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The Best of What They Said and I Read Week Ending 1/28/2018

Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

Bloomberg Businessweek – January 29, 2018 – In Brief - Africa

“Nigeria’s Olympic bobsled team, the first on the continent, has scooped up endorsement deals from Apple, Under Armour, and Visa ahead of the opening of the Winter Games in Pyeongchang.”

Barron’s – January 27, 2018 – What Could Signal the End of This Rally? – by Ben Levisohn

“…The Dow Jones Industrial Average gained 544.99 points, or 2.1%, to 26,616.71 last week, while the Standard & Poor’s 500 index rose 2.2%, to 2872.87. And the Nasdaq Composite climbed 2.3%, to 7505.77. All three indexes closed at all-time highs Friday. For the S&P 500, it was the 14th record high of the year, setting a record for the number of new highs in January.  And why shouldn’t the market feel good? Earnings season has been stellar, with S&P profits growing at a 12.7% clip, with a quarter of companies reporting.”

“…the S&P 500’s rise has gone parabolic. Its 6%-plus gain this month trounces the 2% average monthly advance from September to December 2017 and the 1.2% average monthly gain from January through August 2017. Rather than being worrisome, these accelerations into a new year have historically led to even more upside. Only eight years have played out like this since 1928, and just two—in 1929 and 1946—were followed by big drops in the market.”

Barron’s – January 27, 2018 – Why a Weaker Dollar Could End This Bull Market – by Randall W. Forsyth

“…The stock market has had a pretty good year, and 2018 is not even a month old. The major averages have been setting records on an almost daily basis, with the Standard & Poor’s 500 index up 7.5% so far. And, according to the old market saw, as goes January, so goes the year.  There’s more than legend behind that saying, which Yale Hirsch, the founder of the Stock Trader’s Almanac, originated in 1972, according to this year’s edition. Based on data going back to 1950, its January barometer has been wrong only nine times in those 68 years, an 87% accuracy ratio. As for those whiffs, the advisory ascribes a number of them to military conflicts, including Vietnam in 1966 and 1968, and the anticipation of the invasion of Iraq in 2003, which held down the market that January.”

The Wall Street Journal – January 27 - 28, 2018 –  Retail Investors Jump Into Market– by Lisa Beilfuss

“…Discount brokerages TD Ameritrade…E*Trade  …and Charles Schwab…reported surges in client activity at the end of 2017 that have accelerated in January. The firms attributed much of the activity to retail, or individual, investors who are opening brokerage accounts for the first time, some of them lured by the boom in cryptocurrency and cannabis investments.

“…After retreating from the market in recent years, investors have piled into stocks in recent weeks. They put $33.2 billion into global stock mutual funds and exchange-traded funds in the week through Wednesday, the biggest inflows for any comparable stretch going back to 2002, according to Bank of America Merrill Lynch. Further demonstrating an increasing euphoria, investors have put almost $258 million combined into 10-day-old ETFs that buy companies that have invested in blockchain, the technology behind cryptocurrencies.”

“…Over the past year or so, the three main U.S. stock indexes have surged to record after record. The Dow Jones Industrial Average, for instance, in 2017 alone ran from 20000 to 26000, setting records for speed in hitting 1,000-point increments. Stock gains, however, pale in comparison to gains in cryptocurrencies such as bitcoin, which was up around 1,400% last year.”

“Crypto and cannabis…volumes have been up big,” E*Trade Chief Executive Karl Roessner said Friday on the firm’s fourth-quarter earnings call with analysts and investors. Despite the bitcoin-futures offering not being “a material offering,” Mr. Roessner said about a 10th of daily average revenue trades—a key metric for brokerages—has so far this month been blockchain- or pot-related.”


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