News for the Week of July 24-28, 2017

News for the Week of July 24 – July 28, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

General Markets / Economic

                                                                                                           

1.     Regulators have signaled they want to abandon plans to further regulate Wall Street pay, but events have already led to tighter controls

2.     Wildfires in Canada are pushing up the price of lumber, threatening the supply to US home builders

3.     OPEC ministers held talks about challenges to their oil-output-cutting deal ahead of a meeting in Russia

4.     OPEC is weighing a crackdown on members that aren’t curbing oil output as the group struggles with efforts to raise crude prices

5.     Existing home sales fell 1.8% in June from May and prices jumped as strong demand outstripped supply

6.     A pickup in global growth and a weakening dollar boosting profits at many US companies that do businesses overseas, helping support the years-long rally in the stock market.

7.     A top UK banking regulator said the LIBOR benchmark will be phased out over the next five years

 

 

Company News

 

1.     KKR is nearing a deal to buy health-information provider WebMD

2.     BMW denied it cooperated with rivals to manipulate diesel engines, after VW requested a probe

a.     Eh, I don’t believe BMW. Let’s see; it’s primarily the German auto companies that got caught on the emissions scandals, and all of them were on diesel engines.  Collusion is incredibly likely!

3.     Fiat Chrysler faces calls to buy back diesel vehicles that allegedly used emissions-cheating software

4.     Boeing shed more than 6,000 jobs in the first half, the fastest rate of staff cuts in over a decade

5.     Alphabet said its advertising business continued to grow rapidly but that ads on smartphones and YouTube videos are less lucrative than Google’s desktop ads

 

 

Interesting News

 

·       As many men probably know, typically March Madness in the US is also the time of the most vasectomy’s in the nation. However, vasectomy clinics are beginning to make the experience even more “bro-friendly,” as pals willing to spend a few thousand dollars are getting together for brosectomies at clinics that are looking more like club lounges. These brosectomies are typically a few male friends getting together for a vasectomy, then enjoying couches, big-screen TV, snacks, alcohol, steaks, etc.

 

 

 

Commentary for the Week of July 24 – July 28, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

It’s hard to ignore just how on edge the market seems to be, as every drop, no matter how small, is analyzed for signs that it’s the one that marks the end of the long bull market.

 

Jim Paulsen of Leuthold Group says “there’s a sense that many things are coming together that make you feel like you’re headed for a correction. There’s so much of that right now, that it almost would surprise me if it happens.” And for good reason. The S&P 500 has suffered two 15% drops since the bull market got going in earnest. According to Tony Dwyer of Canaccord Genuity, “the underpinnings for a major drop are just not there right now,” as he noted strong US GDP, earnings growth, and a weak dollar.

 

This doesn’t mean there won’t be sudden bouts of volatility. One event in particular has the potential to shake things up. This Friday we have the July payroll data coming out which could provide evidence of whether the Federal Reserve, which left interest rates unchanged last week, is ahead of or behind the curve. Just don’t bet on it, “the market appears bulletproof” says Ian Winder of Wedbush Securities.

 

 

 

 

 

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

 

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