Topley’s Top Ten – December 6, 2019

Author

Matt Topley
December 06, 2019

1.December-Nearly All the Gains Happen at End of Month.

Twits remind us what your average December forthe S&P 500 looks like – “Nearly all the gains happen latein the month.”

From Dave Lutz at Jones Trading.

2.December Even Stronger in Pre-Election Years.

Reasons We StillBelieve In December

Posted by lplresearchMarket BlogDecember 4, 2019

Ithas been a rough start to the most wonderful month of them all, with theS&P 500 Index down each of the first two days of December. Don’t stopbelieving just yet, though.

Everyoneknows December has usually been a good month for stocks, but what happened lastyear is still fresh in the minds of many investors. The S&P 500 fell 9.1%in December 2018 for the worst December since 1931. That sounds really bad,until you realize stocks fell 30% in September 1931, but we digress.

Onemajor difference between now and last year is how well the global equities havebeen performing. Heading into December 2018, the S&P 500 was up 3.2% yearto date, but markets outside of the United States were already firmly in thered, with many down double digits.

“Wedon’t think stocks are on the verge of another massive December sell off,” saidLPL Financial Senior Market Strategist Ryan Detrick. “If my Cincinnati Bengalscan win a game, anything is possible. However, we are quite encouraged by theoverall participation we are seeing from various global stock markets this yearversus last year, when the United States was about the only market in the greenheading into December.”

Stockshave also overcome volatile starts to December recently. The S&P 500 wasdown four days in a row to start 2013 and 2017, but the gauge still managed togain 2.4% and 1%, respectively, in those years.

Asthe LPL Chart of the Day shows, December has been the second-best month of theyear for stocks going back to 1950. It is worth noting that it was the bestmonth of the year before last year’s massive drop. Stocks have historicallybeen strong in pre-election years as well, and December has never been lowertwo times in a row during a pre-election year. Given stocks fell in December2015, bulls could be smiling when this month is wrapped up.

3.Twitter Stock Drop Since Sept. 2019…Now Offering $600m Junk Bond.

Twitter Is Seeing Plenty of Demand for ItsFirst-Ever Junk Bond — Maybe Too Much Demand

Twitter is marketing $600million of high-yield bonds this week, and they have been met withplenty of investor demand.

Underwriters’early Tuesday estimates put the yield of the eight-year non-callable notearound 4.5%. That has since been cut to 4% and then to 3.875% by middayThursday.

That isunusually close to the yield on benchmark Treasuries for a high-yield bond,according to CreditSights. S&P Ratings puts the bonds at BB+ and Moody’srates them at Ba2, one and two tiers below investment grade, respectively.

Twitter(TWTR) currently has two convertible notes outstanding: a 2021 note with a 1%coupon, and a 2024 note with a 0.25% coupon. Together they add up to $2.1billion of debt.

Thehigh-yield bond pricing Thursday will be its first ever nonconvertible bond.

The social-media platform has$5.8 billion of cash, cash equivalents and short-term investments, which likelysupported investor demand for its bonds. CreditSights analysts said that thecompany’s debt should trade at a narrower spread to Treasuries than Netflix (NFLX).

But a yield below 4% wouldleave Twitter’s bond yield 0.6 percentage points closer to Treasuries thanNetflix’s, they write, which “is a lot given [Netflix’s] significantly larger equity cushion.”

Write to AlexandraScaggs at [email protected]

4.Palladium Doubled in 12 Months.

Higher Emissions Standards Help Extend Booming Palladium Rally

Supplydeficits persist, despite predictions car makers will replace the metal withcheaper alternative

By Amrith RamkumarUpdated Dec. 5, 2019 3:17 pm ET

Pricesfor a rare metal used to filter emissions in gasoline car engines continuerising, defying predictions that substitution of a cheaper alternative by automakers would halt a yearslong rally.

Palladium,a silvery-white material used in catalytic converters, has risen to new highsin recent days, bringing its rally for the year to about 54%. Most-activefutures inched up less than 0.1% to a record of $1,845.70 a troy ounceThursday, erasing an earlier drop. They have roughly doubled since the summerof 2017.

Thegains highlight the challenges facing investors trying to predict how changingenvironmental standards and shifting technologies will affect commoditymarkets. Analysts have long predicted that palladium will be replaced byplatinum in gasoline cars, but so far, demand continues to exceed supply.

Supplydeficits persist in large part because of the logistical hurdles associatedwith replacing palladium with platinum, analysts say.

Palladiumis more than twice as expensive as its close relative and is still one of themarket’s best-performing assets in 2019, supported by stricter emissionsstandards in Europe and China that are expected to lift consumption.

5.Longest Bull Without 20% Drawdown…Last December Didn’t Hit 20%

6.Central Banks Developed vs. Emerging.

First, the story of the moment for markets hasbeen the U-turn by central banks in the developed world, who are now pumpingout liquidity, even as emerging markets see liquidity tightening. This wasillustrated beautifully by this chart from CrossBorder Capital of London whichwe billed last month  as “The Only Chart You Need to Understand 2019’sGlobal Markets”:

7.The Most Regretted College Majors…Interesting Sciences #2

The top 10 college majorsAmerican students regret the most

PUBLISHED THU, DEC 5 20198:34 AM ESTUPDATED THU, DEC 520199:27 AM EST

8.Big Tech and Healthcare. 

Here are some of the key takeaways from the report:

  • Tech companies’ expertise in data management and analysis, alongwith their significant compute power, can help support healthcare payers,health systems, and consumers by providing a broader overview of how health isaccessed and delivered.

  • Each of the Big Four tech companies — vying for a piece of thelucrative healthcare market — is leaning on their specific field of expertiseto develop tools and solutions for consumers, providers, and payers.

  • Alphabet is focused on leveraging its dominance in data storageand analytics to become the leader in population health.

  • Amazon is leaning on its experience as a distribution platformfor medical supplies, and developing its AI-assistant Alexa as an in-homehealth concierge.

  • Apple is actively turning its consumer products into patienthealth hubs.

  • Microsoft is focusing on cloud storage and analytics to tap intoprecision medicine.

  • Health organizations can further tap into the opportunitypresented by tech’s entry into healthcare by collaborating with tech giants torealize cost savings and bolster their top lines. But understanding how each techgiant is approaching healthcare is crucial.

·        BIG TECH INHEALTHCARE: How Alphabet, Amazon, Apple, and Microsoft are shaking uphealthcare — and what it means for the future of the industry

8.Youth Tobacco Highest in 19 Years.

Data: Centers for Disease Control and Prevention;Table: Axios Visuals

New datafrom the National Youth Tobacco Survey show that 6.2million middle school and high school students use tobacco, the highest level since2000.

Why itmatters: Tobacco use among middle schoolers and high schoolersremains high thanks to the popularity of e-cigarettes.

9.4 Daily Stretches for a Healthy Body

By Tiffany Cruikshank | November 30,2019 | 6 

No matter how old you areor what you do for a living, we are all part of a society that spends way toomuch time sitting.

The following poses areaimed at keeping your body healthy as a counterbalance to all of the time wespend in a sedentary state. Keep in mind that more isn’t necessarily better,and try to find a gentle stretch you can breathe into. Happy stretching!

Figure 4 Hip Stretch

This pose is an accessibleway to release the posterior hip and take pressure off of the sciatic nerve,which is great for athletes, as well as those who spend most of their daysitting.

Lie on your back with bothfeet on the floor, then place your right ankle on your left thigh just aboveyour knee. If you feel a stretch here, stay. Otherwise, draw your legs intoward your torso and grab either behind your left hamstring or around yourleft shin. Stay here for one to two minutes, resting your head and back on thefloor as you take a few deep breaths.

Supine Hamstring Stretch andBack Release

The hamstrings arenotoriously tight, especially for those who sit a lot. The wonderful thingabout this pose is that it stretches the hamstrings while also taking pressureoff of the back.

Lie on your back and bendone knee in toward your chest. Start to straighten your leg until you feel agentle stretch through the back of the leg. Grab behind the thigh orcalf—somewhere you can relax into as you rest your head and back on the floor.Stay for one minute on each side.

Anterior Hip Stretch

Releasing the front of thehip can be a great way to prevent lower back and hip issues.

For this stretch, you’llneed a large bath towel rolled up tightly to about three or four inches indiameter. Lie on your back and place your feet on the ground, then lift yourhips to place the rolled towel underneath your sacrum (the bone on the back ofyour pelvis, at the bottom of your spine). Hug one knee in toward your chestand stretch the other leg out on the floor. Relax and stay for one to twominutes on each side.

This article originallyappeared in the November/December 2019 issue ofSUCCESS magazine.

Photo by @shanti /Twenty20

10.Exercise for Your Aging Brain

Researcherssay benefits can be reaped after a single bout of physical activity.

A single exercise session reapsmental benefits.

Source:Clker-Free-Vector-Images/Pixabay, used with permission

A studyout of the University of Iowa’s Department of Psychological and Brain Scienceshas found that a single exercise session can do as much to improve cognition and memory in the minds of some older people as along-term regime of regular exercise. Why?  The mental boost is temporary,regardless of how often you exercise. So on a day-to-day basis, you get thesame benefit every time you exercise. If you want the benefit to continue, youexercise every day. But if the thought of exercising every day is overwhelming,or seems like too much of a commitment, you can use this information as motivation to exercise just for today. Wake uptomorrow, and you can revisit the idea.

Thissmall study included 34 healthy, cognitively normal men and women ages 60 to 80who were not normally active. The participants undertook a 12-week aerobictraining program wherein they exercised on a stationary bicycle for 50 minutes,three times a week. They were divided into two groups: a moderate intensityworkout and a lighter intensity workout. The groups switched so that allparticipants exercised at both levels of intensity. To measure and compareimprovements in cognitive function and working memory after each single episodeof exercise at different intensities, and after they completed 12 weeks oftraining, the participants underwent brain scans (fMRI) and tookcomputer-based, flash-card recognition tests for working memory.

Theresults showed that some of the study participants gained the same mentalbenefits after a single spell of exercise as they did upon completing the sameactivity routinely for 12 weeks. They also found that those participants whosebrain scans showed increased connectivity in regions of the brain that areinvolved in cognition and memory also performed better on the computer memorytest. There was little to no difference between light and moderate-intensityexercise results.  

Althoughmost participants demonstrated both short and longer-term improvements, someshowed little or no change at all. The same researchers are currently running alarger, longer study to confirm their findings and find out more about theeffects of exercise on the brains of older adults.