EbeneInfo – CA – Inflation may well accelerate

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(Bloomberg Opinion) – It may seem strange to worry about inflation in the midst of a global recession, pandemic and huge political cuts in the US, but I strongly suspect that it is about to recover both quickly and strongly The speed at which this occurs depends on how quickly the developed world recovers over the next few months, but the pressures are increasing As has been the case for many many years, global inflation has marked the ‘Made in Asia’ everywhere This time, however, this will likely be made worse by much greater supply constraints in the economy

First of all, a little humility It is devilishly difficult to forecast inflation In general, the best forecast is that of inflation at the moment Central banks have failed to predict inflation and creating it Indeed, in essence, classical economics largely assumes that, all other things being equal, the increase in the money supply pushes inflation higher And yet, after years of falling rates, d ‘quantitative easing, etc., the only thing that has increased are asset prices It was Apple Inc, so to speak, not apples

So it’s clear that all things are not created equal.Economic models assume that the speed at which money changes hands (its speed, in the lingo) is both stable and predictable.Instead, it collapsed This is why everyone who predicted a massive rise in inflation following central bank QE got it wrong Velocity may rise – your guess is as good as mine – but it doesn’t won’t tell us much about what will happen in the next couple of years as this is more of a long term indicator And there are many signs that inflation is heading higher

Ask yourself the following counterfactual question Did you know that the economy of the developed world would be largely shut down, what did you expect to happen to the prices of traded goods? You probably expected them to collapse But as the chart below shows, they didn’t even drop as much as during the 2015 manufacturing recession, let alone during the global financial crisis.

Prices are now rising sharply, in part because Asian growth is booming Chinese export prices have increased year on year Excluding oil, industrial commodity prices are also now higher than they are were at the end of last year Even if nothing changes between now and the end of spring 2021, year-over-year comparisons will start to look very dramatic – prices this spring are at their point low These trends are already being felt in developed countries US import prices, for example, are rising sharply Prices of durable goods are falling There are signs that service inflation is also increasing

Yet much of the developed world is still in the midst of a pandemic, reducing demand When the vaccine arrives or the virus wears off, demand will intelligently pick up What will happen to prices when will that happen? I strongly suspect that a lot of manufacturing capacity has been lost Both domestically and internationally, transportation is both more difficult and more expensive The vogue for ESG investing has probably also meant a lack of investment in things you loosen from the ground or drop on the foot

Assuming it all takes enough time to get up and running, you would expect these constraints to last. The same is probably true for services Many companies have already gone out of business and many more are at risk falling into the wall The supply potential of economies has therefore suffered serious losses All this means that the path of least resistance when demand picks up is rising prices

Central bank reaction is key They told us they would let the economies run hot What they are really saying is that nothing they did made any difference headline inflation and they don’t know why But let’s take them at their word What would that mean in practice? Would they avoid raising short rates or would they try to hold long rates at a time when government borrowing would likely remain huge? In fact, either would ease monetary policy by lowering real rates when economies – and inflation – are growing strongly.It is not credible and countries that do nothing would likely see their currencies. fall instead, thus pushing imported inflation up

I suspect that private holders of longer-term bonds won’t wait for central banks to change their mind, knowing that they will have to rise at some point Risk is asymmetric Bond yields are insanely low and , sooner or later they will rise, perhaps quickly: there is a lot of leverage in fixed income securities, and bonds with de minimis coupons potentially move much more in price than those that actually pay an interest rate decent

Those with a few gray hairs will remember the surging carnage of 1994 At some point I expect yield curves to widen considerably from current levels Avoid government and corporate debt to longer term and sticking to the very short term seems reasonable Just like buying long term put options out of the money on long term debt

Central banks have been suppressing volatility and rates in debt markets for years It’s about to get a lot harder

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners

Richard Cookson was Head of Research and Fund Manager at Rubicon Fund Management He was previously Chief Investment Officer at Citi Private Bank and Head of Asset Allocation Research at HSBC

Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett is one of the richest people in the world, with a net worth of around $ 86 billion Unfortunately for small retail investors who want to follow in Buffett’s footsteps, buying even a share of Berkshire Hathaway is rather expensiveBerkshire’s Class A shares are trading at around $ 345,000 a share Class B shares for retail investors aren’t necessarily cheap, trading around $ 230 But just because Buffett’s company doesn’t -even has an expensive stock that there are no affordable Buffett stocks to buy Here are five stocks owned by Berkshire Hathaway that are priced below $ 25 per shareRelated link: How Bank Of America Became One Of Warren Buffett’s Best Investments Sirius XM Holdings Inc (NASDAQ: SIRI) Sirius is a radio operator satellite and owner of over 140 content channels The company also owns Pandora Media after a $ 3 billion buyout in 2019 Berkshire owns 50 million shares of Sirius XM worth around $ 320.5 million, and the stock is priced at just $ 6.41 per share Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) Teva is the world’s largest generic drug maker Buffett recently added five new health stocks in the third quarter, but it owns its stake in Teva since 2018 Teva is a classic Buffett value stock, trading at just 35 times future earnings Buffett owns 427 million shares of Teva a va their approximately $ 400 million, and each share costs only $ 9.35 Liberty Latin America Ltd (NASDAQ: LILA) (NASDAQ: LILAK) Liberty Latin America is a member of the Liberty Media Group which was separated from its parent company in 2018 Liberty Latin America is a telecommunications company that serves over 6 million homes in Latin America and the Caribbean The company has two classes of shares, and Buffett owns a combined 46 million shares worth $ 48.1 million The good news is that both share classes are trading at around $ 11.90 per shareSuncor Energy Inc. (NYSE: SU) It has been a brutal year for the oil and gas industry, and Canadian oil exploration and production company Suncor Energy. is no exception Stocks are down 535% since the start of 2020, but Buffett isn’t giving up Buffett urged investors to be greedy when others are afraid, and there is a lot of fear in the world. energy side these daysBerkshire owns 192 million shares of Suncor valued at around $ 296.4 million The stock is priced at just $ 15.44 per share Barrick Gold Corp (NYSE: GOLD) Buffett has always been very skeptical of gold as that investment, which is why many followers were surprised when Berkshire revealed a large stake in gold miner Barrick Gold earlier this year Buffett may anticipate a surge in gold prices after US measures Government’s unprecedented economic stimulus this year Berkshire owns 12 million Barrick shares worth $ 290 1 million Share trades at just $ 24.50 per share Illustration by Joel Stralnic See more Benzinga * Click here for options trades by Benzinga * How Options Traders Play Zoom Video As Spike Coronavirus Case * Josh Brown Loves GM Right Now: «  They Are Going From A Combustion Engine Giant To An Electric Giant  » (C) 2020 Benzingaco m Benzinga does not provide investment advice All rights reserved

Returning on June 5, President Donald Trump said Wall Street legend Warren Buffett made a “mistake” in selling United Airlines (NYSE: UAL) and other airline stocks Buffett has threw away his UAL stock and all of his other airline names in the first quarter
Source: travelview / Shutterstockcom

Regardless of what you think of Trump, he’s right about airline shares Since the end of the first quarter, United shares have risen by around 30% As 2021 approaches, two coronavirus vaccines extremely promising are on their way United appear to be on their way to being one of those long-term recovery games Buffett has been known for over the years But this time he was selling when he should have bought
United Airlines Stock and the Buffett philosophy
I was very puzzled when Buffett sold airline stocks in early 2020 Buffett is well known for his famous quote that investors should be « fearful when others are greedy » and « greedy only when others are afraid”InvestorPlace – Stock market news, Stock market tips & Trading tips
However, I always liked another quote from Buffett that is worded slightly differently.
“The best thing that happens to us is when a big company has temporary problems… we want to buy them when they’re on the operating table,” Buffett said.

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In theory, airline stocks fit this description perfectly United said earnings per share of $ 04 in 2019, up 353% year-over-year Its revenue grew 47% on a year, and the stock was trading at an attractive earnings multiple of around 73 United was a market leader in a critical sector and a value stock offering impressive earnings growth

Obviously, the pandemic has completely crushed the global travel industry, but it was not United’s fault United seems to me to be a clear example of a large company that has had « temporary problems »
Why Buffett sold the stock
At the time Buffett sold the airlines stock, there was no coronavirus vaccine candidate.There was certainly no candidate with efficacy rates potentially above 90% like Pfizer’s vaccines (NYSE: PFE) and Moderna (NASDAQ: MRNA) appear to have
By the time Buffett sold his shares, scientists weren’t quite sure about COVID-19 either.The death rate from the virus ended up being much lower than feared It continued to decline throughout year, doctors who learned the best way to treat patients
There are two main reasons the UAL stock has climbed 30% since late March First, the US government has intervened with an unprecedented economic stimulus
As a result, United and other airlines got $ 25 billion from Washington without any financial conditions. Airlines also expect to get another round of dedicated bailouts in upcoming stimulus package
At the time Buffett sold his airline shares, he had no idea the government would provide virtually unlimited funding to help them get through the crisis.
The other thing Buffett didn’t know was the effectiveness of a potential vaccine The typical influenza vaccine is around 40% effective Moderna’s vaccine candidate is said to be 94% effective and could be widely available by mid- 2021
Is UAL action still a buy?
The hindsight does very little for investors other than educating them on how to trade in the future The trick to airline stocks is to determine if they are likely to rise further in 2021 and beyond
I bought myself some UAL shares at the end of March and am still on board for the long haul
In the short term, United’s finances will be fine, thanks to the government It will likely be completely safe to fly in the course of next year, thanks to the vaccines For me, the only big question for investors is whether and when airline activities will return to pre-pandemic levels
Bank of America expects United to post 2022 EPS of $ 5.70 This is less than 50% of the company’s 2019 EPS However, United shares are currently only trading at a earnings multiple of around seven times that number, which is extremely cheap
Bank of America also forecast United earnings before interest, taxes, depreciation, amortization, and restructuring or lease charges (EBITDAR)
Firm estimates United shares will rise 20% above current levels even if its EBITDAR only recovers 75% of long-term pre-pandemic levels In other words, the stock should trade higher even though the company has definitely lost around 25% of its business For the record, I doubt this last scenario will play out
How to play United’s Stock
Buffet scared off airline investors by selling his shares earlier this year My best guess as to why he did this is that the risk posed by stocks was just too extreme at the time. Now that vaccines and bailouts have alleviated much of that risk, I think United and the other major airlines are good examples of Buffett stocks to buy while there is still some blood on the streets.
As of the publication date, Wayne Duggan held a long position in UAL
Wayne Duggan has been a US News & World Report Investing contributor since 2016 and is a writer at Benzinga, where he has written over 7,000 articles. He is the author of the book « Beating Wall Street With Common Sense, » which focuses on psychology of investing and practical strategies to outperform the stock market
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Elizabeth Holmes, former CEO of Theranos, wants to prevent information about her past income and « luxury » spending from being revealed in court, CNBC reported What happened: Holmes’ defense attorneys have filed a motion to exclude reports showing her income and expenses, as they could turn the jury against the accused « The jury should not be subjected to arguments regarding Ms. Holmes’ alleged purchase of luxury travel, of » good wine « or » delivery of food to his home « , » CNBC said citing the defense team in its request »Many CEOs live in luxury housing, buy expensive (vehicles) and clothes, travel luxuriously, and partner with famous people – as the government claims Holmes did « Holmes had a private jet and several assistants to » do her shopping, « according to CNBC Why it matters: Holmes faces dozens of fraud charges and up to 20 years in prison She and her partner Ramesh Balwan , former president and chief operating officer of Theranos, told investors, board members and the general public that the company’s developing products would be able to diagnose any disease, including cancer and diabetes, from a single drop of blood Privately valued at one point at $ 9 billion, the startup was exposed by a Wall Street Journal investigation and subsequent public review which found that technology was non-existentThe trial is set to begin on March 9, 2021 in San JoseImage: WikicommonsView more from Benzinga * Click here for Benzinga options trades * Wish Files for IPO, recognizes challenges of its supply chain rooted in China * Apple is trying to ` «  Watering Down  » China’s Forced Labor Bill: Washington Post (C) 2020 Benzingacom Benzinga Does Not Provide Investment Advice All Rights Reserved

Larry Summers is « skeptical » of blanket loan cancellation being discussed as President-elect Joe Biden comes to power, saying debt cancellation would benefit « well-off » borrowers the most

« Quarterly baskets of the 10 most widely held stocks by mutual funds and hedge funds outperformed the S&P 500 six and 12 months later, » Citigroup equity strategists said

Total return It is a combination of the growth and dividend generated by a stock The dividend is a bit like a guaranteed return, even if the stock does not perform or if the market reverses
This is why companies that offer dividends are considered shareholder-friendly They return a portion of their net profits to their investors and generally return that dividend, even in difficult times
Plus, even small dividends on stocks outweigh interest from savings accounts, money markets, and CDs You can invest your money at a better price than keeping it in the bank and get an additional growth boost InvestorPlace – Stock News , & stock market tips Trading tips
But that doesn’t mean you can pick any stock that delivers a dividend When times are tough, a company can cut its dividend to keep the business afloat Now, not all companies that pay dividends – some have been paying and increasing their dividends for more than 50 consecutive years

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However, the seven “F-rated” dividend stocks to avoid here are not in that narrow group.They are in struggling industries and struggling to keep their stocks on the rise, and companies running:
Strategic Education (NASDAQ: STRA)
Equity Residential (NYSE: EQR)
Federal Realty Investment Trust (NYSE: FRT)
Kennedy-Wilson Holdings (NYSE: KW)
Energy Transfer LP (NYSE: ET)
CF Industries (NYSE: CF)
Walgreens Boots Alliance (NYSE: WBA)

Dividend stocks to avoid: strategic education (STRA)
Source: Shutterstock

The name might not be familiar, but a few of its products might stand out – Strayer University and now Capella University Both are online and Strayer has 78 campuses around the US with its home campus at Washington, DC
In early November, STRA announced the merger with Capella, which will provide some assistance to the two organizations in expanding enrollment around the US during the novel coronavirus pandemic.
STRA’s recent third quarter numbers were down from last year, due to the pandemic and it also recently sold operations it had in Australia and New Zealand There is also talk of creating a culinary school with Sur La Table
We’re working hard to find a way to be successful in this market, but STRA stock is down 44% year-to-date And another bad quarter or two could mean the dividend could be cut, resulting in the free fall of the action

Residential Equity (EQR)
Source: IgorGolovniov / Shutterstockcom

As a Real Estate Investment Trust (REIT) you would think EQR would have a field day right now
The problem is, EQR is in the apartment rental market in big cities like San Francisco, Boston and New York. It means two things, neither of which is good
First, the pandemic has been particularly difficult in large urban areas due to the density of the population And when these cities close people lose their jobs It means that rent is no longer a reliable source of income
Second, people who still have jobs and work from home are starting to look outside the big cities for work And that means an increase in vacancies
Double whammy hits EQR stock

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The stock is down 26% year-to-date and has a 41% dividend The risk here is that things could get worse before they get better given the resurgence of the pandemic

Federal Real Estate Investment Trust (FRT)
Source: Shutterstock

This REIT has been around since 1962 and has a very good dividend record.But the problem is, while its dividend may be sure, the dividend will not help your return to the stock, as its properties are focused on places where the pandemic is. complicates life for retailers and tenants
FRT focuses on mixed-use properties in high-end markets in major urban centers around the US The problem now is that REIT is exposed to the double whammy of reduced foot traffic for high-end retailers. range (and keeping those storefronts occupied) and reduced interest from homeowners and tenants moving to high density urban areas
And with the reappearance of potential localized lockdowns in major cities as the pandemic worsens, this will continue to affect FRT’s ability to come back at good times.Worst-case scenario, the dividend may be at risk
But even if its dividend remains intact, the stock is down 30% since the start of the year, so its 4A dividend of 7% is a cold comfort as the downside risk increases.

Kennedy-Wilson Holdings (KW)
Source: Shutterstock

Although KW qualifies as an international real estate company, it functions as a REIT enough to be listed in the National Association of Real Estate Investment Trust directory.
It has multi-family properties as well as commercial and hotel properties in the US and Europe This means it is under the same pressures as previous REITs, but globally And its hospitality hub is particularly stressed, since European nations are locked again
There is still some optimism for KW stocks in the markets, but risk levels are rising And its current price / earnings ratio of 28x looks a bit rich for a company with so much risk.

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Also, this P / E is after the stock has sunk 27% year-to-date Given the current situation around the world, thinking that 2021 will be on track for a significant global economic recovery may be a little optimistic And its rich 5 A 4% dividend doesn’t turn as red to black, and it could be in jeopardy if the pandemic has its way this winter

LP energy transfer (ET)
Source: Casimiro PT / Shutterstockcom

The middle energy market – pipelines – is generally a solid place when energy prices are volatile, as these companies act as toll takers for companies using their pipelines. The price of oil and natural gas does not matter to these companies
But what matters is demand And it looks like the US is under siege by Covid-19 and at best that means people will stay close to home Certainly the winter season in much of the country will increase the demand for natural gas for heating, and this is the specialty of the EP
Yet this seasonal demand is built into its pricing and performance models This quarter will certainly be weaker than a year ago
Limited partnerships are the energy version of REITs They reject dividends for investors as a percentage of their net profits But when prices are hit, dividends go up
ET stock is down 53% year to date and it has a whopping 102% dividend It sounds good, but the more it rises, the higher the risk of dividend reduction or elimination. would also be very bad for the stock

CF Industries Holdings (CF)
Source: Shutterstock

This fertilizer company has been around since 1946 so it has seen tough markets over the years And in general, fertilizers are a fairly stable activity
CF is the world leader in converting natural gas to nitrogen It has nine manufacturing plants in the US, Canada and the UK
The only problem is that this sector can be cyclical When economies are strong, the demand for agricultural products increases, as does the demand for fertilizers.
Not so now Although the CF is not in dire straits and will likely make it through this tough global market, it is not time to fish for the ground stock

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The CF stock is down 33% year-to-date, so its 3A 7% dividend won’t save it from a tough year And we don’t know where the bottom is, so think the stock has seen its worst is a risky bet if you hope to sit on that 37% dividend here

Walgreens Boots Alliance (WBA)
Source: saaton / Shutterstockcom

On the positive side, WBA stock has 45 consecutive years of dividend growth On the downside, the stock has been on a significant downtrend since late 2018 At the time it was trading close to $ 85 It is now trading around $ 37
Its fiscal fourth quarter numbers were released in October and they were strong The pharmacy side of the business was strong if unspectacular, same-store sales increased by around 5%
There’s no fear that WBA will disappear from the market But that still doesn’t mean it’s a stock worth owning now.It’s still transitioning from its $ 17 billion purchase to nearly 2,000 Rite Aid stores (NYSE: RAD) in 2018 Given RAD’s difficulties, WBA might not be able to repair some of these stores and this could be a drag on the whole business
WBA stock is down 36% year-to-date, so its 5% dividend is impressive, but that cannot be the reason to rely on this stock’s ability to recover from here
At the date of publication, Louis Navellier does not have any long position in any of the shares in this article Louis Navellier did not (directly or indirectly) have any other positions in the securities mentioned in this article
The InvestorPlace research staff member primarily responsible for this article has not held (neither directly nor indirectly) any positions in any of the securities mentioned in this article.
Louis Navellier had an unconventional start, as a graduate student who accidentally built a stock market beating the market – with returns rivaling even Warren Buffett In his latest feat, Louis discovered the ‘master key’ to profiting from the greatest technological revolution of this (or any) generation Louis Navellier may hold some of the aforementioned titles in one or more of his newsletters
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Its market cap is a modest $ 932 million, and last year it said it barely sold any electric cars. It was a bumpy ride, the stock nearly doubled in the first four days of the last week, after an announcement from the Texas Environmental Quality Commission that two models Kandi plans to launch in the US qualify for tax cuts Then, on Friday morning, stocks fell more than 20% after the company said it would raise $ 100 million through a private placement of shares – the second dry placement in the market in two weeks

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* This weekend’s Barron’s cover article explains why now is the time for investors to start buying overseas * Other featured articles examine emerging market value stocks that are worth the detour, alternative ways to invest in high-priced stocks and the post-vaccine sweet spot for stocks * Additionally, the outlook for a Chinese EV maker, mall operator, banks regional, virtual reality and more The Investors, Put the Rest of the World on Your Radar coverage by Reshma Kapadia suggests that the United States has beaten foreign markets in the past decade, but now is the time to start shopping abroad Among the twenty stock picks from the international roundtable were Alibaba Group Holding Ltd (NYSE: BABA) and Taiwan Semiconductor Mfg Co Ltd (NYSE: TSM) Matt Smith « A small electric vehicle from China is on mad race in the market « shows how Kandi Technologies Group Inc (NASDAQ: KNDI), a Chinese producer of gasoline all-terrain vehicles and electric car parts, embodies the promise (and potential pitfalls) for segment investors. electric vehicles The company plans to launch a small electric car in DecemberIn “The Mall Is Not Dead It’s Time to Buy Simon Property Group Stock,” Liz Moyer argues that Simon Property Group Inc (NYSE: SPG ), Largest US Mall Operator, Uses Financial Strength to Overcome Retail Crisis The article also points out that the REIT has a dividend that earns nearly 7% from Synovus Financial Corp (NASDAQ : SNV) and other stocks in this beaten group have seen a strong rally in recent weeks, notes Carleton English in « 5 Regional Bank Shares To Buy After The Cov Rally id-Vaccine « Find out why Barron’s thinks they have even more benefits In Bill Alpert, » The power of the socket has skyrocketed this year How Walmart and Amazon have also benefited from the green energy rally, « see the two big beneficiaries from one of this year’s market leaders, Plug Power Inc (NASDAQ: PLUG), a pioneer in clean power supplies for forklifts and other gas guzzlers « Emerging market value stocks are worth a look » by Craig Mellow explains why emerging market value stocks look particularly attractive, assuming the growth stock rotation has started Find out if ICICI Bank Ltd (NYSE: IBN) is one of those stocks worth checking out See also: The Bulls and Benzinga’s Bears of the Week: Moderna, Palantir, Tesla and more There are easy ways for novices without a lot of money to start building a wallet in some of the p The big names in the market, such as Amazonom, Inc (NASDAQ: AMZN), according to Daisy Maxey « Daunted by Lofty Share Course? Here Are 3 Ways For Newbie Investors To Get Into The Stock « In » How the Vaccine Age Could Be a Great Spot for Stocks, « Jacob Sonenshine Explains Why Pfizer Inc Vaccines (NYSE: PFE) and Moderna Inc (NYSE: MRNA), and the economic recovery they are expected to bring, might not fuel much inflation Find out how this might benefit stocks Max A « Virtual Reality Doesn’t is no longer just a dream « Cherney says we’ve been talking about virtual reality for decades, but it’s hardly going anywhere However, six years after Facebook, Inc (NASDAQ: FB) paid $ 2 billion for the company virtual reality Oculus deal, the deal could start to bear fruit, thanks to the launch of its Quest 2 Also in this week’s Barron’s: * A value fund that goes beyond expectations * What has helped stocks to exceed Bad Headlines From Last Week * How To Protect Portfolios In A Low Yield, High Volatility Environment * Why Low Volatility Coming Does Not Mean Smooth Trading For Stocks * Five ETFs Ride On The Rebound In Value stocks * Is forgiveness of student loans a bad economy * Bucket list trips booked in record numbers * The ongoing debate over bitcoin’s viability At the time of writing, the author had no positions in the mentioned stocks Keep up to date with the latest news and trading ideas by following Benzinga on Twitter See more from Benzinga * Click here for Benzinga options trades * Notable Insider Buys from Last Week : Avis, Biglari and more * Bulls and bears of the week from Benzinga: Moderna, Palantir, Tesla and more (C) 2020 Benzingacom Benzinga does not provide investment advice All rights reserved

Let me start this note by saying it’s a joy to see General Electric (NYSE: GE) regain respect It’s a great American company that has been in the penalty box too long Until recently that was the end of jokes Some Wall Street pundits added injury insults by downgrading GE stock even when it was $ 7 It was a mistake and investors finally admitted it
Source: Miscellaneous Photography / Shutterstockcom

Today’s rating is going to look bearish, but I remind you that I have recommended it several times before.More recently I suggested that it had upside potential about a month ago At the time, it was not fashionable to be a GE for long Now everyone is on board, but this is where my main caveat lies
Recently, experts like Goldman Sachs blessed it as a great idea for next year My concern here is price, not business failure I have great confidence in GE’s continued success in this long recovery It’s a process, not a moment in time InvestorPlace – Stock news, Stock market advice & Trading advice
Even in the most difficult year on record, GE management finally silenced the naysayers I don’t blame those who sold it last year The company gave us plenty of reason to doubt it The embarrassing stories that unfolded along the way are the ones they write about in the books But eventually, and after many shift changes, they put together a team that got the job done. Now it’s still a massive company with nearly $ 100 billion in revenue last year It’s 60 times bigger than Shopify (NYSE: SHOP) and 153 times bigger than Zoom (NASDAQ: ZM)
Yet each of them has a larger market cap than GE.

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In addition, the company structure is clearer than ever General Electric operates in four major segments Three of them are currently hot topics, including energy, health and renewable energy The fourth, unfortunately, swimming upstream – the aviation industry grapples with the spread of Covid-19, but it’s also on the mend
The valuation of GE shares is not yet a problem
Valuation is important, and it gets a little more difficult in the short term This is good for now because in absolute terms a forward price / earnings ratio of 24x is not inflated But it is at a level where investors generally seek growth
Management has just restructured its operations so measuring sales against the past is misleading It will normalize over time In the meantime this could become a sticky point for critics Remember I’m a GE fan so I have a good idea of ​​this potential friction

The GE stock is now selling at one-time sales There are absolutely no baked hops in it This means that investors are completely realistic and know what they are doing by owning it If I am long in the stock I can stay there long term In the meantime those looking to get in now should be patient There might be better starting points lower and soon
The other reason I’m hesitant to launch significant new positions now is the extrinsic risk of indices They just won’t stop setting new highs, even in the face of bad news This leaves the door open for a correction in the blind side As it stands, my guess is it would be an ordinary plunge If it happens, it would provide great opportunities to buy GE shares
Starting partial long positions is a happy medium It relieves the itching and eases the feeling of FOMO that runs through us all
Patience is a virtue now
Source: Charts by TradingView

Technically, there are also reasons to temper short-term enthusiasm as well GE stock is up 60% from the September low and 45% since my last write It deserves a rest It is now near the retracement of Fibonacci at 50% Correction Pandemic Crash Another smaller sign is the Nov 18 candle that looks like an island This is now becoming a hurdle for the bulls to overcome These are not stock killer concepts, but simple ones reasons to pause or make a rally go away I don’t expect a complete collapse, but entry into the stock would make a lot more sense of $ 1 less
I expect there to be support throughout $ 8 so it’s not short here But there is also level resistance from previous battles Zooming out on the weekly chart also shows that ‘he entered a pivot zone He’s been in contention since the 2018 crash
Basically he’s trying to get out of a hideous down-treble channel and he’s hit the edge of it It’ll take a few tries to break through The bulls can possibly do it, but it’ll be a slog from here Most of the easy work is made
At the date of publication, Nicolas Chahine did not hold (neither directly nor indirectly) any position in the securities mentioned in this article.
Nicolas Chahine is the Managing Director of SellSpreadscom
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Do we finally have blue skies for airline stocks? It’s too early to ring it all, but things are sure to improve Pfizer’s (NYSE: PFE) vaccine breakthrough announcement last week sparked a seismic shift in the stock market Traders have started to dump their stocks tech and work from home while buying airlines, cruise lines, restaurants, retailers and other pandemic recovery actions
And that makes a lot of sense Since then we’ve heard even more positive news For example, the Moderna vaccine (NASDAQ: MRNA) has also shown great results in clinical trials, providing the world with a safety net if something goes wrong. with the Pfizer candidate
As such, we can hope to start hoping for a post-pandemic world once and for all InvestorPlace – Stock News, Stock Market Tips & Trading Tips

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So, with the aviation and aerospace sectors on the mend, traders can start making moves under these names Here are the outlooks for seven major airline stocks:
United Airlines (NASDAQ: UAL)
Southwest Airlines (NYSE: LUV)
American Airlines (NASDAQ: AAL)
Delta Airlines (NYSE: DAL)
Hawaiian Airlines (NASDAQ: HA)
Volaris (NYSE: VLRS)
Copa Airlines (NYSE: CPA)

Airline stocks to buy: United Airlines (UAL)
Source: travelview / Shutterstockcom

United Airlines is in a middle ground, as far as the big US carriers go Its financial situation is much better than that of the United States, which allows it to have some flexibility.However, its situation is more precarious than that of the Southwest or the Delta As a result, the UAL action is potentially the most intriguing of the big four airline actions It has a wide range of potential results – from very good to near-fading
So far things appear to be going pretty well for United, however that said, analysts expect United Airlines to lose $ 26.50 per share of earnings in 2020 This is not a printing error – the company is set to lose something in the order of $ 7 billion or $ 8 billion for the year Analysts also expect another large loss for 2021, just over $ 4 per share
Given that UAL stock started the year at $ 90 – before there was a pandemic – and lost around $ 30 outright to its negative profits, it’s highly unlikely that stock will return to more. $ 60 per share anytime soon Factor in longer-term loss of demand – and the negative effects of United’s capital increase this year – and the market price now makes sense.
If the UAL stock was worth $ 90 before, it probably isn’t worth more than $ 40 or $ 50 per share now Therefore, stocks look pretty affordable at the moment.

Southwest Airlines (LUV)
Source: Eliyahu Yosef Parypa / Shutterstockcom

In 1978, the government deregulated the airline industry This allowed airlines to compete directly on price and to launch competitive price and market share wars against each other. It also allowed old regional airlines like Southwest to compete nationally.This deregulation was devastating for most airlines – in fact, all but one of the country’s major airlines subsequently went bankrupt.
The only exception? Southwest Airlines Incredibly enough, the LUV stock has produced a total return of around 36,000% since deregulation was enacted in 1978 This is a very good number for a company in such a historically difficult industry.
Southwest’s earlier superior returns hinged on a few key distinct edges For a long time the company had some of the best fuel hedges in its class, insulating it from the high oil prices that crushed other airlines between 2007 and 2012 The company also had a much lower cost base than other airlines as it avoided expensive unionized labor contracts and expensive big city airports.
In recent years, however, many of the Southwest’s old advantages have eroded The firm is no longer a rambling upstart but rather one of the big dogs As such, its ability to function distinctly has slipped by a degree In other words, don’t expect LUV stock to be the big winner it was before.

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Yet with a blue chip balance sheet and wise management, Southwest is an excellent choice for investors seeking a secure position among otherwise volatile airline stocks.

Delta Airlines (DAL)
Source: Lerner Vadim / Shutterstockcom

Of the three big traditional carriers, Delta entered 2020 with the best financial position by far It gave the company a ton of flexibility to deal with the pandemic DAL avoided committing to the level of dilution and sales assets that other major carriers had to endure
In addition, Delta’s losses were a smaller proportion of its previous valuation To put some numbers on that, DAL stock has traded around $ 60 as 2020 approaches Now analysts expect to lose just over $ 10 a share this year – a much better ratio than United All of this to say that Delta has seen much less degradation of its pre-pandemic value than its rivals.
Currently, Delta stock largely reflects this advantageous position – its stock is only down about 36% for the year.As the safest game of the three main traditional airlines, DAL stock is a reasonable choice here Assuming air travel picks up speed early next year, the stock could return to the $ 50 mark in the next few months This makes it one of the most promising airline stocks.

American Airlines (AAL)
Source: GagliardiPhotography / Shutterstockcom

Next on my airline stock list is American Airlines, which had a terrible 2020 As the pandemic approached, the company was arguably the most aggressive of the major airlines It took tens of billions of dollars in debt largely to buy back more of its own stock
It seems Americans believed the airline industry had overcome its previous problems and would be profitable forever. In 2017, CEO Dough Parker said of the airlines, “The old world was dark, but now it was dark. ‘is the light […] I know I look like an evangelist talking about this « He continued, » I don’t think we’re ever going to lose money again  »
Of course, that faith was misguided And because the American spent so heavily on share buybacks and other unnecessary expenses, he entered the pandemic with the most debt of all the major carriers.

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As a result, American has had to massively dilute shareholders to raise cash and keep the lights on, and as its losses mount, the company will be forced to issue even more stocks and high yield debt. This will keep a lid on the AAL share price

Hawaiian Airlines (HA)
Source: Shutterstock

Although Hawaiian Airlines is not the most well-known U.S. carrier, it stood out from other airline stocks last week.
Last Monday – the day Pfizer vaccine news hit – HA stock was the biggest gainer in its industry Stocks soared more than 50% HA stock’s ability to rise so much in one day testifies to both the risk and the opportunity associated with the regional carrier
What makes Hawaiian Airlines unique? Namely, the business is a heavy game on tourism According to the State Government of Hawaii, the state has suffered much worse than the national economy as a whole Analysts see Hawaii’s economy to contract 123% for the whole of 2020 This is much worse than the 5% contraction the US economy is expected to face during the year
The reason for Hawaii’s striking underperformance isn’t hard to pinpoint – tourist arrivals to Hawaii fell 988% in the second quarter year-over-year (year-on-year) Missing tourists meant missing the sale of tickets for Hawaiian Airlines In addition, the collapse of the tourism industry has dealt a blow to local businesses in Hawaii as a whole
But the good news is that if Hawaii is among the hardest-hit states, it could be on the verge of making a huge comeback.Assuming the vaccine is successful and becomes widely available soon, the company’s shares could allow for a stunning recovery. Already, the state government of Hawaii has lifted its old mandatory 14-day self-quarantine for passengers arriving on the islands And Hawaiian Airlines still had $ 979 million in cash at last earnings report
Combine these factors and Hawaiian Airlines should have enough runway to last until tourism comes back to life in 2021.

Volaris (VLRS)
Source: Shutterstock

Another airline stock pick that investors should consider is the Mexican hyper-discount Volaris The company is attractive for several reasons compared to much of its US-based competition
On the one hand, Volaris has a much lower cost base as it pays a lot of its expenses in Mexican Pesos rather than US Dollars – for example, the difference in salary between a pilot based in Mexico City and New York can be. considerable More broadly, the company is run with an ultra low-cost structure It has a simplified and slim flight offer with a minimum of frills
This means that, historically, Volaris has had more correlation with the price of oil than other airlines This is because jet fuel proportionately represents a much larger share of Volaris’ cost base – therefore – given the current economic downfall – airline profits more than competitors The cost of jet fuel has fallen and this matters much more to Volaris’ bottom line than competing airlines that have overheads in other areas
In addition, Mexico’s aviation sector is already booming Based on figures filed by three of Mexico’s publicly traded airport operators – ASUR, PAC and OMA – traffic has now returned to 55% of its normal level This is well ahead of what we are seeing in US and Europe Volaris itself has returned to 82% of normal traffic levels, absorbing passengers from struggling competitors

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Mexico had a huge wave of Covid-19 this summer, but it quickly passed out As a result, it was able to return to something like normal much faster than the rest of North America The country has already opened its international borders and tourism sector for months This should greatly benefit Volaris in the coming months VLRS shares have already risen in recent weeks, but consider buying in case of withdrawal

Copa Airlines (CPA)
Source: Carlos Yudica / Shutterstockcom

When it comes to Latin America, the last choice on my list of airline actions is Copa, Panama’s main airline.While Panama itself is a small market, Copa has an extensive hub system and of rays stretching from the United States to South America via Panama City Central Airport And – for what it’s worth – the CPA has historically surpassed most of its peers, both in North America and in Latin America
This is in part due to specific competitive advantages For example, there is no major rival airline in most Central American countries This has allowed the Copa to charge unusually high fares on short journeys in and around its main airport in Panama City More broadly, management has also avoided the temptation to grow too quickly, eschewing the empire building that brought down now bankrupt rivals Latam (OTCMKTS: LTMAQ) and Avianca (OTCMKTS: AVHOQ) These core strengths should help the CPA title. to continue its recovery in the future
As of the publication date, Ian Bezek does not hold (neither directly nor indirectly) any position in the securities mentioned in this article.
Ian Bezek has written over 1,000 articles for InvestorPlacecom and is looking for alpha He also worked as a junior analyst for Kerrisdale Capital, a $ 300 million New York-based hedge fund You can reach him on Twitter at @irbezek
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