FINSUM

FINSUM

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Tuesday, 05 February 2019 13:14

Amazon’s Price Fall is a Good Opportunity

(Seattle)

Amazon has had two rough patches following its last two earnings releases. The stock fell in October after its third quarter earnings release, and again last week after its fourth quarter numbers. December as a whole was a rough patch too. However, all this presents a good buying opportunity, says one equity research analyst. “Amazon typically experiences some downside follow-through over the day and week after a move lower on earnings, but over the next one and three months, these moves lower have presented very good buying opportunities”, says the analyst, from Bespoke Investment Group.


FINSUM: This is not arguing that Amazon is suddenly some kind of value stock, but if you are thinking of going long anyway, the current environment may represent a good buying opportunity.

Tuesday, 05 February 2019 13:13

The SALT Change is Hurting Real Estate

(New York)

Real estate across northern cities is taking a pummeling right now. There appears to be a significant exodus of wealthy homeowners leaving high-tax northern states like New York and New Jersey in favor of sun belt areas with lower taxes. The big catalyst for the move has been the elimination of SALT deductions above $10,000. Florida, for instance, has no state income tax and no estate tax. Accordingly, Miami, as well as other sun belt cities like Las Vegas and Phoenix, have seen real estate markets holding up well compared to the trend across the north.


FINSUM: Northern states are going to have to adjust (assuming the federal government doesn’t change policy) as the logic is just too simple for people right now: “should I live in a cold place with high taxes, or a warm place with great weather and low taxes?”.

Tuesday, 05 February 2019 13:11

The Best Dividend ETFs

(New York)

Dividend stocks have not been looking as appealing lately because of the rise in rates. Yields on even short-term assets now look much more attractive than the near zero coupons that were being offered a few years ago. That said, dividend stocks have a special niche within a portfolio, and it is not hard to find some very solid stocks with good yields. One of the best ways to buy dividend stocks is through an ETF that can select a large and balanced group. With that in mind, here are three ETFs to do just that: ProShares Dividend Aristocrat ETF (NOBL), the SPDR S&P Dividend ETF (SDY), and the Vanguard Dividend Appreciation ETF (VIG).


FINSUM: With the Fed showing dovishness on rates, the outlook for dividend stocks has suddenly brightened.

Monday, 04 February 2019 11:17

Beware of Big Earnings Declines

(New York)

We ask you, readers, to name the single most important factor that has supported stock prices through all the turmoil over the last year. We bet more than half of you uttered “earnings” to yourself. Earnings have grown strongly in the last year, something that helped keep prices stable despite big geopolitical worries. However, there pillar of the market may now be crumbling as analysts have just turned the earnings outlook negative for the first time in three years. Analysts now expect first quarter earnings to decline by almost 1% from last year. By contrast, at the end of December, expectations were for a 3.3% gain. Most expect the weakness to come from margins, not top line growth.


FINSUM: Continued strong earnings were supposed to be one of the positives this year. If earnings sputter out, what is there to hold up the market in the face of so much uncertainty?

Monday, 04 February 2019 11:16

The BI Rule Has Backfired Badly

(Washington)

The SEC’s regulation Best Interest Rule appears to have backfired badly. A darling of the industry, in most senses, the rule is so convoluted and lacking in specificity that it seems to have been one step too far for the anti-DOL rule lobby. What we mean is that the rule was so poorly received, and so poorly defended by the SEC, that it can be seen as responsible for the big surge in state-level fiduciary rules that are cropping up across the nation.


FINSUM: The interesting part about this is that the SEC’s new rule, which was supposed to be the sensible solution between demands for a fiduciary standard and industry practicality, has completely undermined its own interests. The rule seems to have been so one-sided and poorly marketed, that it has only emboldened fiduciary advocates and “left them no choice”.

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