HI Market View Commentary 09-28-2020
| Market Recap |
| The S&P 500 index fell 0.6% last week, marking its fourth consecutive weekly drop, as investors continued to shun risky assets amid concerns about the COVID-19 pandemic. The S&P 500 ended Friday’s session at 3,298.46, down from last Friday’s closing level of 3,319.47. With this being the index’s fourth weekly drop in a row, it has been in the red every week of September. The measure is now down 5.8% for September with just three sessions remaining in the month. The S&P 500 is down 8% from the record high reached Sept. 2 and was down by as much as 11% at Thursday’s intraday low, marking a brief trip into correction territory, but hasn’t closed at or beyond the 10% threshold that marks an official correction. This week’s drop came as COVID-19 cases in Europe and the US have been elevated while hopes are fading for US lawmakers to reach an agreement on economic stimulus prior to the November election. The recent death of Supreme Court Justice Ruth Bader Ginsburg has many Congress members now focusing more on filling the Supreme Court seat than on reaching a pandemic relief package. The energy sector had the largest percentage drop this week, down 10.2%, followed by a 5% slide in materials and a 4.8% decline in financials. Still, two sectors ended the week in the black: technology, which rose 2% and utilities, up 0.3%. The tumble in energy coincided with a decline in crude oil futures. Among the sector’s decliners, shares of Halliburton (HAL) fell 14% while National Oilwell Varco (NOV) shed 19%. In the materials sector, shares of Albemarle (ALB) declined 14% as Evercore ISI initiated coverage of the stock with an underperform investment rating and a price target of $86. While the target is above the stock’s Friday closing level of $84.52, it is well below last Friday’s closing level of $97.96. Among financial stocks, decliners included Citizens Financial Group (CFG), which dropped 10% this week, and Unum Group (UNM), down 9.9%. The technology sector remained an outlier as stocks improved amid increased demand during the pandemic. Among its gainers, shares of Lam Research (LRCX) rose 7.5% this week as Stifel Nicolaus upgraded its investment rating on the stock to buy from hold. Next week, all eyes will be on September payroll data. The ADP employment report for the month will come Wednesday, followed by weekly data Thursday and the Labor Department’s monthly nonfarm payrolls and unemployment rate Friday. Other key points ahead include August consumer spending on Thursday, August factory orders due Friday, and September consumer sentiment Friday. Provided by MT Newswires. |
Where will our markets end this week?
Lower
DJIA – Bearish
SPX – Bearish
COMP – Bearish
Where Will the SPX end October 2020?
09-28-2020 -5.0%
Earnings:
Mon: SINA
Tues: HTZ, MU
Wed:
Thur: CCL, BBBY, CAG, PEP, STZ
Fri:
Econ Reports:
Mon:
Tues: Consumer Confidence,
Wed: MBA, ADP Employment, GDP, GDP Deflator, Chicago PMI, Pending Home Sales
Thur: Initial Claims, Continuing Claims, Personal Income, Personal Spending, ISM Manufacturing Index, Construction Spending
Fri: Average Workweek, Non-Farm Payroll, Private Payroll, Unemployment Rate, Hourly Earnings, Factory Orders, Auto, truck, Michigan Sentiment
Int’l:
Mon –
Tues –
Wed –
Thursday –
Friday-
Sunday –
How am I looking to trade?
All positions are mostly protected and now looking for OTM covered calls to add for full collar positions. Just trying to get to the elections and earnings.
www.myhurleyinvestment.com = Blogsite
customerservice@hurleyinvestments.com = Email
Questions???
China’s online shopping growth stalls — a sign of slow economic recovery
KEY POINTS
- Online sales growth for consumer goods and services slowed in August.
- Concerns about employment and income are still an overhang on consumer sentiment, analysts said.
- As the e-commerce market in China is set to expand longer-term, new shopping platforms like short video and livestreaming app Kuaishou are growing.
BEIJING — Chinese fervor for online shopping waned in August, a sign that the world’s second-largest economy still faces many challenges as it tries to boost consumption at home.
The Chinese government is trying to develop domestic demand as the primary driver of the country’s growth, rather than relying on exports.
The coronavirus pandemic this year has accelerated the growth of online shopping, with its share of overall retail sales rising from about one fifth last year to one quarter this summer. But uncertainty about future income and economic growth are proving to be an overhang.
“With unemployment stress and growth headwinds persisting into the fourth quarter, any recovery in overall consumption will be mild,” Imogen Page-Jarrett, research analyst at The Economist Intelligence Unit (EIU), said in an email.
The EIU predicts the job market this year will be the worst since the 1960s, and that overall retail sales will contract by 4.7%.
For January to August, retail sales were down 8.6% from a year ago to 23.8 trillion yuan ($3.5 trillion), according to official data.
Retails sales in China managed to eke out a small 0.5% year-on-year increase in August, their first positive print for 2020, according to China’s National Bureau of Statistics last week. The gains came largely from autos, which posted a sales increase of 11.8%. Excluding the category, retail sales of consumer goods contracted 0.6% in August, figures accessed through the Wind Information database showed.
Online sales of consumer goods and services grew 13.3% in August, slower than the 18.8% growth in July and down from 19% in June, CNBC analysis of official data showed.
“Job loss, income reduction and higher leverage may create new weak spots in domestic demand,” Bruce Pang, head of macro and strategy research at China Renaissance, said in a statement. He pointed to comments in the last few weeks from the State Council, the top executive body, that emphasize the importance of spurring consumption for China’s economic recovery.
The EIU predicts retail sales will turn slightly positive in the third quarter, helped by government policies to boost consumption, such as subsidies for new-energy vehicle purchases.
But in an indication of how tepid overall growth may be, some of the bright spots in China’s e-commerce sector were lower-cost essentials, such as fresh produce and household goods.
“Compared to before, an apparent trend we noticed is that, young Chinese consumers are spending in a more pragmatic and responsible way after the pandemic,” said Jay Xiao, CEO of LexinFintech, which runs Fenqile, an installment purchase online shopping platform.
“On Fenqile, sales of discounted products and preventive health-care products have been growing significantly faster than affordable luxury products or products celebrities use in the past few months,” Xiao said in a statement. He expects that China’s online consumption will recover more quickly in coming months.
New market players
For the longer-term, major Chinese and international companies alike remain intent on capturing opportunities in the largest middle class in the world. China’s rapid growth in the last two decades allowed for the rise of e-commerce giants Alibaba and JD.com. And as the online shopping market grows, new entrants are rising too.
Short-video and livestreaming platform Kuaishou announced last week that shopping orders placed through its platform hit 500 million in August, and claimed it ranks fourth behind Alibaba’s Taobao and Tmall platforms, JD, and Pinduoduo.
More people are also using popular messaging tool WeChat for shopping through in-app mini programs. The Tencent-owned app disclosed this month its mini program feature now has more than 400 million daily active users. The company said that gross merchandise volume (GMV) of physical products purchased through mini programs more than doubled for the January to August period from a year ago. GMV is a metric most commonly used in e-commerce that measures the total dollar value of goods sold over a certain period of time.
Transaction volumes topped 800 billion yuan for all of 2019, according to Tencent’s annual report.
https://art19.com/shows/bcd08fc3-8958-4c47-bf8e-524432adcd77/episodes/5e3ba422-ba47-4045-85ff-4a5d5ad964bb/embed Douyin, the Chinese version of TikTok that’s only available in the mainland, declined to share monthly figures on shopping orders placed through its platform. Last week, the wildly popular short-video and livestreaming app, which is owned by ByteDance, disclosed that more than 22 million creators made more than 41.7 billion yuan ($6.15 billion) on the platform in China over the past year. As of August, Douyin claimed to have 600 million daily active users across its platforms.
The primary app for Douyin has seen the fastest active user growth this summer among its peers, followed by Kuaishou and Pinduoduo, according to CNBC analysis of data from app developer services company Aurora Mobile.
After a promotional shopping event in June, the data showed JD and Alibaba’s Taobao and Tmall saw user declines, while WeChat users held little changed over those three months.
New York-listed shares of JD are up 113% so far this year, versus more than 111% for Pinduoduo and about 29% for Alibaba.
“Sellers that rely purely on online sales are at high risk of being forced out of the market (especially sellers of non-essential items), however, especially as the novelty of promotional activities wears off,” the EIU’s Page-Jarrett said. “Pursuing an omnichannel approach (combining online and offline), focused on building consumer loyalty, will be more sustainable in the long term.”
— CNBC’s Saheli Roy Choudhury contributed to this report.
Warren Buffett: Don’t Bother Hiring Anyone Without This Trait
You’ll never question an employee again if they possess this attribute.
Warren Buffett is most widely known for his investing wisdom, but the Berkshire Hathaway CEO offered up sound advice on critical attributes to look for when considering job candidates.
Buffett narrowed it down to three, but one is purely non-negotiable if you want to achieve success through your workforce. Buffet said:
You’re looking for three things, generally, in a person: intelligence, energy, and integrity. And if they don’t have the last one, don’t even bother with the first two.
Here’s why integrity is so important in the people you hire, especially your future leaders.
1. They won’t flat out lie.
In one recent survey conducted by Checkster, 78 percent of job candidates admitted they had lied or would lie about their credentials and capabilities in an interview.
With nearly 8 out of 10 people lying in interviews, the odds of your workforce being comprised entirely of people with energy, initiative, and integrity are not great.
That’s probably why Warren Buffett always placed such a premium on integrity. It may take longer to hire the right person with this mindset, but chances are, in the end, the added time will prove to be an investment that may save your butt.
2. They won’t steal from the company
So why does integrity reign supreme in Buffett’s list of qualifications? It’s simple. The intelligent and driven people who lack integrity are the ones who will embezzle money from your company, sell proprietary information to a competitor, or leave and take your entire roster of clients with them. Hiring for integrity isn’t easy, but it’s worth the effort.
3. They follow through on their word
Joel Peterson, chairman of JetBlue, author of the book The 10 Laws of Trust, and a previous guest on my podcast said this about working with people that exhibit integrity in team settings: “You’ll find things go more rapidly, you innovate more, people are more flexible and innovative, and they just have more fun.
Peterson added, “Having integrity means, among other things, that the gap between what you say you’re going to do, and what you actually do, is small.”
Plain and simple, people with integrity practice what they preach and deliver on their promises or commitments. Of course, they allow room for mistakes and failure (they’re human, after all), but they hold themselves accountable to a high standard absent of outside influences.
4. They are assertive
Let’s accept the fact that conflict is unavoidable when human beings are involved. Rather than being passive-aggressive and conflict-avoidant, leaders with integrity courageously run toward the eye of the storm.
They are keenly aware that cutting through conflict with active listening skills to understand the other person is a much faster solution to resolving an issue than the negative consequences of running away from conflict. This is the person that you should be after.
JUN 16, 2020 Like this column? Sign up to subscribe to email alerts and you’ll never miss a post. The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
Stanford psychology expert: This is the No. 1 work skill of the future—but most fail to realize it
It’s 9 a.m.: You walk into the office, sit down, fire up your computer and attempt to start your workday. Ping! Everyone is talking about Trump’s latest tweet. Ping! There it goes again — a family member just texted you.
You pick up your phone to look at the news notification and answer your text, only to check a Facebook post and then watch a Youtube video. Suddenly, before you know it, an hour has passed, and you haven’t accomplished a single work-related task.
A lack of focus comes at a cost
The challenge at work, of course, has always been to dodge things that distract us. But today’s distractions feel different.
The amount of information available, the speed at which it can be disseminated and the ubiquity of access to new content on our devices has made for a trifecta of distraction.
What’s the cost of all this? In 1971, the psychologist Herbert A. Simon emphasized that a wealth of information means a dearth of something else: attention.
That was true decades ago, but it’s truer than ever today. Attention, it appears, seems to be the ultimate scarce resource in today’s economy. And if we don’t address it now, it’s only going to get worse.
The most important skill of the 21st century
The workplace is rapidly changing, and in the near future, there will be two kinds of people in the world: those who let their attention and lives be controlled and coerced by others and those who proudly call themselves “indistractable.”
Researchers have been telling us that attention and focus are the raw materials of human creativity and flourishing. And in the age of increased automation, the most sought-after jobs are those that require creative problem-solving, novel solutions and the kind of human ingenuity that comes from focusing deeply on the task at hand.
That said, not being distractable is the single most important skill for the 21st century. Many experts, including Adam Grant, who said that “success and happiness belong to people who can control their attention,” have addressed the importance of focus.
…attention and focus are the raw materials of human creativity and flourishing.
Here are some of the most common workplace distractions and how to hack them so you can become one step closer to mastering the skill of being indistractable:
Email is the curse of the modern worker. A study published in the International Journal of Information Management found office workers take an average of 64 seconds after checking email to reorient themselves to get back to work.
To reduce the total amount of time spent keeping your inbox in check, you must focus on two things:
- Reducing the total number of messages received: To receive fewer emails, you must send fewer emails. It sounds obvious, but most emails we send and receive aren’t very urgent, yet our brain’s weakness for variable rewards makes us treat every message, regardless of form, as if it’s time-sensitive. That tendency conditions us to check our inbox constantly, reply and bark out requests instantaneously. All of that is a huge mistake.
- Reducing the time spent emailing: The most important aspect of an email is how urgently it needs a reply. Because we forget when the sender needs a reply, we waste time rereading the message. The solution? Only touch each email twice. When you first open an email, answer this question before closing it: When does this require a response? Then, tag it as either “Today” or “This Week.” Doing so attaches the most important information to each new message, preparing it for the second (and last) time you open it. (Of course, for super-urgent, email-me-right-now type of messages, go ahead and respond.)
Group chats
Jason Fried, co-founder of the popular group-chat app Basecamp, acknowledged that being in a group chat can be similar to “being in an all-day meeting with random participants and no agenda.”
He recommends enforcing three rules when it comes to group chats:
- Use it like a sauna: Get in, get out.
- Schedule it: Set a time for group chat on your calendar.
- Be picky: The smaller the group, the better. The key is to make sure everyone present is able to add and extract value from being part of the conversation.
- Use it selectively: Group chats are good for some topics and groups, but not for others — so be mindful about how you use it.
Meetings
The primary objective of most meetings should be to gain consensus around a decision, not to create an echo chamber for the meeting organizer’s own thoughts.
One of the easiest ways to prevent superfluous meetings is to require two things of anyone who calls one:
- Circulate an agenda of what problem(s) will be discussed. No agenda, no meeting.
- Give their best shot at a solution in the form of a brief, written digest. It need not be more than a page or two discussing the problem, their reasoning and their recommendation.
Being present is also important. Once the meeting is held, everyone’s laptops and devices should be shut off or left at their desks so that they can be there in both body and mind.
Your phone
Our smartphones have become indispensable. This miracle device, however, is also a major source of potential distraction. The good news is, being dependent isn’t the same as being addicted.
The plan below can save you countless hours of mindless phone time. Plus, implementing it takes less than an hour from start to finish, leaving no excuse for calling your phone “distracting” ever again.
- Get rid of apps you rarely or no longer use. It helps to ask yourself which apps were serving you in a positive way, and which ones were not. Based on my answers, I uninstalled the ones that didn’t align with my values and kept the ones for learning and staying healthy. I also removed news apps with blaring alerts and stress-inducing headlines.
- Get rid of apps you love. This may mean getting rid of apps like YouTube, Facebook or Twitter. If abandoning these services isn’t entirely an option for you, replace when and where you use these potentially distracting services on your phone. One solution is to only put them on your desktop computer.
- Rearrange your apps. Tony Stubblebine, editor-in-chief of the popular Medium publication Better Humans, recommends sorting your apps into three categories: “Primary Tools” (apps that help you accomplish defined tasks you frequently rely on: getting a ride, finding a location, adding an appointment), “Aspirations” (apps that encourage you to do things you want to spend on: meditation, yoga, exercise, reading books, listening to podcasts) and “Slot Machines” (apps you open and get lost in: email, Twitter, Facebook, Instagram).
- Change your app notification settings so you receive fewer, only essential, notifications. Adjusting my notification settings took me less than 30 minutes, but it was the most life-changing. In my experience, it’s only worth adjusting two kinds of notification permissions: sound and sight. Ask yourself which apps should be able to interrupt you when you’re with your family or in the middle of a meeting.
Coworkers
While open-office floor plans offices were designed to foster idea-sharing and collaboration, they often lead to more distraction. Interruptions tend to decrease overall employee satisfaction and increase mistakes.
A multi-hospital study coordinated by the University of California, San Francisco, for example, found an 88% drop in the number of errors nurses made when they wore bright orange vests that told colleagues to not interrupt them.
Like the nurses in the study, you can reduce the number of interruptions while working by placing a “Do Not Interrupt” sign somewhere visible on your desk. It can also read something like, “I need to focus right now, but please come back later.”
This is a simple way to let coworkers know that you don’t want to be interrupted. It’s great because it sends an unambiguous message in a way that wearing headphones can’t.
Nir Eyal is a graduate and instructor at Stanford’s Graduate School of Business. He writes, consults and teaches about the intersection of psychology, technology, and business. Nir’s writing has been featured in Harvard Business Review, Time and Psychology Today. His latest book, “Indistractable: How to Control Your Attention and Choose Your Life” (published by BenBella Books) is out now.
Boeing 737 Max will undergo FAA chief evaluation flight next week
KEY POINTS
- Federal Aviation Administration Chief Steve Dickson is set to conduct an evaluation flight at the controls of a Boeing 737 Max next week, a milestone as the U.S. planemaker works to win approval to resume flights, the agency told lawmakers.
- The Boeing 737 Max has been grounded since March 2019 after two fatal crashes killed 346 people.
- Boeing shares were up 6%.
Federal Aviation Administration Chief Steve Dickson is set to conduct an evaluation flight at the controls of a Boeing 737 Max next week, a milestone as the U.S. planemaker works to win approval to resume flights, the agency told lawmakers.
The Boeing 737 Max has been grounded since March 2019 after two fatal crashes killed 346 people. Dickson, who was previously a commercial airline pilot, plans to undergo simulator training before the flight and will then share his observations with FAA technical staff.
The FAA told lawmakers that Dickson and FAA Deputy Administrator Dan Elwell “will be in Seattle next week to take the recommended training.” The flight by Dickson will fulfill “his promise to fly the aircraft before the FAA approves its return to service.”
Boeing shares were up 6%.
Earlier Friday, Europe’s chief aviation safety regulator said the Max could receive regulatory approval to resume flying in November and enter service by the end of the year.
“For the first time in a year and a half, I can say there’s an end in sight to work on the Max,” said Patrick Ky, executive director of the European Union Aviation Safety Agency (EASA).
Ky said Boeing had agreed to install the computerized third-sensor system on the next version of the plane, the 230-seat 737 Max 10, followed by retrofits on the rest of the fleet later.
Pence says Americans should expect coronavirus cases to rise ‘in the days ahead’
Berkeley Lovelace Jr.@BERKELEYJR
KEY POINTS
- Vice President Mike Pence said Monday that Americans should expect Covid-19 cases to rise “in the days ahead.”
- The rate of Covid-19 tests that come back positive is now rising in 10 states in the Midwest and West, Pence said during a press conference from the White House’s Rose Garden.
- With that development and the United States’ “historic advance in testing,” the public “should anticipate that cases will rise in the days ahead,” he added.
Vice President Mike Pence said Monday that Americans should expect Covid-19 cases to rise “in the days ahead” as testing increases and some Midwest states show worrying coronavirus trends.
The rate of Covid-19 tests that come back positive is now rising in 10 states in the Midwest and West, Pence said during a press conference from the White House’s Rose Garden alongside President Donald Trump. With that development and the United States’ “historic advance in testing,” the public “should anticipate that cases will rise in the days ahead,” he added.
“But as we more readily identify those who have contracted the coronavirus, the American people can be confident,” he said.
The U.S. has the worst outbreak in the world, with more than 7.1 million cases and at least 204,881 deaths, according to data compiled by Johns Hopkins University. On Monday, Reuters reported the rate of tests coming back positive for Covid-19 is topping 25% in several Midwest states in the U.S. as the number of cases and hospitalizations also surge in the region.
Trump and other U.S. officials have suggested increased testing is the reason the United States has the most cases in the world. But infectious diseases experts and scientists have pointed to hospitalizations, deaths and the positivity rate, which indicates the percentage of tests that come back positive in a given region, to dispel that claim.
Earlier in the day, Dr. Anthony Fauci, the nation’s leading infectious diseases expert, said the U.S. is “not in a good place” as colder months loom and the number of newly reported coronavirus cases continues to swell beyond 40,000 people every day.
“There are states that are starting to show an uptick in cases and even some increase in hospitalizations in some states,” Fauci told ABC’s “Good Morning America” in an interview aired Monday.
“And I hope not, but we very well might start seeing increases in deaths,” Fauci said. He added that he’s concerned about being in “a position like that as the weather starts getting cold.”
The U.S. government plans to distribute 150 million rapid Covid-19 tests made by Abbott Laboratories in “the coming weeks” as the country moves into its fall season, Trump announced Monday at the press conference. He said about 100 million of the tests will go toward efforts to reopen schools, while 50 million will go to nursing homes and assisted living facilities.
Abbott has previously said it expected to ship tens of millions of tests in September, ramping to 50 million tests a month from the beginning of October.
Trump also reiterated his claim that the U.S. outbreak is “rounding the corner,” adding the nation has “too many states that are locked down right now.”
“Nobody knows what the governors are doing, actually,” he said.
Trump touted potential vaccines from Moderna, Pfizer, AstraZeneca and Johnson & Johnson, which are all currently in late-stage testing. He said the vaccines are “coming fast” and the results from the trials are going to be “very extraordinary.”
“Vaccines are coming, but we’re rounding the corner regardless,” he said.
— CNBC’s Noah Higgins-Dunn contributed to this report.
HI Financial Services Mid-Week 06-24-2014