Jim Lebenthal

Today's strong jobs data He's bullish not because of a perceived US Fed pivot, but because he believes in better-than-expected earnings going forward. He expects a soft landing. Inflation is of course the major headwind, but gasoline futures are off 33% from late June's peak and that has yet to show up at the pumps. Also, shipping rates are going down.

DIS reports next week. He understands why investors are negative here--Disney has to spend on content. But last quarter, DIS had a great subscription add, due to them buying the rights to Indian Premier League Cricket. Disney+ subs continue to go up. Theme parks are doing gangbusters. Dr. Strange is doing fine box office business. Everything is going right for them, certainly more right than wrong. DIS is undervalued.

Earnings have not been as bad as expected. We'll be bouncing for a while, not go straight up. He's watching inflation. We won't return to previous lows, but it will be bumpy until things are a lot better by year's end. He's optimistic overall.

He's happy he bought this recently and is happy with the quarter just released. There is a secular, wide supply-demand imbalance that won't go away and that oil drawdowns can't keep addressing.

It missed earnings badly and got downgraded. Share are getting hammered. He has traded this in the past, years ago, when momentum was strong. Never owned this for its fundamentals. It remains expensive on earnings that won't come for a few more years. Can flow is starting to appear. Roku is just too expensive. PE matters.

Defence is the place to be. Defence budgets globally will rise. He owned this until early 2022. This has to consolidate before seeing the next leg up and he returns to it.

His long-term concern comes out of Washington which is proposing drug-pricing laws. One mixed quarter doesn't worry him; the stock has been a war horse. AbbVie proves it can refill its pipeline.

A steady performer that consistently outperforms. They use their excess cash to pay down debt (to buy Aetna 3 years ago). They recently announced share buybacks and wants to see this increase. This is a long-term investment. They report next week.

They report next week. They've had several downgrades, but those miss the point. Near-term ads may or may not be soft, but this is not why you own Paramount. You own it for the rapid subscriber growth fueled by their strong content, namely their strong movies like the new Top Gun. A lot of things are going right for Paramount.

It traded down on earnings, which were actually pretty good, but then started to rise, which he expects to continue.

Next week's big tech earnings are overwhelming. Get sleep. He remains bullish long-term, but is nervous now. Earnings of the past two weeks have been pretty good, though there are worries. There isn't enough data yet (only 15% of the S&P stocks have reported). Wants to see what Apple and Qualcomm have to say next week.

Really likes the CEO and they have boast $930 million of free cash flow in the first half of 2022, and estimate to top $2.5 billion by year's end against an $8 billion market cap (=30% free cash flow yield). Revenues are coming from the car business which are seeing pent-up demand due to aging cars out there. CC will likely renegotiate upcoming contracts at prices higher than current. Shares were down (45% in the last 3 months), because they took an accounting hit for the debt they bought back earlier at a discount.

Downgraded today and earlier this week He doesn't get it. This trades at 12x earnings. Last quarter, they added 6 million subscribers to Paramount+ (when Netflix lost subs). They project adding 3 million this quarter. Trades at 70x book value. Are growing their business by investing.

They had a great week for earnings announcement, but we shall see next week's report.

Today's jobs report was better than expected. He does not agree that good news is bad news (strong employment is bad news). Sure, we worry about inflation, but he sees a soft landing by the US Fed. For more than a bear market rally, the Fed needs to back off and it won't until inflation weakens. Next week comes more inflation data. All rallies are suspect until there is lower inflation, but he feels that inflation has indeed peaked. Inflation should be well on the way down in a couple months. He projects the S&P to finish at 4,896 by year's end.