News for the Week of November 6-10, 2017

News for the Week of November 6– November 10, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

General Markets / Economic

                                                                                                           

·       Some banks are shedding their holding company structure as a way to ditch regulation by the Federal Reserve and lower costs

 

 

Company News

 

1.     Disney disclosed new details on coming streaming services and the Star Wars franchise as it posted declines in three core businesses

2.     Hasboro has made a takeover bid for rival Mattel

3.     The Justice Department is pressing for changes to AT&T’s proposed deal for Time Warner, raising the prospect AT&T would have to sell either Turner, which includes CNN, or DirecTV

4.     Broadcom made an unsolicited $105B bid for Qualcomm. However, Qualcomm has formally rejected the bid

5.     CVS will offer next day delivery of prescription drugs as it faces potential competition by Amazon

 

 

Interesting News

 

1.      Worried about the upcoming Robot Apocalypse? While robots may enslave us all someday, here’s a useful tip; if one of them goes berserk, a good tactic is to shut the door behind you. One after another, robots in a government sponsored contest were stumped by an unlocked door that blocked their path at an outdoor obstacle course…this is only in “Interesting News” because I read about this in the WSJ, front page!

2.      T-Mobile’s CEO has a side gig; hosting an online Cooking Leger. John Legere’s “Slow cooker Sunday” show draws millions of viewers on Facebook Live

 

 

Commentary for the Week of November 6– November 10, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

Market sentiment soured last week, snapping an eight-week equity winning streak, as the S&P 500 fell 0.1%. The driving factors of the market move were large scale mergers, pressures in the high yield market, increased uncertainty over differences between the House and Senate tax reform plans (heaven-forbid our legislative branch should decide to ever pass identical laws) and a stronger focus on next year’s mid-term elections following Democratic wins in last week’s contests.

 

At this point, we think positive equity market momentum may be cresting, but we do not see the signals necessary that would presage the end to the bull market. As such, we think volatility may be likely to rise and wouldn’t be surprised to see a market correction or consolidation before prices can sustain another prolonged increase.

 

 

 

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 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.

 

A17-059933

News for the Week of October 23-27, 2017

News for the Week of October 23 – October 27, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 

General Markets / Economic

                                                                                                           

1.     Banks are starting to pay more to keep depositors from moving their money as the strong economy pushes rates higher

2.     The Justice Department is limiting the use of gag orders when seeking information from tech companies

3.     Prime Minister Shinzō Abe said he would tackle the Japanese economy’s structural problems following his election victory

4.     The SEC signaled that the agency is pivoting away from a prosecutorial approach to enforcement

 

Company News

 

1.     Vistra and Dynegy are in advanced talks to combine, with a deal between the two Texas power firms possible as soon as next week

2.     Amazon unveiled a system that lets customers open their homes remotely for package deliveries

3.     Boeing said it may boost output to meet demand for single aisle jets

4.     Sears - you remember them, the company that used to be a popular department store – will stop selling Whirlpool appliances, following a pricing dispute

5.     CVS is in talks to buy Aetna for over $66B, as the drugstore chain scrambles to fortify itself against a health-care-industry reordering and competition from Amazon

 

Interesting News

 

1.      A Mississippi school district is backpedaling after it pulled “To Kill a Mockingbird” from its curriculum earlier this month. Now the students can read it, but need parents’ permission.  Because the book’s language “makes people uncomfortable.” I was in 8th grade once, and boy, did I use some bad words then. This just doesn’t make any sense, and the excuse is even worse.

2.      In Massachusetts, two teenagers entered a store with knives and robbed it. But, they didn’t ask to open the register, they LITERALLY just wanted a single dollar.

 

 

 

Commentary for the Week of October 23 – October 27, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 

What good is earnings season? Well for the last three months, Amazon, Alphabet (Google parent) and Facebook have quietly lagged the market as old economy stocks had double digit gains during that same time period. But then, just last Friday, those three stocks moved up on the day 13%, 4.3%, and 6.4% for Amazon, Alphabet, and Microsoft, respectively. Now it appears tech is hot again! The question is whether investors will wake up this week with a big tech hangover. But this situation isn’t all that different from tech’s June underperformance.

 

There is a theory being floated by INTL FCStone Financial strategist Vincent Deluard. According to Deluard, the Dow Jones has returned 32% over the past 12 months, with only a volatility of 7%, putting its Sharpe ratio – return to risk – at around 4.6x. In order to maintain that Sharpe ratio with a standard market volatility of 16%, Deluard says the Dow needs to be up more than 70%! Through last Thursday, this has been the least volatile October on record, going back to 1928. Ben Bowler of Bank of America says the market assumes that the world’s central banks will backstop a low risk through two factors that might change such an outlook. One would be higher inflation, which could force the Fed to take a more hawkish stance. The second would be a new Fed chief. “We need to break this psychology that shocks are good because it means an opportunity to buy the dip again and keep volatility artificially low.”

 

If tech stocks keep running, that might be easier said than done!

 

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.

 

A17-056885

News for the Week of October 16-20, 2017

News for the Week of October 16 – October 20, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

General Markets / Economic

                                                                                                           

1.     Trading volume has fallen this year even as stock indexes set records amid low volatility and the rise of passive investing

2.     Silicon Valley leaders plan to seek approval for a new stock exchange focused on long term investing

 

Company News

 

1.     Walmart is near a deal to add Lord & Taylor to its website, part of a broader effort to build an online mall to compete with Amazon

2.     GE’s chief is expected to unveil results of a global review that include thousands of job cuts and a global retrenchment

3.     The Nordstrom family suspended efforts to take the chain private after struggling to raise enough financing for a buyout

 

 

 

 

Commentary for the Week of October 16 – October 20, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

A week that could have been a nightmare instead finished like a dream. On Thursday - the 30th anniversary of Black Monday - the Dow briefly traded down more than 100 points, raising concerns of a repeat. But the market rallied back to close at a new high, and the decline became just the latest example of investors buying the dip.

 

For investors, there’s little evidence to suggest dips in the market shouldn’t be bought. Earnings have been solid, more than 70% of the 88 companies that have reported so far have topped estimates. And sales have been even better – 72% of those companies have reported better than expected revenue, well above the longer-term average of 59%.

 

Still, it took more than earnings to push the market higher last week. On Thursday night, Senate Republicans agreed to a budget framework that could allow a tax package to pass with only a majority of votes, rather than a filibuster proof 60. Michael Block of Rhino Trading Partners says, “we still say the line to tax cuts won’t be a straight one; optimism that this gets done quickly and without controversy is bubbling.”

 

But not too much optimism, as the it appears market still refuses to get too excited by anything. The Dow in fact, hasn’t gained more than 1% on any single day since September 11, and yet its managed to hit 53 new highs this year, the most since 1995.

 

 

 

 

 

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. 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.

 

C17-055301