Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Slovakian Prime Minister Robert Fico’s life is no longer at risk, but his condition remains “very serious” after he was repeatedly shot in an assassination attempt, medics and ministers said. As Fico remained in hospital…
Colin Anderson Productions pty ltd Should “Higher For Longer” read “Normal For Longer?” If you have been sitting around the past year awaiting the Sword of Damocles (5% plus Fed funds) to fall on the market and economy, maybe you should be considering this question: why would rates being higher for longer necessarily disrupt the…
Higher for (much) longer? Federal Reserve officials have been saying that the path to achieving 2% inflation would be a bumpy one. Indeed. Inflation has come in hotter than desired for the first three months of 2024, meaning that “higher for longer” will continue to be priced in by investors. As such, don’t expect any…
Justin Paget/DigitalVision via Getty Images In our January earnings review from Two Harbors Investment Corp. (NYSE:TWO) we rated it a Hold, despite the earnings leaving something to be desired. In Q4, interest rates stabilizing were seen as a benefit for the company, vs. rates that were falling and moving rapidly. The yield curve had been…
SDI Productions BCB Bancorp’s (NASDAQ:BCBP) Q1 2024 was released a few days ago and it was not exciting: Q1 GAAP EPS of $0.32 misses by $0.02. Revenue of $25.25M (-2.1% Y/Y) misses by $0.04M. In addition to missing both expectations, it is clear that the bank is struggling with profitability. The higher-for-longer scenario of rates…
Henrik Sorensen/DigitalVision via Getty Images In our last coverage of NextEra Energy Partners, LP (NYSE:NEP), we talked mainly about everyone’s favorite breakfast item. Toast. Our take is that inflation will prove stickier than expected and even the normalization of the 3-month-10 Year Treasury relationship suggests a 5.5% 10 year note. If that outlook comes to…
Bim As explained in Prof. Robert Jarrow’s book, cited below, forward rates contain a risk premium above and beyond the market’s expectations for the 3-month forward rate. We document the size of that risk premium in this graph, which shows the zero-coupon yield curve implied by current Treasury prices compared with the annualized compounded yield…
bjdlzx Thesis We wrote last August about the exchange traded Invesco S&P 500® Equal Weight Energy ETF (NYSEARCA:RSPG), touting it as an excellent choice to obtain a cross-sectional exposure to U.S. oil and gas, in an environment where tech was the favorite trade. Our original article highlighted how RSPG was unique in offering equal weight…
Hiroshi Watanabe More than half a year ago, I wrote an article on the Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO), outlining a rather bullish thesis on how the combination of relatively relaxed covered call strategy (i.e., distant option strikes from the prevailing market price) and exposure to large-cap names provides an opportunity for investors…
ryasick The inflation outlook looks increasingly uncertain, and despite the Fed signaling its intent to cut rates this year, the reality is no one really knows for sure what happens next. If you’re an investor looking for stable income and low portfolio duration to remove the risk that rates don’t fall or even rise further,…
JHVEPhoto/iStock Editorial via Getty Images Comerica (NYSE:CMA) shares have rebounded solidly from a year ago as the regional banking industry has worked past the worst of its funding crisis. Still, shares are down 25% over the past five years as its deposit base was hard hit in 2023. Since upgrading shares to a buy in…
valentinrussanov/E+ via Getty Images Fiserv (NYSE:FI), not Pfizer or Fiverr, is one of the largest fintech in the world with $94 billion in market cap, $19 billion in annual revenues, and $3 billion in net income. The stock has a multidecade history of outperforming the S&P 500, and over the last 6 months, has accumulated…
tupungato As one of Korea’s big banks, Woori Financial Group Inc. (NYSE:WF) looks poised to benefit from some very powerful tailwinds ahead. The key to Korea’s trade-dependent economy has always been export growth and on this front, recent data points to a very positive rate of change; this, in turn, bodes well for near-term credit…
XH4D/iStock via Getty Images Modine Manufacturing Company (NYSE:MOD) has emerged as a big winner amid the AI-driven tech boom, capturing strong demand for its specialized industrial HVAC solutions. The company’s high-performance cooling systems are critical components for data centers running power-intensive computing. Indeed, shares are up more than 230% over the past year, with the…
Editor’s note: Seeking Alpha is proud to welcome Lake Geneva Investor as a new contributor. It’s easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Premium. Click here to find out more » Gold has held the title of the world’s…
William_Potter The Dimensional Core Fixed Income ETF (NYSEARCA:DFCF) is a great way to play the global investment-grade bond market. Benchmarked against the Bloomberg Agg, or Bloomberg U.S. Aggregate Bond Index, DFCF offers exposure to long-duration bonds and other fixed-income securities that, in the aggregate, are expected to maximize the total return for investors. While the…
SOPA Images/LightRocket via Getty Images Elevator Pitch My rating for South32 Limited (OTCPK:SOUHY) [S32:AU] is a Hold. With my prior update written on September 15, 2023, I touched on SOUHY’s distribution of excess capital to shareholders and the restructuring of the company’s portfolio. I turn my attention to South32’s latest 1H FY 2024 (YE June…
Jitalia17 In December, I raised my rating on the Simplify Short Term Treasury Futures Strategy ETF (NYSEARCA:TUA) to a buy, as I believed the Fed had pivoted and would be cutting interest rates in 2024. Since 2 year yields are closely tied to the Fed’s policy rates, the Fed cutting policy cuts should be bullish…
Phiromya Intawongpan We were wrong about the ARK Innovation ETF (NYSEARCA:ARKK) when we covered the fund back in 2022 suggesting the high-growth and tech-heavy thematic strategy was poised to outperform. ARKK is down about 20% from that article publication date and we’ll admit it’s not one of our finer works. While stocks did indeed rebound…
tum3123 We anticipate a strong 2024 for emerging markets (EM) debt on the back of a significant improvement in the global macro backdrop. While it appears likely that the global economy will continue to gradually decelerate, we believe growth should remain close to its long-term potential. In such an environment, central banks in advanced economies…
ALFSnaiper/iStock Editorial via Getty Images In my prior article on SoFi Technologies (NASDAQ:SOFI) I set out my belief that it makes an abundance of sense to short SOFI at above $10. Data by YCharts And as you can see from the price action above, I was correct in my prediction. The share price momentarily breached…
Boy Wirat As explained in Prof. Robert Jarrow’s book cited below, forward rates contain a risk premium above and beyond the market’s expectations for the 3-month forward rate. We document the size of that risk premium in this graph, which shows the zero-coupon yield curve implied by current Treasury prices compared with the annualized compounded…
BlackJack3D Back in June, I initiated coverage on Zscaler (NASDAQ:ZS) with a “Buy” rating, saying that despite a potential economic slowdown, the company had plenty of room to grow and that its valuation at the time was attractive. The stock has soared over 65% since that write-up, compared to a 14% gain in the S&P…
Pogonici Global X U.S. Preferred ETF (NYSEARCA:PFFD) is an income fund that invests into preferred stocks with a high yield. The fund used to have a pretty stable price around $25 but it crashed in the last couple years as the Fed started to hike rates and signaled that it was determined to keep rates…
NoSystem images A couple of months ago, I was surprised by the large drop in Rivian Automotive, Inc. (NASDAQ:RIVN) shares after a convertible debt offering. While I had been telling everyone that another capital raise was eventually coming, the sooner-than-expected debt deal had investors a bit worried. Since then, Rivian shares have rallied more than…
mphillips007 The average time from a yield curve inversion (long interest rates below short) to the onset of recession has been ten months historically, ranging from 11 to 22 months. October marks the eighteenth month of curve inversion this cycle. Moreover, since June, the yield spread has been flattening out. As we start this trading…
Roman Barkov Ares Capital Corp (NASDAQ:ARCC) has long been my favorite overall Business Development Company (i.e., “BDC”)(BIZD), in large part due to its impressive total return performance alongside its very high and consistent dividend payout. However, it is no longer my favorite overall BDC. In this article, I discuss three major reasons why. Why ARCC…
Feverpitched Dividend stocks have seen an absolute shellacking over the last year. The four defensive, debt-utilizing sectors of renewable power production (RNRG), real estate (VNQ), Utilities (XLU), and Consumer Staples (XLP) have sold off hard as interest rates have surged. Data by YCharts In the last month, long-term interest rates in particular have spiked. Corporate…
Lemon_tm By Ewa Manthey, Commodities Strategist Rising yields and dollar strength weigh on gold Refinitiv Eikon, ING Research A still hawkish Federal Reserve, a strong dollar, and higher yields are weighing on gold. US 10-year Treasury yields hit their highest levels since 2007 this week, whilst the USD index is at its strongest level since…
EllenMoran The TSN Investment Thesis Appears To Be Less Than Promising Here Tyson Foods (NYSE:TSN) is a company that requires no introductions, with many American families likely enjoying some of their meats from time to time, while picking up their offerings at multiple retailers, such as Walmart (WMT) or Target (TGT). TSN has also went…
ThitareeSarmkasat “Higher for longer.” That’s what the Fed says they intend to do with interest rates and investors finally decided to believe them last week. Bond yields, which have been stagnant since peaking last October, finally broke above the trading range they’ve been in for all that time. Short-term rates also moved higher, but not…
SDI Productions Ares Commercial Real Estate Corporation (NYSE:ACRE) is a commercial real estate investment trust with a large portfolio of senior commercial mortgage loans. Though the trust has seen a QoQ improvement in its dividend coverage/payout ratio in the second quarter, I think risks have increased for Ares Commercial Real Estate due to the fact…
Torsten Asmus S&P 500 (NYSEARCA:SPY) was down for 3 straight days after the Fed’s meeting. Fed just announced their most recent assessment of the economy, and we believe there are a few points that investors should consider for the management of their portfolios in 2024. 1. Fed Shifts Attention from Inflation to Unemployment While Fed…
yuelan I last updated investors in Johnson & Johnson, or J&J (NYSE:JNJ), in early April, urging them to capitalize on its capitulation to add more shares. That thesis has worked out well, as JNJ dip buyers held its March lows ($150 level), lifting buying sentiments. Following its remarkable surge into its early August highs ($176…
pixdeluxe/E+ via Getty Images Mohamed El-Erian: “I worry that the economic and policy signals coming out of this Federal Reserve press conference may come across to many as both confused and confusing. Some will deem this an inevitable consequence of this phase of the inflation and policy cycle; others will view it as further evidence…
bephotographers/iStock via Getty Images Today’s analysis provides a systematic opinion on the iShares MSCI Mexico ETF (NYSEARCA:EWW), which is an exchange-traded fund (“ETF”) that tracks the MSCI Mexico IMI 25/50 Index. The iShares MSCI Mexico ETF presents a few interesting talking points, as Mexico’s “higher for longer” interest rate roadmap might intertwine with the ETF’s…
Dilok Klaisataporn The Federal Reserve just announced its interest rate policy decision and decided to keep the federal funds rate at 5.25 to 5.50%. While market watchers tend to key in on the Fed’s rate decision, another important announcement was being made in the form of new quarterly economic projections that investors can use as…
kumdinpitak/iStock via Getty Images Over the past few years, I have shifted from being strongly bullish in mid-2021 to strongly bearish at the peak in May this year. After the recent correction from this peak, I am no longer short the metal. While real bond yields suggest gold should be significantly weaker than it current…
hapabapa Fortinet Stock’s Massive Share Plunge It has been nearly a year since I initiated my coverage of leading cybersecurity solutions company Fortinet, Inc. (NASDAQ:FTNT). I assigned a Hold rating on FTNT in October 2022, broadly equivalent to a market-perform thesis. Accordingly, FTNT has performed largely in line, but still came in below the S&P…
BrianAJackson The streak of negative 2-year/10-year Treasury spreads has now reached 287 trading days, 9 trading days longer than the third longest streak since 1976. The probability that the inverted yield curve ends by February 23, 2024 is now 7.6% compared to 13.1% last week. That means that the current streak is less likely to…
Spencer Platt The GameStop (NYSE:GME) rally driven by the Reddit crowd has been one of the most exciting market events in recent times. I’m sure everyone who watches the stock market knows the story by now. However now that GME stock has somewhat fallen back to earth, has this meme-rally saved the business? Taking a…
photographer Diodes Incorporated (NASDAQ:DIOD), a supplier of discrete semiconductors, released its Q2 report on August 8 that came in mixed. On the one hand, while DIOD is still dealing with a surplus of inventory in the market due to a slump in demand, DIOD also reported seeing initial signs of a recovery in demand. On…
Andres Victorero The iShares 0-5 Year Investment Grade Corporate Bond ETF (NASDAQ:SLQD) tracks bonds with some low degree of credit risk from the US corporate sector. There is some duration risk here, as well as some corporate credit risk. We think markets are discounting the risks of higher rates, as well as the fact that…
Dilok Klaisataporn/iStock via Getty Images Regional bank stocks in the ETF (KRE) have risen by nearly 30% on average since their May lows but are still down around 17% YTD. Accordingly, there is a significant divide amongst investors regarding the discount value potential of regional banks. One notable example is Fifth Third Bancorp (NASDAQ:FITB), which…