News for the Week of January 8-12, 2018

News for the Week of January 8 – January 12, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

General Markets / Economic

                                                                                                           

1.     The 10-year inflation break-even rate settled at 2.027%, its highest level in months, highlighting investors’ renewed economic enthusiasm

2.     China reported a record annual trade surplus with the US for last year

3.     The ECB indicated it might move sooner than investors had expected to phase out its bond-buying program

4.     Chinese passenger-car sales grew at their slowest pace in at least 15 years.

5.     Corporate boards are seeking greater insight into cybersecurity risks in the aftermath of the recent breach at Equifax

6.     Chinese authorities ordered the closing of operations that create a large share of the world’s bitcoin supply, tightening a clampdown

 

 

Company News

 

1.     GoPro will slash its workforce and exit the drone market

2.     Facebook and Xiaomi are teaming up to launch a virtual-reality headset in China

3.     Pfizer said it would stop trying to discover new drugs for Alzheimer’s and Parkinson’s

4.     Celgene agreed to buy cancer biotechnology concern Impact Biomedicines for as much as $7B

5.     Facebook is overhauling the way it presents news and information on its platform, as the firm struggles to address criticisms about content

6.     Xerox is in talks to potentially do a major deal with Japan’s FujiFilm, as the US document pioneer struggles to reinvent itself

 

 

 

 

 

Commentary for the Week of January 8 – January 12, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 

Stocks have started the year with a nearly uninterrupted run – one that has us imagining just how high the market can go. The S&P 500 has now gained 4.2% in just two weeks of trading, a pace that would have it triple by the end of the year.

 

But how high could the S&P 500 really go? Well, according to earnings reports from last week, numbers seem very positive, especially with an added boost from tax cuts.

 

RBC Capital Markets strategist Lori Calvasina argues that with the benefit of tax reform, the aggregate earnings per share of the benchmark could grow 17% in 2018…I’m calmly bullish.”

 

Investors for their part, are just plain bullish. The American Association of Individual Investors survey showed that 48.7% of respondents use that word to describe themselves, a big drop from the previous week’s 59.8%, but still well above the historical average of 38.5%. And that optimism may be translating into action.

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. All opinions are as of this date and are subject to change without notice.

 

This information is not a complete description of the securities, markets, or developments discussed and has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.

 

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.  Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

 

To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line. The information contained within this commercial email has been obtained from sources considered reliable, but we do not guarantee the foregoing material is accurate or complete.

News for the Week of January 2-5, 2018

News for the Week of January 2 to January 5, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

Happy New Year!!

 

General Markets / Economic

                                                                                                           

1.     The unemployment rate in some metro areas stands near or even below 3%, and the tighter labor market is leading firms to raise pay to attract employees

·       It should also lead to the Fed raising rates, quickly; 3% unemployment is well below “full employment”, this is not good from a macro-economic standpoint

2.     Speaking of, Fed officials in December debated whether looming tax cuts might require them to raise rates more aggressively in 2018

3.     France’s minister for economy and finance said Paris is looking to China and Russia to act as a counter-weight to trade relations with the US and Britain

4.     EU antitrust regulators are taking a hard look at how companies stockpile and use so-called big data

 

 

Company News

 

1.     The parents of Sears and Kmart hasn’t run paid national television commercials since late November

2.      PricewaterhouseCoopers (PwC) was found negligent in connection with one of the biggest bank failures of the financial bank failures of the financial crisis, a federal judge ruled

 

 

Interesting News

 

1.      Bad news coffee drinkers. Fancy coffee shops are saying it is over for the “pour over,” the type of coffee maker where you pour hot water into a paper containing coffee grounds (sorry, I don’t really drink coffee too frequently)

2.      Super interesting. There is a new “Sport”; it’s slow smoking cigars and there are rules. You can’t speak for the first 5 minutes, you only have one chance to light the cigar for a total of 1 minute, you cannot ash for the first 30minutes.  Super interesting!

3.      Speaking of sports, a new study is highlighting that e-sports – literally video gaming – players are earning up to $1M a year and completely baffling parents. It also baffles me!

 

 

 

 

Commentary for the Week of January 2 to January 5, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

Last week made for an amazing beginning to the year as the major indexes were all up at least 2%. “I get the sense that people are starting to worry they’re missing out on something,” says Greg Woodard of Manning & Napier.

 

Even a tepid jobs report on Friday couldn’t stop the market’s rally. In fact, it fueled it. Never mind that the US economy added just 148,000 jobs in December, fewer than the 190,000 that had been predicted. It ended up being another Goldilocks report – strong enough to suggest that the economy continues to grow, weak enough not to have to worry about the Federal Reserve quickening its pace of rate hikes.

 

Still, it’s hard not to wonder if sentiment is getting a touch frothy. Leuthold Group CIO Doug Ramsey notes that bulls dominated the Investors Intelligence Sentiment Survey in 2017, averaging 77% over the course of the year. That’s the second highest 12-month average on record and only the 10th above 70%. But reading that high haven’t been great for future returns, with the S&P 500 averaging a decline of 0.2% in the following year. “A sentiment indicator with one of the longest histories already suggests investors could be disappointed in 2018,” Ramsey says.

 

And with all the recent upside, it’s easy to forget just what a selloff can look like. The S&P 500 has now gone 385 trading days without falling 5% or more from its 52-week high. According to Jason Goepfert of Sundial Capital notes, when those streaks end, the market drops and average of 8.7% over the next 30 to 40 days.

 

Let’s hope for the best!

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. All opinions are as of this date and are subject to change without notice.

 

This information is not a complete description of the securities, markets, or developments discussed and has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.

 

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.  Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

 

To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line. The information contained within this commercial email has been obtained from sources considered reliable, but we do not guarantee the foregoing material is accurate or complete.