Morning News: March 22, 2018
Posted by Eddy Elfenbein on March 22nd, 2018 at 7:04 am

Europe Plants a Flag in the Digital-Tax Debate

One of Europe’s Biggest Funds Is Betting on the Dollar

Trump to Announce $50 Billion in China Tariffs

China: We Will Hit Back if US Announces New Tariffs

Fed Raises Rates and Signals Faster Pace in Coming Years

Facebook and Zuckerberg Still Don’t Know The Right Thing To Do

Antitrust Case Against Merger of AT&T and Time Warner Feels Stuck in the Past

Porsche Says New High-Performance Mission E Electric Car Is Not A “Tesla Model S Hunter”

Google’s E-Commerce Rivalry With Amazon Just Got More Serious

Whole Foods Is Losing Executives Under New Owner Amazon

Naspers to Sell $10.6 Billion of Tencent to Fund Investments

Meredith Says It Intends to Sell Time, Sports Illustrated, Fortune and Money

Roger Nusbaum: There’s an ETF For That

Howard Lindzon: Mark Zuckerberg Throws Technology Under The Bus

Jeff Carter: If Your Industry Skirts With Government Norms, You Need to Be in DC

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Today’s Fed Policy Statement
Posted by Eddy Elfenbein on March 21st, 2018 at 2:01 pm

The Fed raised rates by 0.25%. The new range for Fed funds is 1.50% to 1.75%.

Information received since the Federal Open Market Committee met in January indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong in recent months, and the unemployment rate has stayed low. Recent data suggest that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent. Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The economic outlook has strengthened in recent months. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to move up in coming months and to stabilize around the Committee’s 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams

Here are the new economic projections.

For the rest of this year, six FOMC members see two more hikes while another six see three more hikes. Two members see no increases while one sees four more increases this year.

The median Fed voter sees two more hikes this year, plus another three next year, plus two more in 2020.

Bad Day for Packaged Goods
Posted by Eddy Elfenbein on March 21st, 2018 at 12:53 pm

General Mills (GIS) is getting clocked today thanks to a lousy earnings report. GIS is the worst performing stock today in the entire S&P 500.

The problem for us is that this is bringing down two of our stocks, Hormel Foods (HRL) and Smucker (SJM). Wall Street assumes that if one company in a sector is having problems, then they all must be. SJM is currently down 4.3% while HRL is off by 2.3%.

Both companies are still doing well. A few weeks ago, Hormel met earnings and raised both their guidance and their dividend. That was their 52nd annual dividend increase. Smucker beat earnings and raised guidance.

Morning News: March 21, 2018
Posted by Eddy Elfenbein on March 21st, 2018 at 7:05 am

China Newspaper Calls for Curbs Against U.S. Soybean ‘Dumping’

Fed Set to Raise Rates, Issue New Economic Projections

How Trump’s Protectionism Backfires

Facebook’s Lax Data Policies Led to Cambridge Analytica Crisis

The End for Facebook’s Security Evangelist

We Fear What We Can’t Control About Uber and Facebook

Amazon is Now Second Most Valuable U.S.-Listed Company, Tops Alphabet

Google Is Creating Its Own Amazon Right Under Our Noses

Salesforce Buys MuleSoft for $6.5 Billion in Expansion Quest

China Pushes Qualcomm to Protect Local Companies in NXP Deal

Bayer Wins EU Approval for $62.5 Billion Monsanto Buy

Toyota to Temporarily Halt Driverless-Car Testing in U.S.

Michael Batnick: The Easy Pickings

Ben Carlson: This Year’s Stock Market Losses Are Normal

Joshua Brown: Some Alternatives to Evidence-Based Investing & The Real Reformed Broker

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Now It’s Fiserv’s Turn to Split
Posted by Eddy Elfenbein on March 20th, 2018 at 9:57 am

This morning, Fiserv (FISV) split 2-for-1. Our Buy Below price drops to $72 per share share. In our tracking portfolio, I’m adjusting the starting price to $65.565 per share. The number of shares doubles to 610.0816.

Morning News: March 20, 2018
Posted by Eddy Elfenbein on March 20th, 2018 at 7:05 am

U.K. Inflation Slows More Than Expected as Pound Shock Fades

U.S. Plans Heavy China Tariff Hit as Soon as This Week

The Fed Is Signaling More Than 3 Rate Hikes This Year

Four Charts That Show the Tech-Stock Tumble May Not Last Long

Crash Marks 1st Death Involving Fully Autonomous Vehicle

Alex Stamos, Facebook Data Security Chief, To Leave Amid Outcry

Here’s What Wall Street Analysts Are Saying About Facebook’s Data Scandal

Facebook’s Content Issues Are Creating a ‘Tailwind’ For Amazon’s Ad Business

Weinstein Co. Files for Chapter 11 Bankruptcy

Why More Than Just the AT&T-Time Warner Deal Is on Trial

Apple and IBM Unveil Artificial Intelligence Service That Coca-Cola Is Testing

VW Plans $340 Million Expansion at Tennessee Plant

Cullen Roche: Why Are Money Managers Paid So Much?

Howard Lindzon: Momentum Monday…Will Facebook’s Faceplant Carry Over?

Roger Nusbaum: March Magic

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S&P 500 Plunges -1.42%
Posted by Eddy Elfenbein on March 19th, 2018 at 5:44 pm

Today was a rough day for Wall Street. The S&P 500 lost -1.42%. That’s it’s biggest drop since February 8. In the Dow, only Boeing was up. The 29 others were down.

Today was particularly hard for tech. The tech sector lost 2.19%. Facebook was the big loser with a loss of close to 7%. The defensive sectors fared much better. In fact, in terms of relative strength, this was an outstanding day for our Buy List. We beat the S&P 500 by 68 basis points today. Hormel, Smucker, C&D, Ross Stores, ADS and Carriage were up for the day.

Today was a classic countertrend day. A lot of the high-beta, high volatility names that had been doing well got hit hard. On the other side, many of the lagging names did OK.

AFLAC Splits 2-for-1
Posted by Eddy Elfenbein on March 19th, 2018 at 9:56 am

Shares of AFLAC (AFL) split this morning 2-for-1. This means you now have twice as many shares and the share price has fallen in half. Our Buy Below splits as well, so now AFLAC is a buy up to $47 per share.

We’re also adjusting AFLAC’s starting price this year. The year-end closing price was $87.78 per share. Now it’s $43.89 per share. Also, the number of shares in our $1 million tracking portfolio will double from 455.6847 to 911.3694.

Morning News: March 19, 2018
Posted by Eddy Elfenbein on March 19th, 2018 at 7:11 am

Can China’s New Central Banker Restart Reforms?

Xi Taps Harvard-Educated Adviser to Tighten Grip on China’s Economy

Powell Jumps in Driver’s Seat as Fed Weighs Speed of Rate Hikes

Hedge Funds Suffer Worst Month in Two Years

Alibaba Bets Another $2 Billion on Southeast Asia

AT&T’s ‘South Park’ Argument

Google to Convert Product Searches Into Cash

Push to Settle McDonald’s Case, a Threat to Franchise Model

FedEx Follows Amazon Into the Robotic Future

Micro Focus Shares Collapse After Sales Warning and CEO Exit

Claire’s Becomes Latest Retailer to Go Bankrupt

StanChart Fined in Singapore for Money Laundering Breaches

Jeff Miller: A New Direction for the Fed?

Lawrence Hamtil: Oil’s Evolving Role in the Dow Transports

Joshua Brown: Nine Rules for Managing a Creative Culture

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RPM Downgraded
Posted by Eddy Elfenbein on March 16th, 2018 at 3:43 pm

This morning, JPMorgan downgraded RPM International (RPM) from Neutral to Underweight. The shares gapped down at the open but have rebounded some.