Posts by Lawrence Lewitinn

  • Soaring commercial real estate market is now bigger than it was in 2006

    Lawrence Lewitinn at Yahoo Finance 6 days ago

    Commercial real estate has been booming this year, with some surprising markets outside of New York or San Francisco making incredible strides. But there are signs the phenomenal run in income-generating properties may be decelerating.

    For the first half of 2015, volume in U.S. commercial real estate – properties like office buildings, shopping malls, and apartment complexes priced above $2.5 million – grew 36% compared to the same time last year, according to data compiled by Real Capital Analytics. At $255.1 billion, transactions were just ahead of the pace set in 2006.

    A total of 15,610 of such commercial properties changed hands with an average transaction price of $16.3 million. That's a huge increase in both quantity and price from the first half of 2014 when 13,270 properties averaged $13.9 million.

    Location, location, location 

    Some smaller markets saw much larger percentage upticks. Orlando’s $4 billion of transactions from January to June 2015 was more than three times the previous year. Places like San Antonio, St. Louis, Raleigh/Durham, and Palm Beach doubled their deals amounts from last year.

    The search for yield

     

  • 'Serious correction' ahead to delay Fed rate hike: Portfolio manager

    Lawrence Lewitinn at Yahoo Finance 7 days ago

    The market is readying for a rate increase from the Fed. But one portfolio manager maintains it’s the Fed that should be concerned about a big move from the markets, namely a major selloff.

    Despite noting modest economic growth, the Federal Reserve is widely expected to hike its fed funds rate by the end of this year. Since December 2008, the Fed has pursued what often called “zero interest rate policy” or ZIRP.

    As investors wait for the Fed to move, stocks have stayed range-bound for the past several months. The S&P 500 (^GSPC) has generally stay in a 100-point range since February, one of its tightest ranges in recent memory.

    However, Doug Ramsey, portfolio manager at The Leuthold Group, sees trouble ahead for stocks that will make the Fed hold off on any rate hikes this year.

    “It’s not how the market will respond to the first Fed rate increases, it’s how might the Fed respond to a possible stock market correction,” Ramsey said.

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  • Fast Facts: Amazon

    Lawrence Lewitinn at Yahoo Finance 7 days ago

    Amazon (AMZN) reports its second-quarter earnings after the bell Thursday.

    Data compiled by Yahoo Finance and S&P Capital IQ show Wall Street expects last quarter's revenues to come in at $22.39 billion versus last year's $19.34 billion. However it is expected to lose about $58.43 million with exceptional charges or $58.6 million on a GAAP basis. That works out to roughly $0.13 cents per share.

     

     

    North America remains Amazon's largest market, with some 62% of the company's $89 billion in revenues coming from there in 2014. Germany is Amazon's second-largest market, contributing $12 billion to the company's top line last year.

     

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    One business segment investors are paying attention to is cloud computing. In the first quarter of 2015, Amazon Web Services (AWS) took in nearly $1.6 billion in revenues. In April, CEO Jeff Bezos said AWS could bring in $5 billion in revenues.

    The company's market cap is now around $225 billion.

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  • Fast Facts: Apple

    Lawrence Lewitinn at Yahoo Finance 9 days ago

    Apple (AAPL) reports its latest quarter's results on Tuesday after the bell. The average analyst revenue estimate is  $49.3 billion versus $37.4 billion last year, according to data compiled by S&P Capital IQ.

    Earnings for the quarter are forecasted at an average of $1.81 per share, a 41% increase from the previous year.

    Asia is Apple's largest market. In the last quarter, $24.5 billion out of $58 billion total came from Asia compared to $21.3 billion from the Americas.

    But some specific markets are more profitable than others. Pre-tax operating profit margins in Japan are 49% while in the Americas and Europe, it's 34%. Greater China and the rest of Asia Pacific see pre-tax operting profit margins of 40% and 38% respeictively.

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    Startup bets wearable will solve a huge problem for girls

  • Startup bets wearable will solve a huge problem for girls

    Lawrence Lewitinn at Yahoo Finance 13 days ago

    Wearable technologies like FitBit (FIT) have been taking the consumer market by storm. Now two entrepreneurs are hoping their wearable product will get young girls to learn coding – and they’ve gotten backing from some serious players in tech manufacturing.

    Though the share of women studying medicine and law is approaching 50%, women are losing ground when it comes to the rapidly-growing computer science field. In the mid-1980s, one out of every three computer science students was a woman. Today, it’s just one out of every five, according to data from the National Science Foundation.

    A startup called Jewelbots is trying to change that ratio by getting girls interested in coding using a new twist on a popular children’s accessory – they are making programmable friendship bracelet.

    Founders Sara Chipps and Brooke Moreland came up with the idea after talking to about 150 girls between the ages of 9 and 14 and asking them what would be an appealing way to get them to learn to write code.

    “They freak out,” said Chipps.

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  • Yellen focuses on wages but this is big for employers: Wealth manager

    Lawrence Lewitinn at Yahoo Finance 14 days ago

    Fed chief Janet Yellen wants to see stronger wage growth to justify higher rates. But businesses are already spending more on workers in other ways, according to one wealth manager.

    “The Fed’s looking for data and one of the last pieces they’re looking for is a rise in wages,” said Jimmy Lee, CEO of the Wealth Consulting Group. “We’re starting to see that now. Companies at that point might get some pricing power enough to increase their prices, thus [lead] the Fed to raise rates, and that’s the correlation there.”

    Year-over-year wage growth has stayed below 2.5% since 2009, according the Bureau of Labor Statistics. Just prior to the recession, that rate was above 3% and in June 2015, it was 2.2%.

    Yet wages aren’t the only employee expense business face, noted Lee. He said healthcare costs have seen a sharp rise, particularly for smaller businesses.

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    With provisions in the “Affordable Care Act” (ACA) kicking in, Lee expects some business will hire more part-time or freelance workers rather than full-time employees.

  • Iran deal is not why oil prices are falling: Analyst

    Lawrence Lewitinn at Yahoo Finance 17 days ago

    A deal with Iran is often cited as the cause for oil’s (CLQ15.NYM) declines to 3-month lows. But one analyst maintains there is another reason why crude is trading in the low $50s.

    Oil has plummeted 13% since late June but that has little to do with talks in Geneva, according to Pavel Molchanov, energy analyst at Raymond James. He called negotiations with Iran are a “non-event” for crude prices.

    “We’ve known exactly what the Iranian deal will look like since March 30,” Molchanov said. “We’ve known for the last 90 days that once the deal is in place and once Iranian compliance is certified, the European Union is going to lift the oil embargo and that will enable Iran to increase its oil exports.”

    He estimated that the deal could increase Iran’s oil production by 500,000 barrels per day, though others estimate it will add 1 million barrels. “Not a game-changer at all for the global oil market,” said Molchanov.

    The country currently produces between 2.8 million and 3.1 million barrels per day, according to OPEC. That puts Iran’s current output at under 10% of the cartel’s total daily production.

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  • Hedge funds will beat the market this year: Portfolio manager

    Lawrence Lewitinn at Yahoo Finance 17 days ago

    Despite all their resources, the average hedge fund was soundly beaten by simple index funds in the first 5 years after the financial crisis. But that all changed this year as managed funds are outperforming broad market indices. And one portfolio manager insists the new trend will continue.

    In 2008, Warren Buffett famously bet Protégé Partners’ Ted Seides $1 million that an S&P 500 (^GSPC) index fund will outperform Seides’ pick of five hedge funds over the following 10 years. In the first 5 years, Buffett was soundly in the lead.

    Yet in the first five months of this year, the average hedge fund gained about 3%, slightly better than the returns of the S&P 500, according to data compiled by Credit Suisse.

    “If you look at the trailing 5 years…hedge funds underperformed just the broad market indices,” said Ethan Powell, chief product strategist at Highland Capital. “We think that time is over.”

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  • 20 schools account for $6.6 billion of U.S. government grad student loans

    Lawrence Lewitinn at Yahoo Finance 20 days ago

    For-profit colleges are topping the charts when it comes to raking in graduate student loan money.

    The Department of Education disbursed some $100 billion in student loans during the 2013/2014 academic year , according to a study by the Center for American Progress published in the Chronicle of Higher Education .

    More than a third of that, approximately $35 billion, went to grad students. The 20 schools drawing the highest levels of federal loan dollars pulled in $6.6 billion, representing an astound 20% of the $35 billion total.

    Perhaps more telling -- half of the top 20 schools based on the amount of federal loan dollars received were for-profit institutions.

    Institutions Receiving the Most Grad Student Loan Disbursements, 2013-14

    Institution name

    Type

    Amount

    Walden University

    For-Profit

    $756,336,024

    Nova Southeastern University

    Private-Nonprofit

    $532,479,305

    University of Phoenix (APOL)

    For-Profit

    $493,078,509

    New York University

    Private-Nonprofit

    $471,627,155

    University of Southern California

    Private-Nonprofit

    $460,167,597

    For-Profit

    $399,450,066

    Liberty University

    $351,847,277

  • China, Greece won't stop the Fed from hiking rates: Fidelity

    Lawrence Lewitinn at Yahoo Finance 22 days ago

    Instability in Greece and the huge downturn in Chinese stocks have traders wondering if the Fed will raise rates by year’s end as expected. However, one strategist says a hike still remains very likely in 2015.

    The markets are priced for a 200 basis point increase – or a move from 0% to 2% – in the fed funds rate, according to Jurrien Timmer, global macro director at Fidelity Investments. The Federal Reserve has kept that rate at around 0% since the end of 2008.

    “Whether they start in September or December for me is a moot point,” he said. “They want to declare victory and get off of 0% because we really don’t belong at 0% anymore. The crisis was 6 years ago.”

    Timmer doesn’t see events in Greece changing the Fed’s likely course. Unlike 2011, when Greece’s payments were due to financial institutions, a large portion of Greece’s debt is now in the hands of Eurozone countries, the European Central Bank, and the International Monetary Fund. That, in combination with the ECB’s quantitative easing policy, will keep Greece’s problems at bay, according to Timmer.

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