Come Sail Away with Great Stuff
I’m sailing away. Set an open course for the Federal Reserve.
Cause markets don’t want to be free … free to face a life with no liquidity.
Fed Chairman Jerome Powell’s the captain, so climb aboard. We’ll search for stock market gains on every shore. And we’ll try the best that we can to caaaaaarry oooon!
Ah … he’s doing the lyric thing again. What you talkin’ ‘bout, Mr. Great Stuff?
Why, I’m talking about Fed Chairman Jerome Powell, you angry young man and your cynical eyes. We’re all troubled, I can tell. Our hands wet with sweat, and our portfolios need a rest.
Out with it already!
Fine … spoilsport.
Powell spoke before the National Association for Business Economics this morning, delivering a call to action for Congress. That call? More fiscal support to aid in recovery from the COIVD-19 “natural disaster.” Powell wants it now. And don’t go easy on the toppings.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said. He also noted that even if Congress doled out more cash than necessary, “it will not go to waste.”
While he applauded Congress for taking unprecedented action back in March and April, Powell thought of childhood friends and the dreams they had. The U.S. economy was supposed to live happily forever … so the story goes. But with a slowing recovery and rocky U.S. economic signals, somehow we missed out on the pot of gold.
“There is a risk that the rapid gains from reopening may transition to a longer than expected slog back to full recovery as some segments struggle with the pandemic’s continued fallout,” Powell said.
The whole crux of his speech was for Congress to try the best that they can … to caaaaaarry oooon!
But, if you’re like me, you don’t hold your breath for a gathering of congressional lawmakers to appear above your head, singing to you a song of hope.
Our trading destiny is ours and ours alone, right lads (and lasses)?
We’re just investors whose circumstances went beyond our control. I’ve got a secret I’ve been hiding under my skin — the one trading strategy that Styx.
Going: They Call Me “Big Data”
Alteryx Inc. (NYSE: AYX) was one of the biggest movers in today’s ho-hum trading session. It’s not a company many investors are probably overly familiar with, but it specializes in Big Data analytics.
In layman’s terms, the company provides data analysis, data profiling, preparation and blending. It also runs web and cloud data analysis, but who doesn’t these days?
Alteryx — which sounds like the name of an evil dragon in some low-budget fantasy film — announced today that CEO Dean Stoecker would step down to be replaced by board member Mark Anderson. Mr. Anderson is notable for increasing sales at cybersecurity company Palo Alto Networks Inc. (NYSE: PANW) and sitting on the board of cloud services firm Cloudflare Inc. (NYSE: NET).
The even bigger news, however, was the company’s updated third-quarter outlook. Alteryx forecast revenue growth of 22% to 24% — well above current expectations for 10% growth. This was particularly good news for AYX investors, who saw the shares plunge in August after a poor second-quarter showing.
AYX spiked more than 30% on the news deluge, but the stock has a long way to go before reclaiming its July highs.
Going: Showing Some LUV
Southwest Airlines Co. (NYSE: LUV) wants you to know that it’s quirky … and that extends beyond the amusing flight attendant announcements.
While United and American Airlines both plan to lay off thousands after the Small Business Administration’s Paycheck Protection Program expires, Southwest asked employees to take pay cuts.
But it’s certainly in Southwest’s MO. According to Barron’s, the company has never laid off employees and never “gone bust.”
But Southwest’s management wouldn’t make employees do anything they won’t do themselves — CEO Gary Kelly won’t take a salary through the end of 2021.
That may sound awfully altruistic, but Kelly’s salary only accounted for about 9.8% of his total compensation of $7.65 million in 2018.
How’s that for quirky?
Anyhoo … analysts believe that Southwest employees will take the deal and the company will continue its “no layoffs” streak.
I mean, where else will they work? Amazon warehouses?
LUV stock was up more than 1% on the news and could rise higher should employees take the pay-cut deal.
Gone: Fisker? I Barely Know Her
If you had “watch another EV maker go public” on your 2020 bingo card, cover that bad boy up.
Electric vehicle (EV) maker Fisker Inc. and Spartan Energy Acquisition Corp. (NYSE: SPAQ) will meet on October 28 to discuss a merger for Fisker to go public. Spartan is one of those fancy special purpose acquisition companies (SPACs) that have become all the rage this year.
Here’s a quick recap: SPACs have no operations, no products, no nothing. Their whole existence is to acquire or merge with an existing private company to take said company public. Think of it as a kind of backdoor initial public offering (IPO).
Meanwhile, Fisker is an EV company with a rocky history. The company’s first attempt at an EV — the Karma — brought with it bankruptcy, 808s & Heartbreak. But CEO Henrik Fisker kept the company name and continued on. Per CNBC’s Jim Cramer, Henrik’s antics are reminiscent of Nikola’s ex-CEO Trevor Milton.
“It’s one thing to fail and then try again. It’s another thing to fail and then lie to your investors and then try to do it again, this time as a public company,” Cramer quipped back in September.
While I trust Cramer a smidge more than Milton at this point, that’s still a disturbing statement. Furthermore, Henrik pulled out one of the oldest stock tricks in the book. He compared Fisker to Apple Inc. (Nasdaq: AAPL).
“We think of the future of automotive the way Apple thought of phones,” Fisker said. “The OEMs haven’t perfected the electric car, but they’ve perfected manufacturing, so why not take advantage of that?”
Wait … Tesla Inc. (Nasdaq: TSLA) hasn’t perfected the EV, but it has perfected manufacturing? There’s so much wrong there I don’t even know where to begin. Tents would be a good place, though.
Needless to say, Fisker’s public offering isn’t one I’m leaping out of my seat to buy into anytime soon.
All you naysayers out there writing off the real estate sector like it was gas station sushi, tsk tsk tsk.
We need to chat. Besides presidential taxes, the hot-button topic up for debate in the Great Stuff inbox this week was … REIT yields?
Yes, those contentious, controversial real estate investment trusts (REIT). Getting in between a yield hunter and their precious dividend is like sticking your bare foot in a dogfight. But for all you looking to jump on someone else’s missed opportunity, here’s the rub.
I’ve said it once, and I’ll say it again: Yes, some parts of the real estate market will fall apart like tissue paper in a monsoon. But other sub-industries are absolutely booming, like thunder in said monsoon.
Just ask Ted Bauman, our in-house REIT expert:
So, who’s making money? Well, how much have you shopped online recently? Check out these logistics statistics, fresh like a biscuit:
Let’s get some more context from Jonatan Crompton, senior director in the industrial and logistics team at CBRE:
Now, this data comes straight from the U.K. real estate scene, but the same exact low-interest land grab is happening stateside. And all those small fry e-commerce storage spaces are mere toolsheds compared to the big-box boys.
It’s turtles all the way up the warehouse ladder, and we’re not talking Sting’s “Dream of Blue Turtles” either.
Amazon.com Inc. (Nasdaq: AMZN), as always, is top dog right now, leasing about 26.9 million square feet in the first half of 2020. The Bezos bunch was also set to open up 100 new operational buildings across the U.S. and Canada in September alone — fulfillment, sorting and delivery centers.
Those in the biz also report that many online retailers are upping their “safety stock” on hand — helpful for both demand surges and supply chain shortages.
Obviously, the only conclusion is that real estate is dead.
Now, before you get to writing us a hasty email, I wouldn’t go into the REIT-investing market blind. Not all REITs are created equal. Real estate can be part of a healthy, well-balanced breakfast. Wait 30 minutes before swimming after you’ve invested in a REIT. So on, and so forth.
Don’t know where to start with REITs? You can’t hold out much longer: Click here to learn more.
Great Stuff: Rumors Greatly Exaggerated
What’s today, Monday part two?
Tuesday has no feel. Monday has a feel, Friday has a feel, Sunday has a feel. I feel Wednesday too some weeks.
But today? This market’s drier than a week-old turkey sandwich. And I need some of that Reader Feedback gravy to ease it up a bit.
Several of you have already written in with hearty, wholesome and horrific contributions for this week’s issue of Reader Feedback. But if you’ve yet to throw out your hot takes, now’s your chance. Only two days remain before we engage in our weekly tête-à-tête with the Great Stuff fan base.
Until next time, stay Great!
Editor, Great Stuff