Monday, February 8, 2016

The Super Bowl's Losers

The Broncos were the big winner last night, but in addition to the Panthers, another loser was the city of San Francisco. The NFL host committee is only reimbursing San Francisco $104,000 for the $4.8 million in city services it spent as the major city closest to Levi’s Stadium.

Last year, the city of Glendale, Arizona — home of the Arizona Cardinals — lost between $579,000 and $1.25 million hosting the Super Bowl, between public safety and transportation costs. That was the second time the city hosted the Super Bowl, and it lost even more the first time, coughing up more than $1 million in 2008.

Two years ago, here in New Jersey, we gave a $7.5 million sales-tax rebate to the NFL for the game held in East Rutherford. New Jersey Transit took the biggest hit - it estimated $7.2 million in additional costs covering the extra Super Bowl ridership, but only made $1.6 million in ticket sales and ad revenue.

Friday, February 5, 2016

January's Jobs Report

The economy added 151,000 jobs in January, a dip below the 231,00 monthly average we've seen over the past three months, according to the report released by the Bureau of Labor Statistics this morning. The unemployment rate fell to 4.9 percent, the first time it's been below 5 percent since February 2008.

Probably the best news in this morning's report is that average hourly earnings increased by 12 cents, to $25.39. Over the past year, average hourly earnings have risen by 2.5 percent, a good sign for a figure that had been relatively stagnant during the recession and recovery.
The gains among industry sectors were fairly broad-based. Retail trade added 58,000 jobs in January, and health care was up 37,000. Manufacturing added 29,000 jobs in January, and employment in financial activities rose by 18,000.

Thursday, February 4, 2016

Those Beleaguered Financial Stocks

We've gotten accustomed to the energy sector dragging down the market, but in this year's sell-off, it's the financials that have looked especially bad. Altogether, the S&P 500 Financials sector is currently down 13.2 percent this year. The worst performer in the group, Legg Mason, is down 28.8 percent on the year.

Of the sector's 90 component stocks, only nine have a positive return on the year. On the other side of the ledger, this year's losers include:
  • Charles Schwab, down 27.3 percent
  • E*Trade, down 24.7 percent
  • Morgan Stanley, down 24.4 percent
  • Bank of America, down 24.1 percent
  • Citigroup, down 24.0 percent

Wednesday, February 3, 2016

A Stormy January

By any measure it was a rough January for the stock markets. The S&P 500 lost 5 percent, marking its worst start to the year since January 2009, just before the market bottomed out in March of that year. According to the portfolio app OpenFolio, 93 percent of all investors lost money this January.

It wasn't just the drop, but how we got there that was so hard to take. The average daily spread between the S&P 500’s intraday high and intraday low was 2.3 percent in January. That's the highest for a month since September 2011 when it was 2.6 percent, according to S&P Dow Jones Indices.

For the year, though we are only a month into 2016, the spread is tracking to be the greatest on an annual basis since 2008. In that disastrous year, the average daily spread was 2.8 percent.

Tuesday, February 2, 2016

The New World's Biggest Stock

The new largest company in the world boasts a name you may not have heard of. With a pop in its stock on Monday  after the company reported earnings and revenue that beat Wall Street’s consensus, Alphabet, the parent company of Google, has surpassed Apple Inc. as the most valuable publicly-traded company in the world. It now has a market capitalization of nearly $565 billion, as opposed to $539 billion for Apple.

Since Alphabet reported strong second-quarter profits in the middle of last July, the stock has surged 28 percent. Meanwhile Apple shares have fallen 25 percent over that time frame, amid concerns about slowing sales of the iPhone.

Alphabet is now the 12th company to achieve the title of the S&P 500’s most valuable company in the history of the index. Aside from Apple, other companies that have held the crown include Exxon Mobil Corp., IBM and Microsoft.

Monday, February 1, 2016

The Biggest LIttle Stock

There was a fun item in the Wall Street Journal over the weekend touting the best-performing U.S. stock over the past 30 years. It's not Apple or Google or any other big name, but little-known Balchem, which is up 107,099 percent since the end of 1985. It's gone from less than a dollar per share to 56 as of last week.

Balchem, which makes flavorings, fumigating gases and nutritional additives for animal feed, isn't that little, though - its total stock market value is about $1.7 billion. Since the end of 1985, Balchem has gained an average of 26.2 percent annually, compared with 10.3 percent for the S&P 500.

Not many stocks ever return 100,000 percent, but over the past 30 years, 44 U.S. stocks have generated total returns of 10,000 percent or more, according to FactSet. Those include Home Depot, Amgen, Nike, UnitedHealth Group, Danaher, Altair, Kansas City Southern, Apple and Altria Group.

Friday, January 29, 2016

Fourth Quarter GDP Reoport

Eceonomic forecasters expected fourth quarter growth to come in weakly, and according to the figures released this morning by the Commerce Department, they were right on target. GDP grew at 0.7 percent in the fourth quarter, down from 2 percent in the third quarter and 3.9 percent in the second quarter. All told, the economy expanded at a rate of 2.4 percent for 2015. That's exactly the same rate that we saw in 2014.

Commerce attributed the slowing growth to a deceleration in consumer purchasing, which dropped from 2.2 percent growth in the third quarter to 1.1 percent in the fourth. Other factors included downturns in commercial real estate, exports, and state and local government spending.

The positive factors: The decrease in private inventory investment was smaller than in the previous quarter. We also saw  a deceleration in imports, and an acceleration in federal government spending.