Barron’s Weekend Summary:
* Cover Story : Many workers have come to enjoy working at home, and companies are under pressure to offer more perks to lure them back to the office as pandemic restrictions ease: “The labor market is likely to stay tight as the economy picks up, and companies may need to ramp up pay or perks to lure workers back. More than nine million postings are on the market, double the level in April 2020. Companies will need to get creative with benefits beyond flex time or working from home, says Tim Glowa, a human-resources consultant with Grant Thornton.” Accordingly, Barrons has picked eight stocks that could benefit from the post-pandemic back-to-the office trend, including HPP, BXP, ROST, WW, SBUX, RUTH, MSFT, CSCO.
* Tech Trader: The latest tech earnings reports have shown that “the economy is moving on from the pandemic. This isn’t to minimize the risks from the Covid-19 Delta variant. But mask mandates or not, Americans have had enough sheltering in place. The rush to leave home is having a material impact on a diverse set of tech businesses.” People “are leaving the counch” and this bodes well for companies such as Uber or Lyft and Yelp. And it bodes badly for companies that benefited from lockdowns such as Roku or Amazon.com
* Trader:There is a counterintuitive process that investors should observe closely. Even as the coronavirus “Delta variant is spreading. Economic growth may be peaking, and lots of people expect a pullback in stocks. It just may be time to bet on reopening stocks once again.” Covid cases in the US have doubled in in the past two weeks alone, and related deaths are also on the rise. Yet, the stock market is going “the other way”: “with consumer-discretionary stocks starting to outperform consumer staples.”
* Interview:This week, Barron’s interviews Whitney Baker founder of Totem Macro. Baker “managed long-only money in Asia, long/short financials, and global macro portfolios for investment firms including Soros Fund Management and Bridgewater Associates, where she was head of emerging markets.” Her goal is to interpret what she calls “the huge amount of confetti in the markets.” In the interview she talks about China, emerging markets, the dollar, and other topics.
* Features: 1. Gary Black has strong opinions about electric vehicle maker Tesla. He talks about various new electric vehicles being offered by legacy auto makers such as Ford ‘s coming electric F-150 and the increasing risks that Tesla will face, stressing the possible mistakes that Tesla bulls such as ARK Invest’s Cathie Wood, are making. Black is a Wall Street analyst and fund manager. Currently, he’s the managing partner and CIO of investment advisor The Future Fund. His ETF, The Future Fund, will launch at the end of August with stock symbol “FFND.” Tesla (TSLA) stock is down 1% year to date. 2. Arguing with insurance companies over a claim is not most people’s idea of fun. But, skilled advisors have ways of negotiating their way into bigger payouts. “When a client shops for insurance or files a claim, some advisors step up. They give tips on selecting the best carriers, how and when to report a claim and pointers to negotiate bigger claim settlements.”
* Europe: Royal Dutch Shell (RDS) might be the best big oil stock now: “it’s the one best positioned to deliver a gusher.”The British-Dutch company pays a safe 5% dividend yield and it “is the most profitable of the major international energy companies, ”even as it offers more value than competitors such as Exxon Mobil (XOM) and Chevron (CVX). Shell also offers investors a safe dividend yield of nearly 5%. Essentially, Barron’s says that Shell is undervalued.
* Emerging Markets: China’s market regulators continue to crack down on some of the country’s biggest companies. According to reports, regulators are getting ready to levy a roughly $1 billion fine on online food-delivery giant Meituan. And investors expect more such actions. The iShares MSCI China exchange-traded fund (ticker: MCHI) was down 1.2%, at $70.69, in Friday trading. To assess what’s next, Ariel Investments’ Micky Jagirdar advises looking “at regulatory risk through the prism of complaints. Small and medium enterprises, for example, had complained about Alibaba Group Holding’s (BABA) exclusivity demands, while employees of ride-sharing giant DiDi Global (DIDI) and Meituan (3690.Hong Kong) had complained about pay and hours. Parents had complained about children getting addicted to online games.” All of these sectors have been targeted by regulators in recent months.
* Commodities: Silver prices are looking bullish and Barron’s suggests they could see as much as a “double-digit percentage rally in the fall.” Still, experts still urge caution or patience: “investors should wait for a likely dip in prices over the next few weeks before snapping up a stash of the metal.” Silver remains vulnerable to selling in August and September. Jeff Christian, managing partner of New York–based commodities consulting firm CPM Group says: “If you see $24 an ounce prices, then buy it because the probability is that we’ll see $28 soon. And ultimately, it will move higher over the next several months.”
* Streetwise: “Plastic Has Gone GoldenProfits in polymers are piling.” Jack Hough talks about plastic. He reminds readers that plastic is ubiquitous-especially the rigid variety, or more technically known as HDPE, or high-density polyethylene. The important thing to know about plastic in 2021 is that “The price of that stuff has doubled in a year. I’m leaving my pig where it stands on my shoe rack—let your winners run, momentum investors say.”