The historic impact of two category 4 hurricanes from the Atlantic in the same year is a hard reminder that weather is playing an increasingly bigger role on our lives. 2016 was the warmest year on record globally, and 2017 is already in a close second place. While day-to-day temperatures can be unpredictable, larger weather patterns are no longer something investors can ignore. One of the harshest weather patterns could be returning soon, bringing with it bone-chilling temperatures in some regions and droughts in others. If it does return, then it could mean big moves in one commodity in particular,… Read More

The historic impact of two category 4 hurricanes from the Atlantic in the same year is a hard reminder that weather is playing an increasingly bigger role on our lives. 2016 was the warmest year on record globally, and 2017 is already in a close second place. While day-to-day temperatures can be unpredictable, larger weather patterns are no longer something investors can ignore. One of the harshest weather patterns could be returning soon, bringing with it bone-chilling temperatures in some regions and droughts in others. If it does return, then it could mean big moves in one commodity in particular, causing a select group of shares to jump. How Does La Niña Affect The Weather And Asset Prices? A cooling in the Pacific Ocean has prompted the U.S. Climate Prediction Center to upgrade its odds for the La Niña weather phenomenon to 62% from just 26% last month. The Australian Bureau of Meteorology also recently said that two of its eight models are forecasting La Niña conditions by year-end. #-ad_banner-#La Niña is caused by colder ocean temperatures in the Equatorial Pacific and their effect on the wind currents over the Pacific. The weather pattern generally… Read More

The market has been intensely concentrated all year on the Federal Reserve’s plan to increase interest rates. That focus has weighed on rate-sensitive sectors and threatened to drive investors back into bonds for income. We are quickly approaching the September 19 meeting of the Federal Open Market Committee (FOMC), one of the last three meetings of the year.  While investors aren’t expecting the Fed to raise rates at the coming meeting, they’ll be watching intently for any clues on future policy. Much of the market has been expecting the Fed to make good on its forecast of three rate hikes… Read More

The market has been intensely concentrated all year on the Federal Reserve’s plan to increase interest rates. That focus has weighed on rate-sensitive sectors and threatened to drive investors back into bonds for income. We are quickly approaching the September 19 meeting of the Federal Open Market Committee (FOMC), one of the last three meetings of the year.  While investors aren’t expecting the Fed to raise rates at the coming meeting, they’ll be watching intently for any clues on future policy. Much of the market has been expecting the Fed to make good on its forecast of three rate hikes this year by raising rates in December.   However, there’s mounting evidence though that could lead the Fed to hold off on its path to higher rates. This economic evidence could be called out in the September press conference. Dovish language from Chair Janet Yellen about future rate hikes could mean a surprise boon for rate-sensitive sectors and stocks. Higher Rates Face Headwinds From Hurricanes, Fed Vacancies, And Inflation The market is estimating a 32% chance the Federal Reserve raises its benchmark target rate in December, according to the FedWatch Tool by CME Group. That’s… Read More

Record sales since the recession are starting to weigh on the automotive industry, signaling that the group may be entering a deep cyclical crisis. Prices on used cars and new trade-ins are plunging and new car sales are down nearly 8% this year. It’s a price the industry is paying for its runaway success over last eight years. After jumping post-recession on “clash for clunkers” and low interest rates, the First Trust Nasdaq Global Auto ETF (Nasdaq: CARZ) is up just 7.6% over the last two years versus a gain of 26% in the S&P 500. #-ad_banner-#And the pain may… Read More

Record sales since the recession are starting to weigh on the automotive industry, signaling that the group may be entering a deep cyclical crisis. Prices on used cars and new trade-ins are plunging and new car sales are down nearly 8% this year. It’s a price the industry is paying for its runaway success over last eight years. After jumping post-recession on “clash for clunkers” and low interest rates, the First Trust Nasdaq Global Auto ETF (Nasdaq: CARZ) is up just 7.6% over the last two years versus a gain of 26% in the S&P 500. #-ad_banner-#And the pain may just be getting started as a record number of auto leases signed over the last several years expire, further depressing prices for new and used cars alike. It could be an industry drought like we haven’t seen since the early 80s, when back-to-back economic recessions and foreign competition nearly destroyed U.S. carmakers. There will be one segment of the market that could survive, and even thrive, in the evolving scenario. In fact, this segment may be about to book a revenue bonanza as the new cars sold over the last few years come back to the shop for repairs. It’s… Read More

Fidelity recently released its annual study of retirement health care costs. The news, as it has been for the last decade, is not good.  A newly-retired, 65-year old couple will need an estimated $275,000 in savings just to pay for healthcare. That’s a 6% jump from last year’s estimate and more than three times the general rate of consumer inflation. If that sounds like a hard pill to swallow for those trying to retire, it’s only going to get worse. At the rate of expected increases in health care costs, a 45-year old couple could need… Read More

Fidelity recently released its annual study of retirement health care costs. The news, as it has been for the last decade, is not good.  A newly-retired, 65-year old couple will need an estimated $275,000 in savings just to pay for healthcare. That’s a 6% jump from last year’s estimate and more than three times the general rate of consumer inflation. If that sounds like a hard pill to swallow for those trying to retire, it’s only going to get worse. At the rate of expected increases in health care costs, a 45-year old couple could need as much as $800,000 just to pay for medical expenses when they prepare to retire in 20 years! Health Care Costs Are Doubling Every Decade While health care cost inflation has slowed from an 11.9% surge in 2007, costs have increased at a compound rate of 7.85% annually over the last decade. In another report, HealthView Services estimated health care expenses could rise at an annual average rate of 5.5% over the next decade, more than double the 2.6% annual projected cost-of-living adjustment (COLA) on Social Security benefits.  That gap between cost-of-living adjustments and health… Read More

The opening of gaming resorts in Macau (China) in 2004 was a boon to casino stocks. By the first full year of operations, Macau casinos were reporting $6.2 billion in revenue and more than twice the gaming receipts of the Las Vegas Strip that year. At its 2013 peak, Macau brought in $44.6 billion for the six companies with licenses to operate, dwarfing the $4.3 billion in gaming receipts for the entire state of Nevada. #-ad_banner-#But measures by the Chinese government to slow currency outflows weighed on Macau in the two years through 2015, and casino stocks got hammered. With… Read More

The opening of gaming resorts in Macau (China) in 2004 was a boon to casino stocks. By the first full year of operations, Macau casinos were reporting $6.2 billion in revenue and more than twice the gaming receipts of the Las Vegas Strip that year. At its 2013 peak, Macau brought in $44.6 billion for the six companies with licenses to operate, dwarfing the $4.3 billion in gaming receipts for the entire state of Nevada. #-ad_banner-#But measures by the Chinese government to slow currency outflows weighed on Macau in the two years through 2015, and casino stocks got hammered. With slow growth in the United States and falling revenue in Asia, investor sentiment fell to a point not seen since the 2008 crisis. Now a new market is opening, one that could rival Macau as a top global gaming destination. Estimates put gaming receipts as high as $25 billion in the initial years — and that could be just the beginning. On top of the upside from this new market, fundamentals are improving for the Macau market and for casino stocks themselves. Investor sentiment could be ready to come back to the industry in a big way. Place Your Bets… Read More

The president’s call for a $1 trillion increase in infrastructure spending seems to have been put on hold, depressing investor sentiment for construction and infrastructure stocks this year.  While we wait for the legislative agenda to clear the way for increased fiscal stimulus, Mother Nature may soon be sending a natural force to boost spending. The National Oceanic and Atmospheric Administration (NOAA) recently upgraded its forecast for this year’s hurricane season — and it could be one of the worst in more than a decade. Weather patterns in the Atlantic continue to build, and all the… Read More

The president’s call for a $1 trillion increase in infrastructure spending seems to have been put on hold, depressing investor sentiment for construction and infrastructure stocks this year.  While we wait for the legislative agenda to clear the way for increased fiscal stimulus, Mother Nature may soon be sending a natural force to boost spending. The National Oceanic and Atmospheric Administration (NOAA) recently upgraded its forecast for this year’s hurricane season — and it could be one of the worst in more than a decade. Weather patterns in the Atlantic continue to build, and all the ingredients are there for another superstorm. #-ad_banner-#When Superstorm Sandy hit the east coast in October 2012, the S&P 500 tumbled 4% over two weeks and it took the rest of the year to recover as the nation assessed the damage. But I’ve found five infrastructure and power companies that have continuously outperformed the market during high-activity hurricane years. Not only have these five stocks outperformed the S&P 500 by an average of 18% during the worst four hurricane seasons of the past decade, but they also outperformed during the six-weeks after hurricane season when higher sales started showing through in… Read More

After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10… Read More

After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10 trading days. New fears around increased competition and high levels of debt are dragging the entire industry lower. At the same time, this is an industry with an immense amount of support from multiple demographics. This could force government regulation that could start to clear the way for faster drug approvals. That means a rebound could be in the making for the best names in the group — those pulled lower with the industry but with strong fundamentals and upside potential. I’ve found three drug-makers trading at attractive valuations, without the debt that overhangs much of the group, and that… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue to talk up the power of brand recognition to rationalize a target price.  While the shift to online shopping means incremental losses in sales, it’s masking a larger trend. Many of these once-valued brands may not have a shot even if they can execute on an online strategy. The Retail Nightmare Isn’t Just Online Vs. The Mall Scott Galloway has been studying the evolution of consumer brands and the digital revolution for decades, first as the founder of Prophet Brand Strategy and Red Envelope and now as a marketing professor at the NYU Stern School of Business.  #-ad_banner-#He’s been… Read More

I watch insider transactions closely, following the big selling just as much as the buying. The conventional wisdom is that the actions of these investors can tell you when to buy or sell a company. After all, directors and executive management are ALWAYS trading on insider information. Much of the time, scanning through recent Form 4 statements, the SEC document required when insiders buy or sell shares, is a big yawn. It’s either too small an amount to mean anything to the overall ownership or simply the insider adjusting their total wealth held in the company. But every once in… Read More

I watch insider transactions closely, following the big selling just as much as the buying. The conventional wisdom is that the actions of these investors can tell you when to buy or sell a company. After all, directors and executive management are ALWAYS trading on insider information. Much of the time, scanning through recent Form 4 statements, the SEC document required when insiders buy or sell shares, is a big yawn. It’s either too small an amount to mean anything to the overall ownership or simply the insider adjusting their total wealth held in the company. But every once in a while you come across something that makes you sit straight up: An insider with other intentions. Finding these instances gives investors the chance to piggyback on the insider trades before the market catches on. I think I’ve found one of those trades studying the insider buying from one of Wall Street’s most famous, or infamous, takeover kings. He’s turned his ability to turnaround struggling companies into a $12 billion fortune, making him the 36th richest person in America. Now it looks like he’s focused his aim on a company he’s already tried to buy out before. This Top Director… Read More

Since the idea of “wearables” and trackers was introduced to the public, any hope of these devices becoming the next major consumer craze has faded, despite their limited popularity. This has caused more than a few competitors in this space to pull products and cut their losses. Shares of Garmin (Nasdaq: GRMN) have been basically flat this year. Apple, meanwhile, refuses to issue details for sales for its smartwatch. In an anticipated filing, San Francisco-based Jawbone went into liquidation last week. Chief Executive Hosain Rahman has already moved on, founding a new company in the health space. The liquidation is… Read More

Since the idea of “wearables” and trackers was introduced to the public, any hope of these devices becoming the next major consumer craze has faded, despite their limited popularity. This has caused more than a few competitors in this space to pull products and cut their losses. Shares of Garmin (Nasdaq: GRMN) have been basically flat this year. Apple, meanwhile, refuses to issue details for sales for its smartwatch. In an anticipated filing, San Francisco-based Jawbone went into liquidation last week. Chief Executive Hosain Rahman has already moved on, founding a new company in the health space. The liquidation is a far cry from the company’s 2014 valuation of $3.2 billion. While the market is facing obvious challenges, the death of the wearables market may be greatly exaggerated. CCS Insight forecasts 2020 sales of $34 billion — more than double last year’s $14 billion. Fitbit Inc. (NYSE: FIT), the one-time leader in the space, has seen its shares plunge 82% since its 2015 IPO. Most investors have written the company off as a has-been with little chance to recover. But I’ve found three reasons that the device maker surge by as much as 52% through this… Read More