Dow Jones Winning: Why China’s Stock Market Surging For First Time in 3 Months is Crucial

For the first time in 3 months, the Chinese stock market has recorded a 3 percent increase triggered by the optimistic prospect of a comprehensive trade deal. The Dow Jones is nearing the 26,000 point mark after initiating a strong rally in the past two weeks.

The solid movement of the CSI 300 Index, which replicates the performance of top 300 stocks in the Shanghai and Shenzhen stock exchanges, has shown that investors in Asia highly anticipate the trade talks with the U.S. to see significant progress in the weeks to come.

The CSI 300 Index made robust gains in anticipation of satisfactory trade talks between the US and China. | Source: TradingView

The Dow Jones recorded a 1.3 percent rise on February 17 and is en route to breaking out of the 26,000 point level for the first time since November.

Dow Jones Rally Expected, Analysts Say Trade Deal Fears are Exaggerated

With jobs growth and household balance sheets at record highs, the U.S. is arguably in a better position than China in any given time frame.

The growing number of defaults in China has placed more pressure on the domestic market and the authorities to achieve a deal with the U.S.

A full-scale trade agreement is crucial for both countries in the short-term as it would alleviate significant pressure from the Chinese economy and strengthen the rally of the Dow Jones and the U.S. stock market in general.

The stock market of China and the rest of Asia are recovering in a period during which the outcome of the trade deals remains uncertain.

The Trump administration has publicly expressed its intent to consider a 60-day extension on the March 1 deadline, a move that could destabilize major markets.

However, the Chinese market has rebounded strongly in the last 24 hours, demonstrating the growing confidence of investors in the prospect of the ongoing trade talks.

Baird vice chairman for equities Patric Spencer said that the fear around the result of the trade talks has been overblown. With the newly adopted patient approach by the Federal Reserve, the executive stated that the market is in a decent place to maintain its momentum.

“The market has been worried about the China tariffs but Trump wants a deal and a lot of the fears are generally overblown. The more patient terminology from the Fed has been fairly accommodative for markets so far.”

Recently, as Admisi strategist Marc Ostwald said, investors have begun to focus on the positives over potentially negative factors that could lead the stock market to the downside.

Similarly, Direxion Investments managing director Paul Brigandi said last week that investors in the U.S. market have been trading based on momentum and the strong performance of the Dow Jones.

The Dow Jones Industrial Index has also seen momentum stick since the turn of the year. | Chart via TradingView

As such, if the trade talks with China continue to show progress in certain areas, the near-term rally of the Dow Jones and the rest of the U.S. market could be sustained.

“Momentum is a key component right now. A lot of people are jumping in to get on board,” he said.

Some Difficulties in the Trade Talks

The stalemate in the trade discussions with China seems to derive from the requests of the U.S. on fundamental changes to the structure of the Chinese economy.

The U.S. government has reportedly asked Chinese negotiators implement significant changes in the country’s industrial policies.

Despite the speed bump in the U.S.-China trade talks, the optimism stems from the intent of both countries to move forward with the discussions without imposing additional tariffs or restoring previous tariffs.

Most of the positive movements in the stock market of the U.S. and China are fueled by the certainty of investors that while the trade deal could be pushed beyond the original deadline, the two countries are not in a rush to impose higher tariffs in the short-term.


Source
Author: Joseph Young 
Image Credit: Source: AP Photo/Richard Drew)

Dow Jones Sess Stunning 10% Recovery, But This One Key Factor Could Fuel Even More Growth

Since January 3, within a one-month span, the Dow Jones Industrial Average has recovered from 22,682 points to 25,102 points, by more than 10 percent.

It has been a stunning 30 days for the Dow Jones, which was at risk of entering a bear market after falling by 19 percent from its all-time high.

The short-term recovery of the Dow was mainly attributed to the Federal Reserve rate, which is expected to remain stable in the range of 2.25 percent to 2.5 percent.

But, another key factor may have largely affected the sentiment around the U.S. stock market throughout the past 48 hours.

Jobs, Jobs, Jobs: U.S. Shutdown Has Minimal Impact as Dow Jones Recovers Off of It

A Reuters report revealed that contrary to the expectations of investors, the shutdown of the U.S. government last month had minimal impact on jobs.

Throughout the 34-day period, more than 800,000 federal workers missed two paychecks, which account for around 0.5 percent of the workforce of the U.S.

Although the unemployment rate of the U.S. increased to 4 percent as a result of the shutdown, the Labor Department said it had no “discernible” effect on job growth.

Most major industries recorded a rise in job growth from December to January.

  • Employment in construction rose by 52,000 in January
  • Employment in manufacturing increased by 13,000 in January, following a 20,000 increase in December
  • 8,000 federal workers were hired by the government in January

Job growth rose In industries including healthcare, finance, and transportation as well, eliminating the concerns of investors that the shutdown could slow down the recovery of the U.S. Stock market.

With job growth strengthening and increasing at a gradual pace and the Federal Reserve vowing to remain patient on rate hikes, the stock market is expected to sustain its momentum throughout the short-term.

Another Variable: U.S.-China Trade War, Trump Remains Positive

Earlier this week, the U.S. government filed more than 20 charges against Chinese telecom and electronics giant Huawei, fueling the tension between the U.S. and China.

The South China Morning Post reported that the trade talks had been overshadowed by the Huawei indictments, which analysts foresee could lead to a substantial fine for the Chinese company.

A professor at the National University of Singapore David De Cremer said:

“It is likely that Huawei will receive a very big fine. Such a decision would communicate to allies of the U.S. to join in this battle and push Huawei out of their markets.”

If the indictments lead to an export ban on Huawei, local analysts in China said that it could have a major impact on both Huawei and its partners.

Crucially, it could heavily affect the “Made in China 2025” roadmap set forth by the government of China that may alter the outcome of the trade talks.

Jia Mo, a Shanghai-based analyst, told SCMP:

“Imposing an export ban on Huawei will inevitably have a tremendous impact, whether for Huawei or for its business partners in the US.”

Analysts emphasized that the Huawei case has added another uncertainty to the trade discussions between the U.S. and China.

IDC Asia-Pacific vice president Simon Piff added:

“Whether [the Huawei indictments] are due to security concerns, business concerns or political concerns are now so blurred it is difficult to tell what the outcome would be.”

But, U.S. President Donald Trump has said that the meeting is going well with good intent from both sides despite the Huawei dispute, which could serve as a catalyst for the short-term growth of the U.S. economy.

If the job growth is sustained throughout the first quarter of 2019 and the Federal Reserve maintains its rate in the 2.25 to 2.5 percent range, the U.S. stock market could aim for a full-fledged recovery from its December downturn.


Source
Author: Joseph Young 
Image Credit: Featured Image from Shutterstock

This Pot Stock Just Surged 90% for the Stupidest Reason Ever

More than three dozen cannabis companies applied for the POT symbol on the Canadian Securities Exchange after it became available this week. Potash Corporation relinquished the symbol, and so many Canadian companies wanted it that the CSE ran a first-ever random lottery for the symbol. A small firm in Vancouver, Weekend Unlimited, won the ticker in the lottery.

The company formerly had the ticker YOLO, which stands for “you only live once.” Most sites like TradingView were still showing YOLO as the company’s ticker. In the 24 hours after it officially became POT, it surged 65%.

Pot Stock Almost Doubles after Winning Coveted Ticker Symbol

YOLO/POT (Weekend Unlimited) rose more than 90% in the 24-hour period.

At the time Bloomberg wrote on the subject earlier today, YOLO/POT was on the way up. By press time it had risen more than 90% over the 24-hour period. The stock market is a psychological game. Traders believe in brand recognition. The strategy is likely along these lines: as people come in and invest in the marijuana industry, one of the first symbols they will consider is POT.

In a prepared statement, Weekend Unlimited CEO Paul Chu says:

“Weekend Unlimited is thrilled to add the iconic POT trading symbol to its identity. As a fast-growing multi-state operator, Weekend Unlimited is developing lifestyle brands around recreational and wellness to help define the future of the cannabis industry. The POT sy+++mbol is a tremendous fit with our brand identity. […] The POT lottery served to raise the profile of Canada’s leadership in legal recreational cannabis and we believe it will also serve to raise Weekend Unlimited’s profile.”

“Weekend Unlimited was not on the list of 8 cannabis companies given a “buy” or “speculative buy” rating by Canaccord recently. Perhaps the only pot stock on the list with a memorable symbol is Curafleaf, whose ticker is CURA.

Other stock exchanges have POT symbols, but the CSE might be the only one where it is a cannabis company. The New Zealand exchange, for example, has POT – Port Of Tauranga NPV. According to Bloomberg, there may soon be another YOLO symbol on the New York Stock Exchange, created by AdvisorShares Pure Cannabis ETF.


Source
Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock

Canaccord Says These 8 Pot Stocks Deserve a Look Thanks to the US Farm Bill

Pot stock analysts believe that the CBD industry is about to explode. The reason? The $867 billion Farm Bill, signed into law by US President Donald Trump on December 20, officially excluded all cannabis products with 0.3% or less THC from the Controlled Substances Act. (THC is the psychoactive element in marijuana that gets users “high.”)

CBD has medicinal uses and is already legal in many states, as is its psychoactive component. As a result, farmers anywhere in the United States can freely grow “hemp” for both industrial and medical purposes.

Several Pot Stocks Set to Explode

Charlotte’s Web is one of eight pot stocks that Canaccord thinks could go higher within the near future. | Source: Shutterstock

Canaccord Genuity, a wealth management firm and investment bank with offices all over the world, believes the effects of CBD legalization will be huge. They rated the following stocks as most promising in a note today:

  • Charlotte’s Web Holdings, Inc. (CWEB-CSE)
  • Canopy Growth Corporation (WEED-TSE)
  • Curaleaf Holdings, Inc. (CURA-CSE)
  • Liberty Health Sciences Inc. (LHS-CSE)
  • 1933 Industries, Inc. (TGIF-CSE)
  • DionyMed Brands, Inc. (DYME-CSE)
  • KushCo. Holdings, Inc. (KSHB-OTC)
  • MJardin Group, Inc. (MJAR-CSE)

Of these, only Charlotte’s Web Holdings was given a firm “buy” rating. The others were categorized as “speculative buys.” The CNBC article on the subject lists the buy targets. In the case of CWEB, that price is $21 Canadian. At press time, CWEB was trading at $19.70, down from its 24-hour high of $20.73. If the advice of Canaccord is to be taken, that means there is still ample room to buy CWEB. However, do note that this article is not intended to be financial advice.

CWEB opened around $10 last August. It has now nearly doubled in value. If Canaccord is correct, it could have a lot of room for growth in the near future as American farmers begin harvest CBD.

The first-quarter report from Canaccord has a message from CEO David Davieu regarding the strategization of the firm going forward. Davieu notes that growth stocks may face a challenging environment in the coming quarters. As a hedge, the firm is moving heavily into cryptocurrency and cannabis companies.

“With signs that the economic backdrop could become more challenging for growth stocks, we anticipate that rising commodity prices will drive increased activities in the natural resource sectors, a historic area of strength for our firm. We also anticipate growing interest in non-traditional sectors where Canaccord Genuity has established a strong market position, such as cannabis and digital assets.”

Canaccord Going Heavy on Cannabis and Cryptocurrency

Canada legalized marijuana nationwide last year. Pot stocks from the United States’ neighbor to the north have been booming as a result. For example, CWEB opened in August 2018 around $10, and has in the meantime almost doubled its per-share price.

Canaccord is continuing their expansion into digital assets despite lingering doubts about a Bitcoin ETF. Their doubts were again confirmed earlier this month when a Bitcoin ETF application was summarily withdrawn.

The note acknowledges that the Food and Drug Administration has yet to get fully on board with CBD legalization, but Canaccord this is a temporary situation.

“While the FDA’s stance has added some initial caution by retailers looking to enter the CBD space, we believe this to be transient, and expect many mass market retailers to begin distributing CBD products over the course of 2019.”

Marijuana legalization has revitalized several economies in the United States, most notably Colorado, which saw a $66 million marijuana tax surplus in fiscal year 2015, the first full year of total legalization. More than 60% of Americans now support legalization of marijuana, paving the way for what may amount to a mandate for elected officials in coming years.


Source
Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock. CWEB chart from TradingView.com.

‘Nobody’s Going to Make Money’ on Pot Stocks: Hedge Funder Jeff Vinik

Renowned hedge fund manager Jeffrey Vinik has dismissed the pot stock craze, describing cannabis investment as overrated and likely to suffer from squeezed margins. Speaking on CNBC’s Squawk Box on January 10, Vinik also revealed that bitcoin currently accounts for “zero percent” of his investment portfolio.

Returning to the hedge fund scene after a five-year hiatus, the Tampa Bay Lightning owner, who also holds minority stakes in the Boston Red Sox and Liverpool Football Club, believes that an entry rush into cannabis investments will create a situation where market demand is overserved, and margins become too small to be profitable.

In his words:

I won’t say zero, but my guess is that they’re overhyped. There’s going to be too much competition, margins are going to come down, [and] nobody’s going to make money.

Rosy Cannabis Stock Predictions Versus Vinik’s Bearish Outlook

Tilray, the poster child of the pot stock bubble, has a price chart that looks more like it belongs to a cryptocurrency than a publicly-traded company.

If anyone has worthwhile experience in predicting stock performance, it would be Vinik whose hedge fund Vinik Asset Management returned an average of 17 percent per annum from 1996 to 2013. His prediction, however, is in stark contrast to the cannabis industry outlook put forward by Vivien Azer and Michael Lavery of Cowen and Piper Jaffray, respectively.

Both analysts have picked Canopy Growth and Tilray to lead the space in 2019 amidst a projected market surge that will see the sector achieve a valuation in the hundreds of billions of dollars over the coming decade.

Vinik, on the other hand, believes that such optimism is itself a cause for concern as it will lead to an unprecedented entry rush due to pot’s relatively low barrier to entry. Over time, as more and more investors come into the space and demand remains more or less stagnant, Vinik predicts that cannabis will thus become a stagnant-volume, low-margin space.

Vinik’s wider economic outlook is not quite so pessimistic, however. Speaking on Squawk Box, he revealed that believes that despite ongoing turbulence, stocks could embark on a multi-year uptrend across amidst good economic growth and low inflation.  In his opinion, tech stocks specifically are in the mid stages of a bull market, which means that regardless of short-term retracements, the asset values will remain bullish in the long term.

In his words:

My belief is that we’re in a secular bull market. In retrospect — I didn’t know it at the time — it started in 2009 and if I had to guess, we’re halfway through it, driven by good economic growth and low inflation.


Source
Author: David Hundeyin
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As Dow Jones Rallies, Trading Bots Tell Investors to Short Everything

The Dow Jones Industrial Average is rebounding, but computer trading bots are alerting investors to short everything.

Trading Bots Suspicious of Dow Winning Streak

Kathryn Kaminski (AlphaSimplex)

According to quantitative investment firm AlphaSimplex, algorithmic trading bots suggest shorting three major asset classes: stocks, currencies, and commodities.

“Pretty much any way you run the models, you end up net short a lot of asset classes,” Kathryn Kaminski told the Wall Street Journal. “This is like the chaos bet.”

Kaminski is the chief strategist at AlphaSimplex Group in Massachusetts. She says the last time the trend-following computer trading bots reversed positions so dramatically was in 2007 and 2008.

According to Kaminski, the algo trading bots have moved from holding long positions in stocks, currencies, and commodities in the third quarter of 2017 to shorting them by 2019.

In other words, the bots are betting that those asset classes will drop, signaling a potential sell-off.

Mathematical Models Not Infallible

However, the trading positions of the bots were assessed based on bearish economic data from late-2018.

At the time, the stock market was roiled by escalating US trade wars with China, as well as the Federal Reserve’s fourth rate hike in 2018.

While many analysts believe algo trading is the wave of the future, others say quantitative analysis has its limits. They note that mathematical models cannot always predict where the markets will move.

“The story has been sold almost like a 2008 protection trade,” says Chris Solarz, a managing director at Cliffwater LLC. “But it’s not necessarily true that they will offset the next crisis, because we don’t know what that’s going to look like.”

Jamie Dimon: Chill Out, No Recession Ahead

Meanwhile, many on Wall Street believe the market plunge in late-2018 was an overreaction, and that the mass sell-off is over.

The Dow Jones closed Wednesday (Jan. 9) at 23,878, up 91 points, posting a four-session winning streak.

The Dow Jones is rallying after being decimated in late December 2018. (Yahoo Finance)

JP Morgan CEO Jamie Dimon says the media-hyped anxiety about an impending global recession is overblown. Dimon insists there is no recession on the horizon, as CCN reported.

The billionaire banker says everyone needs to take a chill pill and calm down. The global economy may be in a “slowdown,” but a recession is not around the corner, he says.

It’s very possible we have a slowdown. People [should] take a deep breath.  It’s not like we’re going into a global recession.

Meanwhile, investment managers like hedge funder Bill Miller say an uncertain stock market could be good news for bitcoin investors.

“Bitcoin basically has no statistical correlation with stocks or bonds, which makes it an excellent diversifier,” Miller says.


Source
Author: Samantha Chang
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Don’t Be Your Own Worst Enemy When Investing

Looking for someone to blame for the not-so-stellar performance of your investment portfolio? Try checking the mirror.

 

Decisions about money aren’t always rational, even when we think we’re acting logically. Common tendencies that make us our own worst enemies when investing include: selling winning investments too soon or holding onto losers for too long, loading up on too-similar assets or failing to assess the future implications of today’s decisions.

Researchers have found dozens of unconscious biases that can drive people to make money decisions they later regret. These behavioral economics concepts include things like “anchoring” — when a specific and perhaps arbitrary number you have in mind sways your decision-making, such as selling Apple just because the company’s stock hit a round number, like $200 a share. Or, the “endowment effect” can cause you to overvalue something simply because you own it, leading you to cling to a stock that’s tanking.

Here are some common human errors in investing, with strategies to overcome them.

Pursuing past predilections

Financial institutions remind us that past performance doesn’t guarantee future results. We don’t always listen.

It’s tempting to look at a stock’s (or the broader market’s) recent performance and conclude gains will persist in the near term, says Victor Ricciardi, a finance professor at Goucher College and co-editor of the books “Investor Behavior” and “Financial Behavior.” “People take a very small sample of data and draw a major conclusion, and that’s a pretty bad pitfall,” Ricciardi says.

How to overcome it: Don’t base investing decisions solely on what’s happened in the past; think about what will drive gains in the future. When investing for the long term, prioritize selecting companies with solid long-term potential.

Diversification that’s not diverse

You may interpret diversification to mean more is better. That’s only half the story; what’s important is owning a variety of assets (both stocks and bonds) with exposure to various industries, companies and geographies.

Sometimes investors exhibit “naive diversification” by owning too-similar assets, which does little to reduce risk, says Dan Egan, director of behavioral finance and investments at robo-advisor Betterment: “People will have three or four different S&P 500 funds and think they’re diversified but don’t look at how correlated they all are.”

Similarly, many investors invest only in companies they know, which results in over-concentration in certain industries, Ricciardi says. That may mean underexposure to “the unknown” — like international stocks — which they perceive to be risky, he adds.

How to overcome it: Invest in a wide range of assets. This can easily be accomplished with a simple portfolio constructed of just a few mutual funds or exchange-traded funds.

Making emotional decisions

When money’s on the line, it’s hard not to let emotions creep into your decisions.

Prior to the 2016 presidential election, many professional investors expressed concerns about a market slump if Donald Trump won. Betterment data suggested that investors who supported Hillary Clinton might let politics shape their investment strategy — and cash out following the election, Egan says. So after the election, the robo-advisor messaged investors with information about the importance of staying invested for the long haul, he says.

On a stock-specific basis, we often let emotions dictate when to sell — not wanting to admit we made a losing bet. “People tend to sell winners too quickly when they go up and, on the downside, they hold on to losing investments too long,” Ricciardi says.

How to overcome it: Think about individual investments in the context of your entire portfolio and craft a plan for when you’ll sell that’s not triggered by short-term factors (like emotions) alone.

Focusing on today

It can be difficult to see the value of saving money for tomorrow when there’s so much to spend it on today. That myopia can make investors either too active or too passive.

If you’re too passive, you may avoid regular check-ins on financial health and stick with a status quo that doesn’t properly prepare for the future, Ricciardi says. Meanwhile, being too active can drive up trading expenses, resulting in lower returns, he adds.

How to overcome it: Let the numbers do the talking. Sit down with a retirement calculator when charting your investing journey. Make sure you fully understand the tax implications and costs associated with selling investments.


Source
Author: Anna-Louise Jackson
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3 Top Marijuana Stocks to Buy After Canada’s Legalization of Recreational Marijuana

Canada now stands as the first major economic power to legalize the use of recreational marijuana. On Tuesday, the Canadian Senate overwhelmingly passed bill C-45, also known as the Cannabis Act. Although it will take provinces and territories another eight to 12 weeks to prepare, a sizable new cannabis market will soon open in the country.



Most Canadian marijuana stocks moved higher after the legislative milestone, but which stocks are the best picks for investors looking to profit from the anticipated marijuana market boom? Here’s why Canopy Growth Corporation (NYSE: CGC) , Aphria (NASDAQOTH: APHQF) , and Aurora Cannabis (NASDAQOTH: ACBFF) look like top marijuana stocks to buy after Canada’s historic vote.

Canopy Growth Corporation

Capitalizing on the coming recreational marijuana market requires two key ingredients: plenty of production capacity and a strong retail presence. Canopy Growth has both.

Canopy currently operates facilities with over 2.4 million square feet of growing space. However, the company is expanding its operations to include more than 5 million square feet of growing space by next year. Based on some back-of-the-envelope calculations, Canopy Growth should be able to produce more than 780,000 kilograms of cannabis each year at its projected full capacity.

There are 10 provinces in Canada and three territories. Canopy Growth already has supply agreements for recreational marijuana with three of them and has announced retail sites in Saskatchewan and Newfoundland and Labrador.

Although Canopy Growth claims the highest market cap of any marijuana stock, it actually ranks as one of the best bargains in terms of cost per kilogram of production capacity. In addition, the company’s partnership with large alcoholic-beverage maker Constellation Brands  gives it access to resources that other marijuana companies don’t have.

Aphria

Aphria appears to be in good shape to compete in the recreational market, as well. Although the company currently can grow only around 35,000 kilograms of cannabis per year, Aphria is on target to have an annual production capacity of 255,000 kilograms by early 2019.

The company also has solidified its retail strategy by forging a key distribution partnership. In May, Aphria selected Southern Glazer as its exclusive distribution partner for recreational marijuana. Southern Glazer is the largest wine and spirits distributor in North America and has operations in all of Canada’s provinces.

Another plus for Aphria is its low cost structure. The company already is able to produce cannabis at less than 1 Canadian dollar per gram. Aphria CEO Vic Neufield has predicted that the ability to operate at low costs could be tremendously important by late 2019 as supply catches up with demand in the Canadian recreational marijuana market.

 

Aurora Cannabis

Aurora Cannabis has been more aggressive than any other marijuana grower in Canada at rapidly expanding capacity through acquisitions. The company has bought CanniMed Therapeutics and MedReleaf  — the third-largest Canadian marijuana grower — over the last few months.

Although some have criticized Aurora’s acquisition strategy, the company’s Chief Corporate Officer Cam Battley recently defended the approach of rapidly scooping up other players. Battley stated that Aurora was in the middle of a “land grab” to establish integrated operations as quickly as it could to compete more effectively.

Thanks in large part to the MedReleaf deal, Aurora will be on course to fund annual production capacity of more than 570,000 kilograms. The company also has secured agreements with smaller marijuana growers to lock in additional capacity.

Aurora’s efforts to prepare for the retail marijuana market include partnering with and buying a stake in Alcanna , which operates 229 liquor stores in Alberta. The company also has signed distribution agreements with leading Canadian pharmacy chains Pharmasave and Shoppers Drug Mart.

But aren’t these stocks too expensive?

Canopy Growth’s market cap stands at nearly $7 billion. Aphria and Aurora Cannabis claim market caps of around $2 billion and $4.3 billion, respectively. Are these marijuana stocks simply too expensive to buy? Not necessarily.

The Canadian annual recreational marijuana market is likely to be in the ballpark of CA$7 billion. Adding the potential for the medical marijuana market in the country brings the total market size to more than CA$8 billion. That’s not enough to justify the market caps of these top marijuana stocks — but the global opportunity is.

Currently, 22 countries other than Canada have active medical marijuana laws. Global demand for medical marijuana could create a market as much as eight times greater than the Canadian cannabis market. And that’s not including the possibility that other countries legalize medical marijuana or that the U.S. could change federal laws to allow states to legalize medical or recreational marijuana without fear of interference.

Granted, it could take longer than expected for these global markets to develop. Even top marijuana stocks could suffer if the delays are too long. Over the long run, though, I think that Canopy Growth, Aphria, and Aurora Cannabis should prosper from the loosening of restrictions on marijuana use.


Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Keith Speights
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Wall Street slips ahead of Fed decision

U.S. stocks were slightly lower on Wednesday, with declines in biotechnology and insurers negating Apple’s rise after strong results, ahead of the Federal Reserve’s policy announcement.

Expectations the U.S. central bank will sound more hawkish on policy tightening kept investors wary of big market moves, especially after currency markets were roiled this week by the dollar’s surge to 3-1/2-month highs against a basket of currencies.

The U.S. two-year Treasury yields US2YT=RR, most sensitive to monetary policy, hit a 9-1/2-year high after data showed U.S. private-sector payrolls for April came roughly in line with market forecasts, cementing expectations for a rate increase in June. [US/]

Despite U.S. companies being on track to post their strongest quarterly profit growth in seven years, worries about inflation and rising raw material costs have weighed on investors’ minds.

Apple (AAPL.O) was a bright spot, rising 4.1 percent after it posted resilient iPhone sales in the face of waning global demand and promised $100 billion in additional stock buybacks.

Its suppliers Cirrus Logic (CRUS.O), Lumentum Holdings (LITE.O) and Skyworks Solutions (SWKS.O) were all up between 2.5 percent and 10 percent.

“The market is on a wait-and-see mode until the Fed announcement, as well as any implication out of China, Mexico, Canada with regards to trade,” said Lindsey Bell, investment strategist at CFRA Research in New York.

Investors kept an eye out for developments around U.S.-China trade talks as a Trump administration delegation is expected to visit Beijing on Thursday and Friday for talks with top Chinese officials.

Don’t forget to join our Telegram channel for up to date Crypto, Business & Technology news delivered daily.

At 11:29 a.m. EDT the Dow Jones Industrial Average .DJI was down 41.35 points, or 0.17 percent, at 24,057.70, the S&P 500 .SPX was down 4.35 points, or 0.16 percent, at 2,650.45 and the Nasdaq Composite .IXIC was up 7.77 points, or 0.11 percent, at 7,138.48.

“It’s refreshing to see Nasdaq leading the way even though everything is more or less flat … you’re seeing tech return to leadership category which is kind of what the market hasn’t had in the past several weeks,” said Bell.

MasterCard (MA.N) rose 2.7 percent after it reported a better-than-expected quarterly profit, boosted by higher consumer spending on credit and debit cards.

The gains kept the S&P technology index .SPLRCT in the positive territory, up 0.52 percent.

On the other end of the spectrum was Snap (SNAP.N), whose shares plunged more than 17.9 percent, after the Snapchat owner fell short of Wall Street forecasts for revenue and regular users.

Biotechnology stocks also took a hit on Gilead Sciences’ (GILD.O) 6.1 percent drop after the company reported a lower quarterly profit as sales of its flagship hepatitis C drugs fell.

Insurers MetLife (MET.N), AIG (AIG.N) and Prudential Financial (PRU.N) were all down after disability insurance provider Unum Group (UNM.N) reported a lower-than-expected profit. Unum shares fell about 16 percent.

Advancing issues outnumbered decliners for a 1.31-to-1 ratio on the NYSE and for a 1.53-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and 16 new lows, while the Nasdaq recorded 56 new highs and 25 new lows.


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Sruthi Shankar

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Take Five – World markets themes for the week ahead

LONDON

Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1/PATIENT, PERSISTENT, PRUDENT

ECB chief Mario Draghi has good reason to stick to a mantra of PPP – patience, persistence and prudence – when the central bank meets on Thursday. Since the ECB’s March meeting, economic data has disappointed, inflation estimates have been revised lower and a global trade spat may loom.

ECB policymaker Francois Villeroy de Galhau has already said the bank may have to alter its march toward a more normal policy stance if protectionism, exchange rates or market swings end up depressing inflation. Flash Purchasing Managers’ Index reports due on Monday will show if the run of soft data — after a record 18 quarters of uninterrupted growth — is continuing.

Economists anticipate that ECB steps towards winding down QE will come only in June or later. But Draghi will be pressed on what he thinks about the economic wobbles, trade wars and the euro. In trade-weighted terms, the euro remains less than one percent below a 3-1/2 year high hit on March 8, the last time the ECB met.

2/FAANGS-TASTIC

The FAANG group of stocks — Facebook, Amazon.com, Apple Inc, Netflix and Google parent Alphabet Inc — have tended to move together in the past, but of late their fortunes have diverged: Amazon shares have risen 33 percent this year, Google and Apple have chalked up single-digit gains and Netflix is up a whopping 72 percent.

Facebook shares are at the other extreme, having fallen 6 percent, hit by fears of tighter regulation and slowing advertising revenue growth after a data privacy scandal.
FAANG-topper Netflix has set the results bar high as well, with corporate earnings on track to rise 19.7 percent for the first quarter, their highest increase in seven years.

Now attention turns to the others. Investor interest is running high in Facebook which reports earnings next Wednesday. Google and Amazon will post their results on Monday and Thursday and investors are hoping that earnings growth and forecasts will be strong enough to bring the FAANGs back into favour.

3/SUCCESSOR-NOMICS

Public support for Japanese Prime Minister Shinzo Abe, the architect of Abenomics — reforms that have lifted growth and corporate profits while weakening the yen — has never been this low. Chances are he will not be re-elected leader of the ruling party, yet investors appear unfazed.

The Nikkei volatility index and implied yen volatility are at their lowest in almost three months. But latest data shows consumer inflation slowed in March to 0.9 percent, stubbornly below the Bank of Japan’s 2 percent target. The question is, if Abe leaves, would his successor have any better ideas than to continue on the path he has set?

The answer may lie at the central bank, which meets on Thursday and Friday. Its governor Haruhiko Kuroda, the man behind the monetary stimulus, was reappointed this year and would therefore survive beyond an Abe exit. While no policy change is expected, the BOJ’s forecasts on inflation will be crucial; sources say it will maintain its view on hitting the target in 2019.

And if Kuroda reassures markets the BOJ is nowhere near an exit from ultra-loose monetary policies, investors will stay unruffled by all the doubts about Abe’s political future.

4/CRUDE: BARRELS OF FUN

European oil majors Shell, Total, Statoil and Eni, and U.S. oil producers Exxon Mobil and ConocoPhilips are all due to report next week.

Crude’s surge to 2014 highs is a boon to oil companies’ bottom line and is supporting share prices but it could also be approaching the point where it starts amplifying inflation.

It is on the radar of U.S. President Donald Trump for sure, inducing him to tweet on Friday that oil prices were being kept “artificially” high by OPEC and this “will not be accepted”. While his tweet sent oil prices lower, they remain just below $73 per barrel, a 9 percent gain in 2018.

Will inflation start to become a concern for investors? They are already hyper-sensitive to any sign inflationary pressures are denting consumer confidence in this late-cycle environment. Bond prices have reacted with minor move upwards but it hasn’t ruffled too many feathers.

Investors in oil stocks, on the other hand, are in a heightened state of anticipation ahead of the big companies’ first-quarter results, which some expect to deliver the strongest cash flow figures in a decade.

5/IT’S A SNAP!

A snap election in Turkey and U.S. sanctions on Russia are seen influencing central bank policy in both countries next week. Turkey is now seen as very likely to raise interest rates at its meeting on Wednesday, while Russia’s Friday meeting may have to hold off cutting rates any further.

With Turkey’s election set for June, expectations are the central bank will at last be able to act on tackling double-digit inflation, the assumption being the government won’t want to go to the polls with a currency in freefall.

The lira has firmed more than 3 percent off record lows since the announcement.
In Russia, inflation is well below target but the rouble’s 6 percent slump to the dollar in the wake of new U.S. sanctions imposed on April 6 has fuelled concerns of pass through to prices.

Having earlier flagged rate cuts, policymakers are now signalling a “hold”, warning of higher inflation expectations. Their take on inflation will be in focus next week as will any comment on the rouble outlook.


 

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Author Reuters 

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