FINSUM + Magnifi: Leisure Bookings have Airline Stocks Flying

(March 2021)

Many Airlines saw increases in stock prices on Monday as increases in bookings for spring and summer leisure trips saw an uptick. American Airlines, Arca Airlines, JetBlue, and Southwest all saw their stock prices jump ahead on the news, with the largest rising 7%. While the airlines don’t secure the funding until after the flight has taken off, the projections are looking better across the industry. The upticks in revenue projections are sizable but they were in a pretty grim spot previously as Covid continues to challenge the airline industry. Finally, the gains also reflect an increase in funding allocation from the new stimulus package. Airlines can expect to receive $14 billion in grants and loans to help facilitate costs, but stipulations have been put on future dividend payments and stock buybacks.
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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: BlackRock Says it is Very Bearish on This Sector

(October 2020)

BlackRock is the largest asset manager in the world, commanding over $7 tn of assets. So when it gives its opinion on an asset class, it is usually worth listening to. Well, the asset manager’s CEO has just issued his view on a key area—emerging markets. Larry Fink, CEO, says that he is bearish on emerging markets for multiple reasons. Firstly, COVID-19 has greatly raised the risk premia for holding EM securities, and he says many EM leaders don’t understand what it will take to restructure their debts, which seems like a necessity for some. Additionally, Fink says that the move towards stronger environmental standards means money will leave emerging markets. “When we talk about climate change, and we think that’s a big issue and a reallocation of capital … part of that reallocation of capital is movement out of the emerging world”.
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FINSUM + Magnifi: The Biggest Market Impact of COVID is Just Beginning

(September 2020)

While the pandemic has hit the economy and markets hard, the real long-term effect that the recession could have on the economy likely hasn’t even started yet. What is that effect you might ask? Deflation. When the pandemic first hit there were worries about inflation because of price spikes in certain consumer goods. However, over time those have proven to be transitory, and instead, what is taking hold is the realization that average costs are falling in many parts of the economy, such as rent, medical care, and college tuition. For example, if you strip out housing and used car prices, the latter of which has surged during the pandemic, consumer prices as a whole fell in September.
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Defensive Investing in a Pandemic

None of us have ever lived through anything like this before. The COVID-19 pandemic has touched every corner of the globe, sickening nearly 45 million and killing more than a million worldwide. It truly is the defining story of our time and a great human tragedy.

Yet, as we all work to protect those most at risk and get through this together, savvy investors are finding novel ways to, not profit off the pandemic, but uncover new opportunities as a result of COVID-19. This is being driven by everything from increased spending on sweatpants and leisure wear, to reduced gasoline sales as commutes faded into memory, to new opportunities for the grocery sector thanks to at-home food prep. These trends and others have formed the foundation of new defensive investment plays.Read more