The best performing currency this week was the Australian dollar, which extended higher for the 5th consecutive trading day against the U.S. dollar. In fact so far this month, there’s only been 4 down days for AUD/USD. This move took the pair to fresh 2-month highs well above 77 cents. Considering that Australian data has been mixed, U.S. dollar weakness, higher commodity prices and a renewed demand for risk currencies are the primary catalysts for AUD/USD’s rise. With no major Australian economic reports scheduled for release this week, these are the same factors that would fuel a continued rally in the currency. In the near term, we ...
The consumer staples sector (including food and beverage stocks) has successfully grabbed investors’ attention, of late. Nevertheless, amid a sound U.S. economic picture and an upbeat consumer confidence data, aspects such as heightened geopolitical tensions due to North Korea’s slew of nuclear tests or uncertainty regarding President Trump’s policies has made investors skeptical. Over the last few months, companies in the consumer staples sector have been countering several challenges like intense competition, input cost inflation, and tight margins. Notably, food deflation added to the woes over the past year, where a supply glut in s...
(Audio length 00:10:37) There are a few factors that have Doc thinking we could see a pullback in the US markets and commodities early next year. For the markets, it has been a historically low volatility year with the VIX consistently hitting signal digits. Also factoring in the second year of a presidency is never as good for markets, there should be some weakness in 2018. As for commodities Doc and I follow up on the comments made by Chris Temple earlier today....
One of the hallmarks of late-stage bubbles is a shift of power from lenders to borrowers. As asset prices soar and interest rates plunge it becomes harder to generate a decent yield on bonds and other fixed income securities, so people with money to lend (like pension funds and bond mutual funds) are forced to accept ever-less-favorable and therefore far-more-risky terms. Recall the liar loans that were popular towards the end of the 2000s housing bubble and you get the idea. Lenders were so desperate for paper to feed the securitization machine that they literally stopped asking mortgage borrowers to prove that they could cover the interest....
Remember the post-tax-reform, pre-Christmas spike in yields and the yield curve? Yeah, that’s all over now!!!! Treasury yields are down 4 days in a row with a major collapse occurring today as the long-end plunges over 8bps – the most in 3 months. The 2s30s yield curve is down over 8bps – the biggest-single-day flattening since Brexit (June 2016)… This is the biggest 4-day drop in 30Y yields since February. Notably, 10Y yields dropped back below 2.4% (YTD unch)… The yield curve is crashing… The biggest 1-day flattening since Brexit… All of which is fascinating given that net spec positioning is ne...
We are less than a week from the beginning of 2018, and many indications for the stock market right now suggest we can expect more of the same. The FANG stocks Facebook Inc (FB); Amazon.com, Inc. (AMZN) Netflix, Inc. (NFLX); Alphabet Inc (GOOGL)figure prominently in many analysts’ list of 2018 tech stock themes. They could continue to ride high as they did for most of this year, or they could remain challenged as tax reform and growing issues within their respective segments remain overhangs. FirmBee/Pixabay 2018 tech stock themes to drive FANG stocks Although every analyst’s list of 2018 tech stock themes is slightly different, they al...
Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors. The advantages of slavery by debt over “chattel” slavery – ownership of humans as a property right – were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part: Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the...
Brigade Capital disclosed a 5.8% stake in Kindred Healthcare (KND) and expressed opposition to the company’s proposed buyout by TPG Capital, Welsh, Carson, Anderson & Stowe and Humana (HUM). Representatives of Brigade intend to engage in discussions with Kindred’s management and board regarding, among other things, the company’s strategic alternatives and direction, and strategies to enhance shareholder value, including regarding the recently announced proposed acquisition. On December 27, Brigade delivered a letter to the board stating its opposition to the takeover and noting the “material inadequacy of the term...
The rising interest-rate environment and an aging real estate cycle have taken a toll on the performance of real estate investment trusts (REIT) in 2017. In fact, since the beginning of the year through Dec 22, 2017, the industry has underperformed the broader market, as indicated by the FTSE/NAREIT All REITs Index’s total return of 7.7% over this time frame versus the S&P 500’s 22.2% gain. In addition, the Fed’s recent decision to hike benchmark interest rates by a quarter point to a target range of 1.25-1.5% along with the tax reforms remain the biggest near-term challenges for REITs heading into 2018. Since REITs are heavily d...
Santa Clause Rallies Don’t Happen As Often As They Used To Stocks indexes were down slightly on Tuesday because of AAPL. Apple fell 2.54% because of reports of weak demand for the iPhone X. If the iPhone X sells badly, the company will shift its focus to lower priced products like the iPhone 8, hurting margins. It is questionable if Apple will continue to be able to ship phones with large bezels like the iPhone 8 and 8 Plus next year at high end price points. The firm may have bit off more than it can chew because most high end phones have bezelless displays. It has become a must have feature instead of an add-on feature which some consumer...