Sunday, 6 December 2015

Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

The US consumer is the clear majority of the US kind of interesting in the run-up to the next Federal Reserve interest rate decision to read this

'The Sentier Research monthly median household income data series is now available for October. The nominal median household income rose $392 month-over-month and is up $2,910 year-over-year. That's an increase of 0.7% MoM and a 5.4% YoY increase. Adjusted for inflation, the latest income was up $279 MoM and $2,845 YoY. The real numbers equate to increases of 0.5% MoM and 5.3% YoY.

Of course there is a 'but':

In real dollar terms, the median annual income is 1.9% lower (-$1,110) than its interim high in January 2008 but well off its low in August 2011'

In another piece of better (?) news @minefornothing noted that the 'Value of global derivatives market fell below $600 trillion in 1H 2015 to its lowest post crisis level'. Good news or reflective of a slowdown in the world?  And US$600 trillion is a lot of money to have a problem with...

The BIS (Bank for International Settlements) appears to have a clear view judging by this Financial Times report: 

Central banks must not let market volatility halt their plans to retreat from crisis-fighting monetary policies, the Bank for International Settlements has warned ahead of the expected first rate rise by the US Federal Reserve in nine years.

Fair enough...but sounds utopian in the current climate.

The final word on the OPEC conclusions from Friday cited by @JavierBlas2 quoting from the WSJ?

As I noted earlier on Twitter it is certainly a very different oil market today than a few years ago:

Remarkable difference between oil price crunch of '08 & current one. Amazing what a new source of supply can do

(h/t @eurofaultlines)

Talking about change, China keeps on investing in Africa: 


Interesting report on Japan under the headline 'Japan's current recession to prove an illusion' 

'Initial figures...economy shrank at an annualised 0.8% in Q3...But Mr Amari said expects a revision from 0.8% to 0'

Meanwhile back in Europe, the Greek parliament passed the austerity budget (link here) clearing the way for more bailout monies.  Here's the reality though:
The budget makes €5.7bn in public spending cuts including €1.8bn from pensions and €500m from defence. It also includes tax increases of just over €2bn...Despite the cuts, the budget will still have a greater deficit than the 2015 budget.

This is a very nice read on the future of Europe from within Greece itself (h/t @GreekAnalyst):

'In spite of Mr Schäuble’s and Mr Varoufakis’s valiant efforts, and notwithstanding five years of harsh austerity, an overwhelming majority of Greeks continue to support the Euro. This hardly makes sense at all, except as a reflection of their longing to share in the European dream of peace, stability and prosperity for all'

And as for this weekend's French elections...

...Stratfor note:

'France began the first round of regional elections Dec. 6, officials said. A second electoral round will be held on Dec. 13. The elections, which will be the last vote held before France's presidential election in 2017, are being closely watched after opinion polls suggested the popularity of the anti-immigration, anti-EU National Front party had increased since the Nov. 13 attacks in Paris. The center-right, led by former President Nicolas Sarkozy, is also expected to win in most regions at the expense of the governing Socialist Party'. 

Watch out for the first round results from here later...

People on average stop using their wearables how quickly? (link here)

(h/t @cgledhill)

Meanwhile on a related front this was kind of interesting on Apple Pay...which was no-way near as dramatic a useage as anticipated.  Plural choices or bad data collection?

(h/t @andreascseh) 

Finally, some great graphics here on nuclear power

Company-related observations:

I am never sure about top ten the opposite or go with the flow?  Anyhow sourced from here are the are the top ten buys...

 ...and top tens sells:

Thoughts as I pull together my own list of stocks for 2016 over the next couple of weeks?  Well you are just going to have to wait until later in the month...but to frame the debate don't forget this:

Talking about bigger picture market observations as we get closer to the year end...I like these couple of graphics from a posting by @HORANCapitalAdv.  First value underperforming growth due to the influence of sectors such as energy...

...and mega caps outperforming smaller cap stocks: 

Sunday Times said that Anglo American to announce dividend slashing at investor day on Tuesday

Meanwhile retail bond investors need to take care.  This from the Weekend FT talking about the UK market:

Recall Pfizer's recent large record breaking acquisition of Allergan?  Well over the last fifteen years or so repeated acquisitions have not had that big an impact on the company...

Growth - or a stock price rising to a new all-time high has not been a problem for Google (Alphabet):

(h/t @StockTwits)

Talking about Google, I see Barrons have dropped the stock from their top 10 for 2016 list:

'For our 2016 picks, tempted as we are by Micron, we’re not waiting for a comeback. Patience, wrote Ambrose Bierce, is a minor form of despair disguised as a virtue. Our sole holdover, General Motors (GM), modestly outperformed on a late-year rally. We’re upgrading our airline to Delta Air Lines (DAL) from American Airlines Group (AAL) and swapping Alphabet, which we still like a great deal, for Apple (AAPL). Videogames and zombie shows are in. Anything oily is out. We’re trading Gilead—whose best-selling drug is so effective that treatments could peak in a year or two as more patients are cured—for Celgene (CELG), which is also highly dependant on a single drug but has much better growth potential. There are no department stores, only a druggist and a sneaker merchant. Sprawling Bank of America (BAC) is gone, replaced by steady grower Discover Financial Services (DFS). And we’re adding some housing exposure in the form of flooring specialist Mohawk Industries (MHK)'

And finally...

'Secret features of your tape measure you wish you knew ages ago'.  Simply fascinating (link here)...

(h/t @WhattheFFacts)

Stuck for a Christmas book present?  Check out this list via @farnhamstreet:

The Best Non-Fiction Books of 2015: The Year of the Biography

Have a good week

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