Topley’s Top 10 – February 10, 2022

1.Earnings Guidance has Turned Most Negative Since 2009

Liz Ann Sonders Schwab

https://twitter.com/LizAnnSonders

2.S&P Forward P/E Correction So Far….31x to 24x

Bloomberg

3.Commodities Rally…DBC ETF Still Needs to Double to See 2008 Highs

www.stockcharts.com

4.Commodity Returns During Past Rate Hike Cycles.

5.The Leader of Zero Interest Rate Policies Japan Sees Positive 10 Year for First Time Since 2016

Jim Bianco Research–Japan started yield curve control (YCC) in Sept 2016 = 10-yr JGB at 0%. In July 2018 the BoJ widen the “band” for YCC to +/- 20bps Today is the highest yield since YCC began, and the first time the 10-yr JGB has been above to top of their band.

https://twitter.com/biancoresearch

6.Oldie but Goodie Chart Now that Rates are Rising.

But we must unfortunately watch the money losing zombies…Just too many firms out there that are not able to service their debt with yesterday’s low rates. What will happen when they need to refinance? They will need to get their capital structures in place now.

Deutsche Bank

361 CAPITAL BLAINE ROLLINS, CFA HTTPS://SNIPPET.FINANCE/THE-10-BEST-FINANCIAL-BLOGS/

7.”Disruptor” Stocks vs. 2 Yr. Treasury

ARKK vs 2-Yr Treasury Yield

Sumit Roy

https://www.etf.com/sections/features-and-news/high-growth-interest-rate-relationship-weakens

8.80% of Americans 18-34 Said Now was a BAD TIME to Buy a House

From Morning Brew.

REAL ESTATE

Young Americans shun the housing market

More than 80% of Americans ages 18–34 said now was a bad time to buy a house, according to a Fannie Mae survey released yesterday. Their gloomy outlook is shared by the broader population: A record-low proportion of Americans—just 25%—said it was a good time to buy a house right now.

It’s not a good time if you can’t afford it

The median home-sale price reached a record high of $365,000 in January, according to Redfin. That’s a 16% jump from the previous January and a 28% increase from January 2019.

Skyrocketing home prices highlight the severe demand–supply imbalance that emerged in the housing market over the pandemic.

Interest in buying homes soared thanks to historically low interest rates and the desire to avoid your trumpet-playing neighbor at all costs.
But the supply of available houses has not kept up—not even close. In fact, the 910,000 homes for sale at the end of December was the lowest since the National Association of Realtors began keeping track in 1999.

It all amounted to January being the most competitive month in US housing market history, Redfin said.

But young people are getting squeezed harder than most

Among the reasons why…

The disappearing starter home: The US’ supply of properties 1,400 square feet or smaller (the ones ideal for your first home) has fallen to its lowest level in 50 years. Starter homes accounted for just 7% of construction in 2019, compared to 40% in 1980.
Battle for the suburbs: Home prices are rising the fastest in suburbs with a higher share of children—neighborhoods where millennials are most interested in buying homes.

Big picture: Millennials like to think they’re the main character in every story, but in this case…they actually are. Many of them are about to hit 32, which is the median age of first-time home buyers in the US. Therefore, “As millennials go, so goes the housing market,” said Zillow economist Nicole Bachaud.—NF

https://www.morningbrew.com/daily

9.31M Americans to bet on Super Bowl, gambling group estimates

By WAYNE PARRYyesterday

ATLANTIC CITY, N.J. (AP) — A record 31.5 million Americans plan to bet on this year’s Super Bowl, according to estimates released Tuesday by the gambling industry’s national trade group.

The American Gaming Association forecasts that over $7.6 billion will be wagered on pro football’s championship game set for Sunday.

Both the amount of people planning to bet (up 35% from last year) and the estimated amount of money being bet (up 78% from last year) are new records.

Bettors include people making casual wagers with friends or relatives, entries into office pools, wagers with licensed sportsbooks, and bets placed with illegal bookmakers.

“Americans have never been more interested in legal sports wagering,” said Bill Miller, the group’s president and CEO. “The growth of legal options across the country not only protects fans and the integrity of games and bets, but also puts illegal operators on notice that their time is limited.”

When the Los Angeles Rams and Cincinnati Bengals begin the game Sunday evening in the Rams home stadium, 30 states plus Washington D.C. will offer legal gambling.

Since last year’s game, 45 million additional people will be able to bet on the Super Bowl because their states have legalized sports betting over the past year: Arizona, Connecticut, Louisiana, Maryland, North Carolina, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming.

The association predicted that:

— 18.2 million American adults will place traditional sports wagers online, at a retail sportsbook or with a bookie, up 78% from 2021.

— 18.5 million plan to bet casually with friends or as part of a pool or squares contest, up 23%. The association said there is some overlap among those two groups.

— 76% say it is important for themselves to bet through a legal operator, up 11% from last year.

— 55% plan to bet on the Rams, with 45% backing the Bengals. That contradicts data from numerous individual legal sportsbooks that shows more bets and total money being wagered on Cincinnati thus far.

FanDuel, the official odds provider for The Associated Press, says 59% of spread bets are on Cincinnati to cover the 4-point spread as an underdog. Among moneyline bets that do not involve a points spread, 76% of bets predict the Bengals will win the game outright. Other sportsbooks report similar breakdowns on bets received thus far.

The Super Bowl is also one of the most perilous times of year for people with a gambling problem.

Harry Levant, a public health advocate from Philadelphia and a recovering gambling addict, is an official with the group Stop Predatory Gambling. He said the ongoing wave of sports betting advertising, and numerous incentives to get people to bet, is reminiscent of the tobacco industry’s efforts to get people to smoke and continue to do so.

He said legal sports betting is increasing a public health crisis in America involving problem gambling.

“One out of two people struggling with a gambling problem contemplates suicide, and one out of five will attempt suicide,” he said. “I am one of those one out of five.”

Levant said the rapid rise of in-game betting feeds into a compulsive gambler’s desire for more and faster opportunities to bet.

“No longer is gambling limited to who’s going to win the game,” he said. “Now gambling is on every play. Keep them gambling, keep chasing action.”

There is a national help line for people with a gambling problem, or who think they might have one: 1-800-GAMBLER.

___

Follow Wayne Parry on Twitter at @WayneParryAC

https://apnews.com/article/super-bowl-nfl-sports-business-gambling-industry-988b31c7a80f31c3fe79c706415e8cab