Search Results
Results 1,051–1,100
of 1,588 found.
Who Wants Pie?
by Scott Brown of Raymond James,
Productivity growth is perhaps the single most important factor in the economy. Increased output per worker facilitates improvements in the standard of living over time. It’s how our children have a better future. It also helps support corporate profits. What to make then of the current situation, where productivity growth has slowed to a crawl in the U.S. and around the world? Will there be enough pie to go around?
I Think Icahn
by Jeffrey Saut of Raymond James,
Last Thursday was session 53 in the “buying stampede” and it was going along swimmingly. Well, I guess the surprise “no stimulus” announcement out of Japan caused an early morning stutter-step, but the equity markets seemed to stabilize after a somewhat weak opening. In fact it caused one market wizard to comment, “I love this market. Bad earnings can't take it down. Remember, the move most people least expect is the DJIA going right through all of that overhead supply and making all-time new highs. I'm in the minority camp, expecting major new highs. Buy in May and don't go away!”
Wait Until You Get a Pitch Right Where You Want It!
by Jeffrey Saut of Raymond James,
One of the most successful investors in history received the only A+ from Professor Benjamin Graham (of Graham and Dodd “Security Analysis” fame) at Columbia: the chairman and chief executive officer at Berkshire Hathaway, Inc., which traded as low as $38 per share in the early 1970s and now trades around $219,000 per share. If you haven’t guessed who by now, it’s Warren Buffett. How does he do it?
The Fed, the Dollar, and Trade Activity
by Scott Brown of Raymond James,
Financial markets have some tendency to over-react to news and the increased globalization of financial markets means that things can now get out of hand a lot more quickly on a global scale. Minor shifts in the Fed policy outlook have had a large impact on exchange rates. The strengthening of the dollar has had an outsized impact on commodity prices. However, shifts in the financial markets can themselves have important effects on economic conditions. It’s enough to make your head spin.
Shad Rowe
by Jeffrey Saut of Raymond James,
For years, when I was living in Virginia, I attended the annual Shad Planking. This morning, however, I am not referring to Virginia’s “Shad Planking,” but rather my friend Frederick “Shad” Rowe, captain of the Dallas-based money management firm Greenbrier Partners. Back in the 1970s/1980s I used to read Shad’s sage comments in Forbes Magazine, but regrettably he is no longer a contributor. He now writes an insightful letter to investors in his partnership every month, which I very much look forward to. This month’s letter was no exception.
Expecting Mixed Economic Data
by Scott Brown of Raymond James,
The broad range of data suggests that the U.S. economy slowed in the first quarter. It’s more likely that this is merely “a slow patch” than the start of a more substantial downturn (not gonna use the r-word). The mixed nature of the economic data allows one to make any particular argument one wants and the noise is likely to add to market volatility in the near term.
Never on a Friday
by Jeffrey Saut of Raymond James,
“Never on a Friday” is one of the mantras that has served me well over the years. Long time readers of these letters know its meaning. To wit, when the equity markets are involved in a pullback attempt they rarely bottom on a Friday. Nope, they tend to give participants time over the weekend to brood about their losses, tell their wives they can no longer buy the new Mercedes Benz (which makes for a pretty tense weekend), and consequently return to The Street of Dreams on Monday/Tuesday in “sell mode.” That sequence typically leads to the phrase “Turning Tuesday” implying the market bottoms either late in Monday’s trading session, or early the next day.
The Economic Outlook and the Fed
by Scott Brown of Raymond James,
The first quarter’s market action was driving by the escalation of fear and the ebbing of that fear, ending with expectations of “more of the same” – that is, mixed but moderate economic growth and a very gradual pace of Fed tightening.
The Philosophy of Tops
by Jeffrey Saut of Raymond James,
Most of the time when I drudge up “The Philosophy of Tops” it is to warn of a pending market “top.” The operative line from Justin’s quip is, “One rule about tops is not that they provide this or that signal, but that they come before anyone is ready.” Manifestly, “[tops] come before anyone is ready!” But, currently EVERYONE is ready, either calling for a market “top,” or a continuation of the trading range market. I see very few of us who are suggesting that we remain in a secular bull market, and in bull markets most of the surprises come on the upside.
Can Manufacturing Jobs Come Back?
by Scott Brown of Raymond James,
The leading presidential candidates of both parties have pledged to bring manufacturing jobs back to America. It’s unclear exactly how this will be done or even whether it can be done. However, the sentiment has hit a nerve with many voters. The more important problem will be to figure out where the economy is headed over the long term and how to prepare the workforce for the future.
Panic?
by Jeffrey Saut of Raymond James,
The markets (any market) are seldom surprised by shocking events. But during those rare instances when the market is caught by a surprise a panic may result. My own definition of a panic is this:
A panic is a collapse (triggered by fear and unforeseen circumstances) which causes the price of the item to fall precipitously within a short span of time. That’s a loose definition but it will do.
The Conference
by Jeffrey Saut of Raymond James,
Last week, we watched a 2012 interview with Jeff Bezos, Amazon’s chief executive. Bezos noted that he was frequently asked what he thought was going to change in the next ten years. His response was that the more important question would be “What is not going to change in the next ten years?”
Turn, Turn, Turn
by Scott Brown of Raymond James,
The story goes that tighter Fed policy has strengthened the dollar, the stronger dollar has led to lower prices of oil and other commodities, and the drop in oil prices contributed to stock market weakness in January and February. However, stock market movements cannot be attributed wholly to the price of oil, the price of oil cannot by tied completely to the dollar, and the dollar’s strength has not been due entirely to monetary policy. Examining these links more closely may provide some insight into where we are heading in the months ahead.
A Banana?!
by Jeffrey Saut of Raymond James,
When Herb Stein, chairman of the Council of Economic Advisers in the Gerald Ford administration, was admonished by his boss not to use the word "recession" to describe a recession, he complied, reluctantly. "From now on," he told a group of economic reporters, "I won't use the word recession. I'll say 'banana.' When I say banana, think 'recession'. I think we must be wary of the risks of a banana."
U.S. vs. The World
by Scott Brown of Raymond James,
The recent economic data reports have continued to reflect the mix of global softness and domestic strength. The economy has continued to add jobs at a relatively strong pace in early 2016, although the real test for the job market will come over the next few months. The job market is getting tighter and, despite a dip in hourly earnings, wage trends are higher. January trade data, overshadowed by the employment report, suggest a larger drag on GDP growth in 1Q16, but the consumer should carry us through into the second half of the year.
Nothing Recedes Like Recession
by Scott Brown of Raymond James,
Recent economic data reports have been mixed, but generally consistent with moderate economic growth in the near term. That won’t stop investors from worrying. The overall theme of domestic strength vs. global softness is going to continue. However, there are likely to be some important issues in the job market and dilemma for Fed policy in the months ahead.
By the Side of the Road
by Jeffrey Saut of Raymond James,
A man lived by the side of the road and sold hot dogs. He was hard of hearing, so he had no radio. He had trouble with his eyes, so he had no newspapers, but he sold hot dogs. He put up a sign on the highway, telling how good they were. He stood by the side of the road and cried, ‘Buy a hot dog, mister’ and people bought.
The Direct Credits Society?
by Jeffrey Saut of Raymond James,
Come with me, and Mr. Peabody, in the “Wabac Machine” (Wabac) to a place from a time long ago and galaxy far, far away. It was during the Great Depression in this country (1929 – 1939) when Lawsonomy was proposed by Alfred Lawson. I recalled Lawsonomy while listening to Bernie Sanders over the weekend, who sounds amazingly like Alfred Lawson. Lawson (1869 – 1954) was a man who believed in giving everything in the world to everybody.
What to Worry About
by Scott Brown of Raymond James,
Global financial markets were unexpectedly volatile in January and there have been few signs of calm in February. Some of the worries are real; others imagined or overdone. It’s difficult for investors to slice through the noise. There is genuine concern that market fear could become self-fulfilling, and while the expectation is that the U.S. economy will muddle through and avoid a recession this year, the risks are tilted to the downside and policy options to counter a downturn are limited.
Dune
by Jeffrey Saut of Raymond James,
Maybe instead of titling this morning’s report “Dune” I should have titled it “Doom” because it has been the worst stock market start to a new year EVER (Chart 1). The 31 session “selling stampede” (as of last Thursday) has fostered fear among investors. Fear we are headed for a recession. Fear because it is indeed the worst start of the year ever. Fear because there was no Santa Rally.
Spotlight on Yellen
by Scott Brown of Raymond James,
Fed Chair Janet Yellen will present her semi-annual monetary policy testimony to the House Financial Services Committee on Tuesday. She is expected to present a moderately upbeat economic outlook, but she should also note the abundance of downside risks to that outlook. This is an election year, so she is unlikely to receive a warm welcome. If fact, many are likely to criticize the Fed for raising rates in December. She will put up a credible defense, but that’s unlikely to appease the markets.
Rich Man, Poor Man
by Jeffrey Saut of Raymond James,
Given the unmerciful “selling stampede” ushered in with the new year, I thought it would be appropriate to republish one of my strategy reports from a few years ago, because its advice is timeless. Indeed, after 45 years in this business, I have seen a number of cycles and developed a long-term perspective, much like Richard Russell wrote about in “Rich Man, Poor Man.”
The Growth Outlook, Near and Far
by Scott Brown of Raymond James,
Real GDP rose at a 0.7% annual rate in the advance estimate for 4Q15, roughly what was expected before the release, but a lot lower than was anticipated at the start of the quarter. It’s not as bad as it looks. Growth was held back by foreign trade and slower inventory growth. Domestic demand was mixed, but moderate. The fourth quarter numbers don’t tell us much about the important question: what’s growth likely to be over the course of this year. More troublesome, there are more important concerns about the economy’s long-term prospects.
Saved by the Bell
by Jeffrey Saut of Raymond James,
“Saved by the Bell” except in this case we are not referring to the late-1980s TV sitcom that focused on a group of high school teens and their principal, but last Wednesday’s closing bell on the floor of the New York Stock Exchange (NYSE). The day began well enough with the preopening S&P futures only off about 9 points when I slid into my trading turret around 5:30 a.m. From there, however, things got pretty ugly as the D-J Industrial Average (INDU/16093.51) went into a minicrash that would see the senior index shed some 567 points and in the process break below its August 25, 2015 clo
Will the Tail Wag the Dog?
by Scott Brown of Raymond James,
Global economic conditions do not appear to be severe enough to justify this year’s adverse market action. However, the adverse market action may pose a risk to the global economic outlook. While the global financial system may currently seem a bit unstable, it’s unlikely that fear will become a self-fulfilling prophecy. At least, that’s the hope.
Assassins, Hunters, and Rabbits . . . Oh My
by Jeffrey Saut of Raymond James,
It was a few weeks ago that I resurrected a line used in my September 10, 2001 missive from the movie Star Wars that read, “I felt a great disturbance in the force . . . as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened.”
What, Me Worry?
by Scott Brown of Raymond James,
Recent economic data releases have been mixed. However, despite strong job figures, most have been on the soft side of expectations. Lower commodity prices are tough for producers of raw materials, but beneficial to the buyers of those materials. However, the bigger concern is why commodity prices are falling. Many view the drop in oil prices as signaling a more pronounced global slowdown and fear that the U.S. domestic economy may not be robust enough to escape that. The anecdotal data from the manufacturing sector is much worse than is suggested by the hard economic data reports.
Albert Einstein
by Jeffrey Saut of Raymond James,
“We can’t solve problems by using the same kind of thinking we used when we created them.”
. . . Albert Einstein
I thought about Einstein’s quote, “We can’t solve problems by using the same kind of thinking we used when we created them” when the Chinese abandoned their stock market circuit breakers system on Thursday (1-7-16) at 9:30 a.m. (EST) after just putting them in place on Monday (1-4-16). Said system halted stock trading for 15 minutes when the Chinese stock market declined 5% last Monday and after the quarter of an hour halt stocks reopened.
Grouchy Tiger, Somethin's Draggin'
by Scott Brown of Raymond James,
It was an important week for U.S. economic figures, but the data releases were overshadowed by market developments in China. The country’s new circuit breakers, which were meant to reduce market volatility, were a disaster, and were jettisoned after the Shanghai market was shut down completely in two of four trading sessions. The hope is that the Chinese authorities will stabilize the situation. However, currency management should be more of a challenge and poses the greater risk.
Monkey See, Monkey Do
by Jeffrey Saut of Raymond James,
This is how the stock market works:
“Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further, and people started going back to their farms...
Boss Kettering
by Jeffrey Saut of Raymond James,
Charles “Boss” Kettering was an American automotive engineer, businessman, inventor, and the holder of 186 patents who was the head of research at General Motors. My father met Kettering during the late 1940s and often reminded me of the aforementioned quote. I recalled the quote when I received a pretty nasty email from someone I don’t even know about my call for a “rip your face off rally.” The phrase he kept using was “you failed!”
What Comes Next?
by Scott Brown of Raymond James,
The Federal Reserve has now raised short-term interest rates for the first time in nine and a half years. In the policy statement, the Fed signaled that policy will still be accommodative, that future action will be data-dependent, and that the pace of rate increase is likely to be gradual. None of that should be a surprise.
It's Beginning to Look a Lot Like Christmas . . . Not
by Jeffrey Saut of Raymond James,
Many of you know that around this time of year I journey to New York City for the Christmas tree lighting and the Friends of Fermentation (FOF) Christmas party; this year was no exception. However, it sure did not feel much like Christmas in Manhattan. The temperatures were in the 50s and 60s, so the top coat I brought was never used. Such warm climes brought about thoughts of the much discussed topic, “global warming.”
What to Expect When You're Expecting Uncertainty
by Scott Brown of Raymond James,
Last week, we looked at the Fed’s various policy tools and how the central bank will use them. This week, let’s examine the implications of a Fed rate hike. While a rate increase should be largely factored into the markets by now, the global reaction may be the largest concern for Fed officials.
What to Expect When You're Expecting (a Fed Hike)
by Scott Brown of Raymond James,
It’s anticipated that the Fed will begin tightening monetary policy soon, but many investors may be unfamiliar with how policy will be tightened. Let’s review the key policy tools and how this tightening cycle will differ from previous cycles.
More Money Has Been Lost Reaching for Yield than at the Point of a Gun
by Jeffrey Saut of Raymond James,
A schizophrenic week, indeed, with a ~10 point loss for the S&P 500 (SPX/2091.69) on Monday followed by a 22 point pop on Tuesday and then 23 point decline on Wednesday and 30 point loss on Thursday, capped by Friday’s 42 point rally.
Richard Russell
by Jeffrey Saut of Raymond James,
A couple of weeks ago I wrote a strategy report titled “Friends.” In that report I scribed, “Regrettably, too many of my friends’, and stock market icons’, stories have been lost forever. One of the best writers I ever knew on the Street of Dreams was my friend Barton Biggs (Morgan Stanley). . . . Other deceased notables include: Alan “Ace” Greenberg (Bear Stearns), Henry Singleton (Teledyne), Muriel Siebert, Marty Zweig . . . well, you get the idea.” Today, it is with great sadness that I report another icon passed away last week when Dow Theorist Richard Russell left us.
Forecasting Exchange Rates
by Scott Brown of Raymond James,
Currency forecasting is inherently difficult. Getting monetary policy right can help in the short-term, but beyond three months, you can’t do any better than a random walk. That aside, the strong dollar (along with softer global economic growth) has played a major role in the slowdown in U.S. corporate profits this year. What can we expect for 2016?
Friends
by Jeffrey Saut of Raymond James,
“Friends” . . . except in this case I am not referring to the 1994 TV sitcom, but the true friends I have met over the past 45 years in this business. I thought about this theme two weeks ago as I was sitting in Bobby Van’s, across from the NYSE, listening to great stories from my friend Art Cashin and Eric Kaufman (captain of the sagacious VE Capital), and other members of Friends of Fermentation (FOF). As I listened to Arthur, I could not shake the feeling that these classic Wall Street stories need to be scribed lest they be lost forever.
Fed Up
by Scott Brown of Raymond James,
The agonizing over whether the Fed will begin raising short-term interest rates is unlikely to end soon. A 25-basis-point increase shouldn’t have much of an impact on the economy, especially if the Fed makes it clear that it intends to go slow with further rate hikes. However, the financial markets believe this to be a big deal. So it is. Fed officials have continued to signal that it “may be appropriate” to start in December, but they have also continued to signal that this is not a done deal.
Financial Festival
by Jeffrey Saut of Raymond James,
I first met Minyanville’s Todd Harrison more than 10 years ago. Subsequently the first “Minyans in the Mountains” confab was held in Crested Butte, Colorado. Todd’s Minyanville idea was to create a financial community whose participants would bond over the years and share investment themes, strategy, and investment ideas. Minyanville also tried to advance the financial education of children. The “glue” that seemed to tether everyone together was dubbed “The Buzz and Banter” where all of us could contribute to the ongoing financial blog.
The Job Market and the Fed
by Scott Brown of Raymond James,
The October Employment Report was stronger than expected, but should be seen in its proper context. That is, while October’s payroll gain far exceeded forecasts, it followed softer figures in August and September. The three-month average was moderate. Financial market participants believe that the report makes a December 16 rate hike a lot more likely. However, the Fed had already been signaling that such a move was likely.
Only the Data Can Stop a December Fed Rate Hike
by Scott Brown of Raymond James,
As expected, the Federal Open Market Committee left short-term interest rates unchanged last week. However, the wording of the policy statement was decidedly hawkish, suggesting (contrary to market expectations) that officials are leaning toward a move on December 16. GDP growth wasn’t especially brisk in the third quarter, but that was due largely to slower inventory growth. Domestic demand remained strong, but monthly figures suggest a loss of momentum heading toward 4Q15. Ultimately, the Fed’s decision will remain data-dependent and there are many reports between now and then.
Results 1,051–1,100
of 1,588 found.
