Not Smart- Updated COVID shots are set for U.S. rollout without human data Aug. 28, 2022 7:27 AM ETPfizer Inc. (PFE)MRNA, BNTX COVID-19 vaccine boosters adjusted for the latest Omicron subvariants are likely to receive U.S. authorizations this week before their human testing is complete, according to regulatory submissions filed by vaccine makers, Pfizer (NYSE:PFE)/BioNTech (BNTX) and Moderna (MRNA). The head of Food and Drug Administration (FDA) Robert Califf, said last Thursday that the agency would not conduct an advisory committee meeting to evaluate the companies’ emergency use requests for the shots adapted for Omicron BA.4 and BA.5 subvariants. Meanwhile, a group of independent advisers of the Centers for Disease Control and Prevention (CDC), whose recommendations the agency usually follows before a final decision, will likely discuss the updated COVID-19 vaccines on Sept. 1 and 2. However, requests submitted by Pfizer (PFE)/BioNTech (BNTX) and Moderna (MRNA) seeking U.S. emergency use authorizations (EUA) for their latest BA.4 and BA5.-adapted boosters contain only data from studies based on animals such as mice.
Apparently the Lithium market went nutso. I did not catch this. Sigma Lithium (SGML) +20.97%; Shares are up +128.67% YTD and continue to be propped by a bull run of lithium prices. Turquoise Hill Resources (TRQ) +19%; Shares of TRQ and other copper miners rose on strength of copper prices during the week. Sociedad Quimica y Minera de Chile (SQM) +16.32% Mosaic (MOS) +15.18%; Mosaic was among U.S. fertilizer producers that saw jumps in share prices as competing European ammonia plants close because of high natural gas prices. Livent (LTHM) +15.02%
Biologic medicines, COVID vaccines spurring growth for contract injectable packaging firms Aug. 27, 2022 4:00 PM ETWest Pharmaceutical Services, Inc. (WST), TMO, CTLT, BAXPFE, CDMO, FUJIF, FUJIY, GRRMF, NPRRF A rise in the number of biologic drugs approved along with the large number of COVID-19 vaccine doses being produced is spurring growth in the contract injectable manufacturing industry. In a recent report from GlobalData, the U.S. FDA approved the highest number of biologic drugs in 2021. Unlike standard medications, which can be given orally, biologics must be given via injection. The report also found that an increasing number of biologics approvals are going to small and mid-sized pharma companies. This is important as they are less likely to have the capabilities to produce biologics and need to outsource production. But even large and mega-cap pharmas are turning to contract injectable manufacturers, the report noted, as many new biologics are complicated cell and gene therapies. "Large [contract manufacturing organizations] have been acquiring [expertise] in recent years and, again, large and mega cap sponsors will require these service," wrote GlobalData Pharma Analyst Adam Bradbury. The report noted that the largest primary packaging type for injectables are vials. That could benefit companies like West Pharmaceutical Services (NYSE:WST), which makes stoppers and seals for injectable packaging systems, as well syringe and cartridge components. Similar companies include Nipro Corp. (OTC:NPRRF) and Gerresheimer (OTCPK:GRRMF). One of the companies that could stand to benefit the most from the contract injectable manufacturing trend is Thermo Fisher Scientific (NYSE:TMO) due to its Pantheon contract development and manufacturing organization (CDMO) division. GlobalData stated that Pantheon is the dominant player in the contract injectable packaging market. TMO<----- IRA? GRRMF- NPRRF- WST-
THE BOTTOM OF THE WEEK- NEW SEGMENT- I have had some look spotting bottoms. They are twitchy and attractive and one can easily fall for a nice bottom without properly thinking out the consequences. These bottom spots are not usually based off any technical merits which makes the process harrowing. Today we take you to 203 Redwood Shores Parkway,8th Floor.Redwood City, CA... to a little place called GoshPosh. Description Poshmark, Inc. operates as a social marketplace for new and secondhand style products in the United States, Canada, India, and Australia. The company offers apparel, footwear, home, beauty, and pet products, as well as accessories. As of December 31, 2021, it had 7.6 million active buyers. The company was formerly known as GoshPosh, Inc. and changed its name to Poshmark, Inc. in 2011. Poshmark, Inc. was incorporated in 2011 and is headquartered in Redwood City, California. Barclays analyst Trevor Young raised his rating from equal weight to overweight, noting positive signs in the company's recent earnings report. He argued that its growing base of active buyers has reached a tipping point for the platform. Young also cited high engagement from social elements of the platform, secular tailwinds, and a benefit from consumers trading down during a possible recession. Young raised his price target on the stock from $13 to $17. In a tough quarter fore-commerce stocks, Poshmark reported revenue growth of 9% to $89.1 million ahead of estimates at $87.4 million and coming after it delivered 22% top-line growth in the quarter a year ago. Active buyers rose 14% to 8 million, but adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA)flipped from a $6.5 million profit in the quarter a year ago to a $9.8 million loss, showing the company is having trouble monetizing its user growth. Guidance for the third quarter was also weak, calling for a sequential decline in revenue to $85 million to $87 million and an adjusted EBITDA loss of $9 million to $11 million. That does not sound good. But is it the sort of clearing out process that then leads to a bottom? As the U.S. continues to wrestle with economic uncertainty and inflation,demand for luxury goods has remained strong. But that may be starting to change, at least for part of the luxury market. According to Pauline Brown, former LVMH Chairman of North America, there are two types of luxury consumers, and they're responding differently as inflation wears on. "There are the uber affluent and then there's the aspirational consumer," Brown told Yahoo Finance Live (video above). She added that recent earnings "indicate that at least on the margin of luxury goods, that there is some fraying. But there is also a segment of buyer that is utterly immune to the kind of forces that we're talking about.” Brown explained that retailers like Ralph Lauren (RL) and Capri Holdings (CPRI), which owns Versace and Michael Kors, are more dependent on aspirational consumers whereas LVMH (LVMUY) and Gucci-owner Kering (KER.PA) rely on the "core" affluent consumer. Ralph Lauren and Capri beat Wall Street expectations in the second quarter, though the European fashion houses held up even better, Brown said. LVMH and Kering both reported revenue growth of over 20% in the first half of the year despite macroeconomic pressures. As the overall retail sector faced a series of setbacks in recent months, Brown stated that luxury conglomerates remained steady because wealthy consumers were paying full price and buying in volume. "That's great for the bottom line of these companies," Brown said. Consumers are “just not looking for discounts in the way that they historically have, number one, because there's a lot of occasions. There's travel, and there's weddings, and there's other celebrations. And that is a big impetus for people to go into the stores." The current environment marks a significant shift from the "very promotional environment" the luxury sector faced at the height of the pandemic. And as the sector continues to rebound, year-over-year comparisons are also looking more favorable. "I would say that in general, with the exception, maybe, of what's happening with the China consumer, which has slowed down for reasons that go above and beyond COVID and post-COVID, that the U.S. consumer, which is consistently showing the fastest growth, is still in a pretty healthy recovery mode from a year ago, and even from two years ago," Brown said. And while the affluent buyer continues to shop for Louis Vuitton and Chanel at full price, aspirational consumers are looking elsewhere for contemporary brands, such as in the resale market and online marketplaces like Poshmark. <---------------------------- 52 week low of $9 Poshmark, Inc. (POSH)- Bottom Call- NasdaqGS - NasdaqGS Real Time Price. 10.58-0.71(-6.29%) Man arranges the window of the Gucci luxury store on August 11, 2022, in Saint Tropez, France.
I'm not seeing Lithium miners move yet here ( I bailed ages ago ) but Copper miners here are definitely grinding higher on some volume. I'm trading Capstone and keeping an eye on Copper Mountain. TRQ is a new $40 Cdn takeover bid so it's an arbitrage play at this point ( $37.xx might be a place to park some cash or day trade dips for spare change ). Old offer was $34 it went as high as $38 on that offer then dropped when they declined the deal. I believe the $40 may still be a low ball offer given the resource but in this market miners can't necessarily get full value.
Nine you seem like you can handle a low price name... Have you heard of Nevada Copper Corp. (NEVDF) Other OTC - Other OTC Delayed Price. 0.2791+0.0262(+10.36%)<-------------- At close: August 26 03:57PM EDT These guys are skirting bankruptcy! But they seem to have aplan... restarting amine and funding seems<--- to be in place. Nevada Copper Announces Restart Plan and Significant Proposed Financing Package Nevada Copper Corp. Thu, August 25, 2022, 8:55 PM In this article: NEVDF +10.36% Nevada Copper Corp. YERINGTON, Nev., Aug. 25, 2022 (GLOBE NEWSWIRE) --Nevada Copper (TSX: NCU) (OTC: NEVDF) (FSE: ZYTA) (“Nevada Copper” or the “Company”)is pleased to announce that it has agreed to non-binding terms with its key financing partners to provide up to US$93 million of liquidity to the Company in order to support the restart and ramp-up of the Company’s Pumpkin Hollow copper mine (the “Underground Mine”) located in Yerington, Nevada. The Company also announced the key components of its newly developed restart plan for the Underground Mine. Randy Buffington, Chief Executive Officer, stated: “I am very pleased with the substantial ongoing support of all our key stakeholders. The significant contribution by each of them is a testament to the conviction in the quality of the Pumpkin Hollow project and its intrinsic value. The current pause of production allows the Company to make meaningful changes to address challenges that were impeding the final stages of the Underground Mine ramp-up. This is intended to de-risk the business plan and build a more profitable long-term business from the Underground Mine. We also continue to advance the open pit project at Pumpkin Hollow through the ongoing pre-feasibility study update process. I would also like to thank our team and key suppliers for the commitment and support through the recent challenges and I look forward to working towards a resumption of full operations.” Restart Mine Plan The Company has advanced planning for the restart of operations at its Underground Mine. The restart plan is intended to de-risk the path to full-scale production by focusing on de-bottlenecking and completion of critical capital projects, in addition to the build-up of significant stope ore inventory, to facilitate a more efficient ramp-up upon mill restart and to reduce cash burn during the ramp-up period. Provided that the funding package described below is completed on the expected timeline, the key components of the restart plan will be as follows: (i) changes to the underground mining contractor arrangements in order to improve performance of ramp-up activities with an ultimate goal of transitioning certain underground mining activities to be Company-performed, (ii) the second dike crossing scheduled to be completed during the third quarter of 2022 and the final dike crossing scheduled to be completed by the end of 2022, (iii) stoping in the higher grade East North mining zone scheduled to commence in the second quarter of 2023, and (iv) the mill restart scheduled to commence in the third quarter of 2023. If the restart plan is executed as planned and on schedule, management anticipates that underground production will ramp-up to hoisting rates of approximately 3,000 tons per day (“tpd”) in the third quarter of 2023 and then further increase to 5,000 tpd in the fourth quarter of 2023. This revised operating plan is designed to mitigate operating risks and enhance flexibility of the underground operations. Board Strengthening In conjunction with the restart financing package, the board of directors of the Company (the “Board”) will be strengthened in a number of areas, including: Chief Executive Officer Randy Buffington will join the Board as a director; and Both Triple Flag and Mercuria will each have the right to nominate a director and to have a representative on the Technical Committee of the Board. Financing Package Highlights Non-binding terms have been agreed with the Company’s senior lender, KfW IPEX-Bank (“KfW”), its working capital provider, Concord Resources Limited (“Concord”), its largest shareholder, Pala Investments Limited (“Pala”), another significant shareholder, Mercuria Energy (“Mercuria”), and its stream and royalty partner, Triple Flag Precious Metals Corp. (“Triple Flag”) for a restart funding package of up to US$93 million. The proceeds of the restart financing package are to be used primarily to fund the restart and ramp-up of the Underground Mine. The highlights of the non-binding package are as follows: Equity Investments (US$40 million): Pala and Mercuria each to provide US$20 million in exchange for common shares of the Company. Pala has already provided an early disbursement of US$7.5 million from its US$20 million commitment. Stream and Royalty Financing (US$30 million): Triple Flag to increase its existing net smelter returns royalty on the Company’s open pit project (the “Open Pit”) from 0.7% to 2% for a purchase price of US$26.2 million, subject to a full buyback of the increased royalty percentage. In addition, Triple Flag to accelerate the US$3.8 million remaining to be funded under the Company’s existing metals purchase and sale agreement with Triple Flag (the “Underground Mine Stream Agreement”). KfW Facility Extension (US$15 million committed): The Company’s senior credit facility with KfW (the “KfW Facility”) to be amended to provide for a new tranche of up to US$25 million, of which Pala, Triple Flag and Mercuria would commit the first US$15 million as a backstop. Deferrals under Senior Project Facility and Working Capital Facility (expected to be at least US$8 million): KfW to defer three interest payments under the KfW Facility. Concord to defer interest and principal payments under the Company’s working capital facility (the “Working Capital Facility”). Further Details of Restart Financing Package Extension and Deferrals under KfW Facility A new tranche under the KfW Facility would provide for new funding of up to US$25 million (the “Extension Tranche”), with such loans being eligible to be funded by any of the parties that are part of the funding package, or any other lenders approved by such parties. Pala, Triple Flag and Mercuria have agreed to each backstop US$5 million under the Extension Tranche. The Extension Tranche would be available to be drawn until December 31, 2023, after (i) the above stream, royalty and equity funds have been fully expended by the Company, and (ii) the Company has less than US$10 million cash available for operating expenses. The Extension Tranche would be available on substantially the same terms as the tranche A loan under the KfW Facility and would mature on the same date as tranche A, July 31, 2029. The interest rate on the Extension Tranche funds would be the SOFR + 5% and such loans would be secured by first lien security that ranks pari passu with KfW’s existing security under the KfW Facility. In addition, KfW would defer three interest payments under the tranche A and tranche B loans of the KfW Facility, being the interest payments due in July 2022 (which was previously deferred), January 2023 and July 2023. The deferred interest payments would be capitalized and added to the outstanding principal amount owing under the KfW Facility. Working Capital Facility Deferrals Concord to defer the repayment of the current principal balance under the Working Capital Facility until the earlier of (i) the restart of copper deliveries from the Underground Mine and the resumption of deliveries of concentrate to Concord pursuant to the offtake arrangements between Concord and the Company and (ii) a restart long-stop date to be determined. Concord would also defer interest payments owing under the Working Capital Facility until the restart of copper deliveries, after which interest would be paid on the repayment date for each tranche owing under the Working Capital Facility. New draws under the Working Capital Facility would become available upon the resumption of deliveries and satisfaction of certain other conditions. These changes would be effected through amendments to, and waivers under, the Working Capital Facility. Equity Investments Pala and Mercuria to provide a US$40 million equity investment to the Company, with Pala and Mercuria to each provide US$20 million. Mercuria will fund its equity investment in two tranches, with US$10 million being funded at the closing of the funding package and the remaining US$10 million to be put in escrow on closing and funded upon the satisfaction or waiver of certain conditions. Pala’s subscription and the first tranche of Mercuria’s subscription will be at a subscription price equal to a 15% discount to the five-day volume weighted average price (the “VWAP”) of the Company’s common shares on the Toronto Stock Exchange (the “TSX”) as of the trading day prior to the closing of the funding package (the “Equity Subscription Price”). The second tranche of Mercuria’s investment will be at a subscription price equal to a 15% discount to the five-day VWAP of the Company’s common shares on the TSX as of the trading day prior to the draw-down of such tranche by the Company. In connection with Mercuria’s investment, Mercuria would be granted the right to nominate one director to the Board and it would also be granted the right to nominate one individual to the Company’s technical committee. Pala’s investment contribution would be satisfied, in part, through the cancellation of the short-term debt advanced to the Company by Pala as interim financing. Pala has indicated that it intends to provide additional short-term financing for the next few weeks to allow the Company time to close the financing package. The Company is in discussions with other potential capital providers and may also pursue public and private capital markets opportunities to raise additional funds to complete the ramp-up process. Stream and Royalty Financing Triple Flag to provide an aggregate of US$30 million through (i) an acceleration of the payment of its US$3.8 million unfunded deposit under the Underground Mine Stream Agreement and (ii) an increase in its existing net smelter returns royalty on the Open Pit from 0.7% to 2% for a purchase price of US$26.2 million: As part of the restart funding package, Triple Flag would accelerate the remaining payment of the increased deposit in the amount of US$3.8 million to be disbursed under the existing Underground Mine Stream Agreement. In addition, the Company and Triple Flag would amend the Open Pit royalty agreement that was entered into in March 2020 to increase the total royalty payable to 2% in exchange for a US$26.2 million purchase price. The Company will have the option to buy back 100% of the increased Open Pit royalty (being the 1.3% increased royalty amount) for US$33 million until the earlier of (i) 24 months from the date that the amended and restated Open Pit royalty agreement is entered into; or (ii) a change of control of the Company. Triple Flag would fund its investment in two tranches, with US$20 million being funded at the closing of the funding package and the remaining US$10 million to be put in escrow on closing and funded upon the satisfaction or waiver of certain conditions. In connection with Triple Flag’s investment, Triple Flag would be granted the right to nominate one director to the Board (which it may opt to exercise at any time through a nominee to the Company’s advisory board instead of the Board) and it would also be granted the right to nominate one individual to the Company’s technical committee. Debt Consolidation The Company and Pala to consolidate all of the indebtedness currently owing to Pala by the Company into an amended and restated credit facility (the “Amended Credit Facility”), which would amend the existing credit agreement entered into by Pala and the Company in November 2021 (the “Pala Facility”). The loans outstanding to be consolidated into the Amended Credit Facility would include (i) the total of US$53 million outstanding under the Pala Facility, and (ii) US$20 million that was recently advanced to the Company under a promissory note in June and July 2022. Amounts owing under the Amended Credit Facility would be convertible into common shares of the Company, at Pala’s option, at a conversion price equal to a 20% premium to the Equity Subscription Price. (In addition, Mercuria would be granted warrants to allow it to acquire common shares pro rata with Pala’s conversion of its convertible debt to preserve its equity position at the same exercise price as the Pala convertible debt conversion price.) Pala would be granted fourth-lien security to secure amounts owing under the Amended Credit Facility (after KfW, Triple Flag and Concord) and the Company’s wholly owned subsidiary, Nevada Copper, Inc. (“NCI”), would become a guarantor of all amounts outstanding under the Amended Credit Facility (NCI is the principal obligor under the KfW Facility, the Underground Mine Stream Agreement and the Working Capital Facility). The remaining commercial terms in the Amended Credit Facility will remain substantially the same as the terms under the Pala Facility. In addition, certain other amounts owing to Pala by the Company would be satisfied through the issuance of additional common shares to Pala at the Equity Subscription Price. In connection with the entering into of the Amended Credit Facility, Pala and KfW would agree to amend Pala’s existing guarantee of the US$15 million tranche B loan outstanding under the KfW Facility to permit Pala to purchase the loan in certain circumstances. Definitive Documentation, Regulatory and Other Matters The closing of the funding package described above is subject to, among other things, finalization of the specific terms thereof, negotiation and execution of definitive documentation and the satisfaction of various regulatory requirements. The Company and its key financing partners intend to enter into definitive documents in respect of the funding package by mid-September. The completion of the financing package will be subject to the approval of the TSX and, given the urgency of the Company’s liquidity situation, the Company intends to rely on certain exemptions from the shareholder approval requirement that might otherwise apply under TSX rules and applicable securities laws. There can be no assurance that binding agreements will be entered into or completed (or the required regulatory approvals obtained) on terms satisfactory to the Company and within the required timeframe, or at all. In addition, there can be no assurance that the Company will be able to raise the further funding to supplement the financing package described above that will be required to complete the restart and ramp-up process. If the restart funding package is not completed, absent other financing, the Company will not be able to continue carrying on business in the ordinary course and may need to pursue proceedings for creditor protection. VWAP in canada<-----
West Pharmaceutical Services, Inc. (WST) NYSE - NYSE Delayed Price. 303.77-10.91(-3.47%) At close: August 26 04:04PM EDT Expensive! But tasty! West Pharmaceutical's (WST) Latest Investment to Boost Business West Pharmaceutical Services, Inc.WST recently announced that it had made a strategic investment in Latch Medical. Following this, the company will take a minority ownership stake in Latch Medical. It is worth mentioning that Latch Medical is a Dublin-based renowned name in next-generation vaccine and biologics delivery technology and is pioneering a new approach to intradermal delivery. The latest minority investment is expected to significantly boost West Pharmaceutical’s global business. Rationale Behind the Investment Per West Pharmaceutical’s management, the continuously evolving methods of delivering medicines to patients reflect their desire for ease of use and effectiveness. Management believes the latest investment will likely boost its business by including Latch Medical's innovative intradermal-delivery technology. This, in turn, will likely provide total care via better outcomes and support innovative technologies that serve patients. Latch Medical's management feels that West Pharmaceutical’s investment in it can accelerate the impact of its technology. Industry Prospects Per a report by bcc research, the global market for vaccine delivery devices should grow from $3.7 billion in 2021 to $4.4 billion by 2026 at a CAGR of 3.8%. Factors like demand for advanced vaccine delivery devices, and urgency for developed and efficient vaccination devices during the COVID-19 pandemic are expected to drive the market. Given the market potential, West Pharmaceutical’s recent investment is likely to provide a significant boost to its business globally. Notable Developments Last month, West Pharmaceutical reported second-quarter 2022 results, wherein it recorded a robust year-over-year uptick in the overall top line and the bottom line. It also saw strong performance by the Proprietary Products segment and continued strong demand for the company’s NovaPure, Envision and Daikyo Crystal Zenith products. Solid double-digit organic sales growth in the Biologics and Generics market units and mid-single digit organic sales growth in the Pharma market unit were other quarterly highlights. In June, West Pharmaceutical announced its plans to introduce its new Daikyo Crystal Zenith (CZ) 2.25mL Insert Needle Syringe System at the BIO International Convention. The 2.25mL CZ Insert Needle Syringe System is an expansion upon the 1mL Insert Needle Syringe System being offered currently. Price Performance The stock has lost 22.9% over the past year compared with the industry’s 5.5% fall and the S&P 500's 4.4% decline. Oooooooooooo. I wonder if WST has options-? The chart is good and in support Uptrend hits $550!!!!!! For options I would Look for $350 calls... VAN?
Small/micro caps have been struggling this year; I think there is no reason to buy into the really riskier ones when higher quality solid names are oversold. I dabble a little in special names like Avanti Helium but that's the only small cap I put new money in this summer. I would be very careful on high risk miners you'd be better off with high risk energy plays with underappreciated assets. I took a hit on Argonaut Gold earlier this year everyone loved the stock it trended nicely then on cost overrun news it cratered overnight. Bailed and it went even lower.
Just as Wall Street Piles In, Tech Stocks Face Fresh Rates Storm 1/ 3 Just as Wall Street Piles In, Tech Stocks Face Fresh Rates Storm Jessica Menton Sun, August 28, 2022, 1:00 PM (Bloomberg) -- Jerome Powell’s latest hawkish missive threatens to open up a new front in the ever-raging battle between tech stocks and Treasury yields -- potentially hurting money managers who’ve just plunged back into US megacap companies in droves. The Nasdaq 100 Index posted its biggest decline since the week ending June 10 after the Federal Reserve Chair touted Friday his iron-clad resolve to hike interest rates into restrictive economic territory to cool inflation at decade highs. Portfolio managers, including long-term bulls on the sector, see the risk of fresh losses ahead for rate-sensitive technology stocks -- as all signs suggest Powell will make good on his policy threat given prices for goods and services are still stubbornly high across the globe. A fast rise in the 10-year note yield this month has already rocked so-called growth equities while igniting a cross-asset selloff after the recent $7 trillion stock rebound. Wall Street worrywarts are now bracing for the Treasury benchmark to retest the near 3.5% peak reached in June or rise higher still to 4% -- threatening fresh damage for blue-chip companies after the group rebounded more than 20% from the bear-market nadir. “If yields spike back to 3.5%, that will jolt markets and be particularly painful for tech stocks,” said Nancy Tengler, chief investment officer of Laffer Tengler Investments. “If we get to 4%, the whole stock market will shift and recalibrate.” All this threatens to catch hedge funds off-guard after the cohort in industry data tracked by Goldman Sachs Group Inc. ramped up tech bets last quarter to the highest since the start of the pandemic, on the conviction that a brewing economic slowdown would revive the megacap safety trade. Another wave of volatility jolted Wall Street on Friday, after Powell’s jawboning at the Jackson Hole symposium as he warned of restrictive policy “for some time” given history “cautions strongly against prematurely loosening policy.” Futures contracts referencing the Fed’s September policy meeting priced in 64 basis points of tightening at one point Friday, compared to 59 basis points before the speech. But the stock market bore the brunt of Powell’s message that interest-rate increases may undercut economic growth as the tech-heavy Nasdaq 100 tumbled 4.1% even as the 10-year yield stayed broadly stable. Generally speaking, technology companies are particularly susceptible to fears of rising interest rates because many of them are valued on projected profits delivered years in the future. The present value of those future profits are worth less as yields rise. Soaring interest rates also make financing operations more expensive. That’s not an issue for companies like Apple Inc. and Microsoft Corp. that are flush with cash, but it increases risks for younger companies that are burning cash in pursuit of rapid growth. The 10-year US Treasury yield hovered around 3% Friday, versus around 2.57% in early August. “Investors are grasping for a dovish pivot, but they’re not going to get it until inflation falls -- it’s certainly peaked, but it needs to meaningfully come down,” said Sean Sun, portfolio manager at Thornburg Investment Management. “If it takes the Fed raising rates even more aggressively to get there, then we could see the 10-year back to around 3.5%. This transition will hardly be painless for tech stocks.” Money managers with a long-term focus are famously reluctant to offload tech exposures due to the cohort’s reliable profit generation, healthy balance sheets and ability to ride disinflationary trends. For investors looking to maintain their exposure to technology firms, Sun recommends clients snap up shares of companies in IT services, while shying away from unprofitable, longer-term plays like early-stage software companies. Tengler at Laffer Tengler sees tech pain in the near term, though she favors the cohort over the next three to five years. She’s sticking with cyber security stocks and companies that invest in cloud services like Amazon.com Inc., Microsoft and Google parent Alphabet Inc., while steering clear of struggling social-media firms like Facebook parent Meta Platforms Inc. Meanwhile, prices for electronics in the Adobe Digital Price Index, an alternative measure of consumer price trends, fell 9.3% in August from a year ago, which may help signal lower inflation in the coming months, according to Jim Paulsen, chief investment strategist at The Leuthold Group. That’s one reason why he’s a bull on the sector. “The real issue for longer-term investors is whether this is the 1970s, where we have inflation permanently higher for longer? If it is, then you don’t want tech stocks,” Paulsen said in an interview. “Or is this just a cyclical spike in inflation? The odds strongly favor that we’ll eventually return to disinflation.” >>>>> Great article! One angle I would of added is what happens if the Fed raises rates and inflation does not go down? Nobody has asked that question. The market would lose faith in the Fed. That is a most horrible and brutal event.
Letter From The Wood- Greetings: Whitey the deer has two babies! Confirmed. They are both normal so one of them will now provide us with a new white deer assuming one is a girl (they usually are) -- Amazing thing happened down by the brook which is just a trickle of sad water-- This Drought! Ayyyyyyyy. But a female mom deer with two babies that we heard was on the property I spotted them from the upper deck. Mom went inland and lunged into the thicket where sometomes the bear is so I thought she was checking it out but then as these deer mom's do she just sauntered off and left the two babies in the brook. Well here comes Whitey and her two babies and THIS IS WHITEYS PROPERTY ALWAYS HAS BEEN FOR GENERATIONS.. And damn if she didn't mini charge the other babies and give a front foot kick! Holy cow. Message sent. In the garden the green been tree keeps giving. Ok it's a vine but its a tree to me and it is a metaphor I think on the stock market. It's amazing how many beans you get out of one plant. It just keeps giving and then at some point it doesn't.