Links for November 14, 2016

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Pande's argument, as he explained to Business Insider, is that as health-technology gets better, we might be able to start replacing physical pills (the hardware) with software. At least in part. And where medicines (think: antibiotics) can't get replaced, we might be able to get the right treatment options to the right people. There are three areas in particular where he says we could see this happen

Andreessen Horowitz investor Vijay Pande on the future of tech and healthcare - Business Insider

Amid the most contentious White House race in recent US history, close to half of consumers told NRF in a survey last month that they were being more cautious in their holiday spending because of uncertainty over the election outcome," writes J. Craig Shearman, a spokesman for the National Retail Federation. "But with the election settled — and television airtime previously consumed by political ads now freed up for retailers’ holiday advertising — shoppers are expected to pull themselves out of the election doldrums and retailers will likely see a rush of customers in the coming weeks.

How the election will impact Black Friday shopping - Business Insider

Trump certainly changes the game in many ways. But he can't change the fundamental backdrop of slowing global growth overnight, and basic investing principles still apply. While investors seem to have thrown caution to the wind as they plow into equities, at some point they're going to turn around and like bonds again.That point may come sooner than many think. Here's why: In recent months, a main argument for buying stocks has been that equities provide regular dividend payments that are much higher than yields on benchmark government bonds. But that dynamic is shifting rapidly.It makes sense to buy stocks that pay an earnings yield of 5.1 percent rather than 10-year Treasuries that pay just 1.36 percent. But what happens when those U.S. government bonds have a 2.2 percent yield and more safety than a basket of expensive stocks? Suddenly they become more attractive.

The Bond Pit and the Pendulum - Bloomberg Gadfly

A report this week from the American Society of Civil Engineers shows just how bad the state of infrastructure in the United States is and how much spending is needed in the next decade to get it back up to par. According to the report, $2.75 trillion needs to be invested in America’s infrastructure by 2020. The ASCE believes that the spending shortfall in this period will come to $1.1 trillion, and will have dire consequences: some $3.1 trillion in lost gross domestic product; about $3,100 annually lost in disposable income per household; some $1.1 trillion lost in total trade; about $2.4 trillion lost in consumer spending; and, worst of all, a loss of about 3.5 million jobs.

The 11 Companies That Will Rebuild America’s Aging Infrastructure - 24/7 Wall St.

The selloff in emerging markets after Donald Trump’s U.S. presidential election was intense. A closer look reveals that things aren’t as bad as they might seem. While local-currency bonds suffered their biggest losses last week since 2008 following the Republican’s surprise victory, a gauge of volatility in developing-market currencies remained 16 percent below the levels seen in February. The cost to hedge against foreign-exchange losses is 38 percent cheaper than it was in August 2015 when China’s yuan devaluation rattled global investors.

Emerging Markets Are Down Hard but Not yet Out - Bloomberg

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BRIC are the largest emerging markets countries that attract investors hunting high returns. For the last year, BRIC ETFs performed well compared to large well-diversified emerging markets ETFs. The combination of Brazil, Russia, India, and China in a single portfolio is less risky than any standalone investment. Still, investment in BRICs provides investors with higher risks and potential rewards compared to the large well-diversified emerging markets ETFs.

Emerging Markets: Investment In Brazil, Russia, India, And China In A Single ETF - Guggenheim BRIC ETF (NYSEARCA:EEB) | Seeking Alpha

“Deutsche Bank still has a lot to deal with, but the German market as a whole is pretty rotten,” said Martin Wilhelm, founder of IfK GmbH, which manages more than 600 million euros ($650 million) of fixed-income securities in Kiel, Germany. “It’s really hard for banks to make money here.” The banking industry in Europe’s biggest economy is sitting on hordes of deposits that increase the pain of negative interest rates, while strict labor laws bloat costs and intense competition eats into earnings.

It’s Not Just Deutsche Bank; German Banking Gloom in Charts - Bloomberg

Hit hard by the recall of its Galaxy Note 7 smartphone, Samsung is switching lanes. The electronics giant said this morning that it was paying $8 billion to buy automotive tech firm Harman International, effectively a massive bet on smarter cars. Connected cars are the latest hot automotive trend. While much of the world was changed by the smartphone revolution, car dashboards remain dated and closed to the outside world. Compare your smartwatch to your car. The watch tells your phone how many steps you’ve walked in a given day. Try easily getting that information from your car.

Why Samsung, Not Apple, Could Really Change Cars - Barron's

Gold jumped to $1,339 an ounce as speculation of a Trump win built. But then, as the chart shows, Trump buying was met by Modi selling. Modi selling finally overtook Trump buying. A subsequent budding rally attempt failed as interest rates rose and the dollar strengthened. After reviewing the chart, you may justifiably ask: "Who is Modi and what makes him so powerful in gold?" Modi is Narendra Modi, the prime minister of India. The Arora Report maintains extensive resources in India as India is often the biggest source for demand of physical gold. Let us understand the background and positioning of big players in gold before discussing how Modi killed the gold rally.

India, not Trump, is the real reason behind the crash in gold prices - MarketWatch

More selling in U.S. bond markets Monday pushed mortgage rates to a psychological breaking point. The average contract rate on the popular 30-year fixed mortgage hit 4 percent, according to Mortgage News Daily, a level most didn't expect to see until the middle of next year. Rates have now moved nearly a half a percentage point higher since Donald Trump was elected president. "The situation on the ground is panicked. Damage control," said Matthew Graham, chief operating officer of Mortgage News Daily. "People were trying to lock loans quickly last week and are now facing a tough choice to lock today or hope for a bounce. Many hoped for a bounce last week heading into the long weekend and we obviously didn't get it."

Trump effect pushes mortgage rates to 4%

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In a flash, the world has changed for bond investors, savers and borrowers. President-elect Donald Trump's White House victory was a surprise, and so is the ripping sell-off in global bond markets, which has quickly driven U.S. interest rates to the highest levels in a year. The rout has wiped out an estimated $1 trillion from global bond markets and has Wall Street scrambling to retool its forecasts.

Donald Trump blew up the bond market and changed everyone's view of interest rates

Digging further into the S&P 500 SPX, -0.06% 65 stocks hit 52-week closing highs on Friday, and 19 of those were up 15% or more last week... Among these 19 companies, 13 are in the financial sector. What has changed for them in the wake of the election? Long-term interest rates are rising. The yield on 10-year U.S. Treasury notes TMUBMUSD10Y, +4.52%  has jumped to about 2.25% from 1.83% just a week ago as bond investors focus on the likelihood of a surge in government spending by the Trump administration and a pickup in inflation. Rising long-term rates means increased volatility, which will increase brokers’ commissions and boost their trading operations. Higher rates also mean the gap between what banks collect as interest on loans and their cost for deposits will increase.

It may be time to take some Trump stock profits - MarketWatch

Investors were worried about the fallout from the massive selloff as bond funds racked up huge losses. Goldman Sachs warned its clients that the speed of the selloff could trigger deeper instability in interest-rate markets. The bond-market selloff, the latest leg of which began last week after Republican Donald Trump beat Democrat Hillary Clinton in the U.S. presidential election, accelerated on Monday despite weak retail and output figures out of China—a telling sign of investors’ priorities, said Aaron Kohli and Ian Lyngen, a team of fixed-income strategists at BMO Capital Markets.

10-year Treasury yield hits 1-year high as bond selloff accelerates - MarketWatch

Above you have a chart showing the S&P 500 earnings yield versus the 10 year treasury. This is called "the Fed model." When bond yields go down stocks become more attractive. Now with the jump in bond yields stocks are less attractive. You see the blue line shows that stocks have not (literally) earned their valuation. Earnings have come down. Now with the recent jump in bond yields the "difference" between earnings yield and bond yields has dropped. See the red line above. That chart is as of yesterday. If bond yields keep going up and earnings don't come through, everybody's favorite trade (The Fed Model) is getting less and less attractive.

What Stocks Need To Go Up - SPDR S&P 500 Trust ETF (NYSEARCA:SPY) | Seeking Alpha

As one might expect, anything that could be negatively impacted by a strengthening dollar and higher rates was hurt. The best example of this is emerging market debt (NYSEARCA:EMB), hit by the double whammy and down nearly 5% on the week (contrarian play? - we believe a little too early, but possible). Similarly, emerging market equities (NYSEARCA:EEM) and global REITs ex-US (NASDAQ:VNQI) got hit pretty hard. On the fixed income side, the prospect of growth (and therefore better financial position) helped offset higher rates by having spreads tighten on credit product.

REITs - Red, White And You | Seeking Alpha

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Facebook is facing a credibility problem. For the second time in two months, Facebook announced that it has been misreporting advertising metrics. In the latest case, Facebook says the reported “organic reach” of posts has been inflated and that actual reach might have been as much as 55% lower. In the case of some videos, Facebook’s miscalculations actually underreported the number of videos that were watched to completion. The latest news follows an earlier Facebook admission that it had overestimated the time users spent watching video ads.

Can Investors Still Trust Facebook? - Barron's

The bond markets now wait for further direction. The initial move in bonds was driven by inflation expectations, but to be honest that could well reflect the underestimation of inflation by markets as much as an anticipation of Trump induced inflation. The markets still have a very conservative view of inflation given that most prices are rising somewhere between 2 and 2.5 percent a year. Investors could do well keeping in mind that Trump inflation is a late 2017 issue, existing labor market tightness is an inflation issue today, but perhaps the Trump plans have refocused investor attention onto the inflation story. U.S. producer price inflation (PPI) is due today. The U.S. inflation and stimulus concerns do not go away entirely and there is the potential for a further bout of bond weakness if these fears are once again emphasized.

Hans Parisis: Trouble Brewing in Europe

Goldman Sachs economists expect Donald Trump's economic agenda to lift inflation and interest rates. They expect to see a more aggressive Fed. They also initially expect higher growth thanks to a Trump plan to spend on infrastructure — bumping their forecast for U.S. GDP growth in the second half of 2017 by a quarter point.

Goldman sees Trump creating more aggressive Fed, 'ambiguous' growth

It’s looking more and more like the post-election pop higher was a tad extravagant. Dow futures are trading barely higher this morning, after the blue-chip gauge snapped a seven-session win streak yesterday. “The Trump rally was exciting, but it may have gotten a bit ahead of itself on the hope that more favorable economic policies are coming,” Barron’s technical analyst Michael Kahn says.

Carl Icahn says dial back on stocks, as Trump rally looks overdone - MarketWatch

As stocks jumped following Donald Trump's electoral win, equity anxiety has fallen precipitously. Contrary to predictions that a Trump win would lead to a jump in volatility, the CBOE Volatility Index, which measures the size of expected moves and more generally the level of nervousness around stocks, has slid significantly. Meanwhile, the bond market has gone into panic mode. Bond prices have tanked, seemingly due to expectations that Trump's policies will lead to a rise in economic growth and thus in inflation. And with bond prices dropping, expected volatility in the bond market has surged.

War of the asset classes: Bond market freaks out while stocks see smooth sailing ahead

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It’s no secret that U.S. stocks have been in rally mode since last week’s presidential election, but the market’s strength has been less broad-based than investors may realize. The S&P 500 SPX, +0.47%  is up 2.2% since the close of trading on Nov. 8—election day—and more than half of that gain is due entirely to one sector: financials.

Stock market’s ‘Trump rally’ is mostly a bank rally - MarketWatch

Donald Trump’s shock victory over Hillary Clinton in the presidential race has implications for all sectors of the economy, from the highly regulated health care, energy and financial sectors, to the much less-regulated tech sector that makes most of its parts and products overseas and employs many foreign workers.

What President-elect Trump means for every U.S. industry - MarketWatch

Both housing starts and permits for new construction rose in October, a sign residential construction is ramping up to meet steady demand. But economists questioned whether the construction uptick would be sustained over the longer term, citing the much smaller increase in permits, as well as an anticipated rise in mortgage rates that could dampen home buyer enthusiasm. Housing starts rose 25.5% in October

U.S. Housing Starts Jump 25.5% in October - WSJ

Since bond prices fall when yields rise, anyone owning longer-term bonds has taken a big hit. In just two days after the election, for example, global bond markets lost a collective $1 trillion. If more of the same is ahead over the next few years, many investors will be in a world of pain, especially retirees, who could suffer 2008-style losses — this time in “safe” bonds. So says Ric Edelman, executive chairman of Edelman Financial Services, a Fairfax, Va.-based financial planning firm that manages $17 billion for 31,000 families. Barron’s named the firm the nation’s No. 1 independent financial advisor in 2009, 2010, and 2012. He is also author of the recently updated bestseller “Rescue Your Money.”

Bond-market losses will be huge, and retirees are most vulnerable - MarketWatch

Russia has banned LinkedIn, the Financial Times reports. Russia's communications watchdog, Roskomnadzor, has reportedly added the social network to a blacklist of websites. As a result, internet service providers in Russia will have to start blocking access to the website, which allows people to find jobs and create an online CV. Legislation was enforced in Russia in 2014 that made it mandatory for internet companies to store Russian users' personal data on servers in Russia.

Russia has banned LinkedIn - Business Insider

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Post-election, financial conditions in the U.S. are tightening — fast. That poses a problem for the Federal Reserve, which has intimated that it will raise interest rates in December, as well as the investors who’ve positioned their portfolios accordingly. Earlier this week, the Goldman Sachs Financial Conditions index touched its highest level since March, driven primarily by a sharp rise in Treasury yields and the U.S. dollar.

Here’s one reason why the Fed might not hike interest rates in December - MarketWatch

The relationships between the large cap SPY ETF, the small cap IWM ETF, and the high yield bond ETF, HYG, have been very interesting in reaction to Trump's victory. If interest rates are backing up in a big way in the high yield market, a reflection of the world in which small cap companies navigate —and will continue to finance their businesses in the future, then my sense is that the 13% upmove in the IWM since Nov. 4 th is unsustainable in its euphoria to pro-growth prospects.  By contrast, the large cap SPY should be performing relatively stronger than IWM because in theory, those companies are better-equipped to handle a sharp back-up in rates. Ironically, IWM made a new all-time high at 130.26 on Monday (11/14)—ahead of the benchmark SPY, which has yet to climb above its all-time high of 219.60.

High yield might be flashing a warning sign for stocks - Business Insider

The number of people who applied for unemployment benefits last week sank to a 43-year low, reflecting the strongest labor market since before the Great Recession. Initial jobless claims fell by 19,000 to 235,000, the government said Thursday. Economists polled by MarketWatch had forecast claims to total a seasonally adjusted 255,000 in the week stretching from Nov. 6 to Nov. 12

Jobless claims fall to 43-year low of 235,000 - MarketWatch

The Fed will have its hands full at the next FOMC meeting on December 14th. I for one do not envy them. Why? The latest round of economic data came in this morning in the form of the Producer Price Index and Industrial Production, and neither looked good. The expectation for PPI had been for +0.3%, and we got a reading of 0%. Meanwhile, IP came in at 0% vs. an expectation of +0.1%.

Don't Expect A Fed Interest Rate Hike In December - iShares 20+ Year Treasury Bond ETF (NYSEARCA:TLT) | Seeking Alpha

A verdict is expected this week in the case of a man arrested in Malawi after he told a BBC reporter he had had sex with pubescent girls as part of a "cleansing" ritual. But some Malawians are asking why only one man is on trial for a practice involving whole communities. Eric Aniva was arrested in July on presidential orders after he admitted having unprotected sex with girls as young as 12 - and keeping quiet about his HIV-positive status. Aniva says he was hired by the girls' relatives to take part in a sexual initiation ceremony which they believe "shakes off" the girl's childhood "dust" so that she can enter adulthood. We believe that if a widow or widower is not sexually cleansed, then bad luck, sudden death or illness will come to some, or all, of the clan Social worker, Nsanje When Malawi's president, Peter Mutharika, ordered the arrest, he wanted Aniva tried for defiling young girls, but no girls came forward to testify against him.

On trial: The man with HIV who says he had sex with 104 women and girls - BBC News

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Profit projections made one year out are usually way too optimistic. Over the next 12 months, they fall steadily to a point just below the eventual actual number. Voila: a huge failure to deliver on the year’s goal gets transformed into a “we beat expectations” victory. This happens all the time, as Lebowitz shows in this chart for the same 17 quarters.

Earning Reports Have Turned Into A Dangerous Shell Game

The Bloomberg Barclays Global Aggregate Index fell by 5% during the two weeks ended Thursday — its worst such drop since March 2003, according to Dow Jones data. More than $77 billion in assets are benchmarked to the index, according to data provided by Morningstar, making it one of the most widely followed in the fixed income world.

Global bonds just endured their worst selloff in more than 13 years - MarketWatch

Gold prices were generally expected to climb if Trump won the election because of the amount of uncertainty surrounding his policies and impact on the economy, but prices have instead fallen by more than 5% since the outcome of the election. Before election day, Holmes didn’t think gold was going to collapse, but he also “didn’t think it was going to take off” when the outcome was known. It wasn’t about who won the election, as much as it was about the winner’s “economic policies that [would] drive the price of gold,” he said. If Trump follows through on his proposal of sanctions on China, that would lead to substantial consumer inflation in the U.S., said Holmes. Higher inflation should keep real interest rates low and that tends to support gold prices. Still, Holmes said that gold trading is likely to be “sloppy” until the December Federal Reserve meeting, during which the central bank is expected to raise interest rates, and until the current carry trade has been unwound.

What’s in store for gold, oil and industrial commodities under President Trump - MarketWatch

understand what makes Burlington unlike almost any other city in America when it comes to the power it consumes, it helps to look inside the train that rolls into town every day. The 24 freight cars that pull up to the city’s power plant aren’t packed with Appalachian coal or Canadian fuel oil but wood. Each day 1,800 tons of pine and timber slash, sustainably harvested within a 60-mile radius and ground into wood chips, is fed into the roaring furnaces of the McNeil Generating Station, pumping out nearly half of the city’s electricity needs. Much of the rest of what Burlington’s 42,000 citizens need to keep the lights on comes from a combination of hydroelectric power drawn from a plant it built a half mile up the Winooski River, four wind turbines on nearby Georgia Mountain and a massive array of solar panels at the airport. Together these sources helped secure Burlington the distinction of being the country’s first city that draws 100 percent of its power from renewable sources. The net energy costs are cheap enough that the city has not had to raise electric rates for its customers in eight years.

America’s First All-Renewable-Energy City - POLITICO Magazine

Minutes after shareholders approved the deal—about 85 percent of them voted yes—Musk told the crowd that he had just returned from a meeting with his new solar engineering team. Tesla’s new solar roof product, he proclaimed, will actually cost less to manufacture and install than a traditional roof—even before savings from the power bill. “Electricity,” Musk said, “is just a bonus.” If Musk’s claims prove true, this could be a real turning point in the evolution of solar power... Make no mistake: The new shingles will still be a premium product, at least when they first roll out. The terra cotta and slate roofs Tesla mimicked are among the most expensive roofing materials on the market—costing as much as 20 times more than cheap asphalt shingles.

Musk Says Tesla’s Solar Shingles Will Cost Less Than a Dumb Roof - Bloomberg

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Alcohol-related cancers will cause about 135,000 deaths and cost the NHS £2bn over the next 20 years in England, unless concerted action is taken to highlight the dangers of drinking, health campaigners have warned. Cancer Research UK, which commissioned Sheffield University to come up with the figures, said the government urgently needed to counter public ignorance about the link between drinking and cancer and introduce minimum unit pricing (MUP) to prevent the number of deaths reaching 7,100 a year by 2035..

Alcohol-related cancer to kill 135,000 in England by 2035 – study | Society | The Guardian

Goldman Sachs has proclaimed going long the dollar as its top trade for 2017, a decision that might revive unpleasant memories for some of the bank’s clients. Specifically, the bank is recommending investors use the greenback to bet against the euro and British pound.

This is Goldman’s top trade for 2017 - MarketWatch

Four years after Japan's Prime Minister Shinzo Abe took office with a promise to revive his country's moribund economy, that pledge is still largely unfilled. The latest blow came with the GOP sweep of the U.S. election, which all but killed an Obama administration Pacific-region trade deal that had already been on life support. The topic will likely top Abe's list of concerns when he meets with President-elect Donald Trump on Thursday, a week after Japan ratified the so-called Trans-Pacific Partnership. Trump has called the 11-country trade deal "a rape of our country" and the "worst danger yet," a sentiment shared by a large number of congressional Republicans...  But supporters predict that by lowering trade barriers, the partners would boost exports by nearly half a trillion dollars by 2030, when the deal was set to be fully in place, according to a report from the Peterson Institute for International Economics. Japan would be one of the biggest beneficiaries of the deal, generating $125 billion in additional income by 2030, adding another 2.5 percent to GDP, the report said. In the United States, boosting TPP partner exports would add 0.5 percent of GDP, with annual exports rising by $357 billion, or 9.1 percent of exports, by 2030. With the TPP now all but dead in Congress, Japan and the other partners in the deal may benefit from the proposed Regional Comprehensive Economic Partnership, or RECP, an alternate trade deal that includes China and 15 other Asian countries. Those countries include a larger share of Japanese exports, which could offer some relief from the failures of the TPP.

Here's why Japan badly needs the trade deal Trump promised to kill

One month ago, when we last looked at the Fed’s update of Treasuries held in custody, we noted something troubling: the number had dropped sharply, declining by over $22 billion in one week, one of the the biggest weekly declines since January 2015, pushing the total amount of custodial paper to $2.805 trillion, the lowest since 2012. One month later, we refresh this chart and find that in last week’s update, foreign central banks continued their relentless liquidation of US paper held in the Fed’s custody account, which tumbled by another $14 billion over the course of a week, pushing the total amount of custodial paper to $2.788 trillion, a new post-2012 low.

iShares Barclays 20+ Yr Treas.Bond (ETF)(NASDAQ:TLT): China, Saudies Dumping Treasuries | ETF Daily News

Turmoil can impact investors in different ways, from loss of capital or impacting the potential upside in a trade. It's important to remember that diversification is not a dirty word on Wall Street, Lutts said. It helps provide exposure to different assets and allows you not to be too heavily weighted toward one sector or one asset class, like stocks or bonds. With so many unknowns in the investing world, it's important to manage risk, limiting downside, while protecting upside. These tips can help.

5 Tips on Managing Risk in Your Portfolio - TheStreet

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There is chatter about the stock market’s post-election rally looking overdone — but also additional bullish buzz about the new state of affairs. RBC Capital Markets strategists stand with those bracing for more gains. The S&P 500 SPX, -0.24% is up 2% since Election Day, yet “this understates the massive rotation that is occurring between asset classes and groups of stocks,” said the strategists in a note dated Monday. Investors should buy into stocks that are “poised to benefit more from pro-growth policies,” wrote the strategists, led by Jonathan Golub. This approach represents “the best way to position portfolios for an all-Republican Washington.” So which stocks look good now?

These 40 stocks are expected to benefit from an all-Republican Washington - MarketWatch

All major U.S. indices are sitting near all-time highs, and one technician thinks there's even more room to run. The dynamic inspired by President-elect Donald Trump and the aftermath of the U.K.'s vote to quit the European Union appear to be converging, which may be good news for investors. All told, it suggests the traditional "Santa Claus" rally that investors see around the holidays could easily become the 'Santa Trump' surge instead.

The Trump rally will carry through the holidays: Bank of America

Tom Berryman knows how to put young people in some pretty sweet blue-collar jobs. Graduates of the two-year auto-mechanics’ training courses he oversees at Lawson State Community College’s campus in Bessemer, Alabama, all get work at auto dealerships, most with starting salaries in the high-40s. If they’re lucky enough to end up at a Toyota dealership, they make over $60,000. That’s in a state with a median household income of $44,765. “My guys are much more successful than a lot of four-year students after spending $14,000 for a two-year degree,” Berryman told me. Still, getting enough students to sign up can be a struggle. “If you can get me in front of the parents, I can get the kid here. But if the kid has to go home and explain it to the parents -- good luck!”

Actually, There Are Still Good Blue-Collar Jobs - Bloomberg View

In a low growth, low inflation world, central banks have had little option but to keep policy loose; many of those that tried to tighten policy have been forced to retreat.

Unaccountable technocrats or convenient scapegoats?: Rethinking central bank independence | The Economist

About every 10 years or so, there is a race in which one driver makes his mark and produces a performance that will be remembered for decades to come. Max Verstappen at Sunday's Brazilian Grand Prix was one of those days. It happened with Ayrton Senna at Monaco in 1984, when he was so close to beating Alain Prost's McLaren in a Toleman at Monaco in his first Formula 1 season. It happened with Michael Schumacher in Barcelona in 1996, when in torrential rain he regularly lapped five seconds quicker than anyone else and won by 45 seconds. And it happened with Lewis Hamilton at Silverstone in 2008, with a remarkably similar performance to Schumacher's in dreadful conditions, winning by more than a minute.

Max Verstappen's drive in Brazil puts him in the company of the legends - Allan McNish - BBC Sport

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S&P 500 firms will spend $2.6T next year, say David Kostin and team, with 52% of that going towards investment (capex, R&D, M&A), and the rest to buybacks and dividends. Cash balances currently stand at $1.6T (ex-financials), or 12% of assets vs. the long-term average of 7%. Buybacks will rise 30% to $780B next year, with much of that growth triggered by corporate tax reform, including easing levies on repatriated overseas cash. Excluding that boost, buybacks will rise just 5%. Dividends are expected to grow 6%. Capex will rise 6% as energy capital spending stabilizes, says Goldman, noting energy accounts for 19% of S&P 500 capex after a 45% plunge since 2014.

Goldman sees big boost in buybacks next year, smaller gain in capex spend - PowerShares Buyback Achievers Portfolio ETF (NYSEARCAKW) | Seeking Alpha

The structural decline in potential growth means that it doesn't take as large a negative shock as it used to in order to precipitate a downturn in U.S. activity. Conversely, the rising portion of retirees on Social Security increases the stickiness of consumption, dampening the variability of the largest component of GDP. While Bianco doesn't discount the risks to Corporate America's bottom line posed by a rising U.S. dollar, potential protectionist trade policies under a Trump administration, and the rise in Treasury yields, he thinks the more important things for investors to focus on are lower taxes and the increase in bank profitability.

Deutsche Bank: Trump Could Push the U.S. Economy and Stock Markets to New Records - Bloomberg

Of all the aftereffects of the housing bust and financial crisis, the steady decline in the homeownership rate might be among the most pernicious. Homeownership is traditionally one of the best means into the middle class, and it’s still popularly equated with the American Dream.

The ‘ownership society’ came and went — a long time ago - MarketWatch

Scientists have raised hopes for a radical new therapy for phobias and post-traumatic stress disorder (PTSD) with a procedure that can dampen down fears linked to painful memories. The advance holds particular promise for patients because in early tests, researchers found they could reduce anxieties triggered by specific memories without asking people to think about them consciously.

Tests raise hopes for radical new therapy for phobias and PTSD | Science | The Guardian

Kanye West is missing out on about $30 million in potential ticket sales after abruptly canceling the remaining dates of his Saint Pablo tour. West had 21 dates left on his tour, according to Live Nation Entertainment, which sold tickets through Ticketmaster and promoted many of the dates. The hip-hop superstar had been taking in more than $1.4 million a night off of ticket sales alone, meaning he’s leaving about $30.2 million on the table, according to analysts.

Kanye West Seen Surrendering $30 Million With Abrupt End of Tour - Bloomberg