Topley’s Top Ten – December 11, 2019

Author

Matt Topley
December 11, 2019

1.Trading in U.S. Stocks Has Increased 177% Over the Last 15 Years.

Phil Mackintosh-Nasdaq–Nasdaq Says Fears ETFs AreEating Stock Liquidity Are Unfounded – Trading in U.S. stocks has increased 177%over the last 15 years, Phil Mackintosh, the exchange’s chief economist,wrote in a note last week.

U.S. markets hosted about $164billion additional stock trades every day last year versus 2004; by contrast, average dailyETF trading has increased $93 billion over the same time frame, albeit from asmaller base.

From Dave Lutz at Jones Trading

2.Yesterday We Sent the Top 20 Stocks of Decade….Today Sector List.

Sectors

Here’show the 11 sectors of the S&P 500 have performed from the end of 2009through Dec. 5, 2019, with dividends reinvested, according to FactSet:

3.Who Knew of the Day?  Oil Lost More Than Banks in 2008

4.Aramco IPO—Market Cap Dwarfs MSFT, GOOGLE, APPLE etc

Saudi Aramco shares spike 10% on its opening day of trading — valuing the company at a massive $1.9 trillion

Yusuf KhanMarkets Insider

  • Saudi Aramco shares spiked 10% on Wednesday soon after the company started trading its shares publicly for the first time. That’s the daily limit on the exchange. 

  • The surge in share price means the company is now worth $1.9 trillion.

  • That massive market capitalization dwarfs giant publicly listed Goliaths like Apple and Alphabet. 

  • Crown Prince Mohammad bin Salman had been seeking a valuation of $2 trillion.

  • View Business Insider’s homepage for more stories. 

Saudi Aramco sharesspiked 10% on Wednesday on their first day of trading publicly on the Tadawulexchange.

Thesurge hit the exchange’s daily limit and means the company, which earlier thisweek was valued at $1.7 trillion after raising $25.6 billion in its initialpublic offering, is now worth a whopping $1.9 trillion. That dwarfs the marketcapitalizations of the biggest US giants, including Microsoft, Apple, andGoogle’s parent, Alphabet. 

CrownPrince Mohammad bin Salman had been seeking a valuation of $2 trillion for thestate-owned oil giant, whose public offering was meant to help finance hisVision 2030 plan of diversifying the Saudi economy away from oil.

Accordingto The Wall Street Journal, Saudi officials had been pushing for the country’swealthy to buy shares in the company when it went public, and according tothe Financial Times, thatwas happening until Tuesday evening.

The stake in Aramco that wasactually offered in the IPO, however, was tiny compared with listings fromother companies. Apple, Amazon, and Alphabet have over 84% oftheir shares held by public investors, according to Bloomberg data. ForFacebook, public holders own about 98.8% of its shares. That compares with just1.5% for Aramco.

5.China A Shares 25 Year Low Valuations

China A-shares: Atthe turn of the year China A shares returned to deep value play status —valuations got to a point where you could close your eyes and ears and justbuy, and initially it worked (at one point China A shares were up about 30%),but as the year rolled on the trade war and ever distant deal took its tollleaving the market up only about 17% since then. It goes to highlight howuseful valuation can be particularly at an extreme and after extreme moves, butalso given valuations still remain relatively low in the scheme of things itcertainly remains of interest as attention shifts to 2020.

6.S&P After 4 Rate Cuts

It was a little less than a year ago, onDecember 19, 2018, that the Fed announced the fourth rate hike of 2018 and theninth of the current expansion. Markets roundly jeered the move. The S&P500 Index, already down more than 13% from its all-time high in September 2018,fell to 19.8% off the all-time high by December 24, just a hair below thecustomary 20% decline that marks a bear market. The Fed quickly adjusted itsmessaging and, as shown in the LPL Research Chart of the Day, the S&P 500has climbed nearly 25% year

LPL BLOG

7. Nearly 150 CEOs departed in November, putting 2019 on track to be record year for executive exits

Maggie FitzgeraldPOINTS

  • 148 chief executives left their posts in November, according tobusiness and executive coaching firm Challenger, Gray & Christmas. 

  • Chief executives from Alphabet, United Airlines, Expedia andSoulCycle said farewell in recent weeks. 

  • 2019 is on track to be the highest number of CEO departures onrecord.

8.Millennials Skeptical …Boomers Optimistic

There is a record gap betweenconsumer confidence of young people versus older people. People above 55 yearsold are currently much more optimistic than people below 35, see chart belowand here.

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Let us know if you would liketo add a colleague to this distribution list.

Torsten Sløk, Ph.D.Chief EconomistManaging Director

9. Stopping a Mars mission from messing with the mind

MiriamKramer18 hours ago

Illustration:Eniola Odetunde/Axios

Space agencies and scientistsare testing new ways to mitigate the psychological effects of a trip to Mars.

Why itmatters: One of the major limiting factors for a mission to Marswill be the human mind, experts agree.

  • In order to fly to the red planet, live there and return home, astronauts will need to deal with long bouts of isolation and delayed contact with mission control and family back on Earth.

What’shappening: IBM, Airbus and the German Aerospace Center just launchedCIMON-2 — an upgraded robotic assistant that can read a person’s tone of voice— to the International Space Station.

  • CIMON-2’s creators think the robot could act as a sounding board for astronauts who are feeling stressed but don’t necessarily want to talk to their crewmates about it during a trip in deep space, developer Matthias Biniok told Axios.

Researchersare also studying how the brain and body might change during long trips inspace, affecting a person’s cognition.

  • A group of eight polar explorers experienced changes in their brains that may have been brought about by 14 months in isolation, according to a small study co-authored by psychologist David Dinges of the University of Pennsylvania and published last week in the New England Journal of Medicine.

  • Other scientists are looking into how radiation — considered by some to be the most serious health risk for astronauts going to Mars — might affect space explorers on a cognitive level.

The bigpicture: “From Mars, the Earth is seen as a dot, basically — asmall dot; greenish, blue dot. So everything that is important to you, yourhistory, your family, your culture, your country, becomes an insignificantpoint in the universe,” psychologist Nick Kanas told Axios in August.

  • Mission researchers emphasize the importance of a diverse crew to try to stave off psychological impacts. The thinking is they can work together well and keep each other interested and even entertained for months if not years at a time.

  • “We know that even in a high-fidelity simulation, when it goes long enough that if the agencies aren’t very careful about who they select ahead of time … I would expect that we’re going to see maybe up to 50% or more of the crew develop some significant behavioral problems, psychological problems and physical problems during the mission,” Dinges told Axios.

What’s next: NASAmay consider using its Gateway — the small space station the agency plans toplace in orbit around the Moon in the coming years — as a simulation for a Marsmission in space.

10.Act Like A Professor,Not Like A Boss

ShelcyV. JosephContributor Neil Sheehan, one of sevenprincipals at Chicago-based firm Sheehan NagleHartray Architects, founded Sheehan Partners in 2004 as a smallarchitectural firm with the expectation of having seven or eight employees. Butafter a merge with Nagle Hartray Architects, the firm quickly grew andexpanded, due in no small part to the leadership team’s perspectives on andcommitment to leadership.

Neil and his team take an academic approach to leadership,focusing on the idea that the firm is a collective of collaborators who work intandem and everyone has something to teach and learn from one another. “Actlike a professor, rather than a boss,” he says.

I spoke to Neil to hear more about this new approach, which hasworked well at his firm and has the potential to achieve increasedproductivity, high employee engagement and retention.

Create an open learning atmosphere

In college, you are typically given the freedom to choose yourcoursework, complete your assignments and in some cases, team up with whoeveryou want. One of the main things SNHA strives for is bringing that collegiateatmosphere into the professional world, especially for recent grads andmillennial environment. The firm strives to provide flexibility in its officethrough open workplaces with varying workspace environments, depending onemployee preferences. The leaders set the goals and priorities, and makethemselves available to give advice and guidance as needed with daily tasks.“It’s critical to establish a group mentality in your office and encourageemployees to share and learn from each other,” says Neil.

Promote continued learning in your office

Through mentorships, lunch-and-learns, stipends for outsideeducation, make it easy for employees to continue their education, whether onthe job or not. “These opportunities contribute to the office reservoir ofknowledge as training can be quite specific then be shared among peers,” saysNeil. This helps to make operations more productive and ultimately boost thebottom line of the business.

For recent grads looking to hone their experience or employeeseyeing a promotion or exploring a new field, having educational support iscritical. That said, everyone should have the opportunity to grow and continuecontributing to the company.

Creating an open-door policy

Similar to office hours, encourage employees at any level todiscuss ideas with you, which can result in creative ideas, game-changingconversations, and increased employee loyalty. As Neil explains, the best ideasand solutions tend to come from collaborative brainstorms, and to achieve thisoutcome, leaders need to make themselves available to their employees. Fromweekly check-ins to regular brainstorm meetings, there are plenty of ways toexecute on an open-door policy.