Eq: Materials (4)
California saw its gas prices spike to $6 a gallon, but the Golden state might not be the only one feeling the pressure at the pump. JPMorgan’s global oil and commodities research head warned that there is a risk of national $6+ gasoline. The increase in prices is in no doubt a reflection of the ongoing Russia-Ukraine war, but also US inventories are at the lowest levels in over three years. States like Kansas, Oklahoma, and Georgia with extremely low gas prices have breached the $4 threshold and it could get worse. Inventories are especially bad on the East Coast where they are at decade lows. Other forecasters are predicting many American particularly those with access to public transit will drive less if gas prices continue to creep up and aren’t forecasting $6 prices.
Finsum: This is an opportunity to look to commodities but particularly oil & gas companies' debt as a fixed income option, these prices will make paying back relatively easy.
Schwab or Fidelity: Whose Direct Indexing has the ESG Edge?
Written by FINSUM
Schwab made a splash when they announced they were tossing their hat into the direct indexing ring, but details are coming surrounding what the final products will look like. Schwab is going to limit investors to eliminate up to 3 stocks from their Direct Indexing, which means its only use will really be for tax purposes. Even starting with a relatively green index, if investors want to eliminate greenwashing their options are limited. Fidelity will offer more options to investors when it comes to custom indexing, and also has much lower minimum investments. Specific ESG focus portfolios are in production and can eliminate two more stocks or an entire industry providing more flexibility.
Finsum: Fidelity has an ESG edge and lower minimum investments. Schwab will need to develop more options if it wants to compete with ESG options.
Infrastructure Deal to Send These Internet Stocks Surging
Written by FINSUM
(Chicago)
This infrastructure package is a big deal in many ways. Not only has it been—and will it be—a major market-mover, but the deal is also expansive and intricate in scope. For example, did you know that $100 bn has been specifically earmarked for increasing internet connectivity/infrastructure, which Biden refers to as the new electricity. As one can imagine, this will creative strong returns for firms that specialize in the space. Accordingly, take a look at two stocks: Applied Materials (Nasdaq: AMAT), and American Tower Corporation (REIT) (NYSE: AMT). AMT is a chipmaker and the forthcoming expansion of internet connectivity is seen as a big driver for the chips they make. American Tower is a major provider of 5G broadband, which will be heavily supported the proposed infrastructure package.
FINSUM: If and when it passes, this package is going to be a huge market driver for years to come. These stocks seem like a no-brainer.
These Stocks Will Boom from Biden’s New Infrastructure Package
Written by FINSUM
(Washington)
This week was a big one for infrastructure stocks. After years of discussion, Biden took action and put forth an eye-opening $3 tn package (in two parts) for American infrastructure. The package would focus on infrastructure, education, work force development, and fighting climate change. The aim is to make the economy more productive. However, for the stock market, one of the immediate benefits is how such government dollars would affect infrastructure stocks. Most specifically, look at the following sectors: machines, construction, and materials stocks.
FINSUM: $3 tn is a great deal of money, and a lot of it will likely flow into the private sector to fulfil these mandates. Time to dig in and pick winners. We will continue coverage on this in the coming week.