China’s Economy: Between a Rock and a Hard Place

Noteworthy Monday Option Activity: DPZ, SFM, TXT
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Dominos Pizza Inc. (NYSE: DPZ), where a total volume of 5,302 contracts has been traded thus far today, a contract volume which is representative of approximately 530,200 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 76.2% of DPZ’s average daily trading volume over the past month, of 696,255 shares. Particularly high volume was seen for the $120 strike call option expiring September 16, 2016, with 3,000 contracts trading so far today, representing approximately 300,000 underlying shares of DPZ. Below is a chart showing DPZ’s trailing twelve month trading history, with the $120 strike highlighted in orange:

Brexit QE Isn’t Working As Well As It Should
Don’t expect to see QE money as lending on main street.

The Math Shows ACTX Can Go To $14
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Guru Activist Index ETF (NASD: ACTX), we found that the implied analyst target price for the ETF based upon its underlying holdings is $14.46 per unit.

QQQ’s Underlying Holdings Imply 16% Gain Potential
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the PowerShares QQQ ETF (NASD: QQQ), we found that the implied analyst target price for the ETF based upon its underlying holdings is $127.47 per unit.

Analysts Predict 10% Gains Ahead For OEF
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares S&P 100 ETF (AMEX: OEF), we found that the implied analyst target price for the ETF based upon its underlying holdings is $103.40 per unit.

How The Parts Add Up: QLD Targets $84
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the ProShares Ultra QQQ ETF (AMEX: QLD), we found that the implied analyst target price for the ETF based upon its underlying holdings is $84.35 per unit.

Add Up The Parts: IYH Could Be Worth $170
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares U.S. Healthcare ETF (AMEX: IYH), we found that the implied analyst target price for the ETF based upon its underlying holdings is $169.99 per unit.

The Implied Analyst 12-Month Target For IVW
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares S&P 500 Growth ETF (AMEX: IVW), we found that the implied analyst target price for the ETF based upon its underlying holdings is $132.00 per unit.

Is Amazon Finally Focusing On Profitability?
For more than two decades, Amazon has been enticing customers through “discounted” prices, focusing on sales volumes over profit. But the company is now dropping list prices from its products, with only the final sale price visible to customers. Being a firmly established e-commerce player, Amazon no longer needs to use discounts or best prices to attract consumers, in the view of many. Its loyal user base will continue to use the e-commerce portal for their online shopping needs, irrespective of whether they get the best deal or not. This strategy should help Amazon focus on both sales volumes and profits, allowing it to create a profitable product mix in its general merchandise segment. This move will also allow the e-commerce giant to mute controversies over fake discounts as it highlights real deals.

Why Netflix Deal Matters For Comcast?
Netflix and Comcast have joined forces in a bid to leverage their respective strengths in video streaming and cable TV. This will bring an end to the business rivalry that has characterized their previous relationship. In order to mutually benefit from this collaboration, Comcast will allow Netflix onto its X1 platform, which more than 30% of Comcast’s video customers use. Netflix will gain access to not only a large and previously untapped platform, but (in all likelihood) new content from Comcast as well. Additionally, this will give a boost to its subscriber growth. For Comcast, there are potentially a multitude of benefits, including a subdued competitive threat, stability to the subscriber base and reduced scrutiny from regulators. In simpler terms, since a lot of Comcast’s cable customers are already using Netflix, it makes sense for the cable-television company to bundle Netflix app into its service.

One Essential Retirement Rule Often Ignored
Brexit aside, most people are ignoring one huge retirement rule. Here’s what you need to know.

Becoming A Retirement Millionaire

U.S. Stocks Hit Fresh Highs, S&P 500 Notches New Record
U.S stocks rose at the opening bell Monday, pushing the S&P 500 to a new record high.

Verizon, Wal-Mart Lead 5 Dow Components With 20 Percent Gains Year To Date
The eight ‘Dogs of the Dow’ for 2016 have an aggregate gain of 15.5% year to date as a basket of stocks, led by gains of 20% or more for Verizon, Wall-Mart and Exxon Mobil.

Brexit, Markets And Some Terrible Economics
My colleague Tim Worstall has written a post castigating the economics writing about Brexit. Tim and I are on opposite sides in the Brexit debate – he is in favour of Leave, whereas I voted to Remain. But on this, we are in total agreement. The standard of economic analysis is indeed dismal – both from those who forecast that Brexit will cause economic Armageddon, and those who believe that Brexit will lead to “sunlit uplands”.

Here’s How Much Europe Depends On The UK
Euroskeptiscism is on the rise in Europe. Countries like Poland and Hungary have actively sought to limit the EU’s influence and ignore its rules—most recently with regard to refugee policies.

Brexit Bounce: 3 Big Dividends With 50% Gains Ahead
Did you miss the Brexit bounce? Sure, much of the easy money has been made – but not all of it.

5 Warren Buffett Stocks Trading Lower Post-Brexit
While Warren Buffett (Trades, Portfolio) has no concern as an investor about the United Kingdom’s separation from the European Union or “Brexit,” the event two weeks ago scared away many in the market, including owners of some of his stocks. GuruFocus’ All-in-One screener found 16 stocks in the Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) chairman’s portfolio had declined more than 5% over the past month. All except one, Goldman Sachs (NYSE:GS), had declined since the Brexit decision June 24. The broader S&P 500 market has risen 0.91% since the vote and 0.17% for the month ended July 8.

These 4 Stocks Can Save You From The Next Market Crash
Is the next market brushfire right around the corner? And are investors in denial about it?

The Week Ahead: What Are Those Bear Market Forecaster’s Missing?
The widely anticipated monthly jobs report on Friday shocked forecasters as for the second month in a row they were way off the mark. In the June report May’s numbers were revised even lower to just 11,000 new jobs. The 285,000 reading for Non-Farm Payrolls was above even the most optimistic CNBC forecast and the increase of 38,000 jobs in professional and business services was especially encouraging. Even manufacturing had a gain of 14,000. Still it is not surprising that some who have been warning about the deterioration in the economy were still not impressed. WA7-8a The Non-Farm Payrolls chart suggests the trend may have changed with the June report but one should remember that this data series, like many of the economic reports, is subject to wide swings on a month-to-month basis. Many economists are more concerned by the fact that S&P 500 came within a fraction of the all time high and yields on the 10 Year T-Note dropped to new all time lows. Technical indicators like volume, price as well as the number of stocks advancing or declining are rarely revised and this is one of the many reasons I favor technical over fundamental analysis. As I pointed out last week the fact that the A/D lines on the major averages did not make new lows during the post Brexit market decline was a sign of strength. WA7-8ab Friday’s gains were impressive as the major averages were up 1.5% or more and even more important there were 2711 stocks advancing and just 370 declining. The strength of rally was likely fueled in part by short covering as even after the close one long time market bear called the market’s reaction “comical”. So what are these bear market forecasters missing?

With Jobs in Rear-View Mirror, Time to Focus on Earnings, Retail Sales
Friday’s blowout jobs report gave the market some positive momentum heading into a big week. But can the rally continue?

Trading Options In Google, Amazon and the VIX: Volume, Leverage and Mixed Motivation
If you have been trading options in Google (GOOGL Alphabet A), Amazon (AMZN) and the CBOE Volatility Index (VIX) you are in good company. There are many participants each day. The VIX, however, is the landslide leader in the category of volume. This is not surprising. The lower the price of the trading vehicle, the more likely it would be to lead in volume, if all else was equal. In this case, however, the markets are not equal.

S&P 500 Companies’ Piotroski F-Scores Weaken, Energy Stocks Get Hit The Worst
Throughout the past two years, the distribution of Piotroski F-scores for the Standard & Poor’s 500 index has generally shifted near all-time lows. While many of these companies had strong F-scores in the past, most companies, especially in the energy sector, have experienced declining F-scores. Tumbling oil prices present one likely reason for the weakening F-scores among energy companies.

11 Top Stock Picks From Wall Street Pros For The 2nd Half Of 2016

Why Brexit Will Cause A Huge Breakout On Wall Street
Brexit Means More Easy Money, and U.S. Stocks Love Easy Money (For Now): In a normal world, Brexit would be bearish for capital markets and the economy but in our easy money addicted world, Brexit is actually bullish for U.S. stocks. Why? Because it gives central banks the green light to continue (if not do more) easy money. For now, investors love easy money and are buying stocks because there is so much negative news priced in to the stock market and the economy that any bullish news (Friday’s stronger than expected jobs report) is enough to send stocks racing higher. Investors also do not have to worry about a hawkish Fed because the Fed can now easily wait until after the election (if not longer) before raising rates. All they have to do is say they are “watching” the impact of Brexit on the global economy and keep kicking the can down the road. Additionally, if the U.S. economy weakens, they can easily lower rates (and cite Brexit) and then pump more easy money into the system. Remember, central banks have one objective: keep stocks higher (long enough for the economy to kick into gear).

Can Bed Bath & Beyond Benefit From Its Acquisition Of One Kings Lane?
Recently, Bed Bath & Beyond announced that it had acquired One Kings Lane- a home decor & design company known for its flash sales, for an “immaterial” purchase price. In early 2014, One Kings Lane raised $225 million in venture capital and was valued at $ 900 million. However the once “hot” e-commerce start up subsequently struggled to grow revenues and its acquisition by Bed Bath & Beyond at an non-material price suggests a significant decline in its valuation. While Bed Bath & Beyond believes that this acquisition will bolster its offerings in furniture and home decor, the rationale to purchase a struggling business is being questioned by several experts. We believe Bed Bath & Beyond needs to take bold steps to improve its revenues. The acquisition of a flourishing business in the home furnishing segment might have made more strategic sense. One Kings Land can enhance the company’s product portfolio, but it might not make a significant difference to its revenues in the near term.

Why Did Diageo Invest In A Non-Alcoholic Drinks Company?
After over 250 years in the spirits and beer business, Diageo, the world’s largest distiller, made its first investment in a non-alcoholic drinks company. It acquired a minority stake in Seedlip, a British company, launched in November of 2015. The company is the “world’s first” distilled non-alcoholics company created by entrepreneur Ben Branson, to solve the dilemma of “what to drink when you’re not drinking.” This investment was made through Distill Ventures, a vehicle set up by Diageo to help fund innovations within the spirits world. Such a vehicle offers Diageo the ability to place small bets on upcoming brands at a time of constantly changing tastes and preferences of consumers. One such shift that has been witnessed is that of reduced alcohol consumption, at least in the mature markets of Western Europe and parts of North America. According to the latest available data, the estimated total alcohol consumption in the UK is at 9.4 liters per head for those aged 15 years and older and 7.7 liters per head on average throughout the entire population in 2013. This reflects the downward trend from a peak of 11.6 and 9.5 liters per head in 2004.

BCE’s Series AJ Preferred Shares Cross 5% Yield Mark
In trading on Friday, shares of BCE Inc’s Series AJ Preferred Shares (Toronto: BCE-PRJ) were yielding above the 5% mark based on its monthly dividend (annualized to $0.675), with shares changing hands as low as $13.49 on the day. As of last close, BCE.PRJ was trading at a 46.78% discount to its liquidation preference amount. It should be noted that the preferred shares are convertible.

Citigroup’s Preferred Stock, Series K Shares Cross 6% Yield Mark
In trading on Friday, shares of Citigroup Inc’s 6.875% Fixed Rate/Floating Rate Noncumulative Preferred Stock, Series K (NYSE: C.PRK) were yielding above the 6% mark based on its quarterly dividend (annualized to $1.7188), with shares changing hands as low as $28.64 on the day. This compares to an average yield of 5.48% in the “Financial” preferred stock category, according to Preferred Stock Channel. As of last close, C.PRK was trading at a 14.68% premium to its liquidation preference amount, versus the average premium of 6.24% in the “Financial” category. Investors should keep in mind that the shares are not cumulative, meaning that in the event of a missed payment, the company does not have to pay the balance of missed dividends to preferred shareholders before resuming a common dividend. Click here to find out the 50 highest yielding preferreds, at PreferredStockChannel.com »

Noteworthy Friday Option Activity: PCLN, GS, FDX
Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Priceline Group Inc. (NASD: PCLN), where a total volume of 20,744 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 256.4% of PCLN’s average daily trading volume over the past month, of 809,075 shares. Particularly high volume was seen for the $1320 strike call option expiring July 08, 2016, with 1,147 contracts trading so far today, representing approximately 114,700 underlying shares of PCLN. Below is a chart showing PCLN’s trailing twelve month trading history, with the $1320 strike highlighted in orange:

Notable Friday Option Activity: CMCSA, UPS, ESRX
Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Comcast Corp (NASD: CMCSA), where a total volume of 51,643 contracts has been traded thus far today, a contract volume which is representative of approximately 5.2 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 51.8% of CMCSA’s average daily trading volume over the past month, of 10.0 million shares. Especially high volume was seen for the $70 strike call option expiring August 19, 2016, with 13,516 contracts trading so far today, representing approximately 1.4 million underlying shares of CMCSA. Below is a chart showing CMCSA’s trailing twelve month trading history, with the $70 strike highlighted in orange:

Friday Sector Leaders: Materials, Industrial
Looking at the sectors faring best as of midday Friday, shares of Materials companies are outperforming other sectors, higher by 2.6%. Within that group, CF Industries Holdings Inc (NYSE: CF) and Alcoa, Inc. (NYSE: AA) are two of the day’s stand-outs, showing a gain of 5.8% and 5.2%, respectively. Among the high volume ETFs, one ETF closely following materials stocks is the Materials Select Sector SPDR ETF (AMEX: XLB), which is up 2.3% on the day, and up 8.87% year-to-date. CF Industries Holdings Inc, meanwhile, is down 37.64% year-to-date, and Alcoa, Inc. is up 0.15% year-to-date. Combined, CF and AA make up approximately 3.7% of the underlying holdings of XLB.

Top Buys by Directors: Welling’s $3.2M Bet on ROVI
The directors of a company tend to have a unique inside view into the business, so when directors make major buys, investors are wise to take notice. Presumably the only reason a director of a company would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So in this series we look at the largest insider buys by company directors over the trailing six month period, one of which was a total of $3.2M by Glenn W. Welling, Director at Rovi Corp (NASD: ROVI).

Noteworthy Friday Option Activity: BA, CREE, CCMP
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Boeing Co. (NYSE: BA), where a total of 20,297 contracts have traded so far, representing approximately 2.0 million underlying shares. That amounts to about 46.4% of BA’s average daily trading volume over the past month of 4.4 million shares. Especially high volume was seen for the $132 strike call option expiring July 15, 2016, with 2,389 contracts trading so far today, representing approximately 238,900 underlying shares of BA. Below is a chart showing BA’s trailing twelve month trading history, with the $132 strike highlighted in orange:

Jobs Surprise Sends S&P 500 Back Toward Record Highs
A snapback in monthly jobs figures fueled a big rally on Wall Street that has the market once again chasing record highs.

What A Jobs Report Friday Is Like On BlackRock’s Bond Desk
In January, Forbes got an up-close look at how BlackRock bond guru Rick Rieder operates when a big economic report comes out.

H.B. Fuller About To Put More Money In Your Pocket (FUL)
Looking at the universe of stocks we cover at Dividend Channel, on 7/12/16, H.B. Fuller Company (NYSE: FUL) will trade ex-dividend, for its quarterly dividend of $0.14, payable on 7/28/16. As a percentage of FUL’s recent stock price of $44.00, this dividend works out to approximately 0.32%. Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen » or click here to find out which 9 other stocks going ex-dividend you should know about, at DividendChannel.com »

Ex-Dividend Reminder: Pennymac Mortgage Investment Trust, Aetna and Clarcor
Looking at the universe of stocks we cover at Dividend Channel, on 7/12/16, Pennymac Mortgage Investment Trust (NYSE: PMT), Aetna Inc. (NYSE: AET), and Clarcor Inc. (NYSE: CLC) will all trade ex-dividend for their respective upcoming dividends. Pennymac Mortgage Investment Trust will pay its quarterly dividend of $0.47 on 7/28/16, Aetna Inc. will pay its quarterly dividend of $0.25 on 7/29/16, and Clarcor Inc. will pay its quarterly dividend of $0.22 on 7/22/16.

2 High Yield Utility Stocks to Buy and 2 to Sell Now
Utilities are on fire. As boring as they may be, stocks in this sector have been climbing higher and higher in 2016, thanks to one major trend: investors are desperate for yield, but they don’t want risk.

Verizon Communications Named Top Dividend Stock With Insider Buying and 4.08% Yield (VZ)
In this series, we look through the most recent Dividend Channel ”DividendRank” report, and then we cherry pick only those companies that have experienced insider buying within the past six months. The officers and directors of a company tend to have a unique insider’s view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Verizon Communications Inc (NYSE: VZ), which saw buying by EVP & Chief Marketing Officer Diego Scotti.

Employment Palooza: June Job Gains Come in Way Above Expectations
(Friday Market Open) What a difference a month makes.

The Hypocrisy That’s Turned Hedge Fund Activists Into Billionaires
Who is holding the activists accountable? Missing from the debate on hedge fund activists is a discussion how funds treat their own investors.

Highest-Earning Hedge Fund Managers 2016

Oversold Conditions For Cogeco Communications (CCA)
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

Juno Therapeutics Enters Oversold Territory (JUNO)
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

This Stock Has A 4.18% Yield And Sells For Less Than Book
MetLife Inc (NYSE: MET) has been named as a Top 10 dividend-paying financial stock, according to Dividend Channel, which published its most recent ”DividendRank” report. The report noted that among shares of financial companies, MET displayed both attractive valuation metrics and strong profitability metrics. For example, the recent MET share price of $38.27 represents a price-to-book ratio of 0.6 and an annual dividend yield of 4.18% — by comparison, the average stock in Dividend Channel’s coverage universe yields 3.9% and trades at a price-to-book ratio of 2.2. The report also cited the strong quarterly dividend history at MetLife Inc, and favorable long-term multi-year growth rates in key fundamental data points.

When Bad News For Bond Yields Is Good For Stocks
Investors often sell stocks to buy bonds during uncertain times. But the opposite strategy is often a better idea.

5 Dividend Stocks With High Cash Flows

Which Is A Better Dividend Bet — Altria Or Philip Morris?
Tobacco giants – Altria and Philip Morris International – have been among the top dividend payers in the stock market, and share much of their history together. Until 2008, the two companies were one corporate entity; but, the spin-off of Philip Morris International from Altria eight years ago resulted in the separation of the international tobacco business from the domestic tobacco and wine segments, which remained with Altria. In this article we highlight the performance of the two companies in terms of the dividend paid to its shareholders. 1. Dividend Growth Since the two companies split in 2008, both have not only paid dividends every year, but also increased them. Altria’s payout was $0.29 per share each quarter at the time of the split, and it now currently pays $0.565. On the other hand, Philip Morris initiated its quarterly dividend at $0.46, which has now reached $1.02. This implies a 120% growth for the latter company. While Altria’s rate of 95% is not poor by any standards, it is the one lagging among the two companies.

Here’s How McDonald’s Is Ensuring That “All Day Breakfast” Remains A Winner
After it was launched in October last year, McDonald’s “All Day Breakfast” has been a critical piece in its turnaround strategy. It has helped significantly in improving the company’s top line and comparable store sales in the U.S., which increased nearly 6% in Q1 2016 after McDonald’s starting serving breakfast menu items throughout the day. The company is now expanding its All Day Breakfast menu by adding Biscuit Sandwiches, McMuffin Sandwiches and McGriddles to its national menu, starting September this year. McDonald’s will now have one national All Day Breakfast menu with a wider variety of menu items which should attract more consumers. The company is also working on other improvements such as moving from margarine to real butter and transitioning to cage-free eggs. McDonald’s is addressing concerns around All Day Breakfast waning by including popular menu items such as McGriddles and we believe a wider choice of breakfast items available all day should positively impact its top line and profitability.

First Solar Makes The Right Move By Abandoning Its Bet On Silicon Panels
First Solar, the largest U.S. solar manufacturer, will abandon its foray into the high-efficiency silicon-based solar modules that it began developing in 2013 as a hedge against the competitiveness of its proprietary thin film Cadmium Telluride (Cd-Te) technology. The firm noted that it will take a one time non-cash charge of between $90 million to $110 million this year in this regard, while its operating costs could reduce by about $8 million to $10 million annually.  Below, we take a look at some of the possible reasons for the exit and why its likely to be beneficial to First Solar.

Strong Jobs Report: U.S. Adds 287,000 Jobs In June, Unemployment Rate Ticks Up To 4.9%
Economists had projected that 180,000 jobs would be added.

The Best Jobs In 2016

Why Is The FDA Approval Of Absorb Significant For Abbott?
The recent FDA approval of Abbott’s fully absorbable stent-Absorb, which is used to treat the coronary artery disease, is a significant breakthrough for the company. The following are the key reasons as to why this is significant: Unlike a metallic stent that remains permanently in the Coronary artery after opening a blockage, Abbott’s Absorb stent dissolves completely in three years, leaving the vessel in the natural state after it is fully restored. A fully restored vessel has the potential to flex and dilate in response to the person’s lifestyle. Given the large number of people suffering from the coronary heart disease, which is responsible for 370,000 deaths each year in the U.S., Abbott has a huge opportunity to tap this market. According to studies, the U.S. remained the largest cardiovascular market in the world, with a share of around 40% of the overall market in 2016. Absorb, being the first of its kind in the U.S., is expected to attract significant adoption in the U.S. market. With the FDA approval of Absorb, Abbott stands a chance to reverse the declining trend in its market share in the vascular segment, which constitutes approximately 12% of its value as per our estimates. We currently forecast the company’s market share in vascular segment to decline from 16% in 2015 to 12% over the next six-to-seven years. However, successful commercialization of Absorb can help Abbott reverse this declining trend.

World’s 25 Largest Retail Companies In 2016

How Malls Will Survive In The Age Of Amazon