Mar 9-13: Happy St. Patrick's Day

DJIA 17977 // S&P 2081 // NASDAQ 4929 // 10-YR TRE 2.098% //

EURO 1.057 // OIL 43.68 // GOLD 1154 // BIT 292

Calendar: 

• Mo Mar 16: Industrial production, Housing market index
• Tu Mar 17: FOMC meeting begins, Housing starts
• We Mar 18: FOMC meeting announcement, forecasts, chair conference
• Th Mar 19: Jobless claims, Leading indicators
• Fr Mar 20: Atlanta Fed business inflation

Predictions from last week: 0/3 All-Time: 15/27

• Stock market drops: WRONG
• AAPL shares up: WRONG
• Dollar General beats: WRONG

Weekly Predictions: gathered at conclusion of weekly meeting

1. Yellen removes "patient" wording from Fed report
2. Euro continues slide against dollar
3. Oil moves back above $45

Feb 16-20: DuPont getting peltzed

DJIA 17998 // S&P 2095 // NASDAQ 4888 // 10-YR TRE 2.085% //

EURO 1.139 // OIL 51.27 // GOLD 1205 // BIT 240

Trian Fund Management founding partner Nelson Peltz is accusing DuPont CEO Ellen Kullman and her staff of not doing enough internally to better unlock value for shareholders.

67%

Percent over and above S&P 500 returns that DuPont stock has returned to shareholders since 2009.

Peltz's Firm, DuPont Trade Salvos, WSJ

Nelson Peltz's activist hedge fund, Trian, which already owns a 2.7% stake in DuPont, is pursuing 4 seats on DuPont's board. The US-based materials and chemicals company has been doing well recently, but Peltz insists that Trian's guidance is the leadership for outperformance--not the leadership of CEO Ellen Kullman. Peltz insists there is yet more value to unlock for shareholders.

Currency Wars: Pandering to Debase, Seeking Alpha

Tim Edwards walks through the decision-making of fictional country Atlantis: should they or should they not debase their currency? On the one hand, austerity measures aren't popular with their citizens, and stimulus would be exciting for equity investors while debt should become suddenly cheaper (in dollar terms). On the downside is the specter of inflation. What to do?

Aggregate Income Shows Consumers Ready To Take Growth Baton, Bloomberg Briefs

Economist Carl Riccadonna looks at last week's employment report and more specifically aggregate income to see if US consumers are ready to keep spending. While some pundits cite manufacturing and industrial production specifically in energy as the reason for the US' gradual recovery from crisis, there are signs that a consumption-driven surge may be on the way--or is already here.

Apple: $710 Billion and Counting, WSJ
The eye-catching graphic on the article's front page pretty much sums up the buzz: AAPL's market price is now 2 times Google's, 2.5 times Walmart's, 4 times Bank of America's, 8 times McDonald's, 12 times GM's, and 24 times Twitter's. Tim Cook cited high demand for iPhones in China as one reason for the explosion in value. Carl Icahn is calling for a valuation in excess of $1 trillion.

Convertibles Stay Hot, WSJ
US-listed convertible bond deal volume has jumped 49% since this time last year, totaling $5.7 billion. Convertible bonds get their name from paying their investors interest, like a bond, until they are converted into the company's stock at a certain predetermined strike price--much like an option. The spike in volume is attributed to low interest rates and bullishness in stocks.

Vocabulary: gathered throughout meeting, definitions from www.investopedia.com

• Convertible bond http://www.investopedia.com/terms/c/convertiblebond.asp
• Delinquent http://www.investopedia.com/terms/d/delinquent.asp
• Volatility http://www.investopedia.com/terms/v/volatility.asp
• PMI Manufacturing index http://www.investopedia.com/terms/p/pmi.asp

Calendar: from Barron's, Nasdaq Economic Calendar

• Monday: (President's Day)
• Tuesday: Empire State manufacturing survey, Housing market index; FOSL, FDP, JACK, TAXI, GT, VNO, WM
• Wednesday: Housing starts, PPI, Industrial production, FOMC minutes; ACT, ANGI, CAR, DENN, HLT, MAR
• Thursday: Jobless claims, Philly Fed survey; DTV, EQIX, INTU, LLC, PSA, TMUS, TRUE, WMT
• Friday: PMI Manufacturing index; DE

Predictions from last week: 3/3 All-Time: 10/15

• US import prices fall: CORRECT
• Zoetis beats: CORRECT
• Oil rallies: CORRECT

Weekly Predictions: gathered at conclusion of weekly meeting

1. Chinese yuan will weaken against the US dollar
2. Dow & S&P will continue record highs as Greece signals acceptance of some of EU's austerity program
3. PMI Manufacturing will indicate expansion (score of 50 or more)

Participants: T. Aygun, K. Meenan

Feb 9-13: Earnings parade and a Grexit

DJIA 17729 // S&P 2047 // NASDAQ 4726  // 10-YR TRE 1.948% //

EURO 1.13 // OIL 52.28 // GOLD 1241 // BIT 219

Alexei Tsipras and the Syriza party have rebuffed 5 years of austerity imposed on Greece but intend to steer a course that keeps the country in the Eurozone. The ECB's decision to no longer accept Greek sovereign debt as collateral on loans sent returns on the Greek 10-year to over 11%. Three-year Greek notes now yield over 19%.

24.3%

South Africa's unemployment rate, which dropped this Tuesday to a 1-year low

*NOTE: For paywalled articles, unlock by copying article title into Google Search

Earnings Whiplash Slams GoPro, Pandora, Yelp, Stratasys, Barron's

Tech companies that were wrecked last week after just slight deviations from analyst expectations include Yelp, GoPro, Pandora, and Stratasys. Earnings day darlings included data-enriching software maker Tableau Software, VoIP consultants RingCentral, food delivery providers GrubHub, and mobile video game maker Glu Mobile. Forward prices to earnings multiple for these companies average out to about 70 times 2015 earnings.

ECB: Banks can't use Greek debt as collateral, CNBC via Yahoo Finance

The European Central Bank has revoked a waiver that allowed banks to use Greek government debt as collateral. The implications of this move are profound, including a risk of systemic counterparty risk throughout the Eurosystem. After US markets responded with a drop, it was announced later that Greek would still have access to the ECB's "emergency liquidity assistance" program, retaining a backstop for the beleaguered economy.

Job market looks ripe for liftoff, WSJ

US non-farm payrolls continued their hot streak, as the economy continued to add jobs with a consistency not seen since 1997. Average hourly earnings ($24.75) was up 0.5% last month and 2.2% over the past year. While the labor market still has room for improvement--as it moves closer to the 5.2-5.5% target--some economists argue that slews of retiring baby boomers mean we are closer to full labor participation than some may think.

Treasuries fall as US readies auctions, Microsoft sells bonds, Bloomberg
The combined effect of Microsoft's sale of $10.75 billion of bonds--the biggest issuance so far in 2015--more than Merck's $8 billion issue and Apple's $6.5 billion issue--and the US government's sale of up to $30 billion of 1-month Treasuries accounted for an influx of supply that pushed up yields across different bond markets. Cash-rich corporations are using the exceptionally low rate environment to lock in debt issues with maturities as long as decades into the future.

Vocabulary:

• Grexit http://en.wikipedia.org/wiki/Greek_withdrawal_from_the_eurozone
• Non-farm payrolls http://www.investopedia.com/terms/n/nonfarmpayroll.asp
• JOLTS http://www.investopedia.com/terms/j/jolts.asp

Calendar: check Nasdaq Economic Calendar

• Mon Feb 9: Labor market conditions index; HAS, L, SOHU
• Tue Feb 10: Labor Dept JOLTS;  KO, CVS, TAP, SAVE, HOT
• Wed Feb 11: EIA Petroleum status report, Treasury budget; BIDU, FEYE, NVDA, PEP, TSLA, TRI, TWX, ZTS
• Thu Feb 12: Jobless claims, Retail sales; AIG, APA, DPS, GRPN, HSP, K, MANU, ZNGA
• Fri Feb 13: Import and export prices, Consumer sentiment; RRGB, SJM

Predictions from last week: score: 2/3 All-Time: 7/12

• Chipotle beats: CORRECT (on bottom line, missed on top line)
• Buffalo Wild Wings beats: WRONG (on bottom line, exceeded top line)
• Non-farm payrolls increase: CORRECT (by 250k+, Dec 2014 revised upwards)

Weekly Predictions: gathered at conclusion of weekly meeting

1. US import prices fall amid the strengthening dollar and stagnant global demand
2. Zoetis beats estimates on continued strength in pet and pet products
3. Oil prices rally against a new $50 resistance zone

Participants: R. Niu, S. Shah, K. Meenan, J. O'Brien

Jan 26-30: Gyros and bits

DJIA 17560 // S&P 2041 // NASDAQ 4267 // 10-YR TRE 1.814% //

EURO 1.1270 // OIL 47.51 // GOLD 1286 // BIT 301.61

Global leaders from industry and government gathered this week in Davos,  Switzerland to discuss policy, problems, and possible solutions. Reports note a special focus on topics like "shared value," "creative capitalism," and "compassionate capitalism," perhaps suggesting CEOs' desire to improve the negative image of business around the world.

$43.50

Reported price of a hot dog at Davos (WSJ). Looks like the de-peg is already reaping some unintended consequences.

Oxfam presses Davos forum with wealth inequality claim, FT

Oxfam, the UK-based anti-poverty non-profit, issued a report last week noting that the richest 1% in the world will soon own more wealth than the rest of the world put together. Conversely, the report noted the "more than 1 billion people" living in absolute poverty with income of less than $1.25 a day.

Greece chooses anti-austerity party in major shift, NYT

The Greek people rejected austerity measures being imposed by the EU on Sunday by electing the leftist Syriza party into power, ousting the centrist New Democracy party. Syriza party leader Alexis Tsipras declared in Athens that "Greece will now move ahead with hope and reach out to Europe, and Europe is going to change." Populist movements on the left and right in France, Spain, and Italy are also expected to gain ground in coming weeks.

Swiss miss, Economist

When the Swiss National Bank (SNB) unpegged the currency from the euro last week, the market looked about as "wrong-footed" as it did in responding to the franc's original peg to the euro back in 2011. Retail brokerages--where mom-and-pop traders speculate on currencies expected to move in price by small fractions of a percent and where only tiny amounts of collateral were previously required--were devastated by the move, as clients trading on margin were forced to call in accounts.

Google wireless services aims to switch between carriers, WSJ

Google is shaking up another industry in aiming to give subscribers choice across a variety of wireless carriers and wifi signals in routing calls to one another. This challenges the current paradigm where contracts are signed between subscribers and service providers who provide reception through their network alone. The program is expected to be rolled out later this year throughout the US.

As commodities fall, some investors see reasons to buy, WSJ

After years of falling markets, some investors are betting we are presently at a price bottom across a variety of commodities markets. Despite record supplies resulting from decreased demand across Europe and developing world, among other reasons, investors perceive an opportunity particularly in agricultural commodities, which can respond faster to supply-demand changes as farmers manage crops on a season to season basis.

Vocabulary:
Contango http://www.investopedia.com/terms/c/contango.asp
Backwardation http://www.investopedia.com/terms/b/backwardation.asp
Bitcoin http://www.investopedia.com/terms/b/bitcoin.asp

Calendar, Jan 26-30: (Nasdaq Economic Calendar)

• Jan 26: MSFT
• Jan 27: Durable goods orders, new home sales, consumer confidence; AAPL, YHOO, MMM, AAL, T, CAT, PFE, PG
• Jan 28: EIA petroleum status report, FOMC meeting announcement; BA, FB
• Jan 29: Jobless claims, pending new home sales index; BABA, AMZN, DOW, F, GOOG, JBLU, TWC
• Jan 30: GDP, PMI, consumer sentiment; CVX, LLY, MAT, XRX

Predictions from last week: 1.5/3 All-Time: 4/6

• NFLX beats: CORRECT
• LUV and UAL beat: CORRECT / WRONG
• ECB doesn't deviate: WRONG

Predictions Jan 26-30:

• AAL will beat estimates and adjust guidance upward based on peer performance
• CVX misses estimates on falling oil prices, declining investment
• Bitcoin price rises on news coverage and extra liquidity from Coinbase

Participants: J. O'Brien, K. Meenan, J. Ayat

Nov 10-14: The perks of single life

Alibaba employees are turning up to handle a lot of traffic on their e-commerce platforms this week.

$8,200,000,000

Expected sales during this year's Single's Day (Nov 11) sale on Alibaba's Tmall and Taobao e-commerce platforms. 2013 revenues totaled $5.8 billion.

A Single Company Will Dwarf All of America's Black Friday and Cyber Monday Online Sales on Tuesday, Business Insider

http://www.businessinsider.com/singles-day-is-chinas-cyber-monday-2014-11 

On Tuesday November 11 (11/11), China marks their annual "anti-Valentine's Day" celebrating bachelors, bachelorettes, and single's life. Single's Day also marks an annual online shopping bonanza. With revenues last year of $5.8 billion, Alibaba is anticipating sales this year in excess of $8 billion. Products sold include everything ranging from body pillows to BMWs. By comparison, e-commerce for all sellers during the US's Cyber Monday is expected to come in at less than $2 billion.

WSJ: OPEC Unlikely to Act Till Oil Hits $70/Barrel, Barron's

http://blogs.barrons.com/asiastocks/2014/11/06/wsj-opec-unlikely-to-act-till-oil-hits-70/

Although oil has dropped 20% in price so far this year, there is more downside coming. Experts say that OPEC is unlikely to cut production (i.e. limit supply, producing upward pressure on prices) until oil prices reach $70/barrel. The cartel does not see oil falling below $75 this year. Lower fuel prices may provide a boon to airlines, who could pass gas savings onto customers to boost the number of flyers during the holiday season.

Lampert Weighs Turning 300 Sears Stores Into REIT, New York Post

http://nypost.com/2014/11/07/lampert-weighs-turning-300-sears-stores-into-reit/

As sales at brick-and-mortar retail locations continue to fall, Sears chairman and chief executive Eddie Lampert is planning to 200 to 300 stores to a real estate investment trust (REIT). With same-store sales falling across the franchise, Sears is selling off assets to raise cash to support a failing balance sheet. The company said is has about $330 million in cash and $234 million in its credit facility.

Bond Swing Draws Scrutiny, WSJ

http://online.wsj.com/articles/bond-swings-draw-scrutiny-1415581163 (paywall)

Changes in bond trading practices from phone-based to electronic exchanges and the continued rise of high-frequency and algorithmic trading may have contributed to the 10-year Treasury's dip below 1.9% last week. Some officials are comparing the event to the 2010 Flash Crash during which the Dow Jones Industrial Average dropped 900 points before recovering a few minutes later.

New Vocabulary (Investopedia):

• REIT http://www.investopedia.com/terms/r/reit.asp
• High-frequency trading http://www.investopedia.com/terms/h/high-frequency-trading.asp
• Algorithmic trading http://www.investopedia.com/terms/a/algorithmictrading.asp
• Flash Crash http://www.investopedia.com/terms/f/flash-crash.asp

Calendar, November 10-14 (Nasdaq Economic Calendar):

• Mon 10th: AAPL, MRK
• Tue 11th: PFE
• Wed 12th: NFIB Small Business Optimism (96.0); Wholesale trade (0.2%); CMCSA, SBUX
• Thu 13th: Jobless Claims (280K); AIG, XOM
• Fri 14th: Retail Sales (0.2%/0.5%); CVX

Let's Play Nostradamus! GBA FFS Predictions, Nov 11-14:

• Following lower oil prices and increased consumer confidence reports from October, consumer stocks should continue to increase in price into the holiday season
• Stocks relating to prevention and treatment of Ebola, such as LAKE, APT, and TKMR, should continue to climb
• Oil prices will rebound as cold air hits the US Northeast and seasonal consumption picks up