Author Archive

• ISM Disappoints
  Eddy Elfenbein, September 3rd, 2019 at 10:15 am

  This morning, we got the ISM report for August and it wasn’t that good. The number came in at 49.1. Any number below 50 means the manufacturing sector is contracting.

  This is the lowest level for the ISM since January 2016. Analysts were expecting 51.1.

  Let me add two caveats.

  Last month’s number is still well above where recessions typically kick in. Recessions typically align with ISMs around 44 or 45.

  Also, this is just one sector of the economy. A huge majority of our economy happens outside factories. The consumer part of the economy is still holding up well.

• Morning News: September 3, 2019
  Eddy Elfenbein, September 3rd, 2019 at 7:10 am

  Amid Brexit Chaos, the Pound is Plunging Again After Britain’s Economy Just Posted ‘Shocking’ Manufacturing Data

  Pound Slides Below $1.20 After Boris Johnson Threatens Snap Election

  With a $2 Billion Factory From China, a German City Lets Others Worry

  Prepare for Market Turmoil After the Latest Trump Tariffs

  Make Shoes in U.S., or Pay Tariffs? A Footwear Company Seeks a Third Option

  The World’s First Ambassador to the Tech Industry

  Flight Cancellations Mount as Dorian Lashes U.S. Southeast Coast

  China’s Xiaomi Plans $1.5 Billion Buyback to Arrest Stock Tumble

  Aramco Replaces Chairman as IPO Planning Heats Up

  Walmart’s Mexico Unit Springs Into Same-Day Delivery, Taking on Amazon

  Roche, Spark Again Extend $4.3 Billion Takeover Offer

  Marvel Superheroes Power Up Lego’s Sales

  Ben Carlson: What Do I Want My Money to Do For Me?

  Jeff Miller: Weighing the Week Ahead: Can Presidential Politics Change the Course of Economic Policy?

  Howard Lindzon: The Confusion Bubble…

  Be sure to follow me on Twitter.

• Morning News: September 2, 2019
  Eddy Elfenbein, September 2nd, 2019 at 8:05 am

  Argentina Imposes Capital Controls as Reserves Drain Away

  A German Tax Case Is Putting the Entire Finance Industry on Trial

  JPMorgan Says It’s Finally Time to Buy Stocks Despite Trade Woes

  Sanctions Choke Iran’s Crude Sales, But Oil Product Exports Booming

  How Much Will the Trade War Cost You by the End of the Year?

  As Trump Escalates Trade War, U.S. and China Move Further Apart With No End in Sight

  Trade War Dents Chinese Company Profits, Portfolio Inflows

  China Aims to Rev Up Shale Gas Drive, Wean Itself Off Imports Amid U.S. Trade Row

  Hollywood’s Shaky Summer Box Office Points to Larger Issues

  VW Retains Access to U.S. Public Sector Contracts, Agrees to Second Monitor at HQ

  Tesla Batteries Are Keeping Zimbabwe’s Economy Running

  Cullen Roche: Three Things I Think I Think – Bubbles Edition

  Michael Batnick: Adequate Diversification

  Jeff Carter: Bond Markets Don’t Bend. They Snap.

  Howard Lindzon: You Better Love This

  Be sure to follow me on Twitter.

• Morning News: August 30, 2019
  Eddy Elfenbein, August 30th, 2019 at 7:26 am

  Trump’s New Trade War Tool Might Just Be Antique China Debt

  Japan’s Curbs on High-Tech Materials Exports to South Korea Could Backfire

  Victory in Electric Cars Depends on Recycling. So Far, China’s Winning

  Trump’s Methane Rule Rollback Divides Oil and Gas Industry

  Builders Are Swapping Cement for Weed to Reduce Pollution

  India’s Restaurants Rebel Against Food Delivery Apps

  Uber, Lyft and DoorDash Pledge $90 Million to Fight Driver Legislation in California

  With Racing and Music Events, Tesla Gets Over Marketing Allergy in China

  Month of Bond Market Milestones – How Low Can You Go?

  15 Minutes to ‘Mayhem’: How a Tweet Led to a Shortage at Popeyes

  Joshua Brown: The Real Bubble Has Always Been in Active Management

  Ben Carlson: Will Millennials Get Destroyed During the Next Recession? & Animal Spirits: Best Case Recession

  Roger Nusbaum: A 75/50 ETF? & Plenty of Blame to Go Around

  Be sure to follow me on Twitter.

• Morning News: August 29, 2019
  Eddy Elfenbein, August 29th, 2019 at 5:07 am

  Investors Pull Record Amount From Saudi Arabia ETF

  Bonds Reign Supreme, Equities Struggle on Recession, Brexit Fears

  Japan and South Korea Feud, but Breaking Up Is Hard

  A Windswept Plain, a Sea of Oil and a Mountain of Money

  Apple’s Data Shows a Deepening Dependence on China as Trump’s Tariffs Loom

  China Indicates It Won’t Retaliate Against Newest U.S. Tariffs

  Retailers Howl as U.S. Trade Agency Locks in 15% Tariffs on September 1

  UBS Sets Major Reshuffle Atop Wealth Management Unit

  Tesla Launches Insurance in California, Promising Savings and No Snooping

  Peloton Is a Phenomenon. Can It Last?

  Lord & Taylor Will Be Sold to Le Tote, a Clothing Rental Start-Up

  Popeyes Chicken Sandwich, Now A Sell-Out, Is A $65 Million Marketing Win

  Jeff Carter: Get Ready For More Candy Coated Unicorns

  Jeff Miller: Stock Exchange: Are You Growing Your Trading Knowledge Base?

  Michael Batnick: Animal Spirits: Best Case Recession & The Rise of Amazon

  Be sure to follow me on Twitter.

• Morning News: August 28, 2019
  Eddy Elfenbein, August 28th, 2019 at 6:25 am

  Fake-Branded Bars Slip Dirty Gold into World Markets

  Chinese Currency’s Drop Isn’t Entirely in Beijing’s Control

  Rich Savers Take Another Hit in Denmark

  Pound’s Wild Ride Is Changing Everything on Britain’s High Street

  A Dollar Rising Into a Possible U.S. Recession Could Be a Bad Omen

  Facebook Tightens Rules on Verifying Political Advertisers

  Boeing CEO Eyes Major Aircraft Order Under Any U.S.-China Trade Deal

  BP to Exit Alaska With $5.6 Billion Sale

  Alaska Is the Biggest Bet Yet for Texas’s Anti-Shale Oil Billionaire

  Massive Crowds at China’s First Costco Force the Store to Shut Down Early

  Popeyes Chicken Sandwiches Are Sold Out Across the Country

  Former Star Google and Uber Engineer Charged With Theft of Trade Secrets

  Cullen Roche: Let’s Stop Talking About “Paying Off the National Debt”

  Roger Nusbaum: Are Factor Funds Hokum?

  Howard Lindzon: The App Constellation Strategy & Momentum Monday…He Huffed and He Puffed

  Be sure to follow me on Twitter.

• Smucker’s Earnings Miss
  Eddy Elfenbein, August 27th, 2019 at 9:04 am

  Smuckers (SJM) is out with its earnings report this morning. The company earned $1.58 per share which came in below expectations of $1.74 per share.

  The CEO said:

  “Our first quarter performance fell short of our expectations primarily due to the timing of shipments and deflationary pricing in the coffee and peanut butter categories, as well as competitive activity in the premium dog food category,” said Mark Smucker, Chief Executive Officer.

  “We have continued momentum in many key product categories, and we are already taking decisive actions and prioritizing initiatives that strengthen our business. We remain confident in our strategy, which includes a continued focus on our growth imperatives to lead in the best categories, build brands consumers love, and be everywhere, combined with a relentless focus on operating with financial discipline, all of which will enhance shareholder value for the long term.”

  Now for their outlook.

  Net sales are expected to range from down 1 percent to flat compared to the prior year, which includes the loss of $105.9 million of sales in the first 4 months of fiscal 2019 related to the divested U.S. baking business and $25.4 million of incremental noncomparable sales for Ainsworth. On a comparable basis, net sales are expected to range from flat to up 1 percent.

  Adjusted earnings per share is expected to range from $8.35 to $8.55, based on 114.0 million shares outstanding. Earnings guidance reflects the reduced contribution from sales, gross profit margin of approximately 38.5 percent, and SD&A expenses declining slightly compared to the prior year.

  The previous forecast was $8.45 and $8.65 per share.

  SJM is down about 8% this morning.

• Morning News: August 27, 2019
  Eddy Elfenbein, August 27th, 2019 at 7:13 am

  Norway Wealth Fund Should Move More Investments to North America, Central Bank Says

  After 24 Hours, China Still Unaware of Calls Mentioned by Trump

  Trump Can Battle China or Expand the Economy. He Can’t Do Both.

  The Fed Shouldn’t Enable Donald Trump

  Here’s How Wildly Stocks Swing When Trump Mentions the Trade War

  Three U.S. Bond Kings Wield Same Strategy, Get Same Result: Lag Their Peers

  China Eases Rules on Cheap Drug Imports to Fight Chronic Diseases

  Johnson & Johnson Ordered to Pay $572 Million in Landmark Opioid Trial

  Cadillac’s Last Stand? Storied Brand Aims (Again) for Revival

  GlobalFoundries Sues TSMC, Wants U.S. Import Ban on Some Products

  KFC To Test Plant-Based ‘Meatless Chicken’ In Atlanta

  Nick Maggiulli: Skewed Expectations

  Ben Carlson: Re-Kindled: Amusing Ourselves To Death & Does the Stock Market Have a Say in the Presidential Election?

  Joshua Brown: ‘The Mandalorian’ Trailer Hits!

  Be sure to follow me on Twitter.

• Decent New Home Sales Report
  Eddy Elfenbein, August 26th, 2019 at 11:43 am

  I wanted to touch on Friday’s report on new home sales. The numbers weren’t great, but they were good enough. This is probably better news for the economy than anything the yield curve says.

  These figures are very noisy and they bump around a lot. It’s important to look at the overall trend.

  The Commerce Department said Friday that new homes sold at a seasonally adjusted annual rate of 635,000 units. That’s down from a sharply revised upward rate of 728,000 in June. So far this year, sales have risen 4.1%, a sign that buyers are beginning to respond to lower mortgage rates.

  The volatility in home sales reflects broader uncertainty in the housing market. Buyers have been eager to take advantage of wage growth and historically-low mortgage rates. The average rate on a 30-year loan declined to 3.55% this week, according to mortgage buyer Freddie Mac. The revisions to the June figure, coupled with a rebound in existing home sales in July according to data released by the National Association of Realtors, show sales reacting largely well to lower borrowing costs.

  The mortgage market is helping. This year will probably be the best year for new home sales since 2007.

  Don’t let negative news about the economy overwhelm you. There’s still a lot left in the current economic cycle.

• Morning News: August 26, 2019
  Eddy Elfenbein, August 26th, 2019 at 7:07 am

  Japan Denies it Gave Trump Too Much in Trade Talks

  Gold Steadies as Trump Ratchets Down China Trade Tension

  Oil Rises on Hopes of Easing U.S.-China Trade Tension

  Corporate America Sounds Alarm on Trump’s Threats Over China

  Trump Faces a Stubborn Opponent in Fed’s Economic Experts

  Fund Manager Who Beat 98% of Peers Says Stay Calm and Buy Stocks

  Nissan Got Rid of Carlos Ghosn. The Way It Did So May Prove Costly.

  Iceland’s Purple Planes Are Grounded, and With Them, Its Economy

  Amgen to Buy Celgene’s Psoriasis Drug Otezla for $13.4 Billion in Cash

  The $6 Million Drug Claim

  Tesla to Raise Prices in China on August 30, May Increase Again in December

  Dorm to Table: College Start-Ups Take Aim at Food Industry

  Michael Batnick: Calibrating Your Risk Tolerance

  Cullen Roche: Black Hole Monetary Economics

  Jeff Miller: Weighing the Week Ahead: Can Feedback Alter Trump’s Course?

  Be sure to follow me on Twitter.