Displaying items by tag: stocks

Wednesday, 31 January 2018 10:48

ETFs at Risk of Manipulation

(New York)

Vanguard, one of the preeminent global fund managers, has just gone on the record warning about a big and growing danger for ETFs. Vanguard says that “predators” are increasingly front-running ETFs at the expense of legitimate investors. Because most ETFs disclose their daily holdings, and are benchmarked to an index, they are susceptible to manipulation by those who trade ahead of the reconciliation. Vanguard hopes that regulators will not approve new rules which would demand even greater transparency in the ETF marketplace, as this could worsen the problem. Vanguard currently only discloses its holdings with a one-month lag to mitigate frontrunning, but could be forced to do so on a daily basis.


FINSUM: This is one of the areas of markets where transparency may actual work counter to the interests of the everyday investor.

Published in Eq: Large Cap
Wednesday, 31 January 2018 10:46

Is the Meltdown Finally Here?

(New York)

Investors have been waiting anxiously for a downturn in stocks for several months. In recent weeks the nervousness had risen as we had seemed to reach a period of “melt up”. However, the market has fallen considerably over the last couple of days, including the S&P 500 falling over 1% yesterday. The question is whether the tide is finally turning following the rise in concern over surging bond yields.


FINSUM: This was a pretty scary couple of days, but we have a feeling this is not the beginning of the end given strong earnings coming out.

Published in Eq: Large Cap
Wednesday, 31 January 2018 10:44

Apple Facing DOJ Probe Over Phone Speed Scandal

(San Francisco)

The huge public pushback against Apple’s revelation that it intentionally slowed older iPhone speeds to keep them from crashing is now turning into an ugly, and possibly legal, scandal. The US Department of Justice and the SEC are now launching probes into Apple’s handling of the situation. While the DOJ probe will likely look broadly at behavior, the SEC is looking into whether Apple violated securities laws with regard to its disclosures about software updates.


FINSUM: We have a feeling there is a big fine on the horizon for Apple. The bigger question is whether this hurts their public image and could spark the beginning of the end of the Age of Apple.

Published in Eq: Large Cap
Wednesday, 31 January 2018 10:42

Here is Amazon’s Next Home Run

(Seattle)

Amazon as a company has been nothing but an unmitigated success. But while the business on the whole has been stellar, there have been missteps, such as the venture into smartphones. But where will Amazon’s next big shot in the arm come from? Bloomberg says it is going to be in healthcare. The company is teaming up with JP Morgan and Berkshire Hathaway to make healthcare more affordable for their employees, and eventually all Americans. Bloomberg summarizes Amazon’s potential to transform healthcare best, saying “Amazon’s e-commerce operation could be used to send medication direct to patient’s homes, saving them trips to a pharmacy. Its cloud-computing division can store patient health-care records so they can be easily accessed by doctors anywhere. And its payments system could be used to automate payments with health-care providers.”


FINSUM: Say what you want from a returns perspective, but from a consumer perspective the US healthcare system is decidedly broken. Hopefully, this sort of initiative will eventually turn it around.

Published in Eq: Large Cap
Tuesday, 30 January 2018 10:45

Does the Bond Sell-Off Spell the End for Stocks?

(New York)

Well it finally happened yesterday. The big selloff in bonds finally managed to legitimately spook the equity market. Stocks in the US were down big as the yield on ten-years jumped mightily. The ten-year yield is now 2.73%, the highest in three years, which was a significant mental threshold. Investors are worried that with the world economy doing so well, inflation may again rear its head, causing central banks to raise rates quickly. The S&P 500 fell 0.7% on Monday.


FINSUM: Okay here is the big question we have—why would the world economy doing well and higher rates be negative for stocks? If anything, equities are a good inflation hedge.

Published in Bonds: Total Market

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