|Day's Range||2,135.78 - 2,163.36|
|52 Week Range||966.22 - 2,194.86|
fifa reddit, ครม.ไฟเขียวคลังตั้งกองทุน Start Up 3 พันลบ.-ตั้งคกก.กำหนดยุทธศาสตร์BWG (TP2.5*): Support 1.65/1.6 Resistance 1.74/1.80ขณะที่ ล่าสุดราคาหุ้นบริษัท เธียรสุรัตน์ จำกัด (มหาชน) หรือTSRปิดตลาดเช้าอยู่ที่ 6.70 บาท บวก 0.10 บาท หรือ 1.52% สูงสุด 6.80 บาท ต่ำสุด 6.65 บาท มูลค่าการซื้อขาย 11.24 ล้านบาทแม้เศรษฐกิจไทยจะมีความเชื่อมโยงกับระบบการเงินโลก แต่ภาคการเงินของไทยถือว่าได้รับผลกระทบจากความผันผวนในตลาดเงินตลาดทุนโลกค่อนข้างน้อย เมื่อเปรียบเทียบกับประเทศกำลังพัฒนาแห่งอื่นๆ เนื่องจากไทยมีกันชนหรือมีภูมิคุ้มกันที่ดี โดยเฉพาะฐานะด้านการต่างประเทศที่อยู่ในเกณฑ์ที่เข้มแข้ง， KBANK เผยลูกค้า 15 รายจ่อออกหุ้นกู้ปีนี้ไม่ต่ำกว่า 6.1 หมื่นลบ.กลยุทธ์ที่แนะนำ : ช่วงบ่าย: หากยังพลิกกลับขึ้นมายืนเหนือ 1,300 จุด ไม่ได้ มีแนวโน้มอ่อนตัวลงต่อ โดยแนวรับถัดจาก 1,295 จุด อยู่ที่ 1,285 จุด ส่วนภาพรวม แม้เราให้การอ่อนตัวชุดนี้ ลงไปได้ถึง 1,275 จุด อย่างไรก็ตาม หากไม่ต่ำกว่านี้ มอง SET จะกลับมาปรับตัวขึ้นได้ต่อ กลยุทธ์ การเก็งกำไรช่วงนี้ เหมาะกับผู้รับความเสี่ยงได้สูง โดยมีหุ้นแนะนำตามสัญญาณเทคนิค ได้แก่ FORTH (รับ 7.45 ต้าน 8.20 Cut 7.20) และ SAMCO (รับ 3.86 ต้าน 4.32 Cut 3.74)USDH16/35.46สำหรับในปี 59 บริษัทตั้งงบลงทุนอยู่ที่ 1,700 ล้านบาท เพื่อก่อสร้างโรงแรมแบรนด์ Hop INN ราว 10 แห่ง แต่คาดว่าจะเปิดดำเนินการในปีนี้ได้ 6 แห่งในไทย และอีก 1 แห่ง ในฟิลลิปินส์ รวมปีนี้เปิดโรงแรมใหม่ 7 แห่ง ซึ่งจะทำให้สิ้นปีนี้มีโรงแรมภายใต้การบริหารครบ 40 แห่ง โดยในระยะ 5 ปีจากนี้ บริษัทตั้งเป้ารายได้รวมเติบโตเฉลี่ยปีละ 11% แต่ปี 59 ตั้งเป้ารายได้รวมเติบโตได้ 15% จากปี 58 ที่รายได้ 5,300 ล้านบาท ปี 59 คาดแตะ 6,000 ล้านบาท และปี 63 แตะ 10,000 ล้านบาท พร้อมกันนี้ ตั้งเป้าสัดส่วนรายได้จากอาเซียนในปี 63 จะอยู่ที่ 10% จากปัจจุบันไม่มี ขณะที่อัตรากำไรขั้นต้นก่อนดอกเบี้ยจ่าย ,ภาษี,ค่าเสื่อมและค่าตัดจำหน่าย (EBITDA Margin) จะอยู่ที่ระดับ 13%หุ้นกลุ่มธุรกิจเพื่อสุขภาพและกลุ่มผู้ผลิตวัตถุดิบดีดตัวขึ้น ซึ่งช่วยหนุนตลาดให้สามารถลดแรงลบในระหว่างวันได้ โดยหุ้นมาร์ติน มาเรียตต้า มาเทเรียลส์ พุ่งขึ้น 9.4% หลังจากบริษัทคาดการณ์ว่ายอดขายวัตถุดิบจะปรับตัวเพิ่มขึ้น 7% ขณะที่หุ้นดูปองท์ ดีดตัวขึ้น 1.6% ส่วนหุ้นกลุ่มธุรกิจเพื่อสุขภาพปรับตัวขึ้น โดยหุ้นจิเลียด ซายส์ พุ่งขึ้น 2.3% หุ้นไฟเซอร์ ปรับขึ้น 1.9% หุ้นบอสตัน ไซแอนทิฟิค ทะยานขึ้น 5% สิ้นวัน นักลงทุนซื้อสุทธิ S5028P1603A 3.2 ล้านหน่วย นอกจากนี้ยังมีแรงซื้อสุทธิใน DW ตัวอื่นๆเช่น ADVA28C1604A PTTE28C1608A และ UV28C1604A จำนวน 1.4 ล้านหน่วย 2.0 ล้านหน่วย และ 2.9 ล้านหน่วย เป็นต้น ขณะที่นักลงทุนขายสุทธิหนาแน่นในหุ้นกลุ่มสื่อสารอาทิ ADVA28C1603A 1.9 ล้านหน่วย และ DTAC28C1605A 2.1 ล้านหน่วย เป็นต้นอนึ่ง นายชาญชัย กุลถาวรากรเป็นผู้ถือหุ้นใหญ่อับดับ 1 ของ ROCKทั้งนี้ ปัจจุบันบริษัทมีสัดส่วนรายได้ในธุรกิจอสังหาริมทรัพย์และโรงพยาบาลอยู่ ที่ร้อยละ 70 : 30 และตั้งเป้ายังคงสัดส่วนนี้ต่อเนื่องในอนาคต โดยในส่วนของโครงการอสังหาริมทรัพย์นั้น ล่าสุดได้เปิดตัวคอนโดมิเนียมโครงการใหม่ ทำเลทองริมแม่น้ำเจ้าพระยา ในชื่อ เดอะโพลิแทน รีฟ โดยใช้งบลงทุนประมาณ 3,000 ล้านบาท ， WICE กูรูชี้มีโอกาสติด Cash Balance หากวันนี้ราคาสูงกว่า 3.30 บ.ส่วนผลประกอบการของปี 58 บริษัทคาดว่ารายได้จะอยู่ที่ราว 850 ล้านบาท และยอดขายกว่า 800 ล้านบาท หลังจาก 9 เดือนแรกมีรายได้แล้ว 642.74 ล้านบาท และมียอดขาย 654 ล้านบาท โดยมองว่าเป็นช่วงต่ำสุดแล้ว JUBILE คาดรายได้ Q1/59 โต 10% หลังเปิดตัวคอลเลคชั่น- แบรนด์ใหม่ทั้งนี้ ตลาดน้ำมันยังคงอยู่ในภาวะผันผวน อันเนื่องมาจากความวิตกกังวลเกี่ยวกับภาวะอุปทานล้นตลาด โดยเมื่อคืนนี้ สัญญาน้ำมันดิบ WTI ส่งมอบเดือนมี.ค.ปิดร่วงลง 1.2 ดอลลาร์ หรือ 3.9% ที่ระดับ 29.69 ดอลลาร์/บาร์เรล หลังจากมีรายงานว่าการประชุมระหว่างรัฐมนตรีกระทรวงพลังงานซาอุดิอาระเบียและเวเนซุเอลานั้น ทั้งสองฝ่ายไม่สามารถตกลงกันได้เกี่ยวกับการใช้มาตรการลดกำลังการผลิตเพื่อกระตุ้นราคาน้ำมัน ผอ.สำนักสถิติ ฝ่ายสถิติและข้อสนเทศ (ธปท.) ดัชนีความเชื่อมั่นทางธุรกิจ (BSI) ใน ม.ค. แย่ลงกว่าเดือนก่อนอยู่ที่ 48.5 จุด จาก 49.9 จุด จากผลประกอบการ ปริมาณการผลิต-คำสั่งซื้อสินค้า และการส่งออกที่ลดลง แต่ต้นทุนการประกอบการเพิ่มขึ้นด้าน ราคาหุ้น บริษัท ธนบุรี เมดิเคิล เซ็นเตอร์ จำกัด (มหาชน) หรือ KDH ณ เวลา 10.56 น.ราคาอยู่ที่ 113.00 บาท บวก 26 บาท หรือ 29.89% มูลค่าการซื้อขาย 1 แสนบาท หากเราใช้กำไรที่ 500 ล้านบาท สามารถจะคิดมูลค่าด้วย PE 12 เท่าได้ที่ 0.80 บาท fully diluted จากหุ้นไม่นับวอแรนท์ในปี 60 เท่ากับว่าเราประเมินกำไรได้แล้วจากที่ก่อนหน้านี้ประเมินไม่ได้เพราะไม่เห็นโครงการอะไรเลย ประกอบกับราคาหุ้นที่ลงมามากแล้ว ทำให้ราคานี้มี upside ถึง 56% จัดว่าไม่เลวเลยละทั้งนี้ หากทาง แจส โมบาย ยังไม่ส่งแผนงานดังกล่าวมาให้พิจารณา ทางธนาคารก็คงยังไม่สามารถอนุมัติสินเชื่อให้ได้ ติดตามประธานเฟด แถลงต่อคณะกรรมาธิการบริการการเงินประจำสภาผู้แทนราษฎรสหรัฐในวันนี้ และจะแถลงต่อคณะกรรมาธิการการธนาคารประจำวุฒิสภาในวันพรุ่งนี้ ว่า นางเยลเลนจะส่งสัญญาณชะลอการปรับขึ้นอัตราดอกเบี้ยในการประชุมเดือนหน้าหรือไม่ หลังจากที่เฟดได้ปรับขึ้นอัตราดอกเบี้ยครั้งแรกรอบเกือบ 10 ปีในการประชุมเดือนธ.ค.ปีที่แล้ว。
ทั้งนี้ แม้ว่าเทรดเดอร์ และตัวแทนชาติอื่นๆ ของ OPEC ไม่คาดว่าทางกลุ่มจะสามารถบรรลุข้อตกลงกับประเทศนอกกลุ่มในการลดกำลังการผลิตน้ำมัน ซึ่งจะเป็นครั้งแรกในรอบกว่า 10 ปี แต่ข่าวดังกล่าวก็ถือเป็นปัจจัยบวกต่อตลาดVTE แนวต้าน 2.54 บาท จุดลดความเสี่ยงหากหลุด 2.34 บาท，ITD(ราคาปิดภาคเช้า 7.00)、ฝาก 12 บาท รับ 100 ล่าสุด1️⃣LOOK618、โดยที่ราคาปัจจุบัน ADVANC (แนวต้าน 174.5/187.5) ให้ผลตอบแทนจากเงินปันผล 3.9% (6.49 บาท/หุ้น XD 31 มี.ค. และจ่ายวันที่ 22 เม.ย.นี้) และ INTUCH ให้ผลตอบแทนจากเงินปันผล 4.4% (คาดประกาศจ่ายปันผล 2.40 บาท/หุ้น สำหรับ 2H15)、ราคาปิด 23.40 แนวรับ 23.30-23 แนวต้าน 23.70-24 , 24.20-25 GPSC ปลื้ม! กำไรปี 58 พุ่งแตะ 1.91 พันลบ.เติบโตกว่า 20% จากปีก่อนVIBHA ราคาพักฐานจาก 2.46 ลงมาใกล้ uptrend line และวกตัวขึ้น ยืนเหนือเส้นค่าเฉลี่ย 5 วัน ล่าสุดดีดตัวทำจุดสูงระยะสั้นพร้อม Vol. เพิ่มขึ้น ด้าน MACD ถอยไม่ติดลบ และเริ่มวกตัวตัดขึ้นค่าเฉลี่ยตัวเอง มีสิทธิหนุนราคาแกว่งตัวกลับขึ้น ทดสอบหรือผ่านแนวจุดสูงเดิม，ส่วนผลการ ดำเนินงานในไตรมาส 4/58 คาดว่ากำไรและรายได้จะต่ำกว่าไตรมาส 3/58 เนื่องจากเป็นช่วงโลซีซั่นของธุรกิจรถยนต์เพราะมีวันหยุดยาว อีกทั้งงานแม่พิมพ์ล๊อตใหญ่ที่บริษัททำให้กับฟอร์ดหยุดการใช้งานไปแล้ว ทำให้ไม่มีกำไรพิเศษเข้ามา 3-4 ล้านบาทเหมือนในไตรมาส 3/58 ซึ่งนับว่าเป็นไตรมาสที่มีผลการดำเนินงานดีที่สุดของปีนี้สำหรับนักลงทุนต่างชาติที่เข้ามาลงทุนในนิคมกลุ่มอมตะฯ ส่วนใหญ่เป็นนักลงทุนญี่ปุ่น ,จีน และอื่นๆ โดยมีประเภทอุตสาหกรรมหลัก ได้แก่ ยานยนต์ ,สินค้าอุปโภคบริโภค ,เครื่องใช้ไฟฟ้า ,บริการและสาธารณูปโภคและโรงไฟฟ้า เป็นต้นประกอบกับภัยแล้งที่จะกระทบต่อการฟื้นตัวของการบริโภค โดยต้องติดตามการเร่งดำเนินนโยบายของภาครัฐและแนวโน้มความเชื่อมั่นของทุกภาคเศรษฐกิจอย่างใกล้ รวมทั้งหากภาครัฐเร่งรัดการลงทุนโครงสร้างพื้นฐาน และเริ่มลงทุนได้ตามเป้าในครึ่งปีหลังของปี 2559 ก็จะเห็นเม็ดเงินเข้าสู่ระบบมากขึ้น และทำให้กิจกรรมทางเศรษฐกิจปรับตัวดีขึ้นได้ต่อเนื่อง， เงินเยนอยู่ที่ระดับ 114.95 เยน/ดอลลาร์ จากตอนเช้าที่อยู่ที่ระดับ 114.43/46 เยน/ดอลลาร์และตลาดยังรอการเปิดเผยรายงานข้อมูลเศรษฐกิจของสหรัฐในสัปดาห์นี้ รวมถึงสต็อกสินค้าและยอดค้าส่งเดือนธ.ค., ดุลงบประมาณของรัฐบาลกลางสหรัฐเดือนม.ค., จำนวนผู้ขอรับสวัสดิการว่างงานครั้งแรกรายสัปดาห์, ยอดค้าปลีกเดือนม.ค., ราคาส่งออกและนำเข้าเดือนม.ค., ดัชนีความเชื่อมั่นผู้บริโภคช่วงต้นเดือนก.พ.จากมหาวิทยาลัยมิชิแกน และสต็อกสินค้าคงคลังภาคธุรกิจเดือนธ.ค.โดยปัจจุบันมีลูกค้าทั้งในไทยและต่างประเทศให้ความสนใจเข้ามาเยี่ยมชมกิจการของนิคมฯในกลุ่มอมตะฯต่อเนื่อง แม้จะยังไม่มีการขายได้ในช่วง 1 เดือนแรกของปีนี้ แต่ก็นับเป็นสัญญาณที่ดี เพราะฤดูการขายส่วนใหญ่จะมีขึ้นในช่วงครึ่งปีหลัง โดยล่าสุดมีนักลงทุนจากญี่ปุ่นต้องการซื้อที่ดินราว 120 ไร่ โดยกำลังพิจารณาว่าจะซื้อในไทยหรือเวียดนาม รวมถึง บริษัทยังคาดหวังว่าจะมีลูกค้าในกลุ่มอุตสาหกรรมยางเข้ามาอย่างต่อเนื่องด้วย หลังจากที่ จงเช่อ รับเบอร์ จากประเทศจีนเข้ามาลงทุนผลิตและจำหน่ายยางรถยนต์ในไทย โดยตั้งโรงงานในนิคมอุตสาหกรรมอมตะซิตี้ จ.ระยอง ทำให้พื้นที่อมตะซิตี้มีผู้ผลิตยางรถยนต์รายใหญ่เข้ามาลงทุนแล้วถึง 4 แห่ง ค่าระวางเรืออ่อนตัวต่อเนื่อง ปิดวานนี้ขยับลงเล็กน้อยส่วนหุ้นธนาคารอื่นๆนั้น หุ้นเครดิตสวิส ร่วงลง 8.4% หุ้นยูนิเครดิต เอสพีเอ ดิ่งลง 7.9% หุ้นยูบีเอส กรุ๊ป ร่วงลง 5.6% หุ้นสเวดแบงก์ เอบี ซึ่งเป็นธนาคารปล่อยกู้จำนองรายใหญ่ของสวีเดน ร่วงลง 5.7% และหุ้นคอมเมิร์ซแบงก์ ดิ่งลง 4.4%หุ้นกลุ่มผู้ผลิตสินค้าโภคภัณฑ์ร่วงลงเช่นกัน โดยหุ้นอาร์เซลอร์ มิททัล ดิ่งลง 11% และหุ้นแองโกล อเมริกัน ร่วงลง 11% เช่นเดียวกัน แม้ภาวะตลาดหุ้นไทย จะมีความน่าสนใจในแง่ของพื้นฐาน ที่มีระดับ Forward PE ของ SET Index ที่ระดับ 13 เท่า ถือว่ามีระดับที่น่าสนใจมากกว่าเมื่อเทียบกับเพื่อนบ้าน อินโดนีเซีย และฟิลิปปินส์ ที่มีระดับ PE ที่ 15-16 เท่า จึงมีโอกาสสูงที่เม็ดเงินลงทุนของนักลงทุนเก็งกำไรระยะสั้นจะมาลงทุนที่ไทย แต่ยังไม่เห็นสัญญาณการเข้ามาของนักลงทุนระยะยาว ที่ยังรอดูความชัดเจนทางการเมืองของไทย ตลาดหุ้นไทยจึงมีความไม่แน่นอนสูง และลงทุนมีความยากยิ่งขึ้น ซึ่งผลิตภัณฑ์ทั้ง 7 กลุ่มที่ทำนี้เชื่อว่าจะช่วยให้นักลงทุนสามารถลงทุนได้อย่างมีประสิทธิภาพ และประสบความสำเร็จในอัตราผลตอบแทนที่พอใจได้ดียิ่งขึ้น นายณัฐชาต กล่าวMCS/11.00？ BIGC (HOLD:[email protected]):ช่วง 4Q58 กำไรลดลง 15.2%YoY แย่กว่าคาด หลังมียอดขายและมาร์จิ้นหดตัวลง และทำให้ทั้งปี 58 มีกำไรลดลง 4.7%YoY แต่ปี 59 คาดกำไรจะพลิกกลับมาโตได้ 14.2%YoY หลังมองกำลังซื้อผ่านจุดต่ำสุดแล้ว อย่างไรก็ดีเราคงแนะนำ ถือ เพื่อรอไปขายที่ราคา Tender Offer 252.88 บาท BIGC (HOLD:[email protected]):ช่วง 4Q58 กำไรลดลง 15.2%YoY แย่กว่าคาด หลังมียอดขายและมาร์จิ้นหดตัวลง และทำให้ทั้งปี 58 มีกำไรลดลง 4.7%YoY แต่ปี 59 คาดกำไรจะพลิกกลับมาโตได้ 14.2%YoY หลังมองกำลังซื้อผ่านจุดต่ำสุดแล้ว อย่างไรก็ดีเราคงแนะนำ ถือ เพื่อรอไปขายที่ราคา Tender Offer 252.88 บาทแนวโน้มภาคบ่าย: เคลื่อนไหวในกรอบจำกัด แนวโน้มอ่อนตัวขณะที่ ใช้การหลุด 2.2 เป็น stop loss。
GameStop stock’s sharp rise in the past month has significantly altered the composition of some exchange-traded funds.
Trading restrictions applied by Robinhood and other investing platforms sent recent momentum stocks cratering Thursday, but the major indices still made progress.
Stock in Chinese small-cap electric-vehicle maker (KNDI) is rising after the company announced a deal to sell 3,000 of its K23 electric cars to a member of its ride-sharing alliance. The K23 is a four-seat, low-priced EV that Kandi (ticker: KNDI), which is building a ride-sharing business in smaller Chinese cities, hopes to sell in the U.S. for under $20,000. In its alliance, Kandi provides EVs with battery-swap technology to other firms that will operate the ride-sharing network.
(Bloomberg) -- GameStop Corp.’s epic surge that burned short sellers fueled by an army of day traders briefly made the video-game retailer the biggest company in the Russell 2000 Index.Despite the several restrictions to curtail trading with the high-flying stock, GameStop climbed as much as 39% to $483 at 10 a.m. in New York Thursday, extending this year’s rally to more than 2,000%. Its peak market value of $33.7 billion is a far cry from the end of 2020, when the company was worth $1.3 billion. GameStop momentarily topped Plug Power Inc., a hydrogen fuel-cell maker, in the gauge of small caps and is now bigger than more than half of the companies in the S&P 500 Index.Day traders have taken to platforms including Reddit to tout stocks such as GameStop, encouraging others to join the buying frenzy that’s hammered short sellers. Robinhood restricted transactions on those stocks and others, according to a blog post. Interactive Brokers said it wouldn’t allow clients to take new options positions in names including GameStop, AMC Entertainment Holdings Inc. and BlackBerry Ltd.While the euphoria for traders using services like Robinhood and r/wallstreetbets has captivated Wall Street, the rally in GameStop and other stocks has prompted warnings from analysts and drawn attention from regulators. The U.S. Securities Exchange and Commission said it’s “actively monitoring” volatility in options and equity markets.“The rules of trading have changed long-term versus short-term,” said Ihor Dusaniwsky, managing director of predictive analysis at S3 Partners. “People keep applying value-based fundamental investing to this short-term trading, and right now, for a short-term time horizon, this doesn’t work. Short-term, this is now a momentum market.”The recent trading frenzy shows the unintended consequences of regulatory changes put in after the last financial crisis, including rules on disclosure of short positions, Anne Richards, chief executive officer of Fidelity International Ltd., said in a Bloomberg Television interview on Thursday.GameStop’s short interest currently stands at roughly 123% of its available shares, according to data from S3 Partners.“It ends with insiders selling all of their shares at inflated prices and with GameStop closing close to my target,” said Michael Pachter, an analyst at Wedbush Securities who had a price target of $16 for GameStop as of Jan. 11. “But that will take a bit of time. When insiders sell, the Reddit thesis blows up.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.?2021 Bloomberg L.P.
Let's look at some ETF strategies to help investors gain from optimism surrounding the chances of another trench of coronavirus-aid package and improved coronavirus vaccine rollout.
The major indices delivered significant losses Wednesday; spared were stocks such as GameStop and AMC, which soared amid a push from a corner of the internet.
By Bluford Putnam and Erik Norland The year 2021 is likely to go through several stages, with the pandemic spreading rapidly at the start, then widespread distribution of vaccines, followed by a full opening of economies around the world. Markets, however, are forward-looking, such that prices in various sectors will be anticipating what a post-pandemic world will look like. Here is our perspective on the volatility drivers for a variety of asset classes to get the thought processes churning. I. US Rates: Inflation on the horizon? The fusion of fiscal and monetary policy with massive federal government budget deficits and large-scale purchases of Treasuries and mortgage-backed securities by the Federal Reserve sets up a potential scenario for rising inflation. The inflation scenario puts the back-end of the Treasury yield curve in play, regardless of how long the Fed anchors the short end with zero rates. And there will be an increased focus on Treasury Inflation-Protected Securities (TIPS) for those looking to get a market read on evolving inflation expectations. We want to make several observations about the inflation process to assist in analyzing the probabilities of meaningful inflation pressure arriving in the U.S. in the second half of 2021 or in 2022: First, once serious inflation pressure gets started it can be very hard to stop. Similarly, long periods of price stability anchor inflation expectation at or below 2%, so that creating inflation pressure is extremely difficult. The U.S. has seen both of these environments. The inflation pressure that arrived in the late 1960s and gained momentum through the decade of the 1970s was hard to defeat. To paraphrase former Fed Chair Paul Volcker, it took a big hammer of 20% short-term interest rates in 1980-82 to force the economy into recession and get inflation expectations headed lower. By the same token, the 1950s through the early 1960s, and again from the mid-1990s through 2020 were both periods of price stability, which anchored inflation expectations at or below 2% and extended the time frame for expansionary policies to lead to future inflation pressure. Second, serious inflation pressure, say above 5% or more, is usually associated with currency depreciation in a vicious cycle of each factor re-enforcing the other. The U.S. dollar was quite weak in the 1970s when inflation pressures were rising. And in the 1980s and into the 1990s, dollar strength help create a re-enforcing virtuous circle of lower inflation expectations leading to the long period of price stability which began around 1994. Figure 1: US inflation expectations Third, expansion of the Fed’s balance sheet may not be a sufficient condition to lead to significant future inflation pressure. The Fed’s massive asset purchases (i.e., QE or quantitative easing) have clearly led to asset price inflation yet not goods and service price inflation. Put another way, the maxim of Nobel Laureate Professor Milton Friedman that “inflation is anywhere and always a monetary phenomenon” has been challenged by the structural change in how goods and services are bought. In the 1950s and 1960s when Professor Friedman did his monetary research, goods and services were purchased with the cash bills in your wallet or the funds in your checking account. From the 1980s onward, as interest was paid on checking accounts, as credit cards became ubiquitous, as money could seamlessly flow between checking, savings, and investment accounts, as payments could be made from smart phones, etc., the relationship between measures of the money supply, such as M1, M2, or M3, lost all association with consumer spending, and therefore with inflation. For monetary expansion to lead to inflation, consumer spending has to meaningfully exceed the supply of goods and services available, and if consumer spending no longer depends on the Fed’s balance sheet, the Fed is no longer able to generate consumer price inflation even if it can generate substantial asset price inflation. Figure 2: US Treasury inflation premium has disappeared Fourth, from our perspective, the question of whether the demand for goods and services is pushed well above the economy’s ability to supply the goods and services and will lead to inflation depends on the type and quantity of government spending. In this regard, government borrowing to finance direct payments to individuals or loans to corporations are unlikely to create inflation regardless of how large the payments and loans are because economic agents will make their own spend, save, or invest decisions that takes the current economic environment and economic risks into account. By contrast, new government spending on goods and services that otherwise would not be present has the potential to push demand well above current supply and create inflation pressure. This almost always happens in war time, when governments purchase military equipment in size, and wars are typically associated with bouts of inflation. Also, in the 1930s, the various U.S. work programs helped end the depression, although WWII spending truly ended it. In the 1960s, the guns and butter policies (i.e., Vietnam War and Great Society programs) get considerable credit for igniting the inflation pressure that took hold in the 1970s. What this means for 2021 is that analysts like ourselves will be studying fiscal policy carefully as it evolves to understand if it starts to tilt to infra-structure spending either directly or through grants to state and local governments that can create inflation, or whether fiscal policy focuses on transfer payments and loans which may have only a muted impact on inflation if at all. II. Equities: indexes and sectors on the move? Big tech drove the U.S. stock market to record highs in 2021 on the back of massive fiscal stimulus, an accommodative Fed, and optimism for widespread distribution of a vaccine in 2021. The post-pandemic economy with a change of administrations and party control in Washington is likely to see U.S. policy initiatives that may bolster health care, challenge big tech, and support industrials and materials with infrastructure spending. Equity indices that favor big tech (Nasdaq) or large-capitalization stocks (S&P500?) may react quite differently than the more domestic small-cap indices, such as the Russell 2000. Figure 3: The Russell 2000/S&P 500? ratio has tracked inflation expectations since 2010 For example, since equities hit bottom in March, the Russell 2000 has outperformed the S&P 500? by about 33%, bringing the ratio of the two indexes to its highest point since May 2019. The relative outperformance of small-cap stocks coincided with a sharp rise in inflation expectations, as measured by the difference in yields on nominal U.S. Treasury 10-Year Notes and 10-Year Treasury Inflation Protected Securities (TIPS), from a March low of 0.5% to a recent high of 2.1%. That the fortunes of small-cap versus large-cap stocks would track inflation is not a new phenomenon. Since 2010, small-cap equities have tended to outperform large caps during periods of rising inflation expectations and underperform during periods of falling inflation expectations. 2020 was no exception. Looking back further in history, small caps stocks tended to outperform during periods of economic turbulence and in the early stages of economic recoveries (1979-83, 1990-94, 1999-2005, 2008-2013). By contrast, large caps tended to outperform in the later stages of economic expansion (1984-89, 1994-99, 2006-07 and 2015-19). Perhaps small firms are, on the whole, better at navigating periods of rapid economic change than their larger peers. Figure 4: Periods of under- and outperformance by small-cap stocks III. FX: New role for the US dollar? Emerging market FX opportunities? From March 20, 2020 into early 2021, the U.S. dollar lost almost 15% of its value versus the euro before settling back a bit. Since May 27, 2020, the Chinese yuan has gained almost 10%. USD weakness versus the euro appears to have been driven by changing risk assessments of the US, while the strength of the yuan seems to have reflected China’s quick and rapid domestic recovery from COVID-19. Emerging market currencies offer an array of interest rate differentials versus USD, arguing for a return of the FX carry trade where the emerging market risks seem acceptable. Figure 5: USD vs EUR Figure 6: CNY vs USD In simpler times, exchange rates were mostly driven by the interplay of interest rate policy and economic growth prospects. That is, relatively strong economic growth prospects would attract capital and lead to currency appreciation. A country with sluggish economic prospects that saw its exchange rate depreciating might elect to defend the currency with a relatively high interest rate policy. This latter approach has been repeated often in the case of emerging market currencies. Note that the trade balance does not play much of a role in FX determination because capital flows tend to overwhelm trade flows. The exception is for countries whose economic growth prospects are tightly linked to commodity exports, and for these countries, export growth matters a lot for the currency. As we move into the 2020s, however, two additional factors are in play in exchange rate determination: risk and debt. First, there is rising risk associated with the U.S. dollar as the world moves increasingly to a multi-power environment and away from the US-dominated “Pax Americana” of the post-WWII era. In this multi-dimensional world of global power politics, both the euro and the Chinese yuan are well-positioned to gain ground on the U.S. dollar, and both did so in 2020. The past may not necessarily be a harbinger of things to come, but the changing nature of the risks associated with the U.S. dollar is an important emerging feature of exchange rate determination. Secondly, the roles of rising debt loads in mature developed industrial countries may change the dynamics of interest rate policy decision-making. The more debt a country has, public and private, relative to the size of its economy (i.e., GDP) and growth prospects, the more fragile and sensitive the economy will be to central bank rate hikes. With pandemic-induced fiscal policies generating huge budget deficits financed by government debt issuance, central banks, such as the Fed, are going to be increasingly cautious about raising short-term rates, even if inflation pressures do raise their head. Indeed, the Fed has provided forward guidance that is crystal clear that if any inflation pressures were to emerge in the US, the Fed plans on allowing inflation to overshoot its 2% target for an extended period before considering rate hikes. This means that highly accommodative Fed policies may stay in place well after inflation pressures arrive, which might create a re-enforcing vicious circle of rising inflation and a declining currency. Of course, the inflation pressure has not arrived yet and (see the above section on Rates) is not a foregone conclusion by any means. IV. Energy: Oil has key regional and product differences? Natural gas and weather? When supply and demand are both rising, if unevenly, prices can be more than a little volatile, and this is likely to be the case for oil in 2021. But there are also regional differences. Demand is likely to grow faster in Asia, slower in Europe. A return of international air travel will increase jet fuel consumption relative to other refined products. Divisions within OPEC+ can lead to different supply environments for different grades of oil. Figure 7: US Air Travel Following Russia and Saudi Arabia’s market share war this past spring, OPEC+ has shown a remarkable degree of discipline in maintaining production amid a volatile demand environment. Rather than setting production levels every six months, they have been adjusting them on a more frequent basis to meet rapidly evolving demand conditions. The result has been a recovery and stabilization of oil prices despite still soft demand. For example, air travel accounts for 10% of global petrol consumption. International air travel has not even started to recover. Domestic air travel has recovered in China, but in the U.S. it is still down by about 62% year-on-year. The key short-term challenges for oil producers include the rapidly evolving pandemic and still high levels of inventory. At the beginning of 2021, inventories were much higher than they were at the beginning of the previous three years – though not too far from where they began 2017. Looking deeper into 2021, there remains the possibility of a sharp surge in oil demand as the world starts to fully re-open its economies, perhaps as soon as this summer or early fall. By that time, at least in the wealthier nations, a large portion of the population may have been vaccinated. OPEC+ can turn the taps back on quickly to meet rising demand. Figure 8: US crude oil inventories The same extraction patterns relative to oil prices are not true of the U.S. shale producers. Typically, they wait for about four months after prices have risen to begin drilling again and then it takes, on average, several more months for them to begin extracting significant quantities of oil. As such, the combination of weak and volatile short-term demand as well as high inventories, plus the possibility of a sharp rise in demand later this year that could outstrip the ability of oil producers to keep up, could make for an exceptionally volatile year in the oil markets. We would be remiss if we did not observe that natural gas is on the move, too. Weather is a big factor. The winter of 2020-2021 in Europe is frigid, and it is driving up demand for natural gas. In turn, cargoes of U.S. LNG are headed for Europe at elevated prices. V. Metals: Industrial metals respond to recovery? Bitcoin competes with gold? The post-pandemic world and the rise of China argue for strong support of industrial metals from copper to aluminum and beyond. Gold, on the other hand, has a competitor in Bitcoin, which could siphon off some of gold’s appeal as a portfolio diversifier as well as compete with traders trying to hedge future inflation risks. Moreover, Bitcoin’s supply is tightly constrained, while it is likely that 2021 will bring increased gold production given current prices. Figure 9: Copper Figure 10: Gold and Bitcoin As noted, China holds an important key for industrial metals and the growth of world trade. The virus started in China, hit China hard, yet China contained the virus first and began a robust economic recovery while another wave of the virus curtailed the economic rebound in Europe and the U.S. in Q4/2020. China’s strong 2H/2020 economic recovery, as noted, led to strength in the Chinese yuan, and push the prices of copper, aluminum, and other industrial metals higher. One can also see in the global trade statistics that the China has led the world back to almost a full recovery in world trade activity. The Bitcoin-gold rivalry that we are starting to observe is a little more complex to analyze. Given the current price range for gold, it is highly likely that increased production will be a feature of 2021. By contrast, Bitcoin has a tightly controlled supply based on the rules of “mining” Bitcoin. Fixed supply does not mean less volatility. Indeed, it can mean the opposite. When supply is relatively inelastic, then the dynamics of shifting patterns with demand can have very large and abrupt impacts on prices. Bitcoin definitely appears to illustrate this point. We have also noticed that gold does not appear to be a “go-to” asset any more in terms of global political risks. Indeed, in the 2017-2020 period, the mostly ups and occasional downs of the gold price appeared to be directly tied to Fed policy shifts more than anything else. Since equities were responding to the same driving force, the gold-equity relationship tended to become a little more closely associated, weakening gold’s appeal as a portfolio diversifier. VI. Agriculture: China dominates demand? La Ni?a poses climate challenges? For soybeans and corn, rising demand from China may be a key driver in 2021. Regional price action may respond to how China allocates its purchases. Regional differences may well be complicated by a strong La Ni?a which has the potential to diminish rainfall in Brazil and Argentina, while increasing it in Australia. Elevated price volatility often occurs during La Ni?a. Figure 11: Soybean prices have diverged from the Brazilian real From 2012 to 2019, the price of soybeans largely tracked the Brazilian real. When the real fell versus the U.S. dollar, soybean prices usually fell too. That relationship, most likely driven by the Brazil’s emergence as a leading global exporter of soybeans that rivals the United States, broke down in 2020. Soybean prices soared as Brazil’s currency weakened slightly versus the U..S. dollar. There appear to be two factors at play: 1) weather and 2) China. With respect to weather, a powerful La Nina has developed in the Pacific Ocean –the strongest since 2010. This has coincided with a severe drought that has impacted much of South America including key soybean growing areas in Brazil and Argentina. Figure 12: Sea Surface Temperature Anomaly: Figure 13: South America Hit by Severe Drought Meanwhile, China’s economy has rebounded strongly, with its manufacturing sector showing growth rates of 8% or more year-on-year since May. As China’s economy has recovered more quickly than most others around the world, the currency has advanced by 10% versus the U.S. dollar, increasing its purchasing power. With the Sino-U.S. trade war winding down, China has returned to the market as a major purchaser of soybeans. VII. What a difference a year makes For sure, 2020 looked nothing like 2019, and 2021 is going to be a totally different story from the pandemic year of 2020. The global economy is not going back to pre-pandemic norms. Instead, certain trends have been accelerated, new policies are coming, and the world order is shifting. Markets will have many cross-currents and new themes to digest. U.S. Treasuries are on inflation watch. Equity indexes are dancing to different drummers as big tech and small cap diverge. The role of the U.S. dollar is shifting. In emerging market FX, there are interesting opportunities available due to differences in interest rates and risk assessment. Crude oil faces conflicting scenarios as both supply and demand rise, while regional differences in demand and production complicate the picture. Natural gas is responding to frigid weather in Europe. Corn and soybeans are seeing higher demand from China, while a strong La Ni?a creates drought conditions in South America. To learn more about futures and options, go to Benzinga’s See more from BenzingaClick here for options trades from BenzingaThe Market For Carbon Emissions Credits, ExplainedWill Inflation Force The Fed To Raise Interest Rates?? 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Highly shorted stocks are being targeted by some investors trying to force people who have bet the prices will fall into covering. Watch Dillard’s and AMC Entertainment.
Can you say, "earnings?" This week is earnings, earnings, and more earnings. Wednesday brings the triple crown when Tesla Inc (NASDAQ: TSLA), Apple Inc (NASDAQ: AAPL), and Facebook, Inc. (NASDAQ: FB) all report after the close.Company reporting hits a crescendo this week and next, accompanied by a mountain of data. The cherry on top is Wednesday afternoon when all those big names step to the plate and Fed Chairman Jerome Powell takes the mic following the Federal Open Market Committee meeting. It's a lot to digest, and investors could have their hands full keeping up. In the background and sometimes the foreground, Washington continues to compete for Wall Street's attention. Biden and company are making news every day, often with market implications. Last Friday's word from Capitol Hill didn't sound quite as bullish on the stimulus, which weighed on stocks as investors contemplated potentially seeing $1 trillion instead of $2 trillion injected into the economy. But it's still early on that front. It's also early to talk about this week's data calendar, since there's no important data today. As the week advances, however, we'll get plenty. Some key reports include consumer confidence, durable goods, and a first look at Q4 gross domestic product (GDP). Meanwhile, a measure of German business sentiment dropped today, and that appears to be helping the bond market a bit this morning. Volatility is also higher, but so are stock index futures. Usually, when bonds are up it's a warning sign. So the market is sending mixed pictures early on. Apple, Tesla, Lead The Week's Earnings Parade It's not hard to pick a few earnings that stand out amid all the coming attractions and may set the tone with what they say. AAPL and TSLA could make for an interesting Wednesday afternoon. Maybe call them the "split twins," since both were in the headlines last year for splitting shares. Everyone knows how TSLA stock has gone parabolic since then, but AAPL shares actually spent some time wandering in the desert after the split before picking up some momentum and recently powering to new all-time highs. Looking ahead to TSLA's Q4 earnings report and conference call after the close Wednesday, investors are likely going to want to hear more details about production, especially after CNBC reported a planned 18-day shutdown of Model S and Model X lines in California. This might suggest the company isn't seeing as high demand for those older lines as for newer models. With AAPL, focus is expected to be on the iPhone 12, which the company launched last fall. Analysts take different positions on how well AAPL did in Q4, with some saying it was good but not great and others saying the iPhone 12 launch was an amazing success likely to be reflected by earnings. We'll find out Wednesday, but investors seem to be thinking positive. Shares of AAPL are up nearly 3% in pre-market trading today. Microsoft Corporation (NASDAQ: MSFT) is another mega-cap reporting this week. Focus, as always, could be on its Azure cloud product which has been growing like a weed over the last few years but still appears to be trailing Amazon.com, Inc.'s (NASDAQ: AMZN) cloud offering. Holiday Xbox sales also could get a close look from investors. And then there's Facebook, Inc. (NASDAQ: FB), which is also scheduled to report Wednesday afternoon. Analysts are expecting a continuation of the ad revenue growth pattern, but they may be listening extra closely for any comments on the potential regulatory winds that have been swirling in recent days. Last week's Tech earnings from IBM Common Stock (NYSE: IBM) and Intel Corporation (NASDAQ: INTC) didn't really light the world on fire, so the market might be hoping for something warm and fuzzy out of Tech in coming days. Maybe Johnson & Johnson's (NYSE: JNJ) earnings seemed kind of ho-hum the last few years, but not any more. They'll have a major spotlight tomorrow morning and probably a bigger audience than usual for their conference call, with lots of people hanging on any new word about their Phase 3 COVID-19 vaccine trial. The company's been talking about having results soon. Could tomorrow be the day? We'll wait and find out. Positive vaccine news pumped up the market last fall, so don't rule out a possible boost to major indices if JNJ's single-injection vaccine results impress. Adding everything up, about 20% of S&P 500 companies report this week. Some of the other big ones include AT&T Inc. (NYSE: T) and McDonald Corp's (NYSE: MCD), Verizon Communications Inc. (NYSE: VZ), and 3M Co (NYSE: MMM). There's so many company reports this week that some who'd normally get a lot of attention, like Starbucks Corporation (NASDAQ: SBUX), might get lost in the haze. So far, earnings have been better than expected. Going into earnings season, analysts had expected about a 7% year-over-year drop. So far, with 13% of S&P 500 companies reporting, the actual drop has been 4.7%, according to FactSet. There's still a long way to go, but it looks like the trend seen over the last couple of years where earnings look better in reality than in Wall Street's initial vision might be continuing.Also, 86% of S&P 500 companies have reported a positive EPS surprise and 82% have reported a positive revenue surprise, FactSet said. That's way above historic averages.Two-Way Tech Last week saw a split in the Tech group, especially Friday after old-school Tech behemoths IBM Common Stock (NYSE: IBM) and Intel Corporation (NASDAQ: INTC) reported. Both disappointed Wall Street, and their weakness spread across not only the sector but possibly to the entire market as stocks struggled to stay above the flat line to end the week.At the same time, more money seemed to flow toward mega-cap Tech companies like AAPL and MSFT. Rising along with those were Adobe Inc (NASDAQ: ADBE) and salesforce.com, inc. (NYSE: CRM), whose cloud divisions look strong compared to what people heard from IBM on Friday. It's tough straits for IBM here. They made a big investment in cloud technology and it's not necessarily paying off the way some investors might have hoped. Meanwhile, chip makers forged new highs throughout last week and AAPL and MSFT continued to grind upward ahead of their respective earnings. These fresh all-time peaks can be a double-edged sword for investors as earnings approach. One thing to remember is that when a company reports earnings and its stock is at or near historic peaks, the pressure can really be on to meet or exceed expectations. A stock that's priced for perfection tends to do badly when perfection isn't achieved in an earnings report. That's a warning not just for shareholders of AAPL, which is scheduled to report Wednesday, but for a host of other companies reporting this week with their shares on a roll including D.R. Horton Inc (NYSE: DHI), Starbucks Corporation (NASDAQ: SBUX), Illumina, Inc. (NASDAQ: ILMN), Stryker Corporation (NYSE: SYK), and, of course, TSLA. Boeing Co (NYSE: BA) is also on the docket this week, its first earnings report since getting the 737 MAX back in the air. Shares of BA and the airlines continue to get dragged as U.S. passenger traffic slumped after a brief uptick around the holidays.The Fed meeting that starts tomorrow almost gets pushed to the background with all this earnings news swirling around. It's hard to imagine them saying much of anything different, though obviously we'll look for any observations on inflation.CHART OF THE DAY: PAYING A PREMIUM. Nothing's rallying quite like the small-cap Russell 2000 Index (RUT--candlestick). It's now trading at around 1.37 times its 200-day moving average (blue line). RUT's current premium to its 200-day MA exceeds even the one recorded in early 2000, which was close to 1.3 but never this high. Data Source: FTSE Russell. Chart source: The thinkorswim? platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results. GDP Stands Out in Critical Data Week: You can almost pick and choose your favorite data to watch each day, there's so much on the way. Maybe most critical is the government's first look at Q4 gross domestic product (GDP) Thursday morning. Q3 growth was an amazing 33.4% on an annualized basis as the economy rebounded from its spring collapse. Q4 could be more interesting, and we'll talk about analysts' estimates as we get closer. For a sense of how the economy performed overall, it's helpful to have some earnings and economic data around, and not all of that is available yet for Q4. However, considering some of the recent employment and retail sales data, it feels like things might have slowed down a bit toward the end of the year for consumers, whose spending comprises roughly 70% of the overall economy. One thing economists seem pretty sure of is that overall 2020 GDP--which we'll get a look at Thursday as well--was probably in the dumps and couldn't match the 2.3% growth recorded by China. That country recovered more quickly from the pandemic, analysts say, because it focused on getting factories restarted very early on in the crisis. While the official U.S. government estimates arrive Thursday, the World Bank recently said the U.S. economy likely contracted 3.6% in 2020, but could rise 3.5% in 2021. Stairs and Windows: Since we talked earlier about how you can never be sure a selloff might loom, it might be helpful to think about moving averages. Specifically, about how high the major indices currently sit above their benchmark 200-day moving averages, which in many cases can serve as points of technical support on any downturn. It's also helpful to know which indices have the most and least premium to their 200-day MAs. The winner of the biggest premium is...drumroll please...the Russell 2000 (RUT) index of small-cap stocks, which continued its rally last Friday. As of Friday, the RUT was trading at a hefty 1.37 times its 200-day MA (see chart above). As recently as late September, RUT was trading at a discount to the 200-day, which tells you a lot about its quick ascent as investors plowed money into smaller stocks expected to do better with stimulus thanks to their heavier exposure to the domestic economy. Following up in the premium sweepstakes is the Nasdaq (COMP), trading at 1.24 times its 200-day. The SPX is at 1.16 and the Dow Jones Industrial Average ($DJI) brings up the rear at 1.14. These premiums don't necessarily tell you which indices are most vulnerable in a selloff, but do suggest that if things turn negative, small-caps and the Tech-dominated COMP might suffer more dramatically based on their current status vs. moving averages. Just a Reminder: In case anyone forgot, Friday reminded us that things can go down as well as up. Another thing to keep in mind is that old saying about the market climbing the stairs and falling out the window. Not that anyone's necessarily predicting a big selloff, only that selloffs are common and eventually happen. It's only a matter of time. When they do, it sometimes seems to come out of nowhere. Most years have at least a couple of 5% declines and it's a rare year when there isn't at least one 10% drop. It's been four months since the S&P 500 Index (SPX) had anything close to a 10% pullback, which people commonly call a "correction." That was when the SPX fell 9.6% between Sept. 2 and Sept. 23. It also suffered a more than 7% drop between mid- and late October. There's been nothing really dramatic since then except on the upside, where the SPX is now up 18% from its Oct. 30 low.If the recent rally has your portfolio looking a bit stock market heavy, don't hesitate to go back in and make sure your allocations haven't strayed too far from plan.TD Ameritrade? commentary for educational purposes only. Member SIPC.Photo by Erol Ahmed on UnsplashSee more from Benzinga * Click here for options trades from Benzinga * Intel, IBM Weigh On Broader Market As Investors Also Worry About Coronavirus * Earnings Extravaganza As Investors Digest United's Losses, Await Intel And IBM(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Just when the small and risky underdogs of the U.S. stock market were enjoying a historic rotation at long last, the megacap safety trade has come roaring back.The Nasdaq 100 rallied more than 1% at the Monday open, beating benchmarks including the Russell 200 and S&P 500. Last week, as Netflix Inc. wowed with 200 million subscribers amid the stay-at-home boom, the five biggest technology companies notched their best performance in nearly three months.Powered by confidence the likes of Apple Inc. will hit profit targets in the coming days, the Nasdaq 100 is now flirting with fresh records -- showing once again the decade-long folly of doubting the might of Big Tech.It’s a gut-check for investors who’ve been fading the era of the stock giants on the conviction that firms tethered to the U.S. economy are set to outperform. Small caps are near the highest versus their bigger peers in almost two years. A long-short value strategy is on track for a fourth straight month of gains -- the longest streak since 2016.Last week’s rally underscores the sheer tenacity of the tech behemoths to entrench their market leadership. But with large companies trading at historic prices, a brewing rebound in the economic cycle should send money rushing into smaller shares, the argument goes.“If economic activity withstands the recent Covid wave, slow growth trades that worked last week will reverse and reopening stocks will outperform,” Evercore ISI strategists led by Dennis DeBusschere wrote in a note.At the same time, ever-higher premiums for the mega-caps may be increasingly hard to justify, according to Lawrence Hamtil, co-founder of Fortune Financial Advisors.He points to the gap between their market value and earnings. Tech is 28% of S&P 500, but 22% of its projected profits for 2021, data calculated by Bloomberg show. Consumer discretionary, which includes Tesla Inc., is 13% of the U.S. index’s value, but 7% of its earnings.“The risk might just be that once the virus is dealt with and a semblance of normalcy returns, the rest of the market like energy and financials will play catch up,” he said.In the S&P 500, value stocks -- cheap names that tend to be more cyclical -- are projected to expand their profits by 26% this year. That compares with 22% for growth names, a group that typically include tech, estimates compiled by Bloomberg show.Stock gains have been famously concentrated in recent years thanks to the reliable profitability of Facebook Inc., Apple, Amazon Inc., Microsoft Corp., Netflix and Google’s parent Alphabet Inc.Low rates and sluggish economic growth also favor these shares, since they resemble long-duration assets that are less tethered to the business cycle. So while cyclical stocks’ earnings might rebound sharply this year, they’re still no match for the long-term profit promise of tech shares.All that means megacaps could get even bigger.With the pandemic only deepening the reliance on tech, the top 10 largest firms -- which are nearly all in that sector -- reached 27% of the S&P 500 at the end of last year, the highest in at least three decades. Amazon, Apple and Microsoft accounted for about half of the index’s gains in 2020.But a stock market with broad-based gains would be good news for active managers since they typically spread their exposures. It would also help equities outside the U.S. -- which are typically cheaper, less tech-dominated and more tied to the twists and turns of the business cycle.History may suggest some good news on that front. Decades of data show the more concentrated the S&P 500 is, the better the subsequent five-year performance in small-cap value.This underdog segment of the market could outperform by more than 10% through 2025 based on past trends, suggests analysis from Vincent Vizachero at Denouement Financial Planning.Yet for now, investors have fallen back in love with Big Tech. Hedge funds’ net exposure to the megacap sector jumped from a January low of 14% to 21% ahead of this week’s earnings, though it still remains below 2020 highs, data from Goldman Sachs Group Inc.’s prime brokerage show.In options, the cost of bullish bets on QQQ, the popular tech exchange-traded fund, has risen while that in IWM, a Russell 2000 tracker, has dropped, wrote Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, in a Thursday note.Another sign megacaps could entrench their leadership: The 10-day correlation between the Russell 2000 and Nasdaq 100 has fallen into negative territory -- a historical harbinger of a rotation.Still, with the stock market’s megacap concentration at extreme levels, the case for a sustained rotation into smaller stocks remains intact, according to Vizachero.“I reassure clients with some exposure to small-cap value stocks that times like this are when the wind is most likely to be at their backs,” he said.(Updates with the stock market open in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.?2021 Bloomberg L.P.
If growth and value investing were people, Growth would be the extroverted friend who's mostly a good time but can sometimes get you into trouble. Value investing involves finding and buying securities that seem to be underpriced by the market. The value investor is a bargain hunter, looking to buy stocks for less than their intrinsic value.
Market players were bracing for some corrective action this week, but the market did what it often does and didn't conform to the conventional wisdom. The Nasdaq outperformed while the Russell 2000 ETF lagged.
Carrier, Amazon, Boyd Gaming, and Twitter were some of our key picks. Our 2020 bearish calls, however, did not turn out as well.
Three months since inception, my 2020 Triple Net Active Versus Passive Portfolio experiment rolls on, with the Passive Portfolio taking the driver's seat. The Active Portfolio, unveiled on October 21st and October 23rd (up 23.
The major indices finished at record highs Wednesday as investors digested the new president's inauguration message and hopes for his stimulus plan.
Inaugurations are about fresh starts and optimism. When you combine it with the kind of solid earnings that investors saw last night and this morning from Netflix Inc (NASDAQ: NFLX) and Morgan Stanley (NYSE: MS), you can see why the market is having a little rally to start the day. Events in Washington will probably supersede whatever happens on Wall Street today, but that doesn't mean nothing's going on in the financial world. First of all, MS, the final big bank to report, impressed with its Q4 results and saw shares tick higher in pre-market trading;. The company beat Wall Street estimates on earnings per share and revenue, with an amazing quarter for its investment banking. Revenue in that segment rose 46% year over year, not completely unexpected when you consider the healthy mergers and acquisitions (M&A) and initial public offerings (IPO) environment over the last few months. So, all the big banks are done, and the quarter overall not unbelievable, but good. Some disappointments came from the consumer side and hurt banks like Wells Fargo & Co (NYSE: WFC) and Bank of America Corp (NYSE: BAC) that do a lot of their business there. Investment banking and trading results looked very nice, for the most part. Besides banks, two other major earnings reports come out this morning as investors look over results from Procter & Gamble Co (NYSE: PG) and UnitedHealth Group Inc (NYSE: UNH). Tomorrow is a busy day on the rails featuring results from Union Pacific Corporation (NYSE: UNP) and CSX Corporation (NASDAQ: CSX).Also tomorrow be ready for weekly initial unemployment claims, which surprised in a bad way last week at 965,000, the worst since August. Estimates on Wall Street ahead of tomorrow's report are for a lower number that's still too high: 845,000, according to research firm Briefing.com. Even that would be more than three times what we were used to before COVID-19.Netflix Turns Things Around In Q4 with Impressive Subscriber-Adds There's hope that more Americans can get vaccinated soon, though the process has run into logistical hurdles. Faster vaccinations would likely put a charge into the "reopening economy" and stocks like airlines and hotels that benefit when people go out. Right now, though, it seems like many people remain at home watching Netflix Inc (NASDAQ: NFLX), judging from NFLX's firm earnings and subscriber beats after the close yesterday. Shares gained more than 10% after the bell Tuesday. After adding only 2.2 million subscribers in Q3 and disappointing investors, NFLX went big in Q4 and added 8.5 million, way above the 6.4 million analysts had expected. Maybe more important, the company said it's "very close" to being cash-flow positive. The ability to self-finance growth is a challenge faced by many of today's so-called "disruptors" who, at some point, must rely less on narrative and more on profitability. If NFLX is approaching this point, that says good things about its future as more than a "disruptor" in a very competitive space. Turning to bank earnings--since we're almost done with the bulk of them--Bank of America Corp (NYSE: BAC) stock took some static yesterday immediately after releasing its results in part because of a small miss on the revenue line. But there were things to like and the stock didn't end up falling too hard. Specifically, loans rose 8% in the quarter. Also, the bank said it released $828 million in reserves it had set aside on loans in case of possible default during the economic downturn. If you had just one thing to look at every quarter to get a finger on the economy's pulse, bank loans might be a good one. If banks feel comfortable extending credit and giving loans to businesses, that's a sign of expectations for a robust economy ahead. So why are bank stocks dragging? It could be pretty simple, actually. Look how far they'd rallied going into earnings. Maybe most of the good news was already priced in. That's one theory, at any rate. Elsewhere in the corporate world, an analyst put the first $1,000 price target on Tesla Inc (NASDAQ: TSLA), but other car companies are also rolling right along as investors note that the General Motors Company (NYSE: GM) of the world are also pretty good at building cars and are getting more involved in the electric vehicle space. Earnings Results, Estimates Slowly Improve On a wider note, by the end of last week, investors had seen Q4 results from 26 S&P 500 members, or 5.2% of the index's total membership, according to Zacks Investment Research. Total earnings for these 26 companies were up 7.6% from the same period last year on 1.9% lower revenues, with 96.2% beating EPS estimates and 73.1% beating revenue estimates. In addition, 56 S&P 500 companies have issued positive EPS guidance for Q4, which is above the 5-year average of 34, research firm FactSet reported. None of this guarantees a good earnings season, and in fact, many analysts expect overall earnings to fall year-over-year in Q4. Still, this flow of positive earnings news, along with results from the big banks that don't blow you away but still show signs of new life, could help prolong the rally. One school of thought (and it's not a new one), is that some investors see stocks as the best place in town--at least for now and even with valuations that make some longtime market watchers nervous. The bulls may have a point in saying nothing has really performed like stocks over the last seven or eight weeks as the major indices rode out a new wave of COVID-19, the violence at the Capitol, and rising Treasury yields. The 10-year yield has retreated to a level near 1.1% after rising to nearly 1.2% last week, however. The market seems to be looking past all the problems, including the ones around vaccine logistics. Maybe the thought is that could be a blip, but no one's ever accused stock market traders of worrying too little. At least not until this last year or so.The optimism continued early this week. General Motors Company (NYSE: GM) stayed on a roll with big gains on Tuesday as Microsoft Corporation (NASDAQ: MSFT) announced an investment in GM's autonomous tech division, and CarMax, Inc (NYSE: KMX) had a big day after an upgrade. Some people might be looking at the historically high valuation of Tesla Inc (NASDAQ: TSLA) and seeing companies like GM and Ford Motor Company (NYSE: F) as possible places to diversify their exposure to the future of automotive technology as those companies make progress. Boeing Co (NYSE: BA) and most of the FAANGs also started out strong this week, with BA potentially capturing some interest from investors hoping that vaccine and stimulus could have more people flying soon, perhaps raising future demand for airliners. The fact is, just about everything went up yesterday, and it's hard to say it was "stay at home" or "going out" in the lead. Hearing Treasury secretary nominee Janet Yellen telling Congress that the new administration wants to "go big" on stimulus appeared to put most sectors in a good mood.CHART OF THE DAY: RUT VS. $DJI--NO CONTEST: If comparing the small-cap Russell 2000 (RUT--purple line) to the large-cap Dow Jones Industrial Average ($DJI--candlestick) seems like a David vs. Goliath battle, well, David just won again. This chart comparing them since November shows how the recently approved stimulus and hope for a new one have helped small-caps, which tend to do best in a strong domestic economy. Data sources: S&P Dow Jones Indices, FTSE Russell. Chart source: The thinkorswim? platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results. Nostalgia Rules with Yellen at Podium: It was like old times yesterday as President-elect Biden's choice for Treasury secretary, Janet Yellen, addressed the Senate. Well, not completely like old times, considering Yellen spoke to Congress over a video feed, but aside from that, it was a reminder of those pre-2018 days when Yellen led the Fed and frequently addressed senators. This time she might have raised both positive and negative associations for investors. On the positive side, Yellen said she thinks U.S. companies should be competitive on a global basis on taxes. Some might read into that a message that the new administration isn't in a hurry to raise corporate taxes, which were lowered by the Trump administration and a Republican Congress in 2017. Yellen added that the new administration doesn't feel like now is the time to reconsider other tax cuts from that legislation, due to the economy's struggles. Less positive, from a stock market standpoint, might have been Yellen's commitment to raising the minimum wage and addressing global warming. Whatever you think of those ideas from a political standpoint, some economists have argued both could mean more regulatory pressure on companies and perhaps (according to one school of thought) could hurt small businesses by raising their costs. That's a debate that will probably play out in Congress soon if Biden and Yellen make an effort on the wage front. Daily Riddle: If you want a macroeconomic conundrum, how about this: Even as retail sales and employment looked ugly in December, the underlying "plumbing" of the economy showed new life. Friday's industrial production and capacity utilization numbers both came in above analysts' expectations, with industrial production especially strong. This comes after construction spending also bounced nicely in December and the ISM manufacturing index for December hit nearly two-year highs.Why is this a conundrum? Because consumer spending is so key to all those underlying elements. If people are losing jobs and shopping less at stores and online (as the retail sales report showed), it's hard to understand why the manufacturing sector would be ramping up. Maybe it's the so-called "K-shaped" recovery in which one segment of the population continues to do well despite COVID-19 but many others are in worse shape than ever. Or maybe manufacturers, home builders and others dependent on consumer spending are betting on a strong recovery once vaccines help push back the virus. Or they could be betting on more government stimulus. One question that can't be answered yet: Was the manufacturing sector too optimistic about how quickly the economy would come back? And will it be dragged by heavy inventories in coming months if it bet wrong? Riddles for the future. Better Credit, Better Economy: Another "finger on the pulse" metric for the economy that you can find by checking bank earnings is credit quality. When asset quality increases it helps asset backed-liabilities like bank loans. If you're a bank sitting on loans backed by worthless assets, that's obviously not good. But if they're assets that can improve in coming months, that's better. Default rates are moving down and recovery rates are moving higher. That bodes well for the Financial sector and says good things about the economy as a whole, pointing to an increased availability of capital. Bank of America Corp (NYSE: BAC) extended $2.4 billion in credit to small business clients, up 11%, in Q4.Additionally, the three major banks that reported last week released more than $5 billion combined in loan loss reserves they had set aside in the first three quarters of the year to cover loans going bad as a result of the pandemic, Zacks noted. That's another potential sign of an improving economy, because the banks don't see the need to run for cover like they did last year.TD Ameritrade? commentary for educational purposes only. Member SIPC.Photo by Rene DeAnda on UnsplashSee more from Benzinga * Click here for options trades from Benzinga * Bank Of America And Goldman Sachs Results In Focus Along With Yellen Hearing * Numbers Game For Netflix: Subscriber Growth, Pace Of New Content, New Streaming Competition(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
President-Elect Joe Biden's pick for Treasury secretary sets a market-friendly tone in congressional hearing, lifting investor spirits Tuesday.
By Erik NorlandWhen the pandemic first struck, the Russell 2000 index of small-cap stocks underperformed the S&P 500? by nearly 20%. Investors appeared to view the companies of the Russell 2000 as being more negatively impacted by the lockdowns and more closely tied to U.S. economic conditions than their larger peers. The underperformance coincided with a plunge in inflation expectations.Since equities bounced back from their lows in March, the Russell 2000 has outperformed the S&P 500 by 33%, lifting the ratio of the two indexes to its highest point since May 2019. The relative outperformance of small-cap stocks coincided with a sharp rise in inflation expectations, as measured by the difference in yields on nominal U.S. Treasury 10Y Notes and 10Y Treasury Inflation Protected Securities (TIPS), from a March low of 0.5% to a recent high of 2.1% (Figure 1).Figure 1: The Russell 2000/S&P 500? ratio has tracked inflation expectations since 2010 That the performance of small-cap versus large-cap stocks would track inflation expectations is not a new phenomenon. Since 2010, small-cap stocks have outperformed large caps during periods of rising inflation expectations and vice versa. 2020 was no exception.Looking further back -- the Russell 2000's data history begins in 1979 - the performance of small and large-cap stocks have roughly been similar (Figure 2). However, their ratio has had extremely large moves, at times tracking certain phases of the economic cycle: * Small caps have outperformed during periods of economic turbulence and during the early stages of economic expansion. * Large caps have outperformed in the later stages of economic expansions.Figure 2: Since the Russell's data history began in 1979, it has matched the S&P 500? in price Since the Russell 2000 data history began in 1979, there have been three previous periods when small-cap stocks outperformed:January 1979 - July 1983: The Russell 2000 outperformed the S&P 500 by 77%. During this time, inflation rose to as high as 13% and the economy suffered a double-dip recession in 1980 and 1981-82 before staging an extremely strong recovery in 1983 with growth rates as high as 8.5%.November 1990 - March 1994: The Russell 2000 outperformed the S&P 500 by 50% as the U.S. economy experienced a recession in 1990-91 around the time of the Gulf War and then had a slow "jobless" recovery.March 1999 - March 2011: Small caps outperformed large caps by 116% as the U.S. economy experienced the "tech wreck" recession in 2001, as well as the global financial crisis in 2007-09 and its aftermath. Within this timeline, there was a brief period in late 2006 and 2007 (towards the end of the expansion that began in 2003) when large caps outperformed. Large-cap outperformance during the later stages of economic expansions has been common over the past four decades (Figure 3): * July 1983 - October 1990: As the economic expansion of the 1980s continued, the S&P 500 outperformed the Russell 2000 by 92%. * March 1994 - March 1999: During the last five years of the 1990s economic expansion, large-cap stocks outperformed small caps by 94%. * March 2014 - March 2020: During the later years of the economic expansion in the 2010s, including the first few months of the pandemic, the S&P 500 outperformed the Russell 2000 by 56%.Figure 3: Periods of underperformance and outperformance by small-cap stocks Going forward, the outlook for inflation expectations is unclear. While they have risen substantially from their lows in March, inflation expectations at 2.1% over the next 10 years are not especially high by historical standards. That said, a tight labor market might be a prerequisite for durably higher inflation. Now, with the labor market still significantly disrupted by the pandemic, a demand for higher wages in the U.S. or elsewhere would seem unlikely. However, large budget deficits and continued central bank quantitative easing could help to elevate inflation down the road.As far as the economic cycle goes, during the expansions in the 1990s and 2010s small caps continued to outperform for several years. The same was true during the expansion from 2003 to 2007, when small caps outperformed until the last year of growth. Although smaller U.S. firms were hard hit by the initial lockdowns in March 2020, investors seem to be much more optimistic about their prospects as we begin 2021, despite the continuing impact of the pandemic. Indeed, the Russell 2000 got a much bigger boost from news of the vaccines than did the S&P 500 (Figure 4). It may also be that investors see small-cap firms as being, on the whole, nimbler and more adaptable than their large-cap peers.Figure 4: Small caps rallied most after the November announcements about vaccines Bottom line * Russell 2000 has outperformed during periods of rising inflation expectations. * Small caps have outperformed during economic downturns and early stages of economic expansions. * Small caps rallied more than large caps following news of COVID-19 vaccines.To learn more about futures and options, go to Benzinga's futures and options education resource.See more from Benzinga * Click here for options trades from Benzinga * What Will The Psychedelics Space Look Like In 2021? Experts Weigh In * FTC's Crackdown Against CBD Market Stirs Mixed Feelings Among Cannabis Pros(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Benchmark Treasury yields climbs above 1%, as Uncle Sam gears up to provide more relief to an economy sickened by Covid-19.
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