The 2nd quarter earnings season has started off with a bang as companies from Alcoa to Johnson & Johnson have already posted solid numbers..
Ready for some more great articles? Here's our picks for July 2014:
Congress is very focused on the mid-terms and prob. won’t accomplish much in the coming months. The GOP increasingly thinks it is just months away from recapturing control of the Senate. The Hill http://goo.gl/uZz21k
Inversion scrutiny – data from the Congressional Research Service showed that 47 US firms have reincorporated overseas over the last 10 years and another 12 such deals in the pipeline. WSJ http://goo.gl/zKfHEl
Trucking industry can’t find enough workers; the WSJ discusses how certain industries can’t find enough employees and the trucking sector in particular is experiencing an acute problem. “Businesses with openings across the pay and education spectrum are struggling to hire house cleaners, registered nurses, engineers, software developers and other workers. Employers say suitable candidates aren't raising their hands and individuals who do apply lack the right skills and experience”. If this mismatch persists, wage pressures will increase. WSJ. http://goo.gl/4wUQDc
US companies are conducting more business in yuan, looking to secure a cost advantage over US$ transactions – WSJ http://goo.gl/JJ4FXC
Washington internet surveillance – the Washington Post discusses how the NSA captured information and communications from more innocent individuals than they did specific targets. 90% of account holders found in a large cache of interceptions were not the intended surveillance targets according to a Washington Post study. http://goo.gl/lhFuaq
China remarks suggest the country is comfortable w/decelerating growth (this was out Wed morning); China’s finance minister said the 7.5% GDP target for ’14 “wasn’t a floor” – WSJ http://goo.gl/N1X3SM
China rate/FX reform plan on track; the head of China’s PBOC said the country remained on track to liberalize interest rates within the next two years. WSJ. http://goo.gl/kJBB6P
China property market – a developer bought a plot of land in Shanghai and paid what is thought to have been a record-high price per square meter – WSJ http://goo.gl/xrI9os
And On A Lighter Note…
The following is an excerpt from our July piece, Second Quarter Investment Review 2014, which can be found HERE
Another quarter has passed without the long-awaited and oft-predicted equity market correction. It has been more than 1,000 days since U.S. stock markets experienced an intra-year -10% or greater decline, leading many pundits and investors patiently waiting for the markets to tumble.
The Investment Team at Pathlight continues to marvel at the lack of belief in global investment markets, job creation, and economic growth. To us, it’s almost as if many want to have something go wrong just to be correct about their misplaced views. The television outlets continue to spotlight the same people who consistently call for the pending collapse of stocks, surging inflation around the corner, skyrocketing gold prices, and climbing interest rates. Fortunately for investors, four years..
Egypt, Syria, Ukraine, and now Iraq again. Hear our thoughts on avoiding making investment decisions based on the ever present geopolitical crises.
Ready for some more great articles? Here's our picks for June 2014:
US housing + HELOCs – the WSJ discusses how US homeowners are tapping into their home equity at a fast pace. HELOCs jumped ~8% in Q1 Y/Y to $13B – that was the highest amount since ’09 (although the figure remains far below the pre-crisis peak of $113B). WSJ. http://goo.gl/sjmccY
Obama to unveil new carbon emission rules this Mon; will use his executive authority to cut carbon emissions from the country’s coal fired plants by up to 20%. “People familiar with the rule say that it will set a national limit on carbon pollution from coal plants, but that it will allow each state to come up with its own plan to cut emissions based on a menu of options” – NYT http://goo.gl/3TF1yu
Electric vehicle plan to be announced by 8 states – leaders of 8 large US states plan on unveiling details of a plan aimed at spurring the purchase of ~3.3M “zero emission vehicles” by ’25 – WSJ http://goo.gl/pcrE9J
China asks local governments to accelerate spending in an effort to boost growth. The government is threatening to take back federal money if local municipalities don’t spend it by the end of Sept. "[Local governments] must speed up spending on infrastructure construction projects and make spending materialize as soon as possible” – WSJ http://goo.gl/cUSmhL
China + social media – the government will step up its monitoring of Tencent’s WeChat and other social media. The leadership is concerned about some of the information that is being circulated on social media platforms – WSJ http://goo.gl/z8Ybh0
Japan - Shirai said that aggressive monetary stimulus should remain in place well into 2016; she said it would take longer than the BOJ’s current 2-year timeframe to achieve its inflation goal – Reuters http://goo.gl/S6NKM r
And On A Lighter Note…
Texas man still buzzing from 60 espresso shot Starbucks drink: http://goo.gl/DCU2Ix
Pathlight Investors President, Adrian Larson, discusses the growth in global M&A and the use of tax inversion strategies.
Pathlight Investors CEO, Patsy Nodilo, reminds investors to be vigilant and avoid complacency during this long bull market.
Ready for some more great articles? Here's our picks for May 2014:
Mortgage demand slumps – mortgage demand fell to the lowest level in 14 years as refinancing demand slumped sharply (originations totaled $235B, down 58% Y/Y and 23% Q/Q). “Softness in the housing market, if it deepens and undermines the broader economic outlook, could complicate the Fed's efforts to dial back easy-money policies designed to support the recovery” – WSJ http://goo.gl/BY8A0T
Wages + the Fed – “Don’t Look Now, but Rising Wages Could Spell Trouble for the Fed” – from the WSJ - “After a torturously long wait since the 2008-2009 crisis, this gloomy U.S. labor market is finally improving. There are clear, albeit early, signs of wage growth for most workers. And while that’s a positive development for Americans in general, we must warn one especially pessimistic breed of American – fixed-income investors – that it means market rates could head sharply higher in the months ahead” http://goo.gl/hAcU3x
Net Neutrality: The FCC plans to propose Thurs new open Internet rules that would allow content companies to pay ISPs for special access to consumers. The proposed rules would prevent ISPs from discriminating against specific websites, but would allow ISPs to give some preferential treatment on "commercially reasonable" terms. The proposal does not address the separate issue of back-end interconnection or peering between content providers and broadband networks. http://goo.gl/1A7Ppd
Washington grows nervous about student debt forgiveness plans; some within the government are worried about the rising liability attached to student loan forgiveness programs and wonder whether the aid plans are causing colleges to raise tuitions well beyond the rate of inflation – WSJ http://goo.gl/MrTvyA
US economic recovery has been sluggish but prob. has more room to run; the recovery has been among the longest on record but has been tepid by historical standards. Many key metrics have a lot more room to go before fully normalizing. WSJ http://goo.gl/D9bNQB
And On A Lighter Note…
Giant pile of dirt upsetting people: http://goo.gl/di3MvH
The following is an excerpt from our May piece, GM Investment Thesis, which can be found HERE
In this presentation we discuss how recent recall related setbacks and other temporary conditions have created an excellent opportunity to invest in an international leader at a reduced price.
Here are some excerpts:
Recent recall-related stock price decline of approx. (-15%) provides a compelling opportunity to invest in a fundamentally strong, globally diverse, industry leading company participating in a global auto recovery.
- Valuation gap between GM and its peers is unwarranted and we believe will close, providing strong investor return potential.
Pathlight President M.J. Nodilo discusses why financial TV shows, on all networks, are often detrimental to the individual investor.