- TOPLEY'S TOP 10
- Posts
- Topley’s Top Ten – July 17th, 2019
Topley’s Top Ten – July 17th, 2019
Matt Topley
July 17, 2019
1.More Central Banks Shift to Easing
Central Banks and the Search for Yield
Postedby lplresearch
Centralbanks are back in easing mode, to the dismay of coupon-clipping fixed incomeinvestors.
As shown in the LPLChart of the Day, Global Central Banks Back in EasingMode, central banks around the world are embarkingon a marked policy shift as trade tensions pressure the global economy andgovernment becomes more intertwined with policy decisions.
Two of the world’s most influential centralbanks, the Federal Reserve (Fed) and the European Central Bank (ECB), areeyeing looser policy in the months ahead. We expect the Fed to implement a 25basis point (0.25%) “insurance” rate cut at its July meeting, and policymakershave already announced plans to end balance sheet runoff in September. The ECBhas all but promised a new wave of accommodation, likely through assetpurchases.
2.Why Cuts? Inflation Rolled Back Over, Wages Rolled Back Over and Global Trade Tensions.
Joe DavisJune 14, 2019 16 Comments
Playingpoker well is about understanding 2 key things: 1) the hand that you’ve beendealt, and 2) what that means for the probability of future outcomes. In ourview, the hand the Federal Reserve has been dealt (the current economicenvironment as defined by inflation, labor markets, growth, financial markets,and international conditions) and the probable outcomes it implies for theeconomy suggest that rate cuts in 2019 will be the most prudent response.
Inflation,as measured by core PCE (the Fed’s preferred metric) reached 2% last year forthe first time since 2012 before falling back below that threshold in recentmonths. That backsliding caused markets to begin pricing in the possibility ofan inflation-stoking rate cut this year. While we continue to believe thatinflation will pick up over the rest of the year and fall just a bit short of2%, other factors have contributed to the evolution of our policy rateexpectations.¹
The otherhalf of the Fed’s dual mandate is the labor market, which has evolved much aswe expected in our 2019 Economic and Market Outlook.The average monthly change in payrolls has fallen close to 150,000 jobs permonth. We—and the Fed—would expect this number to continue falling closer tothe level of job growth that would account for new entrants into the laborforce (80,000–100,000).
On thegrowth front, the potential for recent trade tensions to hurt the U.S. economyhas only strengthened the market’s conviction that rate cuts are appropriate.In response, bond traders, for the second time this year, have pushed long-termyields below short-term yields. This phenomenon, known as an inverted yieldcurve, is a traditional bellwether for recession.
Thefigure below shows short-term interest rate expectations from the market, theFed, and Vanguard. We expect an update to the Fed’s outlook at the close of itsJune 18–19 meeting.
The market is anticipating one or more “insurance cuts” this year
Sources: Bloomberg, Federal Reserve Bank ofNew York, and Vanguard.
Note:The Fed expectation is based on the March Summary of EconomicProjections; the market assumption is based on the forward rate curve as ofJune 10, 2019.
3.Software Stocks +41% from Dec. Lows.
The investor MarcAndreessen once famously declared that software will eat the world; now software seems to beabsorbing vast swaths of investor portfolios.
As agroup, software companies enter the second-quarter earnings period trading atrecord valuations. Macquarie Capital analyst Sarah Hindlian finds that theaverage software stock is trading for a record 7.1 times next fiscal year’sprojected revenues. The one-year average valuation on that basis is 5.6 times,she reports. The five-year average is 4.4 times and the 10-year average is 3.9.
SoftwareStocks Hit Record Valuations Just in Time for Earnings Season—Eric Savitzhttps://www.barrons.com/articles/software-stocks-earnings-51563311263?mod=hp_LEAD_1
IGV Software ETF
4.Bad Loans in Europe Tumble.
WSJ-Excellent Full Read on Euro Bad Debt.
Bad Loans in Europe Tumble, but They Are Never Fully Gone
Aparade of big U.S. investors such as Cerberus and Apollo snap up billions inEuropean toxic loans
By Patricia Kowsmann and Margot Patrick
5.I Have Mentioned Transport Stocks Not Making New Highs and Dow Theory Multiple Times in Letter….Below is Good Summary.
One of the oldest investing theories on Wall Street has yet to confirm this year’s rally is for real
The Dow Theory argues a true bullish breakout only occurs when the Dow Jones Industrial Average and the Dow Jones Transportation Average reach new highs simultaneously.
While the Dow Jones Industrial Average keeps refreshing its record after hitting a milestone of 27,000 last week, the transport gauge is still almost 7% below its all-time high hit in September.
For investors cheeringstocks at record highs, a century-old classic theory is saying the market isstill not out of the woods yet.
The so-called Dow Theory,developed in the 1900s by Charles Dow and still religiously used by many WallStreet players, argues a true bullish breakout is confirmed when the Dow Jones Industrial Average and the Dow Jones Transportation Averagereach newhighs simultaneously.
Right now, the Dow JonesIndustrial Average keeps inching to new highs (including Tuesday) after hittinga milestone of 27,000 last week. But the transport gauge is still almost 7%below its all-time high hit in September. In other words, the Dow Theory hasnot confirmed the current rally.
6.Uranium $150 to $10.
7.Demographics and Home Healthcare.
Here are some of the key takeaways from the report:
Home-based care is a large and growing market for US health systems and hospitals, while growth in the services that providers have historically relied on for profitability is tapering off.
The home healthcare market opportunity is driven by the need to manage the healthcare costs and readmission rates of a swelling senior population, as well as the risk of facing financial penalties.
Telehealth is a powerful enabling technology that offers traditional health systems the ability to deliver care in patients’ homes.
Early trials of telehealth-enabled home-based care programs have reaped lower costs, lower readmission rates, and higher patient satisfaction scores.
Providers need to make telehealth and staffing investments now to corner off a chunk of the home healthcare market and fend off growing competition.
8.6 Steps to Finding Your True North
By Sponsored Content | July 15,2019 | 0
Asentrepreneurs, our coaches tell us to work on our business, but work onourselves more. That’s easier said than done when our days are spent jugglingcustomer acquisition and retention, personnel, finance and the myriad otherballs we struggle to keep aloft.
I believethere is a common energy that connects us all and that we attract people andthings to us with similar intention, heart and focus. Therefore, in orderto evolve and attract good people and opportunities into our life, we have torise to their level. Our unlimited potential as human beings makes thispossible. The more we concentrate our energy in this way, the closer wecome to realizing our life’s purpose, or true north. We are all works inprogress, and the more we work to improve ourselves, the more our entire lifeevolves.
Here are sixsteps to set you on your path:
1. Decide.
The firststep is to decide what it is you truly want, both personally andprofessionally. Do you want to attract good relationships into your life? Doyou want to do philanthropy? Do you want to invent a product or provide aservice that will impact people’s lives for the better? Do you want to helppeople who haven’t have the same exposure to opportunities as you? Dream bigbecause that is the only way you will grow, and then decide.
2. Be deliberate.
Establishdaily routines and rituals to help systemize your evolution. For instance,every morning, I work out, shower, meditate and read. Then I close my eyes andtake 120 seconds to visualize how I want my day to turn out. This moment ofmindfulness keeps me present and focused on positive outcomes. Then, atthe end of each day, I close my eyes and spend another 120 seconds reflectingon what worked throughout the day. Before I go to bed, I write down effectivequestions (more on that below) and five things for which I am grateful. The actof writing them down releases them from my thoughts so I can go to sleep with aclear and positive frame of mind.
3. Affirm.
Individualsuccess and achievement are primarily based on one’s sense of self-worth. Thepicture that you have of yourself on the inside determines how you act andreact on the outside. If you see yourself as a 4 out of 10, you will act like a4 out of 10. When your self-image is positively reinforced with deliberateintention by writing affirmations, the benefits are ingrained in yoursubconscious mind.
Affirmationsare short, positive statements written in first person in the present tense.They describe qualities you aspire to, the abundance you wish to attract intoyour life and so on. An app like
canhelp to habitualize the writing of your daily affirmations. The app provides alist of 12 affirmations for you to write out every day. After 21 days, the appprovides a new list.
users span all ages andwalks of life. I have been affirming for more than 30 years and firmly believethat doing so has played a key role in my personal and professional success.
4. Ask effective questions.
Whatever youare worried about likely can’t be resolved between midnight and 5 a.m., but itkeeps you awake just the same. One way to put your subconscious mind to workand help you get a restful night’s sleep is to write down effective questionsbefore you go to bed. Effective questions are open-ended and solicit apositive, constructive response. For example:
How can I help to resolve this situation so everybody wins?
With whom should I be speaking?
How can I make a positive difference?
How can put my skills to good use?
What is the root cause of our gridlock?
What other ways can I try?
What would I do if I knew I couldn’t fail?
Are my motivations based in love or fear?
Often when Ipractice this, my subconscious mind works on the solution overnight, and when Iawake, I recall the name of someone I should call or an action I could takethat will help me grow.
5. Establish a group of advisers.
The originof the quote, “If you’re the smartest person in the room, you’re in the wrongroom” is murky, but it’s one of my favorites. A core group of individuals whoyou respect, admire and trust can be an invaluable source of feedback as youset off on your journey to evolve. Personal and/or professional mentors knowyou in ways you may not know yourself. Bring them into your confidence andshare how you want to improve and ask for their advice.
In business,we need a 30,000-foot view of our industry so we can spot trends and seizeopportunities. A way to draw on the expertise of others to help you getthe perspective of that high-level view is to listen to podcasts. Accordingto Edison Research, monthly podcast listening isincreasing in every age demographic, and the typical podcast consumer is likelyto earn more than $100,000 per year. There are thousands of podcasts availableon virtually any topic. My favorites include those discussing meditation, self-improvementand mentorship.
6. Write a personal missionstatement.
As I travelacross the U.S. and Canada, more than ever people are telling me they aresearching for meaning in their lives. It isn’t about the money; they want to bea difference-maker. They’re searching for a cause or a path that trulyresonates with them. They want to add value and leave their mark.
What is thelegacy that you want to leave? Your written, personal mission statement willbecome the touchstone for every decision you make. It takes into accountyour priorities, life goals and code of conduct. It can take weeks or months towrite. The homework you do on yourself and the effective questions you ask canhelp to define your mission statement.
Now is theonly time we have, yet in the bedlam of business, it can be a challenge to bemindful and stay present in the moment. Dreams are in the present tense.Affirmations are in the present tense. Meditation is in the present tense. Yourpersonal mission statement should be written in the present tense. The moreoften you can stay present in the moment, the higher your personal energylevel, the more goodness you will attract into your life and the more you willevolve as a person.
I am a bigfan of the North Star. When I was a child, Jiminy Cricket promised that when Iwished upon a star, my dreams would come true. I later learned about slaves whofound their way to safety and freedom at night through the UndergroundRailroad, and their only guide—their GPS—was the North Star.
We all havea personal North Star—that feeling in our gut that tells us when we’re on theright track and when we’re not. Trust your internal GPS as you embark on yourjourney of personal evolution towards your true north.
By TamiBonnell
EXITRealty Corp. International’s CEO, Tami Bonnell, is aninternationally renowned leader in the real estate industry and wasinstrumental in building three major brands. Among her many achievements, shewas recognized by real estate trend-watcher, Stefan Swanepoel, as one of the200 most powerful and influential people in residential real estate and amongthe top 10 women leaders.
The post Topley’s Top Ten – July 17th, 2019 appeared first on View From The Top.