December 2016

[admin]

Very dangerous to do some math on a plane!

The Council on American-Islamic Relations said that in the last year it had received nearly a dozen reports of Muslim travelers, or travelers who were perceived to be Muslim, being questioned or removed from flights after complaints. Italian economist Guido Menzio was questioned during a domestic flight when a passenger complained that a differential equation he was working on made her suspicious. Khairuldeen Makhzoomi, a student, was removed from a Southwest Airlines flight and questioned by the FBI in April after a passenger heard him speaking in Arabic to his uncle, he said..

YouTube star kicked off Delta Air Lines flight 'for speaking Arabic' | World news | The Guardian

[admin]

We have a new article about the steel sector

• Steel stocks had a terrific year.
• The rally has been boosted by rising prices and protectionist measures in the US and EU.
• A possible Trump infrasstructure bonanza could provide further impetus.
• But there are risks from China, where there is still massive overcapacity.

Are The Steel Bulls Still In Charge? - ArcelorMittal (NYSE:MT) | Seeking Alpha

[admin]

A week or so ago, we came out with this:

• Himax sold off too much on the delay of its biggest AR client.
• That bonanza, while delayed by a few quarters, is still coming.
• The shares are close to a 52-week low and only a dollar above multiple-year lows.
• This is curious as the financial performance is improving and the company has multiple other growth opportunities.

Left Behind In The Rally: Himax - Himax Technologies, Inc. (NASDAQ:HIMX) | Seeking Alpha

The shares keep on sinking

They are terrificly oversold (RSI of 18), and the slump is probably the result of tax loss selling. There isn't really much in the way of fundamental business deterioration that warrants the almost 50% loss since September.

[admin]

Another out of favor stock that merits a revisit. Hitting support

[admin]

Yesterday, we published this:

• The shares of mortgage software provider Ellie Mae have sold off strongly on rising bond yields.
• While the shares are still anything but cheap (especially on a GAAP basis), we think the sell-off is a little overdone.
• It remains to be seen how far bond yields will rise, to what extent that will slow the housing market, and how that will impact Ellie's earnings.
• If history is any guide, the latter will not suffer all that much.

Sell-Off In Ellie Mae Provides An Opportunity - Ellie Mae, Inc. (NYSEMKT:ELLI) | Seeking Alpha

Now we read this:

Sales of previously owned U.S. homes unexpectedly increased in November to the strongest level since early 2007, ahead of a jump in borrowing costs, National Association of Realtors data showed Wednesday.

U.S. Existing-Home Sales Climb to Highest Since Early 2007 - Bloomberg

[admin]

Micron (MU) came out with interesting figures blowing past earnings and guidance.

I told Durcan that Barron’s last year called Micron potentially one of the most valuable semiconductor companies, but only if it moves away from commodity parts and becomes a leader in more advanced types of chips, for things such as cloud computing and machine learning.

Said Durcan, I think that’s certainly my vision. We have the opportunity, it doesn’t happen overnight, but I do believe that the memory industry will decommoditize over time. We are serving a lot of end segments now where we are delivering subsystems, with controller functionality or processing capabilities, with value-added software and firmware. I believe we will continue to see that trend grow. Memory really will be a very interesting and dynamic market place, as we not only grow the bits we are selling, but change the nature of the products we are providing, so that they are much more intimately designed with customers and there’s much more value-add, and we become a lot more sticky to our customers.

Micron Surges 10%: CEO Durcan Sees a Path Out of Commodity Status - Tech Trader Daily - Barrons.com

[admin]

Where is that 'human touch?' How will new generations work and pay through college? Questions, questions..

We’ve seen robots who can order you pizza, get the snow off your driveway and drive you to work in the morning. Now, robot bartenders may be coming to a bar near you. The payment company Barclaycard debuted a prototype of a self-pouring beer pump last week. It’s not as sophisticated as the robot bartender with the English accent (played by Michael Sheen) in the new sci-fi movie “Passengers” with Jennifer Lawrence and Chris Pratt, but it does the job just the same..

The next job to be automated: bartending? - MarketWatch

[admin]

Here is the chart for existing home sales for the earlier ELLI entry:

[admin]

Apparently these people can see far into the future..

Prepare for more record highs over the next few years, says one Bank of America Merrill Lynch strategist, who says a similar trend in history suggests that this bull market is far from over. "We actually think the Dow will surpass 20,000 and go much, much higher than that," said Stephen Suttmeier, his firm's chief equity technical strategist. "We do believe that we are in a secular bull trend [that was] signaled on the April 2013 breakout in the S&P 500."

This is a 1950s-style market and we could see another decade of gains: BofAML

Lots of stuff that can go wrong in the meantime, we'll come back to that, undoubtedly..

[admin]

For instance, one of the things that can go wrong is the effect of a rising dollar on emerging markets, we wrote about that last week:

• The dollar has surged, and this doesn't look to be over yet.
• In a way, this is good as it spreads US reflation around the world via trade, where it is more needed like in the eurozone and Japan.
• However, one can have too much of a good thing.
• While the trade connection is largely benign, the financial spillover effects are anything but.
• A further dollar bull run could unleash a truly epic emerging market crisis compared to which the Asian crisis of the mid 1990s was child's play.
• For now, we suggest to enjoy the ride and buy Japanese shares as the biggest beneficiaries.

A Rampant Dollar Could Crash The World Economy - PowerShares DB USD Bull ETF (NYSEARCA:UUP) | Seeking Alpha

That's the dark side (which is not necessarily going to happen), here is an expert:

Risks may be rising across emerging markets, but there are still pockets of opportunity, Mark Mobius, executive chairman of Templeton Emerging Markets Group, said in a blog post. Emerging markets have been hit by hefty outflows as the U.S. dollar surged in the wake of Donald Trump's surprise election win and the U.S. Federal Reserve's move to hike interest rates for only the second time in a decade.

Mark Mobius: This is how to play emerging markets in 2017