA relaunched operations on September 23 with a flight from Johannesburg to Cape Town using an A320 aircraft, which carried 123 passengers on the maiden journey. SAA's first flight in over a year Reuters Source: Aerotime Hub The relaunch came after months of restructuring, which included reducing its debt and cutting its workforce by 80%, down from 4,000 to 802. SAA relaunch at Johannesburg airport Reuters Source: Aerotime Hub, ch-aviation The airline will be backed by Takatso Consortium, a joint-venture between Harith General Partners and Global Aviation, which is in late stage talks to buy the majority stake from the South African government in June. South African union buildings Burhan Ay Photography/Shutterstock Source: africannews Takatso Consortium is set to be SAA's lifeline, though is not reportedly involved in the airline's management, relaunch, or funding. However, Takatso CEO Gidon Novick said in a statement that negotiations to take a 51% share are "substantially complete." SAA A320 at Johannesburg airport Thiago B Trevisan/Shutterstock Source: ch-aviation The consortium's deal made with South Africa's Department of Public Enterprises includes investing up to $243 million into the airline over the next three years. SAA A330 takes off from Lusaka, Zambia Vidit Luthra Source: africannews Without its private funds yet secured, the company is using $33.8 million of the $712.3 million bailout it received from the state to restart operations. SAA A320 Thiago B Trevisan/Shutterstock Source: ch-aviation SAA's interim CEO Thomas Kgokolo said the company needs a modern fleet of aircraft if it is going to be competitive outside of Africa. Currently, its all-Airbus fleet has an average age of more than 15 years. SAA plane in Namibia Felix Lipov/Shutterstock Source: africannews However, Kgokolo said ticket sales are promising and early numbers indicate flights could be 75% full. SAA passengers Reuters Source: africannews The airline's fleet has shrunk, having only six of the original 44 it had before insolvency. SAA will start with a small network, operating one domestic route and five regional routes, including to Accra, Ghana; Kinshasa, DRC; Harare, Zimbabwe; Lusaka, Zambia; and Maputo, Mozambique. SAA plane in Johannesburg Reuters Source: ch-aviation While it still has a long way to go, SAA's relaunch has brought pride and excitement for its employees. Crew members danced and sang at the Johannesburg airport before the maiden flight. SAA employees dance after relaunch Reuters Source: Reuters While the airline is optimistic about its return, skeptics believe it will be short-lived. According to Efficient Group economist Dawie Roodt, Takatso Consortium's absence from the relaunch is not a good sign. SAA A340 wing Vidit Luthra/Shutterstock Source: jacarandafm He explained that the slow deal with the consortium makes him wonder where the money to keep SAA in the air is going to come from. Without the agreement finalized, the airline will likely have its wings clipped again soon, according to Roodt. SAA tail at Frankfurt airport Vytautas Kielaitis/Shutterstock Source: jacarandafm Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

5 Must-Buy Stocks on Rebound in U.S. Retail Sales in August

Shrugging off challenges, Foot Locker (FL), Macy's (M), Tapestry (TPR), Costco (COST) and Capri Holdings (CPRI) look well-poised to tap favorable consumer demand. Americans had their fill of shopping last month. The Commerce Department highlighted that U.S. retail and food services sales in August jumped 0.7% on a sequential basis to $618.7 billion, following a revised reading of 1.8% decline in July. Consumer spending activity, one of the pivotal factors driving the economy, was strong with sales rising across most of the categories during the month.Given the challenges related to supply chain and the Delta variant, the rise in August retail sales caught most analysts by surprise, who were expecting consumers to rein in spending. Evidently, the back-to-school shopping season and payments under the Child Tax Credit program to qualifying families supported the metric.Retail sales advanced despite continued sluggishness in sales at motor vehicle and parts dealers, thanks to global chip shortage that has severely hit the auto industry. We note that excluding motor vehicle and parts dealers, retail sales advanced 1.8% sequentially.August Retail Sales Tick UpThe Commerce Department’s report suggests that sales at furniture & home furnishing stores jumped 3.7%, while the same at building material & supplies dealers rose 0.9% on a sequential basis. Sales at miscellaneous store retailers and general merchandise stores grew 1.4% and 3.5%, respectively.Sales at health & personal care stores and clothing & clothing accessories outlets increased 0.2% and 0.1%, respectively. While sales at food & beverage stores climbed 1.8%, sales at food services & drinking places remained flat. Meanwhile, receipts at gasoline stations were up 0.2%. Impressively, non-store retailers witnessed a rise of 5.3% in sales.However, sales at motor vehicle & parts dealers declined 3.6%, while the same at electronics & appliance stores fell 3.1%. Again, at sporting goods, hobby, book & music stores, the metric decreased 2.7%.Indicator of Strong Holiday SalesSurge in retail sales is a positive indicator ahead of the holiday season, especially when the industry is currently grappling with supply chain woes, rising freight charges and labor shortages. Retailers need to address any logistical or inventory issues and roll out strategies to provide a seamless shopping experience, whether offline or online.To beat the COVID-19 blues, retailers are emphasizing on membership programs, upgradation of store technology and omni-channel capabilities, shopping via mobile app, and last mile delivery solutions. Undeniably, expedited delivery services like doorstep delivery, curbside pickup or buy online and pick up at store, and contactless payment gateway will continue to play a crucial role in maximizing share of customers’ wallet.Per Mastercard SpendingPulse, U.S. retail sales, excluding automotive and gas, are anticipated to increase 7.4% from a year earlier during the traditional holiday period that runs from Nov 1-Dec 24. With e-commerce still being one of the preferred modes for shopping, Mastercard SpendingPulse foresees online sales to rise by 7.6%.That said, we have highlighted five stocks from the Retail - Wholesale sector that look well positioned based on their sound fundamentals and earnings growth prospects. These stocks have either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.Price Performance Year-to-Date Image Source: Zacks Investment Research5 Prominent PicksInvestors can count on Foot Locker, Inc. FL, a retailer of athletic footwear and apparel. The company has been witnessing strong demand for athleisure and fitness products. It plans to continue investing in boosting store fleet, including revamping and remodeling of the same. Markedly, it is on track with converting Footaction stores to other existing banner concepts. It has been bolstering omni-channel capabilities by adding new functionalities. The company is progressing well with the expansion of FLX membership program. At the end of the second quarter, FLX program members exceeded 25 million, globally. Impressively, the company has a trailing four-quarter earnings surprise of 73.1%, on average. The stock has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 17.7% and 146.6%, respectively, from the year-ago period.Macy's, Inc. M, one of the nation’s premier omni-channel retailers, is worth betting on. In spite of a tough retail landscape, the company has managed to stay afloat, courtesy of its Polaris Strategy. The strategy includes rationalizing store base, revamping assortments and managing costs prudently. Markedly, customers have been responding well to the company’s expanded omni-channel offerings such as curbside, store pickup and same-day delivery. In this respect, its tie-up with DoorDash for expediting delivery service is encouraging. Macy's also collaborated with Sweden-based buy-now, pay-later group — Klarna — for offering online shoppers financial ease and payment flexibility. The company is constantly improving its mobile and website features to deliver enhanced shopping experience. Notably, this New York-based company has a trailing four-quarter earnings surprise of 269.8%, on average. The stock has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 37.3% and 269.7%, respectively, from the year-ago period.Tapestry, Inc. TPR is another potential pick. The company has been benefiting from the successful execution of Acceleration Program. The program is aimed at transforming the company into a leaner and more responsive organization. It intends to build significant data and analytics capabilities with focus on enhancing digital and omni-channel capabilities, and operating with a clearly defined path and strategy for each of its brands namely Coach, Kate Spade and Stuart Weitzman. The stock has a Zacks Rank #1 and a VGM Score of B. This provider of luxury accessories and branded lifestyle products has a trailing four-quarter earnings surprise of 65.2%, on average. The Zacks Consensus Estimate for its current financial year sales and earnings indicates an improvement of 11.6% and 12.5%, respectively, from the year-ago period.You may invest in Costco Wholesale Corporation COST. The company’s growth strategies, better price management, decent membership trends and increasing penetration of the e-commerce business have been contributing to its upbeat performance. Cumulatively, these factors have been aiding the Issaquah, WA-based company in registering impressive sales numbers. Costco’s net sales increased 16.2% to $15.75 billion for the retail month of August — the four-week period ended Aug 29, 2021 — from $13.56 billion in the last year. This followed an improvement of 16.6%, 16.9% and 24.2% in July, June and May, respectively. Remarkably, the company has a trailing four-quarter earnings surprise of 7.7%, on average. The stock has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 17.6% and 20.5%, respectively, from the year-ago period.We also suggest betting on Capri Holdings Limited CPRI. The company has been reinforcing its position in the luxury fashion space, and looks to maximize the potentials of Versace, Jimmy Choo and Michael Kors brands through expanded products and categories. While exploring growth opportunities in apparel is crucial to the company, it is emphasizing on boosting its accessories business including leather goods and handbags. The company has been constantly deploying resources to expand product offerings, upgrade distribution infrastructure, create seamless omni-channel capabilities and deepen engagement with customers. The stock has a Zacks Rank #2 and a VGM Score of A. The company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters. The Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 30.8% and 138.4%, respectively, from the year-ago period. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough 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 Macys, Inc. (M): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Foot Locker, Inc. (FL): Free Stock Analysis Report Tapestry, Inc. (TPR): Free Stock Analysis Report Capri Holdings Limited (CPRI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P, NASDAQ Each Gain Over 1% to Keep the Records Coming

S&P, NASDAQ Each Gain Over 1% to Keep the Records Coming Another strong performance from tech kept the NASDAQ and S&P on their record-breaking paces Wednesday, while the Dow also closed higher after snapping a three-day winning streak yesterday. All of the FAANGs were solidly higher in the session, especially Netflix (NFLX, +11.6%) and Facebook (FB, +8.2%). Amazon (AMZN) and Alphabet (GOOG) were both up nearly 3%, while Apple (AAPL) rose about 1.4% following a rare decline for the $2 trillion company on Tuesday. As a result, the NASDAQ easily outperformed its counterparts by rising 1.73% (or just under 200 points) to 11,665.06. Meanwhile, the S&P jumped 1.02% to 3478.73. The NASDAQ has now made history for five straight days, while the S&P has put together four consecutive record highs. One of the biggest stories on Wednesday, though, was software company  salesforce.com (CRM), which soared 26% after beating second-quarter expectations and raising its revenue guidance. Remember that CRM will be joining the Dow on Monday. Speaking of the Dow, the index advanced 0.30% (or about 83 points) to 28,331.92. It has now been up in four of the past five days. We also enjoyed some good news outside of technology and salesforce. Moderna (MDRA) released encouraging results for its coronavirus vaccine, sending the stock higher by 6.4%. In addition, durable goods orders surged over 11% in July, which easily beat expectations and marked three consecutive months of gains. Now, we’re gearing up for Fed Chair Jerome Powell’s statement at the virtual Jackson Hole conference  tomorrow. It seems like he will be outlining a shift in policy designed to increase inflation. It was a week ago today that the market reacted negatively to a cautious tone in the Fed minutes, in which Powell warned that the pandemic could impact the economy’s near and medium terms. So it’ll be interesting to hear what Mr. Powell has to say, but even more interesting to see how this exuberant market reacts. Today's Portfolio Highlights: Home Run Investor: It’s always great to find a company with huge EPS estimate increases and a good valuation. Well, that’s exactly what Brian added on Wednesday with Griffon Corporation (GFF). This diversified play has 3 major business lines, including tools & home storage; garage & rolling steel doors; and surveillance & communications products. The company beat earnings expectations in each of the last four quarters with the most recent report surprising by a hefty 391%. The editor was extremely impressed with its margin expansion and the upward estimate revisions for this year and next, which explains why GFF is a Zacks Rank #1 (Strong Buy). It also has a “super cheap” 15x forward earnings and a 2.1x book. Meanwhile, the portfolio sold Meridian Bioscience (VIVO) and The Lovesac Company (LOVE) today with the former bringing in a return of more than 10%. Read the complete commentary for a lot more on these moves. By the way, Dynatrace (DT) advanced 8.75% in the session, which was one of the best performing stocks of the day. Insider Trader: Who doesn’t like new buys? Tracey wanted some fresh picks in the portfolio, so she added two names on Wednesday. Apple Hospitality (APLE) is a hotel REIT, so it is obviously a recovery play. However, the important thing here is that nearly all of its properties are outside urban areas, which are having a tougher time with this pandemic. This month has seen three insiders pick up shares. The other buy is Coeur Mining (CDE), which operates gold and silver mines in North America. Shares are up 62% over the past year, but that hasn’t stopped a director from buying several times throughout the year, including earlier this month. The editor added APLE and CDE today with about 9% allocations each. She also sold the underperforming Sally Beauty (SBH). Read the full write-up for tons more info on today’s moves. Large-Cap Trader: There doesn’t have to be a deeper meaning behind every portfolio change. Case in point, John swapped out three positions on Wednesday simply to “put up some new, mostly tech names, and take some tech profits”. He sold Akamai Technologies (AKAM) for a 9.6% return, Microchip Technology (MCHP) for a profit of 5.8%, and Pentair (PNR) brought in 6.3%. The new buys that filled these spots were: • Applied Materials (AMAT) • KLA Corp. (KLAC) • Halliburton (HAL) All of these stocks are Zacks Rank #2s (Buys). AMAT and KLAC are both chip names that have been in the portfolio before, while HAL is an oilfield services giant that’s a play on the rebounding domestic energy sector. Read the full write-up for a lot more on all of today’s moves. Surprise Trader: At a time of social distancing, the safest vacations involve activities like camping, fishing and hunting. That’s good news for a company like Sportsman’s Warehouse (SPWH), which is a Zacks Rank #2 (Buy) outdoor sporting goods retailer that hasn’t missed earnings since May 2019. It beat by more than 116% last time and has a positive Earnings ESP of 25.81% for the quarter being reported after the bell on Wednesday, September 2. Expectations of 31 cents suggest year-over-year improvement of more than 138%. Dave added SPWH on Wednesday with a 12.5% allocation, while also selling Autohome (ATHM) for a slight loss. Read the full write-up for more on today’s moves. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

NASDAQ Rises More Than 1% to Begin October

NASDAQ Rises More Than 1% to Begin October New Zacks Feature: ASK ALEXA Now call out a stock name or ticker. Alexa will give you its latest Zacks Rank and price. Also hear daily additions to and deletions from the services you follow. For easy directions on starting Zacks on Alexa, click here >> Nobody knows yet if October will look more like September or the positive five months that preceded it. But we DO know that it got off to a good start on Thursday. Not only did the major indices all move higher to kick off the new month, but the NASDAQ led the way. The index saw the biggest drop in September by losing approximately 5.4% as technology fell out of a favor when uncertainty began to rise. But today it was up 1.42% (or nearly 160 points) to 11,326.51. The FAANGs were all higher with Netflix (NFLX, +5.5%) out front and Apple (AAPL, +0.85%) lagging behind. The index easily outperformed its counterparts. The S&P rose 0.53% to 3380.80, while the Dow advanced 0.13% (or about 35 points) to 27,816.90. The latter index had been higher by more than 200 points earlier in the day. The S&P and Dow slipped approximately 4% and 2.3%, respectively, in September. However, all of the indices saved face with gains in four of the month’s final five sessions. If there’s going to be some new stimulus before the election, then it would have to happen in the discussions between Speaker Pelosi and Treasury Secretary Mnuchin. So far there’s nothing… but they’re still talking! All we’re hearing is that the talks have been somewhat productive, but they’re still far away from an agreement. The market will be paying close attention to these talks and hope the leaders can come up with some compromise to help the economy. Speaking of the economy, it’s managing to hold up rather well all things considered. The ISM Manufacturing report came in at 55.4 for September, which is down a bit from the previous month’s 56 but remains solidly in expansion territory (over 50). Meanwhile, jobless claims last week were still very high at 837,000, but that was an improvement on the previous week’s 850K and better than expectations. It was also the fifth straight month under 1 million. We all know what happens tomorrow! It’s the Government Employment Situation report. Let’s see what happens…  Today's Portfolio Highlights:  Blockchain Innovators: Sometimes Dave has to explain how a certain company is involved with blockchain. But when the issue is wire transfers and other processing services, the use of this technology is rather obvious. Therefore, International Money Express (IMXI) is a pure blockchain play, especially considering its recent partnership with Ripple for use of its On-Demand Liquidity product. IMXI is a Zacks Rank #1 (Strong Buy) and usually rather expensive, but a recent secondary offering has taken a toll on shares. Dave jumped at this opportunity to buy the stock at an attractive price with plenty of running room ahead. Read the complete commentary for a lot more on today’s addition. In other news, this portfolio had two of the top performers among all ZU names today with Camtek (CAMT) jumping 17.6% and Exp World Holdings (EXPI) rising 13.1%.  Technology Innovators: The plan for this portfolio is to be fully invested before the election, so Brian got started today by adding Jabil (JBL). This electronic manufacturer beat by 48% in its most recent report, which marked its third beat in the past four quarters and brought its average surprise over that time to 13%. Rising earnings estimates have made JBL a Zacks Rank #1 (Strong Buy). The editor “loves” its valuation. Not only does the stock have an 8.5x forward earnings multiple and a 2.8x book, but it also enjoys double-digit topline growth of 11%. If margins improve, then Brian thinks JBL’s EPS multiple could double. Read the full write-up for more on today’s addition. Surprise Trader: Over the past 14 quarters, Helen of Troy (HELE) has beaten earnings expectations 13 times and matched once. In other words, it hasn’t missed in all that time… and Dave thinks that record will continue in the report coming before the bell on Thursday, October 8. The cosmetics company beat by more than 61% last time and has a positive Earnings ESP of 0.73% for the upcoming release. The editor added HELE on Thursday with a 12.5% allocation, while also selling H.B. Fuller (FUL). See the complete commentary for more on today’s moves. Insider Trader: In addition to beating on the top and bottom lines in its second-quarter report, Bed Bath & Beyond (BBBY) also announced its first same-store sales growth since 2016. Comps were up 6%, while ecommerce growth surged nearly 90%! The home goods retailer soared more than 25% on Thursday, which means it was easily the best performer among all ZU services. Remember that Tracey once called BBBY the most poorly run retailer in the industry! It’s a good thing she gave the new management a chance, because this stock is now the best performer in the portfolio with a jump of more than 103% since being added on July 17. Options Trader: "Stocks closed higher again today, making it now five up days out of six since the correction lows were put in last week. "Stimulus hopes continue to underpin the market. Although, as of yet, there is still no official deal. "Strong economic data however keeps rolling in. That was on full display all week. But the report everybody's waiting for is tomorrow morning’s Employment Situation report. The consensus is calling for 894K new jobs (900K in the private sector and -6K in the public), while the unemployment rate is expected to dip from 8.4% to 8.2%." -- Kevin Matras All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

NASDAQ Back at Record High, while S&P Takes a Breather

NASDAQ Back at Record High, while S&P Takes a Breather The NASDAQ and S&P traded places on Thursday, as the tech-heavy index managed a new closing high while the broader one took a break after two sessions of records. The NASDAQ advanced 0.23% (or nearly 28 points) to make history at 12,377.18. The Dow rose 0.29% (or around 85 points) to 29,969.52. The S&P, though, took a tiny step back with a dip of 0.06% to 3666.72. The index had reached a new intraday high, but a late selloff ruined the momentum. The final-hour stumble was due to news that Pfizer (PFE) was having supply chain issues that would halve its vaccine shipments this year. But the company will make up for it next year, so it wasn’t the earthquake that it could have been. However, it is a reminder to a very optimistic market that there could be hiccups along the way in inoculating the public and getting back to normal. Speaking of hiccups, there were reports today that Speaker Pelosi and Senate Majority Leader Mitch McConnell had spoken and might get back to stimulus talks this month.   That’s certainly more consequential than yesterday’s “big” news of Pelosi and Senate Minority Leader Schumer, both Democrats, agreeing on the recent bipartisan plan. Though its been burned before, the market can’t help but be hopeful that a stimulus deal could be near. Jobless claims last week came in at 712,000, which was better than the 780K that was expected. Perhaps more importantly, the number gets this report moving in the right direction again after two consecutive weeks of misses. But when it comes to jobs, the main event will be the Government Employment Situation tomorrow. Expectations are for around 500K jobs being added, which would be less than the previous month’s surge. Finally, the ISM Services Index came in at 55.9 for November, barely missing the consensus of 56 and down about 0.7 from the previous month. However, it remains solidly in expansion territory (over 50) and marks six straight months of growth. Stocks head into Friday with gains for the week. The NASDAQ is up more than 1% over these four days, while the S&P has advanced 0.8%. The Dow is hanging on with a 0.2% increase. Today's Portfolio Highlights: ETF Investor: Going to the doctor’s office for routine care was never something that people looked forward to doing... and now they really don’t have to! The coronavirus has been a “game-changer” for telemedicine, and there’s a fund that can help you capitalize on this new dynamic. The Global X Telemedicine & Digital Health ETF (EDOC) invests in global health companies with high exposure to telemedicine & digital health. It’s a play on what’s expected to be a long-term paradigm shift in health care toward digitization. Since its launch four months ago, EDOC has already gathered more than $486 million in assets. Neena wants to be part of this shift, so she added EDOC on Thursday. The editor also sold Amplify BlackSwan Growth & Treasury Core ETF (SWAN), which was a “safety trade” that brings nearly 12% to the portfolio in about nine months. Read the full write-up for more. Blockchain Innovators: After years of downside action in earnings, ADTRAN (ADTN) has finally turned the corner. And its price movement has come along for the ride. ADTN designs, manufactures, markets and services network access solutions for communication networks. Or as Dave puts it: “This is the sort of company that provides the backdrop necessary for cloud-based technologies and blockchain.” Revenue and earnings growth look good moving forward, so the editor decided to add this Zacks Rank #2 (Buy) as it continues to move higher. See the complete commentary for more on this new addition. By the way, this portfolio had a top performer today as Brightcove (BCOV) rose 8.5%. Counterstrike: As promised, the portfolio “spiced things up” on Thursday with several moves, including a buy, a short and a couple sells. First of all, Jeremy added Mohawk Industries (MHK) with a 5% allocation. This Zacks Rank #2 (Buy) is a manufacturer of flooring products that reported a 41% surprise last month. The service’s short-term target is $145 while the longer term is even higher, so the editor may add more to this “half position” moving forward. The portfolio also short sold Beyond Meat (BYND), the Zacks Rank #4 (Sell) plant-based meats company. The stock recovered a bit from plunging after its “disastrous quarter” in early November. But Jeremy doesn’t think the slide is over and believes it could have a double-digit pullback. He shorted BYND with a 5% allocation. Meanwhile, Zebra Technologies (ZBRA) was sold for a 48.6% return in less than three months, while a fourth of Turtle Beach (HEAR) was sold for 15.6% in less than six months. Read the full write-up for more. TAZR Trader: What a great fiscal second quarter for Elastic (ESTC)! The search company registered a narrower-than-expected loss, a double-digit revenue beat and even a raised guidance for fiscal 2021. However, the analysts weren't as excited as Kevin would have thought... and it didn’t help that big-data peer Splunk (SPLK) plunged today. Therefore, the editor sold half of ESTC on Thursday for a return of approximately 34.3% in less than three months. Read the full write-up for analyst reactions and a bright spot of news that many have missed.  Commodity Innovators: The portfolio traded in meats for metals on Thursday. Jeremy sold IPath Series B Bloomberg Livestock Subindex Total Return ETF (COW) for a 9.5% return in just under six months as new restrictions due to the rise in coronavirus cases has pretty much ended the momentum in restaurants. The new buy is Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG), which tracks the performance of small and midcap gold and silver mining companies. This move will help the service take advantage of rising gold prices, which the editor thinks will continue into early 2021. Therefore, he considers JNUG to be a short-term trade. Get more specifics in the full write-up. Insider Trader: Shares of Arlo Technologies (ARLO) have been jumping since a set of cameras from this smart home technology company was featured on Apple’s website. In fact, the stock was the top performer of the day among all ZU names on Thursday! Tracey wants to secure some of that profit before the next pullback, so she sold half of ARLO on Thursday for a profit of more than 29%. The editor first added this name on November 20, and it has quickly become the #1 performer in the portfolio. She’s going to let the rest of the position run and see how high it can get. Have a Good Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Cautiously Optimistic

Cautiously Optimistic Daniel Laboe here to cover once again for the vivacious Mr. Giaquinto and provide you with today's market update. After everyone's favorite dovish Fed Chair Jerome Powell spoke soft words of more money being infused into the debt market yesterday, equities drove higher, and today all the major indices closed at all-time highs. Investors & traders are remaining cautiously optimistic. A $900 billion stimulus bill is being rushed through congress and will include another round of direct checks to many Americans, re-enhanced unemployment benefits, direct aid to Main Street businesses, and vaccine support funding. I remain cautious with my investment decisions as there appear to be bubbles forming in some of the hottest tech sectors. The excess can be embodied with what we saw in both the Airbnb (ABNB) and DoorDash (DASH) IPO's last week. In my opinion, investors are much too eager to put on risk right now, and like the famous Warren Buffett saying goes, "Be fearful when others are greedy." I wouldn't be surprised if the markets started pulling profits when the positive expectations it has been pricing in come to fruition.  The Space Race The space race is back in full gear, but this time it's not nations measuring shoe size. The most ostentatious billionaires are now racing to explore (and commercialize) the final frontier. Richard Branson, Elon Musk, and Jeff Bezos are all looking to the sky. Branson has commercially driven Virgin Galactic (SPCE), Musk has the esteemed SpaceX for his conquest to Mars, and now Bezos has NASA's greenlit Blue Origin. Blue Origin is Bezos space play for satellite usage & planetary expeditions. Bitcoin Surge Bitcoin is becoming ingrained in our rapidly advancing financial system as institutions start buying it in bulk. BTC is now one of the few asset tracked on CNBC's bottom right-hand corner quote box, with eager investors & traders unable to take their eye off this skyrocketing digital currency. The blockchain pioneer hit new all-time highs today and looks to be headed higher. The massive monetary expansion that the Federal Reserve employed has executives concerned about the value of their liquid capital, with future inflation expected to swell. MicroStrategy (MSTR) CEO Michael Saylor made a savvy business decision when he decided to store his enterprise's liquid capital in Bitcoin. He made this judgment call in the face of ultra-low interest rates that were poised to eat away at MicroStrategy's cash reserve value. Jerome Powell and the Federal Reserve are printing money like there is no tomorrow and vowing to let inflation run past its 2% target to make up for the past two decades of below-target inflation. MicroStrategy's management team feels that gold is an antiquated store of value and that Bitcoin's blockchain-driven cryptocurrency is the future of inflation-protected assets. This is a store of value strategy that I expect will be increasingly adapted through the roaring 20s. Now fintech giants like Square (SQ) and PayPal (PYPL) are buying up large sums of the pioneering blockchain currency. PayPal has been purchasing nearly 70% of all newly mined 'virgin Bitcoins' since mid-October and is expected to have over $30MM worth of this digital asset by the end of the year. Combined Square and PayPal are purchasing more than 100% of newly issued Bitcoin as they launch their respective cryptocurrency services. Bitcoin has been given the institutional seal of approval, and more establishments are piling into this next-generation currency every day, driving the price to continuously new highs. Below is a list of bitcoin holdings by company holdings provided by BitcoinTreasuries.org. Today’s Portfolio Highlights: We had a number of big movers today, with all 5 of Zacks Top Movers rallying over 8% (SHSP, AVXL, JNUG, FLDM, LQDT). Our well-positioned portfolios are thriving in this fresh bull market with some very well-time trades by Zacks' best and brightest. Commodity Investors: Today, we had a lot of exciting activity in the Commodity Innovators with a couple of well-timed buys and some profit realization from one of the portfolio's most parabolic holdings. The US economy is preparing to come out of the Pandemic stronger than ever, and commodity demand is rising sharply. Steel has been one such beneficiary of this recovery trade, which is catalyzing Jeremy's addition of Steel Dynamics (STLD), a leading American steel producer and metal recycler, into the Commodity Innovator portfolio. He also added Murphey USA (MUSA), a business that markets refined products through a chain of retail fuel stations, in a similar economic recovery-focused trade. Profits were pulled on Cleveland Cliffs (CLF), which had yielded an unprecedented 146.4% over just under 5 months of holding. Stocks Under $10: This portfolio had a fantastic day with Liquidity Services (LQDT) driving up over 8% and pushing this stock's total returns to over 100% since it was added just over 2 months ago. Monday's biotech addition, Fluidigm (FLDM), had an over 8% day as well, propelling FLDM's total portfolio returns to more than 12.4% in just a few trading days. Brian added Northern Oil and Gas (NOG) to the portfolio today as an economic recovery trade that fits nicely with the rest of the highly diversified Stocks Under $10 portfolio. The market is rotating towards 2020 cyclical underperformers, and I think it is time that our portfolios start reflecting this rotation. TAZR: Kevin Cook's TAZR portfolio has had some great plays this year, like the next-generation chip giant Nvidia (NVDA) driving nearly 150% returns from its purchase in March. The cutting-edge telecom equipment enterprise, Infinera (INFN), has also been a great booster to the portfolio with an average return of 51.7%. Today Cooker pulled profits, scaling out of 1/3rd of the position as the stock came over the 15% allocation threshold, letting the remaining 2/3rds keep running. Cheers, Daniel LaboeRecommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

NASDAQ Plunges 3% as 10-Year Yield Crosses 1.7%

NASDAQ Plunges 3% as 10-Year Yield Crosses 1.7% Just when you thought the Fed had soothed the jittery mind of investors in its recent statement, bond yields surged again on Thursday and kicked the legs out from under the tech space. The NASDAQ plunged 3.02% (or nearly 410 points) to 13,116.17, which snapped a three-day win streak and puts it down 1.6% for the week heading into Friday. The last time this index dipped by more than 3% was February 25 when it plunged over 3.5%. All of the FAANGs were sharply lower (as you’d expect), especially declines of more than 3% each for Netflix (NFLX), Amazon (AMZN) and Apple (AAPL). Furthermore, Tesla (TSLA) dipped 6.9% and Microsoft (MSFT) slumped nearly 2.7%. The S&P was off 1.48% today to 3915.46. The Dow reached an intraday high earlier, but reversed course and ultimately ended lower by 0.46% (or around 150 points) to 32,862.30. Both of these indices are coming down from record highs set on Wednesday. The S&P is now in the red by 0.7% for this week heading into Friday, but the Dow is up 0.3% over the four days. If the market flipped out when the 10-year Treasury yield moved above 1.6% earlier this year, then it’s certainly going to react when it soars to 1.75% like it did today. It pulled back from that high, but still finished over 1.7% on Thursday. The move comes a day after a close-to-perfect Fed statement, in which the Committee sharply raised its growth forecast for 2021 but said there’ll probably be no rate hikes through 2023. And they’re going to give inflation more latitude before making any change to policy. Adding to today’s pressure was a disappointing jobless claims report, which rose to 770,000 last week. The result wasn’t even in the same neighborhood as expectations at only 700K. It was also more than the previous result of 725K, which was revised up from 712K. Today's Portfolio Highlights: Headline Trader: These days, everybody is spending on data center expansion to capitalize on the “4th Industrial Revolution”. And they’re spending BIG money! For example, a large portion of Alphabet’s (GOOG) $7 billion capital expenditures this year will be going to data centers, which is fabulous news for Equinix (EQIX). It’s the world’s largest data center REIT and has the highest-quality portfolio of network-dense assets. Best of all, approximately 45% of Google Cloud’s onramps are already at one of EQIX’s global locations. The stock pulled back recently on a lower-than-expected forward guidance, so Dan sees an amazing opportunity to pick up a name that’s in one of the market’s sweetest spots. This addition is a play on the economic rebound and the necessity to leverage digital technology as the digital office space continues to grow. Read the full write-up for a lot more on this new addition.   Technology Innovators: A dip in shares of Amkor Technology (AMKR) is giving Brian an opportunity to pick up this chip name at a great price. This Zacks Rank #1 (Strong Buy) is a leading provider of semiconductor packaging and test services. The company has beaten the Zacks Consensus Estimate in each of the last four quarters with an impressive average surprise of 359% over that time. Furthermore, the editor considers AMKR to be “a winner based on valuation alone” given its 13x forward PE and price to book of 2.5x. The portfolio also sold the underperforming C3.ai (AI) position. The full write-up has more on today’s moves. Counterstrike: The NASDAQ is certainly “having some issues” today, which prompted Jeremy to put on a hedge and reduce some risk on Thursday. He added a 5% allocation in ProShares UltraPro Short QQQ (SQQQ), while selling Anaplan (PLAN) and Zillow Group (ZG) for losses. Read the full write-up for more on today’s moves, including why the editor thinks a 200-day test might be in the works for the NASDAQ. In other news, this portfolio had a top performer today as its short position in The RealReal (REAL) advanced approximately 6.5%. TAZR Trader: The NASDAQ is struggling with resistance, so Kevin decided to take some big profits off the table in three positions. He sold Novavax (NVAX) for a 37.5% return in just two weeks and Magnite (MGNI) for 24.5% in about the same amount of time. The editor also cut half of Square (SQ) for 17.4% in about four months. Learn more about these moves in the full write-up. Commodity Innovators: Tight supply issues for palladium has Jeremy thinking that this commodity will continue moving higher. Therefore, he added Aberdeen Standard Physical Palladium Shares ETF (PALL) on Thursday, while also selling UFP Industries (UFPI) for a nice 25.9% return. The editor sees PALL as a long-term holding. Read the full write-up for more. Zacks Short Sell List: This portfolio was made for difficult days like this, so it’s no surprise that it had four of the top five winners in a session when the S&P plunged more than 1.4%. Those strong performances on Thursday came from short positions in Ceridian HCM Holding (CDAY, +7.1%), Twitter (TWTR, +4.8%), Teradata (TDC, +4.7%) and Shopify (SHOP, +4.4%). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Dow Reaches New Record While Tech Remains Under Pressure

Dow Reaches New Record While Tech Remains Under Pressure SPECIAL ALERT: Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate:   1) Zacks Mailbag: In this regular segment, Kevin Matras will answer your questions ranging from current market conditions, general investing wisdom, usage of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes.   2) Portfolio Makeover: Sheraz Mian and Daniel Laboe will review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tickers you own. Just make sure to email your submissions for either one, or both, by Thursday morning, May 6. Email now to mailbag@zacks.com. Despite concerns of increasing inflation and an overheated market, the Dow still managed to make some history on Wednesday as recovery names are doing better than tech these days. The NASDAQ now has a four-day losing streak. The Dow advanced 0.29% (or about 97 points) today to 34,230.34, which marks its first record close since April 16. The S&P advanced 0.07% to 4167.59. But the NASDAQ just can’t catch a break as the growth names have come under pressure. The index slipped another 0.37% (or around 51 points) to 13,582.42. Big Tech was mostly lower again with Facebook (FB), Amazon (AMZN) and Netflix (NFLX) each down by more than 1%. Apple (AAPL) could only muster a 0.20% advance after plunging more than 3% on Tuesday. Interestingly, Treasury Secretary Janet Yellen walked back her comments a bit from yesterday. The former Fed chair said she was not “predicting or recommending” that interest rates might have to rise to keep the economy from overheating. Investors know deep down that she’s probably right, but they don’t want to hear it right now.   As a prelude to Friday’s Government Employment Situation report, ADP announced that private payrolls added 742,000 in April, which was short of expectations of around 800K. However, it marked a substantial improvement over the previous month’s 565K, which was revised higher. The leisure and hospitality spaces are making up a lot of lost ground as people in those areas get back to work amid the vaccine rollout.   In other data news on Wednesday, the ISM services index came to 62.7 last month, which was down from 63.7 in March and below expectations. However, it remains well in expansion territory over 50 and should continue to be strong as consumers return to normal after the pandemic.    “Its earnings season and while the talking heads on TV will tell you that it is mostly over, the truth is its still on in a big way. The big names might have reported but there are still tons and tons of companies that have yet to tell us what is going on,” said Brian Bolan in Home Run Investor. As usual, Brian is right. Some of the hundreds of reports coming on Thursday include Square (SQ), Roku (ROKU), Moderna (MRNA), Groupon (GRPN) and Penn National Gaming (PENN). Today's Portfolio Highlights: Home Run Investor: Now that the economy is opening up, it’s going to need more goods moving around the country. Therefore, Brian added a transportation play on Wednesday by picking up Echo Global Logistics (ECHO), a leading provider of technology-enabled transportation and supply chain management services. The company beat the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 47%. Rising earnings estimates for this quarter and next made ECHO a Zacks Rank #2 (Buy). Along with all this, the valuation is looking pretty good too. Meanwhile, the editor also decided to sell the underperforming U.S. Silica Holdings (SLCA). See the complete commentary for more on all of today’s action.   Surprise Trader: The retailers will dominate earnings season next week, so Dave got a head start on Wednesday by adding department store chain Dillard’s (DDS). The company has beaten the Zacks Consensus Estimate in each of the past three quarters and has a positive Earnings ESP of 6.49% for the next quarter, which hasn’t officially been announced yet but will most likely be sometime next week. And one more thing: DDS is part of the Retail – Regional Department Stores space, which is in the Top 1% of the Zacks Industry Rank! The editor added DDS on Wednesday with a 12.5% allocation and also sold Perficient (PRFT) for a 2.9% return in a little over a week. The complete commentary has more on these moves. Commodity Innovators: The portfolio cashed in a couple of profits on Wednesday. Jeremy sold Alcoa (AA) for a more than 24% return in a little over a month after the aluminum giant hit his $40 targets. The editor also sold Invesco DB Commodity Index Tracking ETF (DBC) for 8.5% in two months. He would love to get back into these names on any selloffs. Read the full write-up for more specifics. By the way, this portfolio had a couple top performers today as Devon Energy (DVN) rose 7.6% and IPath Series B Bloomberg Coffee Subindex Total Return ETN (JO) increased 6.6%. Stocks Under $10: The two best performers among all ZU names on Wednesday came from this portfolio... and they were both double-digit winners. MRC Global (MRC) jumped 14.1% and GT Biopharma (GTBP) advanced 13%. But that's not all. GTBP is easily the biggest mover over the past 30 days as well. The stock has jumped more than 59% in that time, which is double the runner up! All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Begin June with a Yawn

Stocks Begin June with a Yawn Just like most of us returning from a long three-day weekend, the market ran out of steam in Tuesday’s session and began the month of June with a rather flat performance. The major indices had an energetic start and seemed ready to continue last week’s solid close. The Dow climbed approximately 300 points at its best, but finished in the green by only 45 points. It was up a scant 0.13% to 34,575.31. Meanwhile, the S&P was off 0.05% to 4202.04, while the NASDAQ dipped 0.09% (or about 12 points) 13,736.48. Last week was strong for all indices as stocks pushed past further signs of rising inflation in a very low volume environment. The NASDAQ was especially impressive despite all its challenges by jumping 2% for the five days. The S&P was up 1.2% last week and the Dow improved 0.9%. With the lion’s share of earnings season over and a new month beginning, we’ll be getting a lot of economic data this week. It started today with a solid ISM manufacturing index, which jumped to 61.2 for May from the previous month’s 60.7. The result was also above expectations as demand is on the rise in a re-opening economy. Any reading over 50 means expansion. Of course, the big news comes on Friday with the Government Employment Situation report. You undoubtedly remember that last month’s print showed the economy adding only 266K jobs… when more than a million were expected! Whatever the specifics might be, it’ll play a part in the Fed’s next meeting later this month and, therefore, in the minds of anxious investors who fear a change in policy.   ‘Peak’ earnings season may be behind us, but there are still some noteworthy names going to the plate. One of them came after the bell today with cloud-based video conferencing company Zoom Video Communications (ZM), which beat the Zacks Consensus Estimate by 36% with revenues soaring nearly 200% year over year. ZM will certainly see it’s growth slow now that the pandemic’s days are numbers and people go back to in-person meeting. But we all know that these shutdowns have changed the way business will be done in the future, which means ZM’s services will continue to be in demand. Maybe that’s why this stubborn market, which gave the cold shoulder to most strong reports this earnings season, has allowed ZM to move higher by more than 3% afterhours, as of this writing. To recap the May totals, the Dow rose 1.9% last month as recovery names came into favor amid the vaccination rate and easing restrictions. The S&P advanced 0.5%, but the NASDAQ slipped 1.6% as tech stocks went unappreciated. Now let’s see what June has in store for us.  Today's Portfolio Highlights: Surprise Trader: With Covid on its last legs, Dave & Busters (PLAY) is finally rebounding. However, this dining and entertainment company is still well off the pre-pandemic highs near $52. Dave (the editor) thinks that PLAY may be able to make up some of that lost ground when it reports again after the bell on Thursday, June 10, especially if it can beat the Zacks Consensus Estimate for a fourth straight quarter. The company topped by 10.5% last time and has a positive Earnings ESP of 107.9% for the upcoming release. The editor added PLAY on Tuesday with a 12.5% allocation, and also decided to “give up” on Kohl’s (KSS). Read the full write-up for more on today’s moves.   Commodity Innovators: It was a good session for energy and materials names, which are specialties of this portfolio. As a result, the service had three of the top five best performers on Tuesday. The noteworthy results that made this impressive feat possible were Devon Energy (DVN, 13.7%), Sibanye Gold Ltd. (SBSW, +8.6%) and Nucor (NUE, +8%). Zacks Short Sell List: Nearly half of the portfolio was replaced in this week's adjustment. The four stocks that were short-covered include: • Las Vegas Sands (LVS, +2.2%) • Chegg (CHGG) • T-Mobile US (TMUS) • Yandex N.V. (YNDX) The new buys that filled these open spots were: • Callaway Golf (ELY) • GoodRx Holdings (GDRX) • JOYY (YY) • Maxar Technologies (MAXR) Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. Black Box Trader: Only two changes in this week's adjustment, which is coming a day late due to the Memorial Day holiday. The stocks that were sold today included CNH Industrial N.V. (CNHI, +4.4%) and Graphic Packaging (GPK, +1.9%), and the new buys that replaced these names were American Axle & Manufacturing (AXL) and Cornerstone Building Brands (CNR). Read the Black Box Trader’s Guide to learn more about this computer-driven service. By the way, this portfolio easily had the top-performing stock among all ZU names on Tuesday as Tenneco (TEN) jumped 19.1%. Have a Good Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Come Off Lows While Waiting for Jobs Report

Stocks Come Off Lows While Waiting for Jobs Report SPECIAL ALERT: Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate: 1) Zacks Mailbag: In this regular segment, Kevin Matras answers your questions ranging from current market conditions, general investing wisdom, usage of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes. 2) Portfolio Makeover: Sheraz Mian and Kevin Cook review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tickers you own. Just make sure to email your submissions for either one, or both, by tomorrow morning, June 4. Email now to mailbag@zacks.com. The major indices were all in the red on Thursday, but they came well off the morning lows amid solid economic data released today and before the big monthly jobs report scheduled for tomorrow. A potential compromise on the corporate tax rate also helped the rebound. The Dow’s five-day winning streak has come to an end, but it was still the best-performing index with a loss of only 0.07% (or about 23 points) to 34,577.04. It had been off by more than 250 points earlier in the session. The S&P also had a nice comeback and finished lower by 0.36% to 4192.85. Unfortunately, the NASDAQ didn’t have quite as dramatic a bounce as tech lagged once again. The index slipped by 1.03% (or nearly 142 points) to 13,614.51. Tomorrow’s Government Employment Situation report may be the biggest jobs report of the month… but it’s far from the only one. We had two other such releases on Thursday and they were both noteworthy. The ADP employment report showed that private payrolls added an impressive 978,000 jobs in May, squashing expectations of less than 700K and the previous month’s downwardly-revised total of 654K. As you’d expect in an economy that’s finally reopening, the leisure & hospitality space is making up some lost ground by adding more than 400K jobs. But there’s more. Jobless claims reached another pandemic milestone by moving under 400K at 385,000, which was slightly better than expectations and marked a fifth straight decline. Meanwhile, ISM Services jumped to 64 in May, which is far into expansion territory above 50. The print was better than April’s 62.7 and expectations at just over 63. Ironically (but not surprisingly) these strong reports were probably a big factor in the market’s morning malaise. After tomorrow’s jobs report, the market’s obsession will switch to the next Fed meeting scheduled for June 15-16. These strong results provide even more fuel to nervous investors’ concerns that the Committee may have to change policy sooner than expected. The market fortunately simmered down as the day progressed. And it got a big boost from a news report that the Biden Administration may offer a 15% tax floor instead of hiking the corporate tax rate to 28%. It’ll be interested to see where this goes in the coming weeks as Washington attempts to pass an infrastructure bill. Well… here we go! The jobs report comes out tomorrow. We probably won’t have anything nearly as dramatic as last month’s miss of approximately 700K, but it does have the potential to be a market mover.  As of this moment, the Dow is up slightly in this abbreviated week heading into Friday, while the other two major indices are in the red. Today's Portfolio Highlights: Home Run Investor: It’s time to get more exposure to the oil patch as crude prices continue to climb, so Brian added PDC Energy (PDCE) on Thursday. This independent upstream operator explores for, develops and produces natural gas, crude oil and natural gas liquids. The company has beaten the Zacks Consensus Estimate in each of the last four quarters and amassed an average surprise of 79% in that time. Rising earnings estimates have made PDCE a Zacks Rank #1 (Strong Buy). Looking forward, analysts are calling for topline growth of 24% this year and 11% next year. In order to make room for PDCE, the editor decided to sell MarineMax (HZO) after a sharp pullback, which protects a 42% profit in less than seven months. Read the full write-up for more on all of today’s moves. Counterstrike: Business is picking up for Ulta Beauty (ULTA), which recently reported a 113% positive surprise and raised its fiscal 2021 guidance. The stock just filled its post-earnings gap today but Jeremy thinks it will hold support and continue its move upwards. This Zacks Rank #1 (Strong Buy) is an obvious reopening play, so the editor added it on Thursday with a small 4% allocation. If the selling continues but the support levels hold, he’ll add more of ULTA. Read the full write-up for the specifics on this move. Headline Trader: The first quarter report from Goldman Sachs (GS) was so “unbelievable” that Dan wasted no time and added this financial giant on the same day of its release. And why shouldn’t he? The company beat the Zacks Consensus Estimate by 90% and grew sales by nearly 160% year over year. That was back in mid April. Now, GS is nearing the editor’s Fibonacci-derived price target around $391 and the relative strength index has reached overbought territory. He thinks this is a great time to “scale out” of the stock, so half of the position was sold on Thursday for a more than 16% return in less than two months. Dan is leaving the other half in the portfolio as he still thinks GS has upside potential. Read more in the full write-up. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P Reaches New Record as Stocks Bounce Back

S&P Reaches New Record as Stocks Bounce Back SPECIAL ALERT: The August episode of the Zacks Ultimate Strategy Session will be available for viewing no later than Wednesday, August 11. Kevin Matras, David Bartosiak, Neena Mishra, CFA, FRM, and Sheraz Mian will cover the investment landscape from several angles in this popular event. Don’t miss your chance to hear: • Sheraz and Neena Agree to Disagree on whether inflation worries are overblown • Kevin answers your questions in Zacks Mailbag • Sheraz and David choose one portfolio to give feedback for improvement • And much more Remember, we need your input. Please submit your questions for Zacks Mailbag and Portfolio Makeover by Thursday morning, August 5. Email now to mailbag@zacks.com. Then log on to Zacks.com and bookmark this page. Stocks began Tuesday’s session in the red, but finished higher after a strong second half. In other words, it was pretty much the reverse of Monday’s action. Along the way, the S&P got back to a new high for the first time in over a week. The index rose 0.82% to 4423.15, barely making history by less than one point from the last record of 4422.30 on Monday July, 26. Meanwhile, the Dow advanced 0.80% (or about 278 points) to 35,116.40 and the NASDAQ was up 0.55% (or around 80.23 points) to 14,761.29. It’s a nice rebound from yesterday’s mixed session when the S&P and Dow lost early gains and sold off in the final hour. The NASDAQ managed a slight advance despite the downward pressure. There were no big changes between the two sessions. Investors are still concerned about the delta variant, rising inflation and potential taper talk from the Fed. They’re also a bit nervous about the heavy slate of economic data being released in the days ahead, especially the Government Employment Situation report on Friday. However, investors are also buying any dips that come around amid a strong earnings season. More than 80% of the S&P companies that have reported so far have beaten earnings and revenue expectations. It continued today with positive earnings surprises from heavy hitters like Alibaba (BABA), Amgen (AMGN), BP (BP), ConocoPhillips (COP) and Activision Blizzard (ATVI), just to name a few. Tomorrow will be another busy day of earnings with more than 400 companies coming to the plate, but we’ll also be getting another round of economic data. The big release on Wednesday will be the ADP Employment report, which begins three straight days of important jobs data. Jobless claims comes on Thursday and, as mentioned above, the all-important monthly BLS report closes out the week. Another number to watch tomorrow is ISM Services. Last time, the print was 60.1 in June, which missed expectations and the previous month’s result. However, it remained solidly in expansion territory over 50. The ISM Manufacturing report came out yesterday, which also slightly missed expectations but remained above 50. Today's Portfolio Highlights:  Surprise Trader: In addition to being a Zacks Rank #1 (Strong Buy), Avnet (AVT) is also part of a space in the Top 2% of the Zacks Industry Rank (Electronics – Parts Distribution). The company is one of the world’s largest distributors of electronic components and computer products. It is scheduled to report earnings on Wednesday, August 11, when it will be going for a sixth straight quarterly beat. An Earnings ESP of 9.82% suggests that AVT is well on its way to continuing that streak. Dave added the stock on Tuesday with a 12% allocation, while also selling Schneider National (SNDR) for more than 4% in less than two weeks after a lackluster post-earnings drift. Read the full write-up for more on all of today’s action. In other news, this portfolio had two of the best performers of the day with Terex Corp. (TEX, +6.4%) and AdvanSix (ASIX, +5.3%).  Stocks Under $10: The latest addition to the portfolio is Volt Information Sciences (VOLT), a Zacks Rank #2 (Buy) staffing name that focuses on IT. The company has topped the Zacks Consensus Estimate for five straight quarters now... and some of those beats have been BIG! In fact, the average surprise over the past four quarters is more than 400%. Brian also likes its valuation and is especially impressed by its margins improving to breakeven from a 3% loss. Best of all, the margins look to be positive moving forward. Read the full write-up for more on today’s addition. Meanwhile, this service also had a top performer on Tuesday as Alto Ingredients (ALTO) rose 6%.   TAZR Trader: With the NASDAQ looking a bit vulnerable at the moment, Kevin thought this was a good time to trim a few positions and bank a couple double-digit profits. Advanced Micro Devices (AMD) and Cadence Design Systems (CDNS) have both been big performers since being added, so the editor took partial profits of 39% and 20.9%, respectively, to play it safe at a volatile time. He also sold some of Qualcomm (QCOM) after Google announced it was dropping the company’s chips to make their own. The stock still brought an 8.4% return. Read the full write-up for more. Counterstrike: It looks like we could be in store for a volatile August, so Jeremy decided to add some protection to the downside. The editor bought a 7% allocation in ProShares Ultra VIX ShortTerm Futures ETF (UVXY) to get some exposure to the VIX, which could spike close to 30 if the market heads lower during this historically “strange” month. Remember, UVXY moves 1.5X the VIX and was a double-digit winner for this portfolio last month. The portfolio also added 4% to Direxion Daily S&P 500 Bear 3X Shares (SPXS) to increase its S&P short hedge as a dip to 4300 wouldn’t be out of the question in a selloff. If the market gets back to all-time highs, Jeremy has no problem in exiting these positions. Read the full write-up for more. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Mixed Start to the Roughest Month of the Year

Mixed Start to the Roughest Month of the Year SPECIAL ALERT: Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate: 1) Zacks Mailbag: In this regular segment, Kevin Matras answers your questions ranging from current market conditions, general investing wisdom, usage of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes. 2) Portfolio Makeover: Sheraz Mian and Daniel Laboe review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tickers you own. Just make sure to email your submissions for either one, or both, by Thursday morning, September 2. Email now to mailbag@zacks.com. The roughest month of the year for stocks kicked off on Wednesday with a mixed response from the major indices, though the NASDAQ managed to finish with another record high. Meanwhile, the ADP report for August was a bit disappointing in the first of three jobs reports to be released the rest of this week. The NASDAQ climbed 0.33% (or about 50 points) to a new closing high of 15,309.38, while the S&P is less than five points shy of its own history after inching forward 0.03% to 4524.09. But the Dow was lower for its third straight session with a slide of 0.14% (or about 48 points) to 35,312.53. And now begins September, which is historically the worst month of the year for stocks. In addition to its reputation, we’ll also see a Fed meeting this month that may outline some sort of asset tapering plan. Stocks just completed a solid performance for August with the NASDAQ rising 4%, the S&P advancing just under 3% and the Dow increasing 1.2%. The rest of this week is full of important economic data, including today’s ADP employment report. Private payrolls added only 374,000 jobs last month, which was well off expectations of more than 600K. It’s the first of three straight days of jobs data, followed by jobless claims on Thursday and the Government Employment Situation on Friday. By the way, the ADP report last month was a disappointment too with only 330K jobs being added instead of closer to 700K as expected. However, it wasn’t a harbinger for the monthly jobs report two days later, which blew past expectations by adding 943K. Other data on Wednesday was more promising, such as ISM manufacturing for August rising to 59.9 from 59.5 in July and beating expectations. Remember, anything over 50 means expansion. And construction spending rose 0.3% in July, compared to breakeven in June. Today's Portfolio Highlights: Counterstrike: Retailers showed off quite a bit this earnings season, and one of the most impressive performances came from consumer electronics giant Best Buy (BBY). This Zacks Rank #1 (Strong Buy) beat the Zacks Consensus Estimate by 56% in its most recent report, sending shares sharply higher in response. However, the stock has since pulled back by more than 7% from highs and is now in Jeremy’s wheelhouse. The editor added BBY on Wednesday with a 5% allocation and plans to add more if these levels hold. Read the complete commentary for more on this new buy. Home Run Investor: Could water really be a ‘home run’ idea? According to Californians, the answer is a resounding “Yes!”. The water supply is a huge issue in that state since it’s apparently in a perpetual drought. So Brian added Energy Recovery (ERII) on Wednesday, which is a water desalination play based in the Golden State. This Zacks Rank #2 (Buy) has topped the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 150%. Revenue is expected to jump 20% next year, while the valuation and margins will improve as growth produces more earnings. See the full write-up for more. Surprise Trader: Apparel has been hot this earnings season. In fact, the space is in the top 9% of the Zacks Industry Rank. So Dave decided to add Oxford Industries (OXM) on Wednesday, which has brands that include Tommy Bahama, Lilly Pulitzer, Oxford Gold and others. This Zacks Rank #2 (Buy) has a positive Earnings ESP for the quarter coming after the bell tomorrow. If the company reaches the Zacks Consensus Estimate of $2.33 in the quarter, it would mark year-over-year EPS growth of 713% and sales growth of 60.5%. The editor added OXM with a 12.5% allocation, while also selling Advance Auto Parts (AAP). Read the full commentary for more on all of today’s action. Blockchain Innovators: This portfolio had the best performing stock of the day among all ZU names as iClick Interactive Asia Group (ICLK) rose 14.8%. eGain Corp. (EGAN) made the Top 5 as well with an increase of 7.7%. The service also has one of the biggest winners over the past 30 days as Exp World Holdings (EXPI) is up 39.6%. Have a Great Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021