Small retailers have faced heavy competition from Amazon as the big company has raced to dominate e-commerce. One of the greatest advantages Amazon has had over competitors is its logistical efficiency, quickly moving products to customers before competitors are able. That might be changing though, as FedEx has announced a new program that will allow smaller retailers to directly compete with Amazon on delivery speeds. Bloomberg's Thomas Black reports on the new program, writing: FedEx sees potential profit in the competitive pressure online stores face in keeping up with Amazon’s drive to … [Read more...]
This Leading Indicator Says U.S. Economy Still Strong
Some investors have pointed to the recent correction in stocks as a warning of recession and a reason for the Fed back-off of its interest rate hiking cycle. Recessions are often accompanied by falling stock prices, but falling prices don’t guarantee economic contraction. There have been plenty of false positives throughout history. While the jury is still out on whether the current stock market correction is a signal of recession, the coincident economic data continues to show economic strength. GDP is growing close to 3% according to the Atlanta Fed GDPNow forecast, industrial production … [Read more...]
Can Tech Unicorns Cash Out before the Bubble Bursts?
In a piece in the Financial Times, Rana Foroohar discusses today's tech valuations, and whether or not companies thinking about IPOs can cash out before the next bubble bursts in the tech sector. Foroohar explains the messy dynamics of tech investing today, and how that is hurting the sector's prospects. She writes: There were many disconnects between last week’s World Economic Forum and the real world. One of the most notable was the techno-optimism displayed by many participants, which was in sharp contrast to what the markets themselves are expecting from the technology sector this … [Read more...]
In the Hamptons, Buyers Look for Bargain Homes under $3 Million
Oshrat Carmiel reports in Bloomberg that homebuyers in the Hamptons are looking for "bargain" homes of under $3.3 million. She writes: Buyers of Hamptons homes in the third quarter didn’t want to splurge on something too costly, but they were willing to bid up cheaper properties in their search for a vacation retreat. Purchasers agreed to pay more than the asking price in 10 percent of deals for properties under $3.3 million -- this quarter’s definition of “non-luxury” homes, making up the bottom 90 percent of the market, according to a report Thursday by appraiser Miller Samuel Inc. and … [Read more...]
Can Reuse Save the Mega Brands, and the World?
Some of the world's biggest branded consumer products and food companies, including Procter & Gamble, Nestle, PepsiCo and Unilever are planning to begin trial sales of their products using reusable packaging. The recycling company, TerraCycle, will handle deliveries and pickups of the products and their packaging. Saabira Chaudhuri reports for The Wall Street Journal: Refillables once dominated industries such as beer and soft drinks but lost out to convenient, affordable single-use containers. In 1947, refillables made up 100% of soft-drink containers by volume and 86% of beer … [Read more...]
Will the First Self-Driving Cars also be Planes?
Every old sci-fi cartoon and film seems to be filled with flying cars, whisking characters quickly and efficiently beyond any ground-level impediments directly to their destination. While such vehicles have always seemed just out of reach, that hasn't stopped entrepreneurs and big corporations from pursuing the idea of "flying cars." Now, Boeing, the pioneering aerospace mega-corporation, is building something that could come close to delivering on the promise of the flying car. Bloomberg's Anurag Kotoky and Julie Johnsson report: A Boeing Co. flying car designed to whisk passengers … [Read more...]
To Those Who Don’t Think Politics Matter in Investing
In Davos, Ray Dalio explains that the income tax increases being discussed in the United States could soon play a role in market expectations for the future. Bloomberg reports: Discussing the outlook for a slowing world economy, Dalio said that next year will see “the beginning of thinking about politics and how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger role.” He didn’t mention Ocasio-Cortez by name. “There’s an element, yeah, where people are going to have to start paying their fair share,” … [Read more...]
Grantham’s GMO says U.S. Stock Bubble is Busting
Jeremy Grantham’s firm, GMO, says the bubble in U.S. stocks is busting. Grantham is an expert in financial bubbles and widely known for identifying in advance the dangers of the dotcom and housing bubbles. In a recent piece written by one of Grantham’s associates, a new model of bubbles suggests we may be at the beginning of the end of inflated U.S. stock valuations. Bloomberg has the story. The size and duration of the moves in stock prices in the final three months of 2018 toward their long-term average valuation is consistent with the moves linked with the bursting of the technology … [Read more...]
Is a Shaky Outlook for Aluminum a Shaky Outlook for the Global Economy?
Alcoa CEO Roy Harvey has sounded the alarm bell on global aluminum demand. Aluminum is widely considered an indicator of global economic health. The FT's Ed Crooks reports: Global demand for aluminium is likely to grow this year at its slowest pace since the global recession of 2009, according to Alcoa of the US, in the latest sign of a worldwide economic slowdown. Roy Harvey, Alcoa’s chief executive, said in a presentation to analysts that the company expected worldwide demand to grow by 3-4 per cent this year, which would be the slowest rate since the world market shrank during the … [Read more...]
Is Indexing Hurting Competition?
Researchers working for the NBER have made an interesting case that high levels of common ownership in companies could be anti-competitive. This trend is exacerbated by high levels of indexing, as a greater percentage of publicly traded shares are owned by the same index funds. Bloomberg reports: The rise of indexing mutual funds and other diversified investors is increasing the temptation for public companies to act in the interests of their rivals, a trio of professors say. Their study, “Common Ownership in America: 1980-2017,” is the latest entry in a growing body of research looking … [Read more...]
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