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Market Cap For New Home Sales Spikes Up
Just two months ago, we asked if new home sales in the U.S. were topping out. Based on the just released data for October 2017, we can now say the answer to that question is “not quite yet”. The following animated chart, showing the history of the effective market cap of the new home sales market in the U.S. from December 1975 through the preliminary data for October 2017, shows why we think that. In nominal terms, the spike in new home sales in October 2017 says that the answer is clearly “no”, with the trailing twelve month average of the market cap for new home sales climbing in both September and October 2017 t... -
Finance 0
Slightly Less Bearish On Multi-Line Retailers
If there’s one area of the market that investors couldn’t be more bearish on, it’s the multi-line retailers. With Amazon eating their lunch, consumers changing the way they spend money (choosing experiences over stuff), and an overall bloated retail footprint, multi-line retailers have faced a perfect storm and their stocks have reacted accordingly. With all the negative headwinds, short-sellers have been piling on the group. At the end of 2016, average short interest as a percentage of float for the group was an already high 14.3%, but through the course of the year, short interest levels ballooned to more than 25%. Shorting retail sto... -
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The GOP Tax Bill: Fuggedaboutit!
The GOP has become so politically desperate that they might as well enact a two-word statute and be done with it. It would simply read: Tax Bill! Actually, that’s not far from where they are in the great scheme of things. The Senate Finance Committee’s bill is a dog’s breakfast of K-Street/Wall Street pleasing tax cuts, narrowly focused revenue raisers that will be subject to withering attack on the Senate floor, nonsensical vote-driven compromises and outrageous fiscal gimmicks—-the most blatant of which is the sun-setting of every single individual tax provision after 2025. This latter trick is designed to shoe... -
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The Hidden Riches Inside Your Cash Flow
Most people only have two bank accounts they utilize in their lives. Those two accounts are usually a checking and savings account. Your paycheck gets deposited into your checking account, you then pay bills and if there is anything left the balance goes into a savings account. According to Trading Economics, the national savings rate is 3%. It will be bordering on impossible to accumulate any real wealth with such a pitiful savings rate. Of course, there will be a handful of people who acquire wealth because they bought a certain company at a certain time and it went way up in value thus giving them a form of wealth. Those will be few and fa... -
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China ETFs In Focus On Recent Sell-Off
China is hot and soaring among all the other equity markets this year thanks to improving economic growth. In fact, China is leading the global markets, attaining the best-performing country spot in the year-to-date time frame. But the incredible run eased somewhat last week as a combination of factors including tightening liquidity and jitters over bond markets led to steep sell-off in the large-cap shares. The blue-chip CSI300 Index tumbled nearly 3% on Nov 23, marking the worst one-day loss in nearly 18 months. The sell-off was again witnessed on Nov 27, with CSI 300 Index dropping 1.3%. Inside The Pain Worries over tightening liquidity ha... -
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Black Friday To Thanksgiving Weekend, Discontinuities Aside
I was expecting quite a bit more, but perhaps should not be surprised at what was actually delivered. The National Retail Federation (NRF) after delaying its Black Friday retail spending estimates updated them later Tuesday for the now designated Thanksgiving Weekend. These new figures capture spending activity on both Thanksgiving Day itself as well as the much-discussed Cyber Monday. The NRF, working through Prosper Insights & Analytics, has, the data, I believe, to go back and reconstruct spending estimates for past years in order to make apples to apples comparisons between them and this year. Instead, all it did was figure what peopl... -
Finance 0
Move Over, Tesla – China Holds The Keys To Electric Vehicles
Earlier this month, I shared with you a quote from Arnoud Balhuizen, chief commercial officer of BHP Billiton, the largest mining company in the world. In a September interview with Reuters, Balhuizen called 2017 the “revolution year [for electric vehicles], and copper is the metal of the future.” Balhuizen’s assessment couldn’t be more accurate, and the implications for investors is too compelling to ignore. In the third quarter, global sales of electric vehicles (EVs) soared 63 percent compared to the same period last year, 23 percent compared to the second quarter. A total of 287,000 units were reportedly sold in the September qu... -
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Hasbro-Mattel Merger Could Produce Big Profits
Hasbro (HAS) is not playing around. One of the largest companies in the toy industry is looking to acquire major competitor Mattel (MAT) according to a report from The Wall Street Journal . Mattel reportedly rejected Hasbro’s first offer, but I could still see more effort to make a deal happen. This is not the first time Hasbro and Mattel have considered a combination. The two sides have failed to come to terms in the past, but conditions today make a deal more appealing than ever. The toy industry has been thrown into a state of uncertainty over the past few years for a number of reasons, including: The precipitous decline in revenue a... -
Finance 0
JPMorgan’s Outlook For 2018: “Eat, Drink And Be Merry, For In 2019…”
While the prevailing outlook by the big banks for 2018 and onward has been predominantly optimistic and in a few euphoric cases, “rationally exuberant”, with most banks forecasting year-end S&P price targets around 2800 or higher, and a P/E of roughly 20x as follows… Bank of Montreal, Brian Belski, 2,950, EPS $145.00, P/E 20.3x UBS, Keith Parker, 2,900, EPS $141.00, P/E20.6x Canaccord, Tony Dwyer, 2,800, EPS $140.00, P/E 20.0x Credit Suisse, Jonathan Golub, 2,875, EPS $139.00, P/E 20.7x Deutsche Bank, Binky Chadha, 2,850, EPS $140.00, P/E 20.4x Goldman Sachs, David Kostin, 2,850, EPS $150.00, P/E 19x Citigroup, Tobia... -
Finance 0
Q4 Lifted Hedge Fund Assets To Another All-Time High
Written by eVestment The continued positive aggregate returns to start Q4 lifted hedge fund assets to another all-time high, despite net flows in negative territory for a second consecutive month. On a net basis, outflows were small again in October, but the industry felt redemption pressures more broadly than much of the year. Allocations and redemptions were highly concentrated, more so than any other month of 2017. At the strategy level, there was a mixed bag of trend halts, shifts, and resumptions. Notably, interest in managed futures strategies rose, while macro redemptions continued. Credit/fixed income market exposure (both develope...
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