Avoiding U.S. default Performance report on distribution stocks with cracks Shin In-gyu’s water parsley

2023-05-17 15:12:51

<오늘의 미나리>

1. Macro

Opening status of key indicators

Slight rise in the three major indices
10-year Treasury yields fall, 2-year yields rise

1 month 5.56%, 2 months 4.98%
The 1-month high is down slightly

Crude Oil Rising, Gas Falling
Gold Down, Bitcoin Down, Dollar Up

◆US MBA Mortgage Indicators/Housing Permits/Number of Starts

U.S. 30-Year Mortgage Rates
6.48%->6.57%

Declining mortgage applications
One week new -5.7%

First quarter new mortgage debt
Lowest since 2014… 324 billion dollars

◆European CPI definitive value/Japanese industrial production

European CPI Monthly 0.6% (0.7%) Annual 7.0% (7.0%)
Core CPI also rose 1.0%, in line with 5.6% expectations

Core CPI slows in 10 months, but
Excluding alcohol and tobacco, higher than expected

Japan Industrial Production Monthly +1.1% (0.8%) in March
Downtrend from the previous 4.6%

◆Follow-up details of debt ceiling negotiations

Debt Limit Negotiation Update
Even in the second meeting, no conclusion was reached.

The mood of both parties following the second meeting
‘Confirmation of progress in negotiations’

House Speaker Kevin McCarthy
“Avoid defaulting in the US”

Democratic Party, urgent legislative petition
Republican Party intends to raise debt ceiling

President Biden’s visit to Japan
Attend the G7 Summit

Biden shortened tour schedule
Plan to return home on the 21st

◆(10:30) Crude oil inventory

◆Wall Street market analysis/bond analysis

JP Morgan Management “Economic Recession Virtually Certain”
“Growth slowing, cut possible in September”

“Buying Treasury Bonds is Effective During Economic Downturns”
“Deep Recession Under 2.5% 10-Year Treasury”

Short position in Japanese bonds..Considering YCC change
Interest in emerging market bank stocks such as Mexico

◆Jeseong Yun CIO “Buy TLT at $102-103”
“Wait to buy 99-101.. It seems difficult below 99”

“Low probability of default, long-term inflation above 3%”
“Debt Limit, Buy Against Recession Effective”

◆Technical Analysis CMT Association
“Nasdaq (QQQ) is nearing its peak”

If the previous high is not broken and the rise is reduced, a decline is possible
“A sell signal is possible at two more bullish closes”

2. Performance
◆(loaded) Target (TGT) TJMax (TJX) Tencent (TCEHY)

◆Target (TGT) performance announcement
Sales of 25.32 billion, EPS of $2.05

Same-store sales increased by 0.7%
Online sales down 3.4%

Online and offline visits increased by 1%
Consumer discretionary sales declined

More frugal shoppers
Product inventory decreased by 16% compared to the previous year

Target Suffering from Theft
“Profitability decreased by $500 million from the previous year”

Christina Hennington CGO
“Customers face pressure on consumption”

◆TJX (TJX) sales of 11.8 billion dollars (11.81 billion)
EPS $0.76 (0.71) above only net profit

Same-store sales +3% (2.7% expected)
EPS guidance raised, estimates lower

“Relieve pressure on raw materials and labor costs”
Maintained annual guidance.. Disappointed

After the bankruptcy of Bad Bath and Beyond (BBBY)
Market expectation point

◆ Tencent sales of 7 billion dollars (68.8)
EPS of 0.73 ($0.7) above sales

Increased game sales and revenue
‘Valorant’, etc. International sales 25%, domestic 6%

Gameplay Age Restriction Adverse Effects
WeChat app expands mobile

“Price cut as cloud competition intensifies”
“AI enhancement”..No mention of chatbot disclosure

◆(Janghoo) Cisco (CSCO) Take-Two (TTWO)

Cisco (CSCO) following market close
Take Two (TTWO) earnings to be announced

3. News

◆Tesla shareholder meeting summary/Musk interview

Tesla’s long-term outlook is optimistic
“Continuing the position of the largest electric vehicle company”

Musk: Fed rate cut will be too late
Forecast slowing consumer demand

Concerns over China-Taiwan conflict
“Apple will be hit harder than Tesla”

Musk invested $50 million in OpenAI
“Disappointed with ChatGPT non-profit”

Musk horse, horse, horse
“Demands to work from home are hypocritical”

Tesla, Space X, etc.
Emphasis on going to the front office

Tesla Ad Execution Review
Musk “We’ll see the effect”

Musk was negative regarding Tesla
In 2019, the ‘I hate ads’ tweet

“Cybertruck, year-end production”
Capable of shipping 250,000 to 500,000 units per year

Musk horse, horse, horse
“Tesla’s future is robots, not electric cars”

The economic outlook is negative
“A lot of companies can go bankrupt in one year”

Manly Musk “Even if I lose money because of a tweet…”
“I will say what I have to say”

Wall Street’s Big Bank’s China Crisis/UBS Hit

Big Wall Street banks, dark clouds in China
China also cuts manpower due to US-China conflict and regulation

Goldman downgrades China’s five-year plan forecast
MS, Asia-Pacific 7% job cuts..JP also cut jobs in China

Last year, the atmosphere of local acquisitions and expansions suddenly changed
Regulations in the financial sector have become stronger following the coronavirus

Xi Jinping Tightens Overseas Listing Rules
U.S. cracks down on Chinese companies, etc., bank food disappears

◆UBS “CS Emergency Acquisition Hits $17 Billion”
Due Diligence Adjusted $13 Billion, Litigation-Regulatory $4 Billion

$34.8 billion gain offset by low-cost acquisition of assets
likely to be less than expected gains

Litigation risks such as AT1 bonds remain
“No transaction risk, long-term profit”

Aftermath of Amgen-Horizon lawsuit for pharmaceutical stocks

Amgen-Horizon Acquisition FTC Lawsuit
M&A progress-hit pharmaceutical stocks that have been waiting

SGEN, which was to be acquired by Pfizer
Declined 6% the previous day on fears of a $43 billion deal

Merck-Prometheus (RXDX)
Concerns regarding ISEE-Astellas Pharma deal

Shares of potential takeover candidates also fell
Biomarine (BMRN) Alnilam (ALNY) Sarepta (SRPT)

William Blair: M&A fever in pharmaceuticals will be dampened
Impact of ‘bundling’ practices? Possibility of early-stage enterprise mobility

◆The Transformation of Heinz Ketchup?

125 years ‘ketchup bottle’ Heinz’s transformation
Released dispenser ‘Heinz Remix’

Expanded airport distribution, school-chef version
Pilot operation in restaurants later this year

57 sources via touch screen
Added jalapeno, chipotle, mango ketchup, etc.

“Changing the Consumer Experience”
B2B innovation following Mayocheop and Cranchi?

4. Report

◆Win Resort/Western Alliance

Barclays, Wynn Resort (WYNN) upgrade rating
Neutral -> Overweight… $135 target

Despite macroeconomic headwinds
“Improve Macau traffic and recover the economy

Western Alliance Bancorp (WAL)
Positive investment opinion continues on Wall Street

Stefans: “The future outlook is still strong”
‘Overweight’ $71..125% margin

Jefferies ‘Buy’ “Entering a stable position”
Target price of $48..52% room

UBS ‘Buy’ “Erased deposit concerns”
KBW ‘Excellent’ “Fundamental level approach”

Wells Fargo: Deposit growth will continue next quarter
‘Overweight’… $65 target price

New York = Jeong So-ram/Shin In-gyu Correspondent [email protected]

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