Archive for 2015

Why the World Needs the US Economy to Struggle

Thoughts from the Frontline: Why the World Needs the US Economy to Struggle

By John Mauldin

The headlines this morning talk about the US dollar hitting an 11-year high. I have been saying for years that the dollar is going to go higher than anyone can imagine. This trade is just in the early innings. And the repercussions will be dramatic, not only for emerging markets that have financed projects in dollars, but also for commodities and energy, gold, and a variety of other investments. The world is at the doorstep of a new era of volatility and currency wars.

In this week’s letter, my associate Worth Wray explores what a rising dollar means for emerging markets and what central banks are likely to do in response. Can they smooth the ride, or will it be the world’s scariest roller coaster? This letter will print long because of the number of fabulous charts Worth provides. I might make a brief comment or two at the end. Here’s Worth.

On the Verge of a Disaster… or a Miracle

By Worth Wray

Twenty years after the first divergence-induced currency crisis of the 1990s, commodity prices are tumbling, the US dollar is rallying, and externally fragile emerging markets are reliving the horrors of their not-so-distant past. Except, this time, major economies like the United States, the United Kingdom, the Eurozone, Japan, and the People’s Republic of China may not be able to side-step the ensuing contagion.

With 2014 now behind us, I want to focus this week's letter on what may prove to be the most important global macro pressure points in the coming year(s):

  • The growing divergence among the world’s most important central banks
  • The ongoing collapse in oil and other commodity prices as a function of excess supply and/or weakening global demand
  • The rise of the US dollar, driven by divergence and risk aversion… and the squeeze it’s putting on the multi-trillion-dollar carry trade into emerging markets
  • The vicious slide in emerging-market currencies
  • The rising risk of 1990s-style contagion and financial shocks
  • And what, if anything, can avert the next global financial crisis

But first, let…
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Monday's After-Hours Market Movers

Courtesy of Benzinga.

Related CEMP
Benzinga's Volume Movers
Mid-Morning Market Update: Markets Open Lower; General Motors U.S. Sales Surge 19%

Minerva Neurosciences Inc (NASDAQ: NERV) +77% – Shares are higher following positive study results.

RCS Capital Corp (NYSE: RCAP) +0.62% – Point72 announced an increased stake in RCS Capital to 6.6 percent.

New York Mortgage Trust Inc (NASDAQ: NYMT) +0.25% – The company entered a master purchase agreement with Deutsche Bank AG.

Cyberonics, Inc. (NASDAQ: CYBX) -8.3% – The company provided an update on Departmental Appeals Board decision regarding coverage of its VNS Therapy System.

Cerus Corporation (NASDAQ: CERS) -7.9% – Shares are lower following the announcement of a public offering of common stock.

Five Prime Therapeutics Inc (NASDAQ: FPRX) -4.3% – The company announced a $75 million offering of common stock.

Cempra Inc (NASDAQ: CEMP) -0.53% – The company announced a $100 million common stock offering.

Posted-In: News After-Hours Center Movers





US Stock Futures Slip Ahead Of Auto Sales Data

Courtesy of Benzinga.

US Stock Futures Slip Ahead Of Auto Sales Data
Related SBUX
Sozzi: Starbucks Faces Challenges In 2015 Despite Recent Positive Developments
Fast Money Picks For December 23: Gilead Sciences, Starbucks, CVS Health
10 Things Your Kids Will Live Without (Fox Business)
Related STXS
Morning Market Movers
US Stock Futures Down Ahead Of Wholesale Trade Data

Pre-open movers

US stock futures traded lower in early pre-market trade. Data on motor vehicle sales will be released today. Futures for the Dow Jones Industrial Average dropped 37 points to 17,686.00, while the Standard & Poor’s 500 index futures fell 4.70 points to 2,041.60. Futures for the Nasdaq 100 index declined 8.25 points to 4,206.00.

A Peek Into Global Markets

European markets were lower today, with the Spanish Ibex Index dropping 0.87%, STOXX Europe 600 Index falling 0.21% and German DAX 30 index dropping 0.36%. French CAC 40 Index declined 0.72% and London’s FTSE 100 Index fell 0.64%. Spain’s jobless claims fell by 64,405 to 4.45 million in December, versus November.

In Asian markets, Japan’s Nikkei Stock Average dropped 0.24%, Hong Kong’s Hang Seng Index declined 0.57%, China’s Shanghai Composite Index jumped 3.58% and India’s Sensex slipped 0.16%.

Broker Recommendation
Analysts at Janney Capital downgraded Starbucks Corporation (NASDAQ: SBUX) from Buy to Neutral. The price target for Starbucks has been lowered from $90 to $85.

Starbucks’ shares fell 1.01% to $80.60 in pre-market trading.

Breaking news

  • Stereotaxis, Inc. (NASDAQ: STXS) announced today that it has received 510(k) clearance by the Food and Drug Administration (FDA) for its Vdrive® with V-CAS™ Catheter Advancement System in the U.S., representing the Company’s third Vdrive system product to be cleared for market entry. To read the full news, click here.
  • Amazon.com Inc. (NASDAQ: AMZN) today announced that sellers on Amazon sold a record-setting more than 2 billion items worldwide in 2014. To read the full news, click here.


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Jefferies Downgrades PPL To Hold

Courtesy of Benzinga.

Related PPL
UPDATE: PPL Posts Rise In Q3 Profit, Lifts Forecast
Earnings Scheduled For November 4, 2014

Analysts at Jefferies downgraded PPL Corporation (NYSE: PPL) from Buy to Hold.

The price target for PPL has been lowered from $39 to $37.

PPL shares have jumped 22.22% over the past 52 weeks, while the S&P 500 index has gained 12.67% in the same period.

PPL’s shares rose 0.08% to close at $36.36 on Friday.

Latest Ratings for PPL

Date Firm Action From To
Jan 2015 Jefferies Downgrades Buy Hold
Sep 2014 Hilliard Lyons Initiates Coverage on Buy
Aug 2014 UBS Maintains Neutral

View More Analyst Ratings for PPL
View the Latest Analyst Ratings

Posted-In: JefferiesDowngrades Analyst Ratings





Benzinga's Top #PreMarket Losers

Courtesy of Benzinga.

Related PTNR
Mid-Afternoon Market Update: Crude Oil Slides 3%; Gilead Sciences Shares Spike Higher
Mid-Day Market Update: Ambarella Slips On Analyst Downgrade; Juno Therapeutics Shares Surge

Related MOLG
Shareholder Vincent Tan Says Still Confident in MOL Global's Prospects
MOL Global Extends Gains On Shareholder's Statement

Partner Communications Company Ltd. (NASDAQ: PTNR) shares fell 12.68% to $4.34 in pre-market trading. Partner Communications reported the interest rate for the Series D Notes for the period commencing on December 31, 2014 and ending on March 30, 2015.

MOL Global, Inc. (NASDAQ: MOLG) shares dropped 11.38% to $2.68 in pre-market trading after falling 0.98% on Friday

Transocean Ltd. (NYSE: RIG) fell 2.48% to $17.67 in pre-market trading. Crude oil futures fell 3.11% to trade at $51.05 a barrel.

Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) shares declined 2.47% to $6.72 in pre-market trading after rising 0.29% on Friday.

Starbucks Corporation (NASDAQ: SBUX) shares dropped 1.40% to $80.28 in pre-market trading. Analysts at Janney Capital downgraded Starbucks from Buy to Neutral and lowered the price target from $90 to $85.

Posted-In: PreMarket LosersNews Movers & Shakers Pre-Market Outlook Markets





UPDATE: Wunderlich Securities Reiterates On Harvest Natural Resources As Stock Still Has Value

Courtesy of Benzinga.

Related HNR
Stocks Hitting 52-Week Lows
Morning Market Losers

In a report published Monday, Wunderlich Securities analyst Jason A. Wangler reiterated a Buy rating on Harvest Natural Resources, Inc. (NYSE: HNR), but lowered the price target from $6.00 to $2.00.

In the report, Wunderlich Securities noted, “Harvest Natural Resources’ (HNR) recent announcement that the sale of its Venezuelan assets was terminated sent the stock down hard. Surprisingly, or maybe not given the deal fatigue, the company provided color as to why Venezuela did not approve the deal. These reasons range from a request to ample financing on the projects (which we think were doable) to what amounts essentially to bribes (which we think were not doable); now Harvest still has a 20.4% interest in Petrodelta while the buyer (Pluspetrol) still holds a 11.6% due to the first tranche sale executed about a year ago. The inability to sell the Venezuelan interests, which are out of Harvest’s control, causes us to write the valuable assets off at this time but we still see value in the stock at these depressed levels.”

Harvest Natural Resources closed on Friday at $1.81.

Latest Ratings for HNR

Date Firm Action From To
Jun 2014 Vertical Research Downgrades Sell
Nov 2013 Wunderlich Maintains Buy
Aug 2013 Wunderlich Upgrades Hold Buy

View More Analyst Ratings for HNR
View the Latest Analyst Ratings

Posted-In: Jason A. Wangler Wunderlich SecuritiesAnalyst Color Price Target Analyst Ratings





UPDATE: JMP Securities Reiterates On Esperion Therapeutics On Minimal Risks

Courtesy of Benzinga.

Related ESPR
Benzinga's Volume Movers
Morning Market Losers

In a report published Monday, JMP Securities analyst Jason N. Butler reiterated a Market Outperform rating on Esperion Therapeutics Inc (NASDAQ: ESPR), and raised the price target from $53.00 to $75.00.

In the report, JMP Securities noted, “The completion of two-year carcinogenicity studies represents a key de-risking milestone for ETC-1002; reiterate our Market Outperform rating and increase our price target from $53 to $75 on Esperion Therapeutics. In our view, there is minimal risk of negative results from the two-year carcinogenicity studies for ETC-1002. Specifically, we believe management received final reports for these studies in 4Q14 and we gain confidence from the lack of disclosure of any unexpected negative findings. We see surpassing this milestone as a key de-risking event for the development of ETC-1002 and look to additional value-driving clinical and regulatory catalysts for the drug candidate in 1H15. We believe these catalysts have the potential to further reinforce the strategic attractiveness of the asset (either in a large pharma partnership or acquisition of the company). Our $75 price target is derived from a risk-adjusted, NPV analysis of ETC-1002.”

Esperion Therapeutics closed on Friday at $41.23.

Latest Ratings for ESPR

Date Firm Action From To
Dec 2014 Credit Suisse Maintains Outperform
Oct 2014 Citigroup Maintains Buy
Oct 2014 Credit Suisse Maintains Outperform

View More Analyst Ratings for ESPR
View the Latest Analyst Ratings

Posted-In: Jason N. Butler JMP SecuritiesAnalyst Color Price Target Analyst Ratings





Swing trading portfolio – week of January 5th, 2015

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

Optrader 

Swing trading virtual portfolio

Reminder: OpTrader is available to chat with Members, comments are found below each post.</p></body></html>

 





Wow, They Really Are Tapering

Courtesy of John Rubino.

In the sound-money community there is universal skepticism about the Fed’s plan to stop monetizing the world’s debt. Hardly anyone thinks they’ll go through with it and absolutely no one thinks they’ll succeed if they do.

But the Fed is acting like it’s serious. Take a look at the monetary base, which is the amount of new currency that’s been created and pumped into the banking system. The trajectory since the 2008 crash tells you all you need to know about the “recovery,” which turned out to be just the Fed printing money and a few mostly rich people spending some of it. But check out the far right edge where the line turns negative. Not wildly negative, but still, the Fed does appear to have stopped adding and started subtracting. The money supply is falling.

Monetary base 2015

This kind of tightening would normally coincide with — or cause — rising interest rates. But that’s not yet part of the plan, so even in the face of manifestly tighter money, interest rates have been allowed (or forced) to decline.

But the pressure of tighter money has to be released somewhere, and in this case it’s been the foreign exchange market. The euro, for instance, has tanked since mid-year.

Euro Jan 2015

Every other major currency is down as well, which is the same thing as saying that the dollar is up big. And a rising currency is functionally the same thing as higher interest rates. Consider: If you borrow money you have to pay back the principal plus interest. A higher interest rate obviously makes the loan harder to repay. But so does a rising currency because in order to pay dollars to a creditor you have to get those dollars, and if they’ve become more valuable in the meantime you have to pay up.

So the US is experiencing two of the three symptoms of tighter money: a falling money supply and rising currency. Will we eventually get the third, rising interest rates? That would be interesting to say the least. To understand why, let’s revisit the monetary base chart, with the addition of arrows showing what the stock market did during the previous two attempts at tapering. It tanked — or at least started to tank — and the government relented.

Monetary base plus stocks

Note that during those other two taper attempts…
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US and Canadian Expatriates Comment on US Healthcare

Courtesy of Mish.

I have a couple more emails from readers in response to Single-Payer “Medicare for All” Proposal; Live and Let Die; Why Does Single-Payer “Work” in Europe?

Comments From a US Expatriate

Reader David a US citizen living in Europe writes …

Hi Mish,

I am a native born US citizen who has worked mainly outside of the USA since 2003. In 2012 I liquidated everything in the USA and moved to Europe for the foreseeable future.

In Europe the rules are different for every nation depending on whether you are working for a company, self employed, or a “person of means”. France and Luxembourg have single-payer universal coverage. In Hungary and Spain, you don’t need health insurance if you can prove you can pay your medical expenses (person of means). Switzerland mandates that all people must have some form of health insurance (private). Ireland has a couple of levels:  public, private, etc. Germany allows you to take the state system or take a private system. 

In most “Single Payer” systems that I have seen, the patient pays the bill and the bill is reimbursed at 80% (or whatever) via a SEPA transfer to their account. For those “of means” with no insurance, the person simply pays the bill.

Using Luxembourg as an example, if you go to a doctor and the bill is 50 euros for the visit, You pay the doctor the 50 euros and he hands you a receipt that you submit for reimbursement. The government wires you 80% of the bill within 2 weeks.

Note that the patient sees the bill, and pays the bill at the time of treatment and is typically reimbursed later.

David

Views From a Canadian Expatriate

Reader Peter, a  now living in the US writes …

Hello Mish

I have a few observations about single-payer healthcare. First, here are a few tidbits about me so you know where I get my perspective:



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Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...



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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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 ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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 >>


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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 >>