Bloomberg reports that 40% of Americans will not buy Chinese made goods and a record 60% now have a negative view of the country. It’s about time the public turned negative on China. Young Research has been pointing out the problems in China for years and advising against investment in the country. In early 2012, we explained. It is perplexing that the world has allowed a command style economy run by an unelected political party to become such an important player in the global economy. China is now the world’s second largest economy and America’s second-largest trading partner. If China … [Read more...]
About Jeremy Jones, CFA
Is There a Bubble in Growth Stocks?
Growth stocks are beating value stocks by the widest margin since the dotcom bubble. The top 5 S&P 500 stocks (all growth-oriented technology companies) now account for over 20% of the index—the highest weighting for the Top 5 in the S&P 500 in at least the last three decades. What’s more, for the first time in a decade, a net 20% of fund managers are expecting growth stocks to outperform value stocks. Sounds like a good time to lean into value especially those value stocks that pay and increase their dividends regularly. The Wall Street Journal's Akane Otani reports: Growth … [Read more...]
Gamblers Descend on the Stock Market
If the stock market feels more like a casino to you than a place to invest for retirement these days, the FT has some insight to offer. With all major sports on hiatus and many casinos closed, gamblers are opening stock trading accounts. Net new client accounts have soared at online brokerage firms by almost 800,000 in March and April. Some are even using stimulus money or money they would typically gamble with to bet on stocks. Gamblers who cannot bet on professional sport because fixtures have been scrapped are flocking instead to the US stock market, creating a new class of customer for … [Read more...]
These Numbers are Staggering
Many Americans have wondered why the stock market has bounced so much in the face of an unemployment rate exceeding 20% and economic growth that may fall at the fastest rate on record in the current quarter. Fiscal stimulus is one reason, but as has often been the case over the last decade a Federal Reserve that views its primary job as supporting asset markets is likely a larger cause. Below we present the annualized weekly increase in the Fed’s debt monetization program as a percent of total stock market value. The numbers are truly staggering. In the early weeks of the COVID … [Read more...]
Is the S&P 500 Still Relevant?
Did you know the 5 biggest stocks in the S&P 500 accounting for 22% of the index offer investors an average dividend yield of 0.44%? Only two of the five even pay a dividend. S&P puts them in different buckets, but all five are technology businesses. To meet the SEC’s diversification definition, a fund cannot hold more than 5% of its assets in any one issuer. The two largest stocks in the S&P 500 now account for more than 5% of the index. The index doesn’t even qualify as a diversified fund according to the SEC’s definition. Does that sound like a benchmark anybody in or … [Read more...]
Oil Demand Recovery as the World Reopens
The Wall Street Journal reports that oil demand is rising again as the world reopens after its coronavirus induced shutdown, writing: Oil consumption is rising again in those parts of the world emerging from coronavirus lockdowns, helping to alleviate a global glut and rebalance a market stymied by months of low demand and a devastating rout that saw prices drop as much as two-thirds this year. Green shoots of an oil recovery are sprouting with regions of China attempting a semblance of normal life as lockdowns are eased and parts of Europe and the U.S. allow businesses to reopen. “We … [Read more...]
Should the Trump Justice Department Fight an Uber-Grubhub Acquisition?
Should the Trump administration fight a proposed takeover of Grubhub by Uber? If the two companies unite, they'll own 55% of the market for food deliveries. That's a staggeringly large number in a very young industry. Regulators might want to look at the path taken with Facebook. They allowed the social network to purchase Instagram and WhatsApp, delivering to it massive market share, and killing two of the best options for creating a competitive market. Since then, Facebook has been embroiled in scandal after scandal. Cara Lombardo reports on the proposed deal for the Wall Street … [Read more...]
Established Brands Take Revenge on Startups
The coronavirus effect has halted a trend toward startup consumer companies that has been ongoing in the industry for years. Carol Ryan reports in The Wall Street Journal: Seeking comfort while sheltering at home, shoppers are reaching for Hershey Bars rather than gluten-free energy balls. That is bad news for challenger brands, whose healthy snacks were taking market share from global food companies until very recently. Discussing their latest quarterly results, executives at Nestlé, NSRGY -0.32% Kraft Heinz and Procter & Gamble PG -0.66% all said consumers are returning to … [Read more...]
The Fed Drowns Bond Market Signals
During normal times in markets (remember them?), bond yields play an important roll in signaling investor sentiment. With unprecedented Federal Reserve intervention in bond markets, those signals are completely wiped out. Colby Smith and Tommy Stubbington report for the Financial Times: When the Federal Reserve stepped in to support the world’s largest debt market in March, fixed income investors were relieved. But in successfully staving off a more pronounced financial crisis, the Fed has further distorted markets, they say, overwhelming the once-reliable signals that bonds used to give … [Read more...]
Hedge Funds Gear Up with Gold to Fight Fiat Currency Inflation
Laurence Fletcher and Henry Sanderson report in the Financial Times about hedge fund efforts to use gold to fight fiat currency inflation. They write: Some of the world’s largest hedge funds are raising their bets on gold, forecasting that central banks’ unprecedented responses to the coronavirus crisis will lead to devaluations of major currencies. Paul Singer’s Elliott Management, Andrew Law’s Caxton Associates and Danny Yong’s Dymon Asia Capital are all bullish on the yellow metal, which has risen about 12 per cent this year. They are wagering that moves to loosen monetary … [Read more...]
- 1
- 2
- 3
- …
- 145
- Next Page »