Tag Archives: SPY

Wall Street Breakfast: Must-Know News

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Senate says Apple used Irish subsidiaries to avoid taxes. A Senate report purports to show Apple (AAPL) used three Irish subsidiaries that have no tax residency in either Ireland or the U.S. to avoid paying taxes on some $74B in profits from 2009-2012. Although the practice was legal and is to a certain extent commonplace, the report says AAPL’s scheme was unprecedented in terms of both its complexity and its brashness in the “use of multiple affiliates that had no semblance of a physical presence.” The most glaring example is an Irish affiliate which reported profits of $30B over the period in question but paid no taxes whatsoever. Tim Cook will defend the company (which he says has done nothing wrong) before Congress today.

Cohen, SAC square off with prosecutors. A settlement between SAC Capital and the federal government regarding allegations of insider trading was likely


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The Major Bubble That Nobody Is Talking About

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By Eric Parnell:

“Be fearful when others are greedy and greedy when others are fearful”

–Warren Buffett

A major bubble is currently inflating in investment markets. Yet nobody is talking about it. It’s not that the category in question isn’t getting any attention. To the contrary, it is being talked about at length nearly every day. But what is missing from the discussion is the fact that all of the signs of a massive bubble are now falling into place.

For the purpose of this article, I have taken a different approach with the analysis. Instead of introducing the investment that is showing signs of a bubble, I will be exploring the evidence first in order to avoid any behavioral biases associated with the specific investment in question.

While the bull market for this investment has been underway for nearly two years, it has only recently entered into a parabolic advance over the


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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In its quest for cool, Yahoo nabs Tumblr. Yahoo’s (YHOO) board approved the $1.1B acquisition of popular blogging service Tumblr Sunday, the latest step in Marissa Mayer’s quest to give the internet heavyweight a much-needed makeover. AllThingsD notes the deal is indicative of Mayer’s strategy to increase YHOO’s “cool factor” and relevancy with younger audiences. Tumblr, whose founder/CEO David Karp will reportedly stay at YHOO for the foreseeable future, also comes with a treasure trove of user-generated content, something YHOO covets. As for comparisons between Tumblr and YHOO’s ill-fated 1999 acquisition of Geocities, Forbes notes Geocities faltered in part because a flood of ads drove users away; Tumblr seems to be avoiding that pitfall.

Actavis in $8.5B deal for Warner Chilcott. Actavis (ACT) confirmed it will buy Warner Chilcott (WCRX) for $8.5B in a stock for stock transaction Monday morning. The deal will see WCRX


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Coming Week Market Movers And Outlook For The Rest Of 2013

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By Cliff Wachtel:

In terms of actual scheduled economic calendar events, the week is light. That will leave traders and pundits alike with time to continue speculating on variations and aspects of The Great Question – how much can we trust the current bull market in stocks and other risk assets to continue, and is there still time to get it without excessive risk of buying at them top? See here (section: The Most Compelling Reason To Be Bullish On Stocks & Other Risk Assets) for our take on whether it’s still safe to open new long positions.

For all but the short term traders, all else is just commentary.

Drawing from lessons of the prior week, which we covered here, as well as other sources, we’ll briefly review what high-potential market movers you should monitor this week. We conclude with a few recommendations, and our updated forecast for the


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Market Outlook – Stocks Ignore Shaky Economic Data

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By Price Headley:

Another week, another record high. Nothing new there, though at this point the market’s gotten uncomfortably overbought.

The rationale side of your brain says that’s a reason to sell… or at least stop buying. Yet, the instinct to want to jump onto this rising rocket also makes sense – this may well be the beginning of a rarely-seen true melt-up. They always end badly, but what a ride they take you on while they’re in motion.

Which one are we seeing right now? We’ll talk about that in a moment. First, let’s slice and dice some recent economic data.

Economic Calendar

Whew! What a jam-packed week of economic data. There’s too much to look at each individual piece of information, so let’s just stick with the highlights.

First and foremost, not only are consumers feeling less and less inflation, they’re getting dangerously close to deflation. As of April, the annualized


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Weighing The Week Ahead: Are You Ready For Some Fedspeak?

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By Jeff Miller:

Ready or not, we should expect a week dominated by an even greater focus on Fed policy. There are four reasons:

  1. The economic data calendar is very light;
  2. Earnings season has ended;
  3. Many will be heading for the exits early, anticipating a holiday weekend; and finally
  4. Bernanke testifies on the economy before the Congressional Joint Economic Committee. There will also be other Fed speeches and the minutes of the last FOMC meeting.

What should we expect?

Fedspeak is described by former Fed Vice-Chair Alan Blinder as “a turgid dialect of English.” In the Greenspan era, the Fed Chair was intentionally ambiguous. (Blinder, who favored a more open exchange, did not last long in the Greenspan era). In the Bernanke era there is supposed to be more transparency. There certainly is more open disagreement among the FOMC participants.

Two Viewpoints

Among market participants there is widespread sentiment that current asset


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Beware Of Long-Term Damage From Stock Market Bubble Forming Now

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In the prior essay in this series, I demonstrated that US systemic liquidity is at frighteningly high levels and that this could become a key factor that enables the formation of a stock market bubble, as risk aversion and liquidity preference declines. In this regard, it will be helpful to review the following chart of systemic liquidity available in the US economy (the details of this metric are fully explained in the aforementioned essay):

(click to enlarge)

In the present essay I will show why the extraordinary levels of excess liquidity available in the US economy, under current conditions of declining liquidity preferences, could be extremely dangerous to the long-term health of the US economy.

The thesis of this article is that given the current course of events, broad stock market indices such as the S&P 500, Dow Jones Industrials and Nasdaq could very well rise by 30% or


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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Divide grows on asset purchases. Fed officials are increasingly divided over the efficacy and appropriate duration of monthly asset purchases, speeches delivered this week indicate. Complicating matters is economic data which at times seems to convey conflicting messages regarding the health of the nascent recovery. For instance, while the employment landscape may be improving, some of that improvement may be attributable to discouraged workers exiting the labor force. This week, the heads of the Philadelphia, Dallas, and Richmond Federal Reserve Banks all suggested bond buying should be tapered immediately while Boston’s Eric Rosengren maintained his stance in favor of the purchases. Of particular note is San Francisco Fed Chief John Williams, who said the Fed could reduce the pace of asset purchases “perhaps as early as this summer,” assuming conditions remain stable.

J.C. Penney misses, looks forward. "One of our top priorities this year is to


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