100th Anniversary of the 1920s Bull Market
Posted by Eddy Elfenbein on August 23rd, 2021 at 1:36 pm

The great bull market of the 1920s began 100 years ago tomorrow.

On August 24, 1921, the Dow closed at 63.90. Eight years and 10 days later it closed at 381.17.

And everybody lived happily ever after!!!

In the 1920s there was a real estate bubble, especially in Florida. That’s the backstory of the Marx Brothers first movie, The Cocoanuts.

“You can even get stucco. Oh how you can get stuck-o.”

Energy Stocks Lead the Market Higher
Posted by Eddy Elfenbein on August 23rd, 2021 at 10:45 am

The stock market is up again this morning. The energy stocks are leading the charge. Many of the big-name oil stocks are up 3% or more while the rest of the market is up just a bit.

In the crypto-world, bitcoin is back above $50,000. Just over a month ago, it slipped below $30,000. Given bitcoin’s volatility, this could all change in a few days.

The Federal Reserve has its big Jackson Hole conference this week. The meeting runs from Thursday to Saturday. Fed watchers everywhere are watching for news. If I had to guess, I think it’s slightly early to hear any tapering news from the Fed. Maybe around Thanksgiving.

This morning’s existing-home sales report rose for the second month in a row. One bright spot is that housing inventory is down 12% over the last year. The median price for an existing home is now $359,900. That’s up 17.8% in the last year.

“The housing sector appears to be settling down,” said Lawrence Yun, chief economist for the Realtors. “The market is less intensely heated as before.”

It may be cooling, but it still appears to be competitive. Homes are spending, on average, just 17 days on the market. First-time buyers represented just 30% of the market, whereas they are usually around 40% historically. Nearly a quarter of all buyers are using all-cash, also a higher share than normal.

The latest read on sales of newly built homes from June showed a sharp decline both monthly and annually, according to the U.S. Census. That data set is based on signed contracts, so it is looking at roughly the same activity as the July data on existing homes. Newly built homes come at a price premium to similar-sized existing homes, and builders say they are now seeing even more buyers unable to afford what they would like.

Morning News: August 23, 2021
Posted by Eddy Elfenbein on August 23rd, 2021 at 7:01 am

Xi Doubles Mentions of ‘Common Prosperity,’ Warning China’s Rich

China Halts Over 40 IPOs Amid Regulatory Probe Into Law Firm, Broker

China Muscles In on Middle East Renewables With Alcazar Deal

The Shipping Crisis Is Getting Worse. Here’s What That Means for Holiday Shopping

Delta Variant, Having Put Kibosh on Fed Event, Begins to Menace Recovery

Jerome Powell’s Policy Revolution Was Blindsided by Covid-19

Fed Experts Say Powell Framework Needs Endgame, Inflation Reset

It’s Called The Bond Taper. Yes, It’s Geeky. But This Is Why You Should Know About It

New Appetite for Mortgage Bonds That Sidestep Fannie and Freddie

Biden and the Fed Wanted a Hot Economy. There’s Risk of Getting Burned.

New York’s Economy, Poised for Comeback, Finds Setback Instead

B-Schools Must Evolve for Future Business Demands, Employers Say

Battle for Meggitt Shows Bigger-Is-Better Is Back in Aerospace

Pfizer to Buy Trillium Therapeutics in $2.26 Billion Deal

God, Money, YOLO: How Cathie Wood Found Her Flock

What Say ‘Money Multiplier’ Fabulists As Corporations Stockpile Trillions?

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Ross Stores Drops in Today’s Trading
Posted by Eddy Elfenbein on August 20th, 2021 at 1:31 pm

Shares of Ross Stores (ROST) got clocked hard this morning. At its low, Ross was down by 6%. It’s made back some lost ground and at the time I write this, Ross is down 2.6%.

Wells Fargo apparently agrees with me that Ross is being too conservative with its guidance:

Wells Fargo says the outlook doesn’t match the better-than-expected results the company announced late Thursday. “We get it, 2H has headwinds-but we view this 2H outlook as a tad overly conservative following such a strong 2Q-not an atypical approach for this management team,” wrote analysts led by Ike Boruchow. Wells Fargo rates Ross Stores stock overweight with a $135 price target.

(…)

Credit Suisse says the company has an “unwavering dedication to its conservative/value-leader narrative” and “struck a conservative tone” during its earnings report.

Fiserv’s CEO Talks With Jim Cramer
Posted by Eddy Elfenbein on August 20th, 2021 at 1:15 pm

Morning News: August 20, 2021
Posted by Eddy Elfenbein on August 20th, 2021 at 7:01 am

The World’s Biggest Crypto Exchange Still Lacks U.S. Footing

The Methane Hunters Racing to Change the Course of Global Warming

Norway’s $1.4 Trillion Wealth Fund Puts Oil Stocks on Notice

Chip Crisis Threatens to Cut Auto Output by 7.1 Million Cars

Volkswagen Cuts Output at Biggest Plant as Chip Shortage Bites

The Electric Vehicle Boom is Pay-Dirt for Factory Machinery Makers

Air Canada Sees Cargo Advantage in Toronto Hub As Shippers Avoid U.S. Crunch

For Bank Regulators, Tech Giants Are Now Too Big to Fail

U.S. Revives Facebook Suit, Adding Details to Back Claim of a Monopoly

Facebook’s New Bet on Virtual Reality: Conference Rooms

Amazon Plans to Open Large Retail Locations Akin to Department Stores

Academy Of Country Music Awards Ditches Broadcast Networks, To Air Only On Amazon Prime

Are You Ready for Sentient Disney Robots?

‘Paw Patrol’ Unleashed: Behind ViacomCBS’s Plan to Take on Disney

Three Former Netflix Engineers Are Charged in $3 Million Insider-Trading Ring

What It Means When Musk and Bezos Argue Over the Moon

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Jobless Claims Fall to New Pandemic Low
Posted by Eddy Elfenbein on August 19th, 2021 at 10:25 am

The stock market had a terrible close yesterday. At 2 pm, the S&P 500 was at 4,449. Two hours later, at closing time, it was at 4,400. This morning, the index is on track for its third fall in a row.

The good news is that the jobless claims report was pretty good. Claims fell to 348,000. That’s a new pandemic low and it’s down 29,000 from the week before. Wall Street was expecting 365,000.

The earnings report from Ross Stores (ROST) is due out after the close. Wall Street expects earnings of 94 cents per share.

Morning News: August 19, 2021
Posted by Eddy Elfenbein on August 19th, 2021 at 7:03 am

U.S. and I.M.F. Apply a Financial Squeeze on the Taliban

Big Tech and the Taliban

An $8.8 Billion IPO Wave Sweeps Across India as Startups Soar

179 Reasons You Probably Don’t Need to Panic About Inflation

Start-Up Boom in the Pandemic Is Growing Stronger

Oil Buckles to Lowest Since May as Fed Signals Intent to Taper

White-Collar Staff Calling Shots as Job Markets Recover

Finance Firms Are Giving Coders More Flexibility Than Bankers

China Dip Buyers Finally Reach ‘Breaking Point’ After 56% Loss

Robinhood Tumbles 12% After Warning of Slowdown in Retail Trading

Goldman Sachs Buys Dutch Money Manager in $1.9 Billion Deal

Toyota Slashes September Output Amid Chip Crunch, COVID Resurgence

Why Teslas Keep Striking Parked Firetrucks and Police Cars

To Skip the Line at Disney, Get Ready to Pay a Genie

U.S. States Rush to Meet Deadline to Join $26 Billion Opioid Settlement

Richard Sackler Says Family and Purdue Bear No Responsibility for Opioid Crisis

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Adjusting to the Tapering Has Already Started
Posted by Eddy Elfenbein on August 18th, 2021 at 1:45 pm

The stock market suffered its biggest loss yesterday in a month. That loss wasn’t much, but it says more about how calm things have been over the last month.

Target (TGT) released a very good earnings report. The store earned $3.64 per share versus an estimate of $3.49 per share. Target beat on revenue as well. Target raised guidance and approved a $15 billion buyback.

At CNBC, Jeff Cox notes that the stock market is already adjusting itself in preparation of the Federal Reserve tightening.

For one, he noted that market-based inflation measures pulled back. He also noted the “sideways” movement in commodity prices and the flattening of the yield curve. Within stocks, small-cap, cyclical, international and emerging market equities all pulled back.

Perhaps most importantly, money stock measures, which reacted sharply to when the Fed ramped up the bond buying program in March 2020 as the pandemic hit, have fallen quickly this year – from a 1.4% monthly gain in January to essentially flat in June, even as the Fed continued buying bonds.

Essentially, the lack of growth in the monetary base, or M2, is showing the diminishing impact of the Fed’s bond purchases, Paulsen said.

He also noted that markets have digested the moves fairly well and might not even react once the official tapering starts happening.

I think that could be right.

Morning News: August 18, 2021
Posted by Eddy Elfenbein on August 18th, 2021 at 7:07 am

Americans Turn Against China Stocks as Crackdown Angst Deepens

Smart Money Had the Jump on Another Mid-Month Plunge in S&P 500

Jerome Powell Says It’s Unclear What Covid-19 Surge Means for Economy

Junior Bankers Have Seized the Upper Hand on Wall Street, for Now

Cathie Wood’s Strategy Draws More Skeptics as Returns Dwindle

Kids Jump on the Retail Investing Bandwagon, $5 at a Time

15% of Paycheck Protection Program Loans Could Be Fraudulent, Study Shows

The Bad Economics of Fossil Fuel Defenders

Roblox, Facebook See the ‘Metaverse’ as Key to the Internet’s Next Phase

Lowe’s Forecasts Higher Sales As Big-Ticket Purchases Offset DIY Slowdown

People Now Spend More at Amazon Than at Walmart

T.J. Maxx Owner Beats Sales Estimates as Customers Return to Stores

Target Sales Beat As Shoppers Go Back to Stores; Online Buying Slows

Sacklers Threaten to Pull Out of Opioid Settlement Without Broad Legal Immunity

Bill Ackman’s SPAC Gets Sued

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