News for the week of May 15-19, 2017

News for the Week of May 15 – May 19, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

Government / Political / non-Economic

 

  1. Araba gulf states have offered to take steps to improve relations with Israel if Netanyahu makes what they would consider a peace overture to the Palestinians
  2. Merkel signaled openness to changes to fortify the EU as she met with new French President Macron
  3. Ex-FBI director Mueller was named as special counsel to oversee the federal probe into Russia’s alleged interference in the US presidential election
  4. The US announced new sanctions against Iran aimed at its missile program
  5. Former Senator Lieberman is said to be the leading contender to be Trump’s pick to run the FBI
  6. NATO is considering reviving a naval command to counter Moscow’s submarine activity in the Arctic

 

 

General Markets / Economic

 

  1. Russia and Saudi Arabia sent oil prices higher with a joint statement that cuts in output should be extended into March 2018
  2. Existing home sales climbed 1.4% in the first quarter to hit their fastest pace in a decade
  3. China’s economic activity slowed in many sectors in April after a strong start to the year, a possible early sign of softness
  4. OPEC is trying harder than ever to win over big investors, but the group is finding that falling oil prices are making that a tough sell
  5. Japan’s economy picked up speed in the first three months of 2017, extending a recent stretch of growth

 

 

Company News

 

  1. Ford aims to cut about 10% of its global workforce amid CEO Fields’ drive to boost profit and the auto maker’s sliding stock price
  2. Media firms are racing to be included in new “skinny” streaming bundles as consumers ditch pay-TV at a record pace
  3. Italy put Alitalia up for sale after months of fruitless talks with unions and the airline’s shareholders

 

 

Interesting News

 

  1. US farmers are seeking to boost milk production by pampering their dairy cattle. Some ways include: using waterbeds, playing country music, backscratchers (does anybody remember the children’s book by Doreen Cronin, “Click, Clack, Moo”?!)
  2. An Austin man is suing his date for $17.31 because she was texting during their viewing of Guardians of the Galaxy Vol. 2. The man says his date’s texting was a ‘direct violation’ of the policy at the theater and that his experience was ‘adversely’ affected by it. The best part? After letting his feeling be known to her, she then left the theater and drove away, leaving the man without a ride home. The cost includes the ticket of the movie and pizza. The petition read, “while damages sought are modest, the principle is important as defendant’s behavior is a threat to civilized society”

 

 

 

 

Commentary for the Week of May 15 – May 19, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

The stock market finally took off its blinders last week to the drama in the nation’s capital. The S&P 500 suffered its steepest decline since September 9th, 2016, as phrases like obstruction of justice and impeachment moved from the fringes of liberal fantasies into mainstream discourse; however, by week’s end, the focus returned to stronger-than-expected earnings and the market pared most of its losses.

 

For months, the market has shaken off legislative setbacks for President Trump’s agenda, including multiple revisions to its health-care plan, and turned out the turmoil in the White House. But reports are that Trump allegedly tried to get former FBI Director Comey to drop a probe into a former aide’s ties to Russia followed with the swift appointment of former FBI Director Mueller as special counsel to investigate.

 

According to Brian Nick of TIAA Investment, “when this turned from legislative frustration into a possible ongoing investigation that could suck up the oxygen to get anything done in DC, any residual optimism left for tax reform or other policies to stimulate economy growth fell perilously close to zero.”

 

Moving to the microeconomic news, the weight of corporate and economic events prevailed again last week. Stronger than expected homebuilder sentiment and rising oil prices lifted stocks at the beginning of the week, while strong earnings helped the market recoup midweek losses. As earnings season ends, the focus will turn to economics. Up next week are minutes from the Federal Open Market Committee, as well as a budget proposal from the Trump administration. Expect more volatility as investors tune in to congressional hearings and possible subpoenas, says Natixis Asset Management Chief Strategist David Lafferty.

 

 

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. 

 

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. 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. NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Index performance does not include transaction costs or other fees, which will affect actual investment performance.  Individual investor’s results will vary. Commodities’ investing is generally considered speculative because of the significant potential for investment loss.  Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.  Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results.

 

To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line. 

 

 

A17-027618

News for the Week of May 8–12, 2017

News for the Week of May 8 – May 12, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

Government / Political / non-Economic

 

  1. Emmanuel Macron was elected president of France with 66.1% of the vote. The 39-year-old campaigned on promises to reform France’s economy and stem a tide of nationalism
  2. A North Korean and Chinese firm have had a joint venture since 2008, showing how easily Pyongyang has skirted sanctions
  3. The Pentagon has backed a plan to invest nearly $8B to bulk up the US’s Asia-Pacific presence
  4. Boko Haram freed 82 of the nearly 300 Nigerian schoolgirls it seized in exchange for militants. These girls have been held since 2014!
  5. Mexico rejected a report that deemed the country the world’s second deadliest conflict zone in 2016
  6. The US is beefing up join antiterrorism efforts with Turkey, in an apparent bid to calm tensions over a plan to arm Kurds
  7. President Trump fired FBI director James Comey. Quick; make illegal copies off those VHS and DVDs you rent 😉
  8. The Pentagon is pushing for over 3,000 additional US troops in Afghanistan for the fight against the Taliban and other militants
  9. Indonesia is seeking to ban a hard-line Islamist group that wants to establish a transnational caliphate
  10. Trump called on Russia and Ukraine to make peace, a day after meeting foreign ministers from both nations; spoken like my parents when my sister and I used to fight

 

 

 

General Markets / Economic

 

  1. Trading firms are exiting the US options market as volumes fall and costs rise, draining liquidity from the marketplace
  2. Indian outsourcing firms are applying for fewer US work visas as Trump tightens immigration curbs
  3. China’s exports increased for a second straight month in April, up 8% from a year earlier
  4. US import prices rose 4.1% in April from a year earlier, their fifth consecutive monthly increase
  5. The ECB said around 15% of eurozone workers are jobless or underemployed.
  6. First time buyers are rushing to purchase homes after a decade on the sidelines, which could kick the housing market into higher gear

 

 

 

Company News

 

  1. Comcast and Charter are striking a wireless deal, as the cable giant seeks a piece of the cutthroat business
  2. Coach agreed to acquire Kate Spade for $2.4B, seeking to tap younger consumers amid slower growth in the handbag market

 

 

 

Interesting News

 

  1. Dad Joke Time:
    1. A guy walks into a bar and orders a fruit punch. The bartender says, “Pal, if you want a punch you’ll have to stand in line.” The guy looks around but there is no punch line.
    2. Knock-Knock. Who’s there? Dishes. Dishes Who? Dishes Sean Connery
    3. How did the hipster burn his mouth? He ate the pizza before it was cool
    4. Some people think it’s romantic to carve their names on trees in the park while on a date. I’m more worried about why they’re bringing a knife on their date!
    5. This is my step ladder. I never knew my real ladder ☹
  2. The Penthouse Executive Club – Men’s Lounge, in New York lost a lawsuit in which they now have to pay $3.4M in taxes. They originally claimed that the strippers were in fact “therapists that liked to dance” – they lost the case!

 

 

 

 

 

Commentary for the Week of May 8 – May 12, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

A “scandal” broke out in Washington last week – firing of FBI director James Comey – but the market barely reacted;  is it safe to say it wasn’t a scandal? Some headlines continued throughout the week, even drawing comparisons of Nixon.

 

It certainly was another yawner despite the pyrotechnics in Washington. However, it wasn’t all quiet; retailers like Macy’s and Nordstrom and JC Penney all suffered double digit losses after releasing earnings, but warns Daniel Chung of Alger, “don’t blame their disappointing sales on consumer weakness. It’s the internet, not lack of consumer strength.” As if we didn’t already know this? other earnings reports, however, suggest that the economy may be stronger than it looks. 

 

The real question is all the low volatility we’ve seen lately with the VIX index (implied volatility of potion outstanding between 2 and 3 months) have fallen to near historical lows; the Dow Jones Industrial Average as well has had only four moves of 1% or more in either direction all year – the fewest since 1965! For some, extreme calm is like silence in a horror film – it means something terrible is about to happen. Not quite, says State Street Global’s Michael Arone, “volatility won’t stay this low, but it doesn’t necessarily mean it leads to a correction or a bear market!”

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. 

 

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. 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. NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Index performance does not include transaction costs or other fees, which will affect actual investment performance.  Individual investor’s results will vary. Commodities’ investing is generally considered speculative because of the significant potential for investment loss.  Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.  VIX is the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. It is a widely used measure of market risk. Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results.

 

To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line. 

 

C17-026077

 

 

News for the Week of April 17-21, 2017

News for the Week of April 17 – April 21, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 

Government / Political / non-Economic

 

  1. Russian bombers were busy “buzzing” the Alaskan shoreline last week
  2. The Navy confirmed that it didn’t send an aircraft carrier directly toward North Korea, despite representations by the WH that it was on its way. Doesn’t the Navy report to the President? How was there a miscommunication!?
    1. Fun trivia fact. The average aircraft carrier is only refilled with fuel ONCE in its entire lifespan!!
  3. Trump called for distributing more high-skilled worker visas to the highest paid applicants, a move likely to benefit tech firms
  4. Turkey’s vote on presidential powers contravened the law by changing ballot-counting rules, international observers said
  5. Clashes across Venezuela turned deadly as protesters sought to force Maduro to hold elections

 

 

General Markets / Economic

 

  1. Treasury yields resumed their steep decline as political uncertainty drove investors to buy bonds
  2. US housing starts fell in March, but not enough to signal a reversal from a long-term upswing
  3. Higher growth returned to China in the first quarter, with GDP expanding by 6.9% from the year earlier period

 

 

Company News

 

  1. Exxon applied for a waiver from sanctions on Russia as it seeks to resume its joint venture with state oil giant Rosneft 
  2. As expected, American Express reported lower earnings and revenue, hurt by the loss of its relationship with Costco
  3. Google plans to introduce an ad-blocking feature in the mobile and desktop versions of its Chrome web browser

 

 

Interesting News

 

  1. The US Air Force is dismissing a family’s claim that low-flying fighter jets scared a pet pony to death in the United Kingdom. The case has been referred to the UK Defense Ministry Office
  2. A couple from Lakeland, Florida have just set the record for the most cruises with Carnival Cruise Lines – at 200! Talk about brand loyalty. Now here was my question…will Carnival give them a free cruise, an upgraded suite? Nay! Instead, they got….wait for it, because it truly is ridiculous, bad ridiculous….a personal letter and photo opportunities with the crew. Talk about “loving your customers”
  3. Casinos in Las Vegas are now being more judgmental on whether to offer a player a free alcoholic beverage or not. I mean, first it was watered down liquor, now I have to wait until they think I’ve spent enough money to booze up!? Might as well not even gamble now!

 

 

Commentary for the Week of April 17 – April 21, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

The stock market put its recent woes behind it and broke a two-week losing streak. However, that alone was enough to cause worry as some of the market’s strength was driven by a small number of tech stocks, rekindling memories of the internet bubble. While it’s true that the 10 largest stocks in the S&P 500 accounted for 39% of the market’s gains during the first quarter of the year, according to Birinyi Associates data, it doesn’t’ have to be bad news for the overall market. Birinyi’s Laszlo Birinyi notes that there have been plenty of big gains that have been buoyed with a small number of stocks, including 1980, 1998, and 1999, when the S&P 500 posted gains of more than 19% despite the top 10 stocks being responsible for at least 40% of the move. He says, “our view is that it is another statistic that has no investment implication.”

 

The truth is more complex. Frank Gretz of Wellington Shields notes that only 25% of the stocks in the S&P 500 are above their 10-day moving average, suggesting a good portion of the market is suffering a short-term correction, perhaps explaining the queasy feeling so many investors have right now.

 

All this isn’t to say that there aren’t worries. In Washington, Treasury Secretary Steve Mnuchin talked up tax reform, which the market would love to see, but President Trump also rebooted his nationalist agenda, including the possibility of more tariffs on steel. That would be great news for US steel makers, but not so great for the rest of the market. 

 

Internationally, the markets continue to monitor the French election. Morgan Stanley’s Michael Wilson says a win by hard right candidate Jean-Luc Melenchon could cause a sizable drop in the market, while a victory by mainstream candidate Emmanuel Macron could bring a jump. Whatever happens, getting past the election will allow investors to focus on fundamentals. “we think this is the last major risk event before the summer, after which we can have the next move higher.”

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. 

 

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. Index performance does not include transaction costs or other fees, which will affect actual investment performance.  Individual investor’s results will vary. Commodities’ investing is generally considered speculative because of the significant potential for investment loss.  Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.  Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results.

 

To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line.