Latest Posts
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Finance 0
This Hasn’t Happened Since 2009…
Boy, oh boy: it certainly looks like the “rotation” trade is in full swing on Monday. Last week, as the odds of the GOP tax bill ultimately becoming law increased, more than a few analysts and commentators renewed calls for a rotation out of 2017’s best performers and into the sectors and names that have suffered (relatively speaking) as markets faded the Trump agenda. This was on full display last Wednesday when tech stocks nosedived, leading to the worst underperformance versus the broad market since Goldman triggered a tech rout with their infamous FANG note in early June. A couple of simple charts illustrate the recent shift. Here... -
Finance 0
RBA: Another Snoozefest
This is a big week for economic data and events in Australia. The two most important releases to watch include the RBA’s interest rate decision tomorrow and GDP growth on Wednesday. Despite rate hike hopes throughout the year, the RBA has militantly pursued a neutral monetary policy. As such, consensus continues to expect no change to the current cash rate of 1.5%. We have the same expectation, and believe that the RBA is likely to remain on hold. With mixed data, RBA in no hurry to upset the apple cart While the Australian dollar has been in a bearish trend since late September, recent economic data has been fairly mixed. Last week NAB Bus... -
Finance 0
Tax Reform With Spending And Taxes At Historical Averages
It’s conceptual possible, if not always practically convenient, to separate tax policy into two mainpieces. One issue is the tax cut vs. tax hike debate–that is, whether the total amount being collected should be higher or lower. The other issue is whether the tax code should be adjusted in some way to alter its incentives and disincentives. As one example, the 1986 Tax Reform Act was more-or-less neutral in the amount of revenue it collected, but it altered the incentives of the tax code by combining lower marginal tax rates with a reduction in the availability of various deductions, credits, and exemptions. In thinking about the... -
Finance 0
Blockchains – What Are They? What Can We Expect?
Introduction I know very little about blockchains (BC), distributed ledger systems, and crypto-currencies such as Bitcoin. But I am a bit dumbfounded by the claims of what “the BC era” will bring. In what follows, I comment on some of these claims appearing in a paper written by Don and Alex Tapscott in the MIT Sloan Management Review. Quotes from the article start with BC. The lead-in to my comments is EM. A Little Background BC: For the last century, academics and business leaders have been shaping the practice of modern management. The main theories, tenets, and behaviors have enabled managers to build corporations, which have lar... -
Finance 0
USDJPY – Will The Gap Hold?
The dollar was better bid today with USDJPY gapping higher on the week’s open in Asia as currency markets breathed a sigh of relief that the Flynn indictment may not have been as politically damaging to Donald Trump as initially reported. The passage of the tax cut bill by Senate was also viewed as bullish for US growth with benchmark 10-year yield popping to 2.40% in morning European dealing. But tomorrow we get an insight into how well the US economy is doing. ISM Non-Manufacturing report covers more than 70% of the US economy and is the 2nd most important data point for investors after the NFPs. The market is looking for a modest pull... -
Finance 0
The Q Ratio And Market Valuation: November Update
The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It’s a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Fortunately, the government does the work of accumulating the data for the calculation. The numbers are supplied in the Federal Reserve Z.1 Financial Accounts of the United States of the United States, which is released quarterly. Extrapolating Q The ratio subsequent to the latest Fed data (through 2017 Q2) is based on a subjective process that factors in the m... -
Finance 0
Swing Trading Strategy Report – Monday, Dec. 4
My Swing Trading Approach Let’s see if this opening gap holds in the early going, and from there, I will add 1-2 new long setups to the portfolio. Indicators VIX – Massive spike on erroneous ABC/Trump report. Gave up nearly all the gains on the day. Typical behavior for this indicator, in this market. T2108 (% of stocks trading below their 40-day moving average): rose 0.25% yesterday. 60% of stocks remain above their 40-day moving average. Moving averages (SPX): Broke the 5-day and 10-day moving averages, but rallied back above them before the close of trading. Industries to Watch Today Financials taking a breather the ... -
Finance 0
Net Investment Flows Turn Positive As Growth Picks Up
Nearly ten years on from the start of the financial crisis and it looks as if the recovery is well and truly here. According to Bloomberg, the second quarter was the best earnings season for US companies in 13 years, with more than three-quarters of the Standard & Poor’s 500 member companies beating analyst expectations. Even though the third quarter is generally the weakest quarter of the year for firm’s, the trend reported in the first half has continued with year-over-year profit growth is estimated at nearly 8% for the S&P 500, below the double-digit gains seen in the first two quarters of the year. The Tech sector has ac... -
Finance 0
The Most Active Equity Options And Strikes For Midday – Monday, Dec. 4
Top Tickers For Midday December 4th ... -
Finance 0
EUR/USD: 3 Reasons Why EUR/USD Still Resilient; What’s The Trade?
EUR/USD is trading around 1.1850, in the middle of the range. Does it have room to the upside? The team at Nordea sees room for rises. Here is their view, courtesy of eFXnews: Nordea FX Strategy Research discusses EUR/USD outlook into year-end, and outlines 3 key reasons why the pair is still resilient and hasn’t been traded significantly lower yet. 1- Reason number one why EUR/USD trades at elevated levels still is the continued over-performance from European key figures compared to already lofty expectations… 2- Secondly, the USD is also dented by a turn-around in the trend of the number of excess reserves in USDs… 3- Thirdly, the...
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