Market Weekly: Aug 25 – August 31 2019

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    [color=brown][i][b]Where have we been and where are we…. Hope it is a good week for all 8)
    Trade wars have potential to further escalate & hopefully stability & good talks will set it :huh:
    It would be good to destroy every evil TWITTER device worldwide – lol 👿
    Meanwhile the HERD & I are trying to enjoy those last days for the summer of 2019 :)[/b][/i][/color] ..


    Helmholtz Watson

    Trade wars aren’t going as smoothly as expected for Tariff man – I agree the timing of this by China was intentional to have USA look bad ahead of G-7 and lo and behold we have Macron trying to get Trump to drop Tariffs.


    [color=purple][size=5][i]Keep an EYE on the tropical skies this week as TS Dorian is brewing in Atlantic
    and later this week the “E” storm is expected to form near Carolinas[/i][/size][/color] :woohoo:


    Give Blood …. Sunday Night Open Brought To You Live From X & T (and #PeteTownshend) after a mixed G7


    DOW Futures have surged to +200 into GREEN … up from -320 8)
    POTUS did take some of the G6+1 to woodshed at end … for Iran FM visit & critique of trade policy :ohmy:
    and while we may not like all the theater & negative media reporting :huh:
    This General Patton POTUS ain’t giving away the store — like others had done in past :whistle: [/i][/size][/color]



    [color=green][size=5][b]US July prelim durable goods orders +2.1% v +1.2% expected
    Prior was +1.9% (revised to +1.8%)[/b][/size][/color]

    Ex transport -0.4% vs +0.0% expected Prior +1.0% (revised to +0.8%)

    Capital goods orders non-defense ex air +0.4% vs +0.0% exp Prior +1.5% (revised to +0.9%)
    Capital goods shipments non-defense ex air -0.7% vs +0.1% exp


    Atlanta Fed GDPNow 3Q forecast up to 2.3% v 2.2% last

    Latest forecast: 2.3 percent — August 26, 2019

    The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2019 is 2.3 percent on August 26, up from 2.2 percent on August 16. After this morning’s advance durable manufacturing report from the U.S. Census Bureau, a decrease in the nowcast of the contribution of nonresidential equipment investment to the third-quarter real GDP growth from 0.30 percentage points to 0.26 percentage points was offset by an increase in the nowcast of the contribution of inventory investment to the third-quarter real GDP growth from -0.47 percentage points to -0.43 percentage points.

    The next GDPNow update is Friday, August 30. Please see the “Release Dates” tab below for a list of upcoming releases.


    [quote=”CautiousInvestor” post=11541][color=purple][size=5][i]Keep an EYE on the tropical skies this week as TS Dorian is brewing in Atlantic
    and later this week the “E” storm is expected to form near Carolinas[/i][/size][/color] :woohoo:

    Updated at 1:45 p.m. ET

    Tropical Storm Dorian is forecast to become a hurricane in the eastern Caribbean by late Tuesday, the National Hurricane Center says, issuing warnings to Barbados and other islands in the storm’s path. Puerto Rico, Haiti and other areas are also watching its progress.

    The storm “is expected to be a hurricane when it moves near Puerto Rico and eastern Hispaniola” this week, the NHC says.

    Dorian is forecast to grow into a lower-level Category 1 hurricane, meaning its sustained winds would narrowly top the 74-mph threshold for a hurricane. For now, forecasters say, the storm remains small, projecting tropical-storm-force winds no more than 45 miles from its center.

    Saint Lucia’s government says it’s currently under a hurricane watch, predicting Dorian will make landfall at 2 a.m. local time Tuesday. Forecaster Maclean Jn Baptiste of the Saint Lucia Meteorological Services said that while a tropical storm warning was in effect earlier in the day, “with Dorian strengthening hurricane conditions can be expected across Saint Lucia as well.”

    In Barbados, the government issued a warning around midday Monday stating, “the center of Dorian is expected to pass over or near Barbados later this afternoon/early tonight.”

    The island has already begun to feel the storm’s effects, the Barbados Government Information Service says. It warns that high winds could persist through early Tuesday, and heavy rains could trigger flash floods in low-lying areas.

    Dorian currently has maximum sustained winds of 60 mph. Just before 2 p.m. ET on Monday, it was some 95 miles east-southeast of Barbados, moving to the west-northwest at around 14 mph. The storm is expected to follow a path that could take it through a number of islands.

    But the NHC also warns, “It should be noted that compact tropical cyclones like Dorian are often challenging to predict.”


    Time for a little fun…

    Markets of the damned

    Algos following algos following tweets following tweets following old headlines fake headlines …


    [size=5][b][color=limegreen]Dow 25,898.83 269.93 1.05%
    S&P 500 2,878.38 31.27 1.10%
    Nasdaq 7,853.74 101.97 1.32%[/color]
    Gold 1,538.50 0.90 0.06%
    Oil 53.81 -0.36 -0.66%[/b][/size]


    [size=5][i]TROPICAL STORM ERIN expected to form soon
    thankfully no threat to USA – as it will go out to sea rather than impact land 8)[/i][/size]


    [b][color=purple][i]The THIRD yield curve inversion between 2 & 10 year … plus 30 year less than 2% is alarming :woohoo:
    And the pit traders could shear some sheep … or maybe as alternative the art of deal occurs 😉
    Either way as noted in this classic u-tube below … beware of the CAT BURGLARS on WALL ST :ohmy:[/i][/color][/b]
    [size=5][b][color=red]Dow 25,777.90 -120.93 -0.47%
    S&P 500 2,869.16 -9.22 -0.32%
    Nasdaq 7,826.95 -26.79 -0.34%[/color]
    Gold 1,553.00 15.80 1.03%
    Oil 54.93 1.29 2.40%[/b][/size]


    CI Points out every week the weakness of the RUT ie small companies and what they meanfor the larger indices and the economy.

    From Juergen Amft @jamft
    The Russel 2000 closed at the lowest level in a few months today, and it closed near the lows.


    Michael Burry says Passive investing has all the hallmarks of a bubble

    Michael Burry of the Big Short Fame in an interview with Bloomberg, this does partially explain the spread spx vs russell

    Passive investing means you can essentially own the entire S&P 500 in a single transaction with an expense ratio of 0.09%. even lower elsewhere. The SPY ETF has $241 billion invested in it. Rivals IVV and VOO are the second and fourth largest ETFs with $234 billion combined.

    The SPY has had a 13.87% annual return over the past decade. With so many managers not beating that Moody’s expects more money will be in index funds than under active management by 2021.

    Michael Burry said “The bubble in passive investing through ETFs and index funds as well as the trend to very large size among asset managers has orphaned smaller value-type securities globally,”

    Burry’s firm, Scion Asset Management, has disclosed big stakes in four small-cap companies, including GameStop Corp. GME, and Tailored Brands Inc. TLRD, . Burry has asked the managements of both companies to buy back shares, and told Bloomberg that he is taking an activist approach because he believes there needs to be a “critical mass of smaller value-seeking active managers like me.”

    The trend has also contributed to the outperformance of growth over value.

    Ultimately, the dislocations create opportunity that value investors will eventually exploit with Burry is looking at the South Korean market, the KOSPI is trading at an 11.73 P/E compared to 21.5 in the S&P 500.

    He also said he was interested in small-cap companies since there isn’t a “critical mass of smaller value-seeking active managers like me” to help bring other investors to the table.

    Though Burry’s fame originated from a short trade, he told Bloomberg he was more interested in “long-oriented investing in undervalued and overlooked situations.” His firm, Scion Asset Management, recently revealed large active investments in three small-cap companies in the US and South Korea.

    “There is all this opportunity, but so few active managers looking to take advantage,” he said.

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