Archive for June, 2020

• Morning News: June 19, 2020
  Eddy Elfenbein, June 19th, 2020 at 7:04 am

  In This Coronavirus Wave, China Tries Something New: Restraint

  China to Accelerate U.S. Farm Purchases After Hawaii Talks

  Main Street Investors Bank Profits On Rally That Wall Street Doubted

  Running On ‘Hopium’: Explaining the Market Rally In Wall Street’s Terms

  A Tidal Wave of Bankruptcies Is Coming

  The Pandemic Is Exacerbating America’s Systemic Food Inequality

  Discount Grocers Look To Jump On Home Delivery Bandwagon

  A Former Google Executive Takes Aim at His Old Company With a Start-Up

  Uncle Ben’s, Mrs. Butterworth’s and Cream of Wheat Review Branding After Aunt Jemima Announces Name Change

  Kroger Faces a Tough Crowd

  Reliance Says It’s Net-Debt Free After $15 Billion Jio Deals

  Joshua Brown: 20.5 Million Continuing Unemployment Claims

  Howard Lindzon: Robinhood Robinhood Robinhood

  Ben Carlson: As Old As The Hills

  Michael Batnick: One Out Of Five Investors Sold All of Their Stocks, Market Cap Madness? & Animal Spirits: Advisor Solutions with Helios

  Be sure to follow me on Twitter.

• Jobless Claims Hit 1.508 Million
  Eddy Elfenbein, June 18th, 2020 at 11:24 am

  

  It’s another fairly calm day for the market this morning. The market dropped early on but had made a lot of it back.

  This morning’s jobless claims report was 1.508 million which was worse than expected. This was the 13th straight week that jobless claims topped one million.

  The government report’s total was 58,000 lower than the previous week’s 1.566 million, which was revised up by 24,000.

  The elevated claims number persists even as all states have reopened to varying degrees and nonfarm payrolls grew by 2.5 million in May. Before the coronavirus, the record for a single week was 695,000 in September 1982.

  There’s also been more talk of an uptick in Covid-19 patients, especially in states that had not been particularly hard hit.

• How Important Are the Numbers?
  Eddy Elfenbein, June 18th, 2020 at 10:33 am

  Here’s an interesting study:

  The deteriorating usefulness of financial report information and how to reverse it

  Abstract

  There is a wide-spread and growing dissatisfaction with the relevance and usefulness of financial report information, particularly among investors and corporate executives. The dissatisfaction is corroborated by extensive research which consistently documents a growing gap between capital market indicators and financial information, more so for reported earnings. The reported earnings of most firms no longer reflect enterprise performance. I trace the deterioration of the usefulness of financial information to: (1) the abandonment by accounting standard-setters of the traditional income statement (matching) model in favour of a balance sheet (asset valuation) model, and (2) standard-setters’ failure to adjust asset recognition rules to the fundamental shift in corporate value-creating resources from tangible to intangible assets. I conclude this paper with change proposals to restore the usefulness of financial information to investors.

• Morning News: June 18, 2020
  Eddy Elfenbein, June 18th, 2020 at 7:04 am

  Europe Takes Steps to Block Chinese Bargain Hunters

  U.S. Ranked Worst for Workers’ Rights Among Major Economies

  What It Takes to Reopen a Small Business Right Now

  Got Change? There’s A Coin Shortage Because Of Coronavirus Stopping The Flow Of Physical Currency

  ‘Banking While Black’: How Cashing a Check Can Be a Minefield

  EU In Advanced Talks With Johnson & Johnson On COVID-19 Vaccine Deal

  Automakers Rev Up U.S. Assembly Lines, Wary Of Outside Risks To Workers

  JD.com Shares Rise 3.5% In The E-Commerce Giant’s $3.87 Billion Hong Kong Debut

  The Electric Car Battery Boom Has Screeched to a Halt, For Now

  Michael Batnick: Animal Spirits: The Opposite of a Falling Knife

  Ben Carlson: When Should You Sell Your Stocks?

  Jeff Carter: Risk and COVID 19

  Jeff Miller: Weighing the Week(s) Ahead: Can Investors Depend on the Rebound Trend?

  Howard Lindzon: The Pressure Of Large Numbers and Some Acquisition Predictions

  Joshua Brown: Bankrupt Equities, The Most Volatile Year Ever And The Luckiest Day Traders, Who Is The House? & Driving, Not Flying

  Be sure to follow me on Twitter.

• Quiet Day So Far
  Eddy Elfenbein, June 17th, 2020 at 11:38 am

  The stock market is down a bit today, but not by much. Texas said it saw a one-day jump in hospital admissions of 11%. That’s the largest increase this month and it’s helping to still fears of a second wave.

  We also learned this morning that housing starts rose by 4.3% last month. I was pleased to see that building permits rose by 14.4%. Those are good signs.

• Morning News: June 17, 2020
  Eddy Elfenbein, June 17th, 2020 at 7:03 am

  Saudi Aramco Completes $69 Billion SABIC Stake Deal, Extends Schedule

  The I.P.O. Comes Roaring Back in the Pandemic

  May Flowers: Where the U.S. Retail Blooms Are And Are Not

  Hertz’s Crazy Idea Will Cost Speculators Millions

  The Rich Cut Their Spending. That Has Hurt All the Workers Who Count on It.

  Trump Administration’s Nominee for Development Bank Chief Breaks With Protocol

  Trillions in Stimulus Go Unchecked With Watchdogs Kept Toothless

  Apple’s Dominance Is Finally Under Threat

  Former Bumble Bee C.E.O. Is Sentenced in Tuna Price-Fixing Scheme

  PG&E Pleads Guilty to 84 Counts of Manslaughter in Camp Fire Case

  Nick Maggiulli: Why So Many People Are Getting into the Stock Market

  Ben Carlson: How Will Private Equity Work in 401ks?

  Roger Nusbaum: The Panic Has Subsided For Now

  Howard Lindzon: The Gap Year

  Joshua Brown: Feelings Drive Short-Term Prices & One Fifth of Investors Sold All Their Stocks

  Be sure to follow me on Twitter.

• Market Jumps on Strong Retail Sales Report
  Eddy Elfenbein, June 16th, 2020 at 11:07 am

  The market is having a nice morning thanks to a good retail sales report. The government said that retail sales rose 17.7% in May. Economists had been expecting a gain of “only” 7.7%.

  You don’t often see a retail sales report beat expectations by 10%.

  

  There were also reports on the benefits of dexamethasone. Apparently, the drug was shown to reduce Covid-19 deaths by one third.

  From the BBC, “Had the drug had been used to treat patients in the UK from the start of the pandemic, up to 5,000 lives could have been saved, researchers say.”

  At one point, the S&P 500 was up close to 3% but it’s pared those gains. The index is currently up just under 1%.

• Morning News: June 16, 2020
  Eddy Elfenbein, June 16th, 2020 at 7:02 am

  U.S. Slumps to 10th Spot in World Competitiveness Rankings

  U.S. Expected to Report Record Rise In Monthly Retail Sales

  As Meat Plants Stayed Open to Feed Americans, Exports to China Surged

  The Fed Says It Is Going To Start Buying Individual Corporate Bonds

  Trump Team Weighs $1 Trillion for Infrastructure to Spur Economy

  To Gain Public’s Trust, Should Members of Congress Stop Trading Stock?

  An LGBT Landmark

  Coronavirus Economy Especially Harsh for Transgender People

  Apple Just Got Hit With 2 EU Antitrust Probes Into the App Store and Apple Pay

  Chesapeake Energy To File For Bankruptcy As Soon As This Week

  The Spectacular 955% Surge of a Debt-Ridden Shipbuilder’s Stock

  Has Pandemic Snacking Lured Us Back to Big Food and Bad Habits?

  Most Coronavirus Tests Cost About $100. Why Did One Cost $2,315?

  Top Business Schools That May Best Prepare Grads for a Covid-19 World

  Howard Lindzon: Momentum Monday – Stonks Go Down

  Be sure to follow me on Twitter.

• A Bad Omen in China
  Eddy Elfenbein, June 15th, 2020 at 11:05 am

  

  The stock market is down again today. This could be our fourth drop in the last five sessions. Things seemed to have turned since the Fed meeting last week. Of course, that comes after more than two months of solid wins for the bulls.

  The S&P 500 is below its 200-day moving average and the 50-day isn’t far away.

  Not much economic news this morning. The New York Fed’s Empire State Manufacturing Survey said that business activity in New York State steadied in June. That’s a hopeful sign.

  Bloomberg has an interesting article noting that the fragile nature of the Chinese economic recovery points to how difficult it may be for the entire world economy to recover.

  A string of top-tier data all showed that China’s factory output, consumer spending and investment continued to improve in May, but there are few signs of a broad based rebound needed to spur a V-shaped recovery.

  The worry for the global economy is that if China’s apparent success in containing the coronavirus can’t stoke confidence and a quick return to normal activity, then where can. Those concerns will be compounded by news of an outbreak of virus cases in Beijing that has raised fears of a resurgence of the pandemic.

  “China’s experience so far suggests that it will be a hard road back for the global economy,” said Shaun Roache, Asia-Pacific chief economist at S&P Global Ratings, who notes that confidence among Chinese consumers and privately-owned firms remains low. “We still expect a rebound in the second half, but expectations for a surge in pent-up demand may be disappointed.”

• Morning News: June 15, 2020
  Eddy Elfenbein, June 15th, 2020 at 7:04 am

  Mexico’s Oil Hedge To Be Pricier, But Government Likely Doing It Anyway

  BP Cuts Up To $17.5 Billion From Assets’ Value With Bleaker Oil Outlook

  China’s Slow Recovery Points to Hard Road Back for Global Economy

  Break the China Habit? Lobsters, Lights and Toilets Show How Hard It Is

  Don’t Cheer Too Soon. Keep an Eye on the Core Jobless Rate.

  Goldman Says Mom-and-Pop’s Stock Picks Are Trouncing Wall Street

  Morgan Stanley Economists Double Down on V-Shape Global Recovery

  Trading Sportsbooks for Brokerages, Bored Bettors Wager on Stocks

  Nissan Email Trail Casts New Light on Takedown of Carlos Ghosn

  Michael Batnick: Animal Spirits: Investing in Private Real Estate With FundRise & Who’s Driving the Stock Market?

  Ben Carlson: Is This The Most Volatile Year Ever? & Why the Market is So Confused Right Now

  Roger Nusbaum: A Closer Look At Long/Short Strategies

  Jeff Miller: Weighing the Week(s) Ahead: Can Investors Depend on the Rebound Trend?

  Howard Lindzon: A Few Days Of Fintech With Friends

  Joshua Brown: Listen to Jeremy Grantham Explain the Slow Death of Value Investing Better Than Anyone, Unheard Of & Frank Partnoy on the Hidden Systemic Risk Of Leveraged Loans

  Be sure to follow me on Twitter.