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  • Finance 0

    Small Caps Are Now More Expensive Than At The Peak Of The Tech Bubble

    Everyone knows that tech stocks are – or at least until investors realized that tax reform is a fiasco for the tech sector, were – the darlings of the market, resulting in the biggest concentration of hedge fund holders with a record number of HFs holding the 5 FAANG stocks; at the same time far fewer are aware that while the tech space trades at investors realized that tax reform , it is the small and mid caps that have been the best performing, not to mention most overvalued sectors in recent years. First, looking at midcaps, an analysis by BofA’s Dan Suziki reveals that despite the small-cap rally in late-November &...
    On December 5, 2017 / By
  • Finance 0

    Retailers Rally While Tech Sags (Because Of The Tax Plan)

    Retailers Helped By Tax Bill The stock market indexes reflect the tax bill’s impact on earnings as the Dow rallied, while Nasdaq fell. The Dow was up 0.24%, the S&P 500 was down 0.12%, and the Nasdaq was down 1.05%. Many of the retail names did well because they have high tax rates. Gap stock was up 6.6%, Macy’s was up 6.7%, and O’Reilly Automotive was up 6.8%. The table below reviews some of the names which will be getting a big tax break next year after the bill is passed. As you can see, O’Reilly Automotive will see its tax rate go from 34.7% to 23.0% assuming the corporate tax rate is cut to 20%. When looking at these names, i...
    On December 5, 2017 / By
  • Finance 0

    Markit Economist Cites Rising Inflation: Stagflation Lite?

    “Average selling prices for goods and services showed one of the largest increases recorded over the past four years.” Business activity growth in the US eased in November according to the IHS Markit U.S. Composite PMI™. Key Findings Service sector output expansion softens to five-month low Upturn in new business accelerates Business confidence slips to joint-weakest since February Although output growth eased slightly to a five-month low, the upturn in new business accelerated and was solid overall. Employment growth meanwhile reached a three-month peak, which helped alleviate capacity pressures. In line with this, backlog acc...
    On December 5, 2017 / By
  • Finance 0

    Gold’s Record-Breaking Monthly Volume

    November turned out to be an up-month in gold and the analogy to what happened in late 2012 is no longer crystal clear. Moreover, gold’s monthly upswing was accompanied by extreme, record-breaking volume. What can we infer from the latter? Will we see a breakout shortly? In our opinion, that’s highly unlikely. Let’s move right into gold’s long-term chart – it will be easier to discuss the above issues with the price moves in front of us (charts courtesy of http://stockcharts.com). Before we move to the details, let’s recall what we wrote about two weeks ago on gold’s big yearly volume: We were asked to comment on the fact tha...
    On December 5, 2017 / By
  • Finance 0

    Is The Selling Drying Up For Metals Stocks?

    The Junior Miner Junky David Erfle joins me today with further comments on the sell-off across the board in metals. David is a bit more optimistic about a rebound coming. He also comments on a Company I recently received an update from Fiore Gold. We wrap up the call with comments on the Uranium sector. Audio Length: 00:14:31...
    On December 5, 2017 / By
  • Finance 0

    Senate Approves Tax Bill, Large-Cap Mutual Funds To Buy

    In a 51-49 vote, the Senate passed the new tax code by a narrow margin for the United States on Dec 1. This brings President Trump closer to tax reforms in the United Sates. Members of the GOP cleared a big hurdle after dissentient senators agreed to approve the Bill. Now that the Bill has cleared the Senate, lawmakers are seeking to settle disparities between Senate’s version of the Bill and the one passed by the House last month, before it is presented to Trump. A slash in the corporate tax rate from 35% to 20% and Trump’s one-time tax repatriation mean that large-cap companies would greatly benefit from such policies. Under such condit...
    On December 5, 2017 / By
  • Finance 0

    This Week’s ETF Launches: Betting On The Demise Of Retail

    The pace of new ETF launches finally slows this week, following a busy November that has seen the debut of nearly 40 new funds. With the holiday shopping season in full swing, it’s appropriate that the most notable launches this week both look to profit from the ongoing decline in the traditional brick-and-mortar retail sector. Here are this week’s new fund launches: Ticker Name Issuer Launch Date ETFdb.com Category Expense Ratio (CLIX) ProShares Long Online/Short Stores ETF ProShares 11/14/2017 Long-short 0.65% (EMTY) ProShares Decline of the Retail Store ETF ProShares 11/14/2017 Inverse Equities 0.65%...
    On December 5, 2017 / By
  • Finance 0

    More Strange And Disturbing Action In The Paper Gold Market

    For at least the past decade the behavior of the people who trade gold futures contracts – and thereby determine the metal’s price – has been generally predictable: The “commercials” – big banks and companies that buy gold to do things with it – have suckered the speculators – mostly hedge funds who chase trends – into going very long and very short at exactly the wrong time. Which means the price action in gold six or so months in the future was broadly predictable. When the speculators were way long, it was going down and vice versa. But this year the action – as portrayed in the commitment of traders report (COT) – ha...
    On December 5, 2017 / By
  • Finance 0

    U.S. Services Sector Cool From 12-Year High In November

    The U.S. non-manufacturing sector expanded less than forecast in November after expanding at the fastest pace in 12 years in October. The services sector contracted from 60.1 recorded in October to 57.4, according to the Institute for Supply Management report released on Tuesday. This is below economists’ prediction of 59, however, readings above 50 indicate expansion. Business activities in the sector also eased from 61.4 to 62.2, while gauge of new orders fell from 62.8 to 58.7. Signaling services sector might be settling back to a more sustainable rate of growth. “They’re still confident that the year will finish out strong,” Anth...
    On December 5, 2017 / By
  • Finance 0

    Flynn, Tax Reform, And Gold

    On Saturday, the U.S. Senate passed a tax-reform bill. What does it imply for the gold market? The last weekend was a turbulent period for the gold market. On Friday, Michael Flynn, Trump’s former national security adviser, was charged and pleaded guilty to lying to FBI agents. It means that the Russia probe is getting closer to the White House. Importantly, Flynn could have extremely valuable information about the Trump administration’s potential contacts with Russians. Hence, when the news hit the markets, the price of gold jumped from about $1,273 to almost $1,290, as one can see in the chart below. Chart 1: Gold prices over the last ...
    On December 5, 2017 / By