Posts by Michael Santoli
- Michael Santoli at Yahoo Finance3 days ago
Nine months ago it seemed a prediction that was bold and unimaginative all at once: That the Standard & Poor’s 500 index would claim for itself the theatrical moment of reaching the 2,014 level in the year 2014. Now this unyielding bull market, after a few nervous stutter steps, has made it happen.
The S&P 500 touched this level Friday morning. It got there on the day the instant megacap Alibaba Group (BABA) debuted in a culmination of the easy-money, China-emergence and e-commerce market themes, and in the week when investors were, yet again, reassured for the moment that the Federal Reserve remains inclined to move slow in sunsetting its easy-money policies.
- Michael Santoli at Yahoo Finance5 days ago
On a day when Wall Street is in suspense over details of the Federal Reserve’s exit strategy, China’s central bank showed it isn’t going anywhere when it comes to stoking its slowing economy.
The People’s Bank of China overnight injected a fresh 500 million yuan, the equivalent of $81 billion, into its top five banks, in a bid to boost market liquidity and forestall further sluggishness in the country’s economic performance.
The global financial markets reflexively popped a bit higher on the move, with stocks in China rising by half a percent and commodity prices bouncing. The Shanghai stock market is up more than 15% since its March low despite generally soft Chinese economic numbers, so perhaps investors were already expecting further stimulative action.
Economists at Barclays point out that while this cash infusion is the equivalent of a half-percent cut in the short-term funding rate for banks, it appears a short-term measure to lubricate stressed lending markets rather than an all-out economic stimulus effort.
- Michael Santoli at Yahoo Finance6 days ago
No company is too old, too big or too revered to be spared the attack of activist investors these days.
Wall Street’s leading breakup artist is fed up with what he says is bad chemistry at DuPont (DD) and wants the 200-year-old company and 80-year member of the Dow Jones Industrial Average (^DJI) busted apart.
- Michael Santoli at Yahoo Finance7 days ago
It happens in every bull market. As the stock market stretches skyward, the do-it-yourself industry gets aggressive, creating new products to make investing seem quick, easy and cheap.
In the ‘90s it was low-commission online brokers that spread the get-rich-at-home dream. And in the early 2000s bull run, the exchange-traded fund complex exploded, packaging all sections of the market into cheap little baskets.
Lately, a fast-growing class of so-called robo-advisors such as Betterment.com, Wealthfront and Personal Capital has made a splash with low-fee asset-allocation through software.
To Nick Stuller, CEO of AdviceIQ and a founding sponsor of National Financial Advisor week now beginning in New York, this means individuals need to re-learn the value of having a human financial advisor to “look you in the eye” and help build a comprehensive family financial plan.
Like the debate over active-versus-passive investing, the argument about whether professional financial advice is worth paying for won’t ever be settled.
- Michael Santoli at Yahoo Finance11 days ago
Some people will buy a house if that’s the only way to get at an oil well underneath it. The same logic can drive pay-dirt-hunting investors to buy into a company they’re indifferent to, purely as a way to play another business it owns.
As Wall Street excitedly awaits the near-$24 billion Alibaba Group initial public offering next week, traders have been bidding up shares in two big tech companies with hefty stakes in the Chinese e-commerce megalith: Yahoo Finance parent Yahoo Inc. (YHOO), which owns 22%, and Japan’s SoftBank (SFTBY) conglomerate, which holds 34%.
While Alibaba represents a larger proportion of Yahoo’s market value due to SoftBank’s greater heft, the two stocks are up a similar mid-teens percentage since Aug. 12, when Alibaba streamlined its corporate structure to facilitate the IPO and set a schedule for the marketing and pricing of its shares.
- Michael Santoli at Yahoo Finance13 days ago
Back in 2012, an investor posted a bearish write-up on the shares of organic-food maker Annie’s Inc. (BNNY) in the members-only Wall Street online idea-sharing forum Value Investors Club.
After setting out the case that Annie’s was overvalued, the poster then detailed a scenario that represented a key potential risk of betting against the trendy stock: “Some massive food producer with flagging revenue growth desperately overpays for BNNY in a few years after BNNY has managed to more or less execute on their growth plans.”
That’s exactly how it went down – or, rather, went up – as General Mills Inc. (GIS) agreed to buy Annie’s late Monday for $820 million in cash, or $46 per share.
Slamming the shorts
- Michael Santoli at Yahoo Finance14 days ago
Baby Boomers and television came of age together and sustained one another through their prosperous prime. Will Boomers and TV as we know it die together, too?
New analysis of television viewing trends shows the TV audience is aging much faster than previously believed, as Americans under the age of 50 turn away from network programming, even when DVR-captured delayed viewing is included.
Media analyst Michael Nathanson of MoffettNathanson Research says the median age of the TV audience in the 2013-14 season rose 6%, or 2.5 years, to 44.4 years, from four years earlier. In the past five years, he says, the age of the typical TV viewer has advanced 5% faster than that of the average American. (The 2012 U.S. Census report has the median age of the American population at 37.2).
This “ratings-weighted average age” has climbed by 7% in the past few years among broadcast networks, to 53.9 years, and 8% for cable networks, to 40 years.
Tablets and time-shifting
- Michael Santoli at Yahoo Finance19 days ago
Armed with record profits and loaded with cheap debt, big companies are spending heavily to shrink their stock-market profile rather than grow their business.
The stock-buyback craze has been raging for years, of course, as CEOs have looked to bolster stock prices, lift per-share earnings, goose their own compensation and appease activist investors by purchasing stock hand-over-fist from the public.
Yet the buyback boom is also rooted in deeply ingrained, arguably unrealistic, corporate standards for how much payback a new business expansion must promise in order to get approval.
And with investors now rewarding companies less generously for yet more buybacks and with profit margins already high, corporate America seems to be approaching a critical decision point about whether to push for more internal growth or continue using its billions to swap cash for equity.
Strategists at Barclays Capital point out that, with total buyback volume by companies in the Standard & Poor’s 500 near the 2007 quarterly peak, “capital expenditures are growing slowly” and the proportion of earnings retained by companies to propel future growth has slid sharply.
- Michael Santoli at Yahoo Finance1 mth ago
By the end of this decade, new Teslas will be more popular than Volvos, and Tesla Motors Inc. (TSLA) will be more profitable than Chrysler.
Drivers of the sleek plug-in electric cars will be able to go cross-country at no cost, thanks to a network of Supercharger stations — and battery costs might even improve enough for Teslas to be less expensive to own, in total, than a gasoline car.
This, at least, is the ambitious vision of our automotive future that's captivating Wall Street and has propelled Tesla’s stock-market value above $30 billion, before the company has sold even 30,000 cars in a year. Tesla now has more than half the market value of General Motors Corp. (GM), which this year will sell more than 9 million vehicles.
A polarizing company
The combination of an impressive product line, dramatic hype about a post-petroleum economy, the lionization of capitalist hero and founder Elon Musk and the lack of real profits to date has made Tesla a matter of fierce disagreement among investors and consumers alike.