A few weeks ago, we wrote a note about how European auto lenders are becoming just about as ridiculously undisciplined as their counterparts in the United States.Apparently an ever-growing reliance of European millennials on lease financing has auto ABS investors worried about a potential crash in used car prices at some point in the not so distant future…that sound familiar to anyone? (See: It’s Not Just Americans, Europe’s New Obsession With Auto Leases Is “Catastrophic For Used Car Prices”) Then came an undercover investigation by the Daily Mail exposing just how “undisciplined” the auto lending...
When you were a little kid, you may remember getting a US Savings Bond in your birthday card from your grandparents or your aunts/uncles. While it didn’t seem to be an exciting gift at the time, there are some pretty interesting features about these bonds that you many not know…even as an adult. I recently came across an article in Wealth Management, about some surprising features of US Series EE Savings Bonds that are really cool: 1. What Exactly are Series ‘EE’ Savings Bonds? – These bonds are direct obligations of the United States Treasury. They are available for purchase online at www.treasurydirect.go...
The dollar has been taking a beating on ‘false promises’ of any major fiscal reform from the Trump administration. On July 18th, President Trump lacked the support of the U.S. Senate to pass any new measures on healthcare bill, in the U.S. At least, three Republicans along with the Democrat lawmakers have expressed opposition for any changes to the current “Obamacare”. Some investors have their doubts that the Trump Administration will be able to implement tax reform. This was the key component of their infrastructure spending proposals which should have been implemented within this year or early 2018. Bitcoin prices have been able to...
LA-based commercial bank, Royal Business Bank (RBB) will make its market debut on Wednesday (7.26) and expects to raise 82.8 million pricing its shares between $22 and $24. The bank is offering 2.1 million shares with 892,000 shares being offered by selling shareholder. The company intends to contribute approximately $25 million of its net proceeds to Royal Business Bank, its wholly-owned banking subsidiary, and to use the rest for general corporate purposes such as growth initiatives like future acquisitions. Assuming shares price at the mid-point range, RBB Bancorp will have a market cap value of $373 million. Underwriters for the IPO inclu...
The sales of existing houses in the US dropped by 1.8% for June to an annual base of 5.52 million houses, from 5.62 million the previous month. This was way below expectations which were at 5.58 million houses, and the 2nd lowest reading for 2017, although there is still an 0.8% increase in sales. Potential market dynamics didn’t change for this month, with the persistence strong demand offset by price growth rate that undermines the ability to afford costs and close deals. The core supply of houses is also still weak, despite inventories rose a bit to 4.3 month in June from 4.2, it is still below 4.6 registered in June 2016. Sales rose sli...
Oil prices remained near eight-week highs on Wednesday morning after data released on Tuesday by the American Petroleum Institute showed that U.S. crude stockpiles declined by 10.2 million barrels last week even as refineries increased output. This sharp decline in stockpiles far surpassed analyst expectations of a 2.6 million barrel decline. Oil prices were buoyed earlier this week after Nigeria agreed to cap its production at 1.8 million barrels per day. On Tuesday Indonesia’s energy minister also announced an interest in rejoining OPEC, provided that the country would not be required to participate in the group’s current production cut...
It’s still early in the third quarter of 2017, but compared to the third quarter of a year ago, distressed U.S. firms experiencing distress are cutting their dividends at a slightly accelerated pace. Compared to the two previous quarters of 2017 however, 2017-Q3 is seeing a faster pace of dividend cuts than 2017-Q2 did, but is about on the same pace as 2017-Q1. Looking at the firms that have announced dividend cuts in 2017-Q3 into 25 July 2017, all but one are concentrated in the oil and gas sector of the U.S. economy. The one that wasn’t in that industry is the Blackstone Group (NYSE: BX), a private equity firm that has been r...
Social media giant Facebook (FB – Free Report) is set to release second-quarter fiscal 2017 results on July 26 after market close. After seven consecutive quarters of earnings and revenue beat, what is in store for the company in the Q2 reporting cycle? Investors should note that Facebook has had an impressive run so far this year, hitting fresh highs and locking in gains of about 31.3%, clearly outperforming the industry by a wide margin. This trend is likely to continue given the positive earnings revision trend, which is generally a precursor to an earnings beat, and attractive fundamentals though earnings surprise is difficult to ...
In a recent report I was prompted to look at the NAFTA economies and equity markets. A key reason was the Canadian rate hike that had the Bank of Canada joining the US Federal Reserve and Banco de Mexico on the rate hiking path. But aside from being exposed to a certain common political risk, and sharing geographic proximity, having their central bank hiking interest rates was where much of the similarities ended. From a cyclical perspective the NAFTA economies look to be on fairly divergent paths judging by composite leading economic indicators. On the stock market front, PE10 valuations were 3 different stories (US = expensive, Mexico...
With no expectations of a rate-hike this week, and traders rapidly giving up on The Fed’s dream of a steadily higher rate trajectory, a funny thing happened in the markets… In the eyes of The Fed, their monetary policy has not been this ‘tight’ since October 2008. However, in the eyes of the market, financial conditions just hit their easiest level in history (easier than the September 2005 previous record easiness level). This is what happens when you constantly flip-flop, constantly miss forecasts, and constantly lie. Simply put, this is the death cross of Federal Reserve Credibility. Picking up on the dramatic d...