Feb 23-27: Riding the bull

DJIA 18130 // S&P 2102 // NASDAQ 4448 // 10-YR TRE 2.002% //

EURO 1.1224 // OIL 48.87 // GOLD 1216 // BIT 261

After flip flopping for months on  whether or not additional internet regulation will hamper or speed innovation, regulators last week decided to manage "equal access" to the internet, acknowledging the importance of a platform previously thought of as a frontier territory but which has now become part of the fabric of the modern US economy.

34%

Netflix's share of overall internet downloads during peak evening times in May 2014, up 32% from 2013.

Top News (click on article titles for links; if paywalled, copy article title into Google)

FCC adopts net neutrality rules to ban internet discrimination, Yahoo Finance

After months of debate, on Thursday the FCC moved forward with plans to regulate the internet as a utility much in the same way other telecommunications networks are now controlled. That means Netflix and Google won't have to pay extra fees to assure streaming video quality, but it also means they may be susceptible to connection speed slowdowns as more space is reserved for competitors.

Stock markets all around the world break records, CNN Money
Investors, made giddy by central banks' easing of lending rates, have driven stock market indices worldwide to some of their highest levels since the recession, with some indices hitting all-time highs. The Dow Jones average broke 18,200 for the first time. However, Nobel Prize winner Robert Schiller warns that price/earnings multiples are now around the same level they were before the bubble burst in 2008.

Janet Yellen puts Fed on path to lift rates, WSJ
Citing rates of employment, production, and spending improving at a "solid rate," the Fed plans "at some point" to consider raising the federal funds rate. The cost of credit is considered extremely important to the economy because it determines the cost of home and auto loans for consumers (who constitute around 70% of US GDP) as well as corporate debt for companies, and also plays an important role in valuation.

JP Morgan to start charging big clients fees on some deposits, WSJ
New regulations and low interest rates are pushing bigger banks toward considering charges for larger corporate clients including financial service providers such as hedge funds and PE firms. Retail customers should not be affected by the fees. Traditionally one of banks' most attractive and stable forms of funding, it has become increasingly expensive to maintain profits on deposits amidst newly mandated capital and liquidity requirements.

RadioShack to sell name with $20 million opening bid, CNN Money
Radioshack's largest shareholder agreed to bid $20 million for the consumer electronics brand name in court last Wednesday. After being in business for 94 years, the chain is now liquidating its brand and store leases through bankruptcy proceedings. Despite a financial downtown, RadioShack's name recognition could help save another company a tremendous amount of cost in new branding.

Vocabulary (click to open link)

• FCC
• P/E 10 (Schiller P/E) ratio
• Federal funds rate
• Liquidity
• Private equity

Calendar:

• Mon Mar 2: Personal income and outlays, PMI Mftg, ISM Mftg; CZR, NTRI, PANW, STNG
• Tue Mar 3: Motor vehicle sales, Janet Yellen speaks; AMBA, AZO, BCS, BBY, JD, KATE, TIVO
• Wed Mar 4: ADP employment, ISM Non-mftg, EIA petrol; ANF, AEO, BREW, PETM, TST
• Thu Mar 5: Jobless claims, Productivity, Factory orders; CSIQ, COST, DMND, KR
• Fri Mar 6: Employment situation, International trade; SPLS

Predictions from last week: 1 / 3 All-Time: 13 / 21

• Yellen keeps "patience" wording: CORRECT
• CPI comes in at 0.0%: WRONG
• GDP annualized rate of 3.5%: WRONG

Weekly Predictions:

1. Costco beats estimates after rejecting AmEx's bid
2. Trade gap continues to widen in face of strengthening dollar
3. Caesars misses estimates amidst weakness in China