At The Wall Street Journal, James Mackintosh suggests that the strong performance of the energy sector is making the stock market look better than it should. He writes: Soaring profits at oil companies and miners are making earnings look better than the reality of the rest of the stock market, and distorting Wall Street’s favorite valuation tool, the ratio of price to forecast earnings. Strip out the energy sector and the expected rise in earnings for the S&P 500 this year drops from 8% to just over 1%, according to data from Refinitiv’s IBES. Strip out miners and other commodity … [Read more...]

The Nordic markets have been resilient compared to those of the rest of Europe over the last few years, and in Sweden, the junior market, Nasdaq's First North Growth Market, is becoming the continent's hottest. Ian Johnston writes for the Financial Times: Sweden’s junior market became Europe’s hottest market to raise funds for growth companies in the first half of the year as retail investors took advantage of favourable tax policies to snap up the index’s tech and healthcare stocks. Companies on Nasdaq’s First North Growth Market, based in Stockholm, have raised £1.6bn to date this year, … [Read more...]

Big companies in many sectors are making big investments in things like real estate, equipment, and technology. The Wall Street Journal's Hannah Miao reports on their growing capital expenditures, writing: The biggest U.S. companies keep stepping up their spending on capital projects, an encouraging signal to investors in an uncertain economic climate. Companies from Google parent Alphabet Inc . to General Motors Co. to PepsiCo Inc. are among those that have increased spending on big-ticket items, such as real estate, equipment or technology, to fuel growth. The investments are generally … [Read more...]

In the Financial Times, Madison Darbyshire discusses the tendency for younger investors to take bigger risks, and to treat financial products more like lottery tickets than investments. Darbyshire writes: The appetite for high-risk speculation is particularly sharp among Americans, who tend to have high levels of personal debt, researchers say. The average US student now graduates with $37,000 in student debt — up from $17,000 in 2001. “The idea is that you’re supposed to be able to save money for college, but almost no middle-class family can in a significant way,” says Caitlin Zaloom, a … [Read more...]

Do you remember the BRICS? Did you think "this time is different?" It turns out, that catchy acronyms are not the best way to invest. Ruchir Sharma explains in the Financial Times: Given the battering markets have dealt so far this year to tech stocks, led by the Faangs, it is worth stepping back and recognising what is coming apart: the whole concept of acronym investing. The unbundling of the Faangs is much like the fall of the big emerging markets, known as the Brics, a decade ago. A hot theme seizes the imagination of investors. Marketers coin an acronym to capture the trend and it … [Read more...]

Jeff Bezos has amplified the warning to investors of Bill Gurley, a general partner from Benchmark Capital. MarketWatch reports: Onto our call of the day, which comes from Bill Gurley, general partner at Benchmark Capital and a venture capitalist who made a $11 million bet in Uber UBER, -4.37% in 2011. Several of his more than a half million followers on Twitter sat bolt upright after this Twitter thread: “An entire generation of entrepreneurs & tech investors build their entire perspectives on valuations during the second half of a 13-year amazing bull run. The ‘unlearning’ process … [Read more...]