Friday, June 23, 2017

Where the Millionaire CEOs Are

You might think New York City is home to the most millionaire CEOs on the world, but it's not. That honor goes to London, with 2.9 percent of these individuals living there, according to research conducted by financial publications Compelo and Wealth Insight.

In fact, New York isn't even in second place. San Francisco squeaks ahead of it, with 2.6 percent of all millionaire CEOs, while New York is third with 2.1 percent.


Most of the top 10 was made up of American cities, including Los Angeles, Houston, Boston, Chicago and Washington, D.C. That’s not a huge surprise — the report found that 48 percent of all the world’s millionaire CEOs reside in the U.S.

Thursday, June 22, 2017

What Happened to Buybacks?

Even as the stock market keeps hitting new highs, companies have been holding back on share repurchases. S&P 500 firms repurchased $133.1 billion of their own shares in the first three months of the year, down 18 percent from the same period a year earlier, according to S&P Dow Jones Indices.

What's odd about this is that the decline came during a quarter in which the S&P 500 hit 13 new record highs; corporate executives typically boost share repurchases when the market is strong. Buybacks, for example, hit a record in 2007 before plunging in 2009 during the financial crisis.

And it’s not as if they don’t have the assets available for more buybacks. Cash levels have risen to a fresh record high of $1.5 trillion for S&P 500 companies, excluding financials, utilities, and transportation firms, which already keep high reserves, according to S&P Dow Jones Indices.

Wednesday, June 21, 2017

A Bear Market for Oil

The oil market, which looked like it was recovering at one point, may now be entering a bear market. Another sharp drop in U.S. crude prices yesterday set new lows in oil prices dating back to August.

U.S. crude prices slumped 2.2 percent on the day, to settle at $43.23 a barrel, down 21 percent from its 2014 high of $54.45. It would be 2017′s first reversal from bull to bear market, following five such swings last year.

Earlier this year there were hopes that a historic agreement by OPEC to cut output might start to right the supply-demand imbalance. But rising production from the U.S. and Libya, along with stubbornly high stockpiles, have continued to buoy prices.

Tuesday, June 20, 2017

Hedge Fund Woes Continue

There were 189 new hedge fund launches in the first quarter of 2017, according to Hedge Fund Research, up from the 153 in the fourth quarter of 2016. This marked the first quarter since the first three months of 2016 where the number of launches grew, but there are still plenty of troubling signs for hedge funds.

There were also 259 liquidations in the first quarter. The greater number of closures than launches meant that the total number of active funds dipped to 9,773 in the first quarter. In 2016, more than 1,000 funds closed down, the most of any year since the financial crisis.

And the performance has not been there. In May, the HFRI Fund Weighted Composite Index rose 0.5 percent, bringing its year-to-date gain to 3.5 percent. To compare, the S&P 500 is up 9.4 percent so far in 2017.

Monday, June 19, 2017

College Kids Getting Warier

The younger generation is taking a more cautious approach to college tuition, according to the nonprofit College Savings Foundation. When asked if they would take on debt to cover college bills, only 11 percent of the high school sophomores, juniors and seniors who participated in the survey said yes.

That’s down significantly from 20 percent just last year. Seventy-nine percent of the respondents said costs are a factor on college choice, with 39 percent saying high costs caused them to change their path and enroll in state schools, community colleges and vocational and career schools.

Fifty-four percent have already taken jobs to earn money for higher education, and 85 percent said they would work during college, with 20 percent planning on holding a full-time job. As these kids are well aware, the total amount of student debt stands at $1.4 trillion.

Friday, June 16, 2017

Happy Father's Day!

Americans will spend a record amount on Father’s Day gifts this weekend, a survey from the trade association National Retail Federation found, hitting a 15-year high of $14.3 billion. Some 77 percent of Americans celebrate Father’s Day, and the amount of money consumers spend on the holiday has increased each year consistently since at least 2007.

The average American is now spending $134.75 on gifts, up from $125.92 last year. On the other hand, dads would increasingly prefer to spend time with their kids, rather than a pair of socks or the usual tie.

The number of people opting to give a special outing such as dinner or brunch is at 48 percent, up 5 percent from 2007. Now, 27 percent of dads say they would enjoy an “experience” gift, and 25 percent of shoppers plan to buy a ticket to a concert or a sporting event for the holiday, up from 22 percent last year.

Thursday, June 15, 2017

The Fed Raises Rates

As expected, the Federal Reserve raised its benchmark Fed Funds rate yesterday, to a range of between 1 percent and 1.25 percent. According to the so-called dot plot of forecasts, released at the same time, they’re still projecting one more increase this year, making three total in 2017.

The Fed also released its updated economic projections, and they are all very slightly better than the last set. The Fed members lifted their projected growth in gross domestic product this year to 2.2 percent at the end of 2017 from March’s forecast of 2.1 percent.

The projected unemployment rate was lowered to 4.3 percent from 4.5 percent. And the Fed’s preferred inflation measure is expected to come in at 1.6 percent at the end of the year, down from 1.9 percent.