All major indices finished sharply higher last week despite the market’s continued day-to-day choppiness. The tech-heavy Nasdaq 100 led the pack, gaining 3.5% after a big decline the week before. #-ad_banner-# It will still take a sustained rise above the market’s all-time highs — at 2,135 in the S&P 500 and 18,351 in the Dow industrials — to confirm that a new intermediate-term advance is beginning. However, the sharp bullish reversal has set up a potential intermediate-term buying opportunity, as I anticipated in last week’s report, complete with some attractive… Read More

All major indices finished sharply higher last week despite the market’s continued day-to-day choppiness. The tech-heavy Nasdaq 100 led the pack, gaining 3.5% after a big decline the week before. #-ad_banner-# It will still take a sustained rise above the market’s all-time highs — at 2,135 in the S&P 500 and 18,351 in the Dow industrials — to confirm that a new intermediate-term advance is beginning. However, the sharp bullish reversal has set up a potential intermediate-term buying opportunity, as I anticipated in last week’s report, complete with some attractive risk/reward parameters. Last week’s rally was broad-based, with all sectors of the S&P 500 finishing in positive territory, led by real estate (4.4%) and health care (4.1%). Asbury Research’s ETF-based metric shows the biggest inflow of assets on a percentage basis during the past one-week and one-month periods went to utilities, while the biggest outflows came from financials. The performance of both of these sectors was driven by the recent collapse in long-term U.S. interest rates, which adversely affects the profitability of lending institutions and helps drive yield-seeking investors into riskier but better-paying utilities.     A Tale… Read More

Last week, U.S. stocks reached their high water marks for the year. Then on Friday, they were in freefall after UK voters narrowly voted to leave the European Union. The historic vote will have far-reaching political, social and economic ramifications. Stock markets around the globe were reeling amid the uncertainty surrounding Britain’s departure from the EU, which will influence everything from mortgage rates to foreign currency exchange. #-ad_banner-#Fortunately, we have limited direct exposure in High-Yield Investing. Most of my remaining holdings either have tangential exposure to UK markets or are well-positioned to ride out… Read More

Last week, U.S. stocks reached their high water marks for the year. Then on Friday, they were in freefall after UK voters narrowly voted to leave the European Union. The historic vote will have far-reaching political, social and economic ramifications. Stock markets around the globe were reeling amid the uncertainty surrounding Britain’s departure from the EU, which will influence everything from mortgage rates to foreign currency exchange. #-ad_banner-#Fortunately, we have limited direct exposure in High-Yield Investing. Most of my remaining holdings either have tangential exposure to UK markets or are well-positioned to ride out this storm. Still, even if my portfolio wasn’t directly in the line of fire, there was plenty of collateral damage. Bank lenders and businesses that rely on cross-continental trade were among the hardest hit. The ripple effects of this vote will be felt for many months to come. As is typically the case in turbulent times, cash is flowing into reliable safe harbors like gold and U.S. government bonds. From my vantage, the biggest upshot for us is that the current turmoil will likely stay the Federal Reserve’s hand and rule out any further… Read More

With the pound at historic lows and economic uncertainty at its peak, it makes sense that financial institutions have been having a hard time in the wake of the Brexit. Deutsche Bank (NYSE: DB) is down over 21% and Barclays (NYSE: BCS) has plummeted nearly 32% since June 23. However, in this week’s Project Alpha I’m going to tell you about a small-cap financial services company that was hardly impacted by the Brexit. In fact its recent decision to redomicile, or move its location of incorporation from the United States to the UK, might actually improve… Read More

With the pound at historic lows and economic uncertainty at its peak, it makes sense that financial institutions have been having a hard time in the wake of the Brexit. Deutsche Bank (NYSE: DB) is down over 21% and Barclays (NYSE: BCS) has plummeted nearly 32% since June 23. However, in this week’s Project Alpha I’m going to tell you about a small-cap financial services company that was hardly impacted by the Brexit. In fact its recent decision to redomicile, or move its location of incorporation from the United States to the UK, might actually improve margins due to tax benefits.  #-ad_banner-#​Cardtronics (Nasdaq: CATM) is the no.1 deployer of non-bank ATMs in the world, and provides automated consumer financial services through its multi-function kiosks.  The firm currently operates over 190,000 devices globally for notable retailers and financial institutions including Target, 7-Eleven, CVS, Walgreens, Bank of America, Chase and Wells Fargo. These clients outsource their ATM functions to Cardtronics, which provides services such as machine maintenance, device branding and cash transportation and upkeep. The company’s ATMs are usually located in prominent and high-traffic locations, which creates three-sided network effects between financial institutions, consumers and retailers. Read More

The credit card was popularized in the United States in the 1950s, when Diners Club, Care Blanche and American Express created national — and then global — networks that allowed card holders to charge to a variety of merchants. Loyalty reward programs date back to at least the 1790s in the United States; they’ve remained popular throughout the centuries — from trading stamps through box tops to the present-day airline-style points programs. In the mobile digital age, when consumers have instant access to dozens of shopping options, loyalty is especially important. Consumer-facing companies now aim not only to attract purchases… Read More

The credit card was popularized in the United States in the 1950s, when Diners Club, Care Blanche and American Express created national — and then global — networks that allowed card holders to charge to a variety of merchants. Loyalty reward programs date back to at least the 1790s in the United States; they’ve remained popular throughout the centuries — from trading stamps through box tops to the present-day airline-style points programs. In the mobile digital age, when consumers have instant access to dozens of shopping options, loyalty is especially important. Consumer-facing companies now aim not only to attract purchases but to build networks of loyal customers. Online marketing programs are tailor-made for such efforts, as they allow companies to inexpensively reach customers with targeted appeals. #-ad_banner-#Today, many large retailers have their own credit cards; almost all consumer-facing companies have loyalty programs that reward customers who return to buy their products and services again and again; and almost all such companies also have multi-channel marketing efforts that include sophisticated online programs. One of the leading companies that help manage all of the above is Alliance Data Systems (NYSE: ADS). Alliance describes itself as “the engine” behind marketing and loyalty programs… Read More

Just when things seemed calm, investors found reason to panic. In a historic referendum vote, citizens of the United Kingdom narrowly voted to exit the European Union. The fallout was immediate, as markets around the world plummeted. #-ad_banner-#The UK’s blue-chip FTSE 100 index declined about 2.5% Friday, while its currency, the pound, fell to levels not seen since 1985. Other European exchanges fared even worse. The Stoxx Europe 600 tumbled 7%, while the German DAX fell 6.8% and the French CAC 40 dropped 7%. Even the Japanese Nikkei index closed down… Read More

Just when things seemed calm, investors found reason to panic. In a historic referendum vote, citizens of the United Kingdom narrowly voted to exit the European Union. The fallout was immediate, as markets around the world plummeted. #-ad_banner-#The UK’s blue-chip FTSE 100 index declined about 2.5% Friday, while its currency, the pound, fell to levels not seen since 1985. Other European exchanges fared even worse. The Stoxx Europe 600 tumbled 7%, while the German DAX fell 6.8% and the French CAC 40 dropped 7%. Even the Japanese Nikkei index closed down 7.9%. U.S. markets felt the pain, too, with the Dow falling more than 600 points, or 3.4%, while the S&P 500 lost 3.6%. But it was fear that had the biggest day of all. As I’ve discussed before, the Volatility S&P 500 (VIX) index is a measure of how much volatility premium is factored into the price of options, but it’s also commonly used as a gauge of investors’ level of fear. A low VIX signals traders expect a slow, steady rise in stocks. A high VIX means investors expect rough waters ahead. Read More

To paraphrase the late, great Hunter S. Thompson, “When the going in Europe gets weird, the weird go to Switzerland”. And now, thanks to the Brexit vote, things are officially weird in Europe. Throughout history, whenever things got dicey in Europe, people with assets have always fled to the safety of Swiss banks and even the country itself. Where were the von Trapps from “The Sound of Music” going to escape the Nazis? Yep. Switzerland. And my guess is that Captain von Trapp had some cash stashed in Geneva as well. #-ad_banner-#So will the new Brexit-induced cracks in the EU… Read More

To paraphrase the late, great Hunter S. Thompson, “When the going in Europe gets weird, the weird go to Switzerland”. And now, thanks to the Brexit vote, things are officially weird in Europe. Throughout history, whenever things got dicey in Europe, people with assets have always fled to the safety of Swiss banks and even the country itself. Where were the von Trapps from “The Sound of Music” going to escape the Nazis? Yep. Switzerland. And my guess is that Captain von Trapp had some cash stashed in Geneva as well. #-ad_banner-#So will the new Brexit-induced cracks in the EU stimulate asset migration to Switzerland? I think so. Switzerland is not part of the European Union (EU) or the common euro currency. However, the country maintains a solid, cooperative relationship with the EU — and having a stable, standalone currency in the Swiss franc and a well-regulated, albeit private, banking system make Swiss banks an attractive option for fearful wealthy Europeans.  Of course, customer and asset flows also mean profits which are why investors should have a look at Swiss bank stocks right now. Here are two timely ideas. With a global financial services footprint, Credit Suisse Group (NYSE: CS)… Read More

Jessie Livermore was one of the greatest traders of all time. He first began trading stocks nearly a hundred years ago, making and losing multi-million dollar fortunes several times over.  His life and trading methods are recounted in the 1923 book “Reminiscences of a Stock Operator,” by Edwin LeFerve. The book is considered a classic among traders and is still read to this day (the hardback retails for $187.95 on Amazon).  #-ad_banner-#Livermore began his career in what were called “bucket shops” — typically a warehouse or storefront where smaller speculators could make bets on the price movements of stocks (although… Read More

Jessie Livermore was one of the greatest traders of all time. He first began trading stocks nearly a hundred years ago, making and losing multi-million dollar fortunes several times over.  His life and trading methods are recounted in the 1923 book “Reminiscences of a Stock Operator,” by Edwin LeFerve. The book is considered a classic among traders and is still read to this day (the hardback retails for $187.95 on Amazon).  #-ad_banner-#Livermore began his career in what were called “bucket shops” — typically a warehouse or storefront where smaller speculators could make bets on the price movements of stocks (although actual shares were rarely bought or sold). Of course, this practice was highly risky, since corruption was rampant and the bucket shops allowed individuals to make bets on as little as 1% margin. But somehow, Livermore was able to make $1,000 at the age of 15 (a small fortune back then). Later in life, he moved to New York and began trading in more legitimate markets. Among his accomplishments: — He shorted Union Pacific Railroad before the 1906 San Francisco earthquake — Shorted the market before the Panic of 1907 — Made… Read More

With the Brexit dominating the news and fraying traders’ nerves, it seems crazy to think a footwear maker would be poised to rally by double digits. However, the chart of Crocs (Nasdaq: CROX), the maker of some rather odd shoes, is beautifully set up to do so. Crocs is a love-to-hate brand. Its “ugly” shoes are revered by fans for their comfort and functionality much to the horror of anyone with a fashion sense. Fortunately, we don’t need to concern ourselves with the company’s reputation. The only thing that matters is gains, and that is what the stock is poised… Read More

With the Brexit dominating the news and fraying traders’ nerves, it seems crazy to think a footwear maker would be poised to rally by double digits. However, the chart of Crocs (Nasdaq: CROX), the maker of some rather odd shoes, is beautifully set up to do so. Crocs is a love-to-hate brand. Its “ugly” shoes are revered by fans for their comfort and functionality much to the horror of anyone with a fashion sense. Fortunately, we don’t need to concern ourselves with the company’s reputation. The only thing that matters is gains, and that is what the stock is poised to deliver. After being in a downtrend since 2011, which accelerated in 2015, Crocs stabilized in a range this year. Following an analyst downgrade in April, the stock fell sharply and even dipped below support to a new multiyear low. But within days, better-than-expected earnings caused shares to soar. The post-earnings rally left several seriously bullish markers on the chart. First, it negated the breakdown. Failed bearish signals are often new bullish signals, and within one day, CROX returned to the top of its range. The rally also left a bullish key outside-day reversal on the weekly charts. Read More

The financial world’s reaction to the UK vote to leave the European Union was dramatic and understandable: a huge selloff in the British pound, big drops in most major stock markets and significant gains for U.S. government bonds. After all, voters in the world’s fifth-largest economy decided to remove it from the largest free-trade zone in the world. It’s hard to find an economist who thinks Brexit isn’t a huge mistake. The financial world’s reaction was exacerbated by surprise: despite polls showing a “Leave” victory was quite possible, conventional wisdom in the world’s financial centers was that voters would act rationally… Read More

The financial world’s reaction to the UK vote to leave the European Union was dramatic and understandable: a huge selloff in the British pound, big drops in most major stock markets and significant gains for U.S. government bonds. After all, voters in the world’s fifth-largest economy decided to remove it from the largest free-trade zone in the world. It’s hard to find an economist who thinks Brexit isn’t a huge mistake. The financial world’s reaction was exacerbated by surprise: despite polls showing a “Leave” victory was quite possible, conventional wisdom in the world’s financial centers was that voters would act rationally and remain in the EU, which benefits the UK economy far more than it harms it. #-ad_banner-#U.S. stocks lost about 5% in the first two days following the vote, which makes sense given the potential impact on the global economy — and the importance of the UK and Europe as U.S. trade partners. Stocks in the financial and manufacturing sectors were the hardest hit. Note that the fall comes after a solid period of performance for the overall market; Thursday’s close for the S&P 500 was close to its high for 2016. It’s highly unlikely that Brexit — as significant a… Read More