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9 Stories We are Following Today 11-21-22

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    1. The markets – 5 notes. 1) The Nasdaq is down 28.75% YTD, the S&P 500 is down 16.8%, and the Dow is down 7.13%. 2) Futures point down this AM after the markets also fell on Friday. 3) Oil has dropped below $80 a barrel on concerns of a worldwide economic slowdown. 4) Bitcoin opens around $16,100, it’s down nearly 66% YTD. 5) The 10 year treasury yield is at 3.81%.

    2. The overall PE ratio of the S&P 500 is approximately at 20.62. This tends to move inversely with treasury yields. The 1 year treasury is at about 4.78% reflecting a PE ratio of 20.91. Thus, safe money (treasuries) but no growth money currently provides a PE ratio of 20.91. Equity money (I.e. the S&P) with its upside and it’s risks trades at a PE ratio of 20.62.

    3. The PE ratios of the 10 largest companies by revenues. 1) Walmart 24.34 2) Amazon 86.41 3) Apple 24.76 4) Exxon 9.14 5) CVS 11.20 6) United Health 24.85 7) Google 19.41 8) McKesson 15.49 9) Berkshire Hathaway 21.92 10) AmerisourceBergen 14.70

    The outsized PE ratio of Amazon reflects market perception that there is an ability to generate profits there if the business is managed to focus on profits. The low PE ratio of Exxon Mobil reflects that it’s not viewed as a growth company. Lower PE ratios generally reflect market perception of lower growth potential. PE ratios can generally be perceived as off balance if recent results don’t reflect true ongoing profits. For example, a company’s PE ratio may be higher than expected due to poor recent earnings that the market reflects as an aberration.

    4. Bob Iger returns as CEO of Disney. A big ego but gets a lot of credit for Disney’s success over the last two decades. He replaces the successor he picked.

    5. President Biden turns 80.

    6. Former President Trump returns to Twitter.

    7. The PE ratios of the 10 largest companies by market value. 1) Apple 24.76 2) Microsoft 25.99 not in top 10 by revs. 3) Google 19.14 4) Amazon 86.41 5) Berkshire 21.92 6) Tesla 55.67 not in top 10 by revs 7) United Heath 24.85 8) Exxon Mobil 9.14 9) J&J 17.7 not in top 10 10) Visa 28 not in top 10.

    4 of these companies are in the top 10 by market cap but not revenues.

    8. 3 stories we are watching at the WSJ. 1) “Rising Rates Put Small Business Plans on Hold.” 2) “Carvana Faces Cash Crunch.” 3) “As Savings Slowly Shrink, Consumer Spending is on Hold” .

    9. 6 Stories we are watching at Becker’s Healthcare. 1) “12 Hospitals and Health Systems Cutting Jobs” by Molly Gamble. 2) “Officials Fight to Keep Mississippi Hospital Open Through Legislative Session” by Noah Schwartz. 3) “California Hospital Nurses Sound Alarm Over Planned Bankruptcy” by Noah Schwartz. 4) “Amedisys CEO Out After Less Than 1 Year” by Alexis Kayser. 5) “Rob Allen Named CEO of Intermountain” by Kelly Gooch. Rob Allen An outstanding leader. 6) “Baptist Health Hospital Promotes CNO to President” by Alexis Kayser.

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