Market News

A few years ago, I read an article that described the various items that well-wishers tried to donate to Haiti after the earthquake. Some of the items seemed really critical (medicine), others fell into the category of generally misguided (clothes), and one item really jumped out at me: a single rollerblade. A single rollerblade. Someone tried to donate a single rollerblade to the relief efforts in Haiti. And worse than that, someone who works for an NGO had to take the time to turn down, return or throw away a single rollerblade. The mind boggles. Except, it doesn't, or at least mine doesn't. Having worked between Kenya and the US for the last few years, I have seen hundreds of examples of donors sending things that aren't needed, or even wanted. With that in mind, I always get nervous when donors give me valuable items that I'm unable to make use of (or would rather buy locally in Kenya). I have the best intentions of passing on donated items of children's clothes or books to a local organization that could really use them, but I usually lose steam and end up dropping them off at one of those massive bins you can find in a library car park.

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There's nothing like some bad weather in South America to get the markets humming. Due to potential crop damage, Sugar, Soybeans and Coffee have shown tremendous gains in the last few months. Soybeans are particularly interesting because its market has gone from a contango to an inverted market. This means that participants in the market are willing to pay more for the front month futures contract then for the next month. Typically this is a sign of a shortage or, at minimum, a willingness to take delivery now and take advantage of a product's availability. Neither Sugar nor Coffee had inverted markets, although Sugar is very close. Since April 6th, when all three contracts were in a bit of a trough, Sugar's October contract has increased 32%, while November Soybeans is up 25% and Coffee's September contract is 13% higher.

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Stock exchanges in mainland China, Hong Kong and Taiwan are closed today to mark the Dragon Boat Festival.

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At this year's Strategic Investment Conference, my good friend Mark Yusko poured cold water on whatever bullishly warm feelings the most optimistic folks may have clung to.

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Solar stocks have had a tough year so far, with the MAC Global Solar Energy Index declining by nearly 30% so far this year, compared to the broader S&P index, which has seen a modest year-to-date increase. This under-performance comes despite reasonably strong solar installation growth projections for 2016 (about 17% year-over-year, per IHS). Oil prices, which are often viewed as a proxy for energy prices in general, have also seen strong gains year-to-date. Below we take a look at some of the factors that have likely contributed to the weak performance of solar stocks. December 2015 was a very favorable month on the policy front for the solar industry, as world leaders signed a landmark climate agreement in Paris, dubbed COP21, increasing the urgency to shift to renewable energy sources. Separately, the United States passed a spending package that included a multi-year extension of the crucial Solar Investment Tax Credit beyond 2016. Both these developments resulted in the MAC Global Solar Energy Index rising by 14% during the month. It is possible that the markets overreacted to these policy developments, leading to a correction in January 2016. While the solar industry has seen a few years of relative supply-demand balance, there is a possibility that supply could outstrip demand going forward, impacting pricing and margins.

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The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics - strong fundamentals and a valuation that looks inexpensive. GameStop Corp (NYSE: GME) presently has a stellar rank, in the top 10% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.

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Looking at the sectors faring best as of midday Thursday, shares of Utilities companies are outperforming other sectors, up 0.4%. Within that group, Ameren Corp (NYSE: AEE) and Consolidated Edison Inc (NYSE: ED) are two large stocks leading the way, showing a gain of 2.1% and 1.2%, respectively. Among utilities ETFs, one ETF following the sector is the Utilities Select Sector SPDR ETF (AMEX: XLU), which is up 0.6% on the day, and up 17.72% year-to-date. Ameren Corp, meanwhile, is up 19.32% year-to-date, and Consolidated Edison Inc is up 20.83% year-to-date. Combined, AEE and ED make up approximately 5.6% of the underlying holdings of XLU.

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It's that time of year! I'm talking about graduation, and I am proud to say that one of my children, my daughter Keiko, just graduated from the University of Montana.

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The cash conversion cycle - or net operating cycle - indicates how efficiently a company is managing its working capital and generating cash flows. Wireless carriers generally have low or negative cash conversion cycles, as they are essentially service businesses with short credit periods and low inventory levels (primarily handsets). That said, there are some differences in the metric across major U.S. carriers.

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After not being able to establish itself in China, where Alibaba controls a significant portion of the e-commerce market, Amazon is ensuring that it does not let go of the India opportunity. The company recently announced a $3 billion fresh investment in India, through which the company plans to make its supply chain more efficient. This is a huge investment, almost equal to Amazon's global marketing costs in 2015. (Read Why Amazon Is Betting Big On India?) While India holds strong growth potential in e-commerce and is being touted as a trillion dollar opportunity, Alibaba is still looking to establish itself in the region. With Amazon's huge investment, while local players such as Flipkart and Snapdeal will face the heat, Alibaba's growth ambitions in the region will likely be significantly impacted. Amazon currently holds 15% market share in the Indian e-commerce market while Flipkart and Snapdeal together account for more than 70% share in this market. Alibaba has a stake in Snapdeal and reports suggested that the company is also looking to buy stake in Flipkart. Amazon's significant investment in India clearly shows the company's intent to sieze significant share in the e-commerce market in the region. If Alibaba does not take proactive steps to establish itself in this market, it might lose out to Amazon in the region.

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