Markets & Stocks

Major U.S. stock indices (current trading at links)NASDAQ Composite | S&P 500 Index | DJIA.

FAAMG Stocks: Facebook $FB, Amazon $AMZN, Apple $AAPL, Microsoft $MSFT, Alphabet’s  Google $GOOGL $GOOG.
Dec 6: US Stocks $SPX Soar on Jobs Report (see below).
BLS Report on US Employment SituationNovember Payrolls Smash Expectations: 266K Jobs Added, as Manufacturing Workers SoarUnemployment at 3.5%, a 50 Year LowAnnual wage growth increased by 3.1%, last month's wage growth revised from 3.0% to 3.2%, indicating employers are responding to a tight labor market; wages for production and non-supervisory workers rose 3.7% annually after a 3.8% gain, which was the best since 2008.
The week ahead (Dec 9-13)

Investor Notes for the Week ending Friday, Dec 6, 2019:
US stocks have risen every week the Fed's balance sheet increased following the Fed's October 11 announcement. What about the one week when the Fed's balance sheet shrank? That was the only week in the past two months since the launch of "NOT QE" when the S&P dropped.
US: Online Sales Broke Black Friday Record as Clicks Beat Queues. Online sales rose more than 19.6% to $7.4B on Black Friday, marking the day's largest revenue grab ever, according to Adobe Analytics, which tracks transactions at 80 of the top 100 U.S. retailers. And Retailers see biggest-ever Cyber Monday after record online Black Friday.
The U.S. has posted its first full month as a net exporter of crude oil and petroleum products since government records began in 1949.
S&P 500 in 2020? DataTrek co-founder Jessica Rabe"Even with such a large annual gain this year [2019], history shows the S&P can continue to rally next year, just likely by not as much." 
Amazon, Apple, Facebook, Google, Microsoft, and Netflix over the past decade have collectively avoided $100B+ in taxes according to The Fair Tax Mark
  • Year 2019 Worst #FAILS in Tech: Samsung Galaxy Fold; Facebook privacy & Libra; Apple FaceTime bug & butterfly keyboard; Amazon Ring & local police; Huawei in US; Uber IPO; Amazon HQ2; Airbnb bedbugs; Vaping; Amazon CEO & Washington Post owner Jeff Bezos's mid-life crisis, divorce tweet, dick pics, sexts to skanky girlfriend(s); ICANN & Internet Society & Ethos Capital re: .ORG; WeWork, need we say more? 
  • Read of the Week: Why Apocalyptic Claims About Climate Change Are Wrong  "... First, no credible scientific body has ever said climate change threatens the collapse of civilization much less the extinction of the human species .... What about claims of crop failure, famine, and mass death? That’s science fiction, not science .... Does this mean we shouldn’t worry about climate change? Not at all. One of the reasons I work on climate change is because I worry about the impact it could have on endangered species ...."
Dec 6 9:30 EST: Task Force on Artificial Intelligence: Robots on Wall Street

Dec 6 Robots on Wall Street: The Impact of AI on Capital Markets and Jobs in the Financial Services Industry. House Financial Services Committee Task Force on Artificial Intelligence.
The stock market is designed to transfer money from the active to the patient -- Warren Buffett.
Inverted Yield Curve T10yr/2yr:
Aug 14, 2019: Former Federal Reserve Chair Janet Yellen said the markets may be wrong this time in trusting the yield curve inversion as a recession indicator. "Historically, it has been a pretty good signal of recession, and I think that's why markets pay attention to it, but I would really urge that on this occasion it may be a less good signal," Yellen said, adding, "The reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields."  
UPDATE Aug 15: Mohamed El-Erian agrees with Yellen (CNBC video): Inverted yield curve recession signal is 'distorted' this time around--Mohamed El-Erian, the well-known economist for Allianz who used to run investment giant Pimco, told CNBC on Thursday the inverted yield curve recession signal that made all the headlines this week is not as reliable as it has been in the past--"There are two realities, the European Central Bank has negative rates and it's going to take them lower ... and it's going to restart QE" [quantitative easing, which is an accommodative measure that would involve the ECB buying government bonds from eurozone countries to further boost lending and stoke inflation]. "So all that is going to distort our yield curve. And it's going to weaken the traditional signalling mechanism" for a U.S. recession, said El-Erian who also added that the U.S. should not have such low policy interest rates from the Federal Reserve or market rates in the bond market because the U.S. economic data are not pointing to a recession. But as he said Wednesday, the Fed has "no choice" but to cut rates again at its September policy meeting. "The bond market is distorted. It is distorted by what's happening outside the U.S.," said El-Erian, adding, "If you live in an interconnected world, you have no choice but to import the effect of negative policy rates in Europe." 
Yield on the benchmark 10-year Treasury note was at 1.623% on Wednesday, Aug 14, 2019, below the 2-year yield at 1.634%, causing the yield curve to invert, historically a signal of a recession within the next 2 years.  When asked if the United States is headed into a recession, Yellen said "I think the answer is most likely no. I think the U.S. economy has enough strength to avoid that ...." See also Goldman Sachs CEO says Recession Odds Still Relatively Low.
Goldman Sachs Oct 7: 'US Is Not Close To Recession' - Economic Run 'Not Over'.

Quarterly earnings list:
(company names below link to investor relations for report date; stock symbols to stock charts)
Others of note:
    Economic Calendar, Earnings Results Calendar:
    Markets | cnbc.com | Stock Exchange Trading Hours (24 hour format / local time):
    • NASDAQ and NYSE (New York Stock Exchange)  09:30-16:00

    Twitter: @ReutersTech @techreview @fastFT @technology @markets @business @WSJ @NAR

    How to Read Financial News Redux: Process Determines Priorities & Understanding Consensus &  Separate the Narrative from the Noise.

    Other stock & investor links:  
    SEC.gov | Company Search Page; see also Full Text Search (advanced)

    SEC.gov | How Investigations Work - The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them. One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.

    Profits explained | Finance Decoded FT.com video: Jonathan Guthrie explains how companies calculate their profit, what investors should be wary of and the different measures used to gauge how a company is really performing (video published Feb 17, 2016).

    Peter Lynch on investing:
    Still following the market at age 71--(he has no plans to abandon the stock market for other leisure pursuits, “It’s a fun exercise, beats the hell out of golf" ... Lynch spends time calling companies, listening to earnings calls and reading transcripts)--investor Peter Lynch explains his philosophy this way: Use your specialized knowledge to home in on stocks you can analyze, study them and then decide if they’re worth owning. The best way to invest is to look at companies competing in the field where you work ... "If you’re in the steel industry and it ever turns around, you’ll see it before I do.” The popular-wisdom version of his ideology is mistakenly often cited as “invest in what you know,” which leaves out the role of serious fundamental stock research. “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.” Lynch’s advice for small investors: Picking individual stocks is hard even for the professionals--"if you can’t understand the balance sheet, you probably shouldn’t own it.” Source: Peter Lynch, 25 Years Later: It’s Not Just ‘Invest in What You Know’ - WSJ Dec. 6, 2015

    Where Markets Fail: Visible Hands | CFA Institute Enterprising Investor

    Memos from Howard Marks

    Shortcuts to Factor Investing 101 | blogs.cfainstitute.org"Smart beta and factor investing are just fashionable marketing labels for a wide range of risk-based approaches that sit somewhere beyond active and passive investment management but possess attributes of both. In essence, smart beta and factor investing combine the disciplined rules-based approach of market-cap weighted passive funds with the discretionary selection of whichever chosen factors or index series those who use them hope to replicate."

    See also on Domain Mondo Investing, Jack Bogle, Warren Buffett, S&P 500 Index, US, China

    Common TermsInfographic: Here's 40 Stock Market Terms That Every Beginner Should Know | visualcapitalist.com

    Operating Profits
    "The basis for all sustainable shareholder returns is operating profits, not, repeat NOT revenue. Profit is the source of all future dividends, it is the basis for increased book value via retained earnings. The art of investing involves buying future levels of profitability at a significantly low price to make the whole venture worthwhile. Thus, one of the first things we look at when considering an investment is the level of operating profits the firm manages to generate relative to the capital provided by owners and creditors ..."--Web.com And The Problem With Growth Investing | Seeking Alpha, Nov 8, 2015.

    "Accounting games are also making the profits reported by companies much less trustworthy which, in turn, means P/E ratios are even more out of whack. Ciesielski, who writes The Analyst’s Accounting Observer ... [says] accounting manipulation has become very widespread and companies are using gimmicks to make profits look better. Company executives ...“all have a huge incentive to puff their numbers”... much of their compensation [is] tied to their stock’s performance. ... companies used to report profits according to Generally Accepted Accounting Principles — called GAAP for short. That meant all companies had to follow certain rules so that investors were able to compare apples to apples ... companies are now using creative accounting. GAAP has fallen between the cracks. The use of so-called “extraordinary items” and “non-cash charges” has made corporate earnings reports incomprehensible. “Non-GAAP earnings are more akin to anarchy,” says Ciesielski. ... How many companies are pulling these accounting tricks? Ciesielski says that, in 2009, 232 of the 500 companies in the S&P index were using tricks — thus straying from GAAP. Last year, 334 companies were doing so. Hundreds of billions in extra corporate profits were being reported simply by razzle-dazzle. It’s not that profits were actually higher — they were just made to look so."  source: The secret stock market accounting trick | New York Post

    EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization - essentially net income with interest, taxes, depreciation, and amortization added. Often used to analyze and compare profitability between companies and industries, minimizing effects of financing and accounting decisions.

    Revenue is the income (before deducting expenses) that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Profits or net income generally imply total revenue minus total expenses in a given period. Source: Wikipedia

    Risk Assets generally refer to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate and currencies.

    Market liquidity | Wikipedia.org: "In business, economics or investment, market liquidity is a market's ability to purchase or sell an asset without causing drastic change in the asset's price. Equivalently, an asset's market liquidity (or simply "an asset's liquidity") describes the asset's ability to sell quickly without having to reduce its price to a significant degree. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. In a liquid market, the trade-off is mild: selling quickly will not reduce the price much. In a relatively illiquid market, selling it quickly will require cutting its price by some amount. Money, or cash, is the most liquid asset, because it can be "sold" for goods and services instantly with no loss of value. There is no wait for a suitable buyer of the cash. There is no trade-off between speed and value. It can be used immediately to perform economic actions like buying, selling, or paying debt, meeting immediate wants and needs."

    Fungibility | Wikipedia.org"Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place."


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