Displaying items by tag: stocks

(New York)

Investors beware, US stocks may be in for a real summer storm. On the surface things have been looking better. Despite a week in which many geopolitical events went wrong (e.g. trade war, Trump and North Korea, Italian bonds/government), the markets stayed strong. However, underneath the positive surface, there is some real bearishness. The average stock in the S&P 500 is underperforming the market as a whole by almost a whole percent. The S&P 500 is up 3% this year, but the average stock has gained just 2.1%, showing that market breadth has narrowed.

FINSUM: We do not think the current market breadth figures show much of anything, but then again, we are more concerned about the overall economy than the signals the market is sending.

(Washington)

In what could be could news for those worried about the Fed hiking us into a recession, one of the Fed’s top leaders has just come out with a very dovish tone. St. Louis Fed chief Bullard says the Fed needs to slow its pace of rate hikes to preserve its credibility. “Inflation expectations in the U.S. remain somewhat low, suggesting that further normalization may not be necessary to keep inflation near target”. He suggests that the best policy going forward may be to freeze hikes.

FINSUM: One of the things that has worried us about the Fed is that they seem to be viewing rate hikes as some sort of automatic pre-determined path towards normalization rather than basing it on actual inflation numbers.

(New York)

Allocation funds don’t get a lot of discussion in the press, but they could be a good buy. With their broad mandate to invest in all manner of asset classes, an allocation fund can theoretically be a one-stop shop for advisors or retail investors. However, most of them have not lived up to their hype since broad allocation takes more research horsepower than the funds can afford. However, the T Rowe Price Global Allocation fund has been performing great. The fund invests in 20 different T Rowe funds across all strategies. “This fund represents our best thinking across different asset classes”, says the fund’s manager. It has beaten 92% of its category peers over the past three years.

FINSUM: Allocation funds can be a good choice if you want to merely deposit assets into a single vehicle. However, we would worry about having a great deal of one’s assets with a single manager.

(Washington)

The Financial Times has just put out what we think is a very interesting story about the battle going on between President Trump and Amazon. The president has been pushing hard for a regulatory crackdown on Amazon, some say because of Jeff Bezos’ ownership of the Washington Post. But the FT points out that the president needs to tread lightly, as Amazon is a well-liked company and he might not win a popularity campaign against it.

FINSUM: Amazon is apparently the 10th most reputable company in the country. Trump’s approval rating is 43%. Even if Trump is right to try to breakup up some of Amazon’s grip, it seems like a risky campaign.

(Houston)

Oil has come a long way over the last year, and light years from two years ago. Brent crude is now trading around $80. That has some worried that this big rally might be running out of steam. However, some say it is only in its 2nd or 3rd inning. With that in mind, Barron’s has put out 8 stocks to ride the boom. The big winners seem likely to be the refiners, says Morgan Stanley, who sees oil entering a “golden age”. Some stocks to look at include: Marathon, Phillips 66, Valero Energy, Thai Oil, Repsol SA and more.

FINSUM: Morgan Stanley has done some good analysis of the market, especially looking at future oil supply versus demand, and seems bullish on prices.