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21 Investing Myths That Just Aren’t True

With all of humanity’s collective knowledge available at our fingertips, you’d think investing myths would have disappeared by now. Q3 2021 hedge fund letters, conferences and more Yet they persist, largely because too many people consider money a “taboo” subject and avoid talking about it. Many of us also never question these assumptions, so we […] With all of humanity’s collective knowledge available at our fingertips, you’d think investing myths would have disappeared by now. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Yet they persist, largely because too many people consider money a “taboo” subject and avoid talking about it. Many of us also never question these assumptions, so we don’t bother running a quick web search in the first place. These persistent investing myths cost you money though, in a very real sense. Once you move past these myths, a wider world of investing opportunities open up for you. Myth: You Can Time the Market to Earn Higher Returns When it comes to new investors learning how to invest their money one of the biggest myths is that you can time the market and earn better returns. To profitably time the market, you need to get it right twice. You need to buy at or near the bottom of the market, just as it turns upward. Then you need to sell at or near the top of the market, just as it prepares to plunge. The most experienced, best-informed professionals can’t do this predictably. If they can’t do it, you certainly can’t. Imagine you’re standing on the sidelines, telling yourself that you’ll invest “once the market drops.” But the market continues to rise for the next year or two before its next dip. When the dip does come, its low point might still cost more than today’s price. And that’s assuming you were able to buy at the low point, which you almost certainly won’t time properly. In the meantime, you’ve missed out on years of passive income from dividends or rents, or interest. Rather than trying to time the market, practice dollar-cost averaging. While it sounds complicated, it simply involves investing a set amount every month into the same diversified investments, based on what your budget allows for each month. You ignore timing and just mimic the broader upward trend, to earn better returns in the long run. Myth: You Need a Lot of Money to Start Investing A common myth that many people assume is investing a little bit of money doesn’t make sense. They think that investing $5 a month is pointless so they never even bother to start. That couldn’t be further from the truth. And it leads to wasted opportunities to save and invest over time. The truth is, investing a small amount of money can grow into large sums of money. Jon Dulin, owner of MoneySmartGuides, offers this example: “Let’s say you are 25 years old and invest $20 a month for 25 years. During this time you earn an average 8% return — nothing spectacular, just average returns. “At the end of 25 years, your $20 monthly investment has grown to nearly $19,000. If that doesn’t sound impressive, consider that your measly $20 each month could help your child or grandchild pay for college. Or it could pay for a family reunion vacation that you have on a tropical island. “If you instead keep the money invested for another 25 years, when you reach age 75, you’ll have close to $149,000. This can cover several years’ worth of living expenses during retirement.” Don’t make the mistake of assuming a small amount of money is a waste of time. Thanks to compounding, your money will grow into far larger sums over time. Literally anyone can get started even with little capital. Take the first step now and start investing any excess money you have, regardless of the amount. Read more: Invest in Art like the Ultra Wealthy Without Spending Millions Myth: I’m Too Young (or Too Old) to Start Investing The sooner you start and the longer you keep the money invested, the more it will grow. At an 8% return, you’d have to invest $5,467 each month to reach $1 million in 10 years. But it only takes $287 invested each month to reach $1 million in 40 years. That means that even people working for minimum wage can become millionaires if they invest consistently over time. On the other end of the spectrum, some older adults look at those numbers and despair, wondering why they should bother investing at all. But that’s the price of delaying: you need to save and invest more each month to reach the same goal. As the proverb goes, the best time to plant a tree was 20 years ago. The second best time is now. Start investing today with what you have, and let compounding work its magic for you. Read more: Don’t Miss These 12 Stocks Pay Monthly Dividends Myth: It Takes Decades to Save Enough to Retire In personal finance, the concept of “financial independence” means being able to cover your living expenses with passive income from investments. To make your day job optional, in other words, allowing you to retire if you like. It takes hard work and an enormous savings rate, of course. If you plod along with a 10-15% savings rate, then yes, it will take you decades to save enough to retire. My wife and I got serious about financial independence at 37, three years ago. We’re on track to reach financial independence within the next two or three years, in our early  40s. How? With a savings rate of 60-65% of our annual income and aggressive investing. Neither of us earns a huge salary either, but we still enjoy a comfortable lifestyle with plenty of international travel. We can save so much of our income because we house hack for free housing, avoid owning a car by living in a walkable area, and get full health insurance through my wife’s job. Nor are we alone. Read up on the FIRE movement (financial independence, retire early) to see how thousands of other people are achieving fast early retirement. Myth: Popular Companies Make Better Stock Picks The idea that popular companies make for good stocks sounds appealing on its surface. After all, if a company is popular, it’s probably growing its business. But the popularity and even the quality of a business only tell half the story. The other side is the price you pay for it. “Imagine someone approached you with two offers,” illustrates Ben Reynolds of Sure Dividend. “The first offer is to buy a $100 bill for $150. The second offer is to buy a $1 bill for $0.50. We all know the $100 bill is worth much more than the $1 bill… But any rational person would rather buy $1 for $0.50 than $100 for $150.” Two Warren Buffett quotes sum this up nicely: “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.” “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.” The reason it is difficult to do well investing in popular stocks is because they tend to be overvalued. Everyone already “knows” the business is going to be wildly successful, and that’s baked into the price. If there’s any hiccup in results, the price is likely to decline significantly. Also, as evidenced by the GameStop fiasco, amateur traders can make a significant impact on popular investments. Just because something is popular doesn’t make it a good investment. Read more:  Discover these 19 Blue Chip Dividend Stocks Myth: You Need to Spend Time Researching Stocks or Frequently Trading Many people believe that it takes a lot of time to research stock and make frequent trades to make money, resulting in people leaving their investments with a professional or relying on expensive mutual funds. But individual investors don’t need expensive investment advisors or managed mutual funds (more on them shortly). “For most retail investors, utilizing low-cost passive index ETFs is the easiest and cheapest approach,” explains Bob Lai of Tawcan.com. “These index ETFs track a special index, like the S&P 500 or the NASDAQ Composite Index. Because of index-tracking nature, you get to own all the stocks listed in that index.” There’s no need to spend time determining the earning trend of companies like Apple, Facebook, Amazon, or Pfizer because you own them all. By owning all these stocks in the index ETFs, you are also not making frequent trades. Counterintuitively, frequent trades generally lead to lower returns. Think of your investment portfolio like a bar of soap: the more you touch it, the smaller it gets. Read more: Related read: Diversify Your Portfolio With These Top 10 International ETFs Myth: Expensive Managed Mutual Funds Outperform Passive Index Funds Experienced, professional investors with the best data available to them still can’t pick stocks or time the market better than passive index funds. Need proof? Over the last 15 years, nearly 90% of managed mutual funds underperformed compared to their respective benchmark index. “The best investment strategy would be to invest in index funds of stocks or bonds that track an entire segment of the market — so you don’t have to worry about which specific security will give you the best return over short investing periods,” offers Kelan Kline, cofounder of The Savvy Couple. “My personal favorite low cost broad market index fund is Vanguard’s VTSAX.” Myth: Only the Wealthy Can Hire Investment Advisors A survey from JPMorgan Chase found that 42% of people who aren’t investing are staying out because they don’t think they have enough to invest. On some level, this isn’t surprising. After all, historically people had to work with private wealth managers who require $100,000 or more. Even many popular index funds required a minimum of $10,000 to get started, just 20 years ago. “That is changing with algorithm-driven investment tools such as robo-advisors,” says Jeremy Biberdorf of ModestMoney.com. “In many cases, robo-advisors have no minimum investment and allow you to invest for a small fee. Even investing a small amount every year can make a big difference.” Robo-advisors also won’t run off with your money or engage in insider trading. Many investors let their guard down and trust human investment advisors without doing any due diligence on them, especially when referred to them by friends of family members. “This makes investors vulnerable to conflicting advice in even the best-case scenarios. In the worst-case scenarios, they are easy prey for scammers. That’s why I call this blind faith in financial professionals the worst investment advice I hear everywhere,” explains Chris Mamula of Can I Retire Yet?. Read more: Can I Retire at 62 With 400k In My 401(k)? Myth: Bonds Are Inherently Safer than Other Asset Classes Bonds offer one type of safety — but leave you exposed to other types of risk. When an investor buys a bond from the US Government or most municipalities, there’s little risk of the borrower defaulting. So investors can sleep at night knowing that as long as they hold that bond, they’ll probably receive their modest interest payments. But bond values gyrate on the secondary market just like stock prices. Investors who plan to sell their bonds rather than hold them can find themselves with paper that’s gone down in value, not up. Which says nothing of the corroding effect of inflation on bond interest payments. When inflation runs at 3% in a year, a bond paying 3% interest-only generates a 0% real return. That in turn means that bonds may not actually protect retirees against running out of money before they die. Sure, the stock market is volatile, but in the long term, it generates an average return of 10% per year. At a 4% withdrawal rate, investors will see their stock portfolio go up in value rather than down, in most years. Even conservative income stock investing, such as in dividend kings, can yield 3-4% in dividends alone, on top of share price growth. But bonds paying paltry 3-4% interest will cause a slow decay in your nest egg. None of that means that you should never invest in bonds. But every investor should understand all the risks — not just the risk of default. Myth: Options Trading is Risky For many, selling options is a risky business.  And strategies such as Iron Condors add to the complexity.   “However, when managed correctly, options trading can be a handy addition to an overall portfolio”, explains Gavin McMaster of IQ Financial Services, LLC. An iron condor is a delta-neutral option strategy that consists of both call options, and put options.  The strategy works if the underlying stock stays within a specific range during the course of the trade. The key with iron condors is trading an appropriate position size (never risk your whole account on an iron condor) and knowing how to manage them. Here are a few quick tips to reduce the risks with iron condors: Never risk more than 2-3% of your account size on any one trade Close the trade before the stock breaks through one of the short strikes Avoid earnings announcements Have one or two adjustment strategies ready in case the trade moves against you Focus on stocks and ETF’s with a high IV Rank “While iron condors can be risky if you don’t know what you are doing, using appropriate position sizing and risk management rules can reduce the risks”, adds McMaster.  Generating income from iron condors can be a superb way to increase the returns on your portfolio. Myth: Pay Off Your Student Loans Before Buying a Home Paying off student loans before buying a home is a common misconception. While there is no “one size fits all approach,” many people believe their student loan debt will prohibit them from purchasing a home, however, this isn’t always the case. “For example, doctors and dentists often carry large amounts of student debt, and typically have relatively high debt to income ratios. Therefore, exploring a Physician Mortgage, which allows individuals to carry more debt, may be a better fit than a traditional mortgage”, explains Kaitlin Walsh-Epstein with Laurel Road. For those nonhealthcare professionals looking to purchase a home while managing high outstanding student loan balances, refinancing their student loans can be a good option. By refinancing to a longer-term mortgage, the borrower may lower their monthly payments. However, this may also increase the total interest paid over the life of the loan. “Refinancing to a shorter-term mortgage may increase the borrower’s monthly payments, but may lower the total interest paid over the life of the loan.”, adds Walsh-Epstein. Questions to consider: What is your current student loan interest rate? (Calculate the true cost over the life of your loan) What are mortgage interest rates and are they projected to go up or down?  (Currently mortgage rates are low) Do you pay rent each month and if so, how will your rent payment compare to a mortgage payment?  (As well as carrying costs of owning a home) Is the home (or real estate) projected to appreciate in value? The first step is to review and understand your credit score, student loan terms, and financial goals. Working towards making payments to lower your overall debt will help to raise your credit score, yet again increasing your chances of getting into your dream home faster! Myth: The “Rule of 100” In the 20th Century, investment advisors droned out the same advice to most clients: “Subtract your age from 100, and that’s the percent of your portfolio that should be invested in stocks.” They pushed clients to move their money into bonds instead, as they grew older. A sound strategy — back when Treasury bonds paid 15% interest. This century has seen perpetual low-interest rates, and bonds have offered poor returns compared to stocks. This says nothing of the fact that people are living and working longer, so they both have more risk tolerance and need their nest eggs to last longer. Today, investment advisors tend to instead advise subtracting your age from 110 or 120 instead, if they bother issuing such generic advice at all. Everyone has their own unique risk tolerance and needs; as a real estate investor, I can earn safer, higher returns from real estate than bonds, so I avoid bonds altogether. A high earner nearing retirement might appreciate the tax benefits and security of municipal bonds and tailor their portfolio accordingly. Be careful of anyone peddling such a broad rule of thumb as the “Rule of 100.” Read more: Find Expert Tax Preparers Now! Myth: You Must Pay Off All Debt Before Investing There are plenty of great reasons to pay off consumer debt early. You earn an effective return equal to the interest rate, and it’s a guaranteed return on your money when you use it to pay off debt early. Mark Patrick of Financial Pilgrimage explains it like this: “Our family even went so far to pay down our mortgage debt despite record low-interest rates. With that said, throughout the entire process we invested in our retirement accounts, such as our 401(k) account. The benefits are just too good to pass up. “The company that I work for provides a 401k match of up to 6% plus an additional 1% that every employee receives regardless. Therefore, if I contributed 6% of my salary to my 401(k) I would receive an additional 7% in contributions from my employer. I was more than doubling my money right away! “If you decide to wait to pay down all of your consumer debt instead of starting to invest for your retirement you’ll miss out on years of compound interest. Compound interest is one of the most powerful forces in personal finance. The earlier you can get started, the better. For example, if someone invests $5,000 per year from age 25 to 35 and then never invests another dollar, they would likely have more money at age 65 than someone that invests the same amount every month from age 35 to 65. “While I am a huge proponent of paying down debt, it shouldn’t come at the expense of forgoing investing. Especially when you want that money to grow until retirement. Try to find the balance between paying down debt and investing. We certainly could have paid down our debt faster if we decided not to invest throughout the process, but after 15 years in the workforce I’m sure glad we didn’t. Those dollars invested early on have compounded into much larger amounts over the years. Read more: Should you Pay off Debt or Save for Retirement Myth: You Should Pay Off Your Student Loans Before Buying a Home It might make more sense to pay off student loans before buying a house. Or it might not. Ultimately it depends on your goals, your housing market, your loan interest rates, and your other finances. For example, you might live in a housing market where it’s cheaper to rent than own a home. In that case, it makes sense to pay off your student loans rather than rush into buying. Alternatively, if you plan on buying a duplex and house hacking, and thereby eliminating your housing payment, it probably makes more sense to buy. Just think about how much faster you could pay off your student loans, with no housing payment! Think holistically about how owning versus renting for another year or two would affect your finances. Don’t rush into buying a home — but don’t avoid it without deep analysis, either. Myth: Buying Is Always Better than Renting Despite having owned dozens of properties as a real estate investor, I live in a rental apartment. In some markets, renting makes more sense than buying. Look no further than San Francisco, where the median home price is $1,504,311, but the median rent for a three-bedroom home is $4,567. After adding in property taxes and homeowners insurance, it would cost roughly double the monthly payment to buy a median home as rent, despite all the perennial complaints by San Francisco tenants. And that says nothing of maintenance and repair costs, which average thousands of dollars each year for the typical homeowner. Renters don’t have to pay those costs or do that labor. They delegate them to the landlord. Nor do renters need the fiscal discipline to budget money each month for those irregular, but inevitable expenses. Not everyone has that discipline, and they’re better off with the steady, predictable housing cost of monthly rent. Finally, renting allows flexibility. Tenants can sign a month-to-month lease agreement and move out with a few weeks’ notice. Homeowners don’t have the flexibility; it takes months to sell a home, and typically tens of thousands in closing costs. Myth: Your Home Is an Investment Buyers love to delude themselves that they’re buying an “investment” rather than spending money on shelter. It helps them justify overspending on the biggest, fanciest house they can possibly afford. But make no mistake: housing falls under the “Expenses” category in your budget, not the “Investments” category. It costs you money every month, rather than generating it. House hacking marks a notable exception however, since your home helps you avoid a housing payment. Sure, real estate often goes up in value. So do baseball cards, but that doesn’t justify hobbyists spending as much as they possibly can on them, while patting themselves on the back for their wise “investments.” By all means, invest in real estate. But do it by buying true investment properties, or REITs, or real estate crowdfunding investments. The more you spend on housing, the less you can put toward true investments. Read more: House Hacking – 18 Ways to Never Pay Rent Again Myth: You Should Put the Bare Minimum Down When You Buy a Home Making the bare minimum down payment often enables buyers to overspend on housing. They end up overleveraging themselves, mortgaged to the hilt with an enormous monthly payment and little money left to actually furnish the place, or to enjoy any social life. It also leaves homeowners vulnerable to becoming upside-down on their home, owing more than the home is worth. At that point, they become prisoners in their own homes, unable to sell without the lender’s permission. They end up stuck there until the housing market either improves or they pay their loan balance down enough to be able to afford seller closing costs without coming out of pocket. While it sounds nice to put down next to nothing on a home, look at the bigger picture. If you spend far less on a home than you can afford, then a low down payment can serve you well. But if you’re straining against the limits of your budget, beware of putting every last penny into a tiny down payment with a huge monthly bill. Myth: You Should Put Down as Much as Possible on a Home The common wisdom was once to put down as much as possible when you buy a home, and 20% at the very least. However, this locks up a good portion of the money that could be growing at a faster rate with other investments. “Putting down less than 20% does increase the monthly mortgage payment due to the higher interest rate and PMI (private mortgage insurance),” explains Andy Kolodgie of The House Guys. “However, you should compare your expected returns on that extra down payment if you were to invest it elsewhere, to the annual savings on your mortgage. For example, investing in stocks and bonds could allow you to earn more money while providing the added benefit of easy liquidity. “A lesson learned from the 2008 mortgage crisis was you can’t eat equity in your home. During the recession, it was nearly impossible to refinance the equity out of any home, as home prices dropped below most people’s mortgage balance. Putting less than 20% down to stay more liquid and investing in alternative assets diversifies your portfolio, keeping buyers more risk-averse.” Again, look holistically at your personal finances. As you near retirement, it makes more sense to play conservatively with a larger down payment to avoid PMI and reduce your monthly mortgage bill. For younger borrowers looking to buy a first home, it often makes more sense to put down 3-10%, and invest their other cash more aggressively in the stock market or other assets with high return potential. Myth: You Need 6-12 Months’ Living Expenses in an Emergency Fund To hear the pundits crying from their soapboxes, we all need at least a year’s worth of living expenses parked in a savings account in cash to protect us from a financial apocalypse. And some people do. But not everyone. Those with either irregular incomes, irregular expenses, or both do need a deep cash cushion. For example, as an entrepreneur, there have been months where I didn’t earn enough to take a personal distribution for myself from the company, so I earned $0 in personal income those months. Someone like me does need 6-12 months’ worth of living expenses saved in an emergency fund. Salaried employees with safe jobs at stable employers don’t need as much cash in an emergency fund. That goes doubly if they live a predictable middle-class lifestyle with the same expenses month in and month out. They may only need 2-3 months’ expenses set aside in cash. I go a step further with my emergency fund and think of it as tiered levels of defenses, like a medieval castle. The first level comprises cash savings — you can tap it if you need it. I also keep several unused credit cards with low-interest rates, that I can also draw on in a pinch. Then I keep several low-volatility, short-term investments that I can also turn to if needed. All of which means I don’t actually need 6-12 months’ living expenses in cash after all. Myth: More Education Inherently Means a Higher Income From a statistical standpoint, education level correlates strongly with income. People with college degrees earn more than those with high school diplomas on average, and those with advanced degrees earn a higher average income still. On a personal level, it often doesn’t work out that way. I have plenty of friends and family members with advanced degrees, and most of them earn modest, middle-income salaries. Salaries with ceilings, and little room for advancement beyond their specialized niche. I can’t tell you how many teachers I know with several master’s degrees, who earn little or nothing more than their colleagues with bachelor’s degrees. In fact, my friends and family with the highest incomes all stopped at bachelor’s degrees and while some got high-paying jobs, others went into business in some capacity. This doesn’t mean you shouldn’t pursue an advanced degree if it’s required for your dream job. By all means, pursue your passion. But don’t assume that an advanced degree inherently means an advanced salary. Read more: How to Make $100k/yr As A Brand Ambassador Myth: Gold Offers the Best Hedge Against Inflation Many investors flock to gold when they fear inflation. But historically, gold often performs badly during times of high inflation. From 1980-1984, for instance, gold lost around 10% in value, even as inflation raged at a 6.5% annual rate. Historically repeated itself in the late 1980s as well. Gold actually works best as a hedge against a weakening currency — compared to other world currencies. When investors think the US dollar is about to crumble in value compared to the euro, pound, or yen, that marks a good moment to grab some gold. But investors more generally worried about inflation should consider better hedges against it. Real estate offers an excellent hedge against inflation, for example. It has inherent value: people will pay the going rate, regardless of the value of the currency. The same goes for commodities like food staples; no one stops eating just because inflation surges. Most professional investment advisors recommend holding no more than 5% of your portfolio in precious metals, if that. I personally own none, preferring to invest in stocks, real estate, and the occasional speculative gamble such as cryptocurrency. Article By G. Brian Davis, The Financially Independent Millennial Updated on Oct 5, 2021, 5:10 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 5th, 2021

Sharp Market Turns Not To Miss

S&P 500 steeply declined, yet the credit markets offered a glimmer of hope to suck in the bulls – and thus far, the premarket bounce is sticking. The fact that buying the dip didn‘t work in the 4,350s area, needs some digesting today – the overnight stampede didn‘t develop. The sectoral view though doesn‘t allow […] S&P 500 steeply declined, yet the credit markets offered a glimmer of hope to suck in the bulls – and thus far, the premarket bounce is sticking. The fact that buying the dip didn‘t work in the 4,350s area, needs some digesting today – the overnight stampede didn‘t develop. The sectoral view though doesn‘t allow to declare the bottom to be in just yet. The technical bounce would be probably led by value, with tech lagging behind regardless of the anticipated daily stabilization / retreat in yields. 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 Neither the VIX has calmed down considerably yet. The bulls must be perplexed why buying the dip hasn‘t worked this time around (and before). The sizable open short profits can keep growing. As stated yesterday: (…) VIX understandably calmed down [Wednesday], but doesn‘t give impression of yielding too much to the downside – on the contrary, it seems to be on a general uptrend since early Jul. Volatility is returning, and that‘s characteristic of the unfolding correction. How far lower would it reach? The 4,340 followed by 4,300 and lower to mid 4,250 are the key supports. The bulls haven‘t (and face quite many headwinds from related markets, including the dollar) stepped in to close Tuesday‘s gap, which would be a game changer. For now, we‘re in a trading range where the bears have the advantage. The stock market bull hasn‘t topped, we‘re merely in an unpleasant correction, of which the daily upswing in utilities or consumer staples is a testament. The key fundamental events Thursday were Powell acknowledging that pesky inflation and China ordering its state-owned enterprises to secure oil supplies for the coming winter at any cost. The former finally lit the fuse behind precious metals (did you see how profoundly silver recovered from that $8bn futures contract drop representing 40% of worldwide mining output before Powell spoke on Wednesday?), the latter keeps crude oil prices underpinned. That‘s why I wasn‘t spooked by the copper plunge yesterday (really out of tune with the commodities sentiment and CRB Index performance) – the commodities superbull is merely getting started. Bringing up the key inflation thoughts of yesterday: (…) The slowly but surely acknowledged inflation surprise will come back to bite the central bank as inflation expectations are finally surging again, reflecting the cost-push inflation (hello commodities superbull), job market challenges and increasingly strained supply chains characterized by order cuts, delays, shortages and general issues in getting merchandise where it‘s awaited (hello port congestion, docking plus trucking staff shortages and full container ships anchored and awaiting unloading). And I‘m not even talking record drought through the West Coast stretching into Rockies and Midwest, or China electricity rationing. Precious metals seem to be the most undervalued asset class these weeks really. Once we look back at autumn 2021 a few short years down the road, we would all say that precious metals have been outrageously undervalued indeed. And have you seen the great crypto breakout that‘s making bulls such as myself very happy... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 pause is very clearly over, and the bears keep having the upper hand. Credit Markets Credit markets let the bulls have second thoughts, and the high HYG volume indicates a brief pause in the stock market selling. Gold, Silver and Miners Precious metals sprang to life – first swallow of a turnaround. The bottom looks to be in, and would be confirmed by silver increasing in price faster than gold in order to bring the gold to silver ratio back down from its 80 local top. Reinforcing that move would be copper catching up and outperforming the CRB Index too. Crude Oil Crude oil consolidation continues, and every dip is being bought. Upswing continuation appears a question of time only. Copper Copper downswing could have attracted higher volume but that doesn‘t detract from a vigorous response of the bulls coming most likely next. The pattern of lower highs is likely to be broken to the upside the cryptos way (discussed next), in due time. Bitcoin and Ethereum Bitcoin and Ethereum bulls confirmed they were on the move, and the early Sep highs are next in their sights. The chart is very bullish, and the daily indicators have plenty of room to go before reaching overbought levels. Summary Stocks aren‘t out of the woods yet, but the bears are likely to take a daily pause today. Inflation is coming back into focus, today‘s core PCE price index confirms it isn‘t going away any time soon, and Treasury yield spreads (10-year over 2-year) are coming back from the false breakdown earlier in Sep, which would feed into the hunger for commodities. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Oct 1, 2021, 11:32 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: valuewalkOct 1st, 2021

Inflation Waking Up Bonds

S&P 500 bulls didn‘t make much progress even though the credit markets initially favored the daily rebound to stick. Bouncing between the daily highs and lows, the 500-strong index gave up a few moderately good opportunities to take on 4,390 again. VIX understandably calmed down on the day, but doesn‘t give impression of yielding too […] S&P 500 bulls didn‘t make much progress even though the credit markets initially favored the daily rebound to stick. Bouncing between the daily highs and lows, the 500-strong index gave up a few moderately good opportunities to take on 4,390 again. VIX understandably calmed down on the day, but doesn‘t give impression of yielding too much to the downside – on the contrary, it seems to be on a general uptrend since early Jul. Volatility is returning, and that‘s characteristic of the unfolding correction. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more How far lower would it reach? The 4,340 followed by 4,300 and lower to mid 4,250 are the key supports. The bulls haven‘t (and face quite many headwinds from related markets, including the dollar) stepped in to close Tuesday‘s gap, which would be a game changer. For now, we‘re in a trading range where the bears have the advantage. The stock market bull hasn‘t topped, we‘re merely in an unpleasant correction, of which the daily upswing in utilities or consumer staples is a testament. Yields and the dollar are taking turns at pressuring inflation plays, and precious metals are feeling the heat especially, ignoring the debt ceiling being still unresolved. Treasury yields are returning to more reasonable levels in order to reflect the Fed‘s dillydallying: (…) Bonds are signalling that the Fed‘s image of inflation fighter (right or wrong, have your pick) is losing the benefit of the doubt it was given with the Jun FOMC – bond yields have abruptly ended their descent and subsequent trading range. This spells not only inflation (the risk of Fed‘s policy mistake – warnings it would take longer with us than originally anticipated coupled with the professed faith it would just naturally subside all by itself), but smacks of stagflation. The slowly but surely acknowledged inflation surprise will come back to bite the central bank as inflation expectations are finally surging again, reflecting the cost-push inflation (hello commodities superbull), job market challenges and increasingly strained supply chains characterized by order cuts, delays, shortages and general issues in getting merchandise where it‘s awaited (hello port congestion, docking plus trucking staff shortages and full container ships anchored and awaiting unloading). And I‘m not even talking record drought through the West Coast stretching into Rockies and Midwest, or China electricity rationing. Precious metals seem to be the most undervalued asset class these weeks really. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 paused for a day, and the bulls wasted a few chances to move higher. Credit Markets Credit markets opened on a strong note (HYG did), but gave up the advantage – lower values still seem a question of (relatively short) time. Gold, Silver and Miners Precious metals remain under pressure, and silver was hammered by the daily upswing in the dollar. Gold volume didn‘t correspondingly jump higher, indicating that the selling pressure taking gold to silver ratio to 80, is a tad overdone. As stated days ago, look to copper to show signs of life first – outperformance of CRB Index would be a first welcome sign. Crude Oil Crude oil consolidation continues, and the volume behind last two days, shows healthy accumulation. Copper Copper couldn‘t keep the unfolding flag intact – the hesitation goes on, and the red metal is increasingly trading in the rather undervalued end of its spectrum. Overall, it remains range bound for now. Bitcoin and Ethereum Bitcoin and Ethereum bulls are on the move, and the $40K in BTC held up – the daily indicator posture is improving, and we can look for the upswing to continue – remarkable in the face of rising dollar, which is in my view closer to a top than generally appreciated. Summary Stocks aren‘t out of the woods yet, and the yields are putting pressure on tech. Commodities are largely ignoring the taper timing and pace speculation, which can‘t be said about precious metals reacting once to the dollar, then to yields – but not to rising inflation, inflation expectations, or deeply negative real rates. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Sep 30, 2021, 10:54 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 30th, 2021

Applying A Barbell Investment Strategy To Protect Against Stagflation

An inclination towards this strategy can be seen with the bids for exceptionally safe dividend drivers like utilities, real estate, & consumer staples, combined with a growing penchant for speculative innovation-fueled equities. Since last Friday's jobs report (10/8), the US Treasury yield curve has been flattening, with short-term yields (1 to 5-year notes) floating higher while longer-duration bond yields tumbling. The September jobs report intensified stagflation fears with outsized monthly wage increases (one of the stickiest inflation gauges) coupled with decelerating jobs growth.These concerns are pushing money managers into a barbell equity allocation to protect themselves against the potential stagflation, which poses a significant risk to the broader equity market over the next year or two.The barbell investment approach is used to protect portfolios against systemic economic and market risk by taking the 2 extreme ends of the risk-reward spectrum. This strategy stays away from equities whose value is heavily correlated with broader market performance, typically found in the middle of this risk-reward scale.With weights on each polarized edge of the risk-reward spectrum, investors can capture the annual (risk-adjusted) returns that they are looking for while protecting themselves from index-level risks. Secular market-disrupting growth stocks move at the beat of their own innovation-driven drum with little influence from broader equity moves. At the same time, low beta high-yielding defensive sectors like utilities, REITs, & consumer staples have little market correlation (low systemic market risk). This equity allocation is similar to that of the investment mix of bonds and stocks that most of us learned about in personal finance class, only this strategy replaces bonds with higher-yielding equities. The equity market remains the most attractive asset class for your capital in this rising rate, inflationary environment.In this 4th Revolution video, I present 3 well-positioned ultra-high growth stocks to buy today like SoFi SOFI, UiPath PATH, & Splunk SPLK, along with several ETFs including Cathie Wood’s Ark Innovation ETF ARKK, SPDR Utilities ETF XLU, & SPDR Real Estate ETF XLRE that can be utilized to implement this barbell investment strategy. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Splunk Inc. (SPLK): Free Stock Analysis Report UiPath, Inc. (PATH): Free Stock Analysis Report Utilities Select Sector SPDR ETF (XLU): ETF Research Reports ARK Innovation ETF (ARKK): ETF Research Reports Real Estate Select Sector SPDR ETF (XLRE): ETF Research Reports SoFi Technologies, Inc. (SOFI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 15th, 2021

Bet on Floating Rate ETFs As Yields Surge

Investors seeking to prepare for higher rates could flock to the bonds with yields that track broader interest rates ??? floating rate bonds. The U.S. Treasury yields has been on the rise given the prospect of the Fed’s policy tightening as well as persistent high inflation. The 10-year yields topped the 1.6% level last week, its highest since Jun 4 while yields on 20- and 30-year bonds also jumped to levels previously seen in June.The Fed has indicated that it will soon start rolling back on some of the monetary stimulus it provided during the pandemic crisis, primarily because inflation has met and exceeded the Fed’s 2% goal. The central bank is expected to begin scaling back the monthly bond purchases as soon as next month and complete the process by mid-2022. The policy statement also revealed that nine of 18 Fed policymakers Fed policymakers foresee a liftoff in interest rates next year compared to seven policymakers in June. The median dot also projects three to four total rate hikes by the end of 2023. Through the end of 2024, the median FOMC member sees six to seven total rate hikes (read: ETFs to Play Higher Benchmark Treasury Yields).Meanwhile, inflation, which measures the increase in the cost of living over time, is running at 5.3% — the highest in nearly 13 years — driven by surging consumer demand, rising energy prices, and supply chain-related shortages. Additionally, the latest preferred inflation gauge by Fed rose 3.6% in August from the year-ago month, representing the biggest jump since 1991. This has fueled concerns that price increases will last longer than expected and eventually hit consumer spending. Additionally, a spike in commodity prices, especially energy, as well as the wider reach of COVID-19 vaccinations has lifted inflationary expectations.That said, investors seeking to prepare for higher rates could flock to the bonds with yields that track broader interest rates – floating rate bonds.Why Floating Rate Bonds?Floating rate bonds are investment grade and do not pay a fixed rate to investors but have variable coupon rates that are often tied to an underlying index (such as LIBOR) plus a variable spread depending on the credit risk of the issuers.Since the coupons of these bonds are adjusted periodically, these are less sensitive to an increase in rates compared to traditional bonds. Unlike fixed coupon bonds, these do not lose value when the rates go up, making the bonds ideal for protecting investors against capital erosion in a rising rate environment.Investors currently have four floating rate bond ETFs in the market, any of which could make for a compelling choice (see: all Investment Grade Corporate Bond ETFs here).iShares Floating Rate Bond ETF FLOTThis ETF follows the Bloomberg Barclays US Floating Rate Note < 5 Years Index and holds 436 securities in its basket. The fund has an average maturity of 1.47 years and an effective duration of 0.09 years. It focuses on better quality notes with 83% of them rated A or higher. The product has amassed $6.8 billion in its asset base while trades in volume of 675,000 shares per day on average. It charges 20 bps in annual fees (read: Rising Yields Rattles Market: Inverse ETFs in Vogue).SPDR Barclays Investment Grade Floating Rate ETF FLRNThis ETF tracks the Barclays U.S. Dollar Floating Rate Note < 5 Years Index with an average maturity of 1.77 years and adjusted duration of 0.06 years. It holds 431 securities with the top-rated bonds (A or higher) accounting for 85% share. The fund has AUM of $2.4 billion and charges 15 bps in annual fees. Volume is solid at around 379,000 shares a day on average.Market Vectors Investment Grade Floating Rate ETF FLTRThis fund follows the Market Vectors Investment Grade Floating Rate Bond. Holding 222 securities, it has average years to maturity of 2.88 and modified duration of 0.03 years. The product has accumulated $729 million in its asset base and trades in an average daily volume of 217,000 shares. Expense ratio came in at 0.14%.Invesco Variable Rate Investment Grade ETF VRIGInvestors seeking an active approach could find VRIG an exciting pick. This fund seeks to invest at least 80% of its net assets in a portfolio of investment-grade, variable rate instruments that are U.S. dollar denominated and U.S. issued. It holds 188 bonds in its basket and has amassed $455.7 million in its asset base. The ETF trades in an average daily volume of 90,000 shares and charges 30 bps in annual fees. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Floating Rate Bond ETF (FLOT): ETF Research Reports VanEck Investment Grade Floating Rate ETF (FLTR): ETF Research Reports SPDR Bloomberg Barclays Investment Grade Floating Rate ETF (FLRN): ETF Research Reports Invesco Variable Rate Investment Grade ETF (VRIG): ETF Research Reports To read this article on Zacks.com click here......»»

Category: topSource: zacksOct 15th, 2021

3 Top-Ranked Dividend Aristocrats to Buy in Q4

With the stock market widely expected to gyrate all through Q4, it's prudent to invest in fundamentally sound dividend aristocrats like Procter & Gamble (PG), Walmart (WMT) & General Dynamics (GD). The month of October has a reputation of not being good for the stock market. Per a Barron’s article, historically, the S&P 500 had declined 0.4% in October, particularly after the broader index decreased more than 2% in the prior month, which by the way, did happen this time.Also, the October effect cannot be completely written off. It states that Wall Street had witnessed some of the worst declines in the month of October, including the great crash in 1987, and 1929’s Black Tuesday and Thursday.We may not witness huge crashes this October, but certainly, the month hasn’t been off to a good start for the stock market. In fact, the three major U.S. benchmarks have been dragged lower for the third successive trading session on Oct 12, and have witnessed choppy trading so far this month. Of course, there is a series of headwinds that is impacting the stock market’s upward journey and may well continue to do so this quarter.Investors now believe that the Fed may move away from its easy monetary policy soon, which actually helped the stock market stay afloat amid the coronavirus pandemic. The Fed may soon taper its bond-buying program and is widely expected to hike rates next year. Moreover, the European Central Bank is also expected to join the Fed in increasing its key interest rates in 2022. Thus, the possibility of higher interest dampens the prospects of growth-oriented tech stocks as it may impact the company’s ability to buy back stock and fund its growth.Adding to the woes is the current rise in energy prices. This is because an increase in energy prices leads to higher inflation, which curtails consumer spending, slows down economic growth, and drags stocks lower. On Oct 12, the U.S. crude benchmark – West Texas Intermediate, settled at $80.64 a barrel, its highest settlement value in almost seven years, citing a Wall Street Journal article. Similarly, coal price has hit a record high, the price of natural gas has jumped and Americans are  paying the highest at gas stations since 2014.Talking about inflation, the Fed’s preferred gauge of inflation, in reality, had already climbed the highest in 30 years on a yearly basis during the month of August. This rise in prices of essential goods would certainly have an impact on consumers’ outlays in the near future, something that doesn’t bode well for the economy vis-à-vis the stock market (read more: 3 of the Best Stocks to Buy as Inflation Threat Rises).By the way, the International Monetary Fund (IMF) has recently lowered its growth predictions for the world economy for this year. The spread of the more contagious Delta variant of the coronavirus and supply-chain disruptions across major economies compelled the IMF to cut the global growth forecast. Undoubtedly, such gloomy forecasts aren’t good for stocks in the near term.However, from an investment standpoint, investors shouldn’t shun equities completely at this time. Instead, they can opt to invest in dividend aristocrats. After all, these stocks boast solid fundamentals and are unfazed by any market gyrations. Furthermore, they have better quality business compared to just dividend payers. Let us, thus, take a look at the three top dividend aristocrats that should be added to your portfolio. These stocks also possess a Zacks Rank #1 (Strong Buy) or 2 (Buy).The Procter & Gamble Company PG provides branded consumer packaged goods to consumers. Procter & Gamble has paid out dividends for almost 130 years and has raised its payout for a whopping 64 successive years. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.2% over the past 60 days. The company’s expected earnings growth rate for the current year is nearly 5%.Walmart Inc. WMT has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. This company is known for raising its dividend for 48 consecutive years. It currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 5.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 15.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.General Dynamics Corporation GD engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. For 25+ straight years, the company has raised its dividend. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 4.5%. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD): Free Stock Analysis Report Procter & Gamble Company The (PG): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 13th, 2021

Should You Invest in Consumer Staples ETFs? Let"s Explore

Investors can consider parking money in the non-cyclical consumer staples sector during an economic recession. This largely defensive sector has been found to have a low correlation factor with economic cycles. The consumer staples sector is known for its non-cyclical nature and acts as a safe haven during unstable market conditions. Moreover, like utility, consumer staples is considered a stable sector for the long term as its players are likely to offer decent returns.Investors can consider parking their money in the non-cyclical consumer staples sector during an economic recession. This high-quality sector, which is largely defensive, has been found to have a low correlation factor with economic cycles.Research has shown that consumer staples companies have been mostly found to outperform during market turbulences. Thus, the space generally acts as a safe haven for investors. Moreover, consumer staples stocks have more stable profit levels in a contracting economy.Wall Street just made it through the worst month this year, with the broad market indices exiting September in the red. The Dow Jones Industrial Average was down 4.3%. Moreover, the S&P 500 index and the Nasdaq Composite declined 4.8% and 5.3%, respectively.The weakness has been caused by a variety of factors like rising coronavirus cases due to the highly contagious Delta variant, surging inflation levels, uncertainty surrounding the Federal Reserve’s meeting and its decision on tapering the fiscal stimulus along with China’s property crisis. Notably, 10 out of 11 S&P sectors were negative, while the energy sector was positive, with more than a 9% rise in September.Going on, market analysts are skeptical about the Wall Street performance in October. The S&P 500 index has been observed to lose 0.4% in October after losing more than 2% in September, according to a Barron’s article. October has a tarnished image of witnessing some of the biggest stock market crashes like the 1929 Black Tuesday and Thursday, and the great crash of 1987, which occurred on Oct 19. On that particular day, the Dow had tanked more than 20% on a single trading session, making it debatably the worst single-day decline in history.October is clouded by certain issues like inflationary pressures, supply chain challenges, probabilities of Fed tapering the fiscal stimulus, China’s Evergrande crisis along with concerns about a debt-ceiling breach. These factors can keep the stock market volatile.Consumer Staples ETFs to Watch Out ForHere we highlight certain ETFs that have gained more than 20% year to date (see: all Consumer Staples ETFs here):The Consumer Staples Select Sector SPDR Fund XLPThe fund seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Consumer Staples Select Sector Index. With AUM of $11.66 billion, the fund has an expense ratio of 12 basis points (bps) (read: Walmart Tops Q1 Earnings Estimates, Ups View: ETFs to Gain).Vanguard Consumer Staples ETF VDCThe fund seeks to track the performance of the MSCI US Investable Market Consumer Staples 25/50 Index. With AUM of $5.71 billion, the fund has an expense ratio of 10 bps (read: 5 ETFs to Combat Stimulus Tapering Concerns, Virus Woes).Fidelity MSCI Consumer Staples Index ETF FSTAThe fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the MSCI USA IMI Consumer Staples Index. It has an AUM of $798.8 million and charges 8 bps in fees.iShares U.S. Consumer Staples ETF IYKThe fund seeks to track the investment results of an index composed of U.S. equities in the consumer staples sector. It has an AUM of $674.8 million and charges 41 bps in fees.First Trust Consumer Staples AlphaDEX Fund FXGThe fund seeks investment results that generally correspond to the price and yield, before fees and expenses, of an equity index called the StrataQuant Consumer Staples Index. With AUM of $256.6 million, the fund has an expense ratio of 63 bps (read: Energy and Consumer Staples: 2 ETFs to Watch for Outsized Volume). 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 Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports First Trust Consumer Staples AlphaDEX ETF (FXG): ETF Research Reports Vanguard Consumer Staples ETF (VDC): ETF Research Reports iShares U.S. Consumer Staples ETF (IYK): ETF Research Reports Fidelity MSCI Consumer Staples Index ETF (FSTA): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 8th, 2021

The Deficit Ceiling Is No Longer A Concern

In his Daily Market Notes report to investors, while commenting on the deficit ceiling, Louis Navellier wrote: Q3 2021 hedge fund letters, conferences and more We survey our investors each week, and this week’s topic was whether or not now is a good time to invest in stocks.  Despite market gyrations, retail investors remain bullish. 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Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more We survey our investors each week, and this week’s topic was whether or not now is a good time to invest in stocks.  Despite market gyrations, retail investors remain bullish. Refreshing Poise It looks like we just went through the pause that refreshed and these oscillations are about to end. And one of the reasons is, is a lot of the things that were overhanging the market of have dissipated. Obviously, the deficit ceiling is no longer a concern.  Higher energy prices impacting Europe and other countries is now dissipating because Russia reassured Europe they have plenty of natural gas. Also, crude oil prices have started to ebb. Some of it's seasonal pressure. A lot of its OPEC increased their production. So that energy inflation that was starting to impact some economy severely is now dissipating. Also, private payrolls are much stronger than anticipated. Today, we had new claims for unemployment and continuing claims both fell after rising for three weeks, especially on new weekly claims. And so, they finally fell and they were well below economist's expectations. That's setting the stage for a very, very strong Friday payroll report. And that's important because the Fed has an unemployment mandate. And if the jobs really start to come back, then that'll allow the fed to go to this next stage and start to briefly taper and things like that. If the Fed starts to taper and/or next year raises key rates a quarter percent, it's not going to hurt growth stocks. Growth stocks are the place to be when rates start to tilt up just a tad. So our stocks are going to be in oasis. We're going to have wave after wave of good earnings, starting the third week of October. It looks like for many stocks better earnings are coming from margin rather than sales expansion. The Proposed Tax Increases Have Been Shelved One thing that should help the U.S. consumer is the proposed tax increases have been shelved, due to the infighting within the Democratic Party that is scared of losing their majority in the 2022 mid-term elections.  Essentially, any significant tax increase, even for infrastructure spending, would be viewed as a negative development heading into the 2022 mid-term elections. Furthermore, Senator Joe Manchin made it crystal clear that no matter what spending package the House of Representatives passes, he had not been consulted and would likely not support the proposed bill.  In the end, Senator Joe Manchin is the most powerful person in Washington D.C., so any spending and tax increases will have to be approved by him. The good news is that as inflation continues to heat up and push China and other countries into a recession, the U.S. remains an oasis.  The port bottlenecks and supply chain glitches persist, but at least the U.S. is not expected to be crippled by high coal and natural gas prices that are now hindering China and much of Europe. Interestingly, the Fed’s favorite inflation indicator, namely the Personal Consumption Expenditures (PCE) index rose 0.3% in August and is now running at the highest level in 31 years.  Consumer Spending Up However,  the Commerce Department reported that consumer spending rose 0.8% in August, up sharply.   Any time consumers are spending more than their income is a good sign. So has we head into the fourth quarter, much of the uncertainty plaguing financial markets is starting to dissipate.  The only thing that continues to frustrate many investors is inflation.  The bottom line is that U.S. economy remains an oasis around the world, which is why the U.S. dollar is near a one-year high. The Atlanta Fed on Tuesday lowered its third quarter GDP estimate to an annual pace of 1.3%, down from its previous estimate of 2.3%.  The trade deficit and weaker than expected home sales seem to be the primary culprit behind the Atlanta Fed’s downward GDP revision.  Overall, the U.S. seems constrained by ongoing port bottlenecks, which are getting worse as retailers strive to stock up on merchandise for the holidays. The Facebook Outage The Facebook, Inc. (NASDAQ:FB) outage earlier this week was one part of a perfect storm facing the company that also included alarming claims whistleblower Frances Haugen.    In the end, Facebook still has a lot of allies in Congress, so it will be interesting to sell what, if any regulatory action will be taken against Facebook.  I suspect that due to the First Amendment, very little action will be taken against Facebook. The fourth quarter is a seasonally strong quarter that is characterized by positive gains for October, November and December.  I should add that January is also a seasonally strong month, so we have four straight months of seasonal strength to look forward too.  November is the strongest month in the fourth quarter, since we typically get an “early January effect” just before Thanksgiving, when small capitalization stocks seasonally surge. v Updated on Oct 7, 2021, 5:07 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 7th, 2021

5 Stocks to Buy on Continued Expansion in Services Activity

The services sector has witnessed steady growth since reopening. This has seen companies like TransUnion (TRU), YETI Holdings, Inc. (YETI) and Chipotle Mexican Grill, Inc. (CMG) putting up a good show. The Delta variant of the coronavirus has been a reason of worry, raising concerns of an economic slowdown for some time now. This also resulted in markets taking a hit in September. However, the services data for September paints a different picture.Recently released data for the U.S.services industry PMI (purchasing managers’ index) by the Institute of Supply Management (ISM) showed that the economy is on solid ground. And the worries of economic slowdown owing to another surge in coronavirus cases may not have dented the spirit of investors.Services Activity Continues to ExpandAccording to data released by the Institute for Supply Management (ISM) on Oct 5 non-manufacturing (service) purchasing managers’ index (PMI) rose 0.2% to 61.9 from 61.7 in August. The consensus estimate was 60. Any reading above 50% means expansion in services activities.September’s reading also indicates that the services sector expanded for the 16th straight month and140 months in a row, barring just two months. The Supplier Deliveries Index fell 0.8% to 68.8% from 69.6% in August.The Business Activity Index rose to a reading of 62.3, increasing 60.1% sequentially. The New Orders Index gained 0.3% to reach 63.5%. The Backlog of Orders Index rose to 61.9%, advancing 0.6% from August’s reading of 61.3%.Services Sector Grows With Economic ReopeningInterestingly, despite growing fears of the Delta variant of the coronavirus, 17 of the 18 service-related industries grew in terms of new orders and production. This also indicates that the growth is all around and people are a lot more confident now with millions having been vaccinated.The sector had contracted 41.8% and 45.4% in April and May 2020, respectively, but has bounced back since then and is growing faster than ever. And this is despite the growing inflationary pressures.As more people worked and learned from home during the pandemic, they became technology-dependent, boosting tech services. However, people primarily invested in goods at that time but things started changing with the vaccination drive as they shelled out more on services.As the economy reopened, people started making travel plans, eating out at restaurants as well as visiting stores and recreation joints. This has been helping the services sector.Business services are only likely to increase in the coming months as more people get vaccinated. This will only help people get back their confidence and business services to expand.Our Choices The services sector is poised to grow on vaccination and more purchasing power from the government stimulus. Given this situation, it would be ideal to invest in these five stocks.Avis Budget Group, Inc. CAR operates as a leading vehicle rental operator in North America, Europe and Australasia with an average rental fleet of nearly 650,000 vehicles.The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved 14.4% over the past 60 days. Avis Budget sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.YETI Holdings, Inc. YETI designs, markets and distributes products for the outdoor and recreation market under the YETI brand primarily in the United States. The company's products are designed for outdoor activities, including hunting, fishing, camping, barbecue, and farm and ranch activities, among others. The company’s expected earnings growth rate for the current year is 32.6%. The Zacks Consensus Estimate for current-year earnings improved 0.8% over the past 60 days. The company has a Zacks Rank #2.Concentrix Corporation CNXC provides technology-enabled business services. The company serves technology & consumer electronics; retail, travel & ecommerce; banking, financial services & insurance; healthcare; communications & media; automotive; and the energy & public sector. The company’s expected earnings growth rate for the current year is 60.5%. The Zacks Consensus Estimate for current-year earnings improved 5.8% over the past 60 days. The company has a Zacks Rank #2.Chipotle Mexican Grill, Inc. CMG offers a focused menu of burritos, tacos, burrito bowls and salads. Chipotle restaurants feature free-range, hormone-free pork, natural chicken and other meat products cooked through traditional methods and served in a unique atmosphere. The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. Chipotle Mexican Grill carries a Zacks Rank #2.Dennys Corporation DENN is one of the largest restaurant companies, operating moderately priced restaurants: Denny's, Hardee's, Quincy's, El Pollo Loco, Coco's and Carrows. The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. Chipotle Mexican Grill carries a Zacks Rank #2. 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 Avis Budget Group, Inc. (CAR): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Dennys Corporation (DENN): Free Stock Analysis Report Concentrix Corporation (CNXC): Free Stock Analysis Report YETI Holdings, Inc. (YETI): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksOct 7th, 2021

Futures Surge On Debt Ceiling Reprieve, Slide In Energy Prices

Futures Surge On Debt Ceiling Reprieve, Slide In Energy Prices The nausea-inducing rollercoaster in the stock market continued on Thursday, when US index futures continued their violent Wednesday reversal - the biggest since March - and surged with Nasdaq futures up more than 1%, hitting a session high, as Chinese technology stocks rebounded from a record low, investors embraced progress on the debt-ceiling impasse in Washington, a dip in oil prices eased worries of higher inflation and concerns eased about the European energy crisis fueled a risk-on mood. At 7:30am ET, S&P futures were up 44 points or 1.00% and Dow futures were up 267 points or 0.78%. Oil tumbled as much as $2, dragging breakevens and nominal yields lower, while the dollar dipped and bitcoin traded around $54,000. Wednesday's reversal started after Mitch McConnell on Wednesday floated a plan to support an extension of the federal debt ceiling into December, potentially heading off a historic default, a proposal which Democrats have reportedly agreed to after Senate Majority Leader Chuck Schumer suggested an agreement would be in place by this morning. While the deal is good news for markets worried about an imminent default, it only kicks the can to December when the drama and brinksmanship may run again. Markets have been rocked in the past month by worries about the global energy crisis, elevated inflation, reduced stimulus and slower growth. Meanwhile, the prospect of a deal to boost the U.S. debt limit into December is easing concern over political bickering, while Friday’s payrolls report may shed light on the the Federal Reserve’s timeline to cut bond purchases. “We have several things that we are watching right now -- certainly the debt ceiling is one of them and that’s been contributing to the recent volatility,” Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute, said on Bloomberg Television. “But we look for these 5% corrections to add money to the equity markets.” Tech and FAAMG stocks including Apple (AAPL US +1%), Nvidia (NVDA +2%), Microsoft (MSFT US +0.9%), Tesla (TSLA US 0.8%) led the charge in premarket trading amid a dip in 10-year Treasury yields on Thursday, helped by a slide in energy prices on the back of Putin's Wednesday announcement that Russia could ramp up nat gas deliveries to Europe, something it still has clearly not done. Perhaps sensing that not all is at Putin said, after plunging on Wednesday UK nat gas futures (NBP) from 407p/therm to a low of 209, prices have ominously started to rise again. As oil fell, energy stocks including Chevron, Exxon Mobil and APA led declines with falls between 0.6% and 2.1%. Here are some of the other big movers today: Twitter (TWTR US) shares rise 2% in U.S. premarket trading after it agreed to sell MoPub to AppLovin for $1.05 billion in cash Levi Strauss (LEVI US) rises 4% in U.S. premarket trading after it boosted its adjusted earnings per share forecast for the full year; the guidance beat the average analyst estimate NRX Pharmaceuticals (NRXP US) drops in U.S. premarket trading after Relief Therapeutics sued the company, alleging breach of a collaboration pact Osmotica Pharmaceuticals (OSMT US) declined 28% in premarket trading after launching an offering of shares Rocket Lab USA (RKLB US) shares rose in Wednesday postmarket trading after the company announced it has been selected to launch NASA’s Advanced Composite Solar Sail System, or ACS3, on the Electron launch vehicle U.S. Silica Holdings (SLCA US) rose 7% Wednesday postmarket after it started a review of strategic alternatives for its Industrial & Specialty Products segment, including a potential sale or separation Global Blood Therapeutics (GBT US) climbed 2.6% in Wednesday after hours trading while Sage Therapeutics (SAGE US) dropped 3.9% after Jefferies analyst Akash Tewari kicked off his biotech sector coverage On the geopolitical front, a senior U.S. official said President Joe Biden’s plans to meet virtually with his Chinese counterpart before the end of the year. Tensions are escalating between the two countries, with U.S. Secretary of State Antony Blinken criticizing China’s recent military maneuvers around Taiwan. European equities rebounded, with the Stoxx 600 index surging as much as 1.3% boosted by news that the European Central Bank was said to be studying a new bond-buying program as emergency programs are phased out. Also boosting sentiment on Thursday, ECB Governing Council member Yannis Stournaras said that investors shouldn’t expect premature interest-rate increases from the central bank. Here are some of the biggest European movers today: Iberdrola shares rise as much as 6.8% after an upgrade at BofA, and as Spanish utilities climbed following a report that the Ministry for Ecological Transition may suspend or modify the mechanism that reduces the income received by hydroelectric, nuclear and some renewables in relation to gas prices. Hermes shares climb as much as 3.8%, the most since February, after HSBC says “there isn’t much to worry about” from a possible slowdown in mainland China or questions over trend sustainability in the U.S. Edenred shares gain as much as 5.2%, their best day since Nov. 9, after HSBC upgrades the voucher company to buy from hold, saying that Edenred, along with Experian, offers faster recurring revenue growth than the rest of the business services sector. Valeo shares gain as much as 4.9% and is Thursday’s best performer in the Stoxx 600 Automobiles & Parts index; Citi raised to neutral from sell as broker updated its model ahead of 3Q results. Sika shares rise as much as 4.2% after company confirms 2021 guidance, which Baader said was helpful amid market concerns of sequentially declining margins due to rising raw material prices. Centrica shares rise as much as 3.6% as Morgan Stanley upgrades Centrica to overweight from equalweight, saying the utility provider will add market share as smaller U.K. companies fail due to the spike in wholesale energy prices. Earlier in the session, Asian stocks rallied, boosted by a rebound in Hong Kong-listed technology shares and optimism over the progress made toward a U.S. debt-ceiling accord. The MSCI Asia Pacific Index climbed as much as 1.3%, on track for its biggest jump since Aug. 24. Alibaba, Tencent and Meituan were among the biggest contributors to the benchmark’s advance. Equity gauges in Hong Kong and Taiwan led a broad regional gain, while Japan’s Nikkei 225 also rebounded from its longest losing run since 2009. Thursday’s rally in Asia came after U.S. stocks closed higher overnight on a possible deal to boost the debt ceiling into December. Focus now shifts to the reopening of mainland China markets on Friday following the Golden Week holiday, and also the U.S. nonfarm payrolls report due that day. READ: China Tech Gauge Posts Best Day Since August After Touching Lows “Risk off sentiment has persisted due to a number of negative factors, but worry over some of these issues has been alleviated for the near term,” said Shogo Maekawa, a strategist at JPMorgan Asset Management in Tokyo. “One is that concern over stagflation has abated, with oil prices pulling back.” Sentiment toward risks assets was also supported as a senior U.S. official said President Joe Biden plans to meet virtually with Chinese President Xi Jinping before the end of the year. Of note, holders of Evergrande-guaranteed Jumbo Fortune bonds have yet to receive payment; the holders next step would be to request payment from Evergrande. The maturity of the bond in question was Sunday October 3rd, with a Monday October 4th effective due data, though the bond does have a five-day grace period only in the event that payment failure is due to an administrative/technical error. Australia's S&P/ASX 200 index rose 0.7% to close at 7,256.70. All subgauges finished the day higher, with the exception of energy stocks as Asian peers tumbled with a retreat in crude oil prices.  Collins Foods was among the top performers after the company signed an agreement to become KFC’s corporate franchisee in the Netherlands. Whitehaven tumbled, dropping the most for a session since June 17.  In New Zealand, the S&P/NZX 50 index fell 0.5% to 13,104.61. Oil extended its decline from a seven-year high as U.S. stockpiles grew more than expected, and European natural gas prices tumbled on signals from Russia it may increase supplies to the continent. The yield on the U.S. 10-year Treasury was 1.526%, little changed on the day after erasing a 2.4bp increase; bunds outperformed by ~1.5bp, gilts by less than 1bp; long-end outperformance flattened 2s10s, 5s30s by ~0.5bp each. Treasuries pared losses during European morning as fuel prices ebbed and stocks gained. Bunds and gilts outperform while Treasuries curve flattens with long-end yields slightly richer on the day. WTI oil futures are lower after Russia’s offer to ease Europe’s energy crunch. Negotiations on a short-term increase to U.S. debt-ceiling continue.    In FX, the Bloomberg Dollar Spot Index was little changed and the greenback was weaker against most Group-of-10 peers, though moves were confined to relatively tight ranges. The U.S. jobs report Friday is the key risk for markets this week as a strong print could boost the dollar. Options traders see a strong chance that the euro manages to stay above a key technical support, at least on a closing basis. Risk sensitive currencies such as the Australian and New Zealand dollars as well as Sweden’s krona led G-10 gains, while Norway’s currency was the worst performer as European natural gas and power prices tumbled early Thursday after signals from Russia it may increase supplies to the continent. The pound gained against a broadly weaker dollar as concerns over the U.K. petrol crisis eased and focus turned to Bank of England policy. A warning shot buried deep in the BoE’s policy documents two weeks ago indicating that interest rates could rise as early as this year suddenly is becoming a more distinct possibility. Australia’s 10-year bonds rose for the first time in two weeks as sentiment was bolstered by a short-term deal involving the U.S. debt ceiling. The yen steadied amid a recovery in risk sentiment as stocks edged higher. Bond futures rose as a debt auction encouraged players to cautiously buy the dip. Looking ahead, investors will be looked forward to the release of weekly jobless claims data, likely showing 348,000 Americans filed claims for state unemployment benefits last week compared with 362,000 in the prior week. The ADP National Employment Report on Wednesday showed private payrolls increased by 568,000 jobs last month. Economists polled by Reuters had forecast a rise of 428,000 jobs. This comes ahead of the more comprehensive non-farm payrolls data due on Friday. It is expected to cement the case for the Fed’s slowing of asset purchases. We'll also get the latest August consumer credit print. From central banks, we’ll be getting the minutes from the ECB’s September meeting, and also hear from a range of speakers including the ECB’s President Lagarde, Lane, Elderson, Holzmann, Schnabel, Knot and Villeroy, along with the Fed’s Mester, BoC Governor Macklem and PBoC Governor Yi Gang. Market Snapshot S&P 500 futures up 1% to 4,395.5 STOXX Europe 600 up 1.03% to 455.96 MXAP up 1.2% to 193.71 MXAPJ up 1.8% to 633.78 Nikkei up 0.5% to 27,678.21 Topix down 0.1% to 1,939.62 Hang Seng Index up 3.1% to 24,701.73 Shanghai Composite up 0.9% to 3,568.17 Sensex up 1.2% to 59,872.01 Australia S&P/ASX 200 up 0.7% to 7,256.66 Kospi up 1.8% to 2,959.46 Brent Futures down 1.8% to $79.64/bbl Gold spot up 0.0% to $1,762.96 U.S. Dollar Index little changed at 94.19 German 10Y yield fell 0.6 bps to -0.188% Euro little changed at $1.1563 Top Overnight News from Bloomberg Democrats signaled they would take up Senate Republican leader Mitch McConnell’s offer to raise the U.S. debt ceiling into December, alleviating the immediate risk of a default but raising the prospect of another bruising political fight near the end of the year The European Central Bank is studying a new bond-buying program to prevent any market turmoil when emergency purchases get phased out next year, according to officials familiar with the matter Market expectations for interest-rate hikes “are not in accordance with our new forward guidance,” ECB Governing Council member Yannis Stournaras said in an interview with Bloomberg Television Creditors have yet to receive repayment of a dollar bond they say is guaranteed by China Evergrande Group and one of its units, in what could be the firm’s first major miss on maturing notes since regulators urged the developer to avoid a near-term default Boris Johnson’s plan to overhaul the U.K. economy is a 10-year project he wants to see out as prime minister, according to a senior official. The time frame, which has not been disclosed publicly, illustrates the scale of Johnson’s gamble that British voters will accept a long period of what he regards as shock therapy to redefine Britain The U.K.’s surge in inflation has boosted the cost of investment-grade borrowing in sterling to the most since June 2020. The average yield on the corporate notes climbed just past 2%, according to a Bloomberg index A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded positively as the region took impetus from the mostly positive close in the US where the major indices spent the prior session clawing back opening losses, with sentiment supported amid a potential Biden-Xi virtual meeting this year, and hopes of a compromise on the debt ceiling after Senate Republican Leader McConnell offered a short-term debt limit extension to December. The ASX 200 (+0.7%) was led higher by strength in the tech sector and with risk appetite also helped by the announcement to begin easing restrictions in New South Wales from next Monday. The Nikkei 225 (+0.5%) attempted to reclaim the 28k level with advances spearheaded by tech and amid reports Tokyo is to lower its virus warning from the current top level. The Hang Seng (+3.1%) was the biggest gainer owing to strength in tech and property stocks, with Evergrande shareholder Chinese Estates surging in Hong Kong after a proposal from Solar Bright to take it private. Reports also noted that the US and China reportedly reached an agreement in principle for a Biden-Xi virtual meeting before year-end and with yesterday’s talks in Zurich between senior officials said to be more meaningful and constructive than other recent exchanges. Finally, 10yr JGBs retraced some of the prior day’s after-hours rebound with haven demand hampered by the upside in stocks and after the recent choppy mood in T-notes, while the latest enhanced liquidity auction for longer-dated JGBs resulted in a weaker bid-to-cover. Top Asian News Vietnam Faces Worker Exodus From Factory Hub for Gap, Nike, Puma Japan’s New Finance Minister Stresses FX Stability Is Vital Korea Lures Haven Seekers With Bonds Sold at Lowest Spread Africa’s Free-Trade Area to Get $7 Billion in Support From AfDB Bourses in Europe hold onto the gains seen at the cash open (Euro Stoxx 50 +1.5%; Stoxx 600 +1.1%) following on from an upbeat APAC handover, albeit the upside momentum took a pause shortly after the cash open. US equity futures are also firmer across the board but to a slightly lesser extent, with the tech-laden NQ (+1.0%) getting a boost from a pullback in yields and outperforming its ES (+0.7%), RTY (+0.6%) and YM (+0.6%). The constructive tone comes amid some positive vibes out of the States, and on a geopolitical note, with US Senate Minority Leader McConnell offered a short-term debt ceiling extension to December whilst US and China reached an agreement in principle for a Biden-Xi virtual meeting before the end of the year. Euro-bourses portray broad-based gains whilst the UK's FTSE 100 (+1.0%) narrowly lags the Euro Stoxx benchmarks, weighed on by its heavyweight energy and healthcare sectors, which currently reside at the foot of the bunch. Further, BoE's Chief Economist Pill also hit the wires today and suggested that the balance of risks is currently shifting towards great concerns about the inflation outlook, as the current strength of inflation looks set to prove more long-lasting than originally anticipated. Broader sectors initially opened with an anti-defensive bias (ex-energy), although the configuration since then has turned into more of a mixed picture, although Basic Resource and Autos still reside towards the top. Individual movers are somewhat scarce in what is seemingly a macro-driven day thus far. Miners top the charts on the last day of the Chinese Golden Week Holiday, with base metal prices also on the front foot in anticipation of demand from the nation – with Antofagasta (+5.1%), Anglo American (+4.2%) among the top gainers, whist Teamviewer (-8.2%) is again at the foot of the Stoxx 600 in a continuation of the losses seen after its guidance cut yesterday. Ubisoft (-5.1%) are also softer, potentially on a bad reception for its latest Ghost Recon game announcement. Top European News ECB’s Stournaras Reckons Investor Rate-Hike Bets Are Unwarranted Shell Flags Financial Impact of Gas Market Swings, Hurricane Johnson’s Plans for Economy Signal Ambitions for Decade in Power U.K. Grid Bids to Calm Market Saying Winter Gas Supply Is Enough In FX, the latest upturn in broad risk sentiment as the pendulum continues to swing one way then the other on alternate days, has given the Aussie a fillip along with news that COVID-19 restrictions in NSW remain on track for being eased by October 11, according to the state’s new Premier. Aud/Usd is eyeing 0.7300 in response to the above and a softer Greenback, while the Aud/Nzd cross is securing a firmer footing above 1.0500 in wake of a slender rise in AIG’s services index and ahead of the latest RBA FSR. Conversely, the Pound is relatively contained vs the Buck having probed 1.3600 when the DXY backed off further from Wednesday’s w-t-d peak to a 94.102 low and has retreated through 0.8500 against the Euro amidst unsubstantiated reports about less hawkish leaning remarks from a member of the BoE’s MPC. In short, the word is that Broadbent has downplayed the prospects of any fireworks in November via a rate hike, but on the flip-side new chief economist Pill delivered a hawkish assessment of the inflation situation in the UK when responding to a TSC questionnaire (see 10.18BST post on the Headline Feed for bullets and a link to his answers in full). Back to the Dollar index, challenger lay-offs are due and will provide another NFP guide before claims and commentary from Fed’s Mester, while from a technical perspective there is near term support just below 94.000 and resistance a fraction shy of 94.500, at 93.983 (yesterday’s low) and the aforementioned midweek session best (94.448 vs the 94.283 intraday high, so far). NZD - Notwithstanding the negative cross flows noted above, the Kiwi is also taking advantage of more constructive external and general factors to secure a firmer grip of the 0.6900 handle vs its US counterpart, but remains rather deflated post-RBNZ on cautious guidance in terms of further tightening. EUR/CHF/CAD/JPY - All narrowly mixed against their US peer and mostly well within recent ranges as the Euro reclaims 1.1500+ status in the run up to ECB minutes, the Franc consolidates off sub-0.9300 lows following dips in Swiss jobless rates, the Loonie weighs up WTI crude’s further loss of momentum against the Greenback’s retreat between 1.2600-1.2563 parameters awaiting Canada’s Ivey PMIs and a speech from BoC Governor Macklem, and the Yen retains an underlying recovery bid within 111.53-23 confines before a raft of Japanese data. Note, little reaction to comments from Japanese Finance Minister, when asked about recent Jpy weakening, as he simply said that currency stability is important, so is closely watching FX developments, but did not comment on current levels. In commodities, WTI and Brent front month futures are on the backfoot, in part amid the post-Putin losses across the Nat Gas space, with the UK ICE future dropping some 20% in early trade. This has also provided further headwinds to the crude complex, which itself tackles its own bearish omens. WTI underperforms Brent amid reports that the US was mulling a Strategic Petroleum Reserve (SPR) release and did not rule out an export ban. Desks have offered their thoughts on the development. Goldman Sachs says a US SPR release would likely be of up to 60mln barrels, only representing a USD 3/bbl downside to the year-end USD 90/bbl Brent forecast and stated that relief would only be transitory given structural deficits the market will face from 2023 onwards. GS notes that any larger price impact that further hampers US shale activity would lead to elevated US nat gas prices in 2022, and an export ban would lead to significant disruption within the US oil market, likely bullish retail fuel price impact. RBC, meanwhile, believes that these comments were to incentivise OPEC+ to further open the taps after the producers opted to maintain a plan to hike output 400k BPD/m. On that note, sources noted that the OPEC+ decision against a larger supply hike at Monday's meeting was partly driven by concern that demand and prices could weaken – this would be in-fitting with sources back in July, which suggested that demand could weaken early 2022. The downside for crude prices was exacerbated as Brent Dec fell under USD 80/bbl to a low of near 79.00/bbl (vs 81.14/bbl), whilst WTI Nov briefly lost USD 75/bbl (vs high 77.23/bbl). Prices have trimmed some losses since. Metals in comparison have been less interesting; spot gold is flat and only modestly widened its overnight range to the current 1,756-66 range, whilst spot silver remains north of USD 22.50/bbl. Elsewhere, the risk tone has aided copper prices, with LME copper still north of USD 9,000/t, whilst some also cite supply concerns as a key mining road in Peru (second-largest copper producer) was blocked, with the indigenous community planning to continue the blockade indefinitely, according to a local leader. It is also worth noting that Chinese markets will return tomorrow from their Golden Week holiday. US Event Calendar 7:30am: Sept. Challenger Job Cuts YoY, prior -86.4% 8:30am: Oct. Initial Jobless Claims, est. 348,000, prior 362,000; Continuing Claims, est. 2.76m, prior 2.8m 9:45am: Oct. Langer Consumer Comfort, prior 54.7 11:45am: Fed’s Mester Takes Part in Panel on Inflation Dynamics 3pm: Aug. Consumer Credit, est. $17.5b, prior $17b DB's Jim Reid concludes the overnight wrap On the survey, given how fascinating markets are at the moment I think the results of this month’s edition will be especially interesting. However the irony is that when things are busy less people tend to fill it in as they are more pressed for time. So if you can try to spare 3-4 minutes your help would be much appreciated. Many thanks. It was a wild session for markets yesterday, with multiple asset classes swinging between gains and losses as investors sought to grapple with the extent of inflationary pressures and potential shock to growth. However US equities closed out in positive territory and at the highs as the news on the debt ceiling became more positive after Europe went home. Before this equities had lost ground throughout the London afternoon, with the S&P 500 down nearly -1.3% at one point with Europe’s STOXX 600 closing -1.03% lower. Cyclical sectors led the European underperformance, although it was a fairly broad-based decline. However after Europe went home – or closed their laptops in many cases – the positive debt ceiling developments saw risk sentiment improve throughout the rest of New York session. The S&P rallied to finish +0.41% and is now slightly up on the week, as defensive sectors such as utilities (+1.53%) and consumer staples (+1.00%) led the index while US cyclicals fell back like their European counterparts. Small cap stocks didn’t enjoy as much of a boost as the Russell 2000 ended the day -0.60% lower, while the megacap tech NYFANG+ index gained +0.82%. Risk sentiment improved following reports that Senate Minority Leader Mitch McConnell was willing to negotiate with Democrats to resolve the debt ceiling impasse and allow Democrats to raise the ceiling until December. This means President Biden and Congressional Democrats would be able to finish their fiscal spending package – now estimated at around $1.9-2.2 trillion – and include a further debt ceiling raise into one large reconciliation package near year-end. Senate Majority Leader Schumer has not publicly addressed the deal yet, but Democrats have signaled that they’ll accept the deal, although they’ve also indicated they’d still like to pass the longer-term debt ceiling bill under regular order in a bipartisan manner when the time came near year-end. Interestingly, if we did see the ceiling extended until December, this would put another deadline that month, since the government funding extension only went through to December 3, so we could have yet another round of multiple congressional negotiations in just a few weeks’ time. The news of a Republican offer coincided with President Biden’s virtual meeting with industry leaders, where the President implored them to join him in pressuring legislators to raise the debt limit. Treasury Secretary Yellen also attended the meeting, and re-emphasised her estimate for the so-called “drop dead date” to be October 18. Potentially at risk Treasury bills maturing shortly thereafter rallied a few basis points, signaling investors took yesterday afternoon’s debt ceiling developments as positive and credible. This was a far cry from where markets opened the London session as turmoil again gripped the gas market. UK and European natural gas futures both surged around +40% to reach an intraday high shortly after the open. However, energy markets went into reverse following comments from Russian President Putin that the country was set to supply more gas to Europe and help stabilise energy markets, with European futures erasing those earlier gains to actually end the day down -6.75%, with their UK counterpart similarly reversing course to close -6.96% too. The U.K. future traded in a stunning 255 to 408 price range on the day. We shouldn’t get ahead of ourselves here though, since even with the latest reversal, prices are still up by more than five-fold since the start of the year, and this astonishing increase over recent weeks has attracted attention from policymakers across the world as governments look to step in and protect consumers and industry. In the EU, the Energy Commissioner, Kadri Simson, said that the price shock was “hurting our citizens, in particular the most vulnerable households, weakening competitiveness and adding to inflationary pressure. … There is no question that we need to take policy measures”. However, the potential response appeared to differ across the continent. French President Macron said that more energy capacity was required, of which renewables and nuclear would be key elements, while Italian PM Draghi said that joint EU gas purchases had wide support. However, Hungarian PM Orban took the opportunity to blame the European Commission, saying that the Green Deal’s regulations were “indirect taxation”, which shows how these price spikes could create greater resistance to green measures moving forward. Elsewhere, blame was also cast on carbon speculators, with Spanish environment minister Rodriguez saying that “We don’t want to be hostages of external financial investors”, and outside the EU, Serbian President Vucic said that his country could ban power exports if there were further issues, which just shows how energy has the potential to become a big geopolitical issue this winter. Those declines in natural gas prices were echoed across the energy complex, with both Brent Crude (-1.79%) and WTI (-1.90%) oil prices subsiding from their multi-year highs the previous day, just as coal also fell -10.20%. In turn, that served to alleviate some of the concerns about building price pressures and helped measures of longer-term inflation expectations decline across the board. Indeed by the close, the 10yr breakeven in the US had come down -1.4bps, and the equivalent measures in Germany (-4.6bps), Italy (-6.1bps) and the UK (-4.2bps) had likewise seen declines of their own. In spite of those moves for inflation expectations, this proved little consolation for European sovereign bonds as higher real rates put them under continued pressure, even if yields had pared back some of their gains from the morning. Yields on 10yr bunds (+0.6bps), OATs (+0.9bps) and BTPs (+3.2bps) were all at their highest levels in 3 months, whilst those on Polish 10yr debt were up +13.7bps after the central bank there unexpectedly became the latest to raise rates, with the 40bps hike to 0.5% marking the first increase since 2012. However, for the US it was a different story, with yields on 10yr Treasuries down -0.5bps to 1.521%, having peaked at 1.57% earlier in the London morning. There was a late story in Europe that could bear watching in the coming weeks as Bloomberg reported that the ECB is studying a new bond-buying tool that could help ease market volatility if a “taper tantrum”-esque move were to happen when the PEPP purchases end in March. The plan would reportedly target purchases selectively if there were to be a larger selloff in more heavily indebted economies, which differs from the existing programs that buys debt in relation to the size of each member’s economy. Asian stocks overnight have performed strongly, with the Hang Seng (+2.28%), Nikkei (+1.68%) and KOSPI (+1.61%) all advancing after the positive news on the debt-ceiling, as well on news that US President Biden was set to meeting with Chinese President Xi by the end of the year. All the indices were lifted by the IT and consumer discretionary sectors, and the Hang Seng Tech index has rebounded by +3.29% this morning. Separately, Evergrande-related news has been subsiding in recent days, but China Estates, a company controlled by a backer of Evergrande, rose 30% after the company disclosed an offer to take it private for $245mn. Otherwise, US futures are pointing to a positive start later, with those on the S&P 500 (+0.50%) and DAX (+1.19%) both advancing. Turning to Germany, exploratory talks will be commencing today between the centre-left SPD, the Greens and the Liberal FDP, who together would make up a so-called “traffic-light” coalition. That marks a boost for the SPD, who beat the CDU/CSU bloc into first place in the September 26 election, although CDU leader Armin Laschet said that his party were “still ready to hold talks”. However, the CDU/CSU have faced internal tensions after they slumped to their worst-ever election result, whilst a Forsa poll out on Tuesday said that 53% of voters wanted a traffic-light coalition, versus just 22% who favoured the Jamaica option led by the CDU/CSU. So momentum seems clearly behind the traffic light option for now. Looking at yesterday’s data, in the US the ADP’s report at private payrolls came in at an unexpectedly strong +568k (vs. +430k expected), which is the highest in their series for 3 months and comes ahead of tomorrow’s US jobs report. However in Germany, factory orders in August fell by -7.7% (vs. -2.2% expected) amidst various supply issues. To the day ahead now, and data releases include German industrial production and Italian retail sales for August, whilst in the US we’ve got the weekly initial jobless claims and August’s consumer credit.From central banks, we’ll be getting the minutes from the ECB’s September meeting, and also hear from a range of speakers including the ECB’s President Lagarde, Lane, Elderson, Holzmann, Schnabel, Knot and Villeroy, along with the Fed’s Mester, BoC Governor Macklem and PBoC Governor Yi Gang. Tyler Durden Thu, 10/07/2021 - 07:57.....»»

Category: blogSource: zerohedgeOct 7th, 2021

Is Oshares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?

Smart Beta ETF report for OUSA Making its debut on 07/14/2015, smart beta exchange traded fund Oshares U.S. Quality Dividend ETF (OUSA) provides investors broad exposure to the Style Box - Large Cap Value category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.Fund Sponsor & IndexManaged by Oshares Investments, OUSA has amassed assets over $700.73 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA, before fees and expenses, seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.The FTSE US Qual / Vol / Yield Factor 5% Capped Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.Cost & Other ExpensesSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.OUSA's 12-month trailing dividend yield is 1.75%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.Representing 23.70% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Consumer Staples round out the top three.Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 5.39% of total assets, followed by Home Depot Inc/the (HD) and Johnson & Johnson (JNJ).The top 10 holdings account for about 38.08% of total assets under management.Performance and RiskThe ETF return is roughly 12.36% so far this year and is up about 17.03% in the last one year (as of 10/06/2021). In the past 52-week period, it has traded between $34.51 and $44.42.The ETF has a beta of 0.87 and standard deviation of 20.44% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.AlternativesOshares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.92 billion in assets, Vanguard Value ETF has $82.97 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>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 Oshares U.S. Quality Dividend ETF (OUSA): ETF Research Reports Microsoft Corporation (MSFT): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 6th, 2021

Economic Theory & Long-Wave Cycles

Economic Theory & Long-Wave Cycles Authored by Alasdair Macleod via GoldMoney.com, Investors and others are confused by the early stages of accelerating price inflation. One misleading belief is in cycles of industrial production, such as Kondratieff’s waves. The Kondratieff cycle began to emerge in financial commentaries during the inflationary 1970s, along with other wacky theories. We should reject them as an explanation for rising prices today. This article explains why the only cycle that matters is of bank credit, from which all other cyclical observations should be made. But that is not enough, because on their own cycles of bank credit do not destroy currencies - that is the consequence of central bank policies and the expansion of base money. The relationship between base money and changes in a currency’s purchasing power is not mechanical. It merely sets the scene. What matters is widespread public perceptions of how much spending liquidity is personally needed. It is by altering the ratio of currency-to-hand to anticipated needs that purchasing power is radically altered, and in the earliest stages of a hyperinflation of prices it leads to imbalances between supply and demand, resulting in the panic buying for essentials becoming evident today. Panics over energy and other necessities are only the start of it. Unless it is checked by halting the expansion of currency and credit, current dislocations will slide rapidly into a wider flight from currency into real goods - a crack-up boom. Introduction For eighteen months, the world has seen a boom in commodity prices, which has inevitably led to speculation about a new Kondratieff, or K-wave. Google it, and we see it described as a long cycle of economic activity in capitalist economies lasting 40—60 years. It marks periods of evolution and correction driven by technological innovation. Today’s adherents to the theory describe it in terms of the seasons. Spring is recovery, leading into a boom. Summer is an increase in wealth and affluence and a deceleration of growth. Autumn is stagnating economic conditions. And winter is a debilitating depression. But these descriptions did not feature in Kondratieff’s work. Van Duijan construed it differently around life cycles: introduction, growth, maturity, and decline. We must discard the word growth, substituting for it progress. Growth as measured by GDP is no more than an increase in the amount of currency and bank credit in circulation and therefore meaningless. Most people who refer to growth believe they are describing progress, or a general improvement in quality of life. Instead, they are sanctioning inflationism. There is little doubt that economic progress is uneven, but that is down to innovation. Kondratieff’s followers argue that innovation is a cyclical phenomenon, otherwise as a cyclical theory it cannot hold water. An economic historian would argue that the root of innovation is the application of technological discoveries which by their nature must be random, as opposed to cyclical, events. Furthermore, a decision must be made about how to measure the K-wave. Is it of fluctuations in the price level and of what, or of output volumes? Bear in mind that GDP and GNP were not invented until the 1930s, and all prior GDP figures are guesswork. Is it driven by Walt Rostow’s contention that the K-wave is pushed by variations in the relative scarcity of food and raw materials? Or is it a monetary phenomenon, which appeared to cease after the Second World War, when currency expansion was not hampered by a gold standard? It was an argument consistent with that put forward by Edward Bernstein, who was a key adviser to the US delegation at Bretton Woods, when he concluded that the war need not be followed by the deep post-war depression which based on historical precedent was widely expected at the time. Kondratieff’s wave theories were buried by the lack of a post-war slump, until price inflation began to increase in the 1970s and Kondratieff became fashionable again. Kondratieff maintained that his wave theory is a global capitalist phenomenon, applicable to and detected in major economies, such as those of Britain, America, and Germany. But there is no statistical evidence of a long wave in Britain’s industrial production in the first half of the nineteenth century, when Britannia ruled the economic waves. And while there were financial crises from time to time, the downward phase to complete Kondratieff’s cycle never materialised. Today, with K-waves being fundamental to so much analysis of cyclical factors and their extrapolation, the lack of evidence and rigour in Kondratieff theory should be concerning to those who believe in it. That there are variations in the pace of human progress is unarguable, and that there is a discernible cycle of them beyond mundane seasonal influences cannot be denied. But that is a cycle of credit, a factor which was at least partially understood by Bernstein, when he correctly surmised that the way to bury a post-war depression was by expanding the quantity of money. Bank credit cycles and inflation When the inflation of money supply is mostly that of bank credit, it is cyclical in nature. Its consequences for the purchasing power of the currency conforms with the cycle, but with a time lag. Furthermore, the effect is weaker in a population which tends to save than with one which tends to spend more of its income on immediate consumption. No further comment is required on this effect, other than to state that over the whole cycle of bank credit prices are likely to be relatively stable. This was the situation in Britain, which dominated the global economy for most of the period between the introduction of the gold sovereign following the 1816 Coinage Act until the First World War. Figure 1 confirms that despite fluctuating levels of bank credit, from 1822—1914 the general level of prices was broadly unchanged. The price effect of the expansion of coin-backed currency between the two dates and the increase in population offset the reduction of costs in production through a combination of improvements in production methods, technological developments, and increased volumes. What cannot be reflected in the graph is the remarkable progress made in improving the standards of living for everyone over the nineteenth century. The gold standard was abandoned at the start of the First World War, and the general level of prices more than doubled. Having seen prices rise during the war, in December 1919 the Cunliffe Committee recommended a return to the gold standard and the supply of currency was restricted from 1920 with this objective in mind. A gold bullion standard instead of a coin standard was introduced in 1925, tying sterling at the pre-war rate of $4.8665, which remained in place until 1931.[iv] From thereon, the purchasing power of the currency began its long decline as central bank money supply expanded. There is no long-term cyclicality in these changes. Following the abandonment of the gold standard, and in line with other currencies which abandoned gold convertibility in the 1930s sterling simply sank. The key to this devaluation is not fluctuations in bank credit, but the expansion of base currency. And there is no evidence of a Kondratieff, or any other long-term cycle of production. It can only be a monetary effect. The role of money in long waves It is worth bearing in mind that the so-called evidence discovered by Kondratieff was in the mind of a Marxist convinced that capitalism would fail. The downturn of a capitalist winter, or decline in growth — whatever definition is used, was baked in the anti-capitalist cake. The Marxists and other socialists were and still are all too ready to claim supposed failings of capitalism, evidenced in their eyes by periodic recessions, slumps, and depressions. Kondratieff’s economic bias may or may not have coloured his analysis — only by digging deeply into his own soul could he have answered that. But in the absence of firm evidence supporting his wave theory we should discard it. After all, there is a rich history of the religious zeal with which spurious theories in the fields of economics and money arise. The consequences of sunspot cycles and the supposed importance of anniversary dates are typical of this ouija board theme. Non-monetary cycle themes such as that devised by Kondratieff have socialism at their core. It is assumed that capitalists, bourgeois businessmen seeking through the division of labour to manufacture and supply consumer goods for profit, in their greed are reckless about commercial risks from overinvestment. This is nonsense. Fools are quickly discovered in free markets, and they are also quickly dismissed. Successful entrepreneurs and businessmen are very much aware of risk and do not embark on projects in the expectation they will be unprofitable, and it is therefore untrue to suggest that the capitalist system fails for this reason. To the contrary, markets that are truly free have been entirely responsible for the rapid improvement in the human condition, while it is government intervention that leads to periodic crises by interfering in the relationships between producers and consumers and setting in motion a cycle of interest rate suppression and currency expansion. Markets which are truly free deliver economic progress by anticipating consumer demands and deploying capital efficiently to meet them. It is no accident that economies with minimal government intervention deliver far higher standards of living than those micro-managed by governments. Hong Kong under hands-off British administration, with no natural resources and enduring floods of impoverished refugees from Mainland China stood in sharp contrast with China under Mao. Post-war East and West Germany, populated by the same ethnic people, the former communist and the latter capitalist, provides further unarguable proof that capitalism succeeds where socialism fails. Marxist socialism kills cycles by the most brutal method. It cannot entertain the economic calculations necessary to link production with anticipated demand. There is no mechanism for the redistribution of capital for its more efficient use. Consumption is never satisfied, and consumers must wait interminably for inferior products to be supplied. Any pretence at a cycle is simply suppressed out of existence. Almost all long-wave literature assumes that prices change due to supply and demand for commodities and goods alone, and never from variations in the quantity of money and credit. But even under a gold standard, the quantities of money and credit varied all the time. In Britain, and therefore in the rest of the financially developed world which adopted its banking practices, gold was merely partial backing for currency and bank deposits, which since the days of London’s goldsmiths also lubricated the creation of debt outside the banking system. While originally gold was used as coin money, since 1914 when Britain went off the gold coin standard even this role in transactions ceased. Having explained the random nature of free market capitalism, the difference from capitalistic banking must be explained. It owes its origin to London’s goldsmiths, who took in deposits to use for their own benefit, paying six per cent out of the profits they made by dealing in money. This evolved into fractional reserve banking which became the banking model for the British Empire and the rest of the world. As well as renewing the Bank of England’s charter, the Bank Charter Act of 1844 further legitimised fractional reserve banking by giving in to the Banking School’s argument that the amount of credit in circulation is adequately controlled by the ordinary processes of competitive banking. If banks acted independently from one another competing for customers and business, we might reasonably conclude that there would be from time-to-time random bank failures without cyclicality, as the Banking School argued. In capitalistic commerce, it is this process of creative destruction that ensures consumers are best served and an economy progresses to their advantage. But with banks, it is different. Each bank creates deposits which are interchanged between other banks, and imbalances are centrally cleared. Therefore, every bank has financial relations with its competitors and is exposed to its competitors’ counterparty risks, which if acted upon creates losses for themselves and other banks, risking in extremis a system-wide crisis. Banking is therefore a cartel whose members acting in their own interests tend to act in unison. In the nineteenth century his led to systemic crises, the most infamous of which were the Overend Gurney and Baring failures. It was to address this systemic risk that central banking took upon itself the role of lender of last resort, so that in future these failures would be contained. But this mitigation of risk merely strengthened the banking cartel even further, leading to the possibility of a complete banking and currency failure. And since bankers have limited liability and personally risk little more than their salary in the knowledge that a central bank will always backstop them, reckless balance sheet expansion is richly rewarded — until it fails. Fred “the shred” Goodwin, who grew a staid Royal Bank of Scotland to become the largest bank in Europe before it collapsed into government ownership was a recent example of the genre. It is these differences between banking and other commercial activities that drive a cycle of bank credit expansion and contraction while non-financial business activities cannot originate cycles. The state-sponsored structure of the banking system attempts to control it. Governments through their central banks also trigger a boom in business activity by suppressing interest rates as the principal means of encouraging the growth of currency and credit. The distortions created by these interventions and their continuence inevitably lead to a terminating crisis. As Ludwig von Mises put it: “The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." A long period of credit expansion with relatively minor hiccups ending in such a crisis could easily be confused with a Kondratieff 40—60-year cycle. But the error is to mistake its origins. Kondratieff tried to persuade us that the boom and bust was a feature of capitalist business failings when it is a currency and credit problem. The irony is that Stalin refused to admit even to an expansionary phase in capitalism, condemning Kondratieff to the gulags, and then a firing squad in 1938. He lived as a Marxist-Leninist and was executed by the system he venerated. Having identified the source of cycles as being a combination of state action and fluctuations in currency and credit in a state-sponsored banking system and not capitalistic production for profit, we can admit that there are further cyclical consequences. Whether they exist or not is usually a matter of conjecture. Purely financial cycles, such as Elliott Wave Theory, will also owe their motive forces to cycles of credit and not business activity. The effect on commodity and consumer prices Kondratieff wave followers claim that commodity bull and bear markets are the consequence of a K-wave spring and summer followed by autumn, when it tops out, and winter when it collapses before rising into the next K-wave cycle. But we have demonstrated that the K-wave is not supported by the evidence. Instead, changes in the general level of commodity prices are a function of changes in the quantity of money. And as we have seen, there is a base component and a cyclical component of bank credit. We must now refocus our attention from the long-run UK statistics shown in Figure 1 to the contemporary situation for the US dollar, in which commodities have been priced almost exclusively since the early 1970s. The chart from the St Louis Fed below is of an index of industrial materials from 1992. We can see why the Kondratieff myth might be perpetuated, with industrial material prices more than halving between 2011 and 2016. But these swings came substantially from the dollar side of prices, whose trade-weighted index rose strongly between these dates. Between 2016—2018 the dollar weakened, before strengthening into 2020. Clearly, it was the purchasing power of the dollar driving speculative as well as commercial flows in international commodity markets. In March 2020, the Fed reduced its fund rate to the zero bound and announced QE (money-printing) of an unprecedented $120bn every month. Figure 2 below shows the consequences for the general level of commodity prices. Since late-March, the components of this ETF have almost doubled in price, and after a period of consolidation appear to be increasing again. K-wave followers might conclude that it is evidence of a new Kondratieff spring or summer, with the global economy set for a new spurt of economic “growth”. But this ignores the expansion of the Fed’s balance sheet reflected in base money, which is the next FRED chart. The monetary base has approximately doubled since the Fed’s March 2020 stimulus, additional to the post-Lehman crisis expansion. The last expansion undermined the purchasing power of the dollar to a similar extent in terms of the commodity prices shown in Figure 2. Evidential consequences of price inflation Sudden increases in the money quantity have disruptive effects on markets for goods and services and the behaviour of individuals. As well as undermining a currency’s purchasing power, supplies of essential goods become disordered by unexpected shifts in demand. Throughout history there has been evidence of these inflationary consequences, often exacerbated by statist attempts to impose price controls. The Roman emperor Diocletian with his edict on maximum prices caused starvation for citizens, who were forced to leave Rome to forage for food in the surrounding countryside. The edict made the provision of food uneconomic, leading to extreme scarcity. During the reign of Henry I in England there was a monetary crisis in 1124 from the debasement of silver coins, which combined with a poor harvest drove up the prices of staples, causing widespread famine. The French revolution has been attributed to the insensitivity of royalty and the aristocracy to the masses; but it occurred at the time of the assignat inflation, which led to aggravated discontent among the lower orders and the storming of the Bastille. And today, we have widespread disruption of essential supplies, ranging from energy to carbonated foodstuffs. The lesson from history is it has only just started. Why today’s logistics and energy disruptions have only just started The problems arise because individuals’ knowledge of the relationship between money and goods comes from the immediate past. They use that knowledge to decide what to buy for future consumption, and if they are in business, for production. In the latter case, they might change inventory policies from today’s just-in-time practices to ensure an adequate stock of components is available, driving up demand for them and creating shortages of vital factors of production. Consumers faced with shortages will alter the balance between their money liquidity and goods for which they may not have an immediate need but expect to consume at a future date. Bank account balances and credit available on credit cards will be drawn down, for example, to fill their car tanks with fuel, even though no journey is planned. And as we see in the UK today, it rapidly leads to fuel shortages and rationing at the petrol pumps. While the authorities try to calm things down, either by denying there is a supply problem or by imposing price controls, consumers are likely to see these moves as propaganda and justification for reducing money liquidity even further by purchasing yet more goods. The flight out of currency liquidity has a disproportionate effect on prices, particularly for essentials. They will simply drive prices higher until no further price rises are expected. Or put more accurately, the value of the currency continues to fall. It is worth illustrating the problem for its true context. If on the one hand everyone decides they would rather have as much cash in hand money as possible rather than goods, prices will collapse. It is, as a matter of fact, a situation which cannot occur. If alternatively, everyone decides to dispose of all their liquidity by buying everything just to get rid of the currency, then the purchasing power of the currency sinks to zero. Unlike the former case, this can and does happen, when it becomes widely recognised that the currency might become worthless. In other words, a state-issued unbacked currency then collapses. Almost no one, so far, attributes today’s logistical and economic dislocations to monetary inflation, yet as pointed out above, empirical evidence points to a clear connection. Governments and central banks also seem unaware. But they appear to sense that there is an undefinable risk of consumer panic, making fuel and other shortages even worse. So far, the blame lies with logistic failures, which seem to be getting worse. Comments from leading central bankers, currently meeting in Portugal and organised by the ECB, confirm the official position of playing popular tunes while the ship goes down. The heads of the Fed, the ECB, the Bank of England, and the Bank of Japan are quoted in the Daily Telegraph as agreeing that staff shortages, shipping chaos and surging fuel costs are likely to cause further disruption as winter draws near. Andrew Bailey, Governor of the Bank of England, warned “…that the UK’s GDP will not recover to pre-pandemic levels until early next year”. But besides the Bank keeping a close watch on inflation, he commented that monetary policy can’t solve supply side shocks. Jay Powell admitted that at the margin apparently bottleneck and supply chain problems are getting marginally worse. But all the central bankers agreed that price pressures will be temporary. We can see from these comments a desire not to rock the boat and cause further panic among consumers. More worrying is the insistence that inflation remains a temporary problem. Unless there is a move to stop the monetary printing presses, they must believe it. It is confirmation that there is no intention to change monetary policy. But these problems are not restricted to the West. This week we learn that even China, which has followed a policy of restricting monetary growth, faces an energy crisis with coal at power plants critically low, and coal prices up fourfold. Energy is being rationed with production of everything from food and animal feedstuffs to steel and aluminium plants supplying other factories, which in turn face power outages. China is the world’s manufacturing hub. The United States relies on China’s exports. There were some seventy container ships at anchor or at drift areas off San Pedro earlier this week, but after dropping slightly the numbers are expected to rise again. And in China, there are delays at ports of more than three days in Busan, Shanghai, Ningbo and Yantian. Ship charter rates have rocketed from $10,000 a day to as much as $200,000.[ix] There can be no doubt as the northern hemisphere enters its winter that the consuming nations in America and Europe will see yet more product shortages, more price rises, and continuing logistics disruption. Central banks will become increasingly desperate to discourage consumers’ from hoarding items by claiming that shortages and price increases are transitory. What they fail to realise is that the consequences of currency debasement have led to consumption goods being wrongly priced, fuelling the shortages. These shortages can only be addressed by yet higher prices, even in the absence of further monetary debasement — until no further price increases are expected by consumers. But with massive and increasing government deficits to finance, central banks have no mandate to restrict the expansion of currency. An acceleration of monetary debasement as each unit of it buys less is therefore inevitable because consumers and businesses alike will begin to understand there is no limit to prices increasing. Left to its logical conclusion, the purchasing power of a currency falls exponentially until it has no value left. The speed at which it happens depends on the time taken for acting humans to realise what is happening. Unless it is stopped, an economy experiences what in the 1920s was described as a flight into real goods, or a crack-up boom. Economists today seem unable to comprehend the instability caused by monetary inflation. They adopt their models to ignore it. As von Mises put it, “The mathematical economists are at a loss to comprehend the causal relation between the increase in the quantity of money and what they call ‘velocity of circulation’". The confusion in the minds of central bank economists renders it unlikely that they will take the actions necessary to stop their currencies sliding towards worthlessness sooner rather than later. Central to resolving the problem is maintaining confidence that the currency will retain its purchasing power. But with the advent of cryptocurrencies, there is a growing proportion of the public who understand in advance of inflationary consequences that fiat currencies are being debauched at an accelerating rate. This represents a major change from the past, when, as Keynes put it supposedly quoting Lenin, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in one million is able to diagnose”. The fact that millions now do understand the currency is being debauched is likely to make it more difficult for the state to maintain confidence in the currency in these troubled times. We should know that what is happening to commodity prices is not some long-term Kondratieff wave, or any other wave with origins in production beyond purely seasonal factors. We can say unequivocally that the cause is in changing quantities of currency and bank credit. We can also see that there are yet further effects driving prices higher from the expansion of currency so far. We can expect currency expansion to continue, so prices of commodities and consumer goods will continue to rise. Or put in a way in which it is likely to become more widely understood as the current hiatus continues, the purchasing power of the currencies in which prices are measured will continue to fall. Tyler Durden Mon, 10/04/2021 - 21:40.....»»

Category: blogSource: zerohedgeOct 4th, 2021

Here"s Why Internet ETFs Are Sizzling With Opportunities

Strong demand for online gaming, shopping, video streaming and work-from-home trends are being observed due to the coronavirus crisis, which might lead to Internet remaining a major requirement in daily lives. The coronavirus outbreak has largely impacted the lifestyle choices and preferences of people. The most notorious change worth mentioning is the growing inclination toward digitization. Amid the pandemic, work-from-home, online shopping, digital payments, video streaming and video game have gained immense popularity.  With the new trends making way, Internet will continue to be a significant requirement in daily lives.The pandemic has been a blessing in disguise for the e-commerce industry as people continue to practice social distancing and shopping online for all essentials, especially food items. Thus, on par with the digitization trend, the upcoming U.S. holiday season is expected to see a significant surge in online sales. A Mastercard SpendingPulse report predicts online sales growth of 7.5% during the “75 Days of Christmas” period that runs from Oct 11-Dec 24.The world is gradually moving toward digitization that is increasing the dominance of technology in the financial sector. A Market Data Forecast (MDF) report also highlights the growing opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026. According to the report, the fintech space is expected to reach a market value of around $324 billion by 2026.Along with an increased interest in online shopping, customers are resorting to digital payments to clear bills. At the same time, merchants and utility providers are increasingly advocating the same. Payment services from tech titans like Google Pay, Facebook Pay, Apple Pay, Amazon Pay, PayPal (PYPL) and Square Inc.’s (SQ) Cash App are the key winners amid the increasing shift to digital payments.The video game industry is seeing a boom as people are increasingly playing video games for some in-house entertainment, while maintaining social distancing amid the pandemic. Moreover, the boom in the video gaming space might remain in the post-pandemic era as well. For eight months, the total consumer spending on gaming is up 13% year over year to $37.9 billion (according to The NPD Group report). What impresses more is that the video gaming industry is delivering robust growth despite tough year-over-year comparisons, highlighting the true strength in the space.Cloud computing has emerged as a key technology and is keeping up with the growing work-from-home trend in the fight against coronavirus. It supports organizations in remotely processing a lot of information, developing and running key applications and services, and helping employees worldwide collaborate while working. The work-from-home model has bumped up sales of PCs, laptops and other kinds of computer peripherals.Internet ETFs to GainAgainst this backdrop, let’s look at some Internet ETFs that will gain from the increasing demand for online gaming, shopping, video streaming and work-from-home trends due to the coronavirus crisis:First Trust Dow Jones InternetIndex Fund FDNThe fund seeks investment results that generally correspond to the price and yield of the Dow Jones Internet Composite Index. It has amassed $10.96 billion in assets and charges 51 basis points (bps) in expense ratio. The fund has a Zacks Rank #2 (Buy), with a High-risk outlook (read: ETFs to Win & Lose as Delta Variant Cases Surge).ARK Next Generation Internet ETF ARKWIt is an actively-managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and U.S. exchange traded foreign equity securities of companies that are relevant to the fund’s investment theme of next-generation Internet. The fund has AUM of $5.36 billion, with an expense ratio of 79 bps. It has a Medium-risk outlook (read: Robinhood Warns on Trading Activity: ETFs in Focus).Invesco NASDAQ Internet ETF PNQIIt is based on the Nasdaq CTA Internet Index. The fund will typically invest at least 90% of its total assets securities that comprise the index. The index is designed to track the performance of the largest and most liquid US-listed companies engaged in Internet-related businesses and are listed on one of the major U.S. stock exchanges. It has amassed $1.08 billion in assets and charges 60 bps in expense ratio. The fund has a Zacks Rank #2, with a High-risk outlook.O’Shares Global Internet Giants ETF OGIGThe fund is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential. The fund has AUM of $634 million, with an expense ratio of 48 bps. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARK Next Generation Internet ETF (ARKW): ETF Research Reports Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports First Trust Dow Jones Internet ETF (FDN): ETF Research Reports OShares Global Internet Giants ETF (OGIG): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 3rd, 2021

Stock Market News for Oct 1, 2021

Benchmarks closed in the red on Thursday despite Congress' last-minute move to prevent a partial government shutdown. Benchmarks closed in the red on Thursday despite Congress’ last-minute move to prevent a partial government shutdown. The last trading day of the month reflected rising investors’ concerns over COVID-19, inflation fears, and budget squabble in Washington, tagging September as the worst month since the onset of the pandemic.How Did the Benchmarks Perform?The Dow Jones Industrial Average (DJI) fell 546.80 points, or 1.6%, to close at 33,843.92, with Walgreens Boots Alliance, Inc. WBA leading the benchmark into the negative territory with a 3.4% decline. Walgreens Boots Alliance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The S&P 500 slid 51.92 points or 1.2%, to close at 4,307.54 on Thursday. All the 11 major sectors of the broader index closed in the red, led by 2.1% and 1.9% decline in the industrials and consumer staples sectors, respectively. The Nasdaq Composite Index closed at 14,448.58, after declining 63.86 or 0.4%.On Thursday, the fear-gauge CBOE Volatility Index (VIX) increased 2.6%, to close at 23.14. Declining issues outnumbered advancing ones on the NYSE by a 1.74-to-1 ratio. A total of 12.88 billion shares were traded on the last day of September, higher than the last 20-session average of 10.61 billion.September Ends Rough Despite Congress’ Short-term Spending Bill On Thursday, Congress voted through a short-term spending bill, which will help the federal government-run through till early December. The House still aims to pass the $1 trillion infrastructure bill already passed by the Senate. However, the bill’s fate remains uncertain as a portion of the Democrats threaten to block the bill unless moderate members sign to support a separate bill focused on climate change, education, and healthcare. Investors also analyzed Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen’s comments in front of the House Financial Services Committee on inflation remaining high temporarily due to supply bottlenecks as the economy recovers from the pandemic, for COVID relief.Initial Claims Jumps to a Two-month High The government reported on Thursday that for the week ending Sep 25,initial claims came in at 362,000, an increase of 11,000, from the previous week's unrevised level of 351,000 and higher than the consensus estimate of 328,000. New jobless claims rose the highest in California. Meanwhile, continuing claims for the week ending Sep 11, came in at 2.802 million, a significant decrease from the week before.Economic Data Roll-UpThe government yesterday reported that the third estimate for second-quarter Gross Domestic Product (GDP) grew at a 6.7% annual pace, slightly higher than the previous estimate of 6.6%. Government stimulus in spring, rapid vaccination helped businesses reopen and boosted the economy.In a separate report, the Chicago PMI, that measure of business conditions in the Chicago region slipped in September to the lowest level in seven months to 64.7, lower than the consensus estimate of 65.4, and much lower than 66.8 in the prior month.Monthly RoundUpFor the month of September, the three major indexes ended in the red, with the Dow closing 4.3% lower. The S&P 500 snapped its seven-straight month winning streak and closed 4.8% lower. The Nasdaq was weighed down by the recent downward spiral in tech and growth stock due to an increase in treasury yield and recorded the worst September in the years, losing 5.3%.Quarterly RoundUpIn the third quarter of 2021, the Dow slid 1.9%, while the S&P 500 and the Nasdaq added 0.2% and 0.4%, respectively. This quarter markets have been through a rollercoaster ride as reopening plans and economic recovery faced hurdled due to rise in new cases of coronavirus led by the rapid spreading Delta variant. Supply-side constraints, especially chip and shortage in labor constantly pressurized the economy and inflation clouded investors’ sentiments. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 1st, 2021

4 of the Best Stocks to Counter a Volatile October

After the September slump, more volatility may be awaiting October, which calls for investing in risk-adjusted stocks like BARINGS BDC (BBDC), FirstEnergy (FE), Pfizer (PFE) & Redwood Trust (RWT). U.S. equity benchmarks just saw the worst September in almost a decade. In fact, all three major indexes notched their worst performance in the month since 2011, when the European debt crisis took a toll on markets worldwide. To put things into perspective, the Dow and the Nasdaq slumped 3.5% and 4.6%, respectively, in September. Meanwhile, the S&P 500 declined 3.9%, and the broader index witnessed a 5% drop from its recent peak for the first time in 227 trading days, per Dow Jones Market Data, citing a MarketWatch article.For quite some time, the S&P 500 hasn’t experienced a 5% or more pullback. But in September, the stock market’s buoyancy fizzled due to myriad issues. First, investors dumped stocks on contagion fears linked to the collapse of China’s real estate giant, Evergrande Group. Of course, the property behemoth didn’t have enough cash to clear its humongous debt. Second, companies in the United States have begun to witness downward earnings estimate revisions, primarily due to supply-side constraints, which again roiled markets. Last, bond yields climbed and particularly damaged the allure of growth-oriented technology stocks, mostly perceived as risky investments.Worsening matters, the month of October isn’t expected to be any better for the stock market. Citing Barron’s article, traditionally, the S&P 500 index had decreased 0.4% in October after the broader index dropped more than 2% in September, which was the case this time. Moreover, we can not completely write off the October effect. It states that the stock market tends to decline in October and the month has witnessed some of the biggest stock market crashes. Notable among them are the 1929’s Black Tuesday and Thursday, and the great crash of 1987, which occurred on Oct 19. On that particular day, the Dow had tanked more than 20% on a single trading session, making it debatably the worst single-day decline in history.This October, we may not expect such big crashes but certain things aren’t looking up for the stock market either. Many market pundits believe that the Fed will eventually move away from its accommodative policy, which was helping the stock market chug along amid the pandemic. The Fed is at the moment widely expected to hike rates in 2022 and the European Central Bank is also likely to do the same next year. Additionally, concerns about a debt-ceiling breach and a possible government shutdown are expected to impact the economy vis-à-vis the stock market at a time when consumer sentiment is at a low.Thus, with Wall Street expected to face higher bouts of volatility in October, it’s prudent for investors to invest in stocks that provide risk-adjusted returns. Hence, it’s imperative to create a portfolio of low-beta stocks, which generally tend to be less volatile than the broader market. At the same time, such stocks should be dividend payers. Any stock that pays dividend consistently exhibits financial strength, healthy fundamentals and a solid business structure that help them stay afloat amid market vagaries. We have, therefore, highlighted four such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).BARINGS BDC, INC. BBDC is an externally managed business development company that primarily makes debt investments in middle-market companies. The company has a Zacks Rank #2 and a beta of 0.7. It has a dividend yield of 7.6%, while its five-year average dividend yield is 9.1%. The company’s expected earnings growth rate for the current year is 40.6%.FirstEnergy Corporation FE is a leading regional energy provider dedicated to safety, operational excellence and responsive customer service. The company has a Zacks Rank #2 and a beta of 0.24. It has a dividend yield of 4.3%, while its five-year average dividend yield is 4.2%. The company’s expected earnings growth rate for the current year is 6.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.Pfizer Inc. PFE is a research-based, global pharmaceutical company that discovers, develops, manufactures, and markets medicines for humans and animals. The company has a Zacks Rank #2 and a beta of 0.74. It has a dividend yield of 3.6%, while its five-year average dividend yield is 3.8%. The company’s expected earnings growth rate for the current year is 84.2%.Redwood Trust, Inc. RWT is a self-advised and self-managed real estate investment trust. The company has a Zacks Rank #1 and a beta of 0.97. It has a dividend yield of 6.5%, while its five-year average dividend yield is 8.1%. The company’s expected earnings growth rate for the current year is 2,925%. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE): Free Stock Analysis Report FirstEnergy Corporation (FE): Free Stock Analysis Report Redwood Trust, Inc. (RWT): Free Stock Analysis Report BARINGS BDC, INC. (BBDC): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksOct 1st, 2021

Dow falls 546 points as consumer stocks dragged by supply-chain worries to close 3rd quarter

Shares of Bed Bath & Beyond and Kohl's sank as retailers head into the crucial last three months of the year. Traders work on the floor at the NYSE in New York. Reuters Major stock indexes turned lower to close in the red Thursday. The Dow was down nearly 550 points. Consumer stocks dropped as supply-chain worries hit shares of Bed Bath & Beyond and Kohl's. Wall Street's major indexes dropped in September. See more stories on Insider's business page. All three major indexes ended lower Thursday as worries about global supply-chain problems contributed to a decline in consumer stocks, though the S&P 500 managed to notch a modest win for the third quarter. The S&P 500 and the Dow each ended lower, with retailing stocks hurt after Bed Bath & Beyond cut its yearly sales outlook and Kohl's suffered a double ratings downgrade at Bank of America to underperform. Shares in each company plunged. The Dow fell nearly 550 points. The S&P 500 pulled out a slight quarterly gain but suffered in September, its first monthly loss this year. The Dow and the Nasdaq dropped for the month. Here's where US indexes stood at 4:00 p.m. on Thursday: S&P 500: 4,307.54, down 1.19%Dow Jones Industrial Average: 33,843.92, down 1.59% (546.80 points)Nasdaq Composite: 14,448.58, down 0.44%The S&P 500's consumer staples and discretionary indexes were among the worst-performing as backed up shipping ports and other supply bottlenecks affecting nearly all industries cropped back into focus for retail stocks. BofA said a sales recovery at Kohl's may be threatened by snarled supply chains and Bed Bath & Beyond cited that issue, rising costs, and resurgent COVID-19 fears as pressure points for its business. Home Depot fell on the Dow index and Target, which it says is the second-largest importer in the US, also declined. From the labor market, weekly jobless claims reported early Thursday rose to 362,000, a third straight increase that missed the 335,000 consensus estimate from Econoday. But the Federal Reserve may still be on course to start reducing purchases of Treasury and mortgage-backed securities from $120 billion a month. "We remain focused on the evolution of monetary policy and expect the Federal Reserve to lay out the pace and timing of adjustments to the bond purchase program (tapering) in the fourth quarter as they weigh recent inflation readings against the longer-term goal of price stability," said Bill Northey, senior investment director at U.S. Bank Wealth Management, in a note to Insider.Around the markets, billionaire investor Chamath Palihapitiya has invested millions of dollars into bitcoin and believes it's tough to impose a blanket ban on cryptocurrencies, he said CNBC. The US network of bitcoin ATMs is vulnerable to hacks, says crypto exchange Kraken. Gold rose 1.8% to $1,757.80 per ounce. Oil prices turned higher, with West Texas Intermediate crude up 0.6% to $75.25 per barrel.Bitcoin jumped 5.2% to $43,664.59. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 30th, 2021

4 Sector ETFs Gaining Double Digits Amid September Selling

We have highlighted four that have gained in double-digits over the past month and could be compelling picks in the weeks ahead even if September selling continues. With only a few trading days left, September, known for being a weak month for stock markets, has turned out to be brutal given a myriad of woes. These include concerns over accelerating coronavirus infections, renewed inflation fears, signs of a slowdown in China, potential for high corporate tax rates and Fed’s tapering worries.Concerns over the financial contagion of the potential failure of China’s Evergrande property group and the ongoing debates over the debt limit in Washington also made investors’ jittery early this week. But these worries seemed to ease with the China Evergrande deal on some of its looming debt payments as well as the House passing a bill to avert government shutdown.Notably, the S&P 500 Index logged in its worst day on Sep 20 since May 12 after three consecutive weekly declines. Every sector in the index is on track to end the month in negative territory for the first time since March 2020. Meanwhile, the five biggest tech titans — including Microsoft MSFT, Google-owner Alphabet GOOGL, Amazon.com AMZN, Apple AAPL, and Facebook FB collectively shed more than $500 billion since the Nasdaq 100 peaked on Sep 7 (read: September's Weak History Turning True: 5 ETF Buying Zones).The S&P 500 has dropped 3.7% so far in September, dragged down by a 7.2% decline in the materials sector. If the loss persists for the remaining trading days of the month, it will be the index’s first monthly decline since January.In such a scenario, a few sector ETFs are still trading in green. We have highlighted four that have gained in double-digits over the past month and could be compelling picks in the weeks ahead even if September selling continues.North Shore Global Uranium Mining ETF URNM – Up 44.9%Uranium stocks have been on a tear buoyed by growing social media attention, restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by COVID-19 pandemic related production cuts (read: Why Uranium Stocks & ETFs are Going Nuclear).This ETF provides exposure to companies that are involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee. The ETF holds 35 stocks in its basket with a heavy concentration on the top two firms accounting for a combined 27.3% share while other make up for no more than 9.7% share. It has accumulated $780.1 million in its asset base and trades in a good volume of 298,000 shares per day on average.SonicShares Global Shipping ETF BOAT – Up 12.2%The global shipping industry is enjoying a smooth sailing due to supply chain disruptions around the world caused by the pandemic. Port congestion and delays are the primary drivers as the pandemic has halted the movement of ships and will continue to do so at least in the near term.BOAT provides pure-play exposure to the global maritime shipping industry by tracking the Solactive Global Shipping Index. The index consists of global shipping companies engaged in the maritime transportation of goods and raw materials, including consumer and industrial products, vehicles, dry bulk, crude oil and liquefied natural gas. The product holds 53 stocks in its basket with heavy concentration on the top two firms at 10% share each. It has amassed $10.1 million in its asset base since its inception last month and charges 69 bps in annual fees. The fund trades in average daily volume of 17,000 shares (read: What's Behind the Smooth Sailing of the Top ETF of 2021?).Invesco DWA Energy Momentum ETF PXI – Up 11.5%The energy sector has gained momentum on oil price surge driven by tightening supply and expectations of an increase in demand as vaccination roll-outs widen. While many of the energy ETFs have been rising, PXI is the biggest beneficiary. This fund tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies that are showing relative strength (momentum). It charges 60 bps in annual fees and trades in a good volume of 139,000 shares a day on average. The fund has 36 stocks in its basket with each making up for less than 4.8% of assets and AUM of $64.1 million. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.Simplify Volt Fintech Disruption ETF VFIN – Up 10.1%Digitalization has been powering this niche ETF. It seeks to offer exposure to the most disruptive fintech companies that are on the forefront of cashless payments. It aims to invest close to 25% across Square (SQ) stock and Square call options while targeting 25% in Lemonade (LMND) stock and Lemonade call options. A modest put option overlay is designed to help mitigate sharp market crashes. The product has accumulated $2.7 million since its inception in late December and charges 0.95% in annual fees. It trades in an average daily volume of 2,000 shares. 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 Invesco DWA Energy Momentum ETF (PXI): ETF Research Reports North Shore Global Uranium Mining ETF (URNM): ETF Research Reports Simplify Volt Fintech Disruption ETF (VFIN): ETF Research Reports SonicShares Global Shipping ETF (BOAT): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

4 Top Stocks to Buy Amid the Evergrande Crisis-led Market Dip

The Evergrande crisis has led to a temporary market selloff. So, investors should stay invested in fundamentally sound stocks like Apple Inc (AAPL), Eagle Bulk Shipping (EGLE), J & J Snack Foods (JJSF) & Nucor (NUE). A massive stock sell-off took place globally on Sep 20, as investors were gripped by contagion fears from the most likely collapse of China’s property behemoth, Evergrande Group. The real estate giant currently has mammoth debt obligations, and its crisis could easily roil the second-largest economy in the world. Fears are mounting that China’s real estate giant may not have enough cash to pay its debt obligations leading to a liquidity crisis. What’s more, if the company is forced to sell its properties to pay the debt, then its assets will be less than its liabilities leading to a solvency crisis.Evergrande, which was founded in Guangzhou in 1996, turned out to be one of China’s biggest property developers. The Evergrande Group had expanded its wings across 280 cities in China. However, now the property developer is on the verge of collapse as it is overwhelmed by a $300 billion-plus in debt.  Its reputation is now at stake, while its credit rating and share prices have tanked. Without a doubt, Evergrande’s ordeal is likely to hurt China’s economy, which is already decelerating at this point in time.The cascading effect of the Evergrande crisis was felt across the major indexes in the United States as well, with the Dow registering its worst daily percentage decline yesterday since July 19, as mentioned in a MarketWatch article. The article further noted that the broader S&P 500 booked its worst percentage drop since May 12, while the teach-laden Nasdaq recorded its biggest percentage decline since May 12. The Russell 2000 index of small-caps also tumbled. However, the question is whether the Evergrande crisis a major threat to the US economy, and will it continue to impact the US stock market, in particular.With a degree of certainty, the Evergrande crisis is unlikely to impact the United States severely. This is because most of the real estate giant’s debt is denominated in the People’s Republic of China’s currency and not in US dollar terms, or in any other foreign currency. Therefore, it’s expected that there will be little contagion effect across the globe and most of it will only be limited to China. To put things into perspective, the bankruptcy of Lehman Brothers way back in 2008 shook the global stock markets as it was linked to several financial organizations across the world. But in the case of Evergrande, its estimated humongous debt is actually not widely held.Some may argue that the Evergrande crisis may impact China’s economy and slow down consumer spending, which may have a repercussion on the United States since both countries have trade relations. However, the Chinese government has time and again proved its ability to pull its economy out of any crisis and has habitually resorted to stimulus measures to boost the same. This time as well, the Chinese government is widely expected to take steps to prevent the Evergrande-led economic crisis.Thus, it can be safely concluded that China’s property market crisis had led to a short-term selloff. The markets are certainly expected to bounce back, and anyhow the US economy is doing pretty good at present. After all, sales at US retailers unexpectedly rebounded last month, squashing any expectations of a sharp slowdown in the third-quarter GDP and indicated continued strength among American consumers.Hence, despite momentary blips, it would be wise for investors to consider equities. They should invest in companies that are fundamentally solid enough to regain strength after yesterday’s blow. By doing so, investors will be buying shares at a discounted price as well. Here, we have highlighted four such stocks that possess a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Apple Inc.’s AAPL business primarily runs around its flagship iPhone. However, the Services portfolio that includes revenues from cloud services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services has now emerged as the cash cow. The Zacks Consensus Estimate for its current-year earnings has moved up 7.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 70.4%. Shares of Apple slipped 2.1% yesterday.Eagle Bulk Shipping Inc. EGLE is the largest U.S. based owner of Handymax dry bulk vessels. The Zacks Consensus Estimate for its current-year earnings has moved up 27.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 395%. Shares of Eagle Bulk Shipping lost 13.6% on Sep 20.J & J Snack Foods Corp. JJSF is an American manufacturer, marketer, and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. The Zacks Consensus Estimate for its current-year earnings has moved up 32.1% over the past 60 days. The company’s expected earnings growth rate for the current year is almost 182%. Shares of J & J Snack Foods dipped 1.1% yesterday.Nucor Corporation NUE is a leading producer of structural steel, steel bars, steel joists, steel deck and cold finished bars in the United States. The Zacks Consensus Estimate for its current-year earnings has moved up 22.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 508.1%. Shares of Nucor fell 7.6% on Sep 20. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Nucor Corporation (NUE): Free Stock Analysis Report J & J Snack Foods Corp. (JJSF): Free Stock Analysis Report Eagle Bulk Shipping Inc. (EGLE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Gaming ETFs to Keep Shining Bright Amid Surging Sales

The video games industry continues to see growing demand since the pandemic began last year. The video game industry continues to surprise investors with the consistent strength in sales amid the ongoing health crisis. The total consumer spending on gaming for eight months is up 13% year over year to $37.9 billion, per The NPD Group report. What impresses more is that the video gaming industry is delivering robust growth despite tough year-over-year comparisons, highlighting the true strength in the space.Video Game Sales Keep SoaringRecently-released data from The NPD Group emphasizes that the video game industry, including packaged media, digital, consoles and accessories, witnessed robust sales in August with people spending $4.37 billion in all, reflecting 7% growth year over year.Hardware spending surged 45% in August to $329 million, led by wider distribution of new-generation consoles from Microsoft MSFT and Sony, per the same NPD Group report. Spending on consoles jumped 49% year over year to $3 billion in the year-to-date period. Nintendo’s NTDOY Switch continues to be the top-selling console in terms of units sold for August and year to date, per a GameDaily article. Meanwhile, Sony’s SONY PlayStation 5 dominates the charts in terms of dollar sales in both the periods.Spending on content that includes physical & digital full game, DLC/MTX console, cloud, mobile, portable, PC and VR platforms increased 5% on a year-over-year basis to $3.88 billion. Year-to-date sales rose 11% to $33.33 billion. Meanwhile, accessories spending remained flat in August at $164 million, per the same NPD Group report. Moreover, there was a 12% rise in accessories sales to $1.59 billion in the year-to-date period.Titles like Madden NFL 22, Ghost of Tsushima, Call of Duty: Black Ops: Cold War, Humankind and Marvel’s Spider-Man: Miles Morales were among the top-five best-sellers in August.Game developers are continuing to innovate and attract users every day and also retain the old ones. They are increasing engagement for existing players by providing new titles, levels, arenas or environments as the games require at regular intervals. Mergers and acquisitions continue to support the gaming space.Video Gaming ETFs to Keep GainingIt seems that the boom in the video gaming space may remain even in the post-pandemic era as the outbreak changed the lifestyles and preferences of U.S. citizens to a large extent. Against this backdrop, investors can take a look at the following video gaming ETFs:The Roundhill BITKRAFT Esports & Digital Entertainment ETF NERDThe fund is designed to offer investors exposure to esports & digital entertainment by providing investment results that closely correspond, before fees and expenses, to the performance of the Roundhill BITKRAFT Esports Index. It holds 35 stocks in its basket. With AUM of $77.6 million, the fund charges 50 basis points (bps) as expense ratio (read:  Gaming ETFs to Gain Post Apple-Epic Games Ruling).VanEck Video Gaming and eSports ETF ESPOThe fund aims to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Video Gaming and eSports Index, which is intended to track the overall performance of companies involved in video game development, esports and the related hardware and software. It holds 26 stocks in its basket. With AUM of $703.7 million, the fund charges 55 bps as expense ratio (read:  Sports Betting ETFs Set to Soar on NFL Wagers).Global X Video Games & Esports ETF HEROThe fund looks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues or produce hardware used in video games and esports including augmented and virtual reality. It holds 40 stocks in its basket. With AUM of $551 million, the fund charges 50 bps as expense ratio (read: Thematic ETF Investing: What You Should Know).Wedbush ETFMG Video Game Tech ETF GAMRThe fund provides pure-play and diversified exposure to a dynamic intersection of technology and entertainment. It also corresponds generally to the price and yield performance of the EEFund Video Game Tech Index.  The index is designed to reflect the performance of companies involved in the video game technology industry, including game developers, console and chip manufacturers as well as game retailers. It holds 135 stocks in its basket. With AUM of $107.4 million, the fund charges 75 bps in expense ratio (read: 5 Bargain ETFs to Tap Renewed Tech Strength). Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Global X Video Games & Esports ETF (HERO): ETF Research Reports Nintendo Co. (NTDOY): Free Stock Analysis Report Wedbush ETFMG Video Game Tech ETF (GAMR): ETF Research Reports VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD): ETF Research Reports Sony Corporation (SONY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Invest in These 3 Funds as Retail Sales Rebound in August

Retail sales surged in August as Americans resumed spending on services that were avoided at the onset of the pandemic. Americans continue to splurge despite the spread of the Delta variant in August, pushing retail sales up by 0.7%, after a downwardly revised decline of 1.8% in July. The U.S. Census Bureau reported on Sep 16 that retail and food services sales are now 15% higher than the same period last year.Clothing and clothing accessories stores witnessed a 38.8% rise in sales, with sales advancing in almost every major retail category. In fact, retails sales were much stronger in August, on a 1.8% rise, excluding auto sales. A shortage of new cars and trucks due to chip scarcity continues to plague the market, affecting sales at auto dealers.Meanwhile, high inflation continues to bother consumers, curtailing consumers’ current spending when compared to spring. However, Americans are comfortably spending on services they avoided during the pandemic like dining out, hotel rentals, movies and theater tickets, airfare, etc, compared to the year-ago period. Although rise in new coronavirus cases slowed demand for the aforementioned services and sales at restaurants were flat last month.Sales across groceries, home centers, gas stations and home furnishings stores continued to rise last month, while sales of big-box electronics retailers, especially those selling hobby items and sports equipment, slipped.August’s retail sales not only outpaced the consensus estimate of a 0.9% decline but also highlighted that Americans are willing to spend and have an appetite for big budget vacations as well as new cars and trucks. Additionally, the University of Michigan on Sep 17 reported that its preliminary reading for the index of consumer sentiment rebounded to 71 in September, after a steep decline of nearly 9 points in August.With the holiday season approaching, Americans are expected to continue to spend elaborately, especially on clothes, electronics and jewelry. Per Mastercard SpendingPulse forecast, holiday retail sales are expected to rise 7.4% from a year earlier. Bain and Deloitte also forecast sales growth between 7% and 9%.Big brands like Walmart have already started hiring freight handlers and lift drivers for the holiday season and beyond, and plan to hire 20,000 supply chain employees. Home Depot has reported the selling out of Halloween decorations, which were released early this year. This signals at higher sales of Christmas decorations this year. 3 Fund PicksGiven the rebound in retail sales in August, we are optimistic that the trend will continue for the rest of the year, especially during the holiday season. Hence, we have shortlisted three mutual funds that are poised to grow and carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).Fidelity Select Retailing Portfolio FSRPX fund aims for capital appreciation. This non-diversified fund invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 21% and nearly 23% over the past three and five-year period, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 0.79%.Fidelity Select Leisure Portfolio FDLSX fund aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies, principally engaged in the design, production, or distribution of goods or services in the leisure industries.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FDLSX has three and five-year return of 16.6% and 16.5%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 0.79%.Fidelity Select Consumer Staples Portfolio FDFAX fund aims for capital growth. It invests majority of assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. The non-diversified fund invests in both U.S. and non-U.S. issuers.This Zacks sector – Other product has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 12.7% and 7.6% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.FDFAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.75% versus the category average of 0.76%.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.Get it free >> 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 Get Your Free (FSRPX): Fund Analysis Report Get Your Free (FDFAX): Fund Analysis Report Get Your Free (FDLSX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksSep 21st, 2021