You wouldn’t know it if you rely on CNBC for your financial news, but outside of a select group of U.S. growth stocks, global equity markets are down YTD. The MSCI All-Country World Index is down 2.4% for the year, while the same index excluding U.S. stocks is down 9.34%. Emerging equity markets have already dipped into bear market territory (down 20% from high), and developed equity markets outside of the U.S. are not far behind, falling 15% from their January peak. Two thirds of the 3,000+ stocks in the FTSE All World Index (similar to the MSCI All Country Index) are down … [Read more...]

Despite offering no-fee stock trades, Robinhood Markets is still getting paid. The company is using a controversial process called "payment for order flow," to generate revenue. Despite its "free" trades, investors should always remember that there's no such thing as a free lunch. Bloomberg's Simone Foxman, Julie Verhage and Suzanne Woolley report: Here's how it works: Retail brokers like Robinhood focus on recruiting customers and building the trading interface, but don't actually execute their clients' orders. They outsource that to firms—including Citadel, Two Sigma and Wolverine … [Read more...]

Once America’s most venerable industrial company, GE has been a disaster. Former CEO Jeff Immelt oversaw the firm’s fall from grace, and his replacement, John Flannery, has been even worse for shareholders. GE shares are down 54% over the last twelve months. The board has finally woken up to the mess and fired Flannery. Larry Culp will become the new CEO. Culp had success as CEO of Danaher, and he is not a life-long GE insider. Ed Crooks reports at FT: Mr Culp said in a statement: ““GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be … [Read more...]

When most people think of fast food they immediately think "unhealthy." As obesity rates rise, some Americans have developed an obsession with finding healthy food, and anything foods with a reputation for unhealthiness have been shunned by many people. To combat its unhealthy image, McDonald's has removed the artificial ingredients from its burger, taking out such appetizing sounding additives such as calcium propionate and sodium benzoate. Julie Jargon reports on the move for The Wall Street Journal, writing: Those and other ingredients found in the buns, cheese and sauce on some of … [Read more...]

Customers are demanding instant gratification when it comes to the delivery of their products, and Home Depot is stepping up its efforts to fulfill their desires. Matthew Townsend reports at Bloomberg that Home Depot "has started same-day delivery across the U.S. to help it stay relevant with consumers’ need-it-yesterday mentality." The move is a strategy to compete with fast-delivering e-commerce sites such as Amazon. Townsend writes: The home-improvement chain had already been using trucks to deliver large items such as building materials from stores in a day or so. Now, aided by … [Read more...]

In the early days of Coca-Cola, there were trace amounts of the drug cocaine in the drink. Once the drug was found to be unsafe, the company removed it. Today though, the Coca-Cola Co. is exploring adding a new drug to its drinks, cannabis. James Fontanella-Khan and Alistair Gray report in the Financial Times: Coca-Cola is exploring entering the budding cannabis drinks business, as the iconic beverage company seeks new opportunities to offset slowing soda consumption. The world’s largest beverage group by revenue is “closely watching” the cannabis drinks sector, which uses the … [Read more...]

Writing at the Financial Times, Michael Mackensie explains that a reversal in the the decade long, quantitative easing fueled boom in asset price is worrying. He writes: The stellar ride asset prices have enjoyed since the demise of Lehman Brothers dominates the financial system. And the prospect of a reversal is rightfully worrying. Years of ultra low, and in some cases negative, interest rates, alongside massive quantitative easing programmes, have been a grand experiment in monetary policy. Low rates have compelled investors to seek higher returns from riskier assets such as equities, … [Read more...]

I have written to you before about my unease with program trading, especially stop losses (see here and here). Add to that the algorithmic groupthink of computerized trading and it's a nasty brew. Today the Wall Street Journal's Stephanie Yang reports: On Feb. 5, the Dow Jones Industrial Average suffered its worst one-day point-decline in history amid a tumultuous week for global markets. Although the blue-chip index has since erased that loss, some investors are still trying to puzzle out what caused such a drop. One possible culprit: a cascade of automated stop-loss sell orders by … [Read more...]

Investing in the stock market can be a maddening task for the amateur investor. As a friend in the real estate investing business once remarked, the stock market is the only place one can be right and still lose money. That’s not totally accurate. The bond market can be just as unforgiving. But he was correct, being right isn’t enough. Take Microsoft for example. Microsoft hit a high of $53.61 in December of 1999 on expectations that the company would dominate the market for operating systems for the foreseeable future and its earnings would continue to increase at a rapid … [Read more...]

In an effort to expand its sales beyond its core American brands, Coca-Cola has been encouraging its overseas operations to increase their innovation and find winning products in new markets. Eric Bellman and Jennifer Maloney report: When Coca-Cola Co. directed its global subsidiaries to launch more local flavors last year, the company’s Indian arm came up with a unique drink: chunky mango juice. Indians commonly squeeze mangoes to soften them and then bite a hole in the tropical fruit’s tough skin to suck out the pulp, Coke’s Indian drink developers knew. So they concocted a beverage to … [Read more...]