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This Cycle – It’s China!
I know everything is fan-freaking-tastic – with the tax reform bill and global synchronized expansion and all. I figure the last thing you need is some nattering naysayer throwing cold water on this unbelievable party, so I won’t. At least not for the short run. This rally will end when it ends. Maybe tomorrow, maybe next week, maybe next month, maybe next year. I don’t know and every time I try to guess, I just end up looking foolish. But I recently listened to this terrific Bloomberg Masters in Business interview of the legendary hedge fund manager, Felix Zulauf, and he articulated such a compelling argument for the timing of the ... -
Finance 0
GBP/USD Breakout Faces First Hurdle- Bullish Above November Open
GBP/USD Daily Chart Technical Outlook: I’ve been tracking this advance in the British Pound for months now with Cable setting the November opening range just above slope support extending off the yearly lows. Earlier this month we highlighted that a breakout was imminent as prices continued to consolidate above this threshold. The subsequent breach above the monthly open / opening-range highs on 9/22 validated the reversal with prices now eyeing near-term resistance targets at 1.3417 and 1.3482/95. This region is defined by the yearly high-day close and the 50% retracement of the 2016 decline – a breach / close above would be need... -
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Is Value Investing Really Dying?
In 2017, traditional value investing has suffered some of the most eye-raising attacks in recent memory. It started in June, when Goldman Sachs published a widely circulated report showing that following the value approach espoused famously by Fama and French returned a cumulative LOSS of 15% over the past decade. That is a remarkably bad performance in a climate where the S&P 500 has doubled. This was followed up in October, when notable value-based hedge fund manager David Einhorn (in a note to Greenlight Capital clients) flat-out said he was having “questions regarding whether value investing is a viable strategy”. Ein... -
Finance 0
Did ECB’s Hansson Talk Out Of Turn?
Ardo Hansson is the Chicago-born Governor of the central bank of Estonia. He was interviewed by Market New today. He seemed to say that barring a surprise; the ECB can end the asset purchases next September. Recall that last month the ECB indicated it wouldcontinue to extend its purchases through the first nine months of next year, albeit at half the current 60 bln euros a month pace. It specifically chose not to provide a hard end-date. This seemed to be somewhat controversial as some (the usual representatives from creditor nations suspected) wanted an official end date. Leaving aside the merits of extending or not, we think that tactic... -
Finance 0
Is The Equity Market Making You Jumpy?
After nine years, some investors are getting increasingly worried about the continued viability of the long-running bull market. Add in the rumors of rising interest rates, and some investors are ready to make dramatic changes to their equity investments, such as moving a significant portion of their portfolio to cash or cash equivalents (money market funds or ultra-short bonds). Changing Your Asset Allocation Before you let your nerves rule your investment strategy, consider that changing your asset allocation based on nerves is something your financial advisor would probably caution against if you are properly allocated. There are a couple ... -
Finance 0
Chipotle, In Search Of New CEO, Says Founder Ells To Focus On ‘innovation’
Shares of Chipotle Mexican Grill (CMG) jumped in morning trading after the company announced it had begun to search for a new chief executive officer. Once the search is compete, Chipotle founder Steve Ells said he will focus primarily on innovation. Chipotle has faced several foodborne illness outbreaks since 2015. CEO SEARCH: Chipotle founder and current chairman and CEO Steve Ells will step down as CEO and transition to the role of executive chairman, the company said on Wednesday. The restaurant chain’s board has formed a search committee to help find a new chief, Chipotle said. Directors Robin Hickenlooper and Ali Namvar, as well a... -
Finance 0
Tax Reform Rotation
I have often said that as traders, it is not our job to pass judgment on what should be, but, instead, to take advantage of what is. I will try to stick to that mantra when discussing the US tax “reform” package, but I must admit, it’s going to be tough for my feelings to not wiggle through. Regardless of your ideological views, I think we can agree on a couple of points. First, this is not tax reform. There is no wholesale dramatic change to the tax code. Second, this is not a tax cut for lower and middle American workers, but instead a corporate and upper-class break of monster proportions. Now, you might think this is the best av... -
Finance 0
October 2017 Pending Home Sales Seasonally Adjusted Index Rose Strongly
The National Association of Realtors (NAR) seasonally adjusted pending home sales index rose strongly following three straight months of diminishing activity, but continued to fall behind year ago levels. The quote of the day from this NAR release: … Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand. … Analyst Opinion of Pending Home Sales The rolling averages are in negative territory. The data is very noisy and must be averaged to make sense of the situation. There is no signs of a surge in home sales, although th... -
Finance 0
A Productive Day On Several Fronts
I spent yesterday morning in meetings with the folks at Janus Henderson here in Denver. I’m a big believer in the idea that active fund managers will be worth their weight in gold (or should I say, bitcoin?) in the bond market as rates, global economic growth, and perhaps even inflation, potentially chart new courses in the coming quarters/years. The bottom line here is that London-based portfolio manager John Pattullo runs a strategic income fund with a macro-based theme approach and a strong record. As such, chatting with John and his Denver compatriots in the high yield/multi-asset class space was very productive. At the mid-morning brea... -
Finance 0
US GDP Revised Up To 3.3% – USD Extends Gains
The US economy grew at an annualized rate of 3.3% in Q3 2017 according to the updated estimate. This is slightly better than 3.2% that was expected and above 3% originally reported. Q2 saw 3.1%. Corporate profits are up but not as much as beforehand. 4.3% q/q, 5.4% y/y. Personal consumption is somewhat on the softer side. with 2.3% against 2.4% originally reported. Business investment was revised up to 4.7% against 3.9% originally published. All in all, this is a positive report. The US dollar was already gaining quite nicely ahead of the publication and it extends its gains now. The US was expected to upgrade the assessment of GDP growth in ...
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