David's Feed
Jul 22, 2014
via Counterparties

MORNING BID – The quiet days for Apple

Apple’s been the two-ton behemoth of the stock market for so long that it is going to be surprising, in a way, to see that the company isn’t really pulling its weight anymore when it comes to its percentage of S&P 500 earnings. This sort of thing can be a bit silly, but Howard Silverblatt, the index guru over at S&P Dow Jones, points out that Apple right now is about 3.2 percent of the total market value of the S&P while at the same time accounting for an expected 2.8 percent of earnings in the S&P – the first time since 2008 that Apple hasn’t delivered a percentage of S&P earnings equivalent to its market value.

In the past few years, Apple has tended to carry much of the S&P on its back, such as in the fourth quarter of 2011 and first quarter of 2012, when it accounted for 6 percent and 5.2 percent of the index’s earnings – compared with accounting for about 4.4 percent of the market’s value at that time. In the last quarter of 2012 the stock was 6.3 percent of the market’s earnings and was less than 4 percent of its market value.

Jul 18, 2014

Murdoch’s tenacity is the trade in Time Warner-Fox face-off

NEW YORK, July 18 (Reuters) – Many investors say the best
trading strategy around a potential takeover of Time Warner Inc
by Twenty-First Century Fox is to wager that
media baron Rupert Murdoch will pay up to get what he wants. The
trick is that it may be too late to place the obvious bets.

Time Warner said on Wednesday it had rebuffed Twenty-First
Century Fox’s roughly $80 billion bid, or $85 per share, in
recent weeks over valuation and concerns that the Murdoch family
will have too much power. But people familiar with Twenty-First
Century Fox said Murdoch is determined to buy the rival media
giant.

Jul 16, 2014

Foreigners buy $19 bln in US long-term securities in May

July 16 (Reuters) – Foreigners bought more than $19 billion
in U.S. long-term securities in May, including Treasuries and
corporate bonds, after selling debt in April, the U.S. Treasury
Department said on Wednesday.

Including short-term debt and banking inflows overseas
investors purchased $35.5 billion of U.S. securities, of which
$22.4 billion was acquired by foreign official institutions.

Jul 15, 2014
via Counterparties

MORNING BID – What’s all the Yellen about?

Rants from TV commentators aside, the market’s going to be keenly focused on Janet Yellen’s congressional testimony today, with a specific eye toward whether the Fed chair moderates her concerns about joblessness, under-employment and the overall dynamism of the labor force that has been left somewhat wanting in this recovery. The June jobs report, where payrolls grew by 288,000, was welcome news even as the economy continues to suffer due to low labor-force participation and weak wage growth.

Inflation figures are starting to show some sense of firming in various areas, for sure, but still not at a point that argues for a sharp move in Fed rates just yet. Overall, a look at Eurodollar futures still suggests the market sees a gradual, very slow uptick in overall rates – the current difference between the June 2015 futures and June 2016 futures are less than a full percentage point – not as low as it was in May of this year, but still lower than peaks seen in March and April 2014 and in the third quarter of 2013, before a run of weak economic figures and comments from Fed officials themselves scared people again into thinking that the markets would never end up seeing another rate hike, like, ever again.

Jul 8, 2014
via Counterparties

MORNING BID – Next for Puerto Rico, Argentina and the Fed

The market’s recent chatter has revolved specifically around whether the strength in the jobs figure from last week moves forward the expected timing of the first interest-rate hike from the Federal Reserve.

The answer: yes, but probably by not that much. Jobs growth of 288,000 for June was better than expected, and that 6.1 percent unemployment rate looms large for those who figured the Fed would be ready to start raising rates after at least 6.5 percent was surpassed. So we’re there on that, but as Kristina Hooper of Allianz points out, the wage growth seen hasn’t been terribly strong, and the types of jobs being created – a lot of which are in lower-paying industries like retail – don’t portend the same kind of economic strength that might have been manifest by now in other iterations of U.S. recoveries.

Jul 1, 2014
via Counterparties

MORNING BID – Crypto-sale of the Century

Details on the sale of about 30,000 bitcoin have been spare, but what can be inferred by reading through the lines is that the sale of about $18 million went a lot better than many expected – particularly those who expected to get the coins on the cheap somehow. The prevailing market rate at the end of Monday was about $639, according to Coindesk, currently the leader in the pricing world, and the chatter trickling out was that the unsuccessful bidders – including hedge fund Pantera and SecondMarket’s Barry Silber, who put together a consortium of more than 40 bidders – aimed too low in one of those “Price is Right” moves but without the warmth of Bob Barker to confront you when you lose on these things.

With that in mind the speculation on just where the auction ended up can run wild – did it go for $650? $700 for the lot? Perhaps; those commenting on twitter and to Reuters in a story from Gertrude Chavez and Nate Raymond on Monday were suggesting that there were plenty of newer bidders in the process, firms that have been just getting going in the bitcoin world and probably wouldn’t mind to get their hands on a large stake even at a somewhat elevated price.

Jun 27, 2014

Wall Street closes up but ends week lower, Europe stocks down

NEW YORK (Reuters) – U.S. stocks erased early losses to close up on Friday but still finished the week lower on mixed economic data, while European equities had their first weekly drop since April on worries over Iraq and Ukraine.

U.S. Treasuries yields eased at the end of a week of steady price gains for government bonds, fueled by increasing worries that economic growth in the world’s No. 1 economy may be slower than policymakers believe.

Jun 27, 2014

European shares head for first weekly drop since April

NEW YORK (Reuters) – Major global equity markets were little changed on Friday while gold rose to near a two-month high as the dollar softened on reduced expectations for U.S. economic growth.

Wall Street was modestly weaker but activity was muted. A survey of U.S. consumer sentiment came in a bit above expectations, but it was not enough to motivate buying with the S&P 500 not far from a record high. The benchmark index is on track for its second weekly loss in the last three weeks.

Jun 27, 2014
via Counterparties

MORNING BID – To my brother Russell…

The index business is a big business, so it’s not for nothing that the London Stock Exchange agreed on Thursday to buy Frank Russell Co and its Russell Indexes.

Those indexes are benchmarked to more than $5 trillion in index funds and puts the LSE in the third position behind S&P Dow Jones and MSCI in the ETF world as well, a lucrative business that involves using their well-known indexes like the Russell 2000 and its “value” and “growth” versions into a multitude of funds.

Jun 26, 2014
via Counterparties

MORNING BID – Climbing the Wall

Eventually, lack of volatility, rock-bottom rates and this accommodating monetary policy will realize the build-up of excesses that causes some kind of market crack that devastates people – particularly in areas where many do not expect it. But it won’t be today, and investors should continue to ride that so-called Wall of Worry through the 2,000 mark on the S&P 500 before long.

Goldman Sachs strategists note in a piece overnight that volatility is likely to remain lower for longer, but the slowness of the economic expansion and the additional regulations as a result of the financial market crisis of 2008 mean that the buildup of those speculative excesses is happening at a much slower rate. That’s not to say they aren’t out there – Brian Reynolds of Rosenblatt Securities is adamant that we are now in a “runaway bull market,” which of course usually ends in tears for someone, but again, not today.

    • About David

      "David Gaffen oversees the stocks team, having joined Reuters in May 2009. He spent four years at the Wall Street Journal, where he was the original writer of the web site's MarketBeat blog. He has appeared on Fox Business, CNN International, NPR, and assorted other media and is the author of the forthcoming book "Never Buy Another Stock Again.""
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