September 2017

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The Dutch economic machine is roaring, government or not. As the caretaker government of Prime Minister Mark Rutte prepares to unveil its 2018 budget on Tuesday, the country is growing at its fastest clip in a decade. With a new government yet to be formed more than 185 days after the Dutch general elections in March -- the second-longest such period since World War II -- many see the strong performance as an indication that systems put in place after Europe’s debt crisis in 2008 are helping shelter the country from the vagaries of international events and political uncertainty at home.

The Dutch Are Doing Just Fine Without a Government - Bloomberg

Investors often track analysts’ price targets on stocks, as any changes can send a ripple through the equity markets. Looking at the S&P 500 Index SPX, 19 stocks have had their consensus (mean) price targets increased by at least 15% over the past three months, according to FactSet:... Here are the 24 S&P 500 stocks for which analysts have lowered their price targets by at least 15% over the past three months

Analysts have raised, or lowered, their price targets the most on these U.S. stocks - MarketWatch

Don’t hold your breath for a bigger pay raise next year. Despite an improving economy and jobs situation, American employers are tightening their belts. Pay raises for U.S. employees are not expected to improve next year, according to a survey released Monday by global professional services company Aon, based on a survey of over 1,000 companies. Base pay is expected to rise 3% in 2018, up slightly from 2.9% in 2017. Spending on variable pay — incentives or bonuses — will be 12.5% of payroll, low levels not seen since 2013. This suggests a “pessimistic view of corporate performance in the coming year,” Ken Abosch, a strategy and development analyst at Aon, said in a statement.

More bad news for American workers: Pay raises will be dismal next year - MarketWatch

The changing nature of work is also a suspect in this mystery. The economist Martin Beck has made powerful arguments that companies which offer less secure forms of employment, like Uber, can switch their demand for labour on and off based on its cost - meaning pay rates no longer move upward as unemployment moves downward. Decline of unions This has the important knock-on effect, argues Beck, that workers become so cheap that companies are tempted to use them rather than invest in more productive machines and processes so worker productivity (and the ability to pay them more per hour) declines.

Why are wages so weak? - BBC News

His biggest bet right now is on Amazon, even after he reduced the fund's stake in tech stocks as the sector continued to leap higher this year. "Their competitive position in both the core retail business and in their cloud business is just so unassailable," he told Business Insider. "The market they're targeting is so large that they're just going to keep winning. They just keep gaining share at a healthy clip in this enormous market, and they'll replicate the strategy in more markets across the world as they can."

Justin White explains why Amazon is most bullish bet - Business Insider

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American companies are holding $2.5 trillion abroad, an increase of nearly 20 percent over the past two years, according to the latest calculations from forecaster Capital Economics. The total is equivalent to nearly 14 percent of total U.S. gross domestic product.

US companies are hoarding $2.5 trillion in cash overseas

"The market is about as highly priced as it was in 1929," said Shiller on Tuesday's "Trading Nation." "In 1929 from the peak to the bottom, it was 80 percent down. And the market really wasn't much higher than it is now in terms of my CAPE [cyclically adjusted price-to-earnings] ratio. So, you give pause when you notice that." In his first interview since penning an op-ed on Sept. 15 in The New York Times, the Yale University economics professor reiterated to CNBC that there's one vital characteristic protecting investors from losing their nest eggs: Market psychology. "It's not just a matter of low interest rates, it's something about the American atmosphere. It's partly the Trump atmosphere. Investors love this. I can't exactly explain – maybe it has something to do with prospective tax cuts. But I don't think it's just that. It's something deeper, and it's pushing the American market up," he added.

The one thing Shiller says is preventing a 1929-like crash

It's conventional stock market wisdom that when investors run out of fresh cash to deploy, the end of a rally is near. Luckily, we're nowhere near that extreme scenario. As Goldman Sachs pointed out in a recent research note, the current cash position of 3.2% for mutual funds is "normal," showing that "skepticism abounds." In other words, the stock market lacks the type of overexuberant sentiment that can leave it vulnerable.

Investor Laszlo Birinyi says high cash levels will send stocks higher - Business Insider

Bilello goes on to describe “second-level thinking.” An investor might have concluded, upon deeper reflection, that Chipotle’s stock was overvalued, or that its earnings might not rise as quickly as expected. The burrito chain might even suffer from growing pains, which is common in the industry. The investor also may have been attracted to the low valuation for McDonald’s shares, and expect its earnings to decline less than expected. McDonald’s, after all, has weathered many storms since its founding in 1955. In the end, the investor who picked old-school McDonald’s over new and exciting Chipotle made a lot of money. We spoke with four professional money managers, and each named at least one company they thought was undervalued based on their own second-level thinking:

These four fund managers’ secret to success: Don’t go with your gut on stocks - MarketWatch

The data released by the department's Bureau of Economic Analysis showed multi-billion dollar foreign direct investments (FDI) in the U.S. from leading economies around the world in 2016. The U.K. ($598.3 billion) led the way, followed by Canada ($453.6 billion), Japan ($424.3 billion), and Germany ($372.8 billion). However, perhaps surprisingly, the world's second largest economy slumped just outside the 10 leading investors. China pumped $58.2 billion into America last year, almost five times less than Ireland ($279.6 billion). France ($267.6 billion), Switzerland ($196.6 billion), the Netherlands ($191.9 billion), Singapore ($73.7 billion) and Spain ($67.2 billion) completed the top 10 in America last year.

US foreign investment: China falls behind Spain and Ireland in 2016

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One more reason to marvel: The Netherlands is a small, densely populated country, with more than 1,300 inhabitants per square mile. It’s bereft of almost every resource long thought to be necessary for large-scale agriculture. Yet it’s the globe’s number two exporter of food as measured by value, second only to the United States, which has 270 times its landmass. How on Earth have the Dutch done it?

This Tiny Country Feeds the World

Despite many claims to the contrary, North Korea tensions aren't actually what's driving the rally in gold, Goldman Sachs said in a Tuesday note. Instead, the bank said, uncertainty inspired by President Donald Trump has boosted the yellow metal — but that's set to fade. Spot gold has certainly rallied of late, climbing from levels under $1,212 an ounce in July to as high as $1,342.90 this week, touching its highest levels in around a year, according to Reuters data.

Goldman Sachs: North Korea tensions aren't pushing up gold prices — Trump is

Aside from the occasional wobble, investors continue to take the threat of military conflict, including potentially the nuclear kind, and other threats in stride. While the market’s ability to hold its own is perplexing to some observers, others argue that it makes sense given what remains a backdrop of bullish fundamentals. At the same time, the same analysts argue that investors might want to take a little money off the table. Despite earnings growth, an improving global economy, and continued low interest rates in the developed world, “some people seem to think it a bad thing that the stock market hasn’t capitulated and sold off by now this year,” said Andrew Adams, analyst at Raymond James, in a Wednesday note. “They seem to want an investor reaction to each new narrative that gets thrown at us despite the overall story not really changing much and despite individual investors being notoriously bad at trying to time the markets.”

Why investors are so chill about North Korea, hurricanes, and everything else - MarketWatch

Shares of Eaton Corporation (ETN - Get Report) just keep rising, climbing from sub-$74.50 levels on Thursday's open, to nearly $77 in early Friday trading. Many investors may be scratching their heads at the recent rally, but not TheStreet's Jim Cramer. Many may have missed Eaton management's recent comments at a Morgan Stanley conference in Laguna Beach, CA., he pointed out. During the conference, they said, "our markets are benefiting from the return of growth around the world in industrial activity." The growth is very strong in China and very strong in Europe, Cramer said, noting that it's less so in the U.S. but there are signs of acceleration. The 1% to 3% organic growth is quite promising, particularly after seeing very little growth before, he reasoned.

The Industrial Renaissance Is Upon Us -- Jim Cramer Reveals How to Play It - TheStreet

From October, America’s central bank will stop reinvesting all of the money it receives when its assets start to mature. As a result, its $4.5trn balance-sheet will gradually shrink. However, the Fed did not give any clues as to what the endpoint for the balance-sheet should be. This is an important question. There are strong arguments for keeping the balance-sheet large. In fact, it might be better were the Fed not shedding any assets at all.

The case against shrinking the Fed’s balance-sheet

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Continuing with his lessons for handling a market selloff, Cramer offered viewers two tips for picking which stocks to have on their shopping list when the next big decline hits. First, look at the 52-week high list. Stocks don't end up there for no good reason, he quipped, and these stocks are terrific buys when their share prices fall by 5% to 7% along with the rest of the markets. The second group of stocks are the big dividend payers. Yes, dividend stocks aren't sexy or overly exciting but as their share prices fall, their yields rise, making them even more attractive as income vehicles. These "accidental high-yielders," as Cramer often calls them, are among the first to rebound after a decline. There is one caveat to investing in dividend stocks, however, and that's the dividend must be safe. A company must have earnings that are at least twice the dividend payout, Cramer said, and have a solid track record of paying it out.

Market Selloff Survival Strategies: Cramer's 'Mad Money' Recap (Thurs 9/21/17) - TheStreet

The bank's analysts are talking about Asian emerging-market equities, which have put the US to shame, surging a whopping 33% over the same period. Based on comparisons to past bull-market stretches, the group has historically risen roughly 230% during expansion periods that last 42 months on average, according to BAML data. The firm says that Asian EM stocks — which have exploded by 60% since the start of 2016, outperforming global equities by 27% — could continue to thrive until they're faced with a recession or with valuations that extend to a price-to-book ratio of three times.

Bank of America says Asian emerging market stocks could double - Business Insider

A focused, well-run, smaller company will often outperform larger companies involved in many businesses. If a larger tech company can't lean on strengths such as its brand, scale and ecosystem to quash upstarts, then an upstart that's able to differentiate its products and is focused on a limited set of offerings could very well execute better than a larger but less focused rival. The ability of next-gen firewall vendors Palo Alto Networks (PANW - Get Report) and Fortinet Inc. (FTNT - Get Report)  to take share from Cisco Systems Inc. (CSCO - Get Report) and Juniper Networks Inc. (JNPR - Get Report) is a good case in point. So is Arista Networks' Inc.  (ANET - Get Report) ability to take share from Cisco in data center switching. In the enterprise software realm, cloud CRM software leader Salesforce.com (CRM - Get Report) and cloud HR/financials software leader Workday Inc. (WDAY - Get Report)  have taken share from Oracle Inc. (ORCL - Get Report) and SAP SE  (SAP - Get Report) , each of which support a wide array of cloud and on-premise products. And with the help of the ecosystem it has built up, Box Inc. (BOX - Get Report) has fought off the launch of rival enterprise cloud file-sharing platforms from Microsoft, Amazon and Google. There are plenty of other examples, such as the pre-merger Broadcom's ability to fight off challenges from Intel (INTC - Get Report) , Yelp's (YELP - Get Report) ability to fend off Google and Square's (SQ - Get Report) ability to hold its own against NCR and PayPal (PYPL - Get Report) . Though the presence of a rival with much deeper pockets generally shouldn't be taken lightly, some of these threats are much less serious than others.

7 Essential Rules for Investing in Tech Stocks Like Facebook - Pg.3 - TheStreet

The condition sees a protein called Tau form clumps that then spread throughout the brain and kill brain cells. It is mostly found in athletes and military veterans who have suffered hundreds or even thousands of head impacts over the course of years, the US-based Concussion Legacy Foundation (CLF) says. Common symptoms include impulse control problems, aggression, depression and paranoia. Later symptoms include memory loss, confusion, impaired judgement, and eventually progressive dementia, the CLF says. CTE has been observed in people as young as 17, but symptoms do not usually start to appear until years after the head impacts began to occur. How widespread is it? In July, Boston University researchers found CTE present in 110 of 111 brains from former NFL players that were donated for research after their deaths. "A high level of play may be related to substantial disease burden," the authors said.

Was Aaron Hernandez a victim of sport's growing brain injury toll? - BBC News

Teenagers are increasingly less likely to engage in adult activities like drinking alcohol, working jobs, driving or having sex according to research from San Diego State University and Bryn Mawr College published in the peer-reviewed journal Child Development Tuesday.

Why American teenagers are not interested in adult activities like sex, drinking — or working - MarketWatch

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His idea is simple enough: cut down the neural networks that are usually used to process sound until they’re efficient enough to run on cheap, lightweight chips. “What I want is a 50-cent chip that can do simple voice recognition and run for a year on a coin battery,” he explained during last week’s Arm Research Summit in Cambridge, U.K. “We’re not there yet … but I really think this is doable with even the current technology that we have now.”

For Disposable Voice Recognition, Take Cheap Chips and Add Simple AI - MIT Technology Review

Bank of Japan policymakers said they should stick with their current policy framework and had reason to be optimistic about consumer prices because measures of inflation expectations have stopped falling, minutes of the central bank's July 19-20 meeting showed on Tuesday. The BOJ kept monetary policy on hold at the meeting in July but pushed back the timing of its inflation target for the sixth time since Governor Haruhiko Kuroda launched quantitative easing in 2013.

Bank of Japan policymakers point to reasons for optimism on spurring inflation, minutes show

Heavy drinking just six times a month reduces the probability that a new college graduate will land a job by 10%, according to researchers at Tel Aviv University and Cornell University published in the peer-reviewed academic journal “Journal of Applied Psychology.”

How binge-drinking in college could affect the rest of your life - MarketWatch

The researchers in the Lancet study also found there was a linear relationship between the amount of exercise and disease risk, meaning the more hours a person spent doing physical activity (again, of any kind), the lower their risk of disease and death.

Don’t overthink your exercise: just 2.5 hours per week of any kind could help you live longer - Vox

A 35-year-old man who had been in a vegetative state for 15 years has shown signs of consciousness after receiving a pioneering therapy involving nerve stimulation. The treatment challenges a widely-accepted view that there is no prospect of a patient recovering consciousness if they have been in a vegetative state for longer than 12 months. Since sustaining severe brain injuries in a car accident, the man had been completely unaware of the world around him. But when fitted with an implant to stimulate the vagus nerve, which travels into the brain stem, the man appeared to flicker back into a state of consciousness.

Nerve implant 'restores consciousness' to man in vegetative state | Science | The Guardian