For the first time since 2002 the euro is headed for parity with the U.S. dollar. Contributing to the steep drop in the euro's value vis a vis the dollar is the monetary stimulus recently undertaken by the ECB, and the expectation by many analysts that the U.S. Federal Reserve will begin raising rates by year-end. … [Read more...]
Strong Dollar Hits U.S. Steel Industry
Oil isn't the only commodity affected by strong dollar economics. While the strong dollar has been a boon to consumers in the U.S., commodity producers are facing competitors in countries with weaker currencies who can now offer lower prices. You can see on the chart below that U.S. steel production has plummeted along with London Metal Exchange prices for steel in dollar terms. The U.S. is now importing more steel, with 2014 imports from Russia and China jumping by 96% and 69% respectively. … [Read more...]
The Monday Melee: Rig Counts Plunge
World Rig Count Lowest Since 2010: The number of oil and gas drilling rigs in operation around the world has fallen to the lowest level since 2010. (Shaded areas indicate recession.) Inside a Barrel of Oil: The Future? What We're Reading: France’s Hollande Casts Fate With Ex-Banker Macron (The Wall Street Journal) How to Survive a Bear Market (The Wall Street Journal) ‘Six-stock candles': Wall Street bull turns 6 (USA Today) Business economists support rate hike this year (AP) 6 bad reasons to make changes to your portfolio (MarketWatch) … [Read more...]
NASDAQ Missed the Boat
NASDAQ crossed 5,000 for the first time in 15 years. That’s a long-time to wait, especially if you’re not getting paid. Back in 2000, when it peaked, NASDAQ yielded one-tenth of the S&P 500 or 0.12%. Imagine investing for 15-years and getting paid. I’ll use a 4% yield as an example, which was hard to do but it was doable. 4% compounded over 15-years multiplies your money by 1.8x--$1million becomes $1.8 million. 15-years is a long-time—a big chunk of your retirement to get nothing. You can’t afford to miss the boat this time around. But it’s amazing how quickly … [Read more...]
Buying Panic in the Board Room
Wondering why stocks rose the most in over three years in February? Bloomberg reports that $104 billion in repurchases were announced last month—the most since TrimTabs Investment Research began tracking the data in 1995. You can read the full story here. The highlights are below. Even with 10-year Treasury yields holding below 2.1 percent, economic growth trailing forecasts and earnings estimates deteriorating, the stock market snapped back last month as companies announced an average of more than $5 billion in buybacks each day. That’s enough to cover about 2 percent of the value of shares … [Read more...]
The Monday Melee: Baltic Dry Index Anchored
Baltic Dry Index Sits a Lows: The Baltic Exchange is the world's only independent source of maritime market information. It's 600 members are responsible for a large proportion of the world's dry cargo and tanker fixtures. Recently the index derived from the members' pricing information for shipping fell to an all-time low and has remained near that level for days. Global Ship Tracking Seen from Space: Massive Container Ship Docks at London Gateway: From Maersk: Watch the spectacular time lapse video capturing Munkebo Maersk, Maersk Line's latest Triple-E, calling at London Gateway … [Read more...]
Lawyers 1, Savers 0
President Obama’s latest financial regulation on retirement accounts will not help savers. But it will help the lawyers. What the White House is trying to do is force savers to work with investment advisors, not brokers, when rolling over their 401(k). I’ve long been a proponent of investments advisors for my own obvious reasons—I am one. But this rats nest of regulation will steer money to big Wall Street, not Main Street. Read here on the fiduciary standard and why a fiduciary should be your guide when looking for investment advice. … [Read more...]
VIDEO: Cuban: TV as you know it is over
From CNBC: Enshrining net neutrality into Federal Communications Communications rules will subject the Internet to the whims of politicians and create uncertainty, Mark Cuban told CNBC on Thursday before the agency approved the regulations. Cuban said FCC Chairman Tom Wheeler has changed his position on net neutrality from his original stance in 2010, when the agency used what was widely seen as a lighter touch to regulating Internet traffic. The courts struck down those rules, saying the FCC lacked authority to enforce them, after Verizon issued a legal challenge. … [Read more...]
Blood-Letters: The Intellectually Sophisticated?
Wellington Denahan, the Chairman and CEO of Annaly Capital, a Mortgage REIT, ripped into the global Central Banking Cabal on her company’s conference call yesterday. It is well worth a read. The video below on Janet Yellen’s Senate hearing on Tuesday is also necessary viewing for all investors, but especially those unsure of the costs and risks of Fed policy. Wellington’s text and the Yellen video provide compelling perspective on just how distorted the global financial system has become. Wellington J. Denahan: Thank you, Willa. Good morning and, again, welcome to Annaly Capital's … [Read more...]
Market Cap Indicator: Snapchat Edition
You can learn a lot about the valuation of a company by comparing it to the valuation of other companies. That is especially true in the land of social media stocks where revenues and earnings sometimes don’t exist. Snapchat, a social-media startup that only recently started generating revenue is valued at $19 billion. Don’t know what Snapchat does? Me either. According to Quartz, Snapchat allows users to share disappearing photos. Hmm…I guess that qualifies as innovation today. The table below comes from Quartz. It compares Snapchat’s market value to companies with similar market … [Read more...]
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