Oppenheimer analyst Brian Nagel upgraded Wayfair (W) to Outperform with an $80 price target. The online home goods retailer closed yesterday up $3.56 to $66.48. The company’s sales growth has been reaccelerating lately and its “inventory-light” business model is both powerful and underappreciated, Nagel tells investors in a research note. He views the stock’s valuation as “compelling.” ...
Consumer Credit Card default rates have “surged” to 4 year highs. Capital One reported its largest write off since 2011 due to credit card delinquencies. Discover Card loan loss provisions in the 1st quarter 2017 rose a whopping 38% to $586 Million. Sounds like the alarm bells have rung! Myth or Reality? Alarming headlines are not always tethered to reality, seeking to grab your attention and “go viral”. The next chart is identical to the chart above with a broader time perspective. Wake us up when default rates rise into the 4 to 5% neighborhood! If the economy improves we would expect default rates to rise as consumers take on m...
Ethereum is an open-source blockchain-based distributed computing platform featuring smart contract functionality. It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a crypto-currency token called “ether”, which can be transferred between accounts and used to compensate participant nodes for computations performed. Ethereum went live in 2015, it quickly gained attraction in the digital world and it’s currently the second largest Crypto-Currency with 20 Billion Dollar in market cap surpassing R...
Talking Points: – May Non-Farm Payroll numbers came in below-expectations, with negative revisions for both April and March. Average hourly earnings increased by .2% for an annualized rate of 2.5%. – This has created another gust of weakness in the Greenback, and with a very busy next couple of weeks, we can certainly see volatility around this theme hasten. This morning saw the release of the last NFP report before the Fed goes into their two-day policy meeting on June 13th/14th. The headline number missed, printing at +138k versus the expectation of +182k. April NFP was revised-lower to +174k while March was revised down by -29k...
When you have a 15 point pullback in today’s market over a 3-day period, it becomes a ‘Generational Bottom’ or better yet, a ‘Generational Buying Opportunity’ for the bulls. Yesterday the market had a solid rally, a bit unexpected, as I didn’t think much of the market with it being a shortened holiday week. Nonetheless, the market moves to its own drummer, and once again, the indices led higher with small caps at the helm for once. The laggard in all of this? The Nasdaq. Large caps didn’t do much better, particularly the Dow 30 like Apple (AAPL), and other big tech names like Amazon (AMZN), F...
The individual investor continues to express concerns for stocks when looking at their sentiment response. Yesterday’s Sentiment Survey report from the American Association of Individual Investors showed a nearly six percentage point decline in the bullish sentiment reading to 26.92%. This pushes the bullishness reading one standard deviation below the average bullishness reading. Confounding investors is the fact the equity market continues to move higher with the NYSE seemingly breaking out to the upside. Additionally, the common stock only advance decline line appears to be breaking through upside resistance as well. Lastly, as can...
Wages are stuck at 2.5% y/y. If the Fed is truly data-dependent, this data should hold them back from raising rates. And not only are wages poor, job gains also slowed down: only 138K jobs gained and a significant downwards revision worth a whopping 66K. If they do hike, they are basically trapped in their own setting of expectations. If they are indeed trapped, their only escape route is to make it a “dovish hike” – raising rates now but signaling a pause for the remainder of the year. Other figures are not that supportive of a rate hike: Q1 growth was only 1.2% annualized. It is not only Q1, growth in 2016 was a paltry 1.6%. This...
Initial Reaction Today’s establishment survey was a much weaker than expected at 138,000 jobs. The establishment survey was 47,000 under the Econodsay consensus and 115,000 below the ADP projection. ADP was also wildly off the mark in March, estimating 263,000. March is now revised at 50,000. BLS revisions took away a net 66,000 jobs in March and April. The household survey was even worse. Employment fell by 233,000. What Happened? The roots of this weakness go back to the April report, for March. I discussed today’s setup on April 7, in Wild Miss in Expected Jobs: Economists Blame the Weather. Here is the pertinent snip. Today’s emp...
In the past we have discussed that some investors demand dividends. (Here is a nice post by Larry Swedroe on the topic and there are more holistic measures, such as shareholder yield, which are better predictors of future returns). A few posts we have on the topic highlight that CEOs cater to dividend demand,mutual funds “juice” the dividend yield, and examine the returns to dividend payers in payment months. These papers support the behavioral finance view of the financial marketplace. Behavioral finance experts, Samuel M. Hartzmark and David H. Solomon, have a new working paper titled, “The Dividend Disconnect,” which ex...
According to a MarketsandMarkets report, the global cloud-based ITSM industry is expected to grow 15% annually over the next five years to be worth $8.78 billion in 2021. Bellevue, Washington-based Apptio (Nasdaq: APTI), which listed last year is trying to make its mark in this industry. Apptio’s Financials Apptio was founded by Sunny Gupta, Kurt Shintaffer, and Paul McLachlan with the intention of offering a service that could help the CIOs of organizations manage the business of technology more efficiently. It soon developed a platform that integrates Cost Transparency, IT Planning, IT Benchmarking, Bill of IT, and Business Insights Sa...