Displaying items by tag: stocks

(Chicago)

McDonalds is taking one of its boldest menu steps in years. The company has announced that it will eliminate all artificial ingredients from its burgers. Ingredients such as calcium propionate and sodium benzoate will disappear from the Quarter Pounder and Big Mac as McDonalds tries to project a more healthy image. The move follows efforts earlier this year to use fresh beef and natural beta carotene in its burgers. Since the changes, many menu items have seen sales increases.

FINSUM: The healthy food movement has reached a significant mass and we think these changes were ultimately a must for the company.

(New York)

US stocks have simply blown away the world this year. The S&P 500 is up around 9% while global shares are down 6%. The outperformance has been driven by a supportive tax policy, great economic performance, and a pro-business attitude out of the White House. However, JP Morgan says that the outperformance of US stocks relative to the globe is set to stop. US stocks and global ones will move towards parity in coming quarters as the stimuli helping American shares wanes. The parity will not come from global stocks catching up as much as the US will stagnate or fall.

FINSUM: When we take everything into account right now, we are feeling increasingly positive about the the next year. We think Democrats winning the House would be favorable for shares as it would calm money managers’ worries about some of the GOPs more extreme positions (e.g. trade war). This could bring on a “goldilocks” scenario, where the economic and political conditions are just right for stocks to move strongly higher.

(New York)

One of the very interesting aspects—which is thoroughly underreported—is that despite the rise of ETFs, mutual funds have held a major portion of market share in the advisor allocation business. One of the trends which has emerged is that the growth of ETFs has not really cost mutual funds as much as one would expect. Rather, advisors have just started to use them in different ways. ETFs are seen as better for broad passive exposure, but when it comes to active management, mutual funds are seen as the superior choice. This helps explain why smart beta and other forms of active ETFs have been relatively unsuccessful.

FINSUM: It is not mutual funds that have suffered from the shift to ETFs, rather it has been variable annuities and individual stocks. This is a quite a positive development for the asset management industry, in our opinion.

(New York)

Consumer confidence in the United States is at an 18-year high. The last time Americans registered a feeling of confidence this high was in September 2000. However, that could be a big problem for the stock market. Consumer confidence can prove a counter-indicator. The highest ever reading for the measure was recorded in May 2000, just before the Dotcom crash. Small business confidence is even higher, running at a 45-year peak. According to one analyst, “[To] any market historian, that does not guarantee a low-risk market, or another big bull market leg on the horizon”.

FINSUM: These kind of ultra-high measures do worry us as we feel healthy gains come in periods of reasonable concern, not euphoria.

(New York)

Value stocks have been hurting for years. They have lagged growth stocks considerably over the last decade, and have been underperforming growth stocks for so long that even some ardent value fans say the shares might never rebound. However, an increasing group of analysts are saying that value is set to stage a big comeback versus growth. Some indicators show that a reversal of growth stocks is imminent, and P/E ratios are running so high that value looks likely to appreciate. Morgan Stanley analyst Michael Wilson thinks that the current rotating bear market will end with growth and small caps sinking.

FINSUM: We don’t see much of a catalyst for growth stocks sinking while value stocks rise. Further, if stocks fall, they could all fall in unison without value seeing any outperformance.