Weekly Equity Market Outlook - December 13 - 17 TBC Capital Brokerage
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Weekly Equity Market Outlook December 13 - 17 TBC Capital Brokerage
Executive Summary
Chart of the Week: FED's Dot Plot Commodities Investment Themes
• The need for interest rate hikes is most visible from the classical
3.0% 96.57 ▲ 0.26% inflation gauges such as the latest PPI report.
USD Index Weekly change
2.5%
• Goldman Sachs decreased their real GDP forecast for 2022: In Q1
2.0% 70.86 ▼ -0.60% from 3% to 2%, in Q2 from 3.5% to 3% and in Q3 from 3% to 2.75%.
Crude Oil Weekly change
1.5% • Real earnings yield on the S&P 500 turned to negative due to sky-
high inflation.
1.0% 46.95K ▲ 0.12%
Bitcoin Weekly change • Morgan Stanley’s chief China economist expects Chinese GDP will
0.5% growth 5.5% in 2022.
0.0%
1.80K ▲ 0.93%
2021 2022 2023 2024 Long Run Gold Weekly change
Macro Update S&P 500 Performance YTD Weekly Sector Performance
Interest Rates in U.S. and U.K. 30%
Sector ◯ Change
27.64%
2% 25%
27.15%
Health Care ▲ 2.48%
22.89% 24.70%
Real Estate ▲ 1.75%
22.16%
1% 20% Consumer Staples ▲ 1.36%
18.52%
Utilities ▲ 1.24%
15% 16.23% Communication Services ▲ 0.53%
0%
2015 2016 2017 2018 2019 2020 2021
Materials ▼ -0.72%
BoE Official Bank Rate U.S. Effective Federal Funds Rate
10% Financials ▼ -1.18%
9.93%
• The focus last week was on the central banks worldwide as the Fed, BOE , 6.47% Industrials ▼ -2.76%
and ECB set the scene for macroeconomic policies expected in 2022. 5% Information Technology ▼ -4.00%
• The Federal Reserve emphasized major concerns regarding the high inflation 5.08%
and explicitly signaled a heavily hawkish sentiment, with faster pace of Consumer Discretionary ▼ -4.73%
2.14%
0% 0.69% Energy ▼ -5.01%
tapering and 3 rate hikes in 2022. Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021Macro Insights
Central Banks Announce Mixed Policies
Interest Rates in U.S. and U.K. • The focus last week was on the central banks worldwide as the Fed, Bank of England, and European Central Bank set
3.0%
the scene for macroeconomic policies expected in 2022.
• The Federal Reserve emphasized major concerns regarding the high inflation and explicitly signaled a heavily hawkish
2.5%
sentiment, with faster pace of tapering and 3 rate hikes in 2022. The markets reacted positively to the news as Fed has
acquired a more decisive stance against the inflationary environment that is still expected to worsen in the first half of
2.0%
next year.
• Similarly, the European Central Bank announced a rate hike despite a record rise in COVID cases. The bank stated that
1.5%
the improvement in the labor market since the end of the furlough scheme and the high unemployment allow for a
more contractionary economic policy.
1.0%
• On the other hand, the European Central Bank remains relatively dovish without any indication that rate hikes are to
be expected in 2022. ECB’s president Christine Lagarde stated that the pace of cutting back on the bond buying
0.5%
program (PEPP) will increase, but if needed, the support will always be available to the economy.
0.0%
2015 2016 2017 2018 2019 2020 2021
BoE Official Bank Rate U.S. Effective Federal Funds Rate
Democrats are Failing to Pass a Crucial Bill
• After the crisis period in late-September when fears of government default due to the inadequacy of the debt ceiling were looming, BBB Investments by Purpose, Billions
Congress managed to postpone the deadline multiple times; now the federal government is expected to run at least till February 18th and
Clean Energy and Climate Investments 555
the debt ceiling has been increased by $2.5 trillion.
• The Congress is also working on passing the Build Back Better plan – one of the main midterm election points for Biden’s administration. Child Care and Preschool 400
The BBB is a $1.75 trillion plan encompassing social spending and climate policy which would increase the national debt. As the election is Child Tax & Earned Income Tax Credits 200
upcoming, the delay in BBB might significantly negatively affect Democrats’ chances.
Home Care 150
• Build Back Better plan is also connected to Child Tax Credit plan under which, families with children receive $250-$300 each month and
the Student Loan Forgiveness plan which affect the current economic conditions and welfare of the population. Housing 150
• Progressive Democrats are emphasizing the importance of the bill during the onset of the omicron variant as it would help families with ACA Credits, Including in Uncovered St… 130
childcare. If Democrats were to lose the midterm elections, a swift change in macroeconomic policies would be expected as republicans
Equity & Other Investments 90
would try to push their agenda..
Higher Ed and Workforce 40
Medicare Hearing 35Commodities and FX
USD Index Bitcoin (BTC)
• U.S. Dollar index remained at the mid- • Bitcoin did not change significantly W-o-
▲ 0.26% 96.57 96 level, as the central banks’ decision ▲ 0.12% 46.95K W as it closed at $46,892 on Monday and
USD Index Weekly change Last Price Bitcoing Weekly change
and omicron variant shaped expectations Last Price
at $46,946 on Friday, therefore, making it
97.0
for economic growth in 2022. a fifth consecutive week of steady and
• The value of the index dropped 60K
declining crypto prices.
following the Fed’s announcement • The positive hike was observed briefly
96.5
regarding rate hikes that make the following the Fed rally on Wednesday but
bullion have higher opportunity costs. 55K then reverted back to the $46,000 level.
• The drop was reversed in the second • According to some analysts, the fall of
96.0 half of the week as Bank of England Bitcoin may also be connected to the
hiked rates and ECB remained dovish. 50K
increasing number of other
The changes in the index will be highly cryptocurrencies which have more
95.5 reliant on omicron, inflation, and rate offerings and are environmentally friendly
Nov 21 Nov 28 Dec 05 Dec 12
hikes in 2022. Nov 21 Nov 28 Dec 05 Dec 12
(relatively).
Crude Oil WTI Gold
• The price of a barrel of oil decreased • Gold experienced a steep drop mid-
▼ -0.60% 70.86 from $71.29 on Monday to $70.86 as ▲ 0.93% 1.80K week, going from $1,788.30 on Monday to
Crude Oil Weekly change Last Price Gold Weekly change Last Price
macroeconomic events affected the $1,764.50 on Wednesday ahead of the
80 1,880
markets. highly-speculated Fed meeting.
• A temporary hike on Thursday might 1,860 • The two-week low on Wednesday was
have been caused by Goldman Sachs’ soon ameliorated by the weakened dollar
75
announcement, stating that oil can 1,840 due to the announcement of a faster pace
possibly hit $100 per barrel by 2022 as of tapering that will end the bond
1,820
the demand increases. purchasing program in March.
70
• Nevertheless, Europe continues posing 1,800 • Gold reached $1,804.90 on Friday as the
restrictions on travel and is increasing uncertainties regarding the omicron
social distancing measures which 1,780 variant and concerns about inflation fuel
65 decrease the demand for fuel and might the demand for safe haven assets.
1,760
Nov 21 Nov 28 Dec 05 Dec 12 negatively affect oil prices. Nov 21 Nov 28 Dec 05 Dec 12Chart of The Week
Dot Plot Reflects Inflationary Pressures
The chart represents The
3.0%
Federal Reserve's so-called
dot plot. It maps out
policymakers’ expectations
2.5% for where interest rates
could be headed in the
future. The dot plot serves
2.0% as a guide for financial
markets, which tend to
dislike policy surprises from
1.5% the nation’s central bank.
Each dot represents the
expectation of individual
1.0% Federal Open Market
Committee (FOMC)
members throughout time.
0.5% Expectations from last
FOMC meetings indicate
that interest rates are going
0.0% to rise in 2022.
2021 2022 2023 2024 Long Run
The Federal Reserve’s dot plot is used to create an understanding of possible upcoming interest rate changes according to the votes of the heads of regional Reserve Banks and Board of
Governors. These projections significantly influence investor expectations for macroeconomic policy.
Last Wednesday, the Federal Reserve held its final meeting of 2021 where 12 out of 18 Federal Open Market Committee members indicated expectations of at least 3 0.25-bp rate hikes in 2022;
five expect 2 rate hikes, and one expects 1 rate hike. By these estimates, the fed funds rate is expected to reach 2%-2.5% by 2024.
Compared to the expectations observed in September (6 votes for 1 rate hike in 2022), the dot plot has changed significantly, which is mostly due to the worrying inflationary environment that is
supposed to be regulated by a tighter monetary policy. The inflation forecasts for 2022 rose from 2.3% to 2.7% over the last 3 months while the unemployment rate is expected to stabilize at
3.5%.Investment Themes
Investment Theme: PPI at Record Highs Goldman Decreases US GDP Forecast for 2022
CPI and PPI • The need for interest rate hikes is most visible from the Goldman Sachs US GDP Projections • After Democrat Senator Joe Manchin indicated that he won’t
10% classical inflation gauges such as the latest PPI report where 3.50% support Biden’s Build Back Better legislation, due to concerns
each type of the components surpassed estimates: November about high inflation, which most likely will persist, Goldman Sachs
8% PPI M-o-M was 0.8% instead of the forecasted 0.5%, Y-o-Y PPI 3.00% 3.00% 3.00% decreased their real GDP forecast for 2022: In Q1 from 3% to 2%,
was 9.6% instead of the estimated 9.2%. 2.75% in Q2 from 3.5% to 3% and in Q3 from 3% to 2.75%.
6%
• The Core PPI Increased by 6.9% - highest since 2014. While the • Since Goldman expects negative fiscal stimulus for 2022 due to
energy sector has been consistently leading, the price index for fading support from COVID-relief legislation, without Biden’s
2.00%
processed goods increased by 26.5%, and the price of Build Back Better legislation effect will be even more negative
4%
unprocessed goods jumped by 52.5% Y-o-Y. which, obviously, will have negative effect on economy growth
• This data, along with the latest CPI readings, creates an • Even though, failure to pass Biden’s plan probably will have
2% understanding of the alarmingly high inflationary pressures that negative effects on GDP growth, it might have positive effect on
are far from transitory. The Federal Reserve’s adjusted tone financial markets, because probability of corporate tax rate hikes
0% regarding the progression of inflationary pressures is also have decreased. As Goldman expected before increase in taxes
evident from its newest inflation expectations that have would have decreased corporate earnings by 3% and have taken
-2% increased for 2021, 2022, 2023 from prior readings. away 3% in S&P profit.
Jan 2020 Jul 2020 Jan 2021 Jul 2021 Q2, 2022 Q1, 2022 Q3, 2022
• Therefore, as long as the pandemic-related closures and
Core PPI YoY PPI YoY supply chain constraints last, inflation will persist. Old Projection Revised Projection
Real Earning Yields for S&P500 Turn Negative, Lowest in 30 Years Morgan Stanley: The China Upswing is coming
S&P 500 Real Earnings Yield • The chart shows real earnings yield on the S&P 500, which now China Credit Impulse, % of GDP • Through the years, China has experienced several mini-cycles.
6% turned to negative due to sky-high inflation. Looking into 30 0.25 The policy cycle has shifted from overtightening to easing, as
year history negative real yields were predicting financial crisis so Morgan Stanley’s chief China economist expects GDP will growth
what it says about valuations should be of great concern. On the 0.20 5.5% in 2022. Investors are less confident in such growth, however
4% other hand, owning stocks is better than obligations as the economists at Morgan Stanley thinks that this mini-cycle repeats a
earnings yield on the 10-year UST note is now -4.75%. The 0.15 familiar pattern and politicians have already taken steps to reverse
premium real earnings yield of stocks over bonds is over 2.5%. the downturn.
2%
The average premium since 1970 is only 0.17%. 0.10 • During this cycle, external demand grew significantly, due to
• Despite negative real earning yield gap between investors and that policy-makers tightened macro policies to slow infrastructure
consumers sentiments continues to increase. The University of 0.05 and property spending. Tightening was unusually aggressive this
0%
Michigan Consumer Sentiment and Expectations rose slightly time with debt/GDP reduced by 10 percentage points in 2021. The
this month but are near 10-year lows and at the same levels as of 0.00 property sector has seen the most prominent tightening.
March 2020. Investor sentiment remains bullish and well above • As Morgan Stanley indicates key risk is the Omicron variant and
-2%
the lows of last March. As consumers’ contribution is huge into -0.05 its greater transmissibility. China’s Covid-zero policy suggests that
the economic activity and corporate earnings, in the near term it could force to impose more selective, surgical shutdowns than
either consumer sentiment will improve or investor sentiment during the Delta wave.
-4% -0.10
2005 2010 2015 2020 may drop. 2008 2010 2012 2014 2016 2018 2020Sector Snapshot
13.34 -4.00% 35.80 27.20 STOCKS TO WATCH TICKER MARKET CAP CLOSE CHANGE P/E EV/EBITDA
Information Technology Market Cap (Trillions) Weekly Change P/E EV/EBITDA
Apple AAPL 2,808bn 171.14 -4.63% 27.76 21.51
Sector Comparison to S&P 500 Performance • Oracle Corporation (ORCL) is in talks with Cerner Corporation (CERN) to acquire Microsoft MSFT 2,431bn 323.80 -5.47% 30.96 21.08
40%
company. A deal that could be worth about $30 Billion, according to Wall Street Adobe ADBE 265bn 556.64 -14.95% 34.43 25.89
Journal a deal could be finalized soon. Broadcom AVGO 262bn 634.96 0.52% 17.64 14.71
• Adobe (ADBE) released in line EPS and beat revenue estimates, however 2022 Oracle ORCL 258bn 96.62 -5.86% 18.42 14.20
30% outlook was weak for both top and bottom lines. The company’s share price tumble Qualcomm QCOM 198bn 176.80 -3.85% 15.61 11.90
to six-month low. Applied Materials AMAT 130bn 146.15 -4.31% 16.55 13.05
Twilio TWLO 49bn 273.63 3.44% 150.99
• News about Apple’s new office to bring wireless chips in-house hit hard its
Dell Technologies DELL 42bn 54.65 -5.12% 7.78 7.21
20% suppliers on Thursday. Skyworks Solutions (SWKS), Broadcom (AVGO), QUALCOMM
Skyworks Solutions SWKS 25bn 151.70 -6.63% 11.80 9.31
(QCOM) and STMicroelectronics (STM) are among the largest suppliers of Apple.
C3.Ai AI 3bn 31.81 -5.44%
• C3.ai (AI) authorizes stock repurchase program, up to $100 million over 18
10% months.
ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
• Dell Technologies (DELL) downgraded at Evercore to In-Line with unchanged price
target ($63) after completing the VMware (VMW) spin-off and recent debt Invesco QQQ Trust QQQ 208bn 384.91 -3.29% 24.44% 0.20%
0% repayments. Vanguard IT ETF VGT 54bn 442.06 -3.91% 27.06% 0.10%
Technology Select SPDR XLK 50bn 167.88 -4.00% 31.26% 0.12%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 Fidelity IT FTEC 7bn 130.66 -3.96% 27.05% 0.08%
Information Technology S&P 500 SPDR Semiconductor XSD 2bn 230.76 -4.84% 35.92% 0.35%
6.46 2.48% 25.40 20.10 STOCKS TO WATCH TICKER MARKET CAP CLOSE CHANGE P/E EV/EBITDA
Health Care Market Cap (Trillions) Weekly Change P/E EV/EBITDA
Pfizer PFE
334bn 59.48 12.69% 10.56 7.97
Sector Comparison to S&P 500 Performance • Eli Lilly (LLY) soared more than 10% after providing upbeat forecast for FY22, Eli Lilly LLY 256bn 267.42 9.54% 31.65 27.16
30% Abbvie ABBV 229bn 129.53 3.24% 9.28 9.63
seeing non-GAAP EPS between $8.50-$8.65 well above the $8.21 - current analyst
Bristol-Myers Squibb BMY 137bn 61.56 9.23% 7.86 6.88
consensus. LLY is planning to release five new drugs in 2022-2023.
25% Moderna MRNA 120bn 294.80 14.68% 10.80 7.84
• Bristol-Myers Squibb (BMY) announced dividend increase and additional $15B
Edwards Lifesciences EW 76bn 122.12 0.23% 47.50 37.24
20%
share repurchase program authorization
Biontech BNTX 70bn 287.28 11.49% 7.90 4.63
• AbbVie (ABBV) gained after receiving FDA approval for Rinvoq – Janus Kinase Regeneron REGN 67bn 619.28 -7.50% 12.77 8.14
15% (JAK) inhibitor for the treatment of adults with active psoriatic arthritis (PsA) Biogen BIIB 35bn 237.43 2.07% 12.62 9.92
• Regeneron (REGN) shares slipped after announcing its Covid-19 antibody Zai Lab ZLAB 7bn 73.31 11.91%
10% treatment (REGN-COV) have diminished potency against the new Omicron variant. Adagio Therapeutics ADGI 1bn 11.48 -65.45%
However, REGN said it has next generation monoclonal antibodies in development
ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
5% that are effective against all known variants of concern, including Omicron
• The European Medicines Agency recommended refusal of marketing Health Care Select SPDR XLV 34bn 137.92 2.48% 22.11% 0.12%
0% Vanguard Healthcare VHT 17bn 260.64 2.36% 17.10% 0.10%
authorization for Biogen’s (BIIB) Alzheimer drug Aduhelm saying results from main
iShares Biotechnology IBB 10bn 154.46 4.90% 2.64% 0.47%
studies were conflicting and did not show that Aduhelm was effective at treating
-5% SPDR S&P Biotech XBI 7bn 115.61 5.19% -17.98% 0.35%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021
adults with early-stage Alzheimer’s
ARK Genomic Revolution ARKG 5bn 64.01 5.54% -31.28% 0.75%
Health Care S&P 500Sector Snapshot
Consumer Discretionary 6.34
Market Cap (Trillions)
-4.73%
Weekly Change
42.00
P/E
24.60
EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Amazon.Com AMZN 1,724bn 3,400.35 -1.27% 49.93 20.98
Sector Comparison to S&P 500 Performance
40% • Loup Ventures analyst Gene Munster said Wednesday that the timing of Elon Tesla TSLA 937bn 932.57 -8.30% 108.92 60.83
Mcdonald'S MCD 196bn 261.70 -1.23% 25.89 18.69
Musk's sale of Tesla (TSLA) stock was "quite judicious" because electric vehicles
Starbucks SBUX 127bn 108.63 -6.94% 27.22 18.29
were unlikely to show the same investor appeal in 2022 as they did in 2021.
Rivian Automotive RIVN 88bn 97.70 -14.79%
20% • Starbucks investigates two stores in China under fire for using expired ingredients,
Starbucks (SBUX) operates more than 5,400 shops in China in total. The region has ETFs TO WATCH TICKER TOTAL ASSETS CLOSE
CHANGE YTD Expense
been a bright spot for the company's sales push. Consumer Disc. Select SPDR XLY 23bn 195.29 -4.73% 22.50% 0.12%
0% • Rivian (RIVN) shares dropped by over 10% Friday after the company said it would Vanguard Consumer Disc. VCR 7bn 326.10 -4.46% 20.04% 0.10%
be a few hundred units short of its initial 1,200 vehicle production target in its Q3 Fidelity Consumer Disc. FDIS 2bn 84.52 -4.48% 19.63% 0.08%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 earnings release. First Trust Consumer Disc. FXD 2bn 59.64 -4.04% 19.38% 0.63%
Consumer Discretionary S&P 500 SDPR S&P Retail XRT 0bn 87.99 -4.80% 38.48% 0.35%
5.71 0.53% 27.80 20.40
Communication Services Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP
CLOSE CHANGE P/E EV/EBITDA
Alphabet GOOGL 1,889bn 2,834.50 -4.24% 22.65 14.83
Sector Comparison to S&P 500 Performance
30%
• Disney (DIS) reached the deal with Google for a distribution agreement. YouTube Walt Disney DIS 270bn 148.76 -2.59% 27.53 18.03
warned last week that it would cut the monthly price for YouTube TV by $15, from Verizon Communications VZ 223bn 53.17 5.94% 9.88 7.97
$64.99 to $49.99 due to that deal. Subscription had reverted to $64.99, but At&T T 170bn 23.78 4.12% 7.53 7.26
20% Ericsson ERIC 35bn 10.54 1.25% 13.52 6.46
affected users would receive a one-time $15 discount.
• Google announced to collaborate with Verizon Communications (VZ) to deliver ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
10% 5G mobile edge computing as Ericsson (ERIC) will pilot 5G edge with google Com.Services Select SPDR XLC 14bn 76.48 -0.29% 15.04% 0.12%
distributed cloud edge at its USA 5G smart factory. Vanguard Com.Services VOX 4bn 133.08 -1.03% 12.44% 0.10%
0%
• AT&T (T) upgraded at Morgan Stanley from Equal Weight to Overweight and First Trust Indxx ETF NXTG 1bn 81.21 -0.85% 17.32% 0.70%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021
updated price target and decreased from $32 to 28$. MS expects Telecom Service Fidelity Com.Services FCOM 1bn 50.44 -0.92% 12.46% 0.08%
Communication Services S&P 500 industry to outperform after a sustained period of underperformance. Ishares Global Com.Services IXP 0bn 81.18 -2.24% 10.27% 0.46%
5.73 -1.18% 17.10 6.20
Financials Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Jpmorgan Chase & Co JPM 463bn 156.76 -1.91% 13.12
Sector Comparison to S&P 500 Performance
40% • Most credit card companies saw both delinquency and net charge-off rates Visa V 461bn 211.88 -0.71% 25.08 20.41
ticking up in November as normalization trends take hold with the fading of Mastercard MA 343bn 349.31 -0.17% 33.16 25.64
Paypal Holdings PYPL 219bn 186.20 -1.23% 35.46 25.67
pandemic-era stimulus.
Goldman Sachs GS 133bn 381.80 -2.37% 9.61 9.86
20% • Wall Street investment giants Goldman Sachs (GS) and JPMorgan Chase (JPM)
ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
plan to expand its bonus pool for investment banking to retain bankers Goldman
Sachs (GS) could boost its investment banking bonus pool by about 50%, and Financial Select SPDR XLF 43bn 38.59 -1.18% 32.70% 0.12%
0% JPMorgan Chase (JPM) may reach a 40% jump Bloomberg reports. Vanguard Financials VFH 12bn 94.59 -2.14% 31.72% 0.10%
• Blackstone (BX) is in talks with a venture led by Brookfield Asset SPDR S&P Bank KBE 3bn 52.91 -3.06% 27.77% 0.35%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021
Management (BAM) to buy a 49% stake in New York City-based One Manhattan iShares Global Financials IXG 3bn 78.25 -2.55% 21.30% 0.46%
Financials S&P 500 SPDR S&P Insurance KIE 0bn 39.42 -1.08% 20.55% 0.35%
WestSector Snapshot
Industrials 7.56
Market Cap (Trillions)
-2.76%
Weekly Change
26.10
P/E
15.80
EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Fedex FDX 66bn 250.32 1.64% 11.03 7.93
Sector Comparison to S&P 500 Performance
30% • FedEx Corporation (FDX) shares rose after announcing new $5B share repurchase General Dynamics GD 56bn 202.20 -1.33% 16.29 12.88
Delta Air Lines DAL 23bn 36.56 -4.24% 12.69 7.95
program along with Q2 adjusted EPS beat of $4.83 vs estimated $4.27 and $23.5B
Generac Holdings GNRC 23bn 357.43 2.64% 31.01 20.88
20% revenues vs estimated $22.47B. FDX forecasts improved earnings and margins for
Abm Industries ABM 3bn 40.26 -11.67% 10.69 7.36
FY, sees FY22 EPS of $20.50-$21.50 vs. estimated $19.64
• Delta Airlines (DAL) is expecting to be profitable in 2022 amid a strong holiday ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
10%
demand, even as travel restrictions have been reimposed due to the Omicron The Industrial Select SPDR XLI 17bn 102.44 -2.76% 18.55% 0.12%
variant. DAL forecasts full-year 2022 available seat miles (ASMs) about 90% vs. 2019 Vanguard Industrials VIS 5bn 195.55 -3.09% 17.70% 0.10%
0%
and full-year 2023 ASMs about 100% vs. 2019. The U.S. Federal Aviation U.S. Global Jets JETS 3bn 20.03 -5.16% -7.23% 0.60%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 Administration said it will award $2.89 billion to 3,075 airports under a new $1 ishares Transportation IYT 2bn 263.80 -2.40% 22.11% 0.42%
Idustrials S&P 500 trillion infrastructure bill signed into law recently Fidelity Industrials FIDU 1bn 54.23 -2.97% 18.23% 0.08%
2.86 1.36% 23.70 16.50
Consumer Staples Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Walmart WMT 385bn 138.75 -1.62% 20.62 11.32
Sector Comparison to S&P 500 Performance
30% • Indian ecommerce giant Flipkart (FPKT), which is owned by Walmart (WMT), is Coca-Cola KO 249bn 57.73 2.58% 23.73 20.41
said to be planning an IPO around November or December of next year. Target TGT 107bn 223.31 -6.24% 16.75 10.30
20% • JPMorgan said that beverage industry will have significatly better second half of Altria Group MO 89bn 48.25 7.01% 10.05 9.20
Duckhorn Portfolio NAPA 3bn 21.80 2.93% 32.73 19.02
the 2022. Top picks in beverages from JPMorgan are Coca-Cola (KO), Constellation
10% ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
Brands (STZ), Primo Water (PRMW) and Duckhorn Portfolio (NAPA).
• Gordon Haskett downgrades Target Corporation (TGT) to Hold-rated from Buy- Consumer Staples SPDR XLP 13bn 75.20 1.36% 12.71% 0.12%
0%
rated after pointing to some choppiness with foot traffic in late November and Vanguard Consumer Stap. VDC 6bn 193.37 0.60% 12.31% 0.10%
-10%
early December. Ishares Consumer Stap. KXI 1bn 63.09 -0.06% 8.64% 0.46%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 Fidelity Consumer Stap. FSTA 1bn 45.21 0.65% 12.35% 0.08%
Consumer Staples S&P 500 First Trust Consumer Stap. FXG 0bn 60.55 1.97% 17.70% 0.63%
1.66 1.75% 10.90 24.20
Real Estate Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
American Tower Corp AMT 127bn 278.86 2.31% 50.77 26.80
Sector Comparison to S&P 500 Performance • Homebuilder Lennar Corporation (LEN) posted mixed results for this quarter as Lennar LEN 32bn 105.84 -9.47% 6.35 4.85
company beat Non-GAAP EPS and missed GAAP EPS. Share of LEN down by 10% American Campus Comm. ACC 8bn 55.69 2.31% 74.45 24.80
40%
relative to previous week. Agree Realty Corp ADC 5bn 67.22 -1.15% 34.65 18.28
• Starts of new homes came in at the high end of expectations. Builder sentiment in Ryman Hospitality Properties RHP 4bn 80.77 -0.62% 43.01 15.97
20% the single-family housing market rose one point to 84 in December, on the ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
National Association of Home Builders Housing Market Index Vanguard Real Estate VNQ 48bn 111.74 0.88% 35.99% 0.12%
• American Campus Communities (ACC), Apartment Income REIT (AIRC) and Ryman Schwab US REIT SCHH 7bn 50.42 1.14% 37.35% 0.07%
0%
Hospitality Properties (RHP) upgraded at Citigroup to Buy and bank analysts iShares U.S. Real Estate IYR 6bn 111.21 0.03% 34.41% 0.42%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 downgraded Agree Realty Corporation (ADC), CoreSite Realty Corporation (COR), Real Estate Select SPDR XLRE 6bn 50.05 1.75% 41.46% 0.12%
Real Estate S&P 500 Equity LifeStyle Properties (ELS) to Neutral iShares REIT ETF REZ 1bn 94.21 0.66% 44.18% 0.48%Sector Snapshot
Energy 1.43
Market Cap (Trillions)
-5.01%
Weekly Change
14.70
P/E
7.60
EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Chevron CVX 219bn 113.60 -4.01% 11.83 5.44
Sector Comparison to S&P 500 Performance
60% • Insiders of Southwestern Energy Company (SWN) sold 7% total free float, causing Williams WMB 31bn 25.79 -3.19% 19.12 9.95
Occidental Petroleum OXY 26bn 28.04 -8.87% 9.75 4.67
price to lose 10%. In addition, Wolfe downgraded company, causing its price to
Eqt Corp EQT 8bn 21.26 1.92% 9.63 4.44
drop even more. In total, SWN lost 18% last week
40% Southwestern Energy SWN 5bn 4.51 -18.00% 3.04 2.93
• EQT Corporation (EQT) gained almost 2% after announcing dividend payment,
introduced $1B share buy-back plan and upgraded its leverage reduction plan ETFs TO WATCH TICKER TOTAL ASSETS CLOSE
CHANGE YTD Expense
20% • Williams companies (WMB), which is energy infrastructure company, was Energy Select SPDR XLE 25bn 54.37 -5.01% 43.23% 0.12%
downgraded by Citi from Buy to Neutral due to its limited upside potential. WMB Vanguard Energy VDE 6bn 75.14 -6.33% 44.14% 0.10%
lost 1.34% last week SPDR Oil & Gas Exploration XOP 3bn 93.61 -7.83% 58.58% 0.35%
0%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 iShares U.S. Energy IYE 2bn 29.22 -5.92% 44.01% 0.42%
Energy S&P 500 iShares Global Energy IXC 2bn 26.65 -6.52% 30.70% 0.46%
1.14 -0.72% 19.70 12.20
Materials Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Vale VALE 72bn 14.00 3.55% 5.53 3.42
Sector Comparison to S&P 500 Performance
30%
• Nucor corporation (NUE) signed an agreement with VALE to buy 50% of VALE’s Nucor NUE 34bn 118.00 4.23% 6.87 4.85
Canadian steelmaking subsidiary business Albemarle ALB 27bn 229.87 -12.55% 38.45 24.51
20%
• Despite raising lithium prices, Albemrale Corporation (ALB) and Livent corporation Alcoa AA 10bn 53.73 10.10% 8.78 3.85
United States Steel X 6bn 23.08 1.54% 2.46 1.94
(LTHM) lost 12.55% and 13.81% respectively on as Goldman Sachs downgraded
them from neutral to sell ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
10%
• Alcoa Corporation (AA) will be part of S&P400 Midcap index effective from 20th VanEck Vectors Gold Miners GDX 13bn 31.13 2.10% -19.16% 0.52%
0%
of December trading day. AA gained 10.10% last week. Materials Select Sector XLB 8bn 87.66 -0.72% 22.26% 0.12%
Vanguard Materials VAW 4bn 189.46 -1.28% 21.61% 0.10%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 SPDR S&P Metals & Mining XME 2bn 43.03 1.46% 27.88% 0.35%
Materials S&P 500 Global X Silver Miners SIL 1bn 36.05 0.75% -26.73% 0.65%
1.13 1.24% 20.70 13.10
Utilities Market Cap (Trillions) Weekly Change P/E EV/EBITDA
STOCKS TO WATCH TICKER MARKET CAP CLOSE
CHANGE P/E EV/EBITDA
Cms Energy CMS 19bn 64.18 2.64% 22.36 11.97
Sector Comparison to S&P 500 Performance • Solar stocks (RUN, FSLR, ENPH) had tough week after California proposes to Plug Power PLUG 17bn 29.75 -10.45%
30%
reduce selling rates to homeowners who can sell excess electricity to the grid First Solar FSLR 10bn 93.16 -4.16% 45.78 14.86
• Plug power (PLUG) along with Edison motors, which is Korean EV automaker, Sunrun RUN 7bn 34.23 -19.08% 397.58
20%
plans to develop and produce hydrogen-powered electric busses Warrior Met Coal Inc HCC 1bn 23.81 5.87% 4.30 2.86
• Warrior Met Coal (HCC), which is coal miner, was upgraded by BMO due to strong ETFs TO WATCH TICKER TOTAL ASSETS CLOSE CHANGE YTD Expense
10%
earnings and free cash flow resilience. Share price of HCC increased by 5.87% for Utilities Select Sector XLU 13bn 70.01 1.24% 14.55% 0.12%
the week. Global X US Infrastructure Dev PAVE 5bn 27.85 -2.45% 33.19% 0.47%
0%
Vanguard Utilities VPU 5bn 151.84 0.52% 13.36% 0.10%
Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 iShares Global Infrastructure IGF 3bn 45.71 -1.91% 5.35% 0.46%
S&P 500 UtilitiesWeek Ahead
Monday Tuesday Wednesday Thursday Friday
Today December 2021 Month Week Day List Today December 2021 Month Week Day List Economic
Today December 2021Calendar
Month Week Day List Today December 2021 Month Week Day List Today December 2021 Month Week Day List
December 20, 2021 Monday December 21, 2021 Tuesday December 22, 2021 Wednesday December 23, 2021 Thursday December 24, 2021 Friday
6:30am - 7:30am CN:Loan Prime Rate 4:30am - 5:30am AU:RBA Meeting Minutes 3:50am - 4:50am JP:BoJ Minutes 9:00am - 10:00am SG:CPI 1:30am - 2:30am US:Fed Balance Sheet
3:00pm - 4:00pm UK:CBI Industrial Trends 11:00am - 12:00pm CH:Merchandise Trade 11:00am - 12:00pm UK:GDP 1:00pm - 2:00pm IT:Business and Consumer Confidence 3:30am - 4:30am JP:CPI
7:00pm - 8:00pm US:Leading Indicators 11:00am - 12:00pm DE:GfK Consumer Climate 11:45am - 12:45pm FR:PPI 5:30pm - 6:30pm CA:Monthly GDP 9:00am - 10:00am SG:Industrial Production
8:30pm - 9:30pm US:3-Month Bill Auction 11:00am - 12:00pm UK:Public Sector Finances 4:00pm - 5:00pm US:MBA Mortgage Applications 5:30pm - 6:30pm US:Durable Goods Orders
8:30pm - 9:30pm US:6-Month Bill Auction 12:30pm - 1:30pm HK:CPI 5:30pm - 6:30pm US:Chicago Fed National Activity Index 5:30pm - 6:30pm US:Jobless Claims
2:00pm - 3:00pm IT:PPI 5:30pm - 6:30pm US:Corporate Profits 5:30pm - 6:30pm US:Personal Income and Outlays
3:00pm - 4:00pm UK:CBI Distributive Trades 5:30pm - 6:30pm US:GDP 7:00pm - 8:00pm US:Consumer Sentiment
5:30pm - 6:30pm CA:Retail Sales 7:00pm - 8:00pm US:Consumer Confidence 7:00pm - 8:00pm US:New Home Sales
5:30pm - 6:30pm US:Current Account 7:00pm - 8:00pm US:Existing Home Sales 7:30pm - 8:30pm US:EIA Natural Gas Report
5:55pm - 6:55pm US:Redbook 7:30pm - 8:30pm US:EIA Petroleum Status Report 8:00pm - 9:00pm US:3-Month Bill Announcement
7:00pm - 8:00pm EZ:EC Consumer Confidence Flash 10:00pm - 11:00pm US:5-Yr TIPS Auction 8:00pm - 9:00pm US:52-Week Bill Announcement
8:00pm - 9:00pm US:4-Week Bill Announcement 8:00pm - 9:00pm US:6-Month Bill Announcement
8:00pm - 9:00pm US:8-Week Bill Announcement
10:00pm - 11:00pm US:20-Yr Bond Auction
Corporate Actions Calendar
Ticker Type Time Maket Cap Ticker Type Time Maket Cap Ticker Type Time Maket Cap Ticker Type Time Maket Cap Ticker Type Time Maket Cap
NKE Earnings After Hours 258bn BHP Earnings Not Supplied 148bn STLA Earnings Not Supplied 59bn EVO Earnings Not Supplied 8bn PLL Earnings Not Supplied 2bn
MU Earnings After Hours 93bn GIS Earnings Pre Market 42bn CTAS Earnings Pre Market 47bn GRFS Earnings Not Supplied 7bn
BRZE Earnings After Hours 6bn FDS Earnings Pre Market 18bn PAYX Earnings Pre Market 45bn IBRX Earnings Not Supplied 2bn
ANAT Earnings Not Supplied 5bn ACH Earnings Not Supplied 9bn KMX Earnings Pre Market 22bn CRON Earnings Not Supplied 1bn
LWLG Earnings Not Supplied 2bn BB Earnings After Hours 5bn MSM Earnings Pre Market 5bn
CVGW Earnings After Hours 1bn NEOG Earnings Pre Market 5bn NFH Earnings Not Supplied 2bn
SVA Earnings Not Supplied 1bn EPAC Earnings Pre Market 1bn AVO Earnings After Hours 1bn
CGNT Earnings Pre Market 1bn CBD Earnings Not Supplied 1bn
AIR Earnings After Hours 1bn
APOG Earnings Pre Market 1bnLegal Notice · This publication (the “Publication”) has been prepared and distributed by TBC Capital LLC (“TBC Capital”) member of TBC Bank Group PLC (“Group”) for informational purposes only and independently of the respective companies mentioned herein. · TBC Capital is operating and performing its professional services on the territory of Georgia and is duly authorized to prepare and distribute this Publication on the territory of Georgia. · Nothing in this Publication shall constitute an offer or invitation to treat to solicit buying or selling or subscribing any assets and/or securities and nothing herein shall form the basis of any contract or commitment whatsoever or shall be considered as a recommendation to take any such actions. · Since distribution of this Publication may be restricted by law in certain jurisdictions, persons into whose possession this Publication comes are required by TBC Capital to inform themselves about and to observe any and all restrictions applicable to them. · As this Publication is not directed to or intended for distribution, directly or indirectly, to or use by any person or entity in any jurisdiction where such distribution, publication, availability or use would be contrary to the applicable law or which would require any registration or licensing within such jurisdiction, neither TBC Capital nor any member of the Group nor any of their respective director(s), partner(s), employee(s), affiliates, adviser(s) or agent(s) (“Representatives”) accept any direct or indirect liability to any person in relation to the publication, distribution or possession of this Publication in or from any jurisdiction. · This Publication is not intended to provide any investment, business, tax and/or legal advice, and credit or any other evaluation. 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Sources Source Name Web Address Bloomberg, Bloomberg Terminal https://www.bloomberg.com/ CNBC https://www.cnbc.com/world/?region=world Fidelity https://www.fidelity.com/ Real Investment Advisors https://realinvestmentadvice.com/ Reuters https://www.reuters.com/ Seeking Alpha https://seekingalpha.com/ Zero Hedge https://www.zerohedge.com/
Brokerage Team Mary Chachanidze, CFA Tornike Mchedlishvili, CFA Nina Sandler Tatia Dzaptashvili Rati Kalandarishvili Sandro Tchanturidze
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