The Emerging-Market Turmoil Has Created An Interesting Buying Opportunity
Consumer staple stocks have come under pressure this year and that a lot to do with the rout in emerging markets, says Josh Peters--editor of Morningstar DividendInvestor. He also thinks that this is a buying opportunity, and that "these issues are going to be temporary."
"What we've seen here in the last couple of months is some turmoil in countries like, say Turkey, and now more recently Ukraine. We've seen currency issues, falling emerging-markets currencies. Venezuela could devalue its currency; it's already practically a black market situation there. Argentina has been a problem. You can say any one of these countries shouldn't have a big impact on a giant company like a Unilever or a Philip Morris International, but when a lot of them are going south at the same time, you're getting some pretty stiff headwinds here for near-term revenue and earnings-per-share growth."
Here Are 2 Financial Crisis-Era Charts That Haunt Wall Street's Nightmares (Business Insider)
The Federal Reserve today released transcripts from its 2008 meetings. In it were two charts that New York Fed president William Dudley brought to the meeting that show the blow to stocks of the big investment banks. The other shows bank credit-default swap (CDS) spreads surging which happens when the risk of default rises.
UBS Pulls $2.6 Million Team From Merrill Lynch (Investment News)
Mark Grueninger and Ben Sauer have joined UBS' Beverly Hills office, from Bank of America Merrill Lynch, reports Mason Braswell at Investment News. The two generated $2.6 million in revenue at Merrill Lynch. Grueninger started at UBS before moving to Banc of America Investment Services in 2003. Meanwhile, Sauer started at Bank of America Investment Services.
Screening For S&P 500 Stocks With Pricing Power Trends (BMO Capital Markets)
"Meaningful trends in the CPI are an important part of our fundamental process for analyzing the US stock market," writes Brian Belski at BMO Capital Markets. "We found that many strong relationships exist between the pricing power and relative price and earnings performance of a particular sector or industry."
While inflation has stayed subdued some have managed to pass on costs to consumers. Areas like delivery services, education, air fare, restaurants, appliances and computers have seen improved pricing power. These include stocks like SanDisk Corp, QEP Resources. Meanwhile, areas like jewelry, furnishings, furniture, audio and video equipment, toys, new cars, and prescription drugs have all seen deteriorating pricing power. These include stocks like Marathon Oil and eBay.
Here Are The Asset Classes Hedge Funds Are Loving And Hating Right Now (Business Insider)
The CFTC just released weekly Commitments of Traders data. It has details on how many standard deviations away hedge funds are from a particular asset class as of February 18, compared to the average position size over the last two years. Based on that hedge funds seem to be long coffee, live cattle, crude oil and they seem to be short eurodollars, the Mexican peso, and E-mini S&P 500 futures.