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For our beach investors… drink a Moscow Mule and get paid.
These are the best rates you can find in the fixed-income markets:
CDs (New Issues): 5.25% at 1yr
U.S. Treasury: 5.38% at 6mo
U.S. Treasury Zeros: 5.01% at 6mo
Agency/GSE: 5.41% at 2yr and 3yr
Corporate (Aaa/AAA): 5.20% at 10yr
Corporate (Aa/AA): 5.42% at 3mo
Corporate (A/A): 7.43% at 10yr
Corporate (Baa/BBB): 16.43% at 3mo
Municipal (Aaa/AAA): 4.62% at 6mo
Municipal (Aa/AA): 4.70% at 10yr
Municipal (A/A): 4.70% at 10yr
Taxable Municipal*: 5.89% at 30yr+
For our street investors… face the wall with sentiment analysis and adjust your trading for Today (May 22th, 2023):
Several key themes could impact the SPY (SPDR S&P 500 ETF Trust) and the overall trading environment.
Monetary Policy and Interest Rates: The remarks from Fed's Kashkari suggest that the central bank may not end the hiking cycle even if there's a pause in June. This could potentially bring some volatility to the markets, as increased interest rates generally tighten financial conditions and may weigh on economic growth. Moreover, persistent concerns over the debt ceiling could add to market jitters.
M&A Activity: Several merger and acquisition deals, like Ironwood acquiring VectivBio, Chevron buying PDC Energy, and Mizuho's takeover of Greenhill, indicate robust corporate activity. This could be a positive driver for the SPY, as it often suggests businesses are confident in the economic outlook.
Tech Sector Valuations: The commentary on Nvidia's 'heroic' valuations suggests that parts of the tech sector might be overextended. High valuations can sometimes lead to sharp pullbacks if earnings disappoint or market sentiment shifts.
Commodity Prices: The drought affecting Kansas farmers could push up wheat and other commodity prices, potentially stoking inflation fears further. Higher commodity prices might weigh on consumer spending and corporate profit margins.
Geopolitical Factors: Escalating tensions between Russia and Western nations, as well as issues related to Chinese chipmakers, could introduce a degree of geopolitical risk to the markets.
Sentiment Analysis:
Overall, market sentiment today seems to be mixed with a leaning toward caution. A mix of optimism comes from M&A activities and concerns about monetary policy and interest rates, geopolitical tensions, and certain sectors' valuations. Investors may want to adjust their strategies by adopting a more defensive posture, considering diversification across different sectors, and focusing on quality stocks with strong fundamentals.
As a note, please remember that while this analysis is comprehensive, it does not represent personalized financial advice, and individual investors should consider their risk tolerance and investment objectives before making any decisions.
Please also keep in mind that news events and market sentiment can change rapidly, and staying informed and adaptable is crucial for successful investing.
Today’s earning releases. What to expect?
1. CI&T Inc. (CINT): The news highlights a recent Q1 earnings report showcasing solid results and a substantial 33.9% Q/Q sales growth. However, this is weighed against a significant EPS Q/Q drop of -35.2%. Given the mixed financials and the fact that the stock has lost 72% over the past year, the sentiment appears negative. This might put pressure on the stock and could contribute to volatility in the technology sector.
2. Catalent, Inc. (CTLT): The sentiment is significantly negative. The company has recently cut its annual revenue forecast due to operational challenges and delayed the publication of its quarterly results. This has already caused downward pressure on the stock. Such news can raise concerns about the healthcare sector's stability, potentially affecting the S&P500 (SPY) and increasing the VIX.
3. Deere & Company (DE): Deere has a positive sentiment. It reported Q2 earnings and revenue surpassed estimates and has raised its annual profit outlook due to strong equipment demand and improving supply chain conditions. This could boost confidence in the industrial sector and contribute positively to the SPY while likely reducing the VIX.
4. Foot Locker, Inc. (FL): The sentiment for Foot Locker is quite negative. The company has drastically reduced its annual forecast due to weak demand and heavy discounting. This could negatively impact the retail sector and increase market volatility, contributing negatively to the SPY and increasing the VIX.
5. RBC Bearings Incorporated (RBC): The sentiment appears to be neutral to slightly positive. The company announced its fiscal 2023 fourth-quarter results, but the actual content is not given in the news provided. The massive Q/Q EPS growth of 677.3% is a positive signal, yet the high P/E ratio might concern some investors. More details would help determine the potential market impact.
Note: This is not financial advice but an analysis based on the data provided. Investors should do their own research before making any investment decisions.
From last week’s top losers, any overseen trade from the news? Let’s take a look to see if you can be the first to get in line and profit from the overreactions.
Global-e Online Ltd. (GLBE): Global-e Online, an internet retail firm from Israel, recently posted its Q1 2023 results. The Q/Q EPS dropped by 18.00%, but the company saw a 69.20% rise in sales Q/Q. Even though the company is not currently profitable with a negative EPS, it's projected to grow its EPS by 28.30% next year. Given its EPS growth over the next five years, it is a potential long-term play. Nevertheless, investors should carefully watch the company's ability to become profitable and manage future growth.
HEICO Corporation (HEI): American aerospace and defense firm HEICO Corporation recently agreed to a major acquisition that may fuel its future growth. With a healthy EPS growth of 15.40% this year and anticipated growth of 15.79% next year, the firm's steady performance seems promising. Although its P/E ratio is relatively high, its robust sales Q/Q growth of 26.60% indicates a strong market presence. Investors looking for stable growth might find HEI appealing.
Lufax Holding Ltd (LU): China-based Lufax Holding operates in the credit services sector. Despite a recent drop in EPS Q/Q of -132.60% and sales Q/Q of -22.20%, it anticipates a significant EPS growth of 38.50% next year. The company's dividend yield is attractive at 6.33%. Investors should remain cautious due to the negative Q/Q figures but keep an eye out for potential future growth.
Nordson Corporation (NDSN): USA-based Nordson Corporation operates in the specialty industrial machinery industry. Despite a minor drop in EPS Q/Q, the company has displayed a strong EPS growth this year and is projected to continue this trend. Its dividend yield of 1.20% could also attract income-focused investors. While the company faces cost headwinds, it might hold potential for long-term investors given its past and projected future EPS growth.
Ryanair Holdings plc (RYAAY): Ireland-based airline Ryanair Holdings swung to a profit as European travel rebounds. The company shows a strong Q/Q EPS growth of 309.40% and sales Q/Q growth of 57.30%. With an EPS growth of 76.70% this year and an anticipated 11.70% next year, the stock could provide solid growth prospects in the recovering travel industry.
Full Truck Alliance Co. Ltd. (YMM): Full Truck Alliance, a Chinese software application company, recently announced its Q1 2023 results. While the company's current P/E ratio is quite high, it's projected to drop significantly next year due to an anticipated EPS growth of 59.30%. Despite a short float of 4.15%, which may indicate some market skepticism, the Q/Q sales growth of 34.50% can't be ignored. This could be an interesting growth play for risk-tolerant investors.
