The Washington Post ran a piece on the dispute in France over weakening labor protections for workers. The piece told readers the law removing protections (such as weakening rules on the 35-hour workweek) is: “an attempt to combat unemployment — an issue all over Europe that is especially acute in France, where the rate has stubbornly lingered over 10 percent for some time now, just below its high in the mid-1990s.” It is far from obvious that weakening protections will be an effective way to reduce unemployment. The most obvious reason that France has high unemployment today is weak demand as a result of the austerity policie...
In yet another paradoxical move that will leave many scratching their heads, just days after throwing in the towel on its bullish dollar call (now that it expects far less rate hikes over the next year), Goldman moments ago announced that it is also cutting back on its longer-term oil price forecasts (which paradoxically are linked to a stronger dollar) for the coming year, as a result of a rebalancing that is taking far longer to take place than previously anticipated. This is how Goldman explains its bearish pivot on crude: The inflection phase of the oil market continues to deliver its share of surprises, with low prices driving disrupti...
This week we’ll begin with our monthly and weekly forecasts of the currency pairs worth watching. The first part of our forecast is based upon our research of the past 11 years of Forex prices, which show that the following methodologies have all produced profitable results: Trading the two currencies that are trending the most strongly over the past 3 months. Assuming that trends are usually ready to reverse after 12 months. Trading against very strong counter-trend movements by currency pairs made during the previous week. Buying currencies with high interest rates and selling currencies with low interest rates. Let’s take a look...
(from my colleague Dr. Win Thin) EM ended last week on a soft note, and that weakness seems likely to carry over into this week. Dollar sentiment turned more positive after firm retail sales data on Friday, though US rates markets have yet to reflect any increase in Fed tightening expectations. Over the weekend, China reported weaker than expected April IP, retail sales, and fixed asset investment. This continues a string of weak data for the month, and will undercut notions that the world’s second largest economy is stabilizing. Country-specific risks remain in play. Brazil markets are showing some “buy the rumor, sell the fact” price ...
Sometimes we forget the basics. In our video series, there’s a lesson called “The Secret to Consistent 20-40% Annual Returns on Stocks” and I hope you’ve seen it. Although the low implied volatility of the market has made it a rough year for option selling, we were still able to scratch out just over 40% profits in four months in our paired Long-Term and Short-Term Portfolios. Our other virtual portfolios are also performing very well with the Options Opportunity Portfolio up over 30% in 2016 and, surprisingly, our very conservative Butterfly Portfolio is up over 60% due to some not very conservative bullish adjus...
Freight shipments by truck and rail in the US fell 4.9% in April from the beaten-down levels of April 2015, according to the Cass Transportation Index, released on Friday. Recession Watch: Freight Volume Drops, Worst Level since 2010...
Photo Credit: GotCredit This is another piece in the irregular Simple Stuff series, which is an attempt to make complex topics simple. Today’s topic is: What is risk? Here is my simple definition of risk: Risk is the probability that an entity will not meet its goals, and the degree of pain it will go through depending on how much it missed the goals. There are several good things about this definition: Note that the word “money” is not mentioned. As such, it can cover a wide number of situations. It is individual. The same size of a miss of a goal for one person may cause him to go broke, while another just has to miss a vacation. ...
Sapiens International (SPNS) is one of a handful of names that recently showed up as I screened for positive EPS, Revenue and Margin trends. The $577.8M provider of software solutions across the insurance industry is an interesting niche value for growth stock. Sapiens has 1,700 employees and 190 customers with 34% exposure to the US, 24% UK, 16% Israel, 15% Europe and 11% APAC, and has posted revenue CAGR of 16% 2011-2015. SPNS has recently pivoted to next generation insurance & technology solutions and is expanding to financial services. Currently, 80% of its business is insurance software for Claims, Benefits, Policy, and Billing...
The US dollar enjoyed a few positive figures and the tables have turned in its favor. Is there more room to the upside? Here is their view, courtesy of eFXnews: The Fed’s Rosengren said last night that the market is ‘too pessimistic’ about the US economy and the likelihood of the central bank removing accommodation is higher than currently priced in. We agree. To us, it appears that a significant part of the negative growth surprises in the US in recent quarters can be explained by lagged effects from the strong USD filtering through to the IP/export cycle. (See Chart 1). As the USD has weakened, this could support the US economy i...