Reddit's army of meme-stock traders can now move the values of the biggest companies in the world because hedge funds are chasing them into options trading strategies. Look what happened to Apple this week. Eric Platt and Madison Darbyshire report in The Financial Times: Investors pointed to several reasons for its strength, including the fact the company is a defensive play as uncertainty abounds over the coronavirus and as monetary policy shifts at the US Federal Reserve. Trading volumes in Apple have been impressive as mentions of the company have climbed up the ranks on Reddit message … [Read more...]
About Jeremy Jones, CFA
SUPPLY CHAIN SOLUTION: Teen Truckers?
The recently passed infrastructure bill contained a new rule allowing some teens to legally drive semi-trucks, in the hope that allowing them to do so will create a supply of new drivers that can alleviate the supply chain troubles America faces today. Bloomberg reports: Dezjion Henson has wanted to be a truck driver his whole life. When he turned 18 last year he jumped at the chance and signed on as an apprentice with Total Transportation of Mississippi, LLC in Richland, Mississippi. He assumed he would have to wait until he turns 21 to book the lucrative, cross-country runs he took with … [Read more...]
Is Anti-Trust Finally Catching Up to Big Tech?
Through time, a small number of tech companies; Facebook, Google, Amazon, Microsoft, etc., have amassed much of the share of their respective markets. Regulators mostly gave them a pass as they acquired smaller rivals, but now those days may be over. Parmy Olson reports in Bloomberg: For years, Facebook and other large technology companies grew into vast digital conglomerates by making so-called killer acquisitions, small deals for companies that could one day pose a competitive threat. Internal emails between executives at Facebook show Chief Executive Officer Mark Zuckerberg and his … [Read more...]
FOOL ME ONCE: Nissan Wary of EV Projections
In 2010, Nissan took a big leap of faith into the electric vehicle market, spending billions on designing and building battery-powered cars. It didn't turn out as planned, and now the company is wary of projections of growth for the electric vehicle market. Sean McLain reports in The Wall Street Journal: TOKYO— Nissan Motor Co. was once the world’s loudest proponent of electric cars, but these days it is one of the more sober voices. On Monday, the Japanese car maker said it would spend about $17.5 billion on 20 new battery-powered models, aiming to have half its sales come from electric … [Read more...]
Did You Miss the Biggest Market Rally in over Eight Decades?
UPDATE November 30, 2021: Since we first posted this in March, stocks have continued their upward climb rising another 18%. Investors who bailed out at the March 2020 bottom and still haven’t gotten the courage to invest back in the market have forgone a 113% return. Ouch! And that doesn’t even count the capital gains taxes that were likely due when long-held positions were sold. Trying to rush for the exits when everyone else in the building is doing the same and then piling back in when the all-clear signal is given is a good way to get banged up. A long-term balanced approach that properly … [Read more...]
Was Friday’s Selloff a Warning of Market Fragility?
Just how fragile are markets? Wellington has done a report, and the results aren't promising. The supply and demand of liquidity are mismatched, and chaos could be right around the corner. Robin Wigglesworth explores the market's fragility in the Financial Times, writing: Investors have been blithely skating into the Christmas period, basking in another remarkable rally across financial markets. But the ice underneath may be thinner and brittler than many realise, as Friday’s violent sell-off showed. The past decade has been characterised by unusually calm, strong and long stock market … [Read more...]
Inflation Pricing Driving Higher Sales at Smuckers
The power of strong branding proved itself once again in the last quarter as J.M. Smucker Co. was able to set higher prices for its products and increase sales in this time of inflation. Adriano Marchese reports for The Wall Street Journal: Food manufacturer J.M. Smucker Co. SJM -1.34% said sales in the second quarter rose, as higher prices and demand helped it navigate higher costs and supply chain challenges. On Tuesday, the company behind Jif peanut butter, its namesake jellies and Folgers coffee said net sales were $2.05 billion in its fiscal second quarter, up from $2.03 billion a … [Read more...]
ELECTRIC VEHICLE EUPHORIA: “Flow, Momentum, Memes and Appetites”
In an interview with The Financial Times, Drew Dickson, chief investment officer at Albert Bridge Capital, explains that in the short and intermediate term, electric vehicle stocks have been dominated not by fundamentals, but by "flow, momentum, memes, and appetites." Robin Wigglesworth reports on the increasing power of electric vehicle makers' over financial markets, writing: An index of EV and electric battery companies compiled by the FT has a combined market capitalisation of almost $1.8tn. In contrast, automotive giants Toyota, Volkswagen and Hyundai, the biggest car manufacturers in … [Read more...]
The Lasting Impact of the Supply-Chain Shock
In the Financial Times, David Bowers analyzes the long-term effects that may be presented by today's supply chain breakdown. He writes: Most policymakers have only known a world where demand has been limited and supply has been elastic. Whatever the demand, China has been ready and willing to meet it as the world’s supplier of last resort. The policy response to the pandemic has upset that balance. High levels of saving and government transfers during lockdowns have underwritten a dramatic rebound in global demand but failed to prepare supply, creating a bullwhip effect. Now it is supply … [Read more...]
Do Investors Even Remember Risk?
The Financial Times headline by Robin Wigglesworth reads "Low yields have left investors numb to risk, bond veteran Dan Fuss says." That assumes investors even remember that risk exists, which oftentimes seems to not be the case. They may have forgotten altogether. Wigglesworth reports: The strong rally in corporate debt markets triggered by a flood of central bank stimulus is spooking veteran bond investor Dan Fuss, who warns that investors are taking the most risks he has seen in the past six decades. Central banks last year sharply cut interest rates and unleashed vast bond-buying … [Read more...]
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