Posts by Aaron Task

  • "It's a boom, not a bubble" -- except in biotech, Lindzon says

    Aaron Task at Yahoo Finance 8 hrs ago

    Stocks were on track for a fourth-straight down day Thursday amid renewed concerns about the Middle East. U.S. crude futures jumped nearly 3% and back above $50 as long-simmering tensions between Saudi Arabia and Iran morphed into a proxy war in Yemen. In recent trading, the S&P 500 (^GSPC) was down 0.7% and in negative territory for the year; traders are now watching the March lows of 2040 as the next key technical level while more bearish forecasters are predicting a retest of the January lows below 2000. The market's failure to break out to a new high last week after the FOMC statement "and the developing weakness that led to Wednesday's drop was a negative signpost," writes noted short-seller Doug Kass of Seabreeze Partners. "Yesterday, the Nasdaq Composite (^IXIC) had the largest down day since April 10, 2014. The market leader, biotech, dropped by 4.4% -- the largest down day of the year -- while transports have dropped by nearly 5% this week. In the past these sort of drops have been readily absorbed; this time I am not so sure." Rising bullish sentiment -- the latest Investors Intelligence poll showed 56% bulls and just 14% bears -- was "something of a short-selling trigger for me" and a technical argument for the bearish case, Kass added. Howard Lindzon, chairman of StockTwits, isn't nearly as bearish as Kass but is "a little nervous" and "has reduced position sized after a couple of days like this." Overall, Lindzon believes "there is no bubble" in the broader market -- nor private markets for that matter -- but says the recent action in biotech is "very scary" and a sign of "real silliness" if not a bubble: At the end of last week, the iShares Nasdaq Biotech ETF (IBB), one proxy for the industry, was up nearly 21% year to date vs. a mere 2% rise for the S&P 500. But the index has fallen more than 11% from Monday's intraday high and suffered some major technical damage.

  • NFL going over-the-top: A "milestone event" for streaming TV, Piecyk says

    Aaron Task at Yahoo Finance 2 days ago

    The NFL is going over the top...and I'm not talking about a running back leaping toward the goal line. On Monday, the NFL announced the Oct. 25 regular season game between Jacksonville and Buffalo will be put up for bid on national digital platforms. The game is being played in London, meaning the broadcast will begin at 9:30 a.m. ET and 6:30 PT. That's not exactly prime time for U.S. fans, or broadcast television, but it is 'prime time' in China, where the NFL isstruggling to gain a toehold.

    "It's a one game test. We will evaluate fan feedback," NFL spokesman Brian McCarthy said via an email exchange. "It's too early to tell about the future [of streaming games]. Will test this season with the one game and evaluate after."

    Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.

  • Saudi Arabia doesn't get it: There is no American 'energy policy'

    Aaron Task at Yahoo Finance 3 days ago

    Crude prices tumbled more than 2% early Monday after Saudi Arabia's oil minister on Sunday said his nation won't unilaterally cut production without cooperation from both other OPEC members and non-OPEC nations alike. Oil prices have bounced from the initial decline but the comments reinforced Saudi Arabia's intent to hold the line on production. "We tried, we held meetings [to discuss production cuts] and we did not succeed because countries outside OPEC were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility," said Saudi Arabian Oil Minister Ali al-Naimi.

    Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.

  • Peter Schiff won't back down: 'The dollar is going to crash, buy gold'

    Aaron Task at Yahoo Finance 6 days ago

    The dollar index has risen for nine-straight months and recently hit a 12-year high vs. the euro. The greenback's robust rise caught a lot of traders by surprise; for years the conventional wisdom was the dollar was heading down the tubes because of America's runaway debt and the Fed's easy money policies. Now, sentiment has now swung 180 degrees to where "everyone" it seems, is bullish on the almighty dollar.

    But some things never change. Peter Schiff, CEO of EuroPacific Capital, remains steadfast in his uber-bearish view.

    "I'm surprised it's rallied this much but that doesn't mean it's permanent," he tells me in the accompanying video. "When traders wake up to reality and realize how wrong these [bullish dollar] bets are, they're going to unwind these trades and the dollar is going to unwind quickly."

    The 'reality' according to Schiff, is the U.S. economy has not "recovered" and the Federal Reserve is not going to raise rates anytime soon.

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  • Oil's "transitory" fall starting to have long-lasting impact

    Aaron Task at Yahoo Finance 7 days ago

    Oil staged a remarkable intraday rally Wednesday, rising 10% from its low after the Fed suggested rate hikes are further off than previously expected, even as it removed the "patient" language from its statement. But oil's prevailing trend resumed Thursday: In recent trading, WTI crude futures were down over 3% and Brent crude was off 2.8% after Kuwait's oil minister said OPEC had "no choice" but to keep production intact or risk losing market share.

    Related: OPEC Secretary General masters the obvious, denies cartel targeting U.S. frackers The Fed believes oil's decline is "transitory" but the steep drop since mid-summer is having a long and far-reaching impact. The macroeconomic and geopolitical affects are fairly obvious and have been widely discussed. Less well known and a step beneath the surface, the fallout includes:

    That's just a sample and just from today's reporting.

  • 'House of Cards' falls on Walmart

    Aaron Task at Yahoo Finance 8 days ago

    Warning: The following includes potential spoilers for Season 3 of 'House of Cards'.

    Bashing Walmart has now officially gone mainstream. In the current season of House of Cards on Netflix, a presidential candidate takes aim at the retail giant. Here's a sample: "The starting salary for an employee at Walmart is below the poverty line....The American government subsidizes Walmart to the tune of $7.8 billion a year by issuing food stamps to over one in 10 of its workers. But here's the scary part. Fifteen percent of all food stamps are actually used at Walmart. Meaning Walmart gets to double dip into the federal government's coffers. "Walmart's top executives have reaped almost $300 million in tax-deductible performance pay over the last six years." A Walmart spokesman said he had "nothing to add," saying the company is "not interested in debating fiction."

    Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.

  • 3 reasons the Fed won't hike in June, even if it loses 'patience' this week

    Aaron Task at Yahoo Finance 10 days ago

    It's highly likely the Fed will remove the "patience" language from the FOMC statement at the end of its two-day policy meeting on Wednesday. What happens after that is far-less certain. Fed watchers agree that removing the "patience" language from the statement opens the door for a rate hike in June; in 2014, Fed Chair Janet Yellen indicated the verbiage meant no rate hikes for at least two meetings so removing it clears that self-imposed hurdle. But Yellen has more recently clarified that removing "patience" does not guarantee anything. The Fed will be data-dependent and assess the situation on a “meeting by meeting” basis, Yellen said during Q&A after her Congressional testimony. Removing the 'patience' language is "a concession Yellen can make to hawkish members of the Fed even [if] she has no intention of raising rates in June and then can wait for another three months of data," says Pedro da Costa, economics reporter for The Wall Street Journal. But "if the economy remains on solid-enough footing, if growth comes in at or around 2.5% to 3%, and if the unemployment rate continues to fall and the payroll growth continues around 300,000 [per month] I do think they'll get ready to raise rates by summer or perhaps later. Depends on whether that does continue."

  • Actually, Snapchat's $15B valuation makes total sense: Blodget

    Aaron Task at Yahoo Finance 13 days ago

    Alibaba is reportedly investing $200 million in Snapchat, putting a $15 billion valuation on messaging ap start-up. Snapchat is less-than four years old and known to many as the place for "sexting" and other illicit behavior because messages disappear after being viewed. In that context, $15 billion seems totally outrageous.   But many of the people crying 'bubble' over Snapchat's valuation are the same people who said the company was 'crazy' to turn down Facebook's $3 billion offer in 2013. "As with Twitter, Facebook and all the other companies when there's a big number on the valuation...they were dead wrong 100% of the time," Henry Blodget declares in the accompanying video. The skeptics and the naysayers aren't wrong 100% of the time but Henry's point is there is a method behind the seeming madness over Snapchat. First and foremost, the kids love it and advertisers have always been desperate to reach them, and never more so than today when there's almost as many different ways for people to consume digital information as there are providers of it. Snapchat has over 100 million users and 71% are under 25 years old, according to DRM, a marketing research website. "It's growing incredibly rapidly and those kids in 10 to 20 years are going to be the mass market," Blodget says. THere's a lot of promise. You have to take it on faith they'll figure out a model. But in the past, for all of these other social networks and Internet companies, attention has been monetize-able and Snapchat has that attention." Furthermore, Snapchat has evolved beyond its original 'disappearing messages' origins. Among other features, Snapchat in January launched 'Discovery' where users can watch videos created by premium content providers, including National Geographic, Vice, CNN and Yahoo! Inc., the corporate parent of Yahoo Finance.  (Disclosure: Yahoo Inc. is an investor in Alibaba.) "Snapchat Discover is a new way to explore Stories from different editorial teams," according to Snapchat's corporate blog. "It’s the result of collaboration with world-class leaders in media to build a storytelling format that puts the narrative first. This is not social media." According to re/Code, ads on Discover are fetched around $100 per thousand view "a rate that’s something like twice what a premium video publisher can get, and many times what a mere Web publisher can command." That may explain why Alibaba agreed to invest in Snapchat at a $15 billion valuation, one of several investments the Chinese Internet giant has made in U.S. startups, including Lyft, Kabam and TangoMe. Tango is a messaging ap and Alibaba's desire to compete in the fast-growing messaging ap market is also key to its Snapchat investment. "Critical to understanding Alibaba’s interest in messaging is that rival Tencent’s WeChat app utterly dominates China to the point that it can be considered the de facto mobile intranet for the country," writes Tech Crunch's Jon Russell, who calls losing China's messaging-app race Alibaba's "single-greatest failure as a business."

  • "Great areas" to invest in retail but avoid the mall: Howard Davidowitz

    Aaron Task at Yahoo Finance 13 days ago

    There's no way to sugarcoat Thursday's retail sales data: The numbers were weak and shockingly so to some.

    Howard Davidowitz, CEO of Davidowitz and Associates has been bearish on the consumer for some time, citing lackluster wage growth and low-quality of jobs being created, leading to a shrinking middle class.

    Related: Retail sales 'go down the tubes': Howard Davidowitz explains why

    Somewhat surprisingly, though, Davidowitz isn't wildly bearish on retail stocks and says there are "great areas" to invest, even outside the high-end merchants that have flourished. The wealthiest 10% of Americans now account for 44% of retail spending, up from 30% prior to the Great Recession, according to Davidowitz. (On Thursday, the Fed reported U.S. household net worth hit a record $82.9 trillion at the end of 2014, driven largely by gains in financial assets, which benefit the wealthy far more than the middle class.)

    Beyond TJX, he likes Ross Stores and Burlington Resources.

  • China's economy: It's worse than you think

    Aaron Task at Yahoo Finance 14 days ago

    Knowing China's economy is slowing is like knowing you can save 15% or more on car insurance with GEICO. Everybody knows that.

    But fewer people are focused on the magnitude of China's slowdown, much less considered the potential far-reaching implications for U.S. policymakers, investors and consumers.

    Data released this week for the January-February timeframe have raised alarm bells among China watchers. Notably:

     

    JPMorgan and Barclays each cut GDP estimates for China in reaction to the latest numbers while Goldman Sachs predicts the "exceptionally soft data" will prompt the government to "loosen policy further."

    The People's Bank of China (PBOC) has already cut its benchmark interest rates twice in the past three months and cut reserve requirements for lenders in February. In response, M2 money supply rose 12.5% in February vs. a year ago, the highest in 4 months and aggregate loans were 1.35 trillion yuan, well above the consensus estimate of 1 trillion yuan.

    Scale of the Response