The Exchange

  • Strong dollar, sluggish growth weighs against Fed raising interest rates

    Yahoo Finance at The Exchange 2 yrs ago

    Peter Morici is an economist and professor of business at the University of Maryland. Formerly, he served as director of the Office of Economics at the U.S. International Trade Commision.

    Federal Reserve policymakers are meeting to consider whether to open the door to raising interest rates as early as June. Falling unemployment favors higher rates but inflation remains well below the Fed target of 2 percent.

    More importantly, other factors could persuade the Fed to be more patient about raising rates than Wall Street or Main Street expect.

    1. Growth Is Flagging

    After finishing 2014 strongly, consumers have been cutting back.

    Even with a rebound in gas prices, retail sales were down in February. More troubling, auto sales, which have led the economic recovery, fell each of the last three months.

    Consequently, first quarter GDP growth will be less than 2 percent, and the stronger jobs growth of recent months will prove hard to sustain.

    Forecasters do expect consumers to pick up the pace this spring, but wages have not been rising much, and Americans have grown more cautious about building up credit card debt.

    2. Slow Growth Abroad and a Strong dollar

  • MicroStrategy CEO Michael Saylor and his all expenses paid world

    Yahoo Finance at The Exchange 2 yrs ago

    This post originally appeared on The Southern Investigative Reporting Foundation (SIRF) website and was written by Keith Larsen. SIRF provides in-depth financial investigative reporting for the common good.

    My yacht Harle cruising off the coast of Grenada yesterday. Reminds us why we like boats.

  • Amazon investors should look beyond the phone

    Aaron Pressman at The Exchange 2 yrs ago

    With (AMZN) on the cusp of entering the smartphone market, investors shouldn’t get too caught up in the razzle dazzle of the new handset.

    Sure, it’s rumored to include a cool new 3-D display, along with cutting-edge specifications. But it’s also likely to be sold at a price that is merely breakeven, doing little or nothing to directly improve Amazon’s bottom line. And most of Amazon's prior hardware offerings have taken little or no market share away from leaders such as Apple (AAPL) and Samsung (005930.KS).

    The real story for investors is more likely to be what else is announced at Amazon's event in Seattle on Wednesday. Will the phone be accompanied by a new kind of cheaper monthly data plan, an innovative mobile payments system or a wider expansion of the company’s “Mayday” personal assistance service? Appealing new offerings could attract a lot more customers – and profit – than the phone itself.


  • HP CEO Whitman wins over a major skeptic

    Aaron Pressman at The Exchange 2 yrs ago

    Hewlett-Packard (HPQ) CEO Meg Whitman has dazzled investors with her cost cutting and right sizing efforts, but this week she offered something even more tantalizing: a potentially game-changing new technology.

    HP unveiled an entirely reimagined computer architecture, which it calls “the Machine,” designed to help big customers like corporations and universities better handle the massive data sets now becoming commonplace. The device uses a completely new memory technology dubbed “memristors” and faster internal communications pathways using beams of light. But the machine, cool as it sounds, is still just a research product, with HP admitting it will deliver all of the various components as products on a timeline that stretches out until 2020.

    “Our bear case was wrong,” Shope headlined his June 12 report, lifting a “sell” rating he’d slapped on the stock over a year ago. Since the April, 2013, rating, shares of HP gained 51%, more than double the return on the S&P 500, Shope noted.

  • Amazon adds lower movie prices to battle over books

    Aaron Pressman at The Exchange 2 yrs ago

    Amazon (AMZN) sells a significant portion of all books sold in the United States but a much smaller portion of all movies. So what to make of the news that Amazon is using similar tactics as it negotiates with a major book publisher and a leading Hollywood studio?

    The answer, of course, is that the popular narrative of a monopolistic bully throwing its weight around isn’t quite right. Rather, it’s just another turn of the screw in the perpetual struggle to divide up the loot between retailers and suppliers.

    Amazon attracted intense (and even some pretty nutty) criticism starting last month after it began under-stocking current titles and stopped taking pre-orders on future titles from publisher Hachette. The two are locked in negotiations over the terms of future sales, with neither side providing any details.

    Crying monopoly

    Looks like more of the same when it comes to online sales.

  • The new nifty fifty stocks are holding up the broader market

    Yahoo Finance at The Exchange 2 yrs ago

    Charlie Bilello, CMT is the director of research at Pension Partners, LLC. He's responsible for strategy development, investment research and communicating the firm's investment themes and porfolio positioning to clients. Follow Charlie's smart Twitter stream here > @MktOutperform.

    “Dow, S&P 500 close at new record highs” – Every Major Financial Publication, June 2, 2014

    You wouldn’t know it after reading any major financial publication yesterday, but the average U.S. stock is down over -1% thus far in 2014. But how can that be if we’re being told almost daily that the Dow and S&P 500 are hitting new all-time highs? The answer is likely to surprise you, especially if you have been focused solely on the large cap space.

  • Apple is about to kill a whole bunch of apps — or not

    Aaron Pressman at The Exchange 2 yrs ago

    As Apple (AAPL) rolled out a bevy of cool new features for iOS this week, the pundits were sure of one thing: A whole bunch of apps were about to be “killed.”

    As the sentiment went, letting iPhone users store files on the Internet for easy access with the new iCloud Drive app was certainly a "Dropbox killer." A new doodling tool in the mail app was spelling doom for Evernote’s similar Skitch app, and Apple's expiring photos and videos in messages obviously were going to demolish Snapchat, or maybe Facebook's (FB) Whatsapp. And of course the HomeKit software standards may mean Google (GOOGL) wasted $3.2 billion buying Nest. You can read all the details laid out by Gizmodo in  "Everything Apple tried to kill at WWDC today." 

    Alive and kicking

  • What would the bursting of the bond bubble look like?

    Yahoo Finance at The Exchange 2 yrs ago

    Ben Carlson (CFA) is an institutional portfolio manager and part of a team that manages a portfolio for an endowment fund of a charitable organization. He is the writer of the excellent A Wealth of Common Sense blog where the post below first appeared. Follow Ben on Twitter here > @awealthofcs

    Investing in bonds is a hedge against bad investment decisions. They may not earn a high return going forward and may even lose some in the next bear market, but I believe the psychology of holding bonds will stop some people from doing the wrong thing at the wrong time. A portfolio with a fixed bond allocation helps reduce behavioral risk and leads to a higher probability for long-term success.

    – Rick Ferri

    A lot has been made about the potential for a bond bubble with interest rates near historic lows and not much room to fall any further. Even though rates are down this year, investors have been worried for some time about what happens when rates do eventually rise.

    So does this mean you should dump all of your bonds for fear of a rise in rates or inflation?

  • Who's afraid of

    Yahoo Finance at The Exchange 2 yrs ago

    Marty Shepard is the co-founder and senior editor of The Permanent Press in Sag Harbor, New York. The Permanent Press is committed "to publishing works of social and literary merit, and has gained a reputation as one of the finest independent presses in America." The following piece originally appeared on Marty's blog, The Cockeyed Pessimist.

    As far as this literary publisher is concerned, this article is poppycock. It starts with the assumption that Amazon is bad and gathers meagre material to prove its point. The last time I checked, Literary Market Place listed over 2,000 book publishers in the United States. Yet Streitfeld and Eddy quote only one independent publisher in paragraph three (Dennis Loy Johnson of Melville House) saying, about Amazon, “How is this not extortion? You know, the thing that is illegal when the Mafia does it?“

  • Gold weakness suggests even lower prices ahead

    Yahoo Finance at The Exchange 2 yrs ago

    J.C. Parets is the founder and president of New York based hedge fund Eagle Bay Capital, LLC. You can find his smart commentary at

    As we start this holiday shortened week, Gold is quietly breaking down from a fairly clean symmetrical triangle. These types of patterns tend to resolve themselves in the direction of the underlying trend. In this particular time frame, we’re leaning on the downtrend from the March highs. A confirmed break should lead to another 100 points to the downside.

    Here is the chart that I’m focused on. We’re looking at a daily line chart going back to the lows in December. After a nice rally to start the year, Gold prices rolled over hard and it appears that this downtrend is continuing to begin the week:

    From where we sit today, I would expect Gold and EURUSD to continue lower. We have our levels and we will maintain the thesis until the data changes.