The Fed’s Next Move – After Friday’s strong employment report investors are now faced with a decision. Which do they want more, jobs or QE? Friday’s answer was a resounding “jobs”. How will they feel if the Fed moves as early as next week to remove stimulus and start the taper? The taper will certainly be on the table when they meet next week and we will hear little from the Fed Governors starting Tuesday as they go into their blackout period.
Despite the strong numbers Friday, my base call is that the Fed’s next move comes sometime near the end of the 1st quarter. If something is going to happen next week, we need a little icing on the cake. A budget deal might make it sweet enough for Ben & Janet to take their foot off the accelerator. Both sides of the aisle would like to get a deal done before the Christmas break. While the scope of the deal certainly is a long way from a grand bargain, a bi-partisan agreement would take the issue off the table until after the 2014 elections.
Baby Boomers Watch Out! – Are Fortune 500 companies heading back to the cities hoping their Baby Boomer employees don’t follow? – My conversation with host Arthel Neville on Fox News. (Click on picture to view video)
Barron’s Picks 2014 – Barron’s came out with their annual picks for 2014. They include alphabetically ABX, C, CNQ, DE, GM, INTC, LCC, MET, NSRGY, SPG. I thought it might be interesting to take their stocks and rank them in my Alpha Select model. The clear winner was DE coming in with a rank above 99 and the not surprising loser was ABX. Ignore the rankings for Nestle’s (NSRGY) and Simon Properties (SPG) as the model doesn’t handle ADR’s and REITS very well. (Click on Chart to Enlarge)
Throwing Water on the Barron’s party is Goldman (GS) who reiterates their SELL rating this morning on (INTC) with a price target of 16.
Gilead Sciences (GILD) – Late Friday the FDA approved Sovaldi with a broad label treatment of chronic hepatitis C. Standard treatment is combination therapy of Ribovirin along with injections of interferon. Current treatments last as long as a year with serious side effects. In addition these regimens aren’t always effective and many are interferon ineligible. Sovaldi isn’t cheap with the 12 week treatment coming in at $84K. I believe analysts covering GILD will raise 2014 and 2015 numbers on this news. (Click on Chart to Enlarge)
(Gilead is out with data on a phase 2 study idelalisib, an investigational oral inhibitor, for the treatment of patients with indolent non-Hodgkin’s lymphoma. Haven’t vetted yet.)
(Full disclosure: funds managed by David are long GILD)
