News for the Week of August 29 - September 2, 2016

News for the Week of 08/29/2016 – 09/02/2016

 

by David Abuaf, CFA

Investment Manager, RJFS

 

Government / Political / non-Economic

 

1.     Health plan choices are shrinking, with nearly a third of US counties likely to offer just a single insurer on ACA exchanges next year. Of course, by then Obama will be out of office

2.     Spain’s leader won the backing of a centrist party in return for agreeing to anticorruption measures

3.     Merkel urged EU nations to reconsider refugee bans as a poll showed support for the German leader slipping

4.     Singapore authorities said they identified 41 cases of Zika virus infection that were transmitted locally

5.     Clinton aide Abedin is separating from her husband, former Rep. Weiner, after he was again hit by a sexting scandal. Far be it from me to tell others how to live their marriage; however, Weiner, seriously, again? Maybe try emailing your mistresses instead, change the game man! That said, he does have nice abs.

6.     The EU demanded that Ireland recoup roughly $14.5B of unpaid taxes from Apple

7.     Trump plans a quick trip Wednesday to meet with Mexico’s president before the nominee is scheduled to give a speech on immigration

8.     Migration to Greece has risen this month despite an EU strategy aimed at deterring refugees

9.     Brazil’s Senate voted to oust Rousseff after an impeachment trial that she called a coup – she’s learning from Erdogan!

 

 

General Markets / Economic

 

1.     A flood of IPOs is expected after the Labor Day holiday, but the market rebound might be brief amid pre-election uncertainty

2.     Fed officials are turning a cold shoulder to negative rates, saying they aren’t needed as the US economy and job market improve

3.     China’s industrial sector showed signs of strength last month, but economists expect the pickup to fade

4.     Nigeria entered its first technical recession since 2004

5.     African Americans in the US lag far behind other groups in business ownership, but there are signs the gap is starting to narrow

6.     The FAA is ratcheting up safety standard for lithium batteries on aircraft

7.     The US is on track to post the longest stretch of falling food prices since 1960. Does anyone see the significance of this as it relates to the Fed? Email Ann your answer.

8.     The IMF signaled another downgrade in its global growth forecast, warning of protectionism and weak trade and investment

9.     Factory activity fell in August, a sign of weak business spending and an uncertain global outlook

10.  The pace of auto sales in the US decelerated sharply in August, with deliveries falling 4.2%

 

 

Company News

 

1.     Glaxo is betting on a new two drug regimen to treat HIV

2.     Two ex-HP employees filed a lawsuit alleging age discrimination

3.     Mondelez dropped its pursuit of Hersey after the chocolate maker rebuffed a new offer and indicated it would be difficult to strike a deal before next year

4.     French telecom Orange has entered preliminary discussions on acquiring a stake in Iran’s largest cellular operator

5.     Amazon and Wells Fargo said their student-loan partnership has ended, six weeks after it was announced!

6.     Mylan said it would offer a half-priced generic version of EpiPen following criticism of price increases for the allergy drug

7.     Google is taking on Uber with a San Francisco ride-sharing service to help commuters join carpools

8.     Canadian fertilizer firms Agrium and Potash are in preliminary talks about a possible merger of equals

 

 

Interesting News

 

1.     According to a new study, teenage pregnancy prevention programs which use “magic dolls,” to stimulate the needs of a new baby do not actually work. I wonder how long it took to perform that study?

2.     As the population of wild horses grow, equestrian family planners are taking aim and shooting wild horses with birth control darts

3.     Lawmakers in Massachusetts are considering moving the state into a new time zone to extend winter daylight afternoon hours. Boston is so far east that the sun may set shortly after 4pm in December.

4.     Germany is considering a change to its paternity law that would force the mother to name any man “who has lain with her during the conception period” – because DNA doesn’t work the same in Germany

5.     In Iceland this week, road workers were told to uncover a rock they’d buried…in order to appease angry elves

 

 

 

Commentary for the Week of 08/29/2016 – 09/02/2016

 

by David Abuaf, CFA

Investment Manager, RJFS

 

Chart via The Wall Street Journal

Chart via The Wall Street Journal

 

All signs last week pointed to a hobbled US economic recovery and lower interest rates for longer. Stocks basked in the mediocrity, with each of the three major indices up at least 0.5%. However, trading was light as the volume on the New York Stock exchange was the weakest of the year on Monday.

 

Data released last week showed that job growth limped forward in August, manufacturing unexpectedly contracted, and inflation stayed muted. Strategists and economists agreed that the new data undercuts the case for a September rate hike by the Federal Reserve. Inflation data gave investors more confidence that the Fed will hold off. A report on personal consumption expenditures indicated that inflation had stayed steady at a core annual rate of 1.6%, still below the Fed’s target.

 

That said, investors do appear ready for a rate hike, according to Jim Paulsen, chief investment officer at Wells Capital Management.

 

 

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

 

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