Saturday, November 10, 2018

Barrons weekend summary

Barrons weekend summary: Cover story positive on Liberty Media 
Cover story: Billionaire John Malone remains the instrumental force behind 10 companies under the Liberty Media umbrella that have a combined value of $80B; Many of the stocks have lagged the market in the past year and look appealing, offering plays on a range of businesses, including cable, sports, and shopping. 

Feature: 1) The recent elections “haven’t meaningfully changed the U.S. economic outlook,” but congressional results could affect U.S. trade policy while a range of state and local elections have implications for economic policy; 2) “The shake-up in the House of Representatives after Tuesday’s election could change the passive posture of the legislative branch, particularly in regards to replacing Nafta.” 

Tech Trader: The growth of 5G technology and its eventually widespread use will be a major event for the communication services value chain, benefiting a range of tech and telecom companies (Positive on INTC, CSCO, KEYS, NATI, TXN, T, VZ, QCOM, COMM, ARRS). 

Trader: The market may be trying to set up for a bullish reverse-head-and-shoulders pattern, but it might not—so Barron’s suggests remaining on the cautious side until the story is clearer; Positive on DLTR: The company has lost its touch during the past year, sending the shares down into the bargain bin, but they are likely to bounce back, especially if an activist investor gets involved. 

Interviews: 1) Libby Cantrill, head of public policy at Pimco, says the firm is cautious about the bond markets and is positioned accordingly; 2) Ron Epstein, who covers aerospace at Merrill Lynch, sees plenty of upside for BA, LMT, and GD, and says Democratic control of the House is the best scenario for defense spending. 

Profile: Ken Taubes, manger of the Pioneer Bond fund for the past 20 years, says higher interest rates have a silver lining for investors, who can be in shorter-duration, shorter interest-rate securities and collect yields without taking on too much risk. 

Retirement: High home healthcare costs are hurting the U.S. population, but there is political momentum behind change, and caregiving is one of the few areas that could find bipartisan support in a divided Congress. 

Follow-Up: Cautious on KR: Upside surprises generally make shares go up, but that hasn’t been true for the retailer for the past five of seven quarters, and while the outlook is bright, investors should consider taking profits. 

European Trader: “There’s lots to like in Hungary, including strong capital flows, fast economic growth, low borrowing costs, and a much improved banking sector. All should help boost local stocks.” 

Emerging Markets: Despite Russia’s challenging political situation with the U.S., the country’s stocks “have become an unlikely paragon for many emerging market investors based on fundamentals,” and valuations are rock-bottom. 

Commodities: “Exchange-traded funds backed by gold increased their holdings by $1B in October, marking a possibly bullish shift in investor sentiment toward the precious metal.” 

Streetwise: To fix healthcare, the U.S. doesn’t need to copy Europe, because the country is already doing so, albeit in overlapping, inefficient fashion—and the best way to solve the problem would through a bipartisan approach that shores up the entire system.