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The Capitalist Newsletter – December 7, 2016

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TRUMP SHAKES UP U.S./CHINA RELATIONS WITH PHONE CALL; CAUSE FOR CONCERN?


Donald Trump isn’t the American president yet, but every move he makes – whether intentional or accidental – already affects the U.S. So it’s a bit unsettling when Trump acts without realizing the consequences of those actions and shakes up international relations between the two largest economies in the world. Why is China so angry? What can the U.S. expect as a result of Trump’s latest action?

Read The Capitalist’s Take Here

Read More at Wall Street Journal

Read More at NPR


ALASKA AIR WINS ANTITRUST APPROVAL TO ACQUIRE VIRGIN AMERICA

Alaska Air Group has won U.S. antitrust approval for its $2.6 billion acquisition of Virgin America on condition that it scale back its code-sharing with American Airlines Group, the Justice Department said on Tuesday. The merged company would be the fifth largest U.S. carrier after American Airlines, Delta, United Airlines, and Southwest Airlines.

Read More at Fortune Here

Read More at USA Today Here

Read More at Reuters Here


SAMSUNG WINS UNANIMOUS 8-0 RULING AGAINST APPLE IN INFRINGEMENT SUIT

This morning’s U.S. Supreme Court ruling was nothing if not decisive. The nation’s highest court handed down an 8-0 ruling in favor of the South Korean smartphone maker in its on-going legal battle against its chief competitor. The case, which dates back to 2011, centers around design patents. Apple sued the phone maker over hardware and software design, including, notably, the use of a grid of icons. Apple scored wins with two lower courts, ultimately walking away with $399 million stemming from infringement found on 11 different smartphone models.

Read More at TechCrunch Here

Read More at CNBC Here

Read More at USA Today Here


Closing Bell

– Tuesday, December 6th

Financials Lead Markets Higher as Dow Sees Another Record Close

Big Insider Trades

– Western Alliance Bancorporation (WAL) Director Steven Hilton Sells $3.6m

– Buckeye Partners, L.P. (BPL) Director Martin White Buys $250k

Winners & Losers

– Neovasc, Inc. (NVCN) Jumps UP (70.42%) on After Inking $75 Million Deal with Boston Scientific.

– Barnes & Noble Education, Inc. (BNED) Falls DOWN (14.24%) as College Bookstore Sales Dwindle

Most Talked About

Sage Therapeutics, Inc. (SAGE) a Strong Buy After Announcing Expedited Development Plan for Sage-547 Drug Following Breakthrough Therapy Meeting with FDA

The TIP Sheets

– Tuesday, December 6th

– TherapeuticsMD, Inc. (TXMD) Rises UP (12.80%) After Announcing Encouraging Results From Late-Stage Clinical Trial for Experimental Compound. Expect Shares to Continue UP

Unusual Volume

– Neovasc, Inc. (NVCN) Jumps UP Another (70.42%) on 108m Shares Traded After Inking $75 Million Deal with Boston Scientific, Seeing Progress with New Medical Technology, and Receiving a Strong Analyst Buy Rating. Look For Shares to Continue UP

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Economy

Morgan Stanley Sees a V-Shaped Global Recovery

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Morgan Stanley experts are looking at complete recovery by the end of year, and are confident that the economy will be back at pre-coronavirus levels by the fourth quarter. The firm noted three reasons why the recession will short-lived: 

  1. Huge imbalances did cause an endogenous shock 
  2. Deleveraging pressures will be more moderate
  3. Policy support has been decisive, sizable and will be effective in boosting the recovery

In the US, more economists are seeing a V-shaped recovery in the making, instead of the previous thought W or U shaped models. They noted recent positive announcements from the federal government including the generation of an additional 2.5 million non-farm jobs, and the low interest rates from the Federal Reserve. 

Analysts expect most countries to post negative GDPs in the second quarter and strongly rebound in the third towards full recovery by the fourth. Even if the timetable for the coronavirus vaccine remains uncertain, they foresee that recurring outbreaks can be more controlled and managed compared to earlier this year.

Watch this video to see more of Morgan Stanley’s forecast of the V-Shaped Global Recovery.

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Business

The Rise of the Retail Investor: How Ordinary Folk Are Beating Wall Street at Their Own Game

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rise retail investor

Mom-and-pop investors are outperforming Wall Street old-timers, but what is the real reason why? Somehow, stocks bought by the so-called “dumb money” investors generate 61% returns compared to stock picks of mutual fund and hedge fund managers, who are returning a lower rate of 45%. 

A new breed of retail investors is on the rise, buoyed by the “things-are-looking-up”reports last May that foresaw a rebound in the market and an end in sight for the coronavirus-led lockdowns. In addition, the Federal Reserve has kept interest rates to zero and near-zero levels since March in order to help protect the economy from the effects of COVID-19.

According to Goldman Sachs, retail investors were able to pull off their victory because they were quicker to acquire high value stocks as the market rally started gaining ground. By May, these investors began shifting to cyclicals, small capital stocks, and economically sensitive stocks, who all warmed up to the positive outlook.  

Apart from the lockdown and unemployment induced environment that led to an increase in retail investors, the stock feeding frenzy was seen as a reaction to the Fed Chairman Jerome Powell’s movements to keep the markets healthy by the time recession hits. The lowering of the Fed interest rates to 0 – 0.25 is an indication that money will be available at least until 2022.  

Some of the stocks that benefited from the outpouring of investments from retail traders include Penn National Gaming, Royal Carribbean, Norwegian Cruise Lines, Apple, Facebook, Nvidia, Snap, GM, Ford, Tesla, MGM Resorts, and Groupon. They also include some questionable buys such as Hertz, which has previously filed for bankruptcy but has been allowed to issue stocks. 

It has been noted that the surge of retail investors were an offshoot of factors: the popularity of minimum amount trades, the Robinhood no-commission trading app, and the general lack of activity among people recently unemployed and those forced to stay home during the lockdown. 

 

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Newsletters

The Capitalist Newsletter – August 2, 2017

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WHAT TRUMP’S ADVISORS WANT THE PRESIDENT TO UNDERSTAND

Sarah Huckabee Sanders has an interestingly difficult job; specifically, she works for a knothead. This morning, NPR reported that President Trump said, “Business spirit is the highest it’s ever been, according to polls.” He continued, “If you look at the polls, (it’s) the highest it’s ever been in the history of these polls.”

But is that really the case? What do Trump’s advisors have to say about it?

Read The Capitalist’s Take Here


SPRINT CEO HINTS AT DEAL PROSPECTS; SAYS MERGER DECISION IS NEAR

Sprint Corp. said it would decide soon on whether to pursue a merger with either T-Mobile US Inc. or Charter Communications Inc., with an announcement coming “in the near future,” according to the wireless carrier’s chief executive.

“We’ve had sufficient conversations with several parties and soon we’re going to start making decisions,” Sprint CEO Marcelo Claure said on a call Tuesday after the company reported results for the three months ending June 30.

Read More at MarketWatch Here

Read More at Reuters Here

Read More at Fortune Here


HBO LATEST HACK VICTIM; UPCOMING GAME OF THRONES DATA, SHOWS, MAY BE LEAKED

HBO has joined the ranks of Hollywood entertainment companies to suffer a major cyber attack.

EW has learned that upcoming episodes of a couple series and at least one alleged script or treatment have been put online by hackers who breached the company’s systems — with more threatened to be coming soon.

“HBO recently experienced a cyber incident, which resulted in the compromise of proprietary information,” the network confirmed in a statement. “We immediately began investigating the incident and are working with law enforcement and outside cybersecurity firms. Data protection is a top priority at HBO, and we take seriously our responsibility to protect the data we hold.”

Read More at Entertainment Weekly Here

Read More at Variety Here

Read More at CNN MoneyHere


Closing Bell

– Tuesday, August 1st

Markets Soar UP as Wall Street Cheers Strong Earnings

Big Insider Trades

– Guidewire Software, Inc. (GWRE) CEO Marcus Ryu Sells $1.8m

– Discovery Communications, Inc. (DISCA) CFO Gunnar Wiedenfels Buys $460k

Winners & Losers

– CombiMatrix Corp. (CBMX) Soars UP (42.42%) After Entering into Agreement to be Acquired for $33 Million

– Kona Grill, Inc. (KONA) Tumbles DOWN (26.42%) After Major Earnings Miss

Most Talked About

CytRX Corp. (CYTR) Considered a Near Unanimous Strong Buy on Licensing Deal Agreement with NantCell

The TIP Sheets

– Tuesday, August 1st

– Shopify, Inc. (SHOP) Shoots UP (12.68%) to Record High After Crossing 500k Merchants. With Revenue Growing 75% Year over Year, Expect Shares to Continue UP

Unusual Volume

Under Armour, Inc. (UA) Slides DOWN (10.38%) on 24m Shares Traded to Record Low After Retailer Cuts 2% of its Workforce, Trims 2017 Sales Outlook. UA Also Announced a Restructuring Plan. Expect Shares to Continue DOWN

 

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