Recovery Friday

One of my habits, when markets move heavily, is to try to decide whether or not to exit. Usually, I don't because markets correct from gains by losses, and from drops by rises. I learned this from fund manager Howard Marks's book Mastering the Market Cycle published in 2018, and The Most Important Thing published in 2011. While he is repetitious and verbose, I think it is important to have a guru who covers recent developments.

Yet for my Global-Investing.com outlook, there is something seriously wrong with Mr. Marks. He tends to consider foreign securities as an oddball way for US fund managers (like him) to protect against US share price drops or rises. Anyway, after the sell-off yesterday reversed more or less at the opening, I don't need a guru to tell me to stay the course. But since this is the second selloff in recent weeks, I know that there is a downtrend coming. US earnings figures will start coming out next week.

Photo by Annie Spratt on Unsplash

The big winners this week were Financials, clear winners from rising US interest rates. The 10 yr US T-bond opened at a yield of 1.34% Friday whereas it opened at 1.23% and closed at 1.29% Thursday. Higher interest boosts financials like American ExpressState Street, and banks. The US was not alone in raising rates. The People's Bank of China did this too. This was bullish for Taiwan and bearish for South Korea. The FTSE London index, heavily weighted with financials, reversed upward despite meh GDP figures and a slow UK recovery. The US opened up 400 points, wiping out the Thursday drop.

Our best performer, not too surprisingly was a European bank which opened up 5%, in part because it has lots of business in the USA. Another European is up 6%!

More follows:

Financials

*The ADR bank winner was Banco Santander, a big US player thanks to its heavy investment in Boston's Sovereign Bank which it bought outright in early 2009. The jump in Madrid did not carry over here where SAN is up only 3.2%.

*Lazard opened up 1.2% at $46.07 but also fell back. It is now $45.75. LAZ.

EMD will pay us 9¢/sh of which 0.444 cents only was earned. The rest is return of capital.

*US financials like State Street Bank STT and American Express AXP were upgraded to buy by UBS and to equal from underweight by CitiGroup.

*Miner Kirkland Lake Gold rose 2.1% to $39.28 at the opening. KL is a recovery play.

*However AIG Asia, AAIGF, an insurer out of Hong Kong fell because of potential Chinese competition.

*Korean Coupang, CPNG, web seller and financier, rose 4.9% at the opening to $41.95.

*South American Mercado Libre rose as much as 1.5% today over the outlook and because MELI was tipped on seekingalpha.com. It too is a web seller and financier.

*Banco Latino of Panama is up 1.52%. BLX, owned by state and private banks, finances trade

*My best performer was Fibra Uno, a Mexican REIT, which gained 6% to $1.06. It uses $ borrowing to finance Mexican building. It rose 9% at the open to MXN 21.9 but then fell back. It yields 4%.FBASF.

*CBOE which runs options trading sites is up 1.27%.

*Mitsubishi, is up 2.15%. MSBHF is a Japanese financial powerhouse. Sumitomo Misui SMFG is up 3.44% to $6.9.

Materials & Metals

*Tomra Systems gained 6% today. It makes recycling machines and sorters for food, pills, and plastics. The Norwegian currency rises with oil, and in theory that makes TMRAF weaker. Anyway, it is $56.82.

*CRH of Ireland rose 2.5% on hopes of infrastructure spend. And Mexican Cemex, CX, gained 2.7%.

*Precious metal prices rose across the board, gold up 0.4%, silver up 0.97%; platinum up 2.34%; palladium up 0.78% but industrial metals fell: iron ore, copper, zink, and nickel were all off 0.7 to 1.08%. Johnson Matthey was up 2.71% at the UK close as JMPLY refines and sell the up metals.

*SPDR Gold, GLD, is up 0.5% to $169.46, 1/10th the gold price.

*ABB of Switzerland is up 2.06%. We own it directly and via Investor A/B, a Swedish fund run by the Wallenberg clan. IVSBF is up 1.24%

*Antofagasta of Britain is up 1.31%. It mines copper in Chile. ANFGF.

*Cosan CSAN of Brazil, my stock of the year, gained 1.66-1.99% today It samba's.

*Weyerhaeuser is up 2.1% on hope there will be more demand for wood as US construction booms. WY is Canadian.

Energy

*Charles Schwab revisited its support for energy stocks and reduced its target prices.

*NIO will have 700 charging stations in China by the end of this year and will offer other autmakers the right to recharge batteries at its sites. It fell later over a drop in Tesla and worries about Chinese oversight.

*Algonquin AQN is up 1.1% and opened at $15.05 over higher oil prices because of a split in OPEC between Saudi Arabia and the United Arab Emirates.

*AYAtlantica Sustainable Infrastructure, a UK $ fund in which it owns 44%, is down 0.1%.

*Azure Power of Mauritius opened up 3.22% but now only up 2.22%. AZRE supplies rooftop solar to India.

*However a pure China play in this sector Canadian Solar, fell another 0.8% to $40.98. CSIQ.

*BP gained 1.7% with higher oil prices. Royal Dutch Shell B shares rose 1%. RDS-B.

*Cabot Oil & Gas, COG, rose to $17.57 as markets get used to its merger.

*Earthstone Energy rose to over 4% but now is 3.53% after Roth Capital again rated ESTE a buy.

*Israeli geothermal stock Ormat rose 1.14% but briefly was up 1.99%. ORA was rated sell by CFRA,

*Plug Power fell 1.6% and is back under $30 on “unusual options activity” continuing. PLUG.

*Dutch Antillean Schlumberger Ltd rose 2.17%. SLB helps find oil and gas. It was rated overweight by Morgan Stanley today.

*Energy Power, UUUU, while not mentioned in an article about rare earths, does refine them outside China with Neo-Performance Materials of Estonia. I was going to complain about its omission but others beat me to it. The rare earths are found alongside uranium.

Drugs

*Aurinia of Canada is up 1.1%. AUPH.

*Astra-Zeneca of Britain is up 0.8%. AZN.

*Bristol Myers gained 0.64%. The $64 question is why Cathie Woods sold it Thurs. BMY.

*Compugen gained 3.46% a remarkable move when Tel Aviv is closed, to $7.77. CGEN.

*Enlivex of Israel rose 2.3% but thrice this morning hit 3%. ENLV.

*Japan's Eisai fell 2.14% this afternoon aftre rising at the open. It is partner with Biogen in Aduhelm which will be restricted by our FDA to only mild Alzheimer sufferers. ESALYTakeda, another Japanese drugmaker, gained 1.7% as some funds have to own a Japanese. TAK.

*Grifols of Spain fell 0.5%. It specializes in blood safety and is hurt by covid rising there. GRFS.

*Novacure rose 1.3% to $194.2 another Israeli overcoming the Friday curse. Piper Jaffrey raised its TP to $249 from 235 and rates it overweight. NVCR.

*Novartis only rose 0.21%, because it is a major and safely Swiss. NVS.

*Danish Novo Nordisk fell 0.45% on no news. NVO.

*Swiss Roche fell 0.51% today after it was graded buy yesterday by Deutsche Bank. RHHBY.

*Even Teva, the Israeli pharma bellwether, rose today, up 1.75% to $9.3. TEVA.

*However Thermo-Fisher Scientific, my largest shareholding, fell 0.3% as TMO did not raise its 26¢/sh divvie announced yesterday, It is now $516.99 bid and $517.13 ask. It will not pay up until Oct.

*Zymeworks, rumored takeover pick, gained 2.2%. ZYME, from Vancouver, was selected by Martin Ferera who lives there.

Telephony

*Ericsson will install the Malaysian 5G network after Huawei was eliminated on security grounds. ERIC.

*Chips with everything. Taiwan Semi, TSM, is up 2.57% whiles Tower Semi, TSEM, of Israel and the US, is up 1.52%. They were mistaken for each other by seekingalpha recently.

*Qualcomm QCOM, the US chipmaker, is up 2.32%. It will partner with Georgia Smart City to test cellular vehicle communications tech. And it does have a nice hold in the global defense market, especially the USA, It is expected to grow 80% in size from last year to this as autonomous connected defense materials grow. The market is about $75 mn this year and is expected to reach $647 mn by 2025.

*Nokia of Finland recovered 2.6% in UK trading Friday. NOK

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William K. 1 year ago Member's comment

Interesting and educational! And all one needs to do to understand about dips and small spikes is to look at the graphs and observe the "noise" atop the signal. This tells me that one will need very fast response time to make a profit based on that. And it seems that the noise is intrinsic to the process, rather much in agreement with your assertion that it all self adjusts. It is indeed hard to see the big picture through a microscope.