Monthly Archives: July 2017

Schwab: “New Accounts Are At Levels We Have Not Seen Since The Dot Com Bubble” As Millennials Rush Into Stocks

We can now officially close the book on the "cash on the sidelines."

One week ago, we reported that in the latest weekly survey of Bank of America high net worth clients, the cash allocation had fallen to an all time low of just 10.4%, below the previous record low of 11% in April 2007 as everyone is "forced" to dance in this market, in which the music is still playing.

Now, in a separate confirmation of what Deutsche Bank recently classified as market "froth", Jonathan Tepper points out that the stock euphoria has finally spread to the retail investor.

Case in point: in its Q2 earnings results, Schwab reported that after years of avoiding equities, Schwab clients opened the highest number of brokerage accounts in first half of 2017 since 2000.

This is what Schwab said on its Q2 conference call:

New accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year. But maybe more important for the long-term growth of the organization is not so much new accounts, but new-to-firm households, and our new-to-firm retail households were up 50% over that same period from 2016.

In total, Schwab clients opened over 350,000 new brokerage accounts during the quarter, with the year-to-date total reaching 719,000, marking the biggest first-half increase in 17 years. Total client assets rose 16% to $3.04 trillion.

Schwab also adds that just like in the case of Bank of America's HNW private clients, the net cash level among its clients has only been lower once since the depths of the financial crisis in Q1 2009:

Now, it's clear that clients are highly engaged in the markets, we have cash being aggressively invested into the equity market, as the market has climbed. By the end of the second quarter, cash levels for our clients had fallen to about 11.5% of assets overall, now, that's a level that we've only seen one time since the market began its recovery in the spring of 2009.

While some of this newfound euphoria may be due to Schwab's recent aggressive cost-cutting strategy, it is safe to say that the wholesale influx of new clients, coupled with the euphoria-like allocation of cash into stocks, means that between ETFs and other passive forms of investing, as well as on a discretionary basis, US retail investorshas never been more "all-in" stocks than they are now.

But wait, there's more: throwing in the towel on prudence, according to a quarterly investment survey from E*Trade, nearly a third of millennial investors are planning to move out of cash and into new positions over the coming six months. By comparison, only 19% of Generation X investors (aged 35-54) are planning such a change to their portfolio, while 9% of investors above the age of 55 are planning to buy in.

Furthermore, according to a June survey from Legg Mason, nearly 80% of millennial investors plan to take on more risk this year, with 66% of them expressing an interest in equities. About 45% plan to take on “much more risk” in their portfolios.

In other words, little by little, everyone is going "all in."

Ironically, Schwab's own economists were forced to caution its clients that the party may soon be ending as we discussed last week in "Even Schwab Is Warning Retail Clients Of 'Danger Signs Rising':"

A solid earnings season should contribute to a continuation of the bull market in stocks. Dangers are lurking, however, and the possibility of a decent-sized pullback has grown over the past couple of months, in light of monetary policy and geopolitical uncertainties. While we would likely view such a move as healthy, it can be disconcerting. Stay diversified and be prepared to guard against overreacting to any such move.

Because if there is anything retail investors are known for, it is avoiding "overreacting" to "decent-sized pullbacks." As for those 45% of Millennials planning to take on "much more risk" at the all time highs in the S&P, good luck.

The post Schwab: “New Accounts Are At Levels We Have Not Seen Since The Dot Com Bubble” As Millennials Rush Into Stocks appeared first on crude-oil.news.

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The Next Escalation: Pentagon Offers To Arm Ukraine, McCain Delighted

When we reported yesterday about Putin's surprisingly harsh response to last week's House legislation to launch new sanctions against Russia, which also binds Trump from unilaterally removing sanctions without getting Congressional approval, we concluded that "now we await the US re-retaliation in what is once again the same tit-for-tat escalation that marked the latter years of the Obama regime, as the US Military Industrial Complex breathes out a sigh of relief that for all the posturing by Trump, things between Russia and the US are back on autopilot."We didn't have long to wait.The WSJ reports that, in what appears to be the next gambit by the U.S. Military-Industrial Complex (or "deep state" for those so inclined) to force Trump to "prove" that he did not, in fact, collude or have any ties with Russia or Vladimir Putin, Pentagon and State Department officials have devised plans to hit Russia where it hurts the most, and supply Ukraine with antitank missiles and other weaponry, and are now seeking White House approval at a time when ties between Moscow and Washington are as bad as during any point under the Obama administration. American military officials and diplomats say the arms, which they characterized as defensive, are meant to deter aggressive actions by Moscow, which the U.S. and others say has provided tanks and other sophisticated armaments as well as military advisers to rebels fighting the Kiev government.Ukrainian national guardsmen are instructed on the proper technique for
using a grenade launcher by an American soldier, on April 21, 2015The question of course is, "why now?" Since the start of the Crimean conflict, which in turn was the byproduct of a State Department-facilitiated presidential coup in Ukraine, the US has been supporting Russian-speaking insurgents in the country’s east however Washington, wary of escalating the conflict, has largely limited its support for Kiev’s military to so-called non-lethal aid and training.So one attempt at "why now", is because with Trump reeling, and having already caved on the latest Congressional anti-Russia bill, why not push the president to escalate the Russia conflict to a point where not even his predecessor dared to take it. For now, Trump is unaware of the plan: A senior administration official said there has been no decision on the armaments proposal and it wasn’t discussed at a high-level White House meeting on Russia last week. The official said President Donald Trump hasn’t been briefed on the plan and his position isn’t known.Of course, that will change once the president, now with a veteran general by his side as new Chief of Staff reads the WSJ report, and starts debating whether it is worth to further deteriorate Russian relations if it means getting Mueller of his back, by showing just how committed Trump is to "containing Russian aggression."Meanwhile, setting the stage for the escalation, a Pentagon spokeswoman, Lt. Col. Michelle L. Baldanza, said the U.S. has not “ruled out the option” of providing “lethal defensive weapons to Ukraine.” U.S. Defense Secretary James Mattis has endorsed the plan, according to U.S. officials quoted by the WSJ.Going back three years, when the Obama administration considered supplying arms to Ukraine - and ultimately refused to do so -  it faced considerable opposition from German Chancellor Angela Merkel and other allied leaders and instead provided Kiev with short-range radar, night-vision goggles and other equipment. So, ironically, just as Trump's imminent signing into law of the Congressional sanctions against Russia, which as we explained before, have already infuriated Europe, so any further escalation in Ukraine will likely add to Europe's animosity toward the US.Germany and France remain deeply skeptical about providing arms to Ukraine, fearing that such moves would raise tensions and deepen the conflict there. But U.S. officials said they expect allies, possibly including the U.K., Canada, Poland and Lithuania to be open to increased military support.  “It is really important we don’t inflame the situation,” said British National Security Adviser Mark Sedwell. “There has been quite a lot of agitation from across the border in the east.”Alas it may be too late for that. Enter, the US warhawks, who now feel that after being shut out for nearly a year, it's their turn to shine. As the WSJ notes, U.S. officials say they "worry" that the conflict has intensified, with a rising number of cease-fire violations as progress on peace efforts has faltered. “The level of violence is up a bit of late,” said Gen. Curtis Scaparrotti, the top U.S. and NATO military commander. “The Russians provide equipment, some of their most modern equipment, and they provide proxy forces with advisers.”Meanwhile, NATO continues to deploy even more troops to countries in the Baltics, Central and Eastern Europe, something which Russia has warned it takes as an act of aggression. Over weapons deliveries to Ukraine rebels may be just the spark that finally launches an armed conflict between Russia and NATO. Under the Pentagon and State Department proposal, the U.S. would provide anti-tank weapons, most likely Javelin missiles, as well as possibly anti-aircraft weapons, in addition to other arms. Ukraine has long sought Javelins to counter Russian-made armored vehicles in rebel-held areas.  U.S. officials, however, said the plan would be to deploy the anti-tank missiles with Ukrainian troops stationed away from the front lines of the conflict —part of an effort by policy makers to limit the risks of escalation and defuse criticism that the moves could encourage offensive action by Kiev.  Javelin missiles and launchers are lightweight and usually carried by two-man teams, so they are highly mobile.And the best bit: just like in Syria, the Pentago has said that "should Ukraine use the weapons improperly, Washington could decide to withdraw its support or technical assistance."It was not immediately clear what 'improper use of weapons' would consist of, but probably taking down another Malaysian Airlines airplane over Ukraine would be not be among the actions permitted. Needless to say, the Ukraine is delighted by this latest development:A senior Ukrainian official said Monday that the fact of the Pentagon’s proposal could help persuade Russia to scale back actions in Ukraine’s east. The official also said it was widely accepted in Kiev that any advanced weapons from the U.S. would be used only in an “emergency” and not during regular combat with separatist forces.And another amusing detour: the WSJ writes that "U.S. and European officials are divided on how Moscow would respond to new arms shipments. Some believe it would push Moscow back to the bargaining table and others think it would prompt the Russian military to escalate the situation further." Spoiler alert: it would be the latter, and most likely with devastating consequences. John McCain, for one, is delighted.It's about time. @WSJ: "Pentagon Offers Plan to Arm #Ukraine" https://t.co/JoOyRv5U63— John McCain (@SenJohnMcCain) July 31, 2017 The post The Next Escalation: Pentagon Offers To Arm Ukraine, McCain Delighted appeared first on crude-oil.news.The post The Next Escalation: Pentagon Offers To Arm Ukraine, McCain Delighted appeared first on Forex news forex trade.
http://forex.wine/the-next-escalation-pentagon-offers-to-arm-ukraine-mccain-delighted/

5 Huge Benefits of Self-Driving Cars

Via The Daily BellNew technology can be scary. It certainly presents risks and challenges. But I have to admit, one technology I am very excited about is autonomous vehicles or self-driving cars.We’ve talked about the potential for the Internet of Thing to leave us with nowhere to hide, and self-driving cars are part of that. We have also mused about the possibility of the government ruining self-driving cars.But let’s take a moment to balance those positions with the benefits of autonomous vehicles.First, it frees up so much valuable time for humans. Time is the most precious resource and morbidly limited. As many as 90% of working Americans drive a car to work. The average commute is about 25 minutes. This means an average American worker would get over 4 hours of their life back each week!Granted, they would still be in a car, but most people have pressing tasks that can be accomplished on a smartphone or laptop. Over the course of a lifetime, this amounts to getting a full year of your life back, that would otherwise be spent flipping off other commuters, and beeping the horn in frustration. Nevermind that most people will use that year to scroll Facebook.Second, way fewer people will die in car accidents. I know it is scary to let go of control, but automation of traffic patterns will lead to far fewer roadway fatalities. Currently, about 1.3 million people worldwide day each year in traffic accidents. Many more are seriously injured.The possibility that cars will be hacked is scary. But seeing as this is a pressing concern for consumers, it would be very bad publicity for whatever company has their car taken over by hackers. So far no hacker has been able to do so in industry tests which reward hackers for finding vulnerabilities in their systems.Also, most cars can already be hacked. It is much easier to make a murder look like an accident when humans are behind the wheel.Third, economic resources that were once spent on cars and insurance will be freed up! Most people will not have to buy a car, they will simply use rideshare programs. The ones who do buy cars will likely have a much lower cost to insure the vehicle.Fourth, we no longer have to worry about drunks, elderly, teen drivers, or distracted drivers. Think of all the social problems this immediately removes! No more debates about taking driver’s licenses away at a certain age. No more tweaking regulations and legislation in a fruitless attempt to curb teen accidents.Go ahead and text in your car, talk on the phone, mess around with friends, and even crack open a beer! It doesn’t matter, the technology is in control.In America, over 10,000 deaths per year from drunk driving accidents will be prevented when all cars on the road are self-driving.Fifth, and possibly widely overlooked, is that autonomous vehicles really throw a wrench in most excuses for the police to engage you. Police can currently pull you over when driving for almost anything. If they see a taillight out, if you cross the center line, if you are driving a bit too fast, if you speed up for a yellow light, if you swerve, and so on and so forth.Most people will be able to go from their own private property to the private property of a car. Then they will exit onto a business or individual’s private property, and never give the government a chance to violate their rights.About 1.5 million people are arrested each year in the U.S. for Driving Under the Influence. Think of how much it costs taxpayers to send those people through the court system.Then there are all the people arrested for drugs after the police search their vehicles during a traffic stop. Again, the court system is unburdened. Fewer rights will be violated. Fewer illegal searches will be conducted.Cops will be safer since they won’t constantly be walking up to strangers in vehicles. People will be safer and not have to worry about being shot when a cop can’t see their hands for a split second. This removes entire swaths of dangerous interactions between the police and the public.Autonomous vehicles might prove instrumental in changing the cultural acceptance of being stopped, questioned, and searched by officers for no real reason.Like with any other new technology, there will be difficulties and unforeseen dangers to autonomous vehicles. But these five benefits only scratch the surface.There will be changes in the landscape, social activity, and recreation. There will be new opportunities for shipping, selling, and conducting business.What are you most worried or excited about for the advent of autonomous vehicles?The post 5 Huge Benefits of Self-Driving Cars appeared first on crude-oil.news.The post 5 Huge Benefits of Self-Driving Cars appeared first on aroundworld24.com.
http://aroundworld24.com/2017/07/31/5-huge-benefits-of-self-driving-cars/

Internal Cracks Are Showing In The Market – Nasdaq’s Bad Breadth & Options Skew

Last week we warned of 'low volume highs' as internal cracks began appearing in the markets. Today, J. Lyons' Fund Management's Dana Lyons points out another 'crack' - The recent string of Nasdaq new highs occurring with negative breadth has only been matched by a stretch in 1999-2000.In the last few months, we have observed a recent cluster of 52-week highs in the Nasdaq Composite occurring along with negative breadth on the exchange, i.e., more declining stocks than advancers.Wednesday marked the 7th such occurrence in the last 3 months. That is the largest string of these days on record, outside of a run of 12 that ended in late January 2000. I probably don’t have to tell you what happened soon after that episode.This chart shows all of the 3-month clusters of at least 5 occurrences going back to the late-1980′s.So is this a red flag regarding the durability of the bull market?Some will point to it as evidence of a thinning out of the rally.We certainly have seen these clusters pop up in the lead up to some tough markets in the past, e.g., 1998, 2000, 2007, 2011.Furthermore, as Nasdaq has soared  - SOMEONE has been buying downside protection...To its most extreme level since November...So these new highs are not seeing an exuberant following. The post Internal Cracks Are Showing In The Market – Nasdaq’s Bad Breadth & Options Skew appeared first on crude-oil.news.The post Internal Cracks Are Showing In The Market – Nasdaq’s Bad Breadth & Options Skew appeared first on aroundworld24.com.
http://aroundworld24.com/2017/07/31/internal-cracks-are-showing-in-the-market-nasdaqs-bad-breadth-options-skew/

5 Huge Benefits of Self-Driving Cars

Via The Daily BellNew technology can be scary. It certainly presents risks and challenges. But I have to admit, one technology I am very excited about is autonomous vehicles or self-driving cars.We’ve talked about the potential for the Internet of Thing to leave us with nowhere to hide, and self-driving cars are part of that. We have also mused about the possibility of the government ruining self-driving cars.But let’s take a moment to balance those positions with the benefits of autonomous vehicles.First, it frees up so much valuable time for humans. Time is the most precious resource and morbidly limited. As many as 90% of working Americans drive a car to work. The average commute is about 25 minutes. This means an average American worker would get over 4 hours of their life back each week!Granted, they would still be in a car, but most people have pressing tasks that can be accomplished on a smartphone or laptop. Over the course of a lifetime, this amounts to getting a full year of your life back, that would otherwise be spent flipping off other commuters, and beeping the horn in frustration. Nevermind that most people will use that year to scroll Facebook.Second, way fewer people will die in car accidents. I know it is scary to let go of control, but automation of traffic patterns will lead to far fewer roadway fatalities. Currently, about 1.3 million people worldwide day each year in traffic accidents. Many more are seriously injured.The possibility that cars will be hacked is scary. But seeing as this is a pressing concern for consumers, it would be very bad publicity for whatever company has their car taken over by hackers. So far no hacker has been able to do so in industry tests which reward hackers for finding vulnerabilities in their systems.Also, most cars can already be hacked. It is much easier to make a murder look like an accident when humans are behind the wheel.Third, economic resources that were once spent on cars and insurance will be freed up! Most people will not have to buy a car, they will simply use rideshare programs. The ones who do buy cars will likely have a much lower cost to insure the vehicle.Fourth, we no longer have to worry about drunks, elderly, teen drivers, or distracted drivers. Think of all the social problems this immediately removes! No more debates about taking driver’s licenses away at a certain age. No more tweaking regulations and legislation in a fruitless attempt to curb teen accidents.Go ahead and text in your car, talk on the phone, mess around with friends, and even crack open a beer! It doesn’t matter, the technology is in control.In America, over 10,000 deaths per year from drunk driving accidents will be prevented when all cars on the road are self-driving.Fifth, and possibly widely overlooked, is that autonomous vehicles really throw a wrench in most excuses for the police to engage you. Police can currently pull you over when driving for almost anything. If they see a taillight out, if you cross the center line, if you are driving a bit too fast, if you speed up for a yellow light, if you swerve, and so on and so forth.Most people will be able to go from their own private property to the private property of a car. Then they will exit onto a business or individual’s private property, and never give the government a chance to violate their rights.About 1.5 million people are arrested each year in the U.S. for Driving Under the Influence. Think of how much it costs taxpayers to send those people through the court system.Then there are all the people arrested for drugs after the police search their vehicles during a traffic stop. Again, the court system is unburdened. Fewer rights will be violated. Fewer illegal searches will be conducted.Cops will be safer since they won’t constantly be walking up to strangers in vehicles. People will be safer and not have to worry about being shot when a cop can’t see their hands for a split second. This removes entire swaths of dangerous interactions between the police and the public.Autonomous vehicles might prove instrumental in changing the cultural acceptance of being stopped, questioned, and searched by officers for no real reason.Like with any other new technology, there will be difficulties and unforeseen dangers to autonomous vehicles. But these five benefits only scratch the surface.There will be changes in the landscape, social activity, and recreation. There will be new opportunities for shipping, selling, and conducting business.What are you most worried or excited about for the advent of autonomous vehicles?The post 5 Huge Benefits of Self-Driving Cars appeared first on crude-oil.news.The post 5 Huge Benefits of Self-Driving Cars appeared first on Forex news forex trade.
http://forex.wine/5-huge-benefits-of-self-driving-cars/

“It’s Better To Turn Cautious Too Soon…”

Authored by Simon Black via SovereignMan.com,

One of the greatest investors in the world is getting worried…

Howard Marks is the billionaire founder of Oaktree Capital, one of the largest and most successful investment firms in the world.

A few times each year Marks write up his thoughts about financial markets– he calls them ‘investment memos’.

And he just released his latest one with a very clear message: it’s time to be cautious.

From Marks’ memo…

I think it’s better to turn cautious too soon (and thus perhaps underperform for a while) rather than too late, after the downslide has begun, making it hard to trim risk, achieve exits and cut losses.

Marks admits this bull market could continue. But he’s happy taking chips off the table in today’s particularly dangerous market.

Asset prices are high across the board – the S&P 500 is trading at 25 times trailing 12-month earnings compared to a long-term median of 15 – and prospective returns are low.

Meanwhile, we’re also seeing record-high complacency amongst investors.

Just this morning the Wall Street Journal published data from Yardeni Research showing that percentage of ‘bearish’ investors who believe that the market will fall is near its lowest level since 1987.

The Volatility Index (VIX), a statistic which measures ‘fear’ in the market place, is at its ALL-TIME lowest point in its entire 27-year existence – hitting 8.84 last week, compared to above 80 in 2008.

The VIX hit 8.89 on December 27, 1993. From Marks:

The index was last this low when Bill Clinton took office in 1993, at a time when there was peace in the world, faster economic growth and a much smaller deficit. Should people really be as complacent now as they were then?

Compare that today, where market pitfalls abound…

  1. North Korea is threatening to nuke the US
  2. Donald Trump is firing his entire cabinet
  3. The Federal Reserve has dropped interest rates to record lows and drowned the world in trillions of dollars of cash
  4. Debt levels are at record highs
  5. Entire banking systems, especially in Europe, are in need of massive bailouts
  6. The US government will run out of money in less than 90-days and hit the debt ceiling once again

Marks points out an important thing to remember about the VIX… It doesn’t say what volatility will be, only what investors think volatility will be. And the crowd is almost always wrong.

We’re eight years into the current bull market. Stocks have been rising for eight straight years– the second-longest winning streak in history behind the S&P 500’s 417% gain between December 1990 and March 2000.

And investors seem to see nothing but clear skies ahead.

And their false sense of security is pushing them to take on greater amounts of risk.

For example, junk bonds today yield just 6%.

In other words, pitiful, low quality companies that few analysts expect them to even remain in business are able to borrow money at just 6%.

That’s insane.

We recently wrote about Netflix losing $2 billion over the past 12 months. Yet the company’s stock price continues soaring to all-time highs.

In May, Netflix issued more than a billion dollars in debt at a rate of just 3.625%.

Would you loan money to a company that loses $2 billion a year in return for 3.625% ?

The answer is probably no. Marks shares his thoughts on Netflix’s debt:

Is it prudent to lend money to a company that goes through it at such a prodigious rate? Will Amazon or Google be able to loosen Netflix’s hold on its customers? Is it wise to buy bonds based on a technology position that could be overtaken? Positive investor sentiment has taken the company’s equity value to $70 billion; what would happen to the bond price if worries about rising competition took a bite out of that one day? Should you take these risks to make less than 4% per year? In Oaktree’s view, this isn’t a solid debt investment; it’s an equity-linked digital content investment totally lacking in upside potential, and it’s not for us. The fact that deals like this can get done easily should tell you something about today’s market climate.

In addition to appetite for their bonds, the “FAANG” stocks – Facebook, Amazon, Apple, Netflix and Google – are priced for perfection.

Netflix trades for nearly 240 times earnings. Amazon’s price-to-earnings ratio is over 190.

The market believes these stocks have cemented their leadership positions and cannot be unseated. But the future is always uncertain.

And throughout history, plenty of “can’t lose” companies – like Kodak, Xerox, Yahoo, etc. have fallen from grace.

I’d encourage you to read Marks’ full memo here. It’s one of the longest he’s ever written.

And remember to be prudent today…

There’s a global glut of liquidity. Asset prices are sky high across the board.

Investors are happily taking large risks for low returns. And they’re as complacent as they’ve ever been.

This is the type of behavior that takes place closer to a market top than a market bottom.

So it’s OK to take some money off the table today. Yes, you may miss out on future returns.

But you can also be 100% certain that money will be safe when the markets turn… And you’ll have more cash to take advantage of any bargains.

To repeat Marks’ initial warning… It’s better to turn cautious too early than too late.

Do you have a Plan B?

The post “It’s Better To Turn Cautious Too Soon…” appeared first on crude-oil.news.

Gold Shrugs Off Strong Housing Report

Gold is showing limited movement at the start of the week. In North American trade, spot gold is trading at $1268.50, down 0.08% on the day. On the release front, Pending Home Sales posted a gain of 1.6% in June, beating the forecast of 0.9%. On Tuesday, the US publishes Personal Spending and the ISM Manufacturing […]The post Gold Shrugs Off Strong Housing Report appeared first on Forex news - Binary options.
http://betiforex.com/gold-shrugs-off-strong-housing-report/

South Korea Is Preparing A “Surgical Strike” Against The North: Report

According to a report in South Korea's Munhwa Ilbo newspaper, which cites an unidentified government official, South Korea's military is preparing a "surgical strike" scenario that could wipe out North Korean command and missile and nuclear facilities ...The post South Korea Is Preparing A “Surgical Strike” Against The North: Report appeared first on crude-oil.news.The post South Korea Is Preparing A “Surgical Strike” Against The North: Report appeared first on aroundworld24.com.
http://aroundworld24.com/2017/07/31/south-korea-is-preparing-a-surgical-strike-against-the-north-report/