Week in Review: Is the Economy Decelerating?
Housing starts missed in a major way, coming in at ~926,000, while Wall Street was looking for 1.04 million. Building permits dropped to 1.04 million.
The bond market and, by extension, REITs will hinge on when the Fed is planning to raise rates. Nothing this week should move the bond market.
The ill effects of sugary drinks are moving consumers away from soda drinks to healthier options. This is unfavorable for Dr Pepper Snapple with 80% in CSD volumes.
Dr Pepper Snapple’s valuation has been revised upward. As of April 17, it’s trading at a forward PE ratio of 19.6x, up 6.7% since the beginning of 2015.
Based on RootMetrics’ results, Sprint’s text performance rank improved in Pittsburgh in 1H15. The wireless carrier shared the second rank with T-Mobile.
Sprint’s (S) network performance improved in 1H15. The wireless carrier’s rank, in terms of overall performance, increased a notch to second place in 1H15.
Analysts expect Dr Pepper Snapple’s margins to be 59.9% in 1Q15, up from 58.2% in 1Q14. The company expects operating margins to be adversely impacted by some headwinds.
The consensus Wall Street analysts’ estimate for Dr Pepper Snapple’s 1Q15 adjusted EPS is $0.76. The estimate for full year 2015 adjusted EPS currently stands at $3.86.
The impact of currency headwinds was less on Dr Pepper Snapple’s sales than the two beverage giants. It gets 12.4% of net sales from international operations.
Apple’s App Store earned 70% more revenues than Google Play in 1Q15, compared to 60% more in 3Q14.
Apple is expecting huge growth in the adoption of Apple Pay, which can only happen if Apple expands this service internationally.
Apple (AAPL) has bought LinX Computational Imaging, a company that develops camera technology for smartphones and tablets.
An interest rate hike would be negative for an asset not yielding any income, leading investors to better interest-yielding asset classes such as equities and bonds.
When money supply growth is used to prop up a financial and economic system instead of fueling strong economic growth, the price of gold is likely to climb.
When spending exceeds earnings, the government borrows money from its citizens and from foreign entities. If this debt accumulates, its currency’s value could decrease.
As US public debt rises beyond a certain point, the federal government must increase taxes and cut spending in productive areas in order to service the interest costs.
A trade deficit means foreign goods are in demand, increasing the demand for foreign currency. This increases long-term outflows of the dollar, leading to its devaluation.
Improving economic prospects for the US should lead to a stronger US dollar, making other investments more attractive, including equities and high-yield bonds.
Wage growth is one of the missing components and could support inflation, which has been anemic and one of the reasons the Fed is deferring its rate hike.
The weak jobs report sent the US dollar lower, which has a positive impact on the gold markets, but means lower consumer spending.
But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.