If you are a stock picker, then it’s basically now or never for whatever investment discipline you might follow. Asset class and industry correlations have taken a surprising nosedive in recent weeks, which - as ConvergEx's Nick Colas notes. should allow your strategy/blend of magic to (hopefully) shine versus the benchmarks. Average industry sector correlations to the S&P 500 have dropped to 69.9%, by far the lowest observation for over two years. High yield bonds now show just 16% correlation to U.S. stocks, and the numbers for Emerging Markets (58%), EAFE stocks (76%), and currencies like the Australian dollar (11%) are also plumbing new lows. Why the sudden return to a ‘Normal’ world? Expectations that the Federal Reserve will begin to ‘Taper’ its bond buying help, to be sure. As do actual inflows (some $8 billion last month) into actively managed mutual funds. We’ll have to wait and see if current trends continue, but for now we welcome the return of the ‘Stock picker’s market’. Let the dart-throwing begin...
While we congratulate Carl Icahn (or is that iCahn) for once again taking over the spotlight in what has otherwise been a newsflow empty summer doldrum week, and like everyone else, are surprised by his most recent activist target, the country's on-again, off-again most valuable by market cap company, Apple, we do, as we did before when David Einhorn proposed virtually the same activist play, have some questions. Chief among them: how will AAPL fund any proposed expanded buyback or increased dividend using domestic cash?
Regardless of what I (or you) do throughout the day we're tracked, logged, profiled and otherwise "identified" in a hundred different ways.
We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come.
— Carl Icahn (@Carl_C_Icahn) August 13, 2013
Why sell cocaine at a 200% markup when there are much bigger profits to be had in this moral hazard economy funded, government protected business.
- U.S. Regulator Subpoenas Banks Over Long Warehouse Queues (BBG)
- Apple Said to Prepare Holiday Refresh of IPhones to IPads (BBG)
- Fed's Yellen Says Stance on Banks Hardened (WSJ)
- Mexico opens up its energy sector (FT)
- Spin: Greek GDP marks gradual deceleration of recession (FT) ... spin aside, it dropped 4.6%, and in reality, probably over 10%
- Made-in-Canada Solution For BlackBerry Avoids Nortel Fate (BBG)
- America's Farm-Labor Pool Is Graying (WSJ)
- Video of 'lame' cattle stirs new concern over growth drugs (Reuters)
- Paulson Bid for Steinway Trumps Kohlberg Offer (WSJ)
- Egyptian government yet to decide on pro-Mursi vigils (Reuters)
It's only fitting that in a bizarro new normal, the news that passes for positive is either conflicting, reflexive or, well, simply bizarre. Last night was no exception as the "good" news came in the form of speculation that in order to promote its consumption tax hike, the Abe government would consider a corporate tax cut. How that helps the country with the 1 quadrillion yen in debt is not exactly clear, or how it makes consumer tax hikes any more palatable in a nation in which more people than anywhere in the world are retired and elderly, and thus removed from the corporate lifecycle, is just as nebulous. But the market liked it. Just as it liked the good ole' European cop out, of posting a surge in consumer confidence, or relying on reflexive indicators to represent an improvement in the economy, when in reality the only thing "improving" is the stock market. This happened when the German ZEW Economic Sentiment survey soared from 36.3 to 42.0 on expectations of a 39.9 print. So one must buy futures, or that's what the GETCO algo programming says.
- Solyndra Cola: California aims to 'bottle sunlight' in energy storage push (Reuters)
- Ackman may sues himself after all - Penney Board Assails Director William Ackman, Considered 'Rogue' After Releasing Deliberations (WSJ)
- CFTC subpoenas metals warehousing firm as inquiry heats up (Reuters)
- Obama Plan to Revamp NSA Faces Obstacles (WSJ)
- Japan growth slows in second quarter, adds to sales tax uncertainty (Reuters)
- China Urbanization to Hit Roadblocks Amid Local Opposition (BBG)
- Parents Losing Jobs a Hidden Cost to U.S. Head Start Budget Cuts (BBG)
- US seeks better access to Africa as part of trade pact review (FT)
- Singapore Cuts Trade Outlook as China Slowdown Caps Recovery (BBG)
- White House Sifts Fiscal Ideas With Band of Senators (WSJ)
- Spain may ask United Nations for support over Gibraltar (Reuters)
- Michigan Safety Net for Boomers Frays on Bankrupt Detroit (BBG)
Last week we witnessed the almost unprecedented veto intervention in the Apple-Samsung patent debate. Last night, after the market had closed, the hits kept coming for the South Korean company as the Cupertino crushed showed the ITC that Samsung's infringements should mean a sales and import ban in the US. As Reuters reports, the decision is likely to inflame passions in the long-running dispute since the decision will now - once again - go to President Barack Obama, who has 60 days to review them and decide whether to side with the American company that 'donated' $16.5mm to his campaign or the South Korean market-share 'stealer' that only gave $3.7 million in offerings at the altar of hope-and-change. While some are calling foul so soon after the veto, with South Korean government officials 'observing' closely, even the US Trade Representative is against the proposed Samsung ban, citing "competitive conditions and the effect on the US consumer."
- JPMorgan Nears Settlement With SEC on London Whale Loss (BBG)
- Without even a wristslap: Iksil to face no U.S. charges in 'Whale' probe (Reuters)
- China’s Credit Expansion Slows as Li Curbs Shadow Banking (BBG)
- China slowdown shows signs of abating (FT), even as...
- Australia central bank Lowers Growth Outlook as Economy Transitions From Mining (BBG)
- SAC Business Plan Goes to Judge, Plan Would Allow Firm to Maintain Business Operations but Restrict Its Ability to Move Assets (WSJ)
- Another buyer of Herbalife? - Norway’s oil fund plans to turn active (FT)
- Mark Carney plays down scepticism over interest rate policy (FT)
- Orders Evaporate for Celebrity Perfumes (WSJ)
- Fukushima: "300 metric tons of contaminated water were likely leaking into the ocean daily" (WSJ)
- Unexpected strength in China trade data eases some gloom (Reuters) - actually, perfectly expected data fakery
- Pimco, BlackRock Seek to Bar California Mortgage Seizures (BBG)
- How will Amazon's Bezos change The Washington Post? (Reuters)
- Montreal Maine Railway Files for Bankruptcy After Crash (BBG)
- Fed Belongs to Everybody as Public Says It’s Our Money in Crisis (BBG)
- Local Russian TV channel broadcasts rare critical segment about Putin (Reuters)
- Loeb’s Reinsurer With No U.S. Staff Gains From Obama’s Jobs Act (BBG)
- As Berlusconi star fades, daughter Marina tipped as new leader (Reuters)
- Detroit Rattles Muni Market (WSJ)
Foreign companies react; at the expense of already revenue-challenged US tech companies
There was a time when wealthy foreigners would frequently travel all the way to these United States in order to receive top notch medical attention. Fast forward a decade or two, and all we hear about now is how it is us Americans being forced abroad in order to receive affordable care. From a hip and knee implant cartel of five companies, kickbacks to surgeons, salespeople in the operating room, massive bureaucratic red tape and rampant price gouging, in complete contrast to the Hippocratic Oath; it is perhaps no surprise that "the list price of a total hip implant increased nearly 300 percent from 1998 to 2011."
- Washington Post Company Chairman and CEO Donald Graham talks about the sale, what it means for the future of The Post (WaPo)
- Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace (WSJ)
- U.S., U.K. Urge Citizens to Leave Yemen (WSJ)
- India Names Rajan Central Bank Governor as Rupee Plunges (BBG)
- Family Offices Chasing Wealthy’s $46 Trillion in Assets (BBG)
- UK 'bad bank' repays $2.9 billion to taxpayers in first half (Reuters)
- Sony rebuffs Daniel Loeb’s push for entertainment spin-off (FT)
- Public Pensions Up 12% Get Most in 2 Years as Stocks Soar (BBG)
- Hidden Billionaire Found With Food Fortune in California (BBG)
- Fonterra under fire over milk scare; more product recalls (Reuters)
- Crédit Agricole Profit Rises After Greek (WSJ)
See if you can spot, on the chart below, why over the weekend Barack Obama (aka the Anti Patent Troll-In-Chief) intervened directly in the ongoing patent dispute between Apple and Samsung on behalf of the Cupertino company (which makes its products in FoxConn facilities in China), resulting in an unprecedented veto of a decision from the US Interantional Trade Commission - an outcome not seen since 1987.