Cover story: The FAANG stocks—FB, AMZN, AAPL, NFLX, and GOOGL—have long been seen as a unified trade, but while they are each disrupters, investors are overlooking substantial differences in their business models; In the wake of Facebook’s data scandal, ignoring those differences could be a risky bet.
Features: 1) Barron’s Top 100 Financial Advisors list is topped by Lyon Polk, Gregory Vaughan, and Andy Chase of Morgan Stanley Private Wealth Management; A list of the Top 50 Institutional Consultants is led by UBS Institutional Consulting, Retirement Benefits Group, and Graystone Consulting, Dobbs Group; 2) Master limited partnerships may have burned some investors, but the oil industry is rebuilding and rebounding, energy production is thriving, and MLP valuations appear cheap, making the investments worth another look; 3) Investors have good reason to remain cautious on Russia, which faces a host of sanctions; while equities could rebound, the country’s sovereign debt looks like a better, safer bet; 4) Positive on GIS: General Mills is among the bargains in the consumer staples sector, with sales trends improving, new product launches, and a potentially high payoff for niche brands such as Blue Buffalo; 5) Positive on DAL, GT, LNC, NAVI: Companies are in the bargain bin, but they don’t face obvious threats of structural decline, and don’t appear to be hitting cyclical peaks, at least not by Wall Street estimates.
Tech Trader: Cautious on INTC, NVDA: Tension between the chipmakers and the world’s largest tech companies is set to grow as the latter increasingly embrace artificial intelligence, and decide—as FB has—to build their own chips tailored to their specific needs.
Trader: Many investors are wondering if Treasury yields are rising in anticipation of better growth or accelerating inflation, and the market will continue to be volatile until the answer is clear; Despite threats from AMZN, NFLX, and others, the consumer-discretionary sector continues to perform well amid an economic recovery, and the sector looks attractive; Cautious on GE: Bulls were encouraged by the most recent earnings report, but the stock doesn’t look cheap, given operational and financial challenges not faced by rivals HON and UTX.
Profile: Jim Barrineau, manager of the Hartford Schroders Emerging Markets Multi-Sector Bond fund, invests broadly across emerging market debt (top 10 issuers: Indonesia Treasury, Republic of Poland Government, Lebanon Government International, Petrobras Global Finance, Ukraine Government International, Ecuador Government International, Eskom Holdings SOC, Provincia de Buenos Aires, Republic of South Africa Government, Russian Federal).
Interview: Tax policy expert Arthur Laffer discusses the ideal tax policy, universal basic income, and other elements of the Republican tax platform.
Follow-Up: Positive on TPR: The parent of luxury goods maker Coach, its flagship brand, “has stitched together a strong recovery, with plenty of room for more growth.”
European Trader: Cautious on Siemens Healthineers: The healthcare company spun off from Siemens “is promising on many counts, but some analysts don’t view the stock as a bargain.”
Commodities: Oil prices have rallied so far this year amid OPEC’s efforts to erase a surplus, but “the market may soon face a shortage of crude that would support further price gains.”
Streetwise: As Donald Trump’s tweets about companies such as AMZN show, politics is intruding on business as never before, and the trend will only grow.