PROFESSIONALLY BIASED SHORT TAKES
United Therapeutics (UTHR): Strong Growth Stock with Solid Fundamentals
4 February 2024
United Therapeutics (UTHR) markets four medicines in the US to treat pulmonary arterial hypertension (PAH) and is expected to have strong earnings and sales growth with solid fundamentals.
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Traders Unconvinced by Powell’s Deterrence: Expectations of Six Rate Cuts, Timing Discrepancy Raise Concerns
4 February 2024
Despite Chairman Jerome Powell’s attempt to discourage traders from expecting as many as six rate cuts this year, traders remain unconvinced. Fed funds futures indicate that the central bank will likely lower rates by six quarter-point increments by December. However, traders did adjust their expectations on the timing of the first rate cut, pushing it to May instead of March. This discrepancy in expectations could lead to a repricing in markets, with potential downside risk to equity markets and a possible downgrade in corporate earnings estimates.
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ConocoPhillips (COP) set to announce its earnings on February 8, 2024
18 January 2024
Forecasts suggest an EPS of $2.42, down 10.7% year-over-year (YoY), and revenues expected at $15.35 billion, a 20.33% decrease YoY. Recent adjustments in analyst estimates for COP reflect the company’s short-term business trends. While the market sentiment appears negative, with a Forward P/E ratio of 10.76, it is trading at a discount relative to the industry’s average of 11.89.
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Fannie Mae: Optimistic Outlook for Housing Market Recovery in 2024
18 January 2024
Fannie Mae’s Economic and Strategic Research Group predicts a gradual stabilization of the housing market in 2024, with potential improvements for homebuyers and sellers. They anticipate mortgage rates falling below 6%, leading to increased refinancing volumes and higher existing home sales. However, concerns about housing affordability remain, and the risk of a recession still exists. Overall, modest growth in the economy and improved financial conditions are expected to support the housing market’s recovery.
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The US Dollar Firms Amidst Positive Economic Indicators and Central Bank Cautiousness
18 January 2024
The US dollar is poised for a second consecutive weekly gain on the back of positive economic indicators and cautious central bank policy. Weekly gains for the Australian and New Zealand dollars are expected to be the highest since November and June respectively, while the dollar is up almost 5% against the Japanese yen this year. The yen’s weakness comes as the Bank of Japan’s plans to raise rates have been thrown into doubt. Meanwhile, the euro and sterling have declined against the dollar, and retail sales in the US have exceeded expectations. Overall, central banks’ hesitant stance towards rate cuts and positive economic data have supported the US dollar.
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Best Buy Co Inc (NYSE:BBY) Declares $0.92 Dividend, Exhibits Strong Growth and Profitability
5 January 2024
Best Buy Co Inc (NYSE:BBY) recently announced a dividend of $0.92 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-11. Best Buy is the largest consumer electronics retailer in the U.S., with a 8.5% share of the market. The company has a consistent dividend payment record since 2003 and has shown solid profitability and growth metrics.
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U.S. Private Employers Surpass Expectations, Adding 164,000 Jobs in December: Impact on Fed’s Rate Reduction Strategy
5 January 2024
U.S. private employers added 164,000 jobs in December, exceeding expectations and indicating resilience in the labor market. The strong job growth may influence the Federal Reserve’s approach to interest rate reductions this year. The leisure and hospitality industries saw the most gains, while pay growth eased to 5.4%. This data, along with a decrease in job-hopping, could potentially ease wage growth and inflation pressures. The ADP report precedes the non-farm payrolls report due on Friday and is closely watched by markets.
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The US Dollar Gains Momentum as Rate Cut Expectations Ease, Fueled by Strong Economic Data
5 January 2024
The US dollar is poised for its strongest week since July due to reduced expectations of interest rate cuts. The currency remained steady on Friday, supported by better-than-expected US private employment data for December. Traders have adjusted their rate cut bets, with a lower chance of a rate cut in March and fewer anticipated cuts throughout the year. The dollar’s strength is attributed to safe-haven demand amidst market volatility and struggling equity markets. Analysts suggest that market expectations for rate cuts may be too aggressive, further supporting the dollar.
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Gold Outlook 2024: Positive Momentum Continues and Geopolitical Risks Drive Bullish Trend
28 December 2023
Gold is expected to finish 2023 on a positive note, with technical indicators pointing towards further gains. The current macro environment and rising geopolitical risks are also supporting a bullish trend. Looking ahead to 2024, the Federal Reserve’s shift to a lower interest rate cycle and ongoing global tensions suggest a favorable market for gold. Investors have various options to gain exposure to gold, including ETFs and physical gold.