Market Talk
This post is an update from the Jones report. The same general outlook from the last post called "laying low awhile" still seems to be prevailing. Volatility is high as many different pronouncements and views give a mixed to sketchy picture of the near term economic climate. The market is forward looking, some say about 6 months ahead. At same time, some of the longer term goals of the new administration seem to present possibilities of green shoots to the American economy.
The market sentiment, since the election has somewhat faded with concerns about inflation, stagflation with slow growth and higher inflation. Add jobs cuts with unemployment increasing over the coming months is raising eyebrows in the trading and investing minds. For example, imposing taxes on imports can initially create higher inflation. The goal could be to create more made in America but that end can be elusive, with mixed initial results. Uncertainty regarding a dangerous world on the global stage is something to watch regarding market triggers. On the other hand, a positive development in the Ukraine may be underway which could lead to more overall optimism including the markets.
The above preamble makes near term stock predicting like "a guess". In this light, the mode here has been to "lighten up, risk off" on some stocks in favor of the sidelines with dry powder. You may have noticed the "Stock Talk" of small cap risk stocks has been down played recently. When market corrections do happen, the more speculative stocks with no earnings can get hit harder.
Stock Talk
Kratos Defense & Security Solutions, Inc. (KTOS)
KTOS stock has been covered here since the 20's. In other defense stocks of larger companies, we see even though they produced good earnings, the share price got hammered. The suggestion to trade some KTOS while it was in the 30's was made here. The nature of the KTOS defense business pointed to holding some shares since it was pointed out here in the 20's. The stock sat at $25 the day before earnings report. About nine cents eps in earnings was estimated. Recent contracts have been announced and the earnings beat has buoyed KTOS to where it is outperforming an overall lousy market.
KTOS is working in defense areas such as drones and hypersonic rockets, testing as well as 3D printing and satellite communications that are all sorely needed to keep up with our adversaries. Holding and/or buying some KTOS on dips seems like a reasonable approach.
Altria Group, Inc (MO) : Steady earnings and a near 7 to 8% high dividend to reinvest. The recent earnings report beat estimates with a buyback in process. There was a recent court decision that could adversely impact their importing of NJOY devices. However, an updated ACE-2 vape is in development and planned for manufacture in the US places such as Richmond VA. The view here is to hold some MO and watch developments.
Permian Resources (PR): With easing of past natural gas restrictions, a new renaissance back to cleaner and reliable energy that nat gas brings. Holding some PR. A current 4.5 % dividend rate is not too bad to hold a few PR shares and see how things play out with natural gas and oil prices in the Permian basin of America. PR has the earnings to hold. But, PR has recently faded some with the overall lousy market.
Kinross Gold Corp. (KGC): Just when ya think Gold can't get over the hump of $3 K an ounce, it starts creeping higher presently $2996 to the magic mark. Today, some fancy pants Wall Street pundits are pronouncing $3500 as the next level to come during the global tax party and expected inflation. It seems that higher gold prices could offset higher production costs and drive Kinross earnings higher. In this climate, KGC stock has been put back on the Jones Report watch list.
Intel Corporation (INTC): As an aside, this post is made on a new laptop PC with Intel processor inside. Like it just fine. Intel is getting a lot of new positive buzz. Recent news of Intel offering a new graphics card, Arc B580, with stellar reviews and selling off the shelves . Yesterday, a new CEO was announced with much experience in the semiconductor market and there are rumors of several entities interested in partnering with Intel's foundry business here in America. Remember that NVDA and AMD produces are made in Taiwan. The buzz on Intel is catching buying interest in the past few days. Is it early or too late to get in some INTC shares? All we can say is maybe INTC is a buy some and watch with key word "some". Or maybe it's a wait and see situation depending on your own risk tolerance. Could INTC be breaking out to head to the 30's again? We have to wait and see said the blind man. It's a tough overall market lately.
Dry Powder. Maintain some dry powder manage your portfolio according to your best views and interests to make some money!
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If you dare ... Stay tuned and aware ....
For now, we close by noting that any views on the market and stocks on any particular day may change in the future days to come. That is why we watch and see how our views match up with the reality of the time. But trying to look ahead a few months into the future may be a way to do things. If you think too deep about world events and the recent alliances forming, projecting ahead can be a dicey endeavor. In all - we use the word maybe "some", not "too much" and play it accordingly. Remember, never get arrogant in our various notions because things do change in the market and individual stocks are subject to many factors outside of our control.. So we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
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