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Gina Sanchez explains why these two mega cap stocks are a buy

In a market that continues to punish the mega cap stocks, Gina Sanchez – the chief market strategist at Lido Advisors, remains bullish on the following…

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In a market that continues to punish the mega cap stocks, Gina Sanchez – the chief market strategist at Lido Advisors, remains bullish on the following two.  

Walmart Inc (NYSE: WMT)

The retail giant did fairly well during the pandemic and now Sanchez is convinced it’ll turn out to be an even better reopening stock. This afternoon on CNBC’s “The Exchange”, she said:

Now they’re playing the reopening game. If anybody can handle supply chain problems, it’s Walmart. They boast one of the top logistics team in the world. So, this is a stock we think can manage and navigate the risks and still give you defensive returns.

The American multinational is expected to report its Q1 results on May 17th. Ahead of earnings, the stock is down nearly 8.0% from its year-to-date high.  

Nvidia Corporation (NASDAQ: NVDA)

The semiconductor giant is down almost 45% year-to-date, which, as per Gina Sanchez, makes up for a fantastic opportunity to buy a market leader at a deep discount. Speaking with CNBC’s Kelly Evans, she noted:

The underpinning for almost all demand going forward seems to be in the digital space. And that’s reliant on the Cloud, which is reliant on semiconductors. Nvidia is easily the top player in this space right now. The Cloud trend is just not going away.

Nvidia will also be reporting its quarterly results before month end. According to Motiur Rahman – financial analyst at Invezz, the Santa Clara-headquartered company is headed for $280 a share.

The post Gina Sanchez explains why these two mega cap stocks are a buy appeared first on Invezz.

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Economics

Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

A week ago, following dismal guidance by Walmart,…

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Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

A week ago, following dismal guidance by Walmart, Target indicated that it is seeing a shift in the consumer wallet away from the pandemic purchases and into reopening purchases - including apparel - and the pace of this shift caught some retailers off guard on inventory. WMT, COST, and TGT all saw their stocks fall sharply last week as investor concerns around a US consumer slowdown mounted and investors reconsidered just where, if anywhere, you can play "defense" in the current market.

But as Goldman's Chris Hussey writes today, this week, results from companies like DKS, Macy's, JWN, WSM, DLTR, and DG painted a decidedly different picture.

Deep discount retailers Dollar Tree - or rather Dollar 25 Tree - and Dollar General both posted strong results and DLTR raised top-line guidance.

Which isn't surprising: as we discussed in "Middle Class Is Shutting Down As Spending By The Rich Remains Robust" when consumers are trading down - as they are doing now due to Biden's runaway inflation - dollar stores see more business.

As a result, Dollar Tree surged as much as 20% on Thursday, the biggest intraday move since October 2020. Evercore ISI said Dollar Tree's move to a "$1.25 price point" last November from $1 “came in the nick of time" adding that "given the broad-based inflationary cost pressures, the 25% price increase drove material sales and margin upside for both the namesake division and the total company," wrote analyst Michael Montani who also said that while freight, transport, and labor headwinds are real, some of the pressure cited by Target last week was likely company specific.

The analyst concluded that the read-across from DG and DLTR is “favorable,” and it seems that the low-end consumer is “hanging in better than initially thought.” Or rather, the middle-class is getting crushed and it has no choice but to trade down to the cheapest retail outlets.

And with countless shorts having piled up and getting massively squeezed, the S&P 500 Consumer Discretionary Index today has risen as much as 5.6%, its best day since April 2020, as optimism on the health of the consumer returns following a string of better-than-expected earnings reports from retailers.

Top performers in the S5COND index include Dollar Tree, Dollar General, Norwegian Cruise, Caesars Entertainment and Carnival; the Discretionary Index is on pace for its best week since March 18, when the group climbed 9.3%; the index sank 7.4% as Walmart and Target reports spooked investors. The index is still down almost 30% YTD.

"Retail earnings are bullish.... with four blow-outs,” said Vital Knowledge’s Adam Crisafulli, referring to quarterly reports from Williams-Sonoma, Macy’s, Dollar General, and Dollar Tree.  “The overall retail industry is experiencing stark changes and the market is incorrectly conflating these shifts with underlying demand weakness when the actual health of the consumer is much better than it seems,” Crisafulli says, although there are many - this website included - who wholeheartedly disagree with his optimistic view of the US consumer.

Remarkably, thanks to today’s rally, even Burlington Stores, which sank as much as 12% in premarket on disappointing results, is trading up as much as 11% and some say, the rally helped reverse the earlier tumble in NVDA shares.

The discretionary group is also getting a boost from airline operators Southwest and JetBlue, helping travel-related names, while on the economic front, better-than-expected personal consumption (for the revised Q1 GDP print). and jobless claims may be adding to the bullishness according to Bloomberg.

Tyler Durden Thu, 05/26/2022 - 15:00

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Spread & Containment

Asymptomatic SARS-CoV-2 infections responsible for spreading of COVID-19 less than symptomatic infections

Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious…

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Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious than symptomatic infections. These are the conclusions of an update of a systematic review and meta-analysis publishing May 26th in the open access journal PLOS Medicine by Diana Buitrago-Garcia of the University of Bern, Switzerland, and colleagues.

Credit: Monstera, Pexels (CC0, https://creativecommons.org/publicdomain/zero/1.0/)

Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious than symptomatic infections. These are the conclusions of an update of a systematic review and meta-analysis publishing May 26th in the open access journal PLOS Medicine by Diana Buitrago-Garcia of the University of Bern, Switzerland, and colleagues.

Debate about the level and risks of asymptomatic SARS-CoV-2 infections continues, with much ongoing research. Studies that assess people at just one time point can overestimate the proportion of true asymptomatic infections because those who go on to later develop symptoms are incorrectly classified as asymptomatic rather than presymptomatic. However, other studies can underestimate asymptomatic infections with research designs that are more likely to include symptomatic participants.

The new paper was an update of a living (as in, regularly updated) systematic review first published in April 2020, which includes additional, more recent studies through July 2021. 130 studies were included, with data on 28,426 people with SARS-CoV-2 across 42 countries, including 11,923 people defined as having asymptomatic infection. Because of extreme variability between included studies, the meta-analysis did not calculate a single estimate for asymptomatic infection rate, but it did estimate the inter-quartile range to be that 14–50% of infections were asymptomatic. Additionally, the researchers found that the secondary attack rate—a measure of the risk of transmission of SARS-CoV-2 — was about two-thirds lower from people without symptoms than from those with symptoms (risk ratio 0.32, 95%CI 0.16–0.64).

“If both the proportion and transmissibility of asymptomatic infection are relatively low, people with asymptomatic SARS-CoV-2 infection should account for a smaller proportion of overall transmission than presymptomatic individuals,” the authors say, while also pointing out that “when SARS-CoV-2 community transmission levels are high, physical distancing measures and mask-wearing need to be sustained to prevent transmission from close contact with people with asymptomatic and presymptomatic infection.”

Coauthor Nicola Low adds, “The true proportion of asymptomatic SARS-CoV-2 infection is still not known, and it would be misleading to rely on a single number because the 130 studies that we reviewed were so different. People with truly asymptomatic infection are, however, less infectious than those with symptomatic infection.”

#####

In your coverage, please use this URL to provide access to the freely available paper in PLOS Medicine:

http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003987  

Citation: Buitrago-Garcia D, Ipekci AM, Heron L, Imeri H, Araujo-Chaveron L, Arevalo-Rodriguez I, et al. (2022) Occurrence and transmission potential of asymptomatic and presymptomatic SARS-CoV-2 infections: Update of a living systematic review and meta-analysis. PLoS Med 19(5): e1003987. https://doi.org/10.1371/journal.pmed.1003987

Author Countries: Switzerland, France, Spain, Argentina, United Kingdom, Sweden, United States, Colombia

Funding: This study was funded by the Swiss National Science Foundation http://www.snf.ch/en (NL: 320030_176233); the European Union Horizon 2020 research and innovation programme https://ec.europa.eu/programmes/horizon2020/en (NL: 101003688); the Swiss government excellence scholarship https://www.sbfi.admin.ch/sbfi/en/home/education/scholarships-and-grants/swiss-government-excellence-scholarships.html (DBG: 2019.0774) and the Swiss School of Public Health Global P3HS stipend https://ssphplus.ch/en/ (DBG). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.


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Economics

‘Insiders’ Are Buying This Dip

‘Insiders’ Are Buying This Dip

The Nasdaq is in the middle of its worst drawdown since the Lehman crisis and the Dow just suffered its longest…

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'Insiders' Are Buying This Dip

The Nasdaq is in the middle of its worst drawdown since the Lehman crisis and the Dow just suffered its longest losing streak in 99 years.

As that is happening, faith in The Fed is crumbling as Powell faces the central bankers' nemesis of stagflation... and all in an election year (threatening the confidence in The Fed's independence should it falter from its path of uber-hawkishness).

According to the latest BofA Fund Manager Survey, the grim 'market' has sent investors reeling with those equity funds tracked by EPFR Global suffering six straight weeks of outflows (the longest stretch of withdrawals since 2019), and cash levels among investors soaring to their highest level since September 2001.

Additionally, the BofA survey also showed that technology stocks are in the 'biggest short' since 2006.

The 'proverbial' dip-buyer appears to have abandoned hope as the strike on any Fed Put (at which Powell will fold like a cheap lawn chair over the pain) gets marked lower and lower.

But...

There is one group apparently, that is willing to dip a toe in the capital market deadpool - corporate insiders.

As Bloomberg reports, according to data compiled by the Washington Service, more than 1,100 corporate executives and officers have snapped up shares of their own firms in May, poised to exceed the number of sellers for the first month since March 2020 marked the pandemic trough two years ago.

The ratio has surged to 1.04 this month from 0.43 in April.

Notably, the insider buy-sell ratio also jumped in August 2015 and late 2018, with the former preceding a market bottom and the latter coinciding with one.

“It is a function of investors functioning at the '30,000 foot level' or 'macro' whereas insiders are functioning at the 'boots on the ground', company-fundamentals level,” said Craig Callahan, chief executive officer at Icon Advisers Inc. and author of 'Unloved Bull Markets'.

“We believe the company-fundamentals view is usually correct.”

Nicholas Colas, co-founder of DataTrek Research, is not as confident:

“All we know for sure is that the valuation of any stock or the entire market hinges on whether investor confidence in future cash flows is rising or falling. At present, confidence is falling,” he wrote in a recent note.

“This is not because stocks expect a recession. Rather, it is because the range of possible S&P 500 earnings power runs in a wide channel and can become wider still.”

Starbucks' Interim Chief Executive Officer Howard Schultz and Intel CEO Patrick Gelsinger are among corporate insiders who scooped up their own stock amid the latest market rout that took the S&P 500 to the brink of a bear market.

With their share prices plunging, we can't help but wonder if this 'buying' is mere virtue-signaling so that the board won't fire them for their absymal loss of market cap? 

Tyler Durden Thu, 05/26/2022 - 13:20

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