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Forex Weekly Outlook – June 5-9 2017
The US dollar was on the back burner throughout most of the week as data remained mixed and speculation about the Fed decision mounts. A rate decision in Australia, the ECB’s critical decision and the UK elections stand out in the first full week of June. Here are the highlights for the upcoming week. Fed members sent mixed messages. It seems that they are trapped in the expectations they created for a June hike, but they may make it a “dovish hike”. Their favorite inflation figure continued falling. In the UK, some opinion polls showed a tightening of the race, causing the pound to slide. But not all polls are equal and the only one ... -
Finance 0
Sabine Royalty Trust: Quality Assets Fuel 5% Dividend Yield With Potential For Growth
Sabine Royalty Trust (SBR) fared relatively well in 2016. It suffered right alongside the other royalty trusts, but Sabine maintained a high dividend payout thanks to the resilience of its quality assets. Sabine is on the high dividend stocks list thanks to its substantial dividend yield. You can see the full list of established 5%+ yielding stocks by clicking here. Sabine pays dividends on a monthly schedule, which gives investors the ability to compound their dividends more frequently than the traditional quarterly schedule. There are only 21 stocks that pay monthly dividends. You can see the entire list of monthly dividend payers here. ... -
Finance 0
NFP Reaction: Mediocre Jobs Report Unlikely To Derail June Hike, But Raises Yellow Flags
As we noted earlier this week, a Fed rate hike in less than two weeks’ time was basically a “done deal” heading into today’s Non-Farm Payrolls report (see “Sector showcase: The utility of utilities for handicapping the Fed” for more). When the jobs figures were released, at least a few traders had to reevaluate that outlook. On a headline basis, the US economy added “only” 138k jobs in May, below expectations of about a 180k gain. Adding insult to injury, 66k jobs were revised away from the previous two months’ reports, meaning that the US economy has generated 100k fewer jobs over the ... -
Finance 0
Non-Farm Friday June 2: Is America Working?
Unemployment is LOW! As noted in the Fed’s Beige Book (which we discussed in Wednesday’s Live Trading Webinar), low unemployment is restraining growth due to a lack of qualified applicants. Low immigration isn’t helping either – to the point of crops rotting in the fields due to lack of laborers. The Fed is becoming very concerned about rising wage pressure, which can quickly eat into Corporate Profit Margins – especially when they are still having trouble pushing price increases through to the consumers. The ever-weakening Dollar means the workers have less buying power with the Dollar falling 6% since Trump to... -
Finance 0
Return On Gross Invested Capital (ROGIC): Explanation & Examples
Return on invested capital (ROIC) is not only the most intuitive measure of corporate performance, but it is also the best. It measures how much profit a company generates for every dollar invested in the company. Return on gross invested capital (ROGIC) (seen in Figure 1) provides additional insights into the profitability of highly-capital intensive businesses. Depreciation policies may differ from firm to firm and can have a significant impact on both NOPAT and invested capital. ROGIC helps to minimize the impact of different depreciation policies and asset write-down policies. Properly calculating ROIC, the primary driver of stock pri... -
Finance 0
US Jobs Market: Much Worse Than Official Data Suggests
I am out of commission today following a small surgery, so I want to thank my new friends at Morningside Hill Capital Management for standing in for me with today’s posting. The question over the strength of today’s job market is key to understanding the durability of the economy and the markets going forward. Pavel Velkov, CFA, and the entire team at Morningside Hill, take a deep dive into the statistics to get down to the startling conclusion. “The US jobs market has been described as the backbone of the recovery – 82 months of continuous jobs growth with unemployment hitting 4.5% – the lowest since 2007.However, the perceived st... -
Finance 0
People Not In Labor Force Soar By 608,000
While the payrolls report (and wage gains) was an unmitigated disaster for anyone seeking “evidence” of an economic rebound (i.e., the Federal Reserve), there was some good news in the Unemployment rate which declined from 4.4% to 4.3%, the lowest going back to 2001. There is just one problem with the above “silver lining”: the unemployment rate declined for all the wrong reasons, because contrary to expectations, the Household Survey reported that the number of employed Americans actually declined by 233K to 152.923 million, the lowest going back to February. So how could the unemployment rate decline as the number of... -
Finance 0
Drop In The Us Unemployment Rate Not Sufficient To Mask Disappointing Report
The US unemployment rate unexpectedly fell to 4.3%, a new multi-year low, but it is a misleading optic for what is a disappointing report. It is likely not weak enough to put much doubt into expectations for a Fed hike later this month, but it will reinforce the caution in the Beige Book and in recent comments from some Fed officials. Besides the decline in the unemployment rate, and a further decline in the under-employment rate (U-6) from 8.6% to 8.4%, there is little positive in today’s report. Non-farm payroll growth fell to 138k, nearly 50k below median expectations, which like our own, had been bolstered by the weekly jobs... -
Finance 0
Hugoton Royalty Trust: A 6% Yielding Bet On Oil And Gas Prices
Royalty trusts can be a good place to look for investors focused primarily on high dividend yields. And, many royalty trusts pay dividends each month. Hugoton Royalty Trust (HGT) is no exception – the company has a high dividend yield of 6.4% using its trailing twelve month dividends. You can see the full list of established 5%+ yielding stocks by clicking here. In addition, It pays a monthly dividend which allows investors to compound their dividends more frequently than quarterly or semi-annual dividends. Monthly dividend stocks are a rare breed. There are currently just 21 stocks that make monthly dividend payouts. You can see the enti...
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