Archive for July, 2019
-
Morning News: July 10, 2019
Eddy Elfenbein, July 10th, 2019 at 7:18 amJapan Curbs Could Drag On, Hurt Global Economy: Moon
UK Watchdog Says All Top Accountants Fail Audit Quality Test
Trump’s Concern About Strengthening Dollar Shows Up in Fed Interviews
Fed, Pressed by Trump to Cut Rates, Faces Fire No Matter What It Does
Wall Street Unbound: Old Shackles Quietly Disappear Under Trump
Amazon Customer Helpline Not Required, Says Europe’s Top Court in Boost for E-commerce
Trump Administration Will Allow Some Companies to Sell to Huawei
Apple Starts China App Development Program in Services Business Push
De Niro and Netflix Bet That New York Can Be a New Hollywood
IBM Closes Its $34 Billion Acquisition of Red Hat
The New Deutsche Bank Might Actually Be Better. But Authorities Should Be Prepared If It Isn’t
Nick Maggiulli: The Price of Admission
Ben Carlson: 3 Ways to Decrease Your Portfolio’s Volatility
Michael Batnick: The 7 Deadly Sins of Investing & Talk Your Book: The Acquirer’s Fund
Be sure to follow me on Twitter.
-
Morning News: July 9, 2019
Eddy Elfenbein, July 9th, 2019 at 7:49 amGlobal Recession Risks Are Up, and Central Banks Aren’t Ready
How Each Country Contributed to the Explosion in Energy Consumption
Turkey’s Long, Painful Economic Crisis Grinds On
Fed Chairman Jerome Powell’s Approach to Interest-Rate Policy Wins Bipartisan Backing
Judge Blocks Trump Rule Requiring Drug Companies to List Prices in TV Ads
Why Olympic Steel Should Acquire A.M. Castle
Deutsche Bank Shares Plunge as Skepticism Mounts Over Revamp
Kohl’s Is Betting on Amazon Returns to Drive Sales
Richard Branson’s Space Unit to Go Public
Apple: The Worst Case Scenario
PepsiCo Results Beat Estimates on Demand for Sodas, Chips
Collectors Are Shelling Out $395 for Bear Stearns Stock Certificates
Cullen Roche: Is Value Investing Dead?
Joshua Brown: How Economic Data Works
Roger Nusbaum: Is Financial Resiliency Your Most Important Trait?
Be sure to follow me on Twitter.
-
The Quiet Before the Fed Storm
Eddy Elfenbein, July 8th, 2019 at 1:42 pmThe market is down today but it’s nothing too severe. The strong jobs report from Friday doesn’t seem to have had much impact on the markets. The indicators still show that Wall Street overwhelmingly expects rate cuts soon. Personally, I just don’t see it, but I’m not an FOMC member.
This week, Chairman Powell will testify before Congress. We’ll learn more about where he sees the economy. The questions from the members of Congress usually don’t help the reputation of Congress.
We’ll also get a look at the minutes from the Fed’s last meeting. We’ll also finally get a look at earnings. There hasn’t been much real news on our Buy List stocks in a few weeks.
-
Morning News: July 8, 2019
Eddy Elfenbein, July 8th, 2019 at 7:29 amIn Firing Central Bank Chief, Turkey’s Leader Trades Credibility for Growth
Fed Easing Could Prompt First China Rate Cut in Four Years
Where to Invest When the Fed Cuts Rates
Morgan Stanley Turns Bearish on Global Stocks as Challenges Grow
Deutsche Bank Plans Radical Surgery After CEO Runs Out of Options
The ‘Texas Miracle’ Missed Most of Texas
Hedge Funds Chart Course Through ‘IMO 2020’ Storm
Huawei Outlines Investment Plans in Poland Depending on 5G Role
Amazon Workers Plan Prime Day Strike Despite $15-an-Hour Pledge
British Airways Faces Record $230 Million Fine for Data Breach
Microsoft Closes The Book On Its E-Library, Erasing All User Content
Mad Magazine, Irreverent Baby Boomer Humor Bible, Is All but Dead
Michael Batnick: Stop Counting Other People’s Money
Jeff Miller: Who Really Runs the Fed?
Ben Carlson: The Thing That’s Probably Blowing a Hole in Your Budget & My Questions About Negative-Yielding Debt
Be sure to follow me on Twitter.
-
June NFP = +224,000
Eddy Elfenbein, July 5th, 2019 at 8:55 amWe got a strong jobs report this morning. The U.S. economy created 224,000 net new jobs last month. That was a lot more than expectations. The unemployment rate ticked up to 3.7%.
In the past year, average hourly earnings are up 3.1%. The broader U6 unemployment rate is 7.2%.
-
CWS Market Review – July 5, 2019
Eddy Elfenbein, July 5th, 2019 at 7:08 am“The laws of probability, so true in general, so fallacious in particular.”
– Edward GibbonThe trading week was shortened by the July 4th holiday. As a result, there wasn’t much news. Sensing this, many Wall Street big shots took off for the Hamptons, causing the usual financial frenzy to be cut short.
I want to take advantage of this lull in market news to summarize our Buy List at the midpoint of the year. I’m happy to report that our Buy List is doing quite well this year.
We also had a somewhat poor ISM report on Monday. This could be further evidence that the Fed will cut rates at its meeting later this month. I’ll review the latest numbers. But first, let’s look at how well our Buy List is doing in 2019.
Our Buy List Is Up 23.21% This Year
I’ll be honest: at the start of the year, I would not have guessed that stocks would do so well in 2019. Fortunately, we always stay in the market and so don’t miss out on any unexpected surges.
The stock market closed early on Wednesday and was closed all day on Thursday. At the closing bell on Wednesday, the S&P 500 reached 2,995.82. That’s another all-time high.
For some context, the index first broke 300 in 1987. The old version of the index broke 30 in 1929. We may break 3,000 any day.
Now let’s look at some numbers. Through Wednesday, our Buy List is up 22.48% on the year compared with 19.51% for the S&P 500. Including dividends (and I always include dividends in our final calculation), we’re up 23.21% while the S&P 500 is up 20.75%.
Our “beta” is running at 0.800 which is bit low compared with previous years (in reality, I don’t pay much attention to it). There’s been a 90.1% correlation between the daily changes of our Buy List and those of the S&P 500.
Our Buy List generally yields about 1%, which is about half the yield of the S&P 500. I don’t plan it this way, but that’s usually how it works out. We’re running a little higher this year.
Twenty of our 25 stocks are up this year. The biggest winner by price percentage is FactSet (FDS). FDS is currently up 47.93% for us this year. Moody’s (MCO) isn’t far behind at 44.68%.
We have four positions up more than 40%, and seven are up more than 30%. Fourteen of our stocks are up, beating the market this year. Sherwin-Williams (SHW) is just a tiny bit behind. Our worst stock this year is Hormel Foods (HRL). The Spam stock is down just over 2%. On Thursday, eight of our Buy List stocks touched new 52-week highs.
Our sells from last year aren’t doing that well. Alliance Data Systems is down 2% this year. Ingredion is off by 8%. Snap-on is up 12%. Wabtec is up by 5%. Carriage Services is the big winner with a 22% gain.
Our most dramatic stock this year has been Cognizant Technology (CTSH) which dropped 18% over the course of two trading sessions. It’s still up a bit for us this year. Due to broad diversification, the drop didn’t shake our portfolio much.
I nearly forgot the most important part—we didn’t make a single trade all year. Yet we still beat the market, and we did it with lower volatility.
Here’s a look at how each stock has done, along with its dividend-adjusted gain.
Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His