Archive for December, 2023

• Morning News: December 21, 2023
  Eddy Elfenbein, December 21st, 2023 at 7:06 am

  With Ukraine’s Aid in Doubt, Companies Say They’re the Plan B

  War in Ukraine Has China Cashing In

  Milei Issues Sweeping Decree to Privatize Argentina’s State-Run Companies

  G7 Tightens Enforcement of Oil Price Cap Amid Widespread Russian Evasion

  Angola Announces Exit From OPEC Amid Spat Over Oil Quotas

  One Last Postcard From the Future of Clean Energy

  California’s Push for Rooftop Solar Panels Isn’t Going So Well Right Now

  Biden Administration Explores Raising Tariffs on Chinese EVs

  US Inflation Report to Show Fed’s Battle Is Now All But Complete

  Vilified Zero-Day Options Blamed by Traders for S&P Decline

  Wall Street Couldn’t Beat Private Credit. Now It Wants a Cut

  Citigroup Is Exiting Distressed Debt Trading

  Elisha Wiesel, Son of Holocaust Survivor, Has Words for Wall Street and Ivy Leagues

  Apple’s $1 Trillion Rally Will Be Tough to Live Up To in 2024

  Salesforce’s Newest Bull Predicts AI Will Send Stock to Record

  Billionaires Compete to Own SpaceX’s Rocket Rival

  Toyota Motor to Recall 1 Million Toyota, Lexus Models Over Airbag-Related Sensor

  A Law to Help Neglected Diseases is Giving Billion-Dollar Drugs Government Freebies

  Hotel Owners Push Back on Merger of National Brands

  Warner Bros. Is in Talks to Merge With Paramount Global

  Why a Warner Bros.-Paramount Does (and Doesn’t) Makes Sense

  Why Peacock Is Giving Fans a Taste of the NFL Without Commercials

  Need Last-Minute Holiday Gifts? This Lobbying Group Has a ‘Made in America’ Catalog for You

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• Morning News: December 20, 2023
  Eddy Elfenbein, December 20th, 2023 at 7:05 am

  Argentina’s Ruined Railways Will Force Milei to Confront Poverty

  An Egg Fried Rice Recipe Shows the Absurdity of China’s Speech Limits

  A New Wave of Chinese Middle-Class Migrants Is Coming to the US

  That’s Two for Two: The World’s Other Big Canal Is in Trouble

  Over 100 Container Ships Reroute as US Weighs Red Sea Response

  Cyprus, Israel Working on Start of Gaza Maritime Aid Corridor

  Powell’s Pivot Sows Confusion Over When and How Fast Fed Will Cut

  Meet the New Economy, Just Like the Old Economy

  As Golden Age for Private Capital Ends, 2024 Heralds More Consolidation

  The Hedge Fund Traders Dominating a Massive Bet on Bonds

  The Hot New Market in Crypto? Trading FTX’s Carcass

  Toshiba Delisted After 74 Years, Faces Future with New Owners

  What Social Trends Taught Us About the 2023 Economy

  Washington Comes for the U.S. Steel Deal

  A $1.3 Trillion Home-Loan System Gone Astray Is Fighting Reform

  As Need Rises, Housing Aid Hits Lowest Level in Nearly 25 Years

  The Future of Homebuying Is Here — and It’s Going to Be a Whole Lot Better

  Seeking a Big Edge in A.I., South Korean Firms Think Smaller

  BT Risks Fine as UK Deadline Looms for Pulling Huawei From Core Network

  US New Vehicle Dealers Jump-Start Holiday Sales with Better Incentives
  

  Tesla Skips Merit-Based Stock Awards, Squeezing Compensation

  Tesla Supplier Panasonic Drops Plan for Oklahoma EV Battery Factory

  Walgreens’s Ambitions Lean on Its Technology. First, It Has to Build Up Its IT Department

  The Fast-Food Industry Wants to Be the Fast-Drinks Industry, Too

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• CWS Market Review – December 19, 2023
  Eddy Elfenbein, December 19th, 2023 at 7:22 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Before I begin, a quick reminder: I’m going to unveil the 2024 Buy List next week.

  I’ll send you the next free issue of CWS Market Review on Monday, which is Christmas Day. The stock market will be closed that day. This will be our 19th annual Buy List.

  Normally, our Buy List has 25 stocks and each year: five new stocks go in, and five old ones come out. This year, we got an extra stock when Danaher spun off Veralto. That means six stocks will go out and five new ones will come in.

  I’ll have all the details for you soon, but it appears that our Buy List has returned over 500% in its entire history. Here’s to the next 19 years!

  The S&P 500 Hits a 23-Month High

  Now let’s look at the stock market which has certainly been in the holiday spirit lately. On Tuesday, the S&P 500 closed at its highest level in nearly two years. The index is getting very close to its all-time high (less than 0.6% away).

  Historically, there really has been a Santa Claus Rally. I broke down the entire history of the Dow back to its beginning in 1896. I found that from December 21 to January 8, the Dow has gained an average of 2.83%. That means that more than one-third of the Dow’s historic gain has come over a period of less than three weeks.

  Roughly one-third of the stock market’s gain over the last four years has come in the last seven weeks. The stock market tends to act like a rabbit: it can sit still for long stretches before it suddenly hops away. That’s one of the reasons why I avoid trying to time the market.

  

  The Federal Reserve meets again in six weeks, and I doubt they’ll make any changes to interest rates. But the meeting after that, the one on March 20, could be a very important meeting.

  Wall Street has completely changed its mind on what could happen. One month ago, traders thought there was a 28% chance of the Fed cutting rates at the March meeting. Today, those odds are up to 75%.

  What’s the cause for the change in outlook? Two things. The jobs reports have gotten noticeably weaker. Nothing alarming, but noticeable. The other is that the inflation reports have been relatively benign. We’re not out of the inflation woods just yet, but we have to note that there has been improvement.

  Lower interest rates, or even the prospect of lower rates, can have a big impact on the economy. Notice, of course, the markets’ nice bounce since late October. Not only that, but interest rates also have a major impact on the housing market.

  Housing Is On the Rebound

  During the middle of each month, several of the important reports on housing are released. Many stock investors tend to overlook these reports, but that’s a mistake. The housing sector is vital to the economy. In fact, several years ago, Edward Leamer, a well-respected economist, went as far as to say that “Housing IS the Business Cycle.” I think he’s right.

  On Monday, the National Association for Home Builders said that homebuilder confidence rebounded slightly in December. The confidence number rose from 34 to 37 while Wall Street had been expecting 36. That’s not a terribly large jump, but it’s good to see something positive as mortgage rates have started to move lower recently.

  I don’t want to declare victory too soon, but it looks like interest rates have peaked for this cycle. Even the Fed sees rates being significantly lower by this time next year.

  On Tuesday, we got a nice surprise from the housing starts report. Last month, single-family housing starts rose to a 19-month high. The report also said that the figure for permits for new construction rose to its highest level since May 2022. This was much better than Wall Street had been expecting.

  

  The problem right now for housing is that there aren’t enough homes, and that’s caused prices to spike. Builders need to catch up to demand.

  Activity was also likely supported by mild temperatures and dry conditions. Data for October was revised slightly lower to show single-family starts rising to a rate of 969,000 units instead of the previously reported 970,000 units.

  Starts vaulted 42.2% on a year-on-year basis in November.
  Single-family homebuilding soared in the Northeast, Midwest and the densely populated South. It declined in the West.

  The rate on the popular 30-year fixed mortgage averaged 6.95% last week, the lowest level since August, from 7.03% in the prior week, according to data from mortgage finance agency Freddie Mac. It has tumbled from a 23-year high of 7.79% in late October, tracking the decline in U.S. Treasury yields.

  The stock market turned right as mortgage rates peaked. I can’t say I’m surprised.

  There are currently about one million homes on the market. Just before Covid hit, there were two million homes on the market. The housing reports helped Goldman Sachs raised its estimate for Q4 economic growth by 0.2% to 1.7%. The Atlanta Fed sees Q4 growth coming in at 2.7%.

  I’m going to watch housing closely. The report on existing home sales is out tomorrow, and on Friday we’ll get the report for new home sales.

  Q4 Earnings Season Will Start Soon

  We’re getting close to Q4 earnings season, and I’ll caution that it probably won’t be a very strong one for the market as a whole. That’s more a reflection of how things have been rather than how they will be.

  For Q3, the S&P 500 had earnings growth of 4.9%, and analysts expect growth to slow down to 2.4% for Q4. Analysts expect quarterly revenue growth of 3.1%. For the year, the S&P 500 is expected to post earnings growth of just 0.6% and revenue growth of 2.3%.

  FactSet (which is not only a Buy List stock, but a great resource for stats on the market) said that the broadline retail industry is expected to report earnings of $30 billion this year. That’s up from a loss of -$1.2 billion last year.

  The earnings figure for the consumer discretionary sector is expected to rise by 43.9%, but there’s a major caveat. If we exclude Amazon, then earnings growth for consumer discretionary would fall to just 16.2%.

  Overall, businesses are healthy even though this has been a subdued period for growth. For 2023, the estimated net profit margin is expected to be 11.6%. That’s down slightly from 11.8% for 2022, but it’s still above average for the last ten years.

  If interest rates come down in 2024, that will spur a housing rebound and that will be good for consumers and businesses. This is why stocks have been in such a good mood.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

  P.S. If you want more info on our ETF, you can check out the ETF’s website.

• Morning News: December 19, 2023
  Eddy Elfenbein, December 19th, 2023 at 7:03 am

  What Icelandic Eruption Means for Travel, Economy

  Russia’s Crude Flows Stay Strong Despite Baltic Port Stoppage

  Gaza Is Making Oil and Gas Markets Twitchier

  How the Suez Canal Attacks Could Upend Global Trade

  With Houthis Menacing Fleet, Shipping’s Great Detour Around Africa Gathers Pace

  Bank of Japan Chief, Bucking Expectations, Avoids Talk of Rate Increase

  Wall Street’s Tepid Bonuses for Traders Lumber Into Another Year

  The Other Side of Greenwich: Hunger Among the Hedge Funds

  The Private Equity Firm Tapping America’s Spring Water

  Borrowers Turned to Nonbank Lenders for Mortgages — And It’s Costing Them

  How the Housing Market Slowdown Is Rippling Through the Economy in Five Charts

  America Doesn’t Have Enough Air-Traffic Controllers, and That’s a Problem

  Apple to Halt US Sales of Smartwatches After Patent Loss

  Apple Races to Tweak Software Ahead of Looming US Watch Ban

  These Tesla Wannabes Are Running Out of Road

  Nippon Makes Steely Bet on a U.S. Manufacturing Renaissance

  End of Adobe’s Takeover Bid for Figma Spells New Challenges for Venture Deals, Startups

  Family Split at LG, a South Korean Giant, Tests Corporate Succession

  Behind the Shortage Keeping Cancer Patients From Chemo

  Possible Ways to Ease Drug Shortages

  Bill Ackman Took a Wall Street Tactic to an Ivy League Fight in His Attempt to Oust Harvard’s President

  Chinese Company Ditches Year-End Bonus for Exercise-Based Reward

  What’s Ahead in 2024? The Cookie Cutters Tell All

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• Morning News: December 18, 2023
  Eddy Elfenbein, December 18th, 2023 at 7:04 am

  China’s Millionaires Are Worried. That’s a Problem for Wall Street

  Goldman Strategists Lift S&P 500 Forecast a Month After Setting It

  The Market is Second-Guessing its Dovish Reaction to Powell. This Analyst Says the Fed Could Slash Rates by as Much as 75%

  To Trade the Fed’s Pivot, Wall Street Turns to Short-Dated Debt

  A $1.3 Trillion Debt-Fueled Boom in Deals Faces a Grim New Reality

  With U.S. Debt Soaring, Wall Street’s ‘Vigilantes’ Are Back. Others ‘Yawn.’

  Why Central Banks Should (but Might Not) Keep the Market Flooded With Money

  The Era of Big Taxes Is Upon Us

  A Shock for Many Retirees: Social Security Benefits Can Be Taxed

  Nasdaq Drops Zoom in Sign Pandemic-Era Darling Trade Is Over

  A-Rod’s Slam SPAC Is Said to Plan Merger With Lynk Global

  Dimon’s Heir at JPMorgan Still Hazy as ‘Five More Years’ Tick By

  Lina Khan’s F.T.C. Secures a Big Win

  Mitsubishi UFJ Agrees to Buy Australia’s Link Administration

  IBM to Buy Software AG’s Enterprise Integration Platforms for $2.3 Billion

  EU Clears Credit Agricole’s Purchase of Belgium’s Degroof Petercam

  Nippon Steel Agrees to Buy US Steel for $14.1 Billion

  BP to Pause All Tanker Transits Through the Red Sea

  Oil Prices Climb as Red Sea Attacks Disrupt Shipments by BP and Others

  US Frackers Return to Haunt OPEC’s Pricing Strategy

  Inside Amazon’s Effort to Challenge Musk’s Starlink Internet Business

  Amazon Strikes Deal With Games Workshop to Bring Warhammer to Screen

  Tencent Shuts US Video Games Studio Team Kaiju

  U.S. Fines Southwest Airlines $140 Million for Holiday Meltdown

  Did the Grinch Come for the Office Holiday Party?

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• Morning News: December 15, 2023
  Eddy Elfenbein, December 15th, 2023 at 7:03 am

  China’s Policy Combo Gives Investors Hope for a Market Rally

  Don’t Buy China’s November Recovery

  The Road to China-Free Supply Chains Is Long. Warning: Legless Lizards Ahead

  Euro Zone’s Rising Recession Chances Fail to Shift ECB on Cuts

  Bank of Portugal Cuts 2024 Growth Outlook, Citing Short-Term Uncertainty

  The Fed’s Shrinking Balance Sheet Is Worrying a Key Corner of US Financial Markets

  What Fed Rate Cuts Mean For Your Money, Mortgages and More

  A $6 Trillion Cash Hoard Could Fuel More U.S. Stock Gains as Fed Pivots

  Fidelity, JPMorgan Buck Market by Betting on Stronger Dollar

  BlackRock, SEC Clash Over Redemption Model for Bitcoin ETF

  Citi Shuts Muni Business That Once Was Envy of Rivals

  Mortgage Rates in US Slide Below 7% for First Time Since August

  Convenience Stores Would Rather Sell You Pizza Instead of Gas

  Pfizer Helped Save the World With Covid Vaccines. Now It Needs to Right Itself

  New Mexico Spaceport Leaves Economic Dreams Grounded

  RTX Names Christopher Calio as Next CEO

  Elon Musk Is Funding a New School Planning to Open in Austin, Texas

  Activist Investor Nominates Two to Disney Board, Including Himself

  In Search of Cash, Studios Send Old Shows Back to Netflix

  Mistrust Looms Over PGA Tour as Deadline for Saudi Deal Nears

  Costco Stock Gets Price Target Upgrades. What Wall Street Loved About Its Earnings

  Inside the Push to Engineer the Toughest 72-Hour Antiperspirant

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• Morning News: December 14, 2023
  Eddy Elfenbein, December 14th, 2023 at 7:14 am

  On Day One of Argentina Overhaul, Milei Scores Crucial Victory

  Germany, Roiled by a Court Ruling, Finally Has a Budget

  US Defense Tech Start-Ups Are Being Shut Out of Europe’s Defense Market

  Deadly New Trade in ‘Frankenstein’ Guns Enabled by a Gap in US Law

  The Sea-Monster-Sized Ship Disrupting Biden’s Wind-Energy Dreams

  Will the End of Fossil Fuels Spoil the Lucky Country’s Streak?

  Oil Demand Growth Shows Signs of Sharper Slowdown, IEA Says

  Credit Agricole to Stop Financing New Fossil Fuel Extraction Projects

  Wall Street Makes Zero Progress in Energy Finance Transition

  Is Jerome Powell’s Fed Pulling Off a Soft Landing?

  Treasuries 10-Year Yield Falls Below 4% as Fed Sees Rate Cuts

  The Markets Are Getting Ahead of the Fed

  Wall Street Traders Go All-In on Great Monetary Pivot of 2024

  Fnality Completes ‘World’s First’ Blockchain Payments at Bank of England

  UBS Intensifies Cash Clawback From Credit Suisse Defectors

  Proponents of Virus ‘Stimulus’ Spending Revive Helicopter Imagery

  How a Plan to End Poor Countries’ Debt Crises Created a New One

  American Colleges Are Losing Their Students and Money

  Holidays Well Spent

  Federal Regulators Seek to Force Starbucks to Reopen 23 Stores

  Range Rovers Become Thief-Magnets, Causing Prices to Tumble

  Meta Lets EU Users Sign Up to Threads Without an Instagram Link

  Remember What Spotify Did to the Music Industry? Books Are Next

  Top Business Leaders Pick the Year’s 62 Must-Reads

  To Get Your Positive Review, Businesses Bully, Badger and Guilt-Trip

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• Morning News: December 13, 2023
  Eddy Elfenbein, December 13th, 2023 at 7:04 am

  OPEC Leaves Global Oil-Demand Views Unchanged

  COP28 Ends With Deal on Transition Away From Fossil Fuels

  The World’s Poorest Countries Buckle Under $3.5 Trillion in Debt

  ‘There Is No Money’: Argentina Begins Economic Shock Remedy

  Xi Disappoints Investors by Skipping Signal for Big Stimulus

  E.U. Moves to Tap Frozen Russian Assets to Help Ukraine

  U.K. Sets Up New Office to Help Enforce Sanctions Against Russia

  Blistering Treasuries Rally Silences Deficit-Obsessed Vigilantes

  Inflation Holds Roughly Steady Ahead of Fed Meeting

  The Fed Isn’t Ready to Speculate on Rate Cuts — Yet

  Vanguard Is Closer Than Ever to Ending BlackRock’s ETF Reign

  UK Proposes Capping Some Visa, Mastercard Fees After Fivefold Jump Since Brexit

  Microsoft Tops the List of Best-Managed Companies of 2023

  Google’s Antitrust Loss to Epic Could Preview Its Legal Fate in 2024

  Chatbot Hype or Harm? Teens Push to Broaden A.I. Literacy

  SpaceX Value Jumps Closer to $180 Billion in Tender Offer

  Swedish Labour Union to Stop Collecting Tesla Waste in Sweden

  Tesla Recalls 2 Million Cars to Fix Autopilot Safety Flaws

  GM Moves Forward After Strike, Focusing on Cost Cuts and EVs

  Why Biden’s EV Tax Credit Could Become Hard to Claim

  Hospitals Creeping Toward Recovery Grapple With ‘Out of Control’ Costs

  There’s a Black Market on Social Media for Pricey Fertility Drugs

  Bill Ackman’s Campaign Against Harvard Followed Years of Resentment

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• CWS Market Review – December 12, 2023
  Eddy Elfenbein, December 12th, 2023 at 6:32 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  The Stock Market Is Closing in on an All-Time High

  The bulls are in charge! On Tuesday, the S&P 500 closed at its highest level in 23 months. This was its fourth up day in a row.

  The index is getting very close to its all-time high reached nearly two years ago. We’re now only about 3% away. The S&P 500 Total Return Index, which includes dividends, is extremely close to making an all-time high (about 0.03% away).

  The index is up for the last six weeks in a row. It’s been 14 months since the last time the bear market made a new low. The S&P 500 is up nearly 30% from its low reached in October 2022.

  

  I’m pleased to see that our ETF continues to do well. The AdvisorShares Focused Equity ETF (CWS) made another new all-time high on Tuesday for its net asset value.

  We had a lot of news this week. On Friday, we got the latest jobs report. This morning, we got the CPI report for November. Also, the Federal Reserve started its two-day meeting today. The FOMC will release its policy statement tomorrow afternoon. Spoiler Alert: The Fed won’t make any changes to interest rates.

  On Friday, the Labor Department said that the U.S. economy created 199,000 net new jobs last month. That was slightly ahead of Wall Street’s forecast for a gain of 190,000 jobs. For October, the economy added 150,000 jobs. The unemployment rate ticked down from 3.9% to 3.7%.

  Here’s a look at the monthly nonfarm payrolls:

  

  One problem for the economy is that a large amount of the new jobs are healthcare and government jobs. Manufacturing added only 28,000 jobs last month. That needs to be higher. Retail lost 38,000 jobs.

  The labor force participation rate rose to 62.83%. That’s now at its highest level since Covid broke out in early 2020.

  One good sign is that average hourly earnings increased by 0.4%. Wall Street had been expecting an increase of 0.3%. Over the last year, wages are up by 4%. While the wage gains have been good, much of the increase has been eaten up by inflation. Adjusted for inflation, workers’ pay increased by 0.2% last month and 0.8% in the last year.

  The Labor Department also tracks a broader measure of unemployment called the U-6 rate which counts “discouraged” workers. For November, the U-6 rate fell 0.2% to 7%.

  We’re not in a recession, but the economy is clearly slowing down. Most economists think the economy grew in real, annualized terms by 1% to 1.5% in Q4. The Fed is trying to engineer a “soft landing” for the economy. The goal is for inflation to dissipate but for the economy to avoid a recession.

  Frankly, that’s tough to do. In the last 40 years, I’d say the only example of a soft landing was in 1994-95. I hope we can repeat it, but I’m skeptical. For now, the promise of lower rates are good for stocks. Don’t let yourself get scared out of the market.

  The Inflation Numbers Aren’t So Bad

  This morning, the Labor Department said that inflation increased by 0.1% in November. That’s not bad, although it was 0.1% higher than Wall Street’s forecast.

  Over the last 12 months, inflation is up by 3.1%. That matched Wall Street’s expectations. Bear in mind that prices are still going up, but the rate of increase is slowing down.

  There’s a curveball to this data and it’s energy prices. Last month, energy prices were down a lot. For example, gasoline prices were down 6% in November. The drop in energy prices weighed heavily on the CPI data.

  

  That’s why we also want to look at the core rate (see above), which excludes food and energy prices. Last month, the core rate increased by 0.3%. Over the last year, core CPI is up by 4%. That was in line with estimates. The-year-over-year core rate has declined for eight months in a row, although the most recent one was very small.

  A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%, boosted by a 0.4% jump in food away from home. On an annual basis, food rose 2.9% while energy was down 5.4%.

  Shelter prices, which make up about one-third of the CPI weighting, increased 0.4% on the month and were up 6.5% on a 12-month basis. However, the annual rate has showed a steady decline since peaking in early 2023.

  For the last several months, the Fed has sounded tough on inflation even though the central bank has backed off its rate hikes. The Fed first paused on rate hikes at its June meeting. It raised again in July, but it paused again at its last two meetings.

  You can forget about a rate hike tomorrow, or one in January. There’s a good chance that the Fed will cut rates sometime in the spring. It could even come as early as March, but May or June is a safer bet. Futures traders currently think there’s a 92% chance that the Fed will cut rates by June. Traders see the Fed lowering short-term interest rates by 1.25% next year. That would be very good for stocks.

  Stock Focus: Alamo Group

  This week, I want to look at an interesting yet overlooked company, the Alamo Group (ALG). No, this has nothing to do with car rentals. Instead, Alamo is in the business of making farm machinery.

  Before you roll your eyes at farm machinery, I’ll tell you that since its low in 2009, Alamo is up 18-fold. Despite having a market cap of $2.3 billion, Alamo is largely ignored by Wall Street. The company is followed by a grand total of three Wall Street analysts. One rates it a buy; the other two are holds. A lot of experts missed this one.

  Check out this chart:

  

  Honest question. How many of those downdrafts would have scared you? I’m sure a few would have, but every single one was reversed. So much of good investing comes down to waiting.

  Alamo was founded in 1969. The company has 4,200 employees. Last year, it registered sales of $1.5 billion. For this year, sales will probably be close to $1.7 billion.

  When I said that Alamo makes farm machinery, that’s not entirely fair. The company makes a wide range of products from street sweepers and snow trucks to tractor-mounted mowing equipment. Alamo divides its business into two units: industrial and vegetation. The company is based Seguin, Texas, about 35 miles from the actual Alamo.

  Shares of Alamo have been rallying very well since early November when the company reported strong results for its Q3. Alamo said it made $2.91 per share which was 26 cents better than estimates. This was the eighth-straight quarter for record sales and earnings. The stock is up 21% since then.

  These results calmed investors who were concerned after Alamo slightly missed its Q2 earnings. The company made $3.05 per share in Q2 which was two cents below estimates.

  Prior to that, Alamo had been crushing its estimates. For last year’s Q4, Alamo made $2.44 per share. That was a 45-cent beat. Then in Q1, Alamo made $2.79 per share which was well ahead of Wall Street’s estimate of $2.12 per share.

  In last month’s report, CEO Jeff Leonard was very optimistic. He said, “our strong, high quality order backlog gives us excellent forward visibility. Combined with the health of our markets, this bodes well for our performance for the remainder of this year and for the first several quarters of 2024.”

  Alamo is currently trading at about 15 times next year’s earnings estimate. However, if Alamo keeps beating estimates as it had, then it’s probably going for around 12 or 13 times earnings. Alamo currently pays out a small quarterly dividend of 22 cents per share. That works out to a yield of less than 0.5%.

  Alamo’s next earnings report won’t be out for two months, but I’m expecting another big beat.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

  P.S. If you want more info on our ETF, you can check out the ETF’s website.

• Morning News: December 12, 2023
  Eddy Elfenbein, December 12th, 2023 at 7:07 am

  Gas Prices Are Falling, Hitting Their Lowest Level in Almost a Year

  Making Oil is More Profitable than Saving the Planet. These Numbers Tell the Story

  What to Watch in CPI Report: Firm Underlying Inflation Could Complicate Prospect for Interest-Rate Cuts

  Inflation Expected to Stay Flat, Giving Fed Room to Cut Rates

  Best Bond Forecasters of 2023 Say the Rally Is Doomed to Fizzle

  Goldman Reshuffles Private Credit in Bid to Double Assets

  Goldman Trader Who Was Paid $100 Million Since 2020 to Step Down

  JPMorgan Is in a Fight Over Its Client’s Lost $50 Million Fortune

  EY Is Laying Off U.S. Partners Amid Tough Economic Conditions

  Cathie Wood Boosts Stake in Microsoft, Facebook in AI Push

  Essential AI Comes Out of Stealth With $57 Million in Funding

  Google Loses Antitrust Court Battle With Makers of Fortnite Video Game

  Google’s Antitrust Setback Could Remake the Mobile App World

  Jet Defects Stoke Debate Over Who Should Inspect Mechanics’ Work

  U.S. Companies Are Finding It Hard to Avoid China

  Why Volkswagen Is Building a Team of 3,000 Engineers in China

  Pernod Ricard Releases First China Whisky Amid Economic Slowdown

  Commodities Carriers Star Bulk and Eagle Bulk Shipping Agree to $2.1 Billion Merger

  Macy’s Billion-Dollar Question: What’s More Valuable, Real Estate or the Business?

  Lowball Bid Could Spur Macy’s to Look for Better Options

  Choice Hotels Launches Hostile Bid for Wyndham

  Redstone’s Predicament: Whether to Sell or Fix Her Media Empire

  The Strangest Toy on Wish Lists This Year

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