Smartkarma Daily Briefs

• Constituent changes to the S&P500 INDEX and capping changes will result in a round-trip trade of US$16.3bn across the Select Sector indices and the S&P500 Equal Weight Index.
• The Select Sector index trackers and S&P500 Equal Weight trackers will need to buy the adds to the S&P500 INDEX and sell the deletes, further increasing flow for the stocks.
• The flows will change over the next week as stock prices move around, and final capping is done after the close on 14 March.

• On Friday post-close, S&P DJI announced the changes to the S&P500, S&P MidCap400, and S&P SmallCap600 Indices. The S&P500 names will get added to/deleted from the S&P500 Equal-Weight Index too.
• There will be 4 changes for the S&P500 and all 4 DELs from S&P500 are demoted to the S&P600 Index. SPDR Select and Equal-Weight Indices add up to big volumes.
• There is a theoretical quantity to trade, and an expected quantity to trade and it is worth knowing the difference. EW, of course, is still “live” for a few days.

• Brent oil price is currently 7% below fair value with short-term technical indicators in oversold territory
• Forecast predicts Brent oil to average $73 in 2025, with a surplus in global oil market of 1.3 million barrels per day
• Market consensus diverges from forecast, with disagreements on oil balances and optimism towards non-OPEC supply growth

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Southern Company reported strong performance for the fourth quarter of 2024, with adjusted earnings per share (EPS) reaching $4.05, marking an 11% growth from the previous year and positioning itself at the top of the 2024 guidance range.
• This success is attributed to steady investments in state-regulated utilities and the successful management of weather-related impacts.
• Positives from the earnings report include the addition of 57,000 new residential electric customers and 26,000 new customers in natural gas distribution businesses, reflecting robust growth, particularly in the Southeast.

• I’m closing out my Kenvue (KVUE) recommendation and will be selling my shares.

• Following the spin-off from Johnson & Johnson (JNJ), KVUE shares performed poorly for a variety of reasons (lockluster growth, Tylenol related litigation, etc.) that I thought were overblown.

• At the time, Kenvue was trading at a sharp discount to its consumer health care peers. Today, Kenvue trades at a slight discount to peers (21 P/E vs. 23.3x for the group).

• Recent news of a fiscal U turn in Germany has been a game changer, with a proposal for a large infrastructure fund and increased defense spending
• This shift in European fiscal policy has led to a more constructive view on the Euro dollar, with potential for it to reach 112 to 114 area
• Regional investment focus on cheap high beta candidates within the euro bloc, with potential for the broad dollar to be biased to the downside due to US exceptionalism fading and European growth stepping up

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Breakout Time in Oil and FX During the last week there occurred many breakout patterns as the volatility in financial markets has risen significantly after president Trump introduced tariffs on Mexico and Canada.
• The Ukraine-drama also doesn’t really help to calm market participants at the moment either.
• We just highlight the technical pattern and add a few words about our current framework and how we view these markets at the moment. 

• China has banned Illumina, the U.S. genomics giant, from exporting gene sequencing machines to the country, escalating sanctions imposed last month when the company was added to Beijing’s Unreliable Entity List.
• The move is expected to accelerate domestic alternatives in the gene sequencing industry.
• Illumina, a dominant player in the global gene sequencing industry, has been a major supplier in China since entering the market in 2005. It once held a near-monopoly in the country’s gene sequencing sector before Chinese rival MGI Tech Co. Ltd. emerged in 2015 as a competitor. Since then, the two companies have battled for market share in China while engaging in global patent disputes.

• Integrating AI Nose into robots. Ainos entered a strategic partnership with ugo, a leading Japanese robotics company, to integrate AI Nose into service robots, enhancing robotic solutions to improve industrial safety, public security, environmental monitoring, and healthcare support.
• Under the collaboration, the AI Nose technology will be licensed to ugo, with the companies working together to design and validate AI Nose-enabled ugo robots for multiple industries.
• Partners with leading Japanese robotics company. ugo (pronounced “you-go”) develops and commercializes next- generation avatar robots, with conventional and autonomous capabilities.

• The recent results from MGIC Investment Corporation for the fourth quarter of 2024 highlight both strengths and potential challenges within the company.
• With a net income of $185 million for Q4 and a 14% annualized return on equity, MGIC showcases financial stability.
• In contrast, for the full year, net income stood at $763 million, a moderate increase from $730 million in the prior year.