FINSUM + Magnifi: Chinese Stocks are Big Winners Despite Delistings
April 29, 2021
Chinese companies allowed to raise funds in the US market saw those funds jump by 440% in the first few months of 2021. This staggering $11 billion raised on the New York Stock exchange and Nasdaq is a record for Chinese companies. The biggest winners RLX Technology and Tuya raised the funds via a combination of IPOs, follow-on share sales, and bond issuance, but another 20 additional companies contributed to the record breaking quarter. This all came as the NYSE delisted three Chinese telecom companies with potential ties to China’s military. This came off the back of China’s 18% annual GDP growth. While stocks have stalled on mainland China, higher P/E ratios in the US (32 in the US vs 19 in China) are showing value in Chinese companies.
FINSUM + Magnifi: Tech Sector Health Looks Strong on IBM Earnings
April 23, 2021
IBM stock price rose about 4% on trading early this week as the company had its first market-beating earnings report in some time and first quarter of revenue growth in the last four. Earnings came in at $1.77 per share vs the expected $1.63 that markets were predicting. IBM’s Cloud and Cognitive, Global Business Services and Systems divisions all had revenue growth ranging from 2-4%. Client-based business volume bounced back such as retail and consumer products. These were some of the worst suffering areas from the pandemic. Additionally, IBM announced the acquisition of two cloud computing-related companies: Taos and 7Summits.
FINSUM + Magnifi: This is the Best S&P 500 “Buy” Sign Since Before the Pandemic
(February 2021)
January and early February offered some rough times for investors. The two-week meme stock debacle had most investors’ hearts skip a beat and fear the entire market was in a bubble. However, applying some cold, rational logic to market movements yields a very nice picture. The reality is that VIX Index, Wall Street’s so-called fear gauge, just fell below 20. To put that in perspective, it is the first time that has happened since February 2020 (yes, BEFORE the pandemic). This means fear is leaving the market and could set the stage for more buying. According to one Wall Street strategist, “This is a positive divergence. Stocks churning but VIX falling. This suggests that ‘fear’ is receding from the market”.Read more
FINSUM + Magnifi: “Raging” Rally is Starting says Morgan Stanley
(February 2021)
According to both Morgan Stanley and Goldman Sachs, last week’s retail-driven chaos was nothing but a blip on the bull market radar. After a significant pullback last week (perhaps more significant psychologically than in pure price action), Morgan Stanley says a “raging” rally is starting. Like Goldman Sachs, who is now calling for a 16% gain in the S&P 500 this year, Morgan Stanley thinks the market is going to continue on a strong upward trend. The banks contend that the underlying economy has a lot of upside and thus markets are going to have a nice economic and earnings tailwind behind them.
Source: fnlondon.com
FINSUM + Magnifi: Morgan Stanley Says Now is the Time to Go All-in on Stocks
(October 2020)
In an unusually bullish opinion, one of Morgan Stanley’s best-known and most bearish strategists—Andrew Sheets—has just released a very bullish outlook. The bank’s chief cross-asset strategist is telling investors to dump their defensive positioning in large tech and long-dated Treasuries and switch to risk-on asset like small caps. Sheets contends—in contrast to many other analysts—that growth will continue unabated, saying “The glass half-full view of stimulus talks is if you don’t get it today you’ll get it tomorrow from whomever wins the election”. He points to the recent outperformance of cyclical and value stocks as evidence that investors are getting more bullish.