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The Best of What They Said and I Read Week Ending 3/3/19

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

The Kiplinger Letter – March 1, 2019

  • “The U.S. is about to become a net energy exporter, a feat not seen since 1953.   Exports of oil, gas and oil-based products have nearly doubled since 2012.  Firms have been allowed to export U.S. oil only since late 2015, when a 40-year ban on letting crude exit the country was lifted.The U.S. became a net natural gas exporter in 2017.  If the country stays on pace, oil and petroleum products will follow by 2021.”

Barron’s – March 1, 2019 – The Dow Just Had Its Best Two Months in Years – and There Could Be More to Come – Ben Levisohn

  • “…the Federal Reserve might have engineered a soft landing for the U.S. economy. Can stocks jump even higher?  The market has certainly had a big bounce this year. The Dow Jones Industrial Average gained 11.1% during the first two months of 2019, its best two months since August 2009, while the S&P 500 rose 11.1%, its best two months since October 2010.Yet despite the rally, the S&P 500 finished just 1.6% above where it ended on Nov. 30, after gaining 0.4% last week. “Everyone forgets how terrible December was,” says Hugo Rogers, chief investment strategist at Deltec International Group, referring to that month’s 9.2% tumble on recession fears.”

U.S. Global Investors Investor Alert – March 1, 2019 – Frank Holmes

  • “…U.S. companies are finally listening to stock and bond investors that have been pressing corporations to cut their debt loads, writes Bloomberg News' Molly Smith. “General Electric is selling its biopharmaceutical business to Danaher for more than $21 billion, and using the money to pay down borrowings. Kraft Heinz said last week it was slashing its dividend and using the proceeds of asset sales to reduce its liabilities...Gap is spinning off Old Navy into a separate public company, the mall store operator announced this week. Gap’s shares soared 20 percent late Thursday after the struggling retailer said it was making the transaction, which should be complete in 2020.” 
  • “The U.S. economy grew faster than expected in the fourth quarter as business investment picked up, suggesting growth could be stronger for longer. Gross domestic product (GDP) expanded at an annualized pace of 2.6 percent for the period October to December…more than the 2.2 percent median estimate in a Bloomberg survey.  Consumer confidence surged in February after the government reopened. The rise in sentiment should assuage fears that consumer spending is poised for a sharp slowdown in the first quarter. The current conditions index also moved higher, signaling that the strong labor market and increasing pace of wage gains has consumers feeling optimistic.”
  • “…The U.S. imported the least amount of crude oil on a weekly basis in 23 years while Saudi Arabia and Venezuela cut their shipments to unusually low levels, writes Bloomberg’s Jessica Summers. Weekly imports fell to 5.92 million barrels per day, which is the lowest since 1996, while domestic crude production skyrocketed to 12.1 million barrels per day.”
  • “According to a Wall Street Journal article dated February 21, “Surprise Winners in U.S. – Beijing Trade Spat: Russia Soy Farmers”, Trump’s trade conflict with China has nearly wiped out U.S. soy exports to the country, the bean’s biggest market. Russia has increased its soybeans exports, which have risen more than 10-fold in four years to nearly 1 million tons.”
  • “…In a New York Times op-ed, Venezuelan economist Carlos Hernandez writes that “bitcoin has saved my family.” Hernandez claims that, with annual inflation at 1.7 million percent and geopolitics in chaos, he owns no local currency and instead relies exclusively on bitcoin to buy milk and other essentials. The entire process of converting bitcoin into bolivars, he says, takes about 10 minutes. What’s more, cryptocurrencies helped his brother escape the beleaguered South American country last year. When his brother sends money home from abroad, he does so in bitcoin, which is “cheaper, faster and safer” than traditional money transfer methods…Warren Buffett still isn’t impressed by bitcoin, reports MarketWatch. In an interview with CNBC on Monday, and on the heels of his annual letter to clients, Buffett commented that bitcoin has no unique value at all, even referring to the digital currency as a “delusion.”

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