Cover story: At a time when renewable energy is on the rise, XOM is doubling down on oil and natural-gas production, while rivals are curtailing capital investment and returning cash to shareholders; To capitalize on oil and natural gas, Exxon “has an ambitious plan to increase its energy output by 25% and more than double its earnings by 2025.”
Features: 1) The current dealmaking boom has gone on for nearly eight years by some estimates, but booms are cyclical and investors are starting to question how long the current cycle will last; 2) Positive on VNQ, BKLN, MUB, NOBL, XLU: As the Fed raises interest rates, income-generating assets may be pressured, but these plays offer decent yields and relative safety; 3) Positive on AEB Pfd, JPM Pfd H, MS Pfd E, KKR Pfd A, APO Pfd A, SSW Pfd E: Amid shifting 10-year Treasury yields and changing corporate and industry credit conditions, these six preferred-stock issues offer high yields and strong protections; 4) “Utility stocks and rising bond yields don’t mix well, but investors can still find companies capable of fighting that headwind with solid growth prospects”; 5) Cautious on WWW: Company has set aside $35M to cover legal and remediation costs for the leak of Scotchguard chemicals into wells and aquifiers, but investors wonder if that amount will be enough.
Tech Trader: Cautious on AAPL: Warren Buffet’s stake in the company is less a tech investment than an appreciation of cash flow, and the company’s current lineup of products “represents a kind of stagnation for Apple and the mobile tech industry”; “The tech world feels like it’s poised on the edge of its next great leap, but the elements to make that possible are not yet available.”
Trader: Stifel’s Barry Bannister thinks the market will decline to around 2520 by the end of September as global growth slows, the dollar rises, and the 10-year yield falls—after which it will rise by 10% by year-end; Positive on BA: Aerospace giant is moving more into the aircraft interiors and avionics sector, and could become a major player when it rolls out the B797; Positive on SRPT: Company’s exon-skipping program is going faster than anticipated, says JMP Securities analyst Liisa Bayko.
Interview: Silicon Valley venture-capital titan John Doerr talks about a corporate approach based on “objectives and key results,” or OKRs, which he would like to bring to government, schools, and nonprofits.
Follow-Up: Positive on AAPL: While Wall Street worries about iPhone growth, the company is diversifying its business in areas such as the cloud, iTunes, and digital content.
European Trader: Positive on Continental: Tire company is also a big player in powertrain manufacturing, brake systems, interior-electronics, and other auto components—and should see sturdy growth ahead.
Emerging Markets: The Fed probably won’t choke off demand for risk assets this time, says Eamon Aghdasi of State Street Global Markets, and currencies will probably remain range-bound with more volatility.
Commodities: “In a few days, the U.S. will decide whether to extend waivers on economic sanctions against Iran. If it doesn’t, the global market could lose about one million barrels of oil a day”
Streetwise: Commenting on TSLA, Ben Levisohn says that “when management feels the need to ply investors with made-up metrics and visionary arrogance, they shouldn’t forget that investors have a choice too: they don't have to buy the stock.”