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The Best of What They Said and I Read week ending 7/23/2017

Short excerpts from articles I found interesting.

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

  

Barron’s – July 22, 2017 – Stocks Rise On Earnings News; Nasdaq Up 1.2% –– by Ben Levisohn

  •  ........“There comes a time when you have to put up or shut up. And with earnings season in full swing, the market has been delivering the goods. The Standard & Poor’s 500 index rose 0.5% to 2472.54 last week, while the Nasdaq Composite gained 1.2% to 6387.75. Only the Dow Jones Industrial Average, which declined 57.67 points, or 0.3%, to 21,580.07 last week, finished in the red.”
  •  “…And what earnings they’ve been. Some 97 S&P-500 companies have reported second-quarter earnings so far, and 74% have topped analyst expectations, according to Thomson Reuters I/B/E/S, above the four-quarter average of 71%.

U.S. Global Investors – July 21, 2017 - Investor Alert - by Frank Holmes

  •  “Your company’s 401k match may be getting bigger.  Company matches are on pace to become 4.7 percent of an employee’s salary this year, up from 3.7 percent last year.  The reason behind the increase? The labor force continues to stay tight. If this trend continues, and more companies start competing on benefits, the stream of capital flowing into the markets from 401ks may become substantial.”
  •  “…Labor participation in the workforce for men age 25 to 54 is lower than it was during the Great Depression.  According to a recent working paper by the National Bureau of Economic Research, video games are responsible for reducing the amount of work the younger generations of men perform over the year by nearly 30 hours. The big concern here is the growth of this behavior, and whether or not the distraction will impact workforce’s overall productivity.”
  •  “…According to Bloomberg Intelligence, a rapidly increasing number of company executives are discussing artificial intelligence during earnings calls and investor presentations, which could be a precursor for labor-disruptive technologies not only in manufacturing but also across the service sector. With the U.S. now arguably at, or very close to, full employment, wages should rise more steadily, which in turn will increase labor costs. This, combined with technological advances over the past decade, may cause automated systems to look far more attractive.

 The Kiplinger Letter – July 21, 2017

  • “How correct is Federal Reserve Chair Janet Yellen on inflation?
  • Are inflation’s doldrums a temporary thing, as she suggests? Or not?  Weak inflation could reduce the number of Fed interest rate increases next year.
  • We see inflation remaining relatively tepid for a number of key reasons:
  • Energy costs aren’t likely to pick up soon. Inventories of crude are bloated, and that will put off a pickup in gasoline and jet fuel prices, benefiting consumers.
  • Prices of new and used vehicles are edging downward. Ample inventories of new cars plus many used cars coming off lease are keeping prices in check.
  • The cost of groceries and eating out remains palatable. Strong market plays by Amazon and Lidl are keeping overall food and restaurant prices under control.
  • E-commerce sales are limiting hikes on back-to-school and other apparel.”

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