Archive for the ‘Phil’s Favorites’ Category

News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

U.S. economy grows 1.2 percent in second quarter as inventories fall (Bloomberg)

The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength.

Yellen Chases Elusive U.S. Wage Gains With Georgia On Her Mind (Bloomberg)

When Janet Yellen decides she’s ready to raise interest rates again, her impetus may be her go-to source on wage trends: the Federal Reserve Bank of Atlanta.

A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008.  REUTERS/Toby Melville/File PhotoGlobal funds cut share holdings to five-year lows as Brexit bites (Reuters)

Global investors dumped equities in July and raised bond allocations after Britain's vote to leave the European Union and subsequent signs of damage to economic growth prompted a dash toward fixed income.

The Glut Strikes Back as Oil Returns to Brink of a Bear Market (Bloomberg)

The bullish spirit that gripped oil traders as industry giants from Saudi Arabia to Goldman Sachs Group Inc. declared the supply glut over is rapidly ebbing away.

The TPP Isn't Just a Trade Deal (Bloomberg View)

The Trans-Pacific Partnership, a multilateral trade deal involving the U.S. and many countries on the Pacific Rim, has become something of a bugaboo for those both on the left and the right. Republican nominee Donald Trump has denounced TPP, declaring it a sop to China, even though China isn't included in the agreement. Bernie Sanders is against it as well. President Barack Obama and Democratic vice presidential nominee Tim Kaine are for it, while Hillary Clinton, who helped negotiate the deal, has now turned against it

Here's a Reason Baby Boomers Will Curb U.S. Growth this Decade (Bloomberg)

Population aging is expected to drag on U.S. growth, and the hit could be substantial.


continue reading





US Dollar Slides Following GDP Report, Yen Up 3 Percent

Courtesy of Mish.

The US dollar index now down about 1%, recovering a bit of the initial plunge after the “unexpectedly” weak GDP report. Against the Yen, the dollar is doing much worse, down about three percent.

US Dollar Index Reaction to US GDP

US dollar Index  2016-07-29

US Dollar vs. Yen

Yen 2016-07-29A

Direction on the above chart is opposite the first. The Yen has strengthened about 3%. Some of that is due to a US GDP reaction, but the bulk of the move is on the heels of a market reaction to actions by the bank of Japan.

Traders expected more QE than the bank of Japan delivered this morning. For details, please see Wild Swings in Nikkei, Yen as BOJ Disappoints Markets That Expected More QE.

Mike “Mish” Shedlock


Continue reading here…





New York Fed 3rd Quarter GDP Nowcast 2.5%; I’ll Take the Under

Courtesy of Mish.

The FRBNY staff Nowcast of GDP Growth for the third quarter of 2016 remains essentially unchanged at 2.5%.

The Atlanta Fed GDPNow forecast for the third quarter will occur after the BEA’s release of the “Underlying Detail” tables of the annual revisions, between August 2 and August 5.

Nowcast 2016-07-29A

I’ll Take the Under

With 2.5% as the current over/under line, I’ll take the under, way under.

Mike “Mish” Shedlock


Original article here.





GDP Revisions 2013-2015 by Quarter

Courtesy of Mish.

Every year in July, the BEA releases a set of annual revisions.

As noted previously, a portion of those revisions are related to a construction spending data error that goes back ten years.

Let’s take a look at the revisions.

GDP as Revised

GDP 2016-07-29

  • 2013 Q1: +0.9 percentage points
  • 2013 Q2: -0.3 percentage points
  • 2013 Q3: +0.1 percentage points
  • 2013 Q4: +0.2 percentage points
  • 2014 Q1: -0.3 percentage points
  • 2014 Q2: -0.6 percentage points
  • 2014 Q3: +0.7 percentage points
  • 2014 Q4: +0.2 percentage points
  • 2015 Q1: +1.4 percentage points
  • 2015 Q2: -1.3 percentage points
  • 2015 Q3: unchanged
  • 2015 Q4: -0.5 percentage points

Because of construction errors I was pretty sure 2015 would be revised lower and I expected 2014 to go up. The latter appears to be flat.

For 2013, upward revisions to inventory investment, exports, and residential and nonresidential fixed investment were partly offset by a downward revision to personal consumption expenditures (PCE).

For 2014, a downward revision to inventory investment, an upward revision to imports, and a downward revision to state and local government spending were offset by upward revisions to exports, PCE, and residential fixed investment.


Continue reading here…





Oil Surges After OPEC Production Hits Record High: Here’s Why

Courtesy of ZeroHedge. View original post here.

Now that the narrative of rising gasoline demand and a "strong summer driving season" is finally over, courtesy of gasoline stocks that just refuse to drop…

… and a glut in PADD1 that has never been greater…

… defenders of the "bull" crude oil thesis are stumped. "Doubts are rife as to whether the oil supply imbalance is indeed slowly drawing to an end," Stephen Brennock of oil brokerage PVM, said.

So with no fallback "story" both WTI and Brent are down 20% since their last peak in June, as another bear market for oil has arrived.

Worse, earlier today we got confirmation that another parallel narrative, namely that OPEC is cutting its production, is also dead and buried.  According to a Reuters survey, OPEC's oil output is likely in July to reach its highest in recent history, as Iraq pumps more and Nigeria manages to export additional crude despite militant attacks on oil installations. Top OPEC exporter Saudi Arabia has kept output close to a record high, the survey found, as it meets seasonally higher domestic demand and focuses on maintaining market share rather than trimming supply to boost prices. Supply has been rising since OPEC abandoned in 2014 its role of cutting supply to prop up prices as major producers Saudi Arabia, Iraq and Iran pump more.

According to the survey, OPEC supply rose to 33.41 million barrels per day in July from a revised 33.31 million bpd in June.

There's more: OPEC's production could rise even further should talks to reopen some of Libya's oil facilities succeed. Conflict has been keeping Libyan output at a fraction of the pre-war rate. "This could shortly release more oil into an already abundantly supplied market," Carsten Fritsch of Commerzbank said, although earlier hopes of a restart have not been realized. "It therefore remains to be seen whether this time will be different."

It won't be different.  As Reuters notes, OPEC's output has climbed due to the return of former member Indonesia in 2015 and another, Gabon, this month, skewing historical comparisons. July's supply from the remaining members, at 32.46 million bpd, is the highest in Reuters survey


continue reading





2nd Quarter Real GDP 1.2%, 1st Quarter Revised Lower to +0.8%; Bloomberg Spins This Mess Positive

Courtesy of Mish.

Not only did real GDP come in on the low side, below nearly all consensus estimates, but first quarter GDP was revised lower to 0.8% from 1.1%.

Factoring in the downward revision, my second quarter guess of 0.8% was extremely close. For details please see GDP Forecast Roundup: GDPNow, Nowcast, Econoday, Goldman, Markit, ZeroHedge, Mish.

Bloomberg Spins This Mess Positive

The Bloomberg Econoday consensus estimate was 2.6% in a range of 2.2% to 3.4%.

Despite the huge miss compared to expectations, Bloomberg Econoday managed to put a positive spin on this mess.

Highlights

Second-quarter GDP looks very weak at only a plus 1.2 percent annualized rate, but the details are positive. The biggest positive is consumer spending where growth, showing strength across readings, came in at a stellar 4.2 percent rate, more than double the first-quarter’s 1.6 percent rate.

A plus for the economy but a big negative in this report is slowing inventory accumulation which pulled down GDP by 1.2 percentage points in the quarter. But lean inventories point ahead to new accumulation which is a plus for future production and employment.

Another negative in the report is a reversal in residential investment, which had been running in the double-digit zone but which fell at an annualized 6.1 percent to pull down GDP in the second quarter by 2 tenths. A central concern remains nonresidential fixed investment, falling at a 2.2 percent rate and pulling down GDP by 3 tenths in the quarter. Weakness here points to weakness in business confidence and trouble ahead for productivity growth.

Recent History

The first estimate for second-quarter GDP is expected to come in at plus 2.6 percent for a sizable gain from first quarter growth of 1.1 percent which was held down by severe weakness in nonresidential fixed investment. Retail sales rose sharply in the second quarter and are expected to feed strong gains for the consumer spending component, offsetting what is expected to be continued weakness in business investment, slowing in residential investment, and slowing in inventory accumulation. The GDP price index, reflecting energy prices, is expected to accelerate sharply, to plus 1.8 percent from 0.4 percent in the first quarter.

Inventory Madness

The inventory-to-sales numbers remain in the stratosphere so it is beyond absurd to spin inventories as a huge positive.


continue reading





Panama Papers: Will Wall Street Get Swept Up in Justice Department’s Investigation?

Courtesy of Pam Martens.

U.S. Attorney General Loretta Lynch Testifying Before Senate Judiciary Committee, March 9, 2016

Attorney General Loretta Lynch of the U.S. Department of Justice

The Wall Street Journal reported yesterday that the U.S. Department of Justice in Washington D.C. and its U.S. Attorney’s office in Manhattan “have launched a criminal investigation into whether individuals at Mossack Fonseca & Co., the law firm at the center of the ‘Panama Papers’ scandal, knowingly helped its clients launder money or evade taxes…”

That investigation, if conducted thoroughly and without improper interference, could turn up the heat on some powerful Wall Street players.

On May 16 Wall Street On Parade broke the story that the Miami office of Citigroup’s Private Bank at 201 South Biscayne Blvd. was the listed address for dozens of offshore companies whose agent is Mossack Fonseca. (See graph below.) Our information was obtained from a search of the public database made available by the International Consortium of Investigative Journalists (ICIJ), which received more than 11.5 million leaked files from the Panama-based law firm, Mossack Fonseca. ICIJ calls Mossack Fonseca “one of the world’s top creators of hard-to-trace companies, trusts and foundations.”

Prior to Citigroup’s implosion and bailout in 2008, it reported its major subsidiaries to the Securities and Exchange Commission. In this report from 2006, Citigroup showed more than 1600 major subsidiaries with more than five dozen in secrecy jurisdictions. As Citigroup came under serial investigations by the Justice Department and other Federal regulators, its list of subsidiaries shrank dramatically. But as we reported in 2014, that doesn’t mean the subsidiaries are actually gone – many are simply just not listed any longer in an out-of-sight-out-of-mind kind of operation.

Wall Street hedge funds may also come under the microscope. Hedge fund titans have turned up in the Panama Papers database or earlier leaked documents that are now part of the ICIJ database.



Continue Here





Greenwald Explains What Out-of-Touch Media Doesn’t Get About Trump, Russia, and US Electorate

 

Greenwald Explains What Out-of-Touch Media Doesn't Get About Trump, Russia, and US Electorate

'People have been so fucked by the prevailing order in such deep and fundamental and enduring ways that they can't imagine that anything is worse than preservation of the status quo'

By Deirdre Fulton at Common Dreams

 
Glenn Greenwald

"You have this huge portion of the populace in both the U.K. and the U.S. that is so angry and so helpless that they view exploding things without any idea of what the resulting debris is going to be to be preferable to having things continue," Glenn Greenwald told Slate.  (Photo: Gage Skidmore/flickr/cc)

Donald Trump poses "extreme dangers" to the United States and the world, journalist and co-founding editor of The Intercept Glenn Greenwald says in a new interview published at Slate.

But to stop the GOP presidential nominee from getting elected, "U.S. media and U.S. elites" must take a lesson from the recent Brexit debacle, he warns—and bending over backwards to link Trump to Russian President Vladimir Putin isn't the right approach.

"U.K. elites were uniform, uniform, in their contempt for the Brexit case, other than the right-wing Murdochian tabloids," Greenwald told Slate contributor Isaac Chotiner by phone.

"They all sat on Twitter all day long, from the left to the right, and all reinforced each other about how smart and how sophisticated they were in scorning and [being snide] about [U.K. Independent party] and Boris Johnson and all of the Brexit leaders, and they were convinced that they had made their case," he said. "Everyone they were talking to—which is themselves—agreed with them. It was constant reinforcement, and anyone who raised even a peep of dissent or questioned the claims they were making was instantly castigated as somebody who was endangering the future of the U.K. because they were endorsing—or at least impeding—the effort to stop Brexit. This is what's happening now."

He continued:

Do you think the people voting for Donald Trump because they feel their economic future has been destroyed, or because they are racist, or because they feel fear of immigrants and hate


continue reading





Wild Swings in Nikkei, Yen as BOJ Disappoints Markets That Expected More QE

Courtesy of Mish.

The markets expected the Bank of Japan to unleash lower yields further into negative territory at its Friday policy meeting.

Instead the board voted to keep rates unchanged and to maintain existing monetary base targets. But the BoJ did vote to increase equity ETF purchases and increased US dollar swaps.

This set of moves led to some wild moves in the Nikkei, and a 1.6% increase in the Yen vs. the US dollar.

Yen Surges

Yen 2016-07-29

Wild Ride in Nikkei

Nikkei 2016-07-26A

The initial reaction was hugely negative. That was followed by a rebound to break even, another plunge, then a rally back to the green, all in a short time span.

Saxo bank chief economist Steen Jakobsen pinged me the key takeaway was the doubling of its US dollar loan facility is an admission of a dollar funding crisis but otherwise the rest of the policy statement was weak.


Continue reading here…





Damning Internal Report Shows IMF Repeatedly Bent Rules, Caved in to Merkel on Greek Bailout

Courtesy of Mish.

An internal IMF report shows the IMF repeatedly succumbed to political pressure, ignored its own rules, and kept many executive board members in the dark about the state of affairs.

Please consider IMF Swayed by Politics During Eurozone Crisis, Say Inspectors.

The International Monetary Fund repeatedly succumbed to political pressure from European governments during the eurozone debt crisis, according a damning internal report on bailout strategy that will fuel debate over whether it should continue to fund Greece.

In-house inspectors highlighted a litany of flaws in the IMF’s “uneven” response, prompting calls for greater clarity over the fund’s rescue strategy for eurozone countries.

Christine Lagarde, the IMF’s managing director since 2011, backed some of the inspectors’ recommendations for improving internal procedures but dismissed calls from the independent evaluation office (IEO) to fortify the fund’s defences against political interference.

T the report is likely to fan suspicions of some emerging market IMF shareholders and some of its staff that it repeatedly bent its own rules to help out the eurozone.

“It highlights the concerns of many — both inside and outside the fund – that the fund’s treatment of developing and emerging market economies is quite different from its treatment of advanced economies,” said Eswar Prasad, economics professor at Cornell University and former IMF official.

“Political factors seemed to play a bigger role than pure technical considerations in matters involving advanced economies.”

The inspectors said the troika arrangement — in which the IMF worked alongside the European Commission and European Central Bank — potentially subjected the technical judgment of IMF staff “to political pressure” from an early stage.

“The European Commission, in the area of emergency crisis lending, acted as the agent of the eurogroup, which in turn represented member states and decided whether to provide assistance.

“Interviews and some internal documents suggest that political feasibility in creditor countries was an important consideration for [European Commission] staff and that IMF staff occasionally felt pressured to accept a less-than-ideal outcome.

The inspectors said the IMF executive board, responsible for the fund’s day-to-day business, was in the dark on sensitive policy questions for Greece and Ireland, which also received a bailout in 2010.

Some executive board members, who usually meet several times each week, learned more from the press throughout the crisis period than from


continue reading





 
 
 

Zero Hedge

Weekend Reading: DNC - Discerning & Notional Conjugations

Courtesy of ZeroHedge. View original post here.

Submitted by Lance Roberts via RealInvestmentAdvice.com,

This week, the headlines have been dominated by the Democratic National Convention pushing Janet Yellen’s latest FOMC non-action to “page 6.”

Of course, it was not surprising to hear yesterday Janet Yellen has once again “flip-flopped” on hiking rates. This tweet from HedgEye sums it up nicely.

In honor of Summer, we're breaking out ...



more from Tyler

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

U.S. economy grows 1.2 percent in second quarter as inventories fall (Bloomberg)

The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength.

Yellen Chases Elusive U.S. Wage Gains With Georgia On Her Mind (Bloomberg)

When Janet Yellen decides she’s ready to raise interest rates again, her impetus may be her go-to source on wage trends: the Federal Reserve Bank of Atlanta.

...



more from Paul

Chart School

Visualizing GDP: An Inside Look at the Q2 Advance Estimate

Courtesy of Doug Short's Advisor Perspectives.

Note: The charts in this commentary have been updated to include the Q2 2016 Advance Estimate.

The chart below is a way to visualize real GDP change since 2007. It uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics:

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE) and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which ...



more from Chart School

Phil's Favorites

US Dollar Slides Following GDP Report, Yen Up 3 Percent

Courtesy of Mish.

The US dollar index now down about 1%, recovering a bit of the initial plunge after the “unexpectedly” weak GDP report. Against the Yen, the dollar is doing much worse, down about three percent.

US Dollar Index Reaction to US GDP

US Dollar vs. Yen

Direction on the above chart is opposite the first. The Yen has strengthened about 3%. Some of that is due to a ...



more from Ilene

ValueWalk

NetSuite Inc Stock Soars On Oracle Corporation Bid

By Jacob Wolinsky. Originally published at ValueWalk.

NetSuite Inc (NYSE:N) is soaring this morning as Oracle Corporation (NASDAQ:ORCL) has made a bid to buy the company for $9.3 billion. This deal has been rumored for some time but obviously few expected such a large premium or did not think the bid was certaintly coming as the stock is up about 18 percent at the time of this writing which is a lot for a tech giant. Here is what the sell side is saying.

NetSuite – analysts react

Nomura

Should the transaction take place, Oracle would pay about 9x NTM EV / revenue (based on consensus estimates for NetSuite), above the average multiple paid in our precedent SaaS Software acquisitions analysis of 6.8x . Additionally, Oracl...



more from ValueWalk

Mapping The Market

Illusion of Choice

From Jean-Luc:

Looks like we are down to about 10 companies for our consumer goods:

http://www.visualcapitalist.com/illusion-of-choice-consumer-brands/

Just like banks, airlines and cable companies! 

The Illusion of Choice in Consumer Brands

Explore the full-size version of the above graphic in all its glory.

If today’s infographic looks familiar, that’s because it originates from a well-circulated report that Oxfam International puts together to show consolidation i...



more from M.T.M.

Digital Currencies

Judge Rules Bitcoin Isn't Money Because It "Can't be Hidden Under A Mattress"

Courtesy of ZeroHedge. View original post here.

By Everett Numbers via TheAntiMedia.org

In a landmark decision, a Florida judge dismissed charges of money laundering against a Bitcoin seller on Monday following expert testimony showing state law did not apply to the cryptocurrency.

Michell Espinoza was charged with three felony charges related to money laundering i...



more from Bitcoin

Kimble Charting Solutions

Junk Bonds at important inflection point, should impact stocks!

Courtesy of Chris Kimble.

Junk bonds have been quality at sending Risk On and Risk Off message to the broad stock market. Below looks at Junk Bond ETF JNK over the past decade.

JNK finds itself at an important price point below and what it does in the upcoming couple of weeks could become a big influence on the Risk On/Risk Off trade.

CLICK ON CHART TO ENLARGE

...

more from Kimble C.S.

OpTrader

Swing trading portfolio - week of July 25th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David

Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

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.

...



more from Biotech

Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



more from Promotions

Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>