Beijing Initiates “Olympic Bubble” Measures For Pandemic Control
A coronavirus outbreak in Beijing’s neighboring city of Tianjin comes just four weeks before the start of the Winter Olympics in the Chinese capital.
This means all 15 million Tianjin residents are barred from entering Beijing which is 100 kilometers away. Meanwhile, Beijing’s so-called “Closed Loop” or “Bubble” measures for the Winter Olympics are now in full swing. The Olympics begin Feb. 4.
On Jan. 9, the Jinnan District Center for Disease Control and Prevention in Tianjin reported that 20 more people tested positive through COVID-19 PCR testing, a day after 20 others were found to have the virus. Those infected are linked to educational facilities, and the outbreak has spread to at least three schools.
The Tianjin Center for Disease Control and Prevention conducted genetic sequencing of the virus in two of the cases and identified the virus at the new Omicron variant.
On Jan. 9, the Tianjin municipal government decided to carry out nucleic acid testing on all its staff. Other testing measures for the public are likewise taking place.
“People in four districts, Jinan, Dongli, Xiqing, and Nankai are taking nucleic acid testing today,” Mr. Zhang from Nankai District, Tianjin told The Epoch Times on Jan. 9.
“The rest will take them tomorrow. Nankai District has notified the closure of the district. People in Jinan District have basically all done nucleic acid yesterday,” he said.
“People were still lining up at 3:00 am. At four o’clock in the morning, the inspectors started going door to door to administer nucleic acid [testing] to elderly people who had not taken it.”
Meanwhile, the Tianjin Municipal Examination Institute announced that all interviews for a teacher qualification examination scheduled for Jan. 9 had been canceled.
“There is a teacher qualification exam these two days,” Zhang said.
“I learned online that those who finished the exam on the 8th were required to quarantine, but it was announced at 11.30 p.m. yesterday that the test on the 9th was canceled,” he said.
“A lot of people came to Tianjin [for the exam] and live in a hotel. Now they just can’t go back. They may need to quarantine at their own expense. I saw someone saying online that he had no money, no food, and couldn’t go out.”
On Jan. 9, Beijing Center for Disease Control and Prevention issued a notice urging “Beijing residents not to go to Tianjin unless it is necessary, and Tianjin residents do not come to Beijing unless it is necessary.”
Officials at the Yingsi checkpoint on the Beijing-Shanghai Expressway told the state-run Beijing News that they had turned back many people and vehicles entering Beijing over the past two days.
The official request is understood not to be a “travel advisory” but an executive order.
In October 2021, Beijing issued a clear order banning entry into Beijing of the so-called “four categories of people,” including “people in the county with one or more local COVID infection(s) and those with travel history in that county within 14 days”. In other words, as long as there is a confirmed positive case of COVID-19 in a county, everyone from that county is not allowed to enter Beijing, including Beijing residents who stayed there within 14 days.
Zhang said the authorities are not concerned about the treatment of those who are ill from the virus.
“The media and the government have always focused on how many people have been tested positive,” he said. “But how many have been infected, and how many have been isolated, but how are these patients doing? How long does it take to recover? How effective is the treatment? Almost nothing is seen. Why is there no follow-up on concerns about lasting adverse effects from vaccines?”
Other than being nervous about the outbreak in Tianjin, Chinese Communist Party (CCP) authorities are further worried that the virus could spread from Xi’an in Shaanxi Province, through similarly named Shanxi Province, plus Henan, and Hebei provinces, and then on to Beijing.
The cities of Zhengzhou and Xuchang in Henan Province, south of Beijing, have been hit by the virus. Henan is a major transportation route into Beijing and currently all passengers traveling by train through the province will not be allowed to enter Beijing.
Another province joining Shaanxi and Hebei provinces is Shanxi. On Jan. 6, the Shanxi Provincial Office of Epidemic Prevention and Control issued a notice requiring people not to go out of the province unless necessary. The notice also requires people entering or returning to Shanxi to immediately report to their workplaces, communities, or hotels and take nucleic acid tests.
On Jan. 9, the Epidemic Prevention and Control Office in Jincheng City, Shanxi Province said that because “the epidemic situation around our city is becoming increasingly severe,” it will be “strictly” tightening controls. Among such measures are prohibiting access to county and village roads in Henan Province to Jincheng and discouraging the return of foreign vehicles and people with a history of travel to Henan Province via high-speed, national, and provincial roads and high-speed trains.
With the 2022 Winter Olympics set to kick off in Beijing on Feb. 4, the CCP hopes to demonstrate its “institutional confidence” to the world with its anti-epidemic measures.
Beijing has also carried out its “bubble management” in the lead-up to the event to ensure that people associated with the Games, including members of foreign sports teams and Chinese participants, do not come into contact with other “ordinary Chinese.”
Given that pandemic data released by the CCP is largely regarded as illogical, it is generally not recognized by the international community. It is incomprehensible for the international community that the city of Xi’an with a population of some 12 million people has been sealed off after less than 100 officially positive infections have been found.
Earnings Season Is in Full Swing — and So Are the Buying Opportunities
The S&P 500 reached 4,724 for the third time in three months — and failed to break higher last week.
When traders see that…
The S&P 500 reached 4,724 for the third time in three months — and failed to break higher last week.
When traders see that sort of behavior, they call it “resistance.” It can start to become part of a self-fulfilling prophecy.
Each time the S&P 500 has reached 4,724, investors worry that other traders will start selling again; they don’t want to be stuck holding the bag, so they sell — which can turn into a feedback loop when the market rises to that key level.
As annoying as this can be, it’s not all bad news. As long as market fundamentals remain positive, it gives us a chance to load up on some stocks that have been overlooked during the back and forth. As you will recall, last week we said investors should focus on energy stocks that had been overlooked over last month. That sector rose another 5% on average during the week.
We still like the energy and basic materials sector this week.
Beyond some technical issues the market is dealing with, this is a big week for earnings reports. Most companies in the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite will be reporting their profits for the fourth quarter of 2021 from now until early February.
The influx of quarterly reports (called “earnings season”) is usually a trigger for volatility. Volatility tends to be worse when the stocks that are reporting are near their yearly or all-time highs. Last week, we warned that because the big banks were near their highs, it would take a lot to make traders happy, and they were likely to fall after their reports.
Starting with JPMorgan Chase & Co. (NYSE:JPM)’s report on Friday morning, the banks are down. In fact, JPM dropped more than 6% following their report. There were a variety of small issues the banks were dealing with, the most worrisome was rising costs from inflation.
However, don’t get us wrong… the financial sector took a hit last week, and there are some weak spots, but overall the sector is doing extremely well, and that is actually setting us up for some interesting opportunities this week.
For the most part, the banks dropped on what we call a “technical issue” — meaning that prices had been rising and traders were looking for any excuse to sell and take some profits off the table. The JPM report was bad, but Citigroup Inc. (NYSE:C) and Wells Fargo & Co. (NYSE:WFC) also reported on Friday and recovered quickly after that selling had a chance to settle down.
Because inflation and economic growth are both pushing interest rates higher, we have a chance to turn a negative into a positive by using that to our advantage with banks and broker-dealers.
Here’s What to Do
After reading the reports and evaluating the sector, we think there are some unique opportunities in the banking sector.
We like Morgan Stanley (NYSE:MS) at prices under $96 per share. The big bank dropped after JPM’s report disappointed, but the stock appears oversold. Rising rates will add directly to MS’s bottom-line profits in 2022, but this recommendation comes with a caveat: Investors shouldn’t add a position just before its earnings report is released. So, you should wait until Wednesday morning, once the MS report has been released.
Raymond James Financial Inc. (NYSE:RJF) is also an interesting stock that many small traders overlook. RJF’s fundamental and price performance has been stellar but they have been lagging other brokers like The Charles Schwab Corp. (NYSE:SCHW). We think SCHW stole the limelight last year as they went on a buying frenzy (gobbling up TD Ameritrade recently). RJF should catch up in the short term, and rising rates will help.
We had recommended the regional banker, Regions Financial Corp. (NYSE:RF), earlier last year in anticipation that consumer loans would continue to grow despite rising rates. That has worked out and the stock is back in another buy position; we like prices at $24 per share or less. This is another company reporting next week, so we recommend waiting until Thursday morning before making a play for the stock.
The official start of earnings season was off to a mostly expected choppy start. The good news is that economic growth is still very positive, and that should send stocks higher towards the end of January.
Besides earnings, the big X-factor right now is rising interest rates. Long-term rates are high enough to slow growth, but it will probably keep tech and retail stocks in the dumps for a few more weeks. However, higher rates will work in our favor in the financial sector, which should be our focus this week.
We’ll be back with you on Friday.
John Jagerson & Wade Hansen
Editors, Trading Opportunites
More From InvestorPlace
- Stock Prodigy Who Found NIO at $2… Says Buy THIS Now
- Man Who Called Black Monday: “Prepare Now.”
- #1 EV Stock Still Flying Under the Radar
The post Earnings Season Is in Full Swing — and So Are the Buying Opportunities appeared first on InvestorPlace.
Top Energy Stocks to Watch in 2022 to Capture the Electrifying Growth
Despite being one of the worst-performing sectors over the past 10 years, the top energy stocks are now leading the stock market.
The post Top Energy Stocks…
Despite being one of the worst-performing sectors over the past 10 years, the top energy stocks are now leading the stock market. With inflation hitting a 39 year high in the U.S, cyclical stocks are back on top.
In fact, the Energy Select Sector SPDR Fund (NYSE: XLE) is up over 55% in the past year. Even more, the top energy stocks are off to a good start in 2022, pushing the ETF up over 13% so far.
After oil prices fell drastically when the pandemic first hit, prices are climbing back to their highest price since 2014. With this in mind, high inflation readings tend to benefit commodity stocks as investors look for less risk.
Not only that but with interest rates likely going up this year, crowded trades like tech stocks are getting clobbered.
Having said that, diversifying your portfolio with commodities can help buffer the impact. Keep reading to find the top energy stocks to watch in 2022 to boost your returns.
Top Energy Stocks for Growth Investors
Tech isn’t the only sector with growth leaders. Several energy stocks are leading the charge as profit margins are improving and more is being returned to shareholders. Given this, here are the top energy stocks for capturing growth.
Devon Energy (NYSE: DVN)
- Market Cap: 34.5B
- 1 Yr. Return: 167%
- 1 Yr. Revenue Growth: 214%
Devon Energy is outperforming the market, making it one of the top energy stocks. It’s surging by 167% in the past year to lead the S&P 500 index. The oil and gas exploration company holds a diverse portfolio of oil volumes (50%), gas volumes (26%) and NGL volumes (24%).
However, DVN is making strategic moves to further its position. A few weeks ago, Devon merged with rival WPX Energy to create one of the largest shale producers in the U.S. Although the deal dilutes ownership, it will help boost cash flow with a larger presence in the Permian Basin.
More importantly, the company is using the excess cash flow to reward shareholders. For example, Devon announced a $1 billion share buyback program on top of a 71% dividend increase.
The company now pays a generous dividend yielding around 7% as DVN expects the growth to continue.
Diamondback Energy (Nasdaq: FANG)
- Market Cap: 22.6B
- 1 Yr. Return: 112%
- 1 Yr. Revenue Growth: 165%
Diamondback Energy is another oil exploration company with an interest in the Permian Basin. So far, the company’s reserves include 58% oil, 20% natural gas, and another 22% natural gas liquids.
Like Devon, FANG stock is outpacing the competition, up 112% in the past year. Strong demand is pushing crude oil prices higher, helping boost the company’s cash reserves. Diamondback’s latest earnings shows the company has $457 million in cash. The company is planning to use the money to pay down debt and return to shareholders.
With this in mind, FANG is committing to a 50% free cash flow return for investors. The company pays a $2 annual dividend thus far, yielding around 1.6%.
Top Energy Stocks for Value Investors
The growth vs. value debate is an ongoing controversy among investors. Growth stocks have had the edge the past few years, but value stocks are outperforming growth so far this year. That said, here are the top energy stocks for value investors.
Exxon Mobile (NYSE: XOM)
- Market Cap: 311.58B
- 1 Yr. Return: 62%
- 1 Yr. Revenue Growth: 58%
As one of the world’s largest publicly traded oil companies, Exxon Mobile, is involved in all aspects of the process. The company’s business segments include upstream, downstream, and chemical.
With gas prices increasing over their 10-year range, Exxon is seeing improved margins across all segments. Exxon also used the excess free cash flow in the third quarter to improve fundamentals. In light of this, XOM paid down its debt by $4 billion, bringing debt to capital to 25%.
Not only that, but this top energy stock distributed another $3.7 billion in dividends. With its latest dividend increase to $0.88 per share, the payout yields nearly 5%.
And on top of this, several investments are starting to pay off in Guyana and the Permian. The offshore projects are creating promising growth potential in the next few years.
Phillips 66 (NYSE: PSX)
- Market Cap: 38.85B
- 1 Yr. Return: 24%
- 1 Yr. Revenue Growth: 90%
Phillips 66 is another one of the top energy stocks. It’s best known as an oil refiner. But the company is branching out into other revenues sources such as chemicals and midstream. So far, PSX operates 13 refineries in the U.S. and Europe with production capabilities of 2.2 million barrels of crude oil per day.
As more people get back to their everyday lives, gasoline demand rises. And as a refiner, PSX is at the heart of production. So, the higher demand is significantly improving earnings and margins.
Like the other energy companies on this list, PSX uses extra cash to improve its balance sheet. In the company’s Q3 earnings, PSX noted paying down debt by $1 billion so far in 2021.
Another key thing to note from the report, PSX is buying out all public partners. The move will help integrate the business while further improving margins.
PSX also offers an attractive annual dividend of $3.68 per share, or a 4.15% yield/
Risks to Consider When Investing in Energy Stocks
Although the stocks listed are up significantly in the past year, these are also the top energy stocks right now. Investing in the energy sector can be challenging with so many changing variables.
Having said that, the sector is heavily influenced by changes in the economy. When the pandemic first hit, oil prices cratered, causing businesses to take on more debt. You can see how easily things can change from March 2020 to where we are now.
Now that oil prices are recovering, we are seeing improving margins. And as a result of the extra cash, companies are reducing debt while rewarding investors.
The past ten years have not been very rewarding for energy investors. But, with OPEC capping supply levels, it looks like higher margins will continue this year. If demand remains strong, we will likely see much of the same in 2022.
The post Top Energy Stocks to Watch in 2022 to Capture the Electrifying Growth appeared first on Investment U.
What are Bond Funds?
Bond Funds have two primary goals: to generate passive income and to hedge against stock market volatility.
The post What are Bond Funds? appeared first…
Also called “debt funds,” bond funds are investment vehicles comprised entirely of debt instruments. They take the form of mutual funds or Exchange-Traded Funds (ETFs), pooling together fixed-income securities and other debt investments to provide investors with both a hedge against stock market volatility and access to passive income.
These funds are a traditionally conservative style of investing: low-risk, low-reward. However, they can serve as both compliments to a balanced portfolio strategy or as the foundation for a passive-income portfolio for retirees. Today’s landscape of bond funds includes a wide range of fund types and strategies, all focused around debt instruments: from U.S. Treasuries to junk bonds.
Here’s a closer look at what these funds are, how they work and some examples of different fund options investors can choose from.
What’s in a Bond Fund?
As the name implies, bond funds can contain any number of debt securities—and they do. Some of the most common assets include U.S. Treasuries, corporate bonds, junk bonds and Treasury Inflation-Protected Securities (TIPS).
Not all funds will contain the same breadth of assets, however. The benefit of these funds is a diverse range of options designed to cater to different investment preferences and profiles. Some examples include:
- Corporate Funds
- Emerging Market Funds
- Global Funds
- High-Yield Funds
- Mortgage-Backed Securities Funds
- Municipal Funds
- U.S. Government Bond Funds
For instance, an investor might choose a fund comprised of TIPS as a way to hedge against inflation. Someone with a little more risk tolerance may buy into a fund comprised of higher-interest corporate bonds. The composition of the fund depends on the strategy used to architect it. Time horizon, risk factors, bond type and more all contribute to which debt securities make it into a bond fund.
The Goals of a Bond Fund
Bond funds have two primary goals: to generate passive income and to hedge against stock market volatility. How investors capitalize on these two benefits depends on their investment strategy.
- Passive income. Retirees and investors seeking passive income invest in funds because of their efficiency. Bond funds hold a collection of bonds with diverse coupon rates and maturities, which makes for a more regular stream of income—even against a bond ladder. As the fund’s assets mature and it adds new bonds, investors benefit from fluctuating monthly coupon payments.
- Hedge against risk. As low-risk, low-reward investments, bonds are historically less volatile than stocks. The added diversity that comes from a bond fund makes them even more stable in the face of volatility. As a result, many balanced portfolio investors use bond funds to hedge against a larger stock portfolio. While interest rate risk is still a factor investors need to consider, it’s a much less prevalent one.
These two objectives make bond funds among the most stable investments out there. And while it’s possible to tinker with levels of risk and reward based on the fund type—such as a safe TIPS-focused fund vs. an emerging market bond fund—investors can nevertheless expect relative reliability from these products. They’re designed to be portfolio stalwarts.
What is a Mutual Fund?
A mutual fund is a diversified investment vehicle that’s actively managed by a fund manager. These funds typically have minimum buy-in requirements, and shares sell for the Net Asset Value (NAV) of the fund. Investors pay an annual management fee to hold shares of the mutual fund, called an expense ratio. The chief benefit of bond mutual funds is the active management: adjustments to the fund’s allocation based on changing creditworthiness or interest rates.
Bond mutual funds focus specifically on debt securities. The fund holds hundreds if not thousands of different fixed-income assets with varying maturity dates, with varying coupon rates. These mutual funds pay out lump sum coupon payments monthly, making them great passive income investment vehicles for retirees.
What is an Exchange-Traded Fund?
An ETF functions similar to a bond mutual fund, with a few key differences. ETFs don’t have minimum buy-in amounts, which makes them more liquid and accessible to everyday investors. They also typically have much lower expense ratios because they’re not actively managed. Instead, they’re pegged to an underlying bond index.
The benefits of a bond ETF are largely the same as a mutual fund, with a higher risk-reward. Without management, investors in bond ETFs leave themselves open to interest rate risk unless they actively oversee their investments. However, lower fees and better liquidity make bond ETFs easier to capitalize on—especially since ETF prices change throughout a normal trading period.
How to Capitalize on Bond Funds
Bond funds provide two important benefits to conservative investors: passive income and a hedge against volatility. Combined, these factors make them ideal for passive income investors such as retirees. Those seeking bond exposure as part of a balanced investment portfolio will find themselves drawn toward funds with higher risk-reward ratios, such as high-yield bond funds. In either case, these funds serve to create stability.
Whether you invest in a bond mutual fund or a bond ETF comes down to preference. Long-term investors tend to see the value in paying for managed funds—especially if the passive income from a mutual fund is consistent and sizable. Investors who want more control over their exposure to debt securities will appreciate the liquidity and low-cost nature of ETFs. In either case, bond funds are one of the best ways to get broad exposure to fixed-income securities without buying individual bonds.
Fed Appears to be All Talk and No Action While Inflation Soars – Got Gold?
Market Volatility – The Good News & The Bad News
As Treasury Yields Soar, Here Is What Wall Street Thinks Happens To Interest Rates Next
Relative Price Changes and Inflation Propagation
What Drives The Price Of Gold? Part 2
Nomura Warns “Rates Vigilantes” Are At The Gates
Canadian dollar calm
WEF’s Schwab Gives China’s Xi Propaganda Platform Against “Hegemonic Bullying… Cold War Mentality”
Market Selloff Into January
Talking heads – “A lot of value to be had” in multi-sector fixed income
Economics18 hours ago
Market Volatility – The Good News & The Bad News
Precious Metals15 hours ago
Canadian Listed Mining Companies Hitting 52-Week Highs
Energy & Critical Metals18 hours ago
Kazakhstan Civil Unrest Lead to a Sharp Increase in Uranium Prices
Economics15 hours ago
As Treasury Yields Soar, Here Is What Wall Street Thinks Happens To Interest Rates Next
Energy & Critical Metals14 hours ago
Wheaton Backs Adventus, Salazar in US$235.5M Copper Mine Deal
Articles16 hours ago
Junior Explorers on a Hunt for New Copper Supply
Precious Metals20 hours ago
First Majestic Produces New Quarterly Record of 8.6M Silver Eqv. Oz in Q4 2021
Precious Metals12 hours ago
Precious Metals Outlook 2022