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The Real Financial Crisis Will Be Caused By ETFs
2016 continues to be “The Year of Living Dangerously” for stock market investors. And we’re only a little more than three weeks into the New Year! So far, China has featured in most of the headlines when it comes to market risk, followed by oil prices. But there’s another risk – lurking right here in the United States – that threatens to add even more risk to an already volatile mix. We already caught a preview of this in 2015 – the very real potential risk caused by ETFs. History Lesson Before I delve into the current risks, I want to remind investors about a time when untested financial innovations added to a financial crisis... -
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Amazon Is Taking Over The Globe, And Retailers Should Panic!
By most accounts, holiday retail sales were a letdown. While retail sales climbed 3.3% over November and December, stores reported a 6.4% drop in foot traffic. So even though people might have spent a bit more, they were choosy in where they spent. When customers spend less, companies earn less, affecting the bottom line. This relationship is on display at companies like Macy’s, which warned that sales were off 4.7% in November and December. The company plans to close stores and lay off thousands of workers. The same story is unfolding at Gap. However, the pain isn’t equally distributed. L Brands Inc. – owner of Victoria’s Secret and ... -
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Stocks, The Economy And The Money Supply – What To Watch
The Stock Market and Economic Data In previous articles we have occasionally discussed the interaction between economic indicators and the stock market. Among the topics we have touched upon: for one thing, the capitalization-weighted indexes can hardly be called “leading indicators” of the economy anymore. In fact, if one studies specific major turning points over the past two decades or so, it is clear that the market seems to “know” very little (at least not in advance). The impression one gets is actually that the major indexes are acting like coincident rather than leading indicators of the economy. However, the market is no... -
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Russia Feels The Chill Of Cheaper Oil
Russia is blessed with significant oil and gas reserves which it can export to the rest of the world for hard currency. It is the largest producer of crude oil and the second largest producer of natural gas; unsurprisingly, oil and gas contribute more than half of the nation’s budget revenue. The price of crude oil has collapsed from $125 to roughly $30 since March 2011, with a decline from $114 since the summer of 2014. In parallel, the Rouble has collapsed from 35 to the Dollar in June 2014 to 79 currently. The upside of this is that oil and gas are priced in Dollars, but it does not cover the extent of the collapse in the oil price, of c... -
Finance 0
Great Graphic: Possible Head And Shoulders Bottom In Aussie
This Great Graphic, composed on Bloomberg shows a potential head and shoulders bottom pattern in the Australian dollar. The left shoulder was set in the first part of the month near $0.6930. The head was carved out in four sessions around the middle of the month a cent lower. The right shoulder was created over the past two days, with yesterday’s spike to $0.6920, before staging an impressive recovery. We drew the neckline near $0.7050. The pattern is a little more than two cents (from head to neckline). The minimum measuring objective is found by flipping the pattern over, or around $0.7250. This seems a bit of a stretch at this ... -
Finance 0
Boeing Stock Tumbles After Drop In Revenue, Cash Flow; Huge Cut To Guidance
It must have been scary for Boeing (BA) for those few months in which the all important Ex-Im bank was taken offline. The result: moments ago BA announced Q4 earnings which while beating expectations (which were sharply lowered in recent months) of $1.27, were still a 31% drop compared to Q4 of last year, driven by a 4% drop in the top line, leading to a substantial decline in gross profit from $3.8 billion to just 2.9 billion, and a whopping 38% plunge in operating cash flow to just $3.1 billion (and $2.5 biliion in FCF). The sharp decline took place even as Boeing benefited generously from America’s numerous wars around the globe, lea... -
Finance 0
Which Energy Companies Are Being Added To US Global Funds In Anticipation Of An Oil Rebalance?
TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. There are still winners in the energy space, but you have to move quickly. In advance of the rebalance U.S. Global Investors CEO Frank Holmes is expecting toward the end of 2016, he and analyst Samuel Pelaez point to the sectors taking advantage of opportunities, including refiners, midstream MLPs, low-cost producers, airlines and chemical companies. In this interview with The Energy Report, they name their favorites and outline the fundamentals that will make 2016 look a lot different than the ... -
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Best Practices For Consuming Business-Cycle Analysis
Recession chatter is on the rise… again. And for an obvious reason: there are fresh signs of weakness in several key indicators. But there’s also ample evidence of strength, at least for the moment. How can we separate the signal from the noise? Carefully, methodically, and with a healthy dose of skepticism when we’re told that a single number marks the tipping point. Let’s dig slightly deeper into these guidelines via a summary of best practices for analyzing the mother of all known risk factors. 1. Refrain from cherry-picking the data points. There’s a habit of focusing on the latest update and drawing conclusions, for good or il... -
Finance 0
Morning Call For January 27, 2016
OVERNIGHT MARKETS AND NEWS March E-mini S&Ps (ESH16 -0.51%) are down -0.67% and European stocks are down -1.04% as technology stocks slide, led by a 3% decline in Apple in pre-market trading, after it reported fewer-than-expected iPhones sold in Q1 and forecast a smaller-than-expected increase in Q2 revenue. The fall in China’s Shanghai Composite to a 13-3/4 month low is also negative for stocks as is the -3.59% decline in crude oil prices that is undercutting energy producing stocks. The markets will be on edge ahead of the post-FOMC meeting statement later this afternoon. Asian stocks settled mixed: Japan +2.72%, Hong Kong ... -
Finance 0
Investment Advice From Seinfeld
“If every instinct you have is wrong, then the opposite would have to be right,” Jerry Seinfeld once mused to his friend, George Costanza, who was putting this thesis to the test. After ordering the “complete opposite” of his usual lunch, George approached an attractive woman whom he would never have talked to on any other day. Instead of a suave pickup line, he blurted out, “My name is George. I’m unemployed and I live with my parents.” It worked. George landed a date, and doing “the opposite” ultimately got him a job with the New York Yankees. Hilarious exchanges and amusing plots like these are what made Seinfeld one of...
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