TOPLEY’S TOP 10 April 01 2024

1. Labor Productivity Breaks Out to New Highs

2. Free Cash Flow Still Climbing Capital Group

Capital Group

At an aggregate level, companies in the S&P 500 Index excluding financials are holding cash at levels that are near 10-year highs. This could fuel stock buybacks, M&A activity or dividend payments. For instance, over the last few months, there has been an increase in M&A activity among some larger oil and pharmaceutical companies, deals that could help drive long-term earnings growth. Companies have also been increasing their dividend payouts, which contribute to total stock returns. Recent high-profile examples are Meta and Salesforce announcing their first-ever dividends, which bode well for capital allocation discipline.  

Capital expenditures will no doubt be on the rise to meet the needs of technology companies, including the large investment in data centers required for AI, but also for the infrastructure investment needed to support the reshoring of supply chains. This investment should translate into steady cash flow growth for a broad array of companies across many sectors. 

5 reasons why equities could defy the odds | Capital Group

3. Funds that Systematically Trade Options has Grown 51% in One Year

Dave Lutz Jones Trading
Goldman says AUM of funds that systematically trade options has grown 51% year-over-year

4. Another EV Stock Falling…Battery Maker CATL -15% One-Year

5. Uber Ride Since Covid

Vitaliy N. Katsenelson We bought Uber a few months before the pandemic. (I wrote about it here). Uber’s stock went up 30% right after we bought it and then declined around 80% within months (the shutdown economy was not good for the ride-sharing business). As the economy started to reopen, the stock went up a lot (we almost doubled our money on the original purchase). Then it more than halved. Two years later, it has tripled from that point.

6. The DJT Stock Story

Barrons By Paul R. La Monica
Even if you assume that TMTG revenue ended the year at $6.8 million—double its first nine months—the stock would be valued at a price-to-sales ratio of more than 1,200. Meta, by comparison, trades at nine times 2023 sales, while Snap goes for four times trailing revenue.  Shorting the stock looks tempting, but that is also risky. Short sellers borrow stock and sell it, aiming to buy it back at a lower price. Annualized borrowing costs are now steep, however, averaging 150%. And with nearly 12% of shares held short, the stock is vulnerable to a squeeze, whereby a stock can pop as short traders are forced to liquidate shares.
According to research firm S3 Partners, DWAC/DJT shorts have lost $158 million so far this year, including $93 million in March.

7. U.S. Energy Independence

Chartr Blog
While artificial intelligence dominates the headlines of business and tech newspapers around the country, America’s energy industry has been quietly thriving. Indeed, 3 weeks ago the US Energy Information Administration (EIA) reported that the US had produced the equivalent of 12.9 million barrels of crude oil and condensate per day last year, 28% more than the world’s previous top producer, Russia, and 33% more than even the oil-rich Kingdom of Saudi Arabia.

And, it’s not just oil.

Thanks to hydraulic fracturing (or fracking), a wave of previously inaccessible, or at least uneconomical, oil and gas reserves are now being extracted at record speed. Indeed, as recently as 2015, America’s liquefied natural gas (LNG) never left the country: now it’s a key component of one of the country’s most geopolitically important exports.

Uncomfortable truth: While America’s fossil fuel output is breaking records, sensors in the world’s oceans are also reading temperatures that we’ve never seen before, leaving researchers and scientists “astounded”.

8. Market Keeps Rising But Most Investors “Expect Correction” and $6 Trillion in Cash

From Callum Thomas Blog @Callum Thomas (Weekly S&P500 #ChartStorm) Correction Risk? Yet, interestingly enough, apparently most people expect a correction. Perhaps they expect it to be a small bump in the upward sloping road — a dip/pullback to buy, rather than something to hedge.




9. American Sports Betting

10. Pew Research: American’s Top Policy Priorities

Americans’ Top Policy Priority for 2024: Strengthening the Economy