Barron's - June 20, 2022

82 Pages·2022·13 MB·English

TOP 100 WOMEN FINANCIAL ADVISORS • SPECIAL PULLOUT SECTION
VOL.CII NO.25 JUNE20,2022 $5.00
Themarketmeltdownisn’t
overyet.Whatcouldtrigger
thenextplunge.PAGE31
Sharesofassetmanagers
likeBlackRockandT.RowePrice
couldsurgewhenstocks
m eventuallyrebound.PAGE15
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C O N T E N T S
06.20.22 VOL.CII NO.25
COVERSTORY P.20 P.27
MARKETSINFLUX Big Pharma’s Biotech Blueprint Tech Trader: A Bullish
P.7
Outlook for Oracle
Up&DownWallStreet:
Insteadofsellingcheaperdrugstotreatcommonailments,moredrugmakersareselling Thecompany’stransformation
Course Correction
expensivebiotech-styleproductstotreatrarerconditions.Thathasbigimplicationsfor intoamajorplayerincloud
Marketsareatthemercyofthe investors—andpublichealth.ByJOSHNATHAN-KAZIS computingisstartingtobearfruit.
FederalReserve,whichisfinally ByERICJ.SAVITZ
realizinghowbadinflationis.
ByRANDALLW.FORSYTH P.30
Economy: The Fed
P.31
Sends Mixed Messages
Trader: Be Patient, but
Monetarypolicyisbeingguided
Prepare to Pounce
byunrealisticprojections.
Stockscouldhavefurthertofall, ByLISABEILFUSS
especiallyifearningsdisappoint.
Butallselloffseventuallyend. P.34
ByBENLEVISOHN Euro Trader: ABB
Gains Ground in EVs
P.15
Asset Manager Stocks ByRUPERTSTEINER
Are Worth Buying Now
m P.34
o
s.c BlackRock,Invesco,andothers EmergingMarkets:The
nt offeraplayonamarketrecovery—
epri andthelong-terminvestmentand Value Case for Alibaba
djr retirementneedsofmillennials. ByRESHMAKAPADIA
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8 P.16 Striking Price: A Way
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mernte Pastperformancedoesnotguaranteefutureresults.Thismaterialisnotintendedtobearecommendationorinvestmentadvice,doesnotconstituteasolicitationtobuy,sellorholdasecurityoraninvestmentstrategy,andisnotprovidedinafiduciarycapacity.Theinformationprovideddoes
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4 BARRON’S June20,2022
I N D E X
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A ABB.......................................34 Hologic....................................13 L Lennar..................................11,13 N Netflix.....................................32
AbbottLaboratories.......................22 Humana...................................13 Lowe’s.....................................13 NorfolkSouthern..........................12
AbbVie....................................21 NovoNordisk..............................21
Abiomed...................................13
Accenture..................................13 I Invesco....................................15 MMarathonOil..............................39
ActivisionBlizzard.........................13 Mastercard................................13
AdvancedDrainageSystems...............38 Mattel.....................................41 O OccidentalPetroleum......................13
AlibabaGroupHolding....................34 J Johnson&Johnson........................21 McCormick ...............................13 Oracle...................................27,39
AllianceBernsteinHolding.................15 JPMorganChase ..........................33 Merck ....................................21
Alphabet...................................27 MereoBioPharmaGroup..................38
Amazon.com...............................27 MetLife....................................13
Amgen.....................................21 K Knight-SwiftTransportationHoldings.....12 MicronTechnology........................41 P PelotonInteractive........................27
Apple......................................16 KraftHeinz................................13 Microsoft..................................27 Pfizer......................................21
ArcBest...................................12 Pool.......................................25
AristaNetworks...........................41 Prologis...................................12
AstraZeneca...............................21
R RaytheonTechnologies....................41
B BankofAmerica...........................33 Redfin.....................................11
BerkshireHathaway.......................33 RupertMurdochExecutiveChairman,NewsCorp RE/MAXHoldings.........................11
BlackBerry................................13 RobertThomsonCEO,NewsCorp AlmarLatourCEO,DowJones RepareTherapeutics.......................38
BlackRock.................................15 Revlon..................................12,39
Blackstone.................................15 SENIORVICEPRESIDENT,BARRON’SGROUPMaeM.Cheng Rivian.....................................39
Boeing..................................32,39 Roblox.....................................39
ASSOCIATEPUBLISHER,BARRON’SGROUPDanShar
BristolMyersSquibb......................21 RocheHolding.............................21
MANAGINGEDITOR,BARRON’SGROUP DavePettit
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s.co C CampingWorldHoldings..................38 EDITORINCHIEFDavidCho S SchneiderNational.........................12
nt CarMax....................................13 EXECUTIVEEDITORBobRose SENIORMANAGINGEDITORLaurenR.Rublin Shell.......................................34
pri C.H.RobinsonWorldwide..................13 SidusSpace................................39
w.djre CChituigrrcohu&p.D..w.i.g.h..t....................................................3133 EDIDTEOPRUIATLYDEDIRIETCOTROSRA,MleAxGEAuZleI,NBEenPhLielvRisooohsnevelt StateStreet...............................15
w CoinbaseGlobal.........................18,39
w Compass...................................11 MANAGINGEDITOR,DIGITALMattBemer MANAGINGEDITOR,ENTERPRISEBrianHershberg
or ContinentalResources................12,39,41 MANAGINGEDITOR,NEWSJoeWoelfel T Tesla......................................26
8 CoterraEnergy............................13 TFIInternational..........................12
d.00 CSX.......................................12 ASSISTANTMANAGINGEDITORSHenryCutter,MelGray,AnitaHamilton,MaryRomano,RobertSabat TheseusPharmaceuticals..................38
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mitt43- ASSOCIATEEDITORSAndrewBary,DarenFonda,RandallW.Forsyth,JackHough,ReshmaKapadia,EricJ.Savitz TT.olRloBwreotPherricse.G..r.o.u.p...............................................1151
per0-8 SENIORWRITERSBillAlpert,LisaBeilfuss,LaurenFoster,TaeKim,JoeLight,ElizabethO’Brien,
ot 80 D DardenRestaurants.......................13 AlRoot,AviSalzman,LawrenceC.Strauss
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6 BARRON’S June20,2022
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June20,2022 BARRON’S 7
U P & D O W N W A L L S T R E E T
Oneestimatenotesthathouseholdsmayhavelost
moreinstocksandcryptothanthe$6trillionfall
inequityfromtheburstingofthedot.combubble.
What Drove the Fed? Incorporatecreditmarkets,mean- lockdown,andbeforethat,sincethe
while,investorsstagedamajorexodus secondquarterof2010.Thatshould
frominvestment-gradeandhigh-yield knockafullpercentagepointfrom
funds,parallelingtheflightfromrisk thecurrentquarter’sgrossdomestic
Inflation—and More inequities. product.TheAtlantaFed’sGDPNow
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weekandfarbelowthemomentary channelisthemainwaythatmone-
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8 BARRON’S June20,2022
Up&DownWallStreet(continued)
Time for a ofthe60/40portfoliowascalledintoques- ScottMinerd,GuggenheimPartners’
tion,includinginthiscolumnmorethan globalchiefinvestmentofficer,fearsthat
threeyearsago.Thoseobjectionsgrew theFedismakinga“gravepolicyerror”in
moreacuteasinflationbuiltupitsheadof tighteningpolicyexcessively.Theresult
steamwhilebondyieldsremainedlow,as couldbea“precipitouscollapseinrisk
notedherelastyear. assets”suchasstocksandspeculativecor-
New Income
Still,itcomesasabitofashocktosee poratedebt.Asahedge,thefirm’sportfolio
howbadlythestrategyhasfaredsince allocationflippedtoemphasizelong-term
then.Accordingtoaresearchnotefrom Treasuries,whichwouldbeexpectedto
BespokeInvestmentGroup,the60/40 rallyiffissuresinthefinancialsystem
portfoliosufferedanegativetotalreturn worsen.
Strategy? of17.8%sincethebeginningof2022,the DavidA.Levy,whoheadstheJerome
worststarttoayearsince1976andthe LevyForecastingInstitute,toldclients
second-worstsix-monthshowingsince thispastweekthathe“wouldnotbesur-
then.Noteventhe2008-09financialcrisis prised”ifTuesday’shighyieldsforTrea-
wasaspainfulforsucha60/40portfolio, suriescouldmarkthepeakforthebusi-
theadvisorynoted. nesscycle.TheTreasurymarketalready
That’sbecausebothportionsofthe appearedtohavediscountedtheFed’sex-
portfoliohavebeenlosersthisyear.The pectedrateincreasesandhadalsobecome
iSharesCoreU.S.AggregateBondETF oversoldindisorderlytrading,headded
Nasdaq 100 (AGG),whichrepresentsthebroadtaxable inaresearchnote.Unusually,risk-free
investment-gradedebtmarket,hadanega- governmentsecuritiesalsofailedtobenefit
Covered Call ETF tive11.5%returnfromthebeginningof fromtheturmoilinriskmarkets,whichhe
2022throughJune15,accordingtoMorn- didn’tthinkwouldpersist.
QYLD ingstar,whiletheSPDRS&P500ETF More-aggressiveandfastermonetary
(SPY)lost19.9%overthatspan. policycouldmeanthatbondpriceswill
m Tothecontrarian-mindedinvestor,such bottom(andyieldspeak)aheadofatrough
o
s.c dreadfulresultsmightsuggestthatarever- instocks,contendsJohnHigginsofCapital
nt saloffortuneforthetraditional60/40 Economics.Tightermonetarypolicymay
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mitt43- GLOBALXETFS.COM felltohistoriclows.Now,withyieldsjump- JanusHenderson’sHettssaystheeq-
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