Succinct Summation of Week’s Events 6.16.17 (plus 9 Rules of Research)

The end-of-the-week summation is here with interest rates up and unemployment claims down.  Following up on yesterday's post, the bonus this Sunday is a nice little eye-shot of 9 bullet points that tell you everything you need to know about proper investment research.  A second bonus this weekend is an equally nice little eye-shot graphic showing which industries make the most money per employee, or to put things in perspective after this week's historic acquisition of Whole Foods by Amazon, what are the most profitable industries to be in ... or put another way ... to invest in?  Does it surprise anyone that energy is way out front and consumer products considerably down the list.  Food for thought.  Hope everyone enjoyed this nice summery weekend one week before summer actually begins.

Succinct Summation of Week’s Events 6.16.17

June 16, 2017 5:00pm by Barry Ritholtz

Succinct Summations for the week ending June 16th, 2017

Positives:

1. FOMC recognized the improving economy, and continued the process of “normalization; Federal Fund Rate Target is now 1.00-1.25%. Reducing the size of the Fed balance sheet continues. 
2. Empire state manufacturing comes in at 19.8, the strongest reading since September 2014.
3. New jobless claims fell from 245k to 237k.
4. Import prices in May fell 0.3% m/o/m.
5. Small business optimism remains high, with NFIB coming in at 104.5, unchanged from last month.

Negatives:

1. Another rate increase this year and more in the future are the other side of the coin from the Federal Reserve.
2. Housing starts fell 5.5% in May to a much lower-than-expected annualized rate of 1.092 million.
3. CPI fell 0.1% m/o/m. Core CPI rose just 1.7% y/o/y, the lowest since May 2015.
4. Retail sales fell 0.3% m/o/m, the biggest decline in 16 months.
5. Energy producer prices fell 3% in May. Export prices fell 0.7%.
6. MBA purchased index fell 3% w/o/w.
7. Industrial production unchanged in May, saw its manufacturing component fell 0.4 percent

 

Ned Davis: 9 Rules of Research

June 18, 2017 9:30am by Barry Ritholtz

Ned Davis: 9 Rules of Research - The Big Picture

I posted my write up of my podcast with Ned Davis yesterday (hear it on iTunes,Soundcloud, Overcast, and Bloomberg).

I reviewed some of my notes prepared for the interview, and almost forgot about this set of rules from him: Its smart, straight-forward, advice.

Ned Davis’ 9 Rules of Research

1. Don’t Fight the Tape – the trend is your friend, go with Mo (Momentum that is)

2. Don’t Fight the Fed – Fed policy influences interest rates and liquidity – money moves markets.

3. Beware of the Crowd at Extremes – psychology and liquidity are linked, relative relationships revert, valuation = long-term extremes in psychology, general crowd psychology impacts the markets

4. Rely on Objective Indicators – indicators are not perfect but objectively give you consistency, use observable evidence not theoretical

5. Be Disciplined – anchor exposure to facts not gut reaction

6. Practice Risk Management – being right is very difficult…thus, making money needs risk management

7. Remain Flexible – adapt to changes in data, the environment, and the markets

8. Money Management Rules – be humble and flexible – be able to turn emotions upside down, let profits run and cut losses short, think in terms of risk including opportunity risk of missing a bull market, buy the rumor and sell the news

9. Those Who Do Not Study History Are Condemned to Repeat Its Mistakes

Source: NDR

Good stuff . . .

Which Companies Make The Most Revenue Per Employee?

June 16, 2017 10:00am by Barry Ritholtz

Which Companies Make The Most Revenue Per Employee? - The Big Picture

In light of today’s big Whole Foods acquisition by Amazon, this is a kinda intriguing metric; its worth pointing out that on average, Consumer Staples generates almost 2X the revenue bang per employee than does Consumer Discretionary.

Hence — I am not predicting this, but inly pointing out the data — it is potentially accretive to earnings when a large Consumer Discretionary firm (Amazon) acquires a large Consumer Staples firm (Whole Foods):

Source: Visual Capitalist