(San Francisco)

Where should investors put their money in the stock market? That has been a very tough question lately, as everyone’s favorite darling, tech, has had a rough several weeks, and the outlook still seems dicey. However, Credit Suisse says that despite its woes, tech is still the best sector to be in at the moment. The reason why? Fundamentals. Tech has great underlying business momentum, with strong revenue, great growth, and strong free-cash-flow valuations.

FINSUM: We think regulation of tech is still some distance away, which mean it should have a good medium term runway to keep outperforming. All of that means the lower valuations right now could prove a good opportunity.

(New York)

Stocks have managed to turn around from their dire condition of a couple weeks ago, and from last week, have rallied well. So, what has driven the turn around, investors are probably asking. According to Barron’s, part of it is earnings, but there is more to the story. The apparent answer is that market breadth and sentiment are improving across the board, which is helping provide positive momentum. It also isn’t hurting that earnings have been strong across the board.

FINSUM: We think the more positive sentiment is just from a lack of bad news on the trade war front. No news is usually good news in such a situation and fear ebbs so long as no new developments are released.

(New York)

The retail sector has been in tumult for years, but the struggles have intensified over the last few years as ecommerce has accelerated and physical stores are under pressure. The big winner so far has been Amazon, but lately, Walmart has been pushing back with a greatly improved and expanded ecommerce offering. Now, Walmart may be able to grab more market share in the US retail market by undercutting other retailers on price. Walmart has been lowering prices and is now 3-5% below other retailers like Dollar General, Kroger, and Big Lots for the same items. Many of the items are so-called “traffic-driving”.

FINSUM: We can comment on this from personal experience. It is remarkable, especially in rural America, how much minor price differences can entice consumers to drive 10+ extra miles to the store which is perceived as cheaper. We think these price differences will be material.

(Washington)

In what must be seen as nothing other than a major diplomatic breakthrough, reports are out that the head of the US’ CIA, Mike Pompeo, had a face to face meeting with North Korean leader Kim Jong Un. The meeting comes in advance of President Trump’s planned meeting with Un. The meeting apparently took place over Easter weekend and was a way to lay the groundwork for the president’s meeting. Reports of the meeting were first covered by the Washington Post, and the White House confirmed it had been having meetings at “very high levels”.

FINSUM: We are not sure why Un is talking to the US after decades of diplomatic silence, but we certainly see the dialogue as good news.

(New York)

There have been growing fears over the real estate market for the last couple of years, and now one corner of the market is in the middle of a growing apocalypse. Retail real estate is currently on trend to have by far the worst year in memory. Already in 2018, 77 million square feet of retail store space has been closed. In 2017, which was seen as the pinnacle of the collapse, 105m closed the entire year. The sector has been hit by the rise in ecommerce and changing shopping habits. Now landlords don’t even know what to do with all their space. They will likely “Try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield”, says a head of real estate at a private equity firm. The US has 24 square feet of retail space per person, by far the highest in the world.

FINSUM: Not only do you have ecommerce as a threat, but consumer spending is starting to tighten as we near the end of this cycle. This is going to be a major bust.