Barrons weekend update: cover story on Bitcoin; Positive features on CRM and regions banks; cautious on ETP, MDP
* Cover story: The price of Bitcoin continues to surge, and Wall Street has taken note; CME and the Chicago Board Options Exchange will introduce Bitcoin futures, with NDAQ following next year, while Cantor Fitzgerald will offer a Bitcoin options product; Getting listed on large exchanges is a “tectonic shift” for the cryptocurrency.
* Features: 1) Cautious on ETP: Investors are worried about the sustainability of the firm’s distribution because of the high fees, called incentive distribution rights, it must pay to its sister company ETE; 2) Investors in companies that operate mostly in the U.S. should benefit greatly from what is arguably the signature provision of the Republican tax bill: a steep drop in the corporate rate; 3) Positive on CRM: Company continues to roll out products beyond its sales software, increasing the dollar amount of business it can pitch for—the so-called addressable market, which could top $100B by the end of the decade; 4) Positive on CIT, CMA, ZION: Among regional banks with excess capital on their balance sheets that should get a boost if new regulations free them up from having to undergo the Fed’s annual CCAR exam; 5) Cautious on MDP: Investors aren’t sure if the magazine company could have gotten better terms than what Koch Equity Development offered for the portion of financing it’s raising to pay for its offer for TIME’s equity.
* Tech Trader: Young tech companies are having trouble gaining traction these days because of the dominance and staying power of large players such as AMZN, GOOGL, and AAPL, though the problem may also be linked to the limited scope of many of this year’s IPOs.
* Trader: JPM strategist Shawn Quigg links the shift from highflying growth stocks to beaten-down value plays to the increasing odds that tax reform will pass; Few investors think UAL is at a disadvantage to DAL, but the debate is about whether United is fixable, which may require a major strategic change; The performance of financial stocks relative to the S&P 500 could be ready to break out, and have a long way to run, says Andy Addison of Institutional View.
* Profile: Ryan Caldwell, manager of Chiron Capital Management, seeks to do well in every kind of market: up, down, or sideways—a complex strategy for any fund to deliver.
* Interview: Wells Fargo Securities analyst Ken Sena uses the firm’s Aiera artificial intelligence system to buy and sell calls on nearly 550 stocks (picks: BABA, GOOGL, AMZN, Tencent).
* Follow-Up: Positive on JNJ: Company had a strong year, and while the gains may not be as high in 2018, shares could rise 20% amid changing investor views on the drug pipeline.
* European Trader: Shares of Swiss companies are trading below their usual premium, the franc will likely slide against the euro, and earnings growth looks good—part of why UBS ranks Switzerland the best European market for investors.
* Asian Trader: Positive on Ping An: Some investors think the Chinese insurance company’s financial-technology assets may be worth a lot more than the market currently thinks.
* Emerging Markets: “After the 30% climb in the MSCI Emerging Markets index this year, investors should expect some bumps in the months ahead.” Commodities: Natural gas prices have risen by 5% amid tight supplies and cold weather, but the boost won’t last long in a market that has already lost 17% year to date.
* Streetwise: Growing tension on the Korean peninsula “is likely to spur a high-tech arms race between the U.S. and China, leading to even more investment in artificial intelligence, robotics, and cyberwarfare.”