At the Financial Times, Billy Nauman examines ESG funds and their potential as victims of short-sellers. He writes: Whenever big money starts flowing into a hot new sector, it seems inevitable that companies that list on the stock market fall short of hype and hope around them. One of the market’s current hottest areas is environmental, social and governance investing. And, like the cryptocurrency boom and cannabis stock surge, the flood of money has been followed closely by allegations of fraud. These claims are often made by activist investors and short-sellers, who bet on the fall in … [Read more...]
About Jeremy Jones, CFA
Double Digit Stock Market Gains Projected if Trump Wins
Many Wall Street strategists have come out in recent weeks with “research” indicating that a blue-sweep would be bullish for the economy and the stock market. See here and here for example. Somebody’s been hitting the blue Kool-Aid hard. Since when are massive tax increases, burdensome regulation, and bigger government bullish for growth and the economy? Thankfully, there is at least one strategist on Wall Street with a sober view. JP Morgan expects a Trump victory to lead to double-digit gains in the stock market. In JP Morgan’s view, a blue sweep would be neutral for the market, but … [Read more...]
The Reach For Yield Reemerges
Not even a year removed from a crash in risky bonds, investors are already reaching for yield again. Bond issuers are putting payment in kind (PIK) provisions into newly issued junk bonds. PIK deals allow bond issuers to make interest payments with more debt. That’s like applying for a new credit card to make the minimum payment on an existing card. With 10-year Treasury bond yields under 1% and the expectation that the Fed no longer has any red lines on bailing out investors, the reach for yield is back on. The FT has more: Private equity firms are testing investors’ appetite for … [Read more...]
Can You Believe Any of the Numbers Out of China?
Official statistics from China have been suspect for some time, but in the wake of COVID-19, more analysts are looking at them with skepticism. The Economist reports: The national statistics bureau will report third-quarter gdp on October 19th. Analysts expect growth of about 5% compared with a year earlier, a strong recovery from the depths of the coronavirus slowdown, and all the more stunning when much of the world is mired in recession. Yet some believe the official growth data have been too rosy this year, not least because China’s pandemic lockdown in the first quarter was among the … [Read more...]
Trucks more like Drones Could Be the Future of Autonomous Transportation
The goal of most autonomous vehicle development is aimed at cutting humans out of the vehicle's operation as much as possible. One Swedish company, Einride, is working on a concept that treats autonomous trucks more like drones. They allow a remotely located "driver" to take over operation of their "Pod" trucks when needed. The Economist reports: The Pod was made by Einride, a Swedish firm founded in 2016 by Robert Falck, an engineer who used to work for Volvo. Mr Falck thinks that the technology of vehicle autonomy, long experimental, has now evolved sufficiently for driverless goods … [Read more...]
New Jersey Chases Away Business with Biden-Like Policies
In the past, former Vice President Joe Biden has expressed his support for a financial transactions tax. Now, New Jersey is trying to implement one of its own to bolster its broken budget. The move's effect could be the opposite of that intended. The NYSE, the world's largest stock exchange by market capitalization, said it plans to leave New Jersey if the state implements the tax. Bloomberg's Elize Young reports: The New York Stock Exchange told New Jersey lawmakers that it’s prepared to move operations out of state should they impose a new tax on electronic trades via data servers. In … [Read more...]
Biden’s Triple Threat to American Wealth and Prosperity
You might think that after a massive regulatory rollback and tax reform drove unemployment to the lowest level in a generation and helped low and moderate-income Americans most, it would sink in on the left that incentives really do matter for economic prosperity. Well, you probably didn’t think that, but you might have hoped common sense would prevail. It hasn’t. Biden’s economic plan looks like a disaster for America’s economy. Biden wants to hike, corporate, personal, and investment taxes. A President Biden would hike the corporate tax rate to 28% from today’s 21%. He would … [Read more...]
The Curse of the Benchmarks
At the Financial Times, Paul Woolley explains a troubling phenomenon in investing that he calls “the curse of the benchmarks.” He writes: All investing boils down to a choice of two distinct strategies implemented in a variety of ways. One is buying securities that are priced cheaply in relation to their expected future cash flows, which is what everyone assumes is done with their savings. Bizarrely, the other is almost the exact opposite: buying securities whose prices have recently been on the rise or that have already gone up most, both without reference to fundamental value. Another … [Read more...]
Is Google Unfairly Competing Against Travel Businesses?
Sam Schechner reports in The Wall Street Journal on the travel industry's concerns over Google's tactics. He writes: Google has long been one of the biggest drivers of new business for travel websites like Expedia and Tripadvisor. Some of them say the Alphabet Inc. GOOG -0.43% unit is also a big competitive threat. Berlin-based HomeToGo GmbH is an example of the bind facing many travel businesses. The vacation-rental website depends in part on Google to direct people to its service, but it says business has been affected by the search company’s placing a box of listings from third-party … [Read more...]
Kroger Scares up Business with Ghost Kitchens
Kroger is working with startup "ghost kitchen" company, ClusterTruck to expand its delivery of freshly made delivered foods. Ben Mahaney writes: Leading grocery chain Kroger and technology start-up ClusterTruck will launch two on-premise ghost kitchens at Kroger stores in Indianapolis, Indiana and Columbus, Ohio. The launch follows a pilot conducted by the two companies last year at stores in Carmel and Indianapolis, Indiana and Columbus, Ohio. The two-on premise ghost kitchens or delivery-only kitchens will offer a variety of over 80 freshly prepared meals on-demand with no service or … [Read more...]
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