Friday, September 23, 2016

The Most Hated Stocks in America

The stock of the venerable retailer Sears is already down 43 percent this year, but people are still betting on it to fall further, leading the web site MarketWatch to call Sears the most hated stock in the U.S. The level of short interest in Sears is at 65.6 percent, meaning nearly two thirds of people interested in the stock expect it to drop.

The other leaders on the list of "most hated":
  • Weight Watchers, 62.4 percent short interest
  • Insys Therapeutics, 57.1 percent
  • Adeptus Health, 54.3 percent
  • Clayton Williams Energy, 53.1 percent
  • RPC Inc., 47.0 percent

Thursday, September 22, 2016

The Interest Rate Outlook

One of the key releases after each Federal Reserve meeting is the so-called dot plot, where committee members use dots to suggest where they see rates heading in the months and years to come. Following today's meeting, the median of the dots at the end of the year is now 0.6 percent, suggesting just one rate increase this year, which would come after the December meeting.

But the spread of opinions is unusually broad. Three officials see no increases this year, while four members expect more than one increase to be appropriate. Looking ahead, policy-makers see two increases in 2017, and three each in 2018 and 2019. The longer-term rate beyond 2019 is forecast to be at 2.9 percent, down from 3 percent in June.

The summary of economic projections also suggested slightly lower expectations for inflation this year, 1.3 percent now versus 1.4 percent in June. The outlook for economic growth also dropped some, sitting at 1.8 percent now versus 2 percent in June.

Wednesday, September 21, 2016

Buybacks Losing Favor

Once the hottest trend among major American companies, stock repurchases have waned considerably in recent months. Year-over-year, S&P 500 company stock buybacks for the second quarter fell 6.8 percent to $125.1 billion. That's their lowest level since the third quarter of 2013.

Mega-buybacks, where a given company spends $1 billion or more in a quarter, have also tapered and are near a three-year low. The decline follows a record amount spent by companies on stock  repurchases for a 12-month stretch that ended in the first quarter of 2016.

The number of S&P 500 companies actively engaged in share buybacks has dropped to 350, marking the lowest number of companies since the fourth quarter of 2010. That's down from 380 in last year’s second quarter.

Tuesday, September 20, 2016

Housing Is Unexpectedly Strong

Some surprising news from the housing industry: U.S. home builder sentiment unexpectedly rose in September to its strongest level in 11 months, prompted by renewed interest in home purchases following a summer lull. The National Association of Home Builders and Wells Fargo said their index on builder confidence regarding newly built, single-family homes climbed to 65 points in September.

This matched the level set in October 2015, which was the highest this figure has been since the height of the housing boom. The index that tracks buyer traffic rose four points to 48: It hasn’t topped the neutral 50 mark since mid-2005.

All that housing growth has lifted U.S. household wealth as well. It increased 1.2 percent to $89.1 trillion in the second quarter,  while housing wealth rose 1.9 percent to $25.6 trillion.

Monday, September 19, 2016

Americans Keep On Working

When it comes to retirement, a whopping 75 percent of Americans say they plan to work “as long as possible” in retirement, according to a new report from Bankrate.com. And for many of them, it’s not because they love their jobs:
  • 38 percent say they are planning to work because they want to
  • 35 percent say they plan to work because they need the money
  • 27 percent said they plan to work because they need the money and want to work
According to the Bankrate.com survey, 47 percent of retirees are either very worried or somewhat worried about outliving their retirement savings. That’s up from 37 percent the last time that question was asked, in 2009. Only 25 percent said they had no plans at all to work during retirement.

Friday, September 16, 2016

Sales Still Sluggish

Will the economy rebound in the third quarter? Retail sales figures released yesterday show that we haven't gotten out of gear yet. U.S. retail sales fell more than expected in August amid weak purchases of automobiles and a range of other goods, pointing to cooling domestic demand.

The Commerce Department said retail sales declined 0.3 percent after edging up 0.1 percent in July. Sales were up 1.9 percent from a year ago. So-called core retail sales correspond most closely with the consumer spending component of gross domestic product, and there the numbers were a little better: Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1 percent last month after a similar drop in July.

The trend was widespread, with sales, rising in only four categories, including clothing stores and restaurants and bars. Receipts at auto dealerships fell 0.9 percent, while online sales, whose share has grown in recent years, dropped 0.3 percent.

Thursday, September 15, 2016

Benefits in Danger?

Are your benefits at work being cut back? According to a new Gallup poll, more U.S. workers say they worry about having their benefits reduced (30 percent) than worry about having their wages cut (20 percent), being laid off (19 percent), or having their hours cut back (17 percent).

Benefits cuts consistently have been the top worry since Gallup first asked the question in 1997, but it's easing from recent years. U.S. workers' concern about having their benefits cut spiked to 46 percent in 2009 before falling to 34 percent in 2014. The 30 percent who worry about benefits reductions today is essentially back to where it was before the September 2008 financial crisis.

Workers' concerns about having their wages cut or their hours reduced remain at least slightly higher than they were at any point before the recession. While the 19 percent worried about being laid off is also higher than just before the financial crisis (15 percent), it is similar to where that mark was in the late 1990s and early 2000s.