>>> HAPPY FRIDAY, EVERYONE.
THIS IS “THE HOMESTRETCH.”
I AM JEFF MARKS.
WELL, YOU KNOW, TODAY, IT’S —
WE’RE STILL IN THE RED.
THE BUYERS DIDN’T COME BACK AS
AGGRESSIVELY AS THEY DID THE
LAST FEW DAYS.
AND THAT’S MORE THAN FINE.
YOU KNOW, WE’VE HAD A NICE RUN.
YEAR-TO-DATE, MARKETS STILL HAVE
ABOUT 5 3/4, AND, YOU KNOW,
PULLBACKS ARE TO BE EXPECTED.
AS I REFERENCED EARLIER, THE
OSCILLATOR WAS NEGATIVE, NOT
OVERSOLD, BUT IT IS SOMETHING
WE’LL THINK ABOUT IF WE CONTINUE
TO SEE DECLINES IN THE MARKET.
NOW, WHAT’S NEW SINCE THE
MORNING MEETING, WE DID PUT OUT
A COUPLE OF TRADES.
WE DID THE DOWN TRADES OF
PIONEER AND COTERRA.
AFTER TALKING TO JIM THIS
AFTERNOON, WE DECIDED TO TRIM
THEM, AS WELL.
TO REDUCE THE DOWNSIDE EXPOSURE
TO FURTHER DECLINES, JUST IN
CASE THEY ALL REACT NEGATIVELY
TO THEIR NEW QUARTERLY
DIVIDENDS.
REMEMBER, THESE ARE DIVIDEND
PLAYS, AND, YES, DIVIDEND YIELD
OF 6% OR MAYBE EVEN 7% ARE NICE.
THEY JUST DON’T CUT IT WHEN YOU
HAVE A SIX-MONTH TREASURY
YIELDING 5%.
A SIX-MONTH TREASURY AT 5% IS
VERY, VERY ATTRACTIVE, AND
THAT’S GOING TO CREATE A LOT OF
COMPETITION WITH STOCKS.
THAT’S WHY WHEN YOU SEE INTEREST
RATES RISE, STOCKS TEND TO FALL.
I DON’T KNOW IF THIS IS — IF
THIS WILL BE PUT OUT BEFORE THIS
IS PUBLISHED OR AFTER, BUT WE’RE
ALSO GOING TO ADD TO PALO ALTO
OUR POSITION THERE THIS
AFTERNOON.
BUT WE’VE WAITED A FEW DAYS, AND
SO NOW WE’RE GOING TO PICK SOME
UP.
REMEMBER, WHENEVER WE START A
NEW POSITION, WE ALWAYS LIKE TO
WORK SMALL, THEN WE CONTINUE TO
ADD ON WEAKNESS.
AS MUCH AS WE MAY LIKE A STOCK
AT THAT VERY FIRST PRICE, WE
CAN’T PREDICT WHAT THE MARKET
WILL DO ON A DAILY BASIS.
AND THAT’S FINE, TOTALLY FINE.
THE MARKET WILL DO WHAT THE
MARKET WILL WANT TO DO.
WE’RE FOCUSED ON BUYING
HIGH-QUALITY COMPANIES WITH
GREAT MANAGEMENT TEAMS, LEADERS
IN THEIR INDUSTRY, STRONG
BALANCE SHEETS.
IF PRICE COMES IN, WE LOOK AT IT
AS A DISCOUNT AND WE WANT TO BUY
DISCOUNTS.
WHEN THERE IS A DISCOUNT AT A
RETAIL STORE, THAT’S WHEN YOU
WANT TO DO YOUR BUYING.
YOU DON’T WANT TO WAIT WHEN
EVERYTHING IS ON FULL PRICE.
IF IT COMES IN, WE’LL JUST
CONTINUE TO ADD MORE.
NOW, IN TERMS OF WHAT’S WORKING
TODAY, IT’S GOING TO BE THOSE
DEFENSIVE AREAS.
AGAIN, THIS IS KIND OF LIKE
YESTERDAY.
YOU HAVE STAPLES AND HEALTH CARE
LEADING THE WAY.
REMEMBER, THIS IS WHY YOU CAN’T
GIVE UP ON THESE, ESPECIALLY
WHEN THEY GO OUT OF FAVOR.
BECAUSE IF THESE SLOWDOWN FEARS
CONTINUE TO PICK UP, I SUSPECT
THIS GROUP, THESE GROUPS, WILL
CONTINUE TO OUTPERFORM.
NOW, ON THE OTHER HAND, NOT
WORKING, THAT’S GOING TO BE
ENERGY WITH OIL PRICES FALLING
AND NAT GAS MAKING A NEW LOW.
THEN, OF COURSE, TECH IS
FALLING, AS WELL, BECAUSE AS
INTEREST RATES RISE, TECH STOCKS
TEND TO FALL.
A LOT OF THESE TECH STOCKS, A
LOT OF THEM HAVE EARNINGS —
MANY ARE NOT PROFITABLE TODAY
AND EARNINGS ARE PROMISED IN THE
FUTURE.
THEIR LONG-DURATION ASSETS.
LONG-DURATION ASSETS TEND TO
FALL WHEN INTEREST RATES RISE,
BUT WE TEND TO STICK WITH
PROFITABLE STOCKS TODAY.
THAT’LL BE THE MANTRA WITH
INTEREST RATES WHERE THEY ARE
THIS YEAR, MUCH LIKE LAST YEAR
WHEN WE SAID AVOID THE
NON-PROFITABLE COMPANIES.
IN TERMS OF WHAT IS MOVING
TODAY, AGAIN, DEFENSIVE.
YOU HAVE J&J UP TODAY.
THAT’S REALLY GOOD TO SEE.
THEN, OF COURSE, PROCTOR IS
HIGHER.
ESTEE LAUDER IS HIGHER.
BOTH HAD BUY RECOMMENDED BY
CITI.
CATERPILLAR IS UP, GOOD BOUNCE
OFF THE DEERE QUARTER, RESULTS
STRONGER THAN EXPECTED.
HONEYWELL, TOO, WHICH IS NICE TO
SEE.
THAT NEEDS TO PLAY CATCHUP TO
COME OTHER AEROSPACE NAMES THAT
HAVE DONE WELL.
THEN THE BOTTOM, IT’S THE BIG
ENERGY STOCKS.
THEN, OF COURSE, SOME OF THE BIG
WINNERS IN TECH THIS YEAR, LIKE
SEMIS, THEY’RE GIVING BACK SOME
OF THEIR GAINS.
LOOKING AHEAD TO NEXT WEEK, A
LITTLE BIT OF A GAME PLAN HERE.
SO WE’RE GOING TO HAVE EARNINGS
AFTER THE BELL TUESDAY FROM PALO
ALTO, SO, REMEMBER, OUR RECENT
BUYS AREN’T A CALL ON THIS
UPCOMING QUARTER.
BUT WE’LL BUY MORE IF IT DOESN’T
GO OUR WAY.
THAT’S PERFECTLY FINE.
SMALL POSITION.
TJX WEDNESDAY MORNING.
WE’LL LOOK TO SEE IF THIS
FAVORABLE INVENTORY ENVIRONMENT
THEY’RE ENJOYING RIGHT NOW HAS
LED TO THE SHARE OF GAINS WE
ANTICIPATE.
ONE THING TO KEEP IN MIND, WHEN
THE COMPANY PROVIDES GUIDANCE
FOR 2023, THEY’RE ALWAYS
CONSERVATIVE TO START THE YEAR.
LET’S JUST ALWAYS KEEP THAT IN
MIND.
WEDNESDAY NIGHT IS A BIG NIGHT.
NVIDIA, PIONEER, COTERRA.
NVIDIA SHOULD GIVE US CLARITY
INTO WHEN THE GAMING INVENTORIES
HAVE BOTTOMED.
THIS QUARTER OR NEXT?
THAT’S WHEN WE’LL KNOW.
OF COURSE, WE HAVE NEAR-TERM
CONCERNS ABOUT REVENUES BASED ON
WHAT A&D SAID EARLIER.
WHAT CAN EXACTLY NVIDIA SHIP TO
ITS CUSTOMERS IN CHINA?
WE DO KNOW NVIDIA HAS AN
EXCELLENT STORY TO TELL WITH ITS
A.I. CHIPS THAT ARE — THAT ARE
THE KEY TO THIS BIG, YOU KNOW,
A.I. REVOLUTION, I’LL CALL IT,
THAT WE’VE SEEN OVER THE LAST
COUPLE OF WEEKS.
THEN PIONEER AND COTERRA WE
COVERED EARLIER.
THEN BAUSCH + LOMB.
IT’LL BE HELPFUL TO HEAR FROM
MANAGEMENT.
WE DON’T HEAR FROM THEM TOO
OFTEN.
I’D LIKE TO KNOW WHEN DO THEY DO
PLAN ON SELLING THEIR NEXT
SLIVER OF BAUSCH + LOMB, WHICH
HAD A BIG WEEK AFTER IT WAS
ANNOUNCED BRENT SAUNDERS, THE
FORMER CEO OF BAUSCH + LOMB AND
ALSO ALLERGEN IS BACK AT BEING
CEO OF BLCO.
THAT’S THE TICKER, BLCO.
WHEN ARE THEY TRACKING TOWARD
SPENDING THE REST OF THE BLCO
STAKE TO SHAREHOLDERS?
SOME OTHER EVENTS, THE ANNUAL
CONSUMER GROUP OF NEW YORK NEXT
WEEK.
A LOT OF COMPANIES ARE TALKING.
THE UPDATE I’M INTERESTED IN IS
FROM CONSTELLATION BRANDS.
THEY REPORTED EARLY IN THE
EARNING SEASON, OR LATER IN THE
EARNING SEASON FROM THE PRIOR
ONE, JUST HOWEVER YOU WANT TO
FRAME THE TIMELINE.
BUT, LOOK, I THINK ALL DATA,
RECENT CHECK SUGGESTS BEER SALES
HAVE ACCELERATED IN THE NEW
YEAR.
I’D LIKE TO HEAR MANAGEMENT
CONFIRM THAT, AND THAT WAS ALSO
PART OF THE THESIS OF STZ.
ON THE ECONOMIC CALENDAR FRONT,
MANUFACTURING.
DEFLATOR IS A BIG ONE, TOO, A
MEASUREMENT OF INFLATION THAT’S
POPULAR WITH THE FED.
SPEAK OF THE FED, WEDNESDAY, WE
HAVE MEETING MINUTES FROM THE
LAST FOMC MEETING.
THAT’LL BE RELEASED.
THAT CAN GIVE US A SENSE IF
THERE REALLY WERE ARGUMENTS
BEING MADE FOR A 50-BASIS POINT
RATE HIKE THAT SEEMS TO HAVE
BEEN SUGGESTED YESTERDAY.
THEN ONE LAST REMINDER, MARKETS
ARE CLOSED NEXT MONDAY, BUT
WE’LL BE BACK TUESDAY.
HOPE EVERYONE HAS A GREAT AND
SAFE WEEKEND.
THAT’S IT FOR ME.