Biden Jets Out for One Last Vacation
Watch a Teacher's Letter Attacking Pro-Trump Family Members Blow Up in His Face
Look What These Israelis Used to Make Their Menorah for Hanukkah This Year
Libs Demand Congress Do Something That Was Considered an Act of Armed Rebellion...
Federal Appeals Court Rules Against Law Barring Nonviolent Felons From Owning Firearms
British Transport Police Sued for Allowing Trans-Identified Males to Strip Search Women
Workers in This State Just Won the Right to Bring Their Guns to...
Here's What Has Jen Psaki Raking Democrats Over the Coals
Former Democratic Presidential Candidate Throws Hat in Ring for DNC Chair
Russia Blamed for Devastating Airline Crash That Killed 38 Passengers Near Ukraine
Celebrating Media Mayhem with The Heckler Awards - Part 3: The Individual Categories
Biden Orders Pentagon to Deliver More Weapons to Ukraine Just Weeks Before Leaving...
You Won't Believe What Happened at This Phoenix Airport on Christmas
Texas Woman Arrested and Charged After Authorities Made This Horrifying Discovery
Man Arrested for Attempted Murder After Plowing Car Through Group of People on...
OPINION

China’s War On Capitalism

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement
AP Photo/Mark Schiefelbein, File

Wider Market Participation

To see the chart, click here.

It was a strong, inclusive rally on Friday, but we begin today’s session under some pressure.  Some of the morning weakness comes from declines in Asian markets driven by China’s war on businesses – especially those with large percentage of American investors (see below).

Advertisement

Growth is back in the driver’s seat and the biggest names report this week. 

  1. Monday:  TSLA
  2. Tuesday:  AAPL MSFT GOOG GOOGL
  3. Wednesday: FB PYPL
  4. Thursday: AMZN

In addition, we get updates on the strength of the consumer and more on manufacturing and housing.  The latter acts greats and should begin to rally higher, matching strength of the housing market.

China’s War on Capitalism

For years, it was a no-brainer to own China educational stocks. We last presented EDU on October 28, 2019, and we took profits in model portfolio on Jan 10, 2020.  Even after we closed it, the stock roared back from a quick dip. But now the stock is off more than 70% from its February high as the CCP expands its war on businesses.

Wall Street is hustling to get out of these names, but it’s mostly too late.  There has been so much carnage and President Xi doesn’t seem to be done (see Tencent and others this morning).

  • Gaotu Techedu (GOTU) downgraded to Sell from Neutral at Goldman; target lowered to $2.60
  • Gaotu Techedu (GOTU) downgraded to Sell from Underperform at CLSA; target lowered to $2.70
  • Glaukos (GKOS) downgraded to Equal-Weight from Overweight at Stephens; target $70
  • Group 1 Auto (GPI) downgraded to Equal-Weight from Overweight at Morgan Stanley; target $203
  • Hilltop Holdings (HTH) downgraded to Mkt Perform from Outperform at Raymond James
  • New Oriental Education & Technology (EDU) downgraded to Hold from Buy at The Benchmark Company
  • New Oriental Education & Technology (EDU) downgraded to Neutral from Buy at Bank of America Securities
  • New Oriental Education & Technology (EDU) downgraded to Neutral from Buy at Goldman; target lowered to $3.60
  • New Oriental Education & Technology (EDU) downgraded to Underperform from Outperform at CLSA; target lowered to $3.20
Advertisement

Portfolio Approach

There are no changes to the Hotline Model Portfolio this morning. 

Guessing Tops

Wall Street continues its game of guessing the top, which is one reason the experts continue to severely underperform against novice investors.

To see the chart, click here.

Meanwhile, individual investors have become far less bullish in recent weeks reflecting confusion in markets, inflation, the Delta variant and potential return of lockdowns.

Goldman Gets the Message

The ten-year bond yield is edging lower once again as the downward channel is firmly entrenched.  Thus far, Wall Street has said ignore recent weakness, as its all-mechanical stuff like short-covering, or a reflection of foreign demand, and has nothing to do with the US economy. 

Goldman is breaking from the pack this morning and adjusting their GDP numbers.

  • 3Q21 8.5% from 9.5%
  • 4Q21 5.0% from 6.0%
  • 2H22 in range of 1.5 to 2.0%    

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos