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Morning News: January 5, 2024
Posted by Eddy Elfenbein on January 5th, 2024 at 7:02 amEurozone Inflation Rose Less Than Expected, Keeping Rate-Cut Talk on Track
Investors Kick Off 2024 with $123 Billion Record Cash Shift
Investors Flee to US Money Market Funds on Caution as Rate Cut Optimism Cools
Economist Alberto Musalem Named Next President of St. Louis Fed
Troubled China Shadow Bank Zhongzhi Files for Bankruptcy
Haidar Overhauls Macro Hedge Fund Trades Amid Record 43% Plunge
Red Sea Attacks Menace Energy Tankers but Don’t Stop Them
Exxon Mobil Expects Up to $2.6 Billion in Upstream Impairments
US Jobs Report to Show Hiring Concentrated in Only a Few Sectors
Apple’s Ugly 2024 Start Puts Most-Valuable Stock Title at Risk
Netflix Considers Ways to Make Money From Videogames in Possible Pivot
How China’s BYD Beat Tesla at Its Own Game
Driverless Truck Companies Plan to Ditch Human Copilots in 2024
Late M&A Bonanza Stokes Healthcare Dealmakers Ahead of JPMorgan Conference
Ozempic Mania’s Billions in Bills Are Coming for US Taxpayers
Starbucks Faces New Pressure Over Union Campaign
Major French Retailer Drops PepsiCo Products Over High Prices
Gen Zers Who Want the Buzz But Not the Hangover Are Fueling a Nonalcoholic Spirits Boom
Tepper’s $2 Billion Hedge Fund Payday Marred by NFL Meltdown
Victor Wembanyama Sets Course to Become a Basketball Billionaire Unlike Any Other
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Morning News: January 4, 2023
Posted by Eddy Elfenbein on January 4th, 2024 at 7:04 amGermany Cut Gas Imports By a Third in 2023
In Europe, Trains Are Full, and More Are on the Way
Citi Targets China Investment Bank Unit Launch, 30 New Hires By End 2024
Wall Street’s Ambitions in China Run Into a Rising Firewall
Wall Street Is Already Cutting Oil-Price Forecasts for This Year
APA to Buy Callon Petroleum in $4.5 Billion Deal
How Supply-Chain Snarls Made Everyone Wrong on Inflation
Fed Minutes Showed Officials Feeling Better About Inflation
The Hidden Force Pushing Mortgage Rates Down
Why Companies Still Aren’t in a Firing Mood
U.S. Awards Chip Supplier $162 Million to Bolster Critical Industries
Apple Hit With Second Downgrade This Week as iPhone Worries Grow
U.S. Auto Sales Bounced Back in 2023
EV Startup Fisker Ditches Tesla-Style Direct Sales Model
Billionaire Space Battle Heats Up as Bezos Eyes SpaceX Rival
SpaceX Illegally Fired Workers Critical of Musk, Federal Agency Says
Clorox’s Future Depends on Winning Your Cat’s Litterbox
Jeff Zucker’s Latest Bet: Prestige TV
Big Fashion Still Hasn’t Figured Out How to Pay a Living Wage
How the Push for Diversity at Colleges and Companies Came Under Siege
Just a Billion Doesn’t Cut It on This Exclusive Florida Island
Pop-Tarts’ Devoured Mascot May Live to Be Eaten Again
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Morning News: January 3, 2024
Posted by Eddy Elfenbein on January 3rd, 2024 at 7:03 amSaving the Panama Canal Will Take Years and Cost Billions, If It’s Even Possible
China’s Top Banks Tighten Exposure to Smaller Peers to Curb Credit Risk
Xi’s Mixed Messages Leave Whiplashed Investors Wary of China
US National Debt Hits Record $34 Trillion
Treasury 10-Year Yield Eyes 4% as Bonds Dip Ahead of US Data
Will America’s Good News on Inflation Last?
Bitcoin Reverses Course Ahead of Eagerly Awaited ETF Decision
How to Save for an Emergency, with Help from Your Employer
Finding a New Job Is Getting Harder
Unemployed Americans Are Being Forgotten in a Strong Job Market
Sustainable Energy Goals Require Public Investment in Emerging Technologies, BCG Chair Says
U.S. Auto Sales Bounced Back in 2023
Why America’s Electric Car Push Isn’t Working
Tesla Faces a Higher Bar for Hype in 2024
U-Haul Report Shows Texas Attracted the Most Number of People Relocating
Disney to Work With ValueAct in Bid to Stave Off Billionaire Activist Peltz
He Revived Old Spice. Can This CEO Save a Sneaker That Lost Its Cool?
Starbucks Will Now Let Customers Use Personal Cups for Nearly All Orders
SoftBank Veteran Arora a Billionaire After Another Huge Payday
Inside a Flaming Jet, 367 Passengers Had Minutes to Flee. Here’s How They Did It.
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Morning News: January 2, 2024
Posted by Eddy Elfenbein on January 2nd, 2024 at 7:05 amIran Sends Warship to Red Sea After US Sinks Houthi Boats
Bangladesh’s Tangles with Yunus, Nobel Winner and Microloan Founder
US Pressured Netherlands to Block China-Bound Chip Machinery
Nigeria to End Practice of Using Central Bank to Fund Deficit
India Is Chasing China’s Economy. But Something Is Holding It Back
Britain’s Economy Is ‘Not Working.’ Here Are 2 Key Reasons
For Investors, 2024 is Year of Transition to a New Economic Order
Here’s (Almost) Everything Wall Street Expects in 2024
US Fintechs Push Into Fixed-Income Trading as Retail Investor Interest Grows
New Disruptions, Geopolitics Hang Over 2024 Supply Chains
As CFOs Prepare for an Unpredictable 2024, Here’s What Tops Their Checklists
I Spent New Year’s Eve Trying to Do the FAFSA. It Didn’t Go Well
Apple Stock Downgraded as Barclays Warns on Cooling iPhone Demand
Iberdrola Ends $4.3 Billion Deal to Buy US Power Firm PNM
Musk’s X Value Cut by Another Fidelity Writedown, Axios Reports
China’s EV Champion BYD Will Take on the World in 2024
Evergrande Auto’s Investment Agreement With Dubai Automaker Lapses
Wayfair’s CEO Wants Staff to Work Harder. Your Boss Probably Agrees
Americans Are Canceling More of Their Streaming Services
The Businesses Betting on New Year’s Resolutions
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Morning News: January 1, 2024
Posted by Eddy Elfenbein on January 1st, 2024 at 7:33 amChina and US Should Strive for Peaceful Coexistence, Xi Says
Putin Says He Wants Peace in Ukraine But on Russia’s Own Terms
Iran Says Prospect for Talks Over Nuclear Deal ‘Still Exists’
Maersk Halts Red Sea Shipping as US Navy Sinks Houthi Boats
Shale Is Keeping the World Awash With Oil as Conflicts Abound
Meet America’s Newest Oil-Trader Extraordinaire: Joe Biden
Pakistan’s Inflation Quickens for Second Straight Month
Bangladesh Sentences Nobel Peace Prize Winner to 6 Months in Prison
‘There’s No Other Job’: The Colonial Roots of Philippine Poverty
US Overtakes China as South Korea’s Top Export Market
Chief Justice Roberts Says AI Will Transform How the Courts Work
The Way Big Banks Shut Down Customer Accounts Is Callous. Let’s Fix It.
Chill in the Housing Market Seeps Into Other Industries
Covid Slashed Consumer Choices. This Is Why They Aren’t Coming Back
Where the Job Market Is Heading in 2024, in Six Charts
Baidu’s Live-Streaming Hopes Hit by Lapse of $3.6 Billion Deal to Buy YY
BYD Posts Record Sales Quarter to Challenge Tesla at Own EV Game
Western Anxiety About Chinese EVs Could Prove Self-Defeating
Volkswagen’s Elusive Quest to Make an EV for the Masses
Climate Activists Block Amsterdam Highway in Protest Against ING
PGA Tour and Saudi-Backed LIV Extend Deadline to Finalize Deal
The Sports-Betting Traders Deciding How Much You Win or Lose
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The 2024 Buy List
Posted by Eddy Elfenbein on December 31st, 2023 at 9:05 pmHere are the 25 stocks for the 2024 Buy List. It’s locked and sealed, and I can’t make any changes for 12 months.
For tracking purposes, I assume the Buy List is a $1 million portfolio that’s equally divided among 25 stocks. Below are all 25 positions with the number of shares for each and the closing price for 2023. Whenever I discuss how the Buy List is doing, the list below is what I’m referring to.
It’s locked and sealed, and I can’t make any changes for 12 months.
Here are the five new buys with their starting Buy Below prices:
American Water Works ($140)
Amphenol ($110)
Farmer Mac ($200)
McGrath RentCorp ($130)
Rollins ($50)The six sells are:
Carrier Global
Danaher
Middleby
Stepan
Trex
VeraltoHere are the corporate descriptions of our five new stocks:
American Water is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people with regulated operations in 14 states and on 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.
As one of the fastest growing utilities in the U.S., American Water expects to invest $34 to $38 billion in infrastructure repairs and replacement, system resiliency and regulated acquisitions over the next 10 years. The company has a long-standing history of executing its core operations, aligned with sustainable best practices, through its commitments to safety, affordability, customer service, protecting the environment, an inclusive workforce and strengthening communities.
Amphenol Corporation is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. Amphenol designs, manufactures and assembles its products at facilities in approximately 40 countries around the world and sells its products through its own global sales force, independent representatives and a global network of electronics distributors. Amphenol has a diversified presence as a leader in high-growth areas of the interconnect market including: Automotive, Broadband Communications, Commercial Aerospace, Industrial, Information Technology and Data Communications, Military, Mobile Devices and Mobile Networks.
Farmer Mac is a vital part of the agricultural credit markets and was created to increase access to and reduce the cost of credit for the benefit of American agricultural and rural communities. As the nation’s secondary market for agricultural credit, we provide financial solutions to a broad spectrum of the agricultural community, including agricultural lenders, agribusinesses, and other institutions that can benefit from access to flexible, low-cost financing and risk management tools. Farmer Mac’s customers benefit from our low cost of funds, low overhead costs, and high operational efficiency.
McGrath RentCorp is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath’s operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company’s rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath’s success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company’s long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.
Rollins, Inc. is a premier global consumer and commercial services company. Through its family of leading brands, the Company and its franchises provide essential pest control services and protection against termite damage, rodents, and insects to more than 2.8 million customers in North America, South America, Europe, Asia, Africa, and Australia, with more than 19,000 employees from more than 800 locations. Rollins is parent to Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, McCall Service, Trutech, Critter Control, Western Pest Services, Waltham Services, OPC Pest Services, The Industrial Fumigant Company, PermaTreat, Crane Pest Control, Missquito, Fox Pest Control, Orkin Canada, Orkin Australia, Safeguard (UK), Aardwolf Pestkare (Singapore), and more.
In terms of market value, Thermo Fisher remains our biggest stock at $205 billion. Abbott Labs is second at $191 billion. Eleven of the 25 stocks have market values between $15 billion and $50 billion. Miller Industries is still our smallest stock at $484 million.
FICO and Fiserv are the only two stocks that don’t pay dividends.
Twenty-one of our 25 stocks are on the normal March/June/September/December reporting cycle. Intuit, SAIC and Heico are on the January/April/July/October cycle. FactSet is the only one that follows February/May/August/December.
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The 2023 Buy List
Posted by Eddy Elfenbein on December 31st, 2023 at 1:41 pmThe 2023 investing year is on the books!
This was a good year for Wall Street. The stock market rode out the last of a long line of interest-rate hikes from the Federal Reserve. The labor market remained strong, and inflation appears to be fading. At least, for now.
The stock market did well in 2023, but returns were very uneven. This was an odd year. About 70% of the stocks in the S&P 500 lagged the index in 2023. Growth outpaced Value, and the large-cap tech sector did especially well. The Nasdaq gained more than 43%, and the Nasdaq 100 was up over 53%. All eyes seemed to be focused on the “Magnificent Seven” (AMZN, AAPL, GOOG, NVDA, META, MSFT and TSLA).
I’m pleased to say that the 2023 Buy List performed well, especially without holding any of the Mag 7. For the year, our Buy List gained 25.12%. Including dividends, we were up 26.58%. For the year, the S&P 500 gained 24.23%. Including dividends, the index was up 26.29%. That means we just slightly beat the stock market, but we did it with a lot less risk.
For the 18 years of the Buy List, the S&P 500 with dividends is up 447.04%, while our Buy List is up 573.30%.
In 2023, the Buy List had a “beta” of 0.9394.
Here’s a look at our Buy List versus the S&P 500 throughout the year (this doesn’t include dividends).
Trex was our top-performing stock last year, with a gain of 95.58%. FICO was our second-biggest winner, with a gain of 94.46%. FICO was our biggest winner in 2022, while TREX was #1 in 2020 and 2021.
Hershey was our biggest loser in 2023. The chocolatier lost 19.49%. Stepan was our worst stock for most of the year, but a late-year rally pushed it to a loss of only 11.19%.
Our new buys gave us a big lift in 2023. Celanese was up 51.97%, and Intuit rallied 60.59%. Middleby gained 9.91%, while Polaris lost 6.17% and Cencora gained 23.94%.
What about last year’s sells? It was a mixed bag. Zoetis gained 34.68% in 2023. That was followed by Sherwin-Williams at 32.42%. Ross Stores gained 19.23%. Church and Dwight was up 17.31%, and Reynolds Consumer Products lost 10.47%.
Trex and Stepan will leave us after four years on the Buy List. Danaher was a member for the last seven years, and it was an outstanding performer. During that time, Danaher nearly tripled for us, and that doesn’t include the Veralto spinoff.
I always strive to be as transparent as possible when discussing our track record. Here’s a breakdown of how our Buy List performed in 2023. For tracking purposes, I assume the Buy List is a $1 million portfolio and that all 25 stocks are equally weighted at the start of the year.
For Veralto, shareholders of Danaher got one share of VLTO for each three shares of DHR they owned.
Here’s the data behind the dividend-adjusted returns. I’ve listed each stock’s beginning price, ending price and dividend-adjusted starting price.
In the chart above, I used Danaher’s starting price adjusted for the VLTO spinoff. I didn’t include Veralto’s small dividend paid in December. In terms of our tracking portfolio, it was a negligible amount.
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Every Buy List Stock
Posted by Eddy Elfenbein on December 31st, 2023 at 9:18 amHere are all 106 Buy List stocks and when they made the cut.
Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His 