|Dow||-251.90 to 17,164.95|
|S&P 500||-26.26 to 1,994.99|
|Nasdaq||-48.17 to 4,635.24|
|10-YR Yield||-.076 to 1.675%|
|Gold||+$28.50 to $1,284.40|
|Crude Oil||+$2.95 to $47.48|
The Super Bowl. The Big Game. Whatever you want to call it, it’s a glorious American tradition for those of us who are football fanatics.
This year is even better because my team — the New England Patriots — is actually playing. We came close to having a “house divided” game last year. But both the Pats and my stepson’s San Francisco 49ers got eliminated in the conference championship round. As for my wife’s Chicago Bears, well let’s just say I’m not holding my breath! LOL.
My game prediction, in case you were wondering, is Pats 27, Seahawks 17. (Oh and just to get it out of the way, I think the whole Deflate-Gate thing is much ado about nothing. There’s no way the head coach, long-time QB and owner would emphatically deny the alleged under-inflating of footballs in front of millions of TV viewers if they had something to hide.)
But you’re not here to read my sports predictions. You’re here to make money. And frankly, there’s a ton of it being thrown around at Super Bowl time, considering an estimated 184 million people will watch the game globally.
|Super Bowl visitors will shell out $206 million on everything from hotels to transportation to food and drinks.|
Kantar Media recently determined that advertisers spent almost $2 billion on network spots over the past nine years. The cost of a 30-second ad surged 70 percent during that time.
Companies that are trying to grab viewer eyeballs this year are facing a bill of around $4 million for a 30-second ad. Plus, there’s no telling how much Pepsico (PEP, Weiss Ratings: A-) is spending to sponsor the halftime show featuring Katy Perry. Estimates suggest production costs alone are running around $10 million.
Finally, consulting firm PwC figures visitors to the Phoenix metropolitan area will shell out $206 million on everything from hotels to transportation to food and drinks. But at several thousand dollars per ticket on the secondary market, I sure as heck won’t be joining them!
That said, with all this money floating around, are there any “Super” stocks you should consider buying?
Well, we’re hosting a Super Bowl party that’ll involve snacks, prepared platters, and drinks from our local supermarket (Publix) and the Fresh Market (TFM, Weiss Ratings: C). Guests will be enjoying a few cold ones too, and it’s worth noting that the share price of mega-advertiser Anheuser-Busch Inbev (BUD, Weiss Ratings: B) has been surging in the days leading up to the game.
So has one of my absolute favorite stocks in this sector. I can’t share the name here, as it wouldn’t be fair to my paying Safe Money Report subscribers. But they’re already showing double-digit open profits, and I’d love for you to join them.
The nearest Buffalo Wild Wings (BWLD, Weiss Ratings: A-) is in West Palm Beach, a bit too far for us to drive to stock up. But you can bet it’ll be doing gangbuster business. I say that because Americans are expected to eat 1.25 billion wings on Super Bowl Sunday!
Then you have places like Domino’s Pizza (DPZ, Weiss Ratings: A) and Papa John’s International (PZZA, Weiss Ratings: B+). The CEO of Domino’s recently said Super Bowl Sunday is typically 80 percent busier than the average Sunday.
|“There are some big opportunities out there if you drill down past just energy.”|
As for Papa John’s, it’s counting on NFL quarterback legends Peyton Manning and Joe Montana to help deliver more customers this weekend. The company estimates it will receive more than 1 million pizza orders on Sunday alone.
While many fast-money hedge fund-style investors have been focused way, way too much on every tick in the oil or interest rate markets, these stocks have been en fuego! That doesn’t mean you should just jump in and buy just because Sunday should feature a great football game. But it does show how there are some big opportunities out there if you drill down past just energy.
So what about you? What are you planning to do for the big game? How much do you think you’ll spend on food and entertainment, and which companies do you think will benefit from the Super Bowl “halo.”
Any predictions you’d like to share about the outcome, or which advertisers should prosper the most? Then head over to the website before Sunday’s kickoff! And good luck regardless of which team you’ll be rooting for!
|Our Readers Speak|
Oil, oil, oil — that’s all the market seems to be focused on lately, and many of you weighed in on my column yesterday noting that correlation. It’s especially worth talking about today, considering oil futures reversed course late in the day — soaring more than 8 percent at one point! That’s the single-biggest, one-day rise going all the way back to June 2012.
Reader Earl McH. Said it’s ridiculous that stocks seem to fall every time oil prices do, and vice versa. His take:
“Someone please explain to me just why falling oil prices should cause the general market to decline. For years the high price of oil from foreign sources was blamed as a ‘tax on the American consumer.’ Now that over 60 percent has been knocked off that price, with more to come, and all those dollars kept in our pockets some people try to blame this phenomenon for the few drops in the market.”
Reader Jim also weighed in on the interplay between stocks and energy, and noted that patterns and correlations have definitely changed. His comments:
“The private investment company I work for has been in business since 1921. Its capital is allocated about half to oil and gas and half to stocks and bonds. The generally accepted investment theory is that when oil is up, stocks will be down and visa versa.
“This has allowed the company to maintain an even keel thru every type of investing climate for all these years. The action of the last several years would indicate that this theory is no longer valid. We have, of course, done well with both going up. But have the rules now changed so that we can expect both to crash?
Jim ended with this cautionary take on the markets:
“After many years of success, I all of a sudden have the sick feeling I don’t know what I’m doing. My generation has never really experienced a real deflationary event. Perhaps we are about to learn why deflation was so feared by our fathers and grandfathers.”
On the flip side, Reader Vic doesn’t think these low oil prices can persist for much longer because they’re putting the squeeze on the entire OPEC cartel. The comments:
“How long can the countries that are in OPEC hang in and not ask for changes in production? Many of these members use oil profits for over 90 percent of their budget to run the country. They cannot survive at these prices and many need $90 — $100 oil.”
Thanks for all your insights, guys. I agree that OPEC is under much more pressure than we are, and that it’s “fold point” is consequently very close. I keep waiting to wake up to a headline about a coordinated OPEC/non-OPEC (Russia, Norway, Mexico?) production cut — a la what we saw in the last major down cycle in 1998-1999.
Finally, Reader Howard notes one of the lesser-appreciated drawbacks to a surging dollar: Falling tourism! His observation:
“Interesting to hear from some bloggers in the U.K. and others that holidays to America are going to be much more expensive with a high-flying dollar. Makes me wonder about the effect of currency wars and whether the U.S. can afford to raise interest rates in the near future?”
Good point on the fallout, Howard. The dollar’s appreciation may be making it cheaper for us Americans to travel to Europe or the U.K. In fact, I just got a promotional email from Delta Air Lines (DAL, Weiss Ratings: A) highlighting the currency move — and noting the great European deals they’re offering as a result. But going the other way is getting pricier by the day!
What other thoughts do you have on the dollar? Or oil? Or the stock market in general? Let me hear from you at the website when you get a chance!
|Other Developments of the Day|
U.S. Gross Domestic Product grew just 2.6 percent in the final quarter of 2014, down sharply from 5 percent in the quarter prior. That missed estimates of 3.2 percent, dragged down by subdued business investment and exports, as well as an outright decline in government spending. Consumer spending surged at a 4.3 percent rate, however, the strongest since 2006.
If homeownership is the American dream, we have a national nightmare on our hands. The Census Bureau said the U.S. homeownership rate sank to 63.9 percent in the fourth quarter of 2014 from 64.3 percent a quarter earlier.
That was the lowest level since 1994, the year I graduated from high school. Blame everything from tighter lending standards to crushing student loan debt to lackluster wage growth to the lingering effect of the biggest housing bubble and bust in U.S. history.
Alibaba Group Holding (BABA, Weiss Ratings: C) was the biggest IPO in the world when it launched last September. But it got crushed yesterday, costing Chairman Jack Ma a cool $1.4 billion in just one day. The culprit? Weaker-than-expected third quarter revenue, which tanked the stock by almost 9 percent.
Deflation is raging across Europe, according to official figures released overnight. Prices dropped 0.6 percent in December.
That was worse than the 0.5 percent expected by economists and the worst since the depths of the Great Recession. Core inflation (excluding food and energy) fell to the lowest level since the euro was thrust upon the financial world in 1999.
President Obama is ready to open up the federal government spending taps, according to the Washington Post. He will propose a budget that pegs spending at $74 billion above the “sequestration” limits that Congress enacted four years ago to shrink the budget deficit.
Of course, with the Republicans controlling both houses of Congress, it’s going to be a knockdown, drag out fight to get anything resembling Obama’s original proposal passed. So grab your popcorn!
If these or any other news stories you’ve come across have you pondering the investment implications, don’t keep your thoughts to yourself. Share them at the website with me and your fellow investors!
Oh, and “Go Patriots!”
Until next time,