Morning News: December 6, 2018
Posted by Eddy Elfenbein on December 6th, 2018 at 7:12 am

Risk of No OPEC deal? ‘It’s Real,’ Saudi Energy Minister Says

The Relentless Flattening in Treasury Yield Curve Has Stalled

Global Stocks Plunge, Suggesting a Grim Day on Wall Street

Powell’s Dovish Rate Tilt Reflects Fear of Fool-in-Shower Trap

U.S. Appeals Court to Hear Arguments to Stop AT&T Purchase of Time-Warner

‘Shocking’ Huawei Arrest Threatens to Upend Trump-Xi Trade Truce

Facebook Emails Show Its Real Mission: Making Money and Crushing Competition

Wells Fargo Reform Plans Fail to Satisfy Fed After Scandals

Volkswagen to Cut Another $3.4 Billion in Costs to Boost Margins

MoviePass, Rattled by a Rough Year, Tries to Change Its Ways

Soros Family Office Fined by Hong Kong Watchdog for Naked Short Selling

The Bloomberg 50: The People Who Defined Global Business in 2018

Ben Carlson: The 80-Hour Workweek

Michael Batnick: The Law of Large Numbers

Joshua Brown: Google’s “Other Bets”

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Morning News: December 5, 2018
Posted by Eddy Elfenbein on December 5th, 2018 at 7:14 am

Dow Tumbles Nearly 800 Points as Trade Jitters Return

Bank Stocks Were Bruised the Worst in the Sell-Off. Here’s Why.

China Swings Into Action on Trade as ‘Tariff Man’ Trump Ups Pressure

The U.S. Yield Curve Inversion Is a Happy Sign for Some

Trade Pledge Slows Stock Sell-Off; Pound Advances

Takeda Wins Shareholder Approval for Its Shire Megadeal

New York City Just Became the First US City to Set a Minimum Wage for Uber and Lyft Drivers

Kroger to Sell Groceries in Walgreens Stores

Slowing Cigarette Sales Push Altria to Explore Other Opportunities

In AT&T Merger Appeal, U.S. Has a Message: We Told You So

Hyundai, South Korea Talks on Low-Cost Carmaking JV Hit Snag

Danske Investors Bank on Maersk Clan to Chart Course Through Crisis

Nick Maggiulli: When Things Stop Working

Howard Lindzon: Momentum Monday…Just When I Thought I Was Out They Pull Me Back In!

Roger Nusbaum: Tariffs, Death Cross, Inversion

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When Is a Senator a Senator?
Posted by Eddy Elfenbein on December 4th, 2018 at 7:04 pm

Here’s an odd story. I’m a fan of real world futures markets. I don’t take them too seriously, but they’re fun to watch. Every so often, I peer into PredictIt to see what they have to say,

This year, PredictIt had a market for the number of GOP senators in the next congress. After the election, the Republicans increased their majority to 53 seats. So the contract for 53 won, right?

Not so fast.

Senator-elect Rick Scott said he won’t step down as governor of Florida until his term ends. That means he’ll be sworn in on January 8, five days after the other senators. So even though the GOP won 53 seats, they’ll only have 52 senators at the start of the session. And that’s the key.

According to the rules, it looks like the case for 52 will prevail. So even if your analysis was correct, you can still lose on a technicality. But if you had spotted the issue, you could have literally bought a dollar for pennies.

Stryker Raises Its Dividend by 11%
Posted by Eddy Elfenbein on December 4th, 2018 at 4:17 pm

Stryker (SYK) is giving shareholders an 11% pay increase:

Stryker Corporation (SYK) announced that its Board of Directors has declared a quarterly dividend of $0.52 per share payable on January 31, 2019 to shareholders of record at the close of business on December 31, 2018, representing an increase of approximately 11% versus the prior year and the previous quarter.

“We continue to deliver strong financial results, and consistent with our stated capital allocation philosophy, are raising our dividend 11%,” said Kevin A. Lobo, Chairman and Chief Executive Officer.

WSJ: “Stock Exchanges Are Beating Other Stocks”
Posted by Eddy Elfenbein on December 4th, 2018 at 10:24 am

The WSJ noted that stock exchange stocks have been doing quite well. Yesterday, shares of Intercontinental Exchange (ICE) reached another new high.

“Exchanges are sitting in a very pretty place in a lot of ways,” said Brad Bailey, research director for capital markets at Celent in New York.

Analysts and investors attribute this performance to large swings in stock, bond and currency markets. After historically calm trading conditions last year, a pickup in volumes on higher volatility in 2018 has been a boon to exchanges and market makers—intermediaries who stand ready to buy or sell shares at any time.

“When volatility hits, volumes will be there,” Scott Hill, chief financial officer at ICE, said on an earnings call in October.

While many assets have fallen victim to slowing global growth, tighter monetary policy and rising trade tensions, exchanges and trading firms tend to benefit from the trading activity bred by rising uncertainty. Plus, a surge in initial public offerings has helped fuel these companies’ top and bottom lines.

“These businesses live off of trading and IPOs,” said Olivier d’Assier, head of applied research for the Asia-Pacific region at Axioma, which sells financial analytical tools to asset managers. “We’ve seen a lot of that.”

Yesterday’s Rally
Posted by Eddy Elfenbein on December 4th, 2018 at 9:59 am

I wanted to add a few words about yesterday’s market. I was busy getting ready for Bloomberg so I didn’t have an opportunity to discuss the market.

Wall Street seemed pleased that there’s an apparent thawing in the Trade War. I’m still not sure how concrete the plans are but at least the rhetoric has changed.

Yesterday’s ISM Manufacturing Index was 59.3 which is quite good. That report before that was a bit weak so I’m glad to see there doesn’t seem to be a weakening trend.

Yesterday’s rally was very unbalanced. I estimated that Amazon’s gain made up about 30% of the S&P 500’s gain. It looks like we’re walking back some of those gains today.

The market will be closed tomorrow in honor of George HW Bush. We’ll get the AD report tomorrow. Thursday is jobless claims and then Friday is the November jobs report.

Morning News: December 4, 2018
Posted by Eddy Elfenbein on December 4th, 2018 at 7:18 am

OPEC Works on Deal to Cut Output, Still Needs Russia on Board

U.K. Can Still Unilaterally End Brexit, EU Top Court Indicates

Stock-Market Vigilantes Show Trump Who’s Boss

Treasuries Extend Gains After Section of Yield Curve Inverts

Trump’s Trade Truce Is Mired in Confusion

Apple Resorts to Promo Deals, Trade-Ins to Boost iPhone Sales

GM Moves to Challenge Ford in U.S. Commercial Fleet Sales

Big Tuna Finds a Scapegoat: Millennials

Exxon Seeks to Sell its Stake in Giant Azeri Oil Field

Marijuana Stock Aphria Plummeted as It Fought a Short Seller Who Called Out ‘Something Very Sinister’

Oath Agrees to $5 Million Settlement Over Children’s Privacy Online

The First Book Written About a Stock Market Is Selling for $300,000

Michael Batnick: Animal Spirits Talk Your Book: Investing in Commodities

Cullen Roche: 3 Reasons to Hold Long Bonds as Short Rates Rise

Jeff Carter: Leading a Deal

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Bloomberg Appearance
Posted by Eddy Elfenbein on December 3rd, 2018 at 6:23 pm

I was on Bloomberg TV today for their market wrap segment at 4 pm. The mood was a bit somber as it immediately followed the coverage of the arrival of President Bush’s remains at Andrews AFB. If I find the link, I’ll post the video.

Morning News: December 3, 2018
Posted by Eddy Elfenbein on December 3rd, 2018 at 7:08 am

U.S.-China Trade Truce Gives Both Sides Political Breathing Room

Trump Says He Plans to Withdraw From Nafta

Qatar Says It Will Leave OPEC and Focus on Natural Gas

Quiet Casualty of Sri Lanka’s Political Crisis: A Sugar Tax

Bank of America Completes Brexit Switch to Dublin

Big Bull Calls for Markets at Year-end Now Look Less Crazy

Apple Will Wait Until at Least 2020 to Release a 5G iPhone

Qualcomm Says NXP Deal is Dead, Even as China Seen Open to Okaying It

Nexstar Clinches $4.1 Billion Deal to Acquire Tribune Media

Unilever Swallows GSK’s Indian Horlicks Business for $3.8 Billion

Royal Dutch Shell Ties Executive Pay to Carbon Reduction

Why Is Everyone Talking About Marijuana Stocks? And Why Are Hemp Stocks Likely Next?

Lawrence Hamtil: 2018: What I Got Right, and What I Got Wrong (So Far)

Ben Carlson: Your Household CFO

Josh Brown: Eleven Rules for Ethical Advisors

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RIP: George HW Bush
Posted by Eddy Elfenbein on December 1st, 2018 at 11:39 am

George HW Bush died at the age of 94. The NYSE and Nasdaq have announced that they’ll be closed on Wednesday, December 5. The exchanges have traditionally closed for the death of a president.