Posts by Michael Santoli
- Michael Santoli at Yahoo Finance8 hrs ago
The surprise $8.5 billion acquisition by Dollar Tree Inc. (DLTR) of Family Dollar Stores Inc. (FDO) – and the live prospect that industry leader Dollar General Inc (DG) might storm in with a competing bid – has kicked up plenty of excitement in the deep-discount retail business. Yet beyond the deal-making headlines and related trading machinations, the sober reality is that the best days for the dollar-store industry may have passed.
There are too many store locations, which will only get worse given expansion plans by the big players and new competitors. Sales growth has slowed dramatically across the industry. And the economic sweet spot for the limited-selection, low-priced neighborhood shopping game is receding.
- Michael Santoli at Yahoo Finance3 days ago
Let’s just assume for a moment that the Standard & Poor’s 500 index will reach 2014 before too long — that this unyielding bull market, which has rejected so many good excuses to falter, will claim for itself the theatrical moment of clicking over to 2014 in the year 2014.
This is hardly a courageous call, given the index is at 1,981 (down from another record closing high of 1,987.98 Thursday), less than 2% from that mark. Sure, no upside target, no matter how near, is ever promised to investors. And the market’s internal gears have been grinding on this recent stretch to fresh highs on the strength of a narrow cluster of stocks, hinting at fatigue and uneven performance in the short term.
But failing to make 2,014 would, at this point, be more surprising than getting there.
- Michael Santoli at Yahoo Finance6 days ago
Never mind all the overheated talk that Janet Yellen’s Federal Reserve is slipping “behind the curve” in containing inflation. Today’s cool consumer-price reading and the collective wisdom of the bond market are suggesting the Fed is amply ahead of that curve.
One month’s consumer price index can’t tell the whole story of inflation risk, of course. But with June’s headline CPI arriving as forecast at 0.3% - and the core measure (excluding food and energy) registering below expectations at 0.1% - Yellen’s patience in projecting interest-rate increases, and her characterization of an uptick in inflation gauges early this year as “noisy,” are ratified.
“ Fed officials characterized the recent pickup in inflation as confirming their projections after nearly two years of weaker-than-forecasted aggregate price growth,” Bank of America Merrill Lynch economist Michael Hanson notes. After today’s data release, he adds: “The Fed is likely to remain patient in the face of the current modest inflationary trends, and not make a hawkish rush to the exit.”
- Michael Santoli at Yahoo Finance6 days ago
The keenest minds in New Media are honing their sharpest technical tools to capture local advertising dollars aimed at mobile consumers. Ironic, then, that some of the best plays on local and mobile ads can be found in the oldest, and flattest, of Old Media: billboards.
The $690 million acquisition Monday by CBS Outdoor Americas Inc. (CBSO) of the largest privately held billboard business from Van Wagner Communications shows the abiding attractiveness of putting ad messages in front of bypassing eyeballs.
CBS Outdoor became independent of media megalith CBS Corp. (CBS) through an initial public offering in March, and has nicely outperformed the market since then, with a 22% gain from its $28-per-share offer price. The shares added more than 3% Monday, closing at $34.52, on the news of its Van Wagner purchase, which shows the market’s enthusiasm for consolidation in this mature but still appealing business. (The stock was down around 1% in early Tuesday trade.)
- Michael Santoli at Yahoo Finance10 days ago
Whenever the ascent of stock prices has faltered over the past couple of years, Pink’s lyrics have started playing across Wall Street: “We’re not broken, just bent.” Will this tune soon be playing again?
The second “stealth correction” of the year had been underway below the surface for a few weeks, with a broadening selection of B-list stocks tiring and investor risk appetites ebbing, and is now threatening to break into the open.
The task of playing for a more damaging break in the upward trend is complicated, though, by the fact that several such threats have proved empty in the recent past. And the sudden rush for safety amid shrill geopolitical news headlines Thursday is just the sort of hasty reflex action that has indicated decent Buy signals during this largely imperturbable bull run.
Yellen’s market call
One of the ironies of Federal Reserve Chair Janet Yellen’s singling out of small-cap, biotech and social media stocks as appearing overvalued is that these sectors have been under pressure for months.
- Michael Santoli at Yahoo Finance12 days ago
Now that we’re five years past the world-shaking financial crisis and markets have grown calm at lofty levels, investors can safely set aside macroeconomic matters and cultivate their own little financial garden, right?
Sorry, but no, says Cullen Roche, a widely followed economic blogger and financial consultant. In his new book, Pragmatic Capitalism: What Every Investor Needs To Know About Money and Finance , Roche argues that an increasingly complex and interconnected world economy requires that investors understand the basic workings of the financial system and the way the macroeconomy alters familiar investment tenets.
The exponential growth of the global population, broadening world trade and ubiquitous technology have intertwined all economic actors – individuals, companies, governments and central banks – as never before.
- Michael Santoli at Yahoo Finance17 days ago
“Love the store, bought the stock” has been one of the lousiest investment strategies of the past year.
The new shipment of consumer initial public offerings that began arriving since last summer featured an array of popular retail and restaurant brands well known to small investors, including housewares chain The Container Store Group Inc. (TCS) and deli operator Potbelly Corp. (PBPB).
Nearly all the nine such Main Street companies came to Wall Street since late June 2013 with a ready-made audience of potential stock buyers. Most opened for trading at levels significantly above the IPO price paid by the select few professional investors awarded shares by the deal underwriters.
Yet in most cases, the stocks have suffered steep declines from the first-day price, where the typical investor could have bought shares. And in eight out of the nine cases, an investor would have been better off sliding cash into a Standard & Poor’s 500 index fund than grabbing for these hot brand-name IPOs.
- Michael Santoli at Michael Santoli21 days ago
Walt Disney Co. (DIS) has been enjoying a sort of endless winter of winning for nearly eight months, a charmed season for a company with plenty of magic moments marking its past. And r arely does a company have so much to look back on with pride and such an abundance of exciting things to anticipate.
When “Frozen” hit theaters the day before Thanksgiving, it touched off a global box-office bonanza, countless little-girl singalongs and a new Disney “franchise” – one of its handful of powerful stories and character sets to be leveraged across film, Broadway, consumer goods, theme-park rides and vacation cruises over many years.