Sunday, December 4, 2016

Barrons weekend update

Barrons weekend update: positive on ARCH 
Cover story: A federal debt that's nearly $19T leaves less flexibility for the U.S. to fund infrastructure projects, but that doesn't mean they shouldn't be undertaken-failing to do so would be more expensive in the long run because of the affect crumbling infrastructure has on productivity; Historically low rates and the possibility of 100-year bonds should provide incentives for the government to act. 

1) Barron's list of the top 10 stock picks for 2017 includes GOOGL, AAPL, C, DAL, Deutsche Telekom, MRK, NVS, TOL, UL, DIS; 
2) The lower corporate tax rates the Trump administration plans to impose will help retailers such as TJX and FL more than struggling ones such as GME, AEO, JCP; 
3) Positive on ARCH: Coal company emerged from bankruptcy having made significant changes, and should benefit from the shifts in supply and demand as it picks up orders for thermal and metallurgical coal.

Tech Trader: T's DirectTV NOW "looks to be a great product, but selling 60 channels of live video at close to, or below, cost seems unwise; Less media regulation under the Trump administration could make vertical integration for media companies such as VZ, DIS, VIA, FOXA, DISH an imperative. 

Trader: Investors are no longer buying stocks whole hog, but are rotating their money from one part of the market to another, keeping a lid on the S&P for now, says Michael Shaoul of Marketfield Asset Management; The recent OPEC deal is a game changer, creating the possibility the oil glut will fade as early as the first quarter of 2017, says MS analyst Evan Calio; The market has accepted that tax cuts are a given under Donald Trump, but Wall Street is trying to figure out how much companies will gain from lower tax rates. 

Interview: John Levin and Jack Murphy of Levin Capital looks for value-priced stocks with potential catalysts, and they see plenty of opportunities in the market (picks: DOW, DD, Nestle, NOK; pan: XOM). 

Profile: Jenny Jones, portfolio manager of Hartford Schroders U.S. Small/Mid Cap Opportunities fund, looks for mispriced companies and companies that grow earnings consistently (top 10 holdings: ARMK, PVH, VWR, VNTV, KAR, SPB, ROL, GHC, XRAY, CPHD). 

Small Caps: Positive on EVC: Broadcaster stands to benefit from a growing Hispanic market in the U.S., and its valuable spectrum holdings could help send shares higher. Follow-Up: "If the past is prologue, the Trump Treasury could go ahead with 50- or 100-year bond sales without further market disruption"; "Double-digit prices for crude oil are here to stay. But $100 crude is likely gone for good, as is OPEC's dominance of the market." 

European Trader: When it meets on December 8 amid a backdrop of downside risks to economic growth from political uncertainty, the European Central Bank's governing council could signal more quantitative easing. 

Asian Trader: China Unicom will invite BIDU, BABA, and Tencent to become shareholders, but investors should be cautious about rushing after the threesome into the stock because of Beijing's uncertain role. 

Emerging Markets: Many emerging markets face a bumpy ride ahead following the presidential election, but countries such as Brazil, India, and Poland have corporate-earnings strength. 

Commodities: Arabica futures prices fell in November as new data pointed to higher-than-expected supply in the current season, which could weigh on prices through next year. 

Streetwise: The Trump administration isn't looking like the anti-establishment outfit the president-elect's working-class voters might have expected, but that doesn't matter to investors-especially those holding financial services stocks.