iShares Core S&P 500
The Longevity Phenomenon: Impact on the World
The longevity phenomenon has given rise to a unique problem. The world’s population is aging rapidly, which could have a negative impact on productivity and growth rates.
The Importance of Rebalancing Your Portfolio
Rebalancing your portfolio means bringing the portfolio back to the asset allocation levels specified in the financial plan. Not rebalancing can expose you to higher risk.
Rate hike horizon: September’s jobs report was largely positive
After September’s strong jobs numbers, a Fed rate hike could be on the horizon early next year. Russ explains two equity market implications.
AXP’s Valuations Down in 4Q15, Targeted $1 Billion in Savings
American Express (AXP) expects its full-year 2016 EPS to be between $5.40–$5.70. It looks to return to positive EPS growth in 2016 and is targeting a minimum of $5.60 EPS for 2017.
What S&P 500 Index Moving Averages Could Indicate
The S&P 500 Index is trading 1.2% above its 20-day moving average and 6% above its 100-day moving average.
Why IBM’s Earnings Could Fall Going Forward
International Business Machines (IBM) reported its 2Q17 results on Tuesday, July 18. The company reported falling quarterly profits and sales yet again.
What key PMI indicators mean for stocks and investors
Last week, the Institute for Supply Management (or ISM) and Markit both released their reports on the Purchasing Managers Index (or PMI). The ISM’s report gave its strongest reading since February.
Could Yum! Brands’ Margins Increase in 1Q16?
With positive same-store sales growth expected in all three of YUM’s divisions, analysts are expecting the leverage to improve the company’s margins.
Inside the Market’s View of Corporate Tax Cuts
Are markets upbeat on potential tax reforms? The markets (SPY) (IVV) surged last week with the announcement of a phenomenal update on the corporate tax cut. The S&P and Nasdaq Comp gained ~2% in the week ended February 10, 2017. The Trump administration’s proposed tax cut is likely to boost the economy, though analysts have […]
Kocherlakota said the FOMC could have done more for labor markets
In evaluating the FOMC’s performance over the past three years, Kocherlakota mentioned that the unemployment rate fell to 5.6%.
You should pay particular attention to this valuation metric
I would pay particular attention to the Shiller P/E Ratio, which is a variation on the Cyclically Adjusted P/E or CAPE. This indicator is worth watching as it has historically correlated with long-term stock market returns.
Rising Stocks: Why It May Not Be Time for the Jitters
Rising stocks have been buoyed by various factors, including the accommodative monetary policy of the Federal Reserve and robust US corporate earnings.
Becton, Dickinson and Company’s 4Q16 Earnings Estimates
Wall Street projected a rise in Becton, Dickinson and Company’s (BDX) adjusted net profit margins. The margins are expected to come in at ~$453 million.
Will We See a Recession within the Next 2 Years?
In a recent interview, Jim Rogers said, “I’m on record as saying that we’re going to have a recession certainly within a year or two.”
Flat Consumer Spending May Cast a Shadow over Department Stores
According to the BEA, consumer spending remained essentially unchanged despite a 0.3% rise in real disposable income stemming from a higher savings rate.
Why Carlyle’s 4Q16 Performance Nosedived
Carlyle Group posted economic net income of $0.02 in 4Q16 on February 8, which was lower than the analyst estimate of $0.41.
What Stretched Utility Sector Valuation Means
Utility sector valuation appears stretched. 2014 was a great year for utilities, which gained 26.62% ex-dividends and were the best-performing sector.
How Will Carlyle Group Perform in 3Q16?
Carlyle expects EPS of $0.44 in 3Q16. For the full year, analysts have revised earnings expectations up to $1.44 with an implied price-to-earnings of 10.8x.
How Gilead Sciences’ Gross Margin Outshines Its Peers
Despite a year-over-year (or YoY) drop in revenues in 2Q16, Gilead Sciences (GILD) managed to earn gross margins of about 92%.
Baker Hughes’s Management on Its 3Q16 Outlook
Baker Hughes’s (BHI) management believes that international upstream operations will continue to stay pressured.
21st Century Fox’s STAR: A Star in India
Twenty-First Century Fox (FOXA) owns STAR India, India’s (EPI) largest media network. STAR India develops, broadcasts, and produces programming for 51 channels in seven languages in its portfolio.
Why the housing market impacts consumption and equity investors
This article considers the importance of investment, including residential investment, in the support of U.S. consumption data and the implications for investors.
US and China avoid contentious issues at the APEC meeting
Both China and the US decided to steer clear of more contentious issues at the meeting. Accordingly, the disputes over Hong Kong and cyber space were not even brought up.
How Did Pfizer Perform in 3Q17?
In 3Q17, Pfizer (PFE) generated revenues of $13.2 billion, an increase of ~1% on a year-over-year (or YoY) basis and a 1% increase on a quarter-over-quarter basis.
Economists Disagree with Trump’s Fiscal and Trade Deficit Views
Donald Trump has been vociferous about cutting taxes. He intends to reduce the current seven tax brackets to three.
Why wage growth could cause rates to rise
Wage growth could cause rates to rise. A hike in wage rates could boost consumption and encourage individuals outside the labor force to join. This will increase disposable income.
Developed Markets Offer Value after the Rout
Developed markets are offering value. The Eurozone has come out of the recession and is seeing some green shoots of growth.
Why investor sentiment can show overvaluation in US markets
While valuation is important, investors should also pay attention to sentiment. The goal is to gauge how – to steal a phrase – “irrationally exuberant” investors have become.
Why monetary policy’s still abnormal as the FOMC nears its target
While addressing the Tennessee Bankers Association’s annual meeting in Palm Beach, Florida, on June 9, 2014, James Bullard explained how the FOMC is moving closer to its target while monetary policy still maintains a distance from its objective.
The Federal Reserve’s patience: Is it here to stay?
The January 2015 meeting minutes showed that several policymakers weren’t in favor of dropping “patience.” Changing the language is a big deal.
Are Tougher Days ahead for Global Equities?
The IMF revealed that emerging Asia is expected to grow ~6.5% in 2018 and 2019.
Will consumer spending affect the yield curve and Fed funds rate?
The Bureau of Economic Analysis will release its personal income and outlays report for March on Thursday, May 1. The report measures individuals’ income and expenditure levels.
Minimum-Volatility Funds Provide Cushion During Downturns
Minimum-volatility funds provide cushion during high volatility. These funds invest in low beta stocks and sectors that weather periods of volatility.
Why Did Time Warner Stock Fall after Earnings Release?
On February 10, 2016, Time Warner (TWX) reported its 4Q15 and fiscal 2015 earnings. The company reported revenues of $7.1 billion in 4Q15, a decline of 6% year-over-year.
Why Energy Could Spell Worry for Wall Street Bulls
US crude oil (USO) (USL) April futures fell 6.3% between March 2, 2017, and March 9, 2017. The fall in XLE corresponded with weakness in crude oil prices.
Advance retail sales for December 2014 were disappointing
Markets were disappointed by the weak retail sales report. Estimates for advance retail sales were $442.9 billion in December 2014.
Why Amazon’s 2Q16 Top Line Remained Strong
Amazon’s top line increased by 31.1% YoY to $30.4 billion in 2Q16 on account of healthy e-commerce sales driven by Amazon Prime membership growth.
What Has Caused the Correction in Transportation Stocks?
DJTI’s price-to-earnings ratio climbed from 15.7x at the start of 2013 to 20.2x at the end of 2014. This year, transportation stocks (IYT) have taken a hit, leading to multiple contractions.
Why Is Sprint Cutting Jobs?
According to Sprint, it has planned to rationalize annual costs by at least $2 billion from fiscal 2016.
Must-know: Why volatility is likely to tick up in September 2014
While volatility fell over the course of August, the VIX’s daily average for last month was approximately 15% higher than its average over the previous three months.
Must-know: Market’s reception of the Fed’s July FOMC statement
Treasury yields on the long-end of the curve, were down since the conclusion of the Fed’s last FOMC meeting on June 18—30-year and ten-year Treasury yields had fallen by 12 bps and three basis points (or bps), respectively over the period June 18 to July 30.
Analysts Expect Medtronic’s Revenue to Rise 4% in Fiscal 4Q17
Wall Street analysts expect Medtronic’s (MDT) revenue to be ~$7.9 billion in fiscal 4Q17, a rise of ~4% compared to its fiscal 4Q16 revenue of $7.6 billion.
What Are the Rate Hike Implications for Emerging Markets?
An interest rate hike in the United States (IVV) is likely to pose a huge challenge to emerging markets.
Part 6: Mid Cap Growth MLP, Mark West Energy Partners—overbought?
MLP’s—have retail investors gone too far? The below graph of Mark West Energy Partners, MWE, reflects exceptional growth against the S&P 400 mid cap index as well as the Morningstar mid cap growth index. This mid cap Master limited Partnership, MLP, has certainly ridden the MLP bull market. Despite the challenges faced by Chesapeake Energy, […]
What Could Expand Keytruda’s Revenues?
In addition to the US market, Merck’s (MRK) Keytruda has been approved in more than 50 international markets for metastatic melanoma.
Why a Chinese Market Slump Won’t Affect the Economy
The Chinese market slump is not likely to dampen consumer spending or affect the economy. Stocks make up a mere 15% of Chinese household financial assets.
Why An Improving Economy Is Good For The Dollar
This article discusses the ways in which an improving economy is good for the dollar.
MasterCard’s Leverage Is Comfortable for Expansion, Acquisitions
MasterCard (MA) has debt of $3.3 billion with a total balance sheet of $15.9 billion as of March 31, 2016. This compares to $16.2 billion in 4Q15.
Market Rebound Causes Stretched Valuations
A market rebound of more than 12% from the depths seen in October has left investor sentiment buoyant.
Analysts Expect Biogen’s Net Profit Margins to Rise in 3Q15
Biogen’s (BIIB) 3Q15 earnings results will be announced on October 21, 2015. Analysts expect that the company will report lower net profit margins as compared to 2Q15.
Fed Rate Liftoff: Not Much Is Likely to Change
So now that the Fed rate liftoff has finally arrived, should you flee to market sidelines? If you can believe history, the answer is an emphatic no.
China’s wage inflation: Bad news for corporate profits and banks
Wage inflation in Chinese manufacturing With an appreciating currency and growing economy, Chinese manufacturers have experienced wage inflation. The cost of Chinese labor is simply becoming more expensive, as the below graph indicates. Private sector wage growth in China was 14% in 2012, while GDP growth is slowing to around 7.5% per annum. Wages are […]
Does Energy Contribute to Wall Street’s Gains?
On December 16, 2016, at 2:19 AM EST, US crude oil (OIIL) was trading at $51.07 per barrel—an 0.8% fall compared to its closing price on December 9, 2016.
Gold Gains on US-Mexico Trade Deal—What’s the Upside?
Gold prices (GLD) recorded their first weekly gain last week after six weeks of continued losses. What changed?
US-China Trade Threats Continue to Escalate
On September 14, Donald Trump indicated that he wants to move ahead with tariffs on $200 billion in Chinese imports.
Structural Considerations Could Mean Lower Yields in the Future
Many structural considerations are likely to keep yields low in the future. Demand for Treasuries and bonds is likely to be more than the supply in the next two years.
Medtronic’s Revenue Is Estimated to Rise in Fiscal 2Q17
On November 22, 2016, Medtronic (MDT) will announce its fiscal 2Q17 earnings for the period that ended on October 31, 2016.
Stellar returns: Why you should consider frontier markets
While a traditional emerging market benchmark is up 1.5% year-to-date, frontier, or “pre-emerging” markets, have been performing well.
Energy Drinks Outperform Soda Drinks in Case-Volume Growth
An interesting development in the energy drinks industry is Monster Beverage’s strategic deal with Coca-Cola. The deal will expand Monster Beverage’s product line-up.
Deflation Continues in the Eurozone: VGK Down 1.43%
Consumer prices in the Eurozone remain in negative territory. Inflation was reported to be -0.1% in March. So, the Eurozone remains in a state of deflation.
Procter & Gamble: Global Giant in Household, Personal Products
The Procter & Gamble Company, or P&G, is the largest household and personal products company in the world. It was established in 1837 by William Procter and James Gamble.
Markets Look at US-China Trade Talks as Slowdown Concerns Multiply
Today, another round of trade talks started in Beijing.
Why China’s trade is good for Apple’s sales in China
China is becoming a relatively less expensive manufacturing base, although it’s also becoming a source of stronger revenues for companies like Apple.
Why Walmart and Target Saw Same-Store Sales Growth in 3Q16
Same-store sales growth came in at 1.5% in 3Q16 for Walmart US compared to 0.4% in 3Q15. Target’s (TGT) same-store sales grew 1.9% in 3Q16, driven by both higher traffic and transaction size.
How a Rate Hike Could Affect High-Leverage Sectors
Industrials, utilities, and telecommunications have much higher leverage, as these sectors have massive capital needs.
Why Estée Lauder’s Margins and Profitability Are Rising
Despite currency headwinds, Estée Lauder’s (EL) worldwide gross profit margin increased to 80.3% in fiscal 2014 from 80.1% in fiscal 2013.
Why investors piled into junk bond funds
High market volatility usually increases risk perceptions for junk bonds (PHB). This increases spreads and yields. As a result, bond prices decrease.
Will S&P 500 Rally Continue?
Major US indexes showed positive movement after the announcement of US election results, and this rally has continued throughout the last month.
Why Emerging Market Debt Still Looks Attractive
Investors have tended to pull money from U.S. equity funds in the month before election day in the past four presidential elections, EPFR Global data show.
Why Most Analysts Are Calling Marathon Petroleum a ‘Buy’
Marathon Petroleum (MPC) has been rated by 19 Wall Street analysts. Seventeen analysts (or 89%) have rated it as a “buy” so far in May 2017.
Mead Johnson Plans to Focus on R&D to Support Innovations
Mead Johnson follows a strategy of investments in innovation, having expanded its liquids portfolio and rolled out its key specialty formulas across Asia.
The Fed’s take on economic growth as the US dollar appreciates
The Fed believes persistently low inflation and an appreciating dollar will impact gross domestic product (or GDP) growth in the coming quarters. A higher US dollar makes US goods less competitive in overseas markets.
A Softer Rebound Could Move Markets in the 2Q
A softer rebound could move markets in the second quarter. If the economy remains weak in the second quarter, the Fed has some leeway to maneuver the rate.
Why some bad news may be good news for international stocks
Bad news may be good news for international stocks. Europe is struggling with deflationary headwinds and Japan is suffering under the burden of last April’s hike in the consumption tax.
Mintel Forecasts Strong Growth in the US Energy Drink Market
The US energy drink and shots market grew by 56% between 2009 and 2014, even though the category was entangled in litigation and had negative publicity.
China tightens monetary policy: Will this be a Japan 1990 redux?
Interbank lending rates The below graph reflects the effects of the China Central Bank’s monetary tightening policies on interbank lending rates. The interbank seven-day lending rate spiked in June. Rates on government bonds have also risen, with the three-month yield on Chinese bills rising from 2.65% to 3.50%, and the ten-year bond yield rising from […]
Emerging Market Dividend Payers Currently Offer Value
Emerging market dividend payers are offering value, given their high volatility.
Evaluating Kraft Heinz’s Core Business Strategies
Kraft Heinz is focusing on core business practices, including ZBB (zero-based budgeting), revenue management, and MBO (management by objectives).
Why inflation scare tactics in Japan drive consumption recovery
Private consumption growth in Japan The below graph reflects the trend in private consumption growth in Japan. As noted in Part 1, Japan’s real gross domestic product (real GDP) today is approximately where it was in 2005. The lack of overall economic real GDP growth has reflected in stagnated wage growth, as well as a […]
Risk-Reward Ratio Is in Favor of Emerging Market Debt
Emerging market debt (EMB) has attracted investor’s attention as a higher-yielding alternative in a world where yields are quickly falling below zero.
The must-know outlook for equities and bonds in 2014
The Fed, in its latest announcement, has further reduced its bond buying program to $55 billion a month, signalling that the improvement in the economy is on track.
Beyond the Ephemeral: Pay Attention to Demographics
Lost in all the chatter about interest rates is a structural phenomenon that may be of far greater significance: demographics.
VanEck International Investors Gold Fund Seeks Global Exposure
The actively managed VanEck International Investors Gold Fund (INIVX) affords investors the opportunity to add gold mining exposure through a more specialized approach.
AstraZeneca’s Valuation Report Card: How Did It Score?
The fundamental factors affecting stock prices and valuation include the performance of growth platforms as well as the exclusivity of blockbuster drugs.
Is It Time to Fix America’s Ailing Infrastructure?
The consistent decline in public spending over the last 20 years has led to weak and inefficient infrastructure in the US. According to the Bureau of Economic Analysis, the average age of highways and streets is 28.4 years.
Best Buy’s Merchandising Efforts Drive Same-Store Sales in 1Q16
Best Buy’s same-store sales in the first quarter of fiscal 2016, which ended May 2, 2015, grew by 0.6%, beating analysts’ expectations of a decline of 0.4%.
Greenspan’s lament: Consumption is no substitute for investment
Why it’s becoming increasingly difficult to expect sustainable prosperity from additional consumption in the U.S. economy.
Why Are Top Money Managers Recommending Gold to Hedge Risks?
Increasing uncertainty, geopolitical concerns, and overvalued markets are giving fodder to gold (GLD) bulls.
What Should Be The “Right Amount” of Cash Allocation?
If you’re preparing your portfolio for the short term, the allocation to cash should be high. As the horizon increases, allocation to cash should go down.
The Broad Market Is Tending above the GDP Curve: A Positive Sign
Indicators change as the business cycle progresses and help define the business cycles. The industrial production curve has been with the GDP curve.
Why you should know the key differences between job reports
Few economic releases elicit as much reaction from both the stock (IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (ADP) and the Bureau of Labor Statistics (the BLS).
How the Latest Tariffs Could Affect US Businesses and Consumers
Both US (SPY) (IVV) businesses and consumers are expected to be negatively affected by the most recent round of trade tariffs.
Alcoholic Beverage Industry Is Reluctant to Embrace E-Commerce
Manufacturers in the alcoholic beverage industry can’t sell directly to consumers due to a three-tier distribution system. This discourages them from having their own e-commerce channels.
How Did Natural Gas, Crude Oil, and SPY Fare Last Week?
For the week ended July 8, 2016, August natural gas futures (UNG) (FCG) (UGAZ) (DGAZ) (BOIL) fell by 6.2%.
AES: A Look at Its Geographical Sales Mix
In 2015, nearly 75% of AES’s earnings came from outside the United States. This brought its earnings brutally under pressure due to currency fluctuations.
How Bill Ackman Is Taking Shelter from a Potential Market Drop
Bill Ackman, an activist investor and the CEO of Pershing Square Capital Management, shared his views on how geopolitical risk could affect market movement (SPY) in a CNBC report.
Biogen Trades at High Valuation Multiples Due to Strong Research Pipeline
After the release of its 3Q15 earnings results on October 21, Biogen was trading at PE multiples in the range of 13.8x–15.3x.
Business Overview of Estée Lauder
Estée Lauder’s sales growth was ranked third-highest globally among leading cosmetic companies between the years 2012 to 2015, with net revenue of $11 billion in fiscal year 2014.
Why are junk bond yields the lowest ever on record?
The BofA Merrill Lynch U.S. High Yield Master II Index increased by 0.34% over the week ending June 20, and is up by 5.64% so far this year (up to June 20).
Municipal Bonds Help You Care For Communities
Municipal bond issuers are state-wide and local. They typically use the funds they accumulate through issuing bonds for infrastructure projects.