JHVEPhoto The Information Technology sector continues to trade with a premium valuation. According to FactSet, the IT space sports a 26.5x forward operating earnings multiple – better than six turns more expensive than the S&P 500. The P/E is also above the sector’s 5- and 10-year averages. Of course, the premium is at least partly…
Adam Gault All eleven sectors of the S&P 500 (SP500) finished higher last week to end a three-week losing streak for the index that was instigated by fears of stalled progress on inflation and a “higher-for-longer” interest rate policy from the Federal Reserve. Reigniting investor enthusiasm were earnings reports from some of our largest technology…
Jose Luis Pelaez Inc/DigitalVision via Getty Images Intro We wrote about Pilgrim’s Pride Corporation (NASDAQ:PPC) (Chicken & Pork Distributor) in December last year when we reiterated our ‘Hold’ rating in the packaged food outfit. Shares, however, have continued their ascent in recent months with the stock now up over 75% since their June lows of…
Pobytov/E+ via Getty Images Purpose I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to “mark your…
Hispanolistic/E+ via Getty Images The March jobs report came in at 303,000, which was significantly more than expected. Initial expectations had been for 200,000 jobs and FOMC hawks have been talking about no cuts this year, yet markets rallied. While the market initially sold off, it recovered shortly after the report. The headline unemployment number…
Anchiy/E+ via Getty Images Summary Following my coverage of Life Time Group Holdings (NYSE:LTH), for which I recommended a buy rating as I believed the fundamentals were actually improving, this post is to provide an update on my thoughts on the business and stock. I reiterate my buy rating for LTH despite the lower growth…
monsitj Financial markets have long been considered discounting mechanisms because of their tendency to move up or down in advance of real world economic developments they are supposed to reflect. Following the Great Financial Crisis, the Federal Reserve manipulated the discounting mechanism of the free market by reducing the cost of money to zero and…
champc With the month of February coming to an end this week, a majority of 2024 is still before us. As the year began, many strategists predicted up to six Fed Fund rate cuts by the Federal Reserve. The first cut was anticipated to occur in March, but economic data and Federal Reserve commentary has…
DNY59 By Ryan J. Puplava Executive Summary In this article, I’ll cover some of the key stories of 2023 and then focus on the likelihood of a soft landing for the economy with a look at monetary policy, economic growth, the earnings outlook, and geopolitical risks. Monetary Policy In two years, the Fed raised rates…
xavierarnau By Andrea Deghi, Financial Sector Expert, Global Financial Stability Analysis Division, IMF’s Monetary and Capital Markets Department; Fabio M. Natalucci, Deputy Director, Monetary and Capital Markets Department; and Mahvash S. Qureshi, Assistant Director and Division Chief, IMF’s Monetary and Capital Markets Department The commercial real estate sector has been under intense pressure globally as…
hansenn/iStock via Getty Images By Andrew Prochnow It’s been nearly 30 years since the Federal Reserve pulled off the last “soft landing” in the U.S. economy. Back in the mid-1990s, the Federal Reserve raised benchmark interest rates to fight inflation, much as it has done over the last couple of years. And once inflation was…
DNY59 The New Year got off to a bit of a rocky start as major indices (DJIA, S&P 500® and Nasdaq Composite) ended lower for the first week of the year, marking the first down week after a 9-week winning streak. In the continued 2023 trend of “good news is bad news,” it was strong…
Watcom At the beginning of the year, I wrote a cautious article on the Western Asset/Claymore Inflation-Linked Opportunities & Income Fund (WIW), warning that a ‘higher for longer’ Federal Reserve may prove to be a headwind for the duration-heavy WIW fund. I also warned that the WIW fund will likely retest its October 2022 lows,…
Tinnakorn Jorruang Soft-landing has been promoted as a solution to the economy’s ills. Let me ask a simple question. Which ones does it solve? Dueling mandates There is nothing in the history of soft-landings that would make any of us think that the soft-landing strategy is a rabbit being pulled out of the hat to…
DNY59 It now appears that the economy is set for a soft landing, that is, a reduction in inflation while economic growth remains positive and avoids high unemployment rates or even a recession. Although soft landings resulting from when the Fed raises interest rates to avoid too high inflation are relatively rare, it looks now…
Althom/iStock Editorial via Getty Images Designer Brands (NYSE:DBI) manufactures and retails footwear in North America. The company operates retail chains called DSW Designer Shoe Warehouse and The Shoe Company, and shoe brands such as Jessica Simpson, Vince Camuto, and Lucky Brand, along with the recently acquired Topo Athletic and Keds. The stock hasn’t had a…
alvarez Back in March 7, 2023 I wrote about the Spirit Airlines, Inc. (NYSE:SAVE) and JetBlue Airways Corporation (JBLU) deal. At the time, my position was that: 1) a likely deal failure was priced in; 2) there wasn’t much downside if the deal failed; and 3) there was a lot of upside if the deal…
peterschreiber.media It’s a rough time in the EV auto space. Tesla (TSLA), specifically, has endured significant selling pressure following strong rallies earlier this year. Fundamentally, lower sticker prices for the firm’s vehicles is certainly a worrisome trend – and that is seen in softer quarterly sales trends. Still, a ‘volume over price’ strategy could be…
Maksim Labkouski Hopes of a soft landing for the US economy will be encouraged by an improved situation seen in October, with headline flash PMI rising to a three-month high. Future optimism also improved, in part due to hopes of interest rates having peaked, something which looks increasingly likely given a further cooling of inflationary…
coldsnowstorm/iStock via Getty Images It’s been a tough year for Sensient Technologies Corporation (NYSE:SXT), recognized as a leading manufacturer of colors, flavors, and specialty ingredients within the chemicals industry. Soft sales and lower earnings amid a challenging macro environment have pushed shares down more than -20% this year. The company just reported its latest quarterly…
Portugal2004 As I briefly mentioned the last time I covered the firm, emerging markets and ‘premiumization’ (i.e. driving higher prices) likely represent Heineken’s (OTCQX:HEINY)(OTCQX:HINKF) best shot in terms of long-term earnings growth. At the end of the day the global brewers, of which Heineken is #2 to Anheuser-Busch InBev (BUD), only have so many drivers…
DNY59 As we near the end of what has historically been the worst performing two months of the year for the stock market, and the pullback intensifies, the chorus of warnings from the bear camp grows louder. The economic data is perceived to be either too hot, suggesting interest rates will stay higher for longer,…
StockByM Real Estate Weekly Outlook U.S. equity markets slumped for a third-straight week while benchmark interest rates returned to the cusp of multi-decade highs after inflation data showed a modest reacceleration in price pressures driven by resurgent oil prices. The disappointing setback follows several quarters of goods-driven disinflation, which was needed to offset some hints…
ebrublue10 Twist Bioscience (NASDAQ:TWST) is slowly making progress in its core SynBio and NGS businesses, but its Biopharma business has execution issues and investment in data storage is being scaled back, potentially delaying commercialization. A greater focus on costs is leading to an improvement in margins, which should continue into FY2024 as production at the…
Soft money is considered through two different concepts. Firstly and generally speaking, it’s a type of money, like paper currency or fiat money, that stands in contrast with hard money. Hard money has physicality, like gold, silver or any other metal-coined money, or it is hard coded to be scarce, like bitcoin. Soft currency is…
G0d4ather Listen below or on the go on Apple Podcasts and Spotify. Rob Isbitts and Matthew Tuttle return to discuss monitoring yields and why Fitch downgrading U.S. debt from AAA to AA+ is not that big of a deal (1:00). AI rally, rate hikes and what other shoes might drop (3:00). Extending bond duration, taking…