I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber… Read More

I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber Technologies Inc. is selling its China operations to fierce rival Didi Chuxing, ending an expensive price war and freeing it up to focus on other markets and possibly an initial public offering. The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has already lost $2 billion in China in two years there, people familiar with the matter have said, prompting investors to pressure the company to cut a deal. As part of the arrangement, Didi will invest $1 billion in Uber’s global company, people familiar with the matter… Read More

The U.S. stock market resumed its rally last week, following three weeks of mostly sideways price activity within a narrow range. Following a much-better-than-expected July jobs report on Friday, the benchmark S&P 500 powered to a new all-time closing high. #-ad_banner-#The tech-heavy Nasdaq 100, up 1.3%, and small-cap Russell 2000, up 0.9%, outperformed the broader market S&P 500, which added 0.4% for the week. At the sector level, last week’s advance was led by financial services (2.2%) and technology (1.3%). The traditionally defensive utilities sector was the worst-performing sector, off 2.7%. The common denominator between financials and utilities is that… Read More

The U.S. stock market resumed its rally last week, following three weeks of mostly sideways price activity within a narrow range. Following a much-better-than-expected July jobs report on Friday, the benchmark S&P 500 powered to a new all-time closing high. #-ad_banner-#The tech-heavy Nasdaq 100, up 1.3%, and small-cap Russell 2000, up 0.9%, outperformed the broader market S&P 500, which added 0.4% for the week. At the sector level, last week’s advance was led by financial services (2.2%) and technology (1.3%). The traditionally defensive utilities sector was the worst-performing sector, off 2.7%. The common denominator between financials and utilities is that both sectors are heavily influenced by U.S. interest rates. Strengthening financials and weakening utilities are characteristic of a market that’s expecting long-term interest rates to rise. I’ll talk about this in more detail later in the report, but before we dig deeper into the interest rate outlook, let’s look at what other indicators are saying about likely market movement. Volatility, Seasonality Still Warn Of A Correction Over the past few weeks, I have stated that near-term downside risk in the stock market exceeds upside potential for a number of reasons, including August and September seasonality (see last week’s report) and current… Read More

Apple (Nasdaq: AAPL) surprised investors who were concerned about slowing iPhone sales when it reported its fiscal Q3 earnings in late July. While profits on the smartphone were down, Apple reported sales of 40.4 million iPhones, slightly beating projections by 400,000. The stock is up 9.5% since the earnings announcement, which is no doubt impressive. But I believe the key to understanding and profiting from AAPL going forward is acknowledging its shift from a high-growth business model to a mature one — and from a high-growth stock to a conservative investment. —Recommended Link— New Retirement Plan Lets You Schedule Payments… Read More

Apple (Nasdaq: AAPL) surprised investors who were concerned about slowing iPhone sales when it reported its fiscal Q3 earnings in late July. While profits on the smartphone were down, Apple reported sales of 40.4 million iPhones, slightly beating projections by 400,000. The stock is up 9.5% since the earnings announcement, which is no doubt impressive. But I believe the key to understanding and profiting from AAPL going forward is acknowledging its shift from a high-growth business model to a mature one — and from a high-growth stock to a conservative investment. —Recommended Link— New Retirement Plan Lets You Schedule Payments When You Want Retirees love this program because they see in advance exactly how much income they’ll make AND exactly when they’ll make it. And it’s 37% safer than the stock market. Check it out here. Unexpected growth isn’t entirely out of the question. The next iPhone could exceed sales expectations, or the company might introduce a new product that revolutionizes an industry. These events have happened before, and they explain why AAPL has one of the greatest growth histories of any stock. But shareholders have already been rewarded for those historic developments. New shareholders should expect their returns… Read More

For as long as I can remember, presidential candidates, their surrogates and the news media have always proclaimed every election as “the most crucial in our nation’s history”. Incidentally, my presidential campaign cycle awareness dates back to 1972.  #-ad_banner-#While I agree that presidential elections are an important exercise, I’m hesitant to label every one of them “crucial”. Case in point: George H.W. Bush versus Michael Dukakis in 1988. I mean…seriously? 2016’s contest has been anything but ordinary and, no surprise, I’m starting to field phone calls from nervous clients about what course of action they should take as the general… Read More

For as long as I can remember, presidential candidates, their surrogates and the news media have always proclaimed every election as “the most crucial in our nation’s history”. Incidentally, my presidential campaign cycle awareness dates back to 1972.  #-ad_banner-#While I agree that presidential elections are an important exercise, I’m hesitant to label every one of them “crucial”. Case in point: George H.W. Bush versus Michael Dukakis in 1988. I mean…seriously? 2016’s contest has been anything but ordinary and, no surprise, I’m starting to field phone calls from nervous clients about what course of action they should take as the general election cycle picks up engine pressure.  So I decided to go back and look at the performance of the S&P 500 during the general election cycles going back to the 1992 race. I did not include the 2000 and 2008 race, as both were extraordinary in circumstance. In 2000 there was the Gore v. Bush controversy that dragged out the final outcome to December of that year, and in 2008 the Obama vs. McCain contest occured during the depths of the financial crisis. I hope you like charts. … Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that… Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that do nothing despite decent economic performance over the next 12 months. Fortunately, there remain plenty of companies to choose from with solid prospects in the near term and excellent long-term opportunities. One of these is General Electric (NYSE: GE).  GE is an iconic company with roots in classic American themes: innovation, ingenuity and industry. Its history is storied, and blue chips don’t come any bluer. But as I’ve said before, what’s most attractive about the stock is not its past, but its future. GE has restructured its business through spinoffs and acquisitions to again focus on innovation — and it… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift to a cashless society happen first hand as people get tired of carrying large stacks of bills and instead opt for credit and debit cards. This shift in emerging markets could carry global payment growth, with Boston Consulting Group (BCG) forecasting as much as $900 billion in transaction-based revenue growth up for grabs through 2024. One market leader is taking advantage of the Brexit shakeup to snap up a competitor at a 12% discount, expanding its global footprint. Even better, its board just authorized a massive share buyback, and earnings this year could be well over expectations. Consumers Seem Unaffected… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When Andy originally wrote about Amplify, he issued an immediate “buy” recommendation on the stock, which had recently gone public. Andy recently confessed to his Game-Changing Stocks readers that his timing was perhaps a little bit off, but anyone who followed his recommendation is still sitting on a nice gain:       “Looking back, I can see — and feel obligated to confess — that I made an error in my timing. As with many IPOs, the market created future entry points far more attractive than the pricing available at the time of my recommendation. I erred further in failing… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well…… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well… Here’s what Jared told readers of his premium newsletter, Pro Trader, about the report:       “The Morgan Stanley report forecast 2017 U.S. GDP growth at only 1.5%, which is 35% lower than the consensus of 2.3%. The report detailed just how bad things are for American consumers and how many were skimping on expenditures and saving in record numbers. Morgan Stanley explained that the Fed would be working overtime just to… Read More