Seaside Profits

For our beach investors… drink a Margarita and get paid.

These are the best rates you can find in the fixed-income markets:

• CDs (New Issues): 5.25% (9 months and 1 year)

• U.S. Treasury: 5.23% (6 months)

• U.S. Treasury Zeros: 4.91% (6 months)

• Agency/GSE: 5.50% (2 years)

• Corporate (Aaa/AAA): 4.76% (9 months)

• Corporate (Aa/AA): 5.41% (3 months)

• Corporate (A/A): 7.25% (10 years)

• Corporate (Baa/BBB): 15.89% (3 months)

• Municipal (Aaa/AAA): 4.50% (3 months)

• Municipal (Aa/AA): 4.48% (3 months)

• Municipal (A/A): 4.56% (20 years)

For our street investors… face the wall with sentiment analysi/s and adjust your trading for Today (May 18th, 2023):

Positive news regarding the US debt ceiling deal could bring about a bullish sentiment to the overall market, potentially causing an upward movement in the S&P 500 index (SPY) as investors gain confidence in the US government's ability to manage its debt. The anticipation of the resolution to the debt ceiling standoff is likely to decrease market volatility, possibly pushing the VIX lower.

The earnings reports of several companies, including Walmart (WMT), Canada Goose (GOOS), and Bath & Body Works (BBW), beat expectations. Positive earnings news often results in increased investor confidence, possibly causing an uptick in these companies' stock prices and lifting the overall sentiment.

However, there's negative sentiment around certain industries and regions. India's biggest airline posting profits short of expectations may negatively impact this sector, and the overall performance of Indian stocks could be negatively impacted. The statement from the Bank of England on not returning the balance sheet to pre-financial crisis levels and concerns about the stability of the world economy could cause investors to exercise caution.

Investors should also look at Eli Lilly's (LLY) positive update on a mid-stage trial for rheumatoid arthritis, which could drive its stock higher. The acquisition of Urstadt Biddle Properties by REIT Regency Centers (REG) in a $1.4 billion all-stock deal could affect these companies' stocks and the REIT sector.

Debt ceiling discussions and debt-related issues seem to be central themes. Thus, market participants should be prepared for potential volatility around these events.

A $1 trillion T-Bill deluge is a potential risk if a debt-ceiling deal is struck. This could lead to increased borrowing costs and might create a more risk-off environment.

While assessing the news, keep in mind that sentiment analysis is not a perfect predictor of market behavior and should be used in conjunction with other forms of analysis. Also, consider that sentiment can change quickly based on new information or shifts in broader market conditions.

Today’s earning releases. What to expect?

AMAT (Applied Materials, Inc.) According to the Street, Applied Materials is heading into earnings with a bullish sentiment. The sentiment is strong, with a 1.2% EPS Q/Q and a forward P/E of 18.51. Although an EPS decrease is expected next year, the projected EPS growth over the next five years is positive. This suggests a long-term growth potential, despite potential short-term volatility. However, investors should closely monitor today's earnings release for indications of continued momentum or potential concerns.

BABA (Alibaba Group Holding Limited) Alibaba's recent earnings beat was overshadowed by news of a potential spin-off of their cloud unit and missed revenue estimates. These factors may introduce uncertainty in the short term. However, the company’s forward P/E of 10.43 and the expected EPS growth next year suggest a potential undervaluation, making it a possible long-term consideration. Investors should closely watch how the cloud unit spinoff is received and keep an eye on China's regulatory environment.

BEKE (KE Holdings Inc.) With negative EPS, a decline in sales Q/Q, and negative EPS growth this year, BEKE is showing weak fundamental signs. However, the strong EPS growth projected for the next year and the next five years, along with the recent announcement of Q1 2023 results, could spark interest from investors betting on future growth. Investors should carefully weigh these conflicting signals.

GRAB (Grab Holdings Limited) Grab has been posting strong Q/Q sales growth and Q/Q EPS growth. While the company still operates at a loss, the trend of EPS growth this year and expected next year is a positive sign. Its earnings release today should be closely watched for further indications of growth or challenges to its business model.

ROST (Ross Stores, Inc.) Ross Stores heads into earnings with mixed indicators - negative EPS growth this year contrasts with positive Q/Q EPS growth. However, the positive expected EPS growth for next year and a fair P/E ratio of 23.68 suggest that the company could be well-positioned for future growth. Today's earnings release could provide critical insights into the company's trajectory.

WMT (Walmart Inc.) Walmart has shown a strong start today, beating earnings estimates and lifting its full-year outlook. Its Q/Q sales and EPS growth have been robust, and it has a relatively low P/S ratio of 0.66. This, coupled with the company’s resilience amid the retail industry's challenges, makes it a potentially safe bet for investors seeking stability in their portfolio.

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.

For fun, on May 18, 2012, a company called Facebook ($META) held its initial public offering (IPO). Here is a poem in their name:

Facebook is now Meta
But don't get too upset-a
It's still the same old stock
With a shiny new name block