Carnegie Market Blog

 

Dow One Million, RIP Bears and the Tribe

Posted by Brent Luce on Oct 6, 2017 3:39:40 PM

Synchronized Global Growth

You may have noticed that stock market indices around the world have all been moving higher over the past year or two.  It was not very long ago that investors were panicking over “Brexit” and the European economy in general.  As you can see below, and as the stock markets imply, we are seeing synchronized global growth like we have not seen since before the Great Recession.  Many believe that this reflects the fact that world is finally past the destruction caused during that period.   In the last blog, I discussed the fact that 2017 has been one of the least volatile years on record and that periods like this can encourage complacence.  The charts below remind me of the same phenomenon – it is important to remain diligent when everyone else is comfortable and complacent.  MORE:  R.I.P. Bears

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Topics: Technology, Cleveland Indians, global growth

1st Half Performance, Solar Boom, iPhone Disruption

Posted by Brent Luce on Jul 5, 2017 4:55:44 PM

First Half Market Behavior

Despite the political drama and other fear-inducing events that have occurred this year, the stock market has been fairly strong this year.  This strength, however, has not been uniform.  MORE:  Year to Date Market Summary  Below are some charts illuminating some of the trends and dispersion within the market so far this year:

-- Dividend paying stocks have lagged this year, while growth stocks have outperformed.  I believe this is due to several factors, including an increased appetite for risk, dividend heavy sectors experiencing fundamental weakness and the perception of higher interest rates on the horizon.

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Topics: Technology, distruption, solar

Retail Is Struggling Financially - Current Inflation Numbers are Out

Posted by Brent Luce on May 12, 2017 3:02:33 PM

Retail Death Spiral

If you have not noticed, brick-and-mortar retailers have not been doing so well.  Value investors who have been trying to “bottom-fish” in the space have continued to suffer.  As we know, Amazon and other companies using and benefiting from new technologies have been perhaps the most disruptive force ever to affect consumer buying behavior.  As I have mentioned before, we seem to be arriving at the breaking point where the weak can no longer fight the battle.  This is just one example of how new technologies are changing the way we live and affecting every business and sector.  When looking at investments, I think there are two types of companies – those poised to benefit from these disruptive forces and those who are likely to suffer from it.  The table below, which I am borrowing from MKM, shows the number of store closings announced just this year – this is just major stores, and does not include the hordes of smaller retail stores that have closed.  Amazon has been taking over fifty cents of every new dollar moving into retail e-commerce, so we can guess that 50% of these sales are going right into Amazon’s pocket.    At the bottom you will see the stock price charts of traditional retailers versus Amazon; it is self-explanatory.  Deep Dive:  The New Retail Ecosystem

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Topics: Inflation, $AMZN, Big Data, Amazon.com, Technology, Retail Distribution

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