Topley’s Top Ten – August 7th, 2019

Author

Matt Topley
August 07, 2019

1.Largest 6 Month Difference in Stock Vs. Bond Flows Since 1993.

BLACKROCK

2.SoftBank smashed profit forecasts ahead of its $100 billion fund launch

Yusuf Khan

  • SoftBank smashed earnings forecasts as its net profits more than tripled in the first quarter.

  • The Japanese tech titan’s gains were linked to sales of Alibaba shares.

  • SoftBank is preparing to launch its $100 billion investment fund, and seeking to raise cash from investors including Microsoft, Apple, and Japanese financial groups. 

  • View Markets Insider for more stories. 

SoftBank smashed analysts’ earnings expectationsfor the first quarter after it more than tripled net profits toa record $10.6 billion.

The Japanese tech conglomerate holds stakes inUber, WeWork, Sprint, and other companies. Its outperformance reflected itssale of shares in Chinese online retailer Alibaba. 

Masayoshi Son, SoftBank’s billionaire founder, iscurrently looking to raise $108 billionfrom investors including Apple, Microsoft, and Japanesefinancial groups as it prepares to launch a new investment fund. 

The existing Delta Fund and Saudi-backed VisionFund generated 58% of the company’s operating profit of $6.5 billion in theperiod, driven by a valuation gain of $3.8 billion.

SoftBank’s stake in Uber fell in value, but thedecline was offset by the appreciation of its investments in Indian hotel-bookingwebsite Oyo, messaging service Slack, and food-delivery startup DoorDash.

As of the end of June, the company’s Vision Fundboasted a portfolio of 81 investments valued at $82.2 billion, representing avaluation increase of 24%.

3.74% of Top Performing Stocks Since 2010 are Outside the U.S.

Beyond that, the highestreturning stocks each year are often located outside the United States. Since2009, the top 50 companies with the best annual returns overwhelmingly had anon-U.S. address. Had you decided to ignore internationalequities, youwould have missed a shot at many of the best opportunities.

4.Another Casualty of Amazon…Fedex Sheds 100 Points from Highs.

FDX -38% from 2018 highs.

5.Fastest Growing ETFs 2019.

Measuring Growth Admittedly, it’s much easier for a small fund to register a big percentageincrease in its assets. A fund with only $1 million in AUM simply has to growto $2 million for its assets to double. Is that noteworthy? Not really.

Howabout a $1 million fund growing to $50 million? Now that could be noteworthyfor some; others might not pay attention until a fund grows even larger, intothe hundred-million or even the billion-dollar range.

That’swhy we’ve put together two lists: one that showcases the fastest-growing ETFsof the year no matter their starting level of assets, and another that includesETFs that had $50 million or more in assets at the start of 2019.

6.Milk’s Massive Decline in U.S.

Yesterday, DeanFoods echoed people around theworld with damp spots on their crotches: “It’s water!” 

The largest milkprocessor in the U.S. reported an earnings miss that dropped shares 36.5%. CFOJody Macedonio partially attributed the result to consumers opting to buy waterover milk. 

Zoom out: U.S. dairy milk consumption is declining dramatically while alternativeslike almond milk, coconut milk, and good old-fashioned H2O are on the rise.Walmart, formerly one of Dean’s biggest customers, also recently brought milkprocessing in-house, cutting off a calcium-rich revenue stream for Dean.

Looking ahead…Dean’s brand-new CEO, Eric Beringause, said the sector is still“target-rich” for private-label and branded products. Beringause would know—onthe earnings call the industry vet explained, “Many of myfriends say I must have milk flowing through my veins.”

That’sincreasingly not the case for Americans, though.

7.Five surprising new markets enter 2019′s top 10 ZIP codes

KEY POINTS

  • -This year’s hottest markets have half of the total number ofhouseholds of the markets on last year’s list and 7% fewer households persquare mile.

  • -It takes just 17 days on average for a home in these ZIP codesto sell, 40 days faster than the rest of the nation.

  • -Homes were also clicked on three times as often by realtor.comusers, compared with homes in the rest of the country and nearly twice as oftenas homes in their respective, larger metropolitan areas.

Affordability is drivingmore homebuyers away from big cities and toward smaller, unexpected markets.The suburbs of San Francisco and New York City used to be the most attractive,but now names like Omaha, Nebraska, and Rochester, New York, are replacingthem.

This year’s hottest ZIPcodes, ranked by realtor.com, are 49505 Grand Rapids, Michigan; 68144, Omaha,Nebraska; 83704, Boise, Idaho; 66203 Shawnee, Kansas; 14609 Rochester, NewYork; 48154 Livonia, Michigan; 02176 Melrose, Massachusetts; 76018 Arlington, Texas;03045 Goffstown, New Hampshire; and 80916 Colorado Springs, Colorado.

It takes just 17 days onaverage for a home in these ZIP codes to sell, 40 days faster than the rest ofthe nation. Homes were also clicked on three times as often by realtor.com users,compared with homes in the rest of the country and nearly twice as often ashomes in their respective, larger metropolitan areas.

Buyers today are facedwith sky-high prices not just in major metropolitan markets, but also in thesuburbs that surround them. That is why areas on the outskirts of cities likeNew York and San Francisco fell off this year’s list, and communities aroundsmall markets like Omaha and Manchester, New Hampshire, moved on. This year’shottest markets have half of the total number of households of the market’s onlast year’s list and 7% fewer households per square mile.

“Even though buyers aremoving to smaller markets, they are looking to retain an urban lifestyle byliving closer to the city center,” said Danielle Hale, chief economist atrealtor.com. “This tells us that today’s home buyers are trying to have it all— proximity to downtown, room to grow, and affordability–and they’re findingit outside of the biggest cities in the U.S.”

The average commutedistance from this year’s hottest ZIP codes to their downtown area is ninemiles, which is 31%, or four miles, closer compared with last year’s top 10,according to Hale.

Also driving the top 10markets are relatively affordable home prices, large numbers of high-earningmillennials and low unemployment. Millennials in these areas are earning 13%more on average than their counterparts in the rest of the nation. The averagehome price in these ZIP codes is $272,000, well below the national price.

The five newbies to thisyear’s list, Grand Rapids, Shawnee, Rochester, Arlington and Goffstown all haveemerging trends that go beyond the usual drivers of popularity.

They have developinglocal economies and much larger populations of millennials. They do, however,still have room to grow. The median income of residents in these ZIP codes is$64,000, 9% lower than the rest of the top 10. The number of households inthese markets is expected to jump 4.3% this year, far higher than the 1.1%national rate.

8.2,191 Mass Shootings Since Sandy Hook

August 4, 2019 6:00pmby Barry Ritholtz

9.America Needs an Independent Fed

Paul Volcker

The economy functions best when the central bank isfree of short-term political pressures.

Aug.5, 2019 6:48 pm ET

Thisarticle is signed by Paul Volcker, Alan Greenspan, Ben Bernanke and JanetYellen.

As former chairs of the board of governors of theFederal Reserve System, we are united in the conviction that the Fed and itschair must be permitted to act independently and in the best interests of theeconomy, free of short-term political pressures and, in particular, without thethreat of removal or demotion of Fed leaders for political reasons.

Collectively, we served our nation across nearly 40years and were appointed and reappointed by six presidents, both Republican andDemocratic. Each of us had to make difficult decisions to help guide theeconomy toward the Fed’s legislated goals of maximum employment and stableprices. In retrospect, not all our choices were perfect. But we believe thosedecisions were better for being the product of nonpartisan, nonpoliticalassessments based on analysis of the longer-run economic interests of U.S.citizens rather than being motivated by short-term political advantage.

The Fed’s nonpartisan status doesn’t mean it isunaccountable. Congress sets the Fed’s powers and charges it with maximizingemployment and promoting stable prices. The chair and other Fed leaders testifybefore Congress and speak regularly in public, explaining their views of theeconomy and how they plan to meet their mandates. Presidents, members ofCongress, financial-market participants, pundits and many private citizensadvocate that the Federal Reserve make particular monetary policy decisions. Inour system of government, that is the right and privilege of every person, onewe don’t question. The Fed welcomes open dialogue, as evinced by the “FedListens” program, in which Fed leaders have engaged with the public aboutpossible changes to the Fed’s policy framework. A robust public debate helpsmake monetary policy better.

History, both here and abroad, has shownrepeatedly, however, that an economy is strongest and functions best when thecentral bank acts independently of short-term political pressures and reliessolely on sound economic principles and data. Examples abound of politicalleaders calling for the central bank to implement a monetary policy thatprovides a short-term boost to the economy around election time. But researchhas shown that monetary policy based on the political (rather than economic)needs of the moment leads to worse economic performance in the long run,including higher inflation and slower growth. Even the perception thatmonetary-policy decisions are politically motivated, or influenced by threatsthat policy makers won’t be able to serve out their terms of office, canundermine public confidence that the central bank is acting in the bestinterest of the economy. That can lead to unstable financial markets and worseeconomic outcomes.

Because nonpartisan, independent monetary policy isso important, Congress wisely established the Federal Reserve as an independentagency with regional participation and safeguards against politicalmanipulation. Among these safeguards are 14-year terms for Federal ReserveBoard members (four years for the chair and vice chairs) and the provision thatFed governors, including the chair and vice chairs, may be removed only for acause related to violations of law or similar misbehavior, and not for policydifferences with political leaders. This system of fixed terms is designed toensure that the Fed makes decisions that best serve the economy—and all ofus—regardless of short-term political considerations.

Elections have consequences. That certainly appliesto the Federal Reserve as well as to other government agencies. When thecurrent chair’s four-year term ends, the president will have the opportunity toreappoint him or choose someone new. That nomination will have to be ratifiedby the Senate. We hope that when that decision is made, the choice will bebased on the prospective nominee’s competence and integrity, not on politicalallegiance or activism. It is critical to preserve the Federal Reserve’sability to make decisions based on the best interests of the nation, not theinterests of a small group of politicians.

Copyright ©2019 Dow Jones & Company, Inc. AllRights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the August 6, 2019, print edition.

10.How to Develop Self-Awareness

https://www.developgoodhabits.com/what-is-self-awareness/