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  • Finance 0

    Why I Prefer Startups To Stocks

    Benjamin Graham, widely considered the father of value investing, once said, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” In other words, over short periods, markets tend to move irrationally along with market psychology. But over longer market cycles (at least 10 to 12 years), fundamentals are ultimately what matter. Since 1996, the U.S. stock markets have acted almost entirely like voting machines. Only during brief bear markets and corrections do they seem to act like weighing machines. The chart below shows the average price-to-earnings ratio of the S&P 500 since 1970. Source: ...
    On June 2, 2017 / By
  • Finance 0

    Chart: Where Is Global Growth Happening?

    According to forecasts from earlier this year by the World Bank, the global economy is expected to average a Real GDP growth rate of 2.8% between 2017-2019. But where will this growth actually happen? Is it in giant countries that are growing at a stable 2% clip, or is it occurring in the smaller emerging markets where 8% growth is not uncommon? Today’s chart looks at individual countries between 2017-2019, based on their individual growth projections from the World Bank, to see where new wealth is being created. China Still Tops Even though growth has slowed in China somewhat, the World Bank still estimates its economy to expand at a 6.5% ...
    On June 2, 2017 / By
  • Finance 0

    RBC Warns Equity Markets Have Entered The ‘FOMO’ Stage

    It’s risk-parity heaven right now, notes RBC’s head of cross-asset strategy Charlie McElligott, with global equities (developed and EM) AND fixed-income all continuing their torrid rallies, but McElligott warns this is a classic “from worst to first” PM-grabbing into a new “Fear Of Missing Out” stage of the equities-rally. Bonds remain well-bid on account of the ongoing ‘slowing into tightening’ narrative, with commodities being the only asset class (outside of volatility, of course) that is lower overnight as a ‘signal’ for the lower bond yields.This continues to be “falling inflation expectations”...
    On June 2, 2017 / By
  • Finance 0

    Economic Data Calls For June 5, 2017

    Here’s what we are looking for in Monday’s economic reports (June 5, 2017). 1. AU PMI Services (19:30 NY Time) — Bearish AUD — Potential for downside surprise given Sharp drop in PMI Mfg. 2. CH Caixin PMI Services and Composite PMI (21:45 NY Time) — No Trade — Chinese data is hard to predict but will be very market moving 3. UK Services and Composite PMI (4:30 NY Time) — Bearish GBP — Potential for downside surprise given drop in PMI Mfg. but rise in GfK 4. US Services PMI, Composite PMI, ISM Non-Manufacturing Composite, Factory and Durable Goods Orders (9:45 and 10:00 NY Time) – No Trade — Drop...
    On June 2, 2017 / By
  • Finance 0

    Ray Of Hope

    I’m starting to see a few rays of hope from various measures of breadth that could provide the fuel for a broad based rally. The first comes from the Russell 2000 Index (RUT). It finally looks like it wants to play catch up with the other major indexes. Another indicator that is showing some strength is the NYSE Cumulative Advance / Decline line (NYAD). It has broken higher with the market this week. One last small ray of hope comes from the ratio between SPX and SPX Equal Weight. It turned up this week. If it can continue to rise it will help the market rise as money moves into large caps (and away from mega caps). Unfortunately, there i...
    On June 2, 2017 / By
  • Finance 0

    Tanger Factory Outlet Centers: A Beaten-Down, High-Yield REIT Paying Safe Dividends

    Real Estate Investment Trusts (REITs) are an appealing way for income investors to benefit from rental properties without any of the liquidity or landlord hassles that come with actually owning physical properties. Many REITs are generally far less volatile than the rest of the stock market as well, making certain REITs a reasonable way to help you live off dividends during retirement. Tanger Factory Outlet Centers (SKT) is arguably one of the highest quality retail REITs in America. However, SKT’s stock has slumped by nearly 40% since mid-2016 and now offers a 5.2% yield. With a 24-year dividend growth streak and a healthy outlook for con...
    On June 2, 2017 / By
  • Finance 0

    Emerging Markets: What Has Changed Lately

    (from my colleague Dr. Win Thin) The Indonesian cabinet is discussing revisions to the 2017 state budget. The Thai central bank plans to reform some FX rules. South African President Zuma survived the no confidence vote within his own ANC. Brazil’s central bank signaled a slower pace of easing ahead after it cut 100 bp again. Moody’s cut the outlook on Brazil’s Ba2 rating from stable to negative. In the EM equity space as measured by MSCI, Egypt (+4.7%), Hong Kong (+2.2%), and Hungary (+1.9%) have outperformed this week, while Russia (-3.2%), South Africa (-3.2%), and Brazil (-2.5%) have underperformed.  To put this in better context, ...
    On June 2, 2017 / By
  • Finance 0

    The U.S. Economy: Are Bonds Or Stocks Telling The True Story?

    On the heels of this mornings employment report indicating jobs creation below even the most pessimistic economist forecast along with revisions lower to the prior months, why are the bond and stock markets telling two such very different stories? This morning at 8:30AM the Employment Report was released by the U.S. Bureau of Labor Statistics showing new jobs creation of +138,000 along with a downward revisions to the jobs created in prior months. Therefore, one needs to ask the following: Is the euphoria over the future of the U.S. economy post-Trump election, the one that has the three major stock indexes at all-time highs correct and war...
    On June 2, 2017 / By
  • Finance 0

    Tesla Options Tracker – June 2

    The Tesla Options Tracker is a snapshot of all the TSLA options info that you need to know. What’s hot today in the name that everyone loves (or loves to hate)? Read on to find out… Today’s Hot $TSLA Strikes (as of 12pm Central) TSLA Jun 2 342.5 C Volume: 10,644 TSLA Jun 2 340.0 P Volume: 10,493 TSLA Jun 2 340.0 C Volume: 10,435  TSLA Jun 2 335.0 P Volume: 8,317  TSLA Jun 2 337.5 P Volume: 7,161 Largest TSLA Open Interest Positions 26,478: TSLA Jan19 50.0 P 16,934: TSLA Jan18 100.0 P 14,293: TSLA Jan18 50.0 P 14,034:  TSLA Jan18 200.0 P 12,703 TSLA Jun 2nd 330.0 P TESLA OPTIONS STATS (as of 12pm Central) TSLA ADV: 157k To...
    On June 2, 2017 / By
  • Finance 0

    US Stock Market – A Rare Red Flag Waving

    I stated many times that it is very hard, or even impossible, to predict the stock market. However, sometimes Mr. Market delivers quite clear indications that something different is in the making. Let me take the US stock market. Here is the chart showing the so-called NAAIM Exposure index:   source: NAAIM According to the NAAIM: “The NAAIM Exposure Index represents the average exposure to US Equity markets reported by our members” It looks like most recently American investment managers are a little bit less bullish on US stocks than before (despite the index printing new historic highs). Additionally, the red arrow depicts th...
    On June 2, 2017 / By