For most of my career it has been good to be an economist. I felt wise, I felt heard. Sure, I got constant reminders from well-meaning people that no one behaves in the rational way that economists generally presume people do. But otherwise it seemed economists had influence and prestige.
You wouldn’t know it from the boom in stocks that hit new highs after tottering for over a year, and from the surge in junk bonds, even the riskiest ones, whose prices have soared and whose yields have plunged: At the riskiest end of the spectrum, the average yield of CCC-and-below rated junk bonds went from 21.5% on February 12 to 14.2% now, as if all credit problems, defaults, and bankruptcies had suddenly disappeared after the latest Fed flip-flop or whatever.
Ever since legendary business magnate Carl Icahn sold his Apple shares earlier this year, many investors lost faith in the company’s future and withheld from taking a position in the tech giant. But history shows that following the herd mentality, even if propagated by someone as prophetic as Icahn, isn’t always the best idea.
“I am not Donald Trump’s campaigner,” the Hungarian leader said at a cultural event in Baile Tusnad, Romania, an area with a large Hungarian population. “I never thought that the idea would ever occur to me that he is the better of the open options for Europe and Hungary.
“I listened to (Trump) and I have to tell you that he made three proposals to stop terrorism. And as a European, I myself could not have drawn up better what Europe needs.”
“If I’m asked what is Hungary’s strongest expectation regarding Turkey today, we will put stability first,” Orban said. “If Turkey becomes unstable, many tens of millions of people from that region will hurtle toward Europe without any sort of filtering, screening or control.”
“Europe’s current political leadership has failed,” Orban said, adding that the EU was “fooling itself” if it still viewed itself as a “global actor,” saying that era had ended with the vote by Britain to leave the 28-nation bloc.
“Our problem is not in Mecca but in Brussels,” Orban said. “The bureaucrats in Brussels are an obstacle for us, not Islam.
Orban arguably did as much to stop the flow of refugees into Europe as did Merkel’s ill-advised deal with Turkey.
After Hungary shut its borders with Serbia and Croatia last year, the flow of migrants coming from Turkey through Greece and further north into the EU collapsed.
Merkel’s deal with Turkey further shut the door, but it was individual nations willing to stand up to Merkel that largely did the trick.
The cycle of central planning and civil unrest. Central banks making big promises, which traders seem to like. S&P 500 near all-time high. Britain’s economy is shrinking, China’s debt is soaring. Gold corrects; several analysts see a top here. Oil falls for the week. Another terrorist attack, this time at a German shopping mall. Trump makes long, dark acceptance speech, very well-received by Republicans. Clinton picks Tim Kaine for VP.
Sixty-day notices of “possible layoffs” were handed out to Boeing employees on Friday, a company spokesperson announced.
Details of exactly how many employees received such notices have not been released. However, spokesperson Jennifer Hogan tells News 9 the possible job cuts are not targeted toward a specific department and are company-wide.
Because the notices are for 60 days, Hogan says total layoff numbers may change through attrition, career changes and retirement.
Honeywell International Inc. posted revenue and profit gains in its latest quarter but cut its revenue forecast for the year as the company saw core organic sales fall in its three business units.
Shares in the company, up 3.9% over the past three months, slid 1% to $117.50 in premarket trading.
Honeywell now expects annual sales of between $40 billion to $40.6 billion, down from its previous guidance for sales between $40.3 billion and $40.9 billion. It also increased the low end of its earnings-per-share guidance for the year by 5 cents, now expecting between $6.60 to $6.70.
On the surface, this morning’s GE non-GAAP results (defined as follows: “Non-GAAP results excluding acquired Alstom businesses, non-operating pension costs, gains and restructuring & other charges”) were spun as very bullish, with extensively adjusted revenues of $33.5 billion rising 15% and beating expectations of $31.4 billion, while non-GAAP EPS surged 65% to $0.51, well above the $0.46 expected.
Bloomberg immediately praised the result.
What was less, if at all, noted is that any comparisons to prior periods were apples to oranges, as the entire upside contribution came not only from transaction “gains”, which added $3.1 billion to the top line, and restructuring charges but all the inclusion of the recently acquired Alstom.
So for those curious how the increasingly industrial firm’s organic operations, and especially the above
The S&P Mid-Cap Index is trading in the tightest 8-day range in over 20 years; is a big move imminent?
Yesterday, we wrote about the Dow Jones Industrial Average’s rare streak of 7 consecutive all-time highs since its long-awaited breakout. However, scanning the broad equity landscape, it appears that consolidation has been more the norm since the market’s last big up day on July 12. This consolidation is demonstrated by the S&P 400 Mid-Cap Index as clearly as any space. Specifically, the 7-day range in the index spans less than 1 percent for just the 8th time ever. And, at precisely 1.00%, the 8-day range is the narrowest in more than 20 years. In fact, all of the historically tighter ranges occurred in the low-volatility early to mid-1990′s period.
So what are the implications of this tight range? Well, it is generally thought that exceptionally tight ranges lead to out-sized moves once the range is broken. The notion is that the action is akin to a coiled spring that, when released, expends its considerable pent-up energy. And, generally, we have found that to be the case with breakouts from similar ranges. However, it also depends on the type of environment we are in as well.
From 1992-1995, for example, the daily average true range in the S&P 400 averaged about 0.65%, an exceptionally low level. Thus, we should not be surprised to see that most of the historically tight trading ranges took place during that period. We also should not be surprised to see that the tight ranges of that era did not always lead to out-sized moves.
On the other hand the average true range during past 4 years has averaged around 1.30%, or about double that of the early-1990′s period. Therefore, when we see an unusually tight range like we are seeing now, it is not unreasonable to expect a sizable move once the tight range is broken.
Additionally, in an environment like the present, a tight range or consolidation is often representative of a continuation pattern.
The price of gas is on the rise again—up five percent globally in the last three months. But cost per gallon alone doesn’t give a complete picture of how big a bite gasoline takes out of an average driver’s paycheck. We ranked 61 countries by three economic measures to see who has the most affordable gas, and who feels the most pain at the pump.
Every year, Consumer Reports and its team of automotive experts test and scrutinize virtually every car sold in the US. Of those cars, a select few stand above the rest and join the vaunted group of vehicles known as Consumer Reports' Top Picks.
A quartet of technology heavyweights will be part of an avalanche of quarterly corporate earnings reports next week that, along with a meeting of Federal Reserve policymakers, could hold the key to whether Wall Street extends its record-breaking rally or loses steam.
Goldman Sachs Group Inc.’s fixed-income traders were supposed to take back market share in the second quarter, halting years of declines. That now looks harder, after JPMorgan Chase & Co. and Citigroup Inc. blew past analysts’ estimates last week.
While most of the attention post-Brexit has been on the UK, we are far more concerned about Europe. Markets and the economy operate in a feedback loop, and the performance of European banks relative to the stock market points to a fall in lending ahead in Europe. Banking stocks provide a one year lead on lending growth in Europe. The dire trading of banks will do little to improve the debt-deflationary dynamic at play in Europe.
Likewise, the very poor performance of European equities points to lower growth ahead in Europe. As you can see from the next chart, the returns of the Euro Stoxx 600 provides a six month lead on industrial production. Lower prices in European stocks will yield bargains, but we foresee more pain ahead in Europe.
Whereas positive feedback tends to lead to instability via exponential growth, oscillation or chaotic behavior, negative feedback generally promotes stability. Negative feedback tends to promote a settling to equilibrium, and reduces the effects of perturbations. Negative feedback loops in which just the right amount of correction is applied with optimum timing can be very stable, accurate, and responsive.
Negative feedback is widely used in mechanical and electronic engineering, but it also occurs naturally within living organisms.
In context, it is quite clear that Variant Perception means positive feedback loops with negative consequences, alternatively feedback loops that reinforce with increasingly negative results.
The engineering error does not take away from an otherwise useful idea.
About one month ago we read that risk parity and volatility targeting funds had record exposure to US equities. It seems unlikely that this has changed – what is likely though is that the exposure of CTAs has in the meantime increased as well, as the recent breakout in the SPX and the Dow Jones Industrial Average to new highs should be delivering the required technical signals.
The bots keep buying… Illustration via carolublog.wordpress.com
All these strategies are more or less automated (they may be tweaked from time to time, but essentially they are simply quantitative and/or technical strategies relying on inter-market correlations, volatility measures, and/or momentum). Active fund managers by contrast are said to be skeptical of the market rally, but it should be stressed that the evidence for this is purely anecdotal.
The vast bulk of trading is nowadays automated. We recently read that in 2015, 23% of the entire year’s equity trading volume was accounted for by the top 100 ETFs (h/t to Brent Johnson of Santiago Capital). These are passive investments – in other words, they are brainless.
In addition to this, some 50% of volume is probably attributable to high frequency trading, and the above mentioned black box strategies presumably account for a good chunk of trading volume as well. This raises an interesting question: how many trades are still made by someone who actually thinks about what he is doing? Does it even matter whether active fund managers are skeptical or not?
It looks pensive in this image, but does it actually think? We don’t believe so…
What prompts us to wonder about this is the following chart. It shows the so-called “smart-dumb money confidence spread” calculated by sentimentrader, which tries to show what historically good and bad market timers are doing with their money. Its construction involves mainly real money gauges (for instance options and futures positioning data, short selling data, odd lot purchases, etc.) rather
It was only a matter of time. And it is now official. Two Navya Arma shuttles arrive in the Confluence district in September.
These shuttles driverless, 100% autonomous and fully electric task will be to carry passengers between the leisure division and Confluence shopping and the tip of the peninsula, up to the GL Events seat.
Navya Arma has “lasers that sweep space, cameras and precise GPS”. The Navya should be able to circulate in the Lyon area starting early September, from 7:30 to 18:30. Despite the absence of a driver, the shuttle can reach 25km/hour, safe for passengers or pedestrians.
Navya Arma Video
Some may scoff at 25km/hour (roughly 15.5 mph) but not me. For starters, the shuttle operates in city traffic, with pedestrians, not in interstate highway traffic that in most respects is much easier (no bicycles, no kids playing in the street, no stop signs, no stop lights).
Finally, I point out this is 2016. Where will the technology be eight years from now? Six? Even four?
Autonomous truck naysayers, please get a grip on reality.
Crude oil inventories in the U.S. have fallen 23.9 million barrels since the end of April, but, as Bloomberg notes, oil bulls counting on further declines are fighting history. Over the past five years refiners' crude demand has fallen an average of 1.2 million barrels a day from the peak in July to the low in October.
"The rough part will be once refineries start going into maintenance," said Rob Haworth, a senior investment strategist in Seat...
The global rally in equities Moderated last week. The average gain of the eight indexes on our world watch list was a respectable 0.41%, down from the previous week's steroidal 3.87% average. Hong Kong's Hang Seng was the top performer with a 1.41% advance. At the other end, the chronic laggard Shanghai Composite fell 1.36%.
A Closer Look at the Last Four Weeks
The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. We've also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the compara...
By Jacob Wolinsky. Originally published at ValueWalk.
Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.
Relypsa Inc (NDAQ:RLYP) bid – analysts react
Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, ...
Companies around the world are exploring blockchain, the technology underpinning digital currency bitcoin. In this Blockchain unleashed series, we investigate the many possible use cases for the blockchain, from the novel to the transformative.
Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the blockchain - the technology infrastructure behind bitcoin...
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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