[Warning: sarcasm ahead] Do you know what I’m sick of? Well, let me tell you. I’m so sick of hearing about how ETFs are actually derivatives, how there’s an inherent liquidity mismatch problem, how a well-behaved NAV basis in normal market conditions doesn’t really say much because critics are concerned with market conditions that aren’t normal, how the morning of August 24, 2015 clearly showed that the model doesn’t function well when stress tested, and how ETFs are, in general, the latest example of financial weapons of mass destruction. All of those criticisms are misguided because ETFs are exactly what every retail investor an...
GBP/USD rallied hard on the elections announcement (see five reasons). After hitting a swing high of 1.2905, the pair went into consolidation mode. What’s next? Here are two levels: Here is their view, courtesy of eFXnews: GBP: Bounce More Than Just A Position Squeeze; Towards 1.30-135 Range – BTMU BTMU FX Strategy Research argues that the GBP bounce in reaction to the UK snap elections will prove more sustainable and is more than just a position squeeze in a continued GBP bear market. In particular, BTMU argues that this decision will in fact shift the markets’ focus away from the probability of a ‘Hard Brexit’ and an easing of th...
Several media organizations blasted President Trump last week for his about-face regarding NATO. During his presidential campaign, Trump called NATO’s military presence “obsolete.” But last Wednesday, Trump held a press conference with NATO Secretary General Jens Stoltenberg, where he called the organization a “bulwark of international peace and security.” “I said it was obsolete. It’s no longer obsolete,” said Trump. Coming from Trump, that essentially amounts to a love letter to NATO. He even altered his stance on Russia. Amid concerns regarding Russia’s backing of Syrian President Bashar al-Assad, Trump admitted that “w...
Corelabs (CLB) reports quarterly earnings after-hours today. Analysts expect revenue of $150.57 million and eps of $0.39. The revenue estimate implies 1% growth sequentially. Investors should focus on the following key items: Top Line Growth Animal spirits returned to the oil patch in Q3 2016. When OPEC followed through on promised supply cuts in Q4, it only amplified the bullishness in energy-related names like CLB. The rise in oil prices into the mid-$50s has increased North America shale drilling. The U.S. rig count stands at 683 — the highest it has been in nearly two years. That bodes well for the company’s Production Enhance...
Some movies beg to be one and done. No sequel. No Part II. No Redux. 1981’s smash hit Arthur is a classic example of what happens when well is not left alone. There was never going to be a way to replicate the hilarity born of sublime scripting and delivery to say nothing of the perfectly unconventional combination of casting and direction. Upon reflection, the only question is what sort of prig it takes to award the movie anything but five full stars – Amazon has it as 4.5 stars. (We’ll leave that one for another day, but you know who you are and you clearly need to get out more.) Who, after all, could fault Dudley Moore’s best mo...
Introduction In all likelihood, Brexit is coming. What will its effects be and what countries will be injured the most? It clearly “depends.” While it is apparent that the UK would like trade linkages to remain the same, numerous Economic Union (EU) members have been piqued by Brexit and want to strip away some of the UK’s trade benefits. At least they do as a starting point for negotiations. Below, the benefits and costs of a breakup are examined. So Far Initially, the sense was that Brexit would weaken Britain. This resulted in a weaker Pound: down nine percent against the Euro and twelve percent against the Dollar. And as a result,...
Photo Credit: Lars Plougmann/Flickr.com According to a recent MarketsandMarkets report, the global video streaming market is estimated to grow from $30.29 billion in 2016 to $70.05 billion in 2021. That translates to an annualized growth rate of 18% over the five-year period. Netflix (Nasdaq: NFLX) is already delivering more than the industry’s growth rate in its revenue growth. But things may not look all that rosy in the future. Netflix’s Financials Netflix’s Q1 revenues grew 35% over the year to $2.64 billion, in line with the Street’s forecast for the quarter. EPS of $0.40 was better than the market’s projections of $0.37 for ...
The aging of the Baby Boomers is not something that caught economists completely by surprise. That generation has been the subject of (academic) study going back to the surge in birth rates right after World War II. In economic terms, the challenges presented by the prospective retirement years for this cohort has been anticipated to some degree all along, particularly as the 20th century from which the demographics were born ended. In November 2006, the Bureau of Labor Statistics in its Monthly Review magazine published a lengthy study that sought to quantify these aspects. Of specific interest was, since this was a BLS publication, any ...
There’s a lot of concern these days about shrinkage. No, not Seinfeld shrinkage. We’re talking about Federal Reserve Balance Sheet shrinkage and how the Fed might go about reducing the size of its balance sheet. When the Fed started expanding their balance sheet in 2008 during the financial crisis there was a great deal of outcry and misinformation floating around. I wrote about 10 billion posts on this trying to clear up the misunderstandings. Let’s review the basics in case you missed it: During the financial crisis the Fed expanded its balance sheet to help stabilize the economy. They do this in the same manner that all banks expand...
Is there any doubt the S&P 500 Index is the most popular investing index in the world? As you probably know, the SPDR S&P 500 ETF (SPY) is the largest ETF on the planet, with $240 billion in assets. However, you may not be aware that the same index is targeted by the second largest ETF, the iShares Core S&P 500 ETF (IVV). In March, the assets in IVV grew to $102 billion, making it only the second ETF to cross the elusive $100 billion threshold. In the ETF world, where transactions take place on a stock exchange, there is really no need to have multiple ETFs targeting the same index. An exception might be when expense ratios are hi...