Archive for December, 2017

• Morning News: December 8, 2017
  Eddy Elfenbein, December 8th, 2017 at 7:03 am

  Southeast Asia’s Ride-Hailing War Is Being Waged on Motorbikes

  Companies Prepare for Disorderly Brexit as Talks Stall

  The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market

  More Than $70 Million Stolen in Bitcoin Hack

  AT&T Commits to Time Warner Deal Even as Judge Delays Deadline

  Ford Will Build Electric Cars in Mexico, Shifting Its Plan

  Boeing CEO: We’re Going to Beat Elon Musk to Mars

  WestJet Has a Radical Plan to Get You on Its Planes

  Spotify Could Get a Little Wild When It Goes Public

  JPMorgan’s Dimon Taking Customer Pricing Hints from Amazon

  Alibaba Redraws Retail Fault Lines with Bricks-and-Mortar Push

  GE’s Power Missteps Take a Human Toll

  Cullen Roche: Why Fed Narratives Can Be Dangerous For Your Portfolio

  Joshua Brown: Crypto Shorthand

  Mark Hines: Stock Exchange: Going Beyond Fundamentals, 3 Attractive Ideas

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• Morning News: December 7, 2017
  Eddy Elfenbein, December 7th, 2017 at 7:00 am

  China’s Banks Need More Capital After Credit Boom, IMF Says

  The FCC’s Net Neutrality Plan May Have Even Bigger Ramifications in Light of This Obscure Court Case

  Trump Pick to Head Consumer Safety Board Is Seen as Too Close to Industries

  Coinbase: The Heart of the Bitcoin Frenzy

  Bitcoin Firm Hacked Days Before Major US Exchange Opens

  There’s an Argument Brewing Over the Launch of Bitcoin Futures

  What’s Driving Walmart’s Digital Focus? Paranoia, Top Exec Says

  Home Depot to Launch $15 Billion Share Buyback Program

  Sharp to Seek All-Japan OLED Alliance to Counter South Korea’s Samsung, LG

  GE Plans 12,000 Job Cuts as New CEO Revamps Power Unit

  U.S. Chip Engineers Charged in Theft Scheme for Chinese Firm

  Volkswagen Official Gets 7-Year Term in Diesel-Emissions Cheating

  Michael Batnick: Animal Spirits: A Random Walk Down Nowhere

  Jeff Carter: Bitcoin Futures Are Coming. Are You Ready?

  Howard Lindzon: The Frenzy…

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• Stryker Raises Dividend
  Eddy Elfenbein, December 6th, 2017 at 7:09 pm

  Good news today from Stryker (SYK). The company is raising its quarterly dividend by 11%. The payout will rise from 42.5 to 47 cents per share. Stryker has raised its dividend every year since 1993.

  “Our financial strength is reflected in the 11% increase in our dividend for 2018 as we continue to execute on our capital allocation strategy,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “With strong organic sales growth and leveraged adjusted earnings gains, we believe we are well positioned to continue to deliver dividend increases in line with our adjusted earnings growth.”

  The new dividend will be payable on January 31 to shareholders of record on December 29. Based on today’s closing price, SYK now yields 1.24%.

• ADP = 190,000
  Eddy Elfenbein, December 6th, 2017 at 11:29 am

  The ADP payroll report came out this morning, and it showed an increase of 190,000 private jobs last month. This is a preview of the government’s jobs report this Friday.

  Note that the ADP is just private sector while the NFP is total jobs. Here’s a chart of the ADP report (in blue) along with the government’s report on just private sector jobs.

  

• Some Words of Caution About the 2/10 Spread
  Eddy Elfenbein, December 6th, 2017 at 11:07 am

  I wanted to say a few words about the 2/10 spread. As long-time readers know, I’m a fan of this indicator, but the 2/10 has gotten a lot of attention recently since it’s been narrowing.

  That’s why I wanted to add a few notes of caution. Let me explain how the world looks through the world of economic stats.

  Lagging indicators: Sure, we got plenty of those.

  Coincident indicators: Eh, a few.

  Leading indicators: Not much.

  The 2/10 is one. As the saying goes, it’s hard to make predictions, especially about the future.

  With the 2/10, we gain a rare example of a forward indicator with a decent track record but it comes at the expense of timing. To put it in clearer words, the world doesn’t automatically explode once the 2/10 gets inverted.

  The key here is that the 2/10 isn’t bad news itself. The world of finance loves to fetishize numbers. Instead, we should focus on what those numbers represent. An inverted 2/10 spread is basically like all the fire trucks being down at Arby’s having lunch. When trouble does come—and it will—the response will be more difficult.

  Let’s look at some history. In December 1988, the 2/10 inverted more than 18 months ahead of the recession.

  In May 1998, the 2/10 briefly inverted. It fought that off, but became inverted again in February 2000. The recession began a year later.

  During the last recession, the 2/10 spread first inverted in December 2005, but the recession didn’t begin for another two years.

  Still, that track record beats a lot of humans. Remember that all metrics have downsides. That’s not a reason to dismiss them. It means we have to be aware of the limitations of our analytical tools.

• Morning News: December 6, 2017
  Eddy Elfenbein, December 6th, 2017 at 7:04 am

  The 2018 Outlook for Major Central Banks

  Plan to Prevent Banks From Seducing Regulators Dies Under Trump

  Consumer Bureau’s New Leader Steers a Sudden Reversal

  Bitcoin Surges Above $12,000 For the First Time

  Canada Scraps Plan to Buy Boeing Fighters Amid Trade Dispute

  Oil Producers Regain Their Sea Legs

  Retailers Can Forget About Being Bought by Steinhoff Now

  The Hidden Player Spurring a Wave of Cheap Consumer Devices: Amazon

  Google Pulls YouTube from Amazon Devices, Escalating Spat

  UnitedHealth Buys Large Doctors Group as Lines Blur in Health Care

  Pizza Hut Will Now Deliver Cold Beer and Wine to Pair With Your Pie

  It Just Got Easier Than Ever to Bet on the Death of Brick and Mortar Retail

  Cullen Roche: Beware the Parade of Annual Stock Market Forecasts

  Ben Carlson: When Small Caps Finally Joined the Party

  Roger Nusbaum: Take the Under on This Time Being Different

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• Talking Rotation Today On Bloomberg
  Eddy Elfenbein, December 5th, 2017 at 6:43 pm

  I had a nice chat today on Bloomberg with Julia Chatterley, Joe Weisenthal and Scarlet Fu.

• Morning News: December 5, 2017
  Eddy Elfenbein, December 5th, 2017 at 7:00 am

  How AI Will Invade Every Corner of Wall Street

  Why Concerns About Net Neutrality Are Overblown

  How Will Consumers Fare if CVS and Aetna Merge?

  Cineworld Agrees to Buy Regal in $3.6 Billion Theater Deal

  Apple Wins Trademark Case Against Xiaomi

  Amazon Opened In Australia, And Nothing Has Changed

  World’s Biggest Starbucks to Open in Shanghai

  How Dollar General Became Rural America’s Store of Choice

  Japan Airlines Puts Millions Into U.S. Startup’s Supersonic Plane

  Broadcom Proposes Unseating Qualcomm Board as Takeover Fight Escalates

  Oprah Winfrey Sells Part of Stake in OWN Network to Discovery

  ICO Scam That Raised $15 Million Halted By SEC

  Joshua Brown: Afternoon Roundup

  Cullen Roche: There’s (STILL) Deflation in Hyperinflation Forecasts

  Michael Batnick: This Could Be The Top

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• The Market Rebounds
  Eddy Elfenbein, December 4th, 2017 at 1:32 pm

  The stock market is rebounding nicely today on the heels of tax reform news. We’ve made back everything we lost when the (incorrect) Flynn news broke on Friday.

  Interestingly, there’s been a big divergence between value and growth stocks over the last few days.

  

  At the moment I’m writing this, the S&P 500 Growth index is down -0.23% while the S&P 500 Value Index is up 1.04%.

  On our Buy List, Axalta, Alliance Data, Express Scripts and Sherwin-Williams are doing particularly well today.

• Morning News: December 4, 2017
  Eddy Elfenbein, December 4th, 2017 at 6:59 am

  Confusion Reigns as Banks Scramble to Price FX, Bond Research Under EU Markets Revamp

  China’s A.I. Advances Help Its Tech Industry, and State Security

  Infosys Turns to Capgemini’s Parekh to Juggle Problems with Founders and U.S. Immigration Reform

  CVS to Buy Aetna for $69 Billion in a Deal That May Reshape the Health Industry

  Fox ‘Resumes Sale Talks’ With Walt Disney

  Bitcoin Hits New High Above $11,500 as the Winklevoss Twins Become the First Bitcoin Billionaires

  As Brokers Line Up to Offer Bitcoin Futures, Others Are Quiet

  5 Bitcoin Rivals That Are Rapidly on the Rise

  Introducing ‘CryptoKitties,’ the New Digital Pets Taking Ethereum by Storm

  Facebook to Hire 800 New Workers in London

  Here’s Why Snapchat’s Huge Redesign Could Revive Its Business, or Sink It

  BlackRock and Vanguard’s $20 Trillion Future Is Closer Than You Think

  Jeff Miller: A Strong Outlook Gets Even Stronger

  The Seed Stage Slump…What is Next?

  Jeff Carter: Can We Beat The Robots?

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