Cover story: Emerging markets have had a bad year, but recent problems obscure their long-term attraction; 83% of the world’s population, of which half are members of the middle class, reside in them; With emerging market stocks trading at steep discounts to U.S. equities, now is the time for investors to start bargain hunting.
Features: 1) Cautious on BABA, Tencent Holdings, BIDU: Members of Barron’s Asia Roundtable discuss the Chinese Internet giants, which face problems but still offer benefits for investors; 2) Barron’s Big Money Poll found that American money managers seem confident the bull market will continue into next year, with 56% bullish on U.S. equities through next June, little changed from the spring survey’s 55%; 3) Positive on BAC, JPM, USB, WFC, JPC, FFC, PFF: Investors seeking yield should be looking at preferred stocks, where yields on many issues have risen a half-percentage point or more in the past month as investors sell off Treasuries; 4) Dallas-based Centurion American Development Group came up with an innovation in municipal finance through the sale of tax increment financing revenues, but the move has raised a number of questions; 5) Positive on CFG: The Providence, Rhode Island-based regional bank has one of the hottest lending niches in the world: It is the exclusive financing partner for iPhones bought directly from AAPL; 6) Story looks at four issues that must be addressed if the U.K. and EU are to avoid a calamity from a so-called hard Brexit: contracts, clearing houses, data, and immigration.
Tech Trader: Barron’s created a FAANG risk score card, ranking FB, AMZN, AAPL, NFLX, and GOOGL on nine issues of importance to analysts, the press, or politicians during the past year; Facebook and Alphabet have the highest scores, followed by Amazon, Apple, and Netflix.
Trader: Positive on UAA: Investors should take a look at the sports apparel company as a contrarian bet before its margins improve and Wall Street becomes confident about its turnaround plans; Positive on VTR: The real estate investment trust owns more than 1,200 properties, many of which focus on seniors, positioning it to benefit as baby boomers finally start to retire.
Interview: Former Federal Reserve chairman Alan Greenspan says the economy doesn’t look so great, and could get worse because of the ballooning deficit and the rising cost of entitlement programs.
Follow-Up: Positive on STZ: Under new chief Bill Newlands, the company will remain committed to the alcohol business, but also focus on the global cannabis market—and he sees continued growth in premium beers and alcohol-free beverages spiked with marijuana.
International Trader: It’s a good time to bet on British stocks—the “economy is strong, stocks are inexpensive relative to those in the U.S., and when the Brexit drama passes, the pound sterling should rise.”
Emerging Markets: Donald Trump is wreaking short-term havoc on China’s stock markets, though he probably won’t succeed in stemming the country’s long-term economic rise.
Commodities: With a number of recent global events clouding the outlook for gasoline prices, there’s a possibility that American consumers won’t see the usual post-summer decline in prices at the pump.
Streetwise: “The Khashoggi case is a reminder to Saudi Arabia’s business partners that they are in bed with an absolute monarchy that has a medieval view of human rights. The question now is whether these partners need to do more than just dodge the spotlight of a single conference.”