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The U.S. stock market, as measured by the S&P 500 Index, is up 23.4% this year and recently reached a new record high, but five signs of investor euphoria suggest growing risks, according to Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. She endorses RBC’s year-end 2019 target of 2,950 for the index, 4.7% below the Nov. 12 close, according to a recent story in Barron’s.
Calvasina discussed these five signs in a note to clients:
- Asset managers have bullish positions in U.S. equity futures similar to the highs before the financial crisis, risking a big negative reaction to bad news.
- U.S. stock valuations are near their late 2017 highs.
- Earnings forecasts for 2020 are too optimistic.
- Stock prices anticipate a phase one U.S.-China trade agreement, but business confidence remains seriously damaged.
- The S&P 500 has risen nearly 32% above its Dec. 2018 low, similar to previous rallies off lows in 2010, 2011 and 2016 that paused.
Significance for Investors
“We haven’t learned anything in the current reporting season that justifies euphoric positioning and peak valuations,” Calvasina wrote. “Reporting season has been better than feared, but the overall tone around demand/macro, tariffs and cost savings all sounds very familiar–it’s what companies have been saying all year,” she added.
On the other hand, money market fund assets are $3.4 trillion, a 10-year high and still rising, undercutting the “euphoric positioning” narrative. Several strategists see this as a bullish indicator, per The Wall Street Journal.
Calvasina predicts that a pause by the Fed in cutting interest rates limits the upside for equity valuations. If 2020 earnings disappoint, as she anticipates, stock prices should sink….CLICK for complete article
The transportation industry boasts this inglorious claim to fame: It’s responsible for nearly 30 percent of all greenhouse gas emissions in the United States.
Of that, cars and trucks alone are believed to be responsible for nearly one-fifth of all U.S. emissions.
It’s not profit loss. It’s how much Americans lost on average every year due to traffic congestion.
Americans have lost an average of 97 hours a year due to congestion, which costs them roughly $87 billion, or an average of $1,348 per driver, according to 2018 INRIX National Traffic Scorecard.
And it’s about to get worse.
The market now is all about doing two things at once: cleaning up and getting out of traffic. The tech advance that makes both possible wins on all levels.
Here are the 5 cleanest modes of travel right now…CLICK for complete article
As Amazon “aggressively recruited Chinese manufacturers and merchants” to sell to US consumers, its China team “saw increasing patterns of fraud, counterfeits and unsafe products.” But consumers have no clue where the sellers are and where the products came from.
Everybody who buys enough on Amazon has noticed this: Buyer beware!
You get a mix of Amazon’s own merchandise and the third-party market place, which accounts for over half of Amazon’s physical gross merchandise sales. You’re surrounded by good merchandise, fakes, and dangerous products made overseas. There are legit sellers, legit manufacturers, and dubious sellers and manufacturers. You don’t know who or where the seller or manufacturer is because they don’t have to disclose it, including many sellers in China. It’s all there, the good, the bad, and the ugly, and buyers have to sort it out on their own. Even many of the product reviews are fake.
We’ve had good experiences too: We bought a set of cotton sheets via the Amazon platform from the manufacturer in India. Because it cut out all the middlemen, except the Amazon platform, the price was a fraction of the price of similar-quality sheets – also made in India – at a big-name US department store. And we got it a couple of days after ordering it. That’s one end of the spectrum…CLICK for complete article
Ousted Uber co-founder Travis Kalanick sold more than half a billion dollars’ worth of stock last week, and many expect he will be redirecting that cash windfall to his new startup.
Kalanick co-founded Uber in 2009 but was ousted as CEO in 2017 after a series of scandals rocked the company. However, he still owns 4 percent of the rideshare giant and remains a director on its board.
Video game stock performance in the two months heading into the holidays has given investors about an even shot at gains and losses over the last decade, historical price data show.
Unless you include Microsoft Corporation.
When looking at six video game stocks’ performance during October and November each year since 2009, Microsoft (which also makes plenty of other consumer goods that holiday shoppers buy) skews the data quite a bit.
Shares of Microsoft have gone up during the two-month period in eight out of the last 10 years.
The other five video game stocks aren’t as sure of a play in the fall. Stocks in the sector fell during the two months slightly more often than they rose….CLICK for complete article
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