These are the four biggest misconceptions about investing in ETFs, says behavioral finance pro

But there are a few simple rules investors can follow to avoid getting caught in anxiety-fueled drops or becoming the weak-handed sellers themselves, says Dan Egan, Betterment’s managing director of behavioral finance and investing. Here are the four main tips he shared with CNBC’s “ETF Edge” on Monday about managing your instincts and using behavioral investing to your advantage. “There’s the School of Hard Knocks [and] there’s the School of Hard Stocks.” That point is especially important when


But there are a few simple rules investors can follow to avoid getting caught in anxiety-fueled drops or becoming the weak-handed sellers themselves, says Dan Egan, Betterment’s managing director of behavioral finance and investing.
Here are the four main tips he shared with CNBC’s “ETF Edge” on Monday about managing your instincts and using behavioral investing to your advantage.
“There’s the School of Hard Knocks [and] there’s the School of Hard Stocks.”
That point is especially important when
These are the four biggest misconceptions about investing in ETFs, says behavioral finance pro Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: lizzy gurdus
Keywords: news, cnbc, companies, investors, youve, theres, let, misconceptions, finance, pro, behavioral, hard, etfs, biggest, school, fund, egan, best, investing


These are the four biggest misconceptions about investing in ETFs, says behavioral finance pro

It’s not easy to keep your emotions out of investing. Those that follow Wall Street’s daily moves may often hear stock market commentators use terms like “weak hands” and “shaken out” to refer to investors who can’t bear the pain of sell-offs or times of higher-than-usual volatility. Those buyers aren’t exactly few in number. The group, made up largely of individuals, has the power to meaningfully exacerbate moments of weakness, making broad-market declines worse than feared or multiplying the effects of certain stocks’ swings. But there are a few simple rules investors can follow to avoid getting caught in anxiety-fueled drops or becoming the weak-handed sellers themselves, says Dan Egan, Betterment’s managing director of behavioral finance and investing. Here are the four main tips he shared with CNBC’s “ETF Edge” on Monday about managing your instincts and using behavioral investing to your advantage.

“If your brother-in-law is talking to you about it over Thanksgiving, you might want to watch out for it.”

One of Egan’s biggest tips for investors is to watch out for themes. The rise of internet culture has sped up the widespread adoption of fads like cannabis investing, making it difficult for people to fully vet thematic trends before deciding to buy in, he said. “If your brother-in-law is talking to you about it over Thanksgiving, you might want to watch out for it,” Egan said in the Monday interview. “The ability to go to market with a new ETF based upon a theme has dropped. The asset base that you need in order to launch that fund has gone down, too. So, we’re seeing quicker uptake on whatever the latest fad is.” To determine if something is a viral trend, Egan asks himself a few questions: “How quickly did the underlying asset price come up? How much are people talking about it on social media? … How fast is this going to spread?” The most important question, though, is “has it performed well recently?” Egan said. “If no and it’s still growing, that’s interesting. If yes, then it’s more likely to be speculative.”

“Maybe it’s time for me to do a little bit of house-cleaning.”

Egan’s second investing rule? You don’t need 50 ETFs. “One of the things I like about New Year’s is it gives you that fresh start where you can say, ‘Maybe it’s time for me to do a little bit of house-cleaning,'” he said. “I’ve done this: you accumulate holdings over the years. Here was this thing that was the best choice maybe 10 years ago, and … the big names, over time, sometimes aren’t the best bet for you.” One of the most common reasons investors are reluctant to sell out of their long-term positions has to do with taxation, Egan said. “One very common bias, especially in taxable accounts, is that people don’t want to realize the taxable gains and pay the tax,” he said. “In a weird way, they’ll end up paying more over the life of a fund if it’s charging an extra 20, 30 or 40 [basis point]s than if they just sold out of it and went to something cheaper.” In short, “pulling the Band-Aid off” and cutting your portfolio down to a manageable number of holdings can actually improve performance, Egan said.

“There’s the School of Hard Knocks [and] there’s the School of Hard Stocks.”

Despite the monster gains funds like the S&P-tracking SPDR S&P 500 ETF Trust (SPY) have accrued over the years, Egan has also found that the biggest aren’t necessarily the best. “You can get the exact same exposure as SPY for one-third of the cost with VOO,” the Vanguard S&P 500 ETF, Egan said. “There’s a lot of big names — EFA [iShares’ Europe-focused fund], EEM [iShares’ emerging-markets fund] — that are funds that have been around. They’re very liquid. They’re very large,” he said. “They’re usually used by large institutional investors because of that liquidity. They can count on it in order to trade it. But that doesn’t mean it’s necessarily good for a long-term, buy-and-hold investor.” That point is especially important when it comes to teaching kids about investing, the behavioral expert said. Often times, parents purchase the largest, most successful and most liquid funds for their kids, but Egan prefers to let the younger generations make their own mistakes. “There’s the School of Hard Knocks [and] there’s the School of Hard Stocks,” he joked. “You’ve got to throw them in there with a little bit of a guardrail on. You’ve got to give them the money; you’ve got to let them make the mistakes.” In other words, “the best way to learn is to actually take your hits,” he said. “You’ve got to learn that you’re not the best investor ever and the best thing for you to do is dedicate your time somewhere else. So, give them money. Let them invest. Let them learn their own way.”

“I’m not going to … be able to bench-press 250 pounds today, but if I come in and I do my reps, I’ll get there.”


Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: lizzy gurdus
Keywords: news, cnbc, companies, investors, youve, theres, let, misconceptions, finance, pro, behavioral, hard, etfs, biggest, school, fund, egan, best, investing


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‘Where do we put our money?’ is biggest issue for the Davos crowd, top fund manager says

Finding a place to invest capital is the biggest problem for wealthy investors and fund managers attending the World Economic Forum (WEF) in Davos this week, according to one prominent U.K. finance player. On Monday, the International Monetary Fund forecast a global growth rate of 2.9% for 2019 and of 3.3% for 2020 — trimming previous estimates. “The biggest problem that the people I meet here have — the investors who give money to us — is ‘where do we put our money?’ “So they are buying infrast


Finding a place to invest capital is the biggest problem for wealthy investors and fund managers attending the World Economic Forum (WEF) in Davos this week, according to one prominent U.K. finance player.
On Monday, the International Monetary Fund forecast a global growth rate of 2.9% for 2019 and of 3.3% for 2020 — trimming previous estimates.
“The biggest problem that the people I meet here have — the investors who give money to us — is ‘where do we put our money?’
“So they are buying infrast
‘Where do we put our money?’ is biggest issue for the Davos crowd, top fund manager says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: david reid
Keywords: news, cnbc, companies, money, investors, growth, capital, issue, fund, biggest, world, manager, crowd, davos, standard, asset, markets


'Where do we put our money?' is biggest issue for the Davos crowd, top fund manager says

Finding a place to invest capital is the biggest problem for wealthy investors and fund managers attending the World Economic Forum (WEF) in Davos this week, according to one prominent U.K. finance player.

The investment world has been beset by sluggish growth and ultra-low interest rates. Bond yields have dipped while many feel the strongest gains in equities have already been made. On Monday, the International Monetary Fund forecast a global growth rate of 2.9% for 2019 and of 3.3% for 2020 — trimming previous estimates.

Martin Gilbert, the outgoing vice chair of British investment company Standard Life Aberdeen, told CNBC’s Steve Sedgwick Monday that despite growth concerns, markets look stable. He said that for large investors, deciding where to allocate capital is now the primary concern.

“The biggest problem that the people I meet here have — the investors who give money to us — is ‘where do we put our money?’ And that is the big issue they all have,” claimed Gilbert.

He said the only asset class he was “slightly worried about” in terms of lofty valuations were government bonds. Property, stocks and high-yield credit all looked “reasonable,” he said.

The current trend for large funds and high-net worth investors, said Gilbert, was to move out of public markets and into private markets, with a global capital swing of about 5% already underway.

“So they are buying infrastructure — be it real estate, student accommodation, airports — all of these asset classes are where the money is going,” said the top fund manager.

After many decades with Aberdeen Asset Management, Gilbert’s last big project was to help fulfill the firm’s merger with Standard Life in 2018. He is now to step down from his role and assume a new position at U.K. financial technology company Revolut.

Gilbert said his passion was growth companies but forecast that a tipping point would only come for the “neobanks” and “fintechs” once people felt safe to pay their regular salary into the firm’s account.


Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: david reid
Keywords: news, cnbc, companies, money, investors, growth, capital, issue, fund, biggest, world, manager, crowd, davos, standard, asset, markets


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Wealthy investors see nothing that will stop this relentless bull market

He is far from the only one who sees no reason the relentless bull market has to end. The percentage of investors who indicated a belief that the business cycle is currently in an expansion went up to 34%, from 20% in Q4 2019. The E-Trade survey was conducted between Jan. 2 and Jan. 10 among an online U.S. sample of 909 self-directed active investors. The E-Trade survey does find investors pursuing a relative valuation strategy when it comes to international equities, which were out of favor las


He is far from the only one who sees no reason the relentless bull market has to end.
The percentage of investors who indicated a belief that the business cycle is currently in an expansion went up to 34%, from 20% in Q4 2019.
The E-Trade survey was conducted between Jan. 2 and Jan. 10 among an online U.S. sample of 909 self-directed active investors.
The E-Trade survey does find investors pursuing a relative valuation strategy when it comes to international equities, which were out of favor las
Wealthy investors see nothing that will stop this relentless bull market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-18  Authors: eric rosenbaum
Keywords: news, cnbc, companies, stop, survey, relentless, market, bull, quarter, stocks, loewengart, earnings, 2019, etrade, wealthy, investors


Wealthy investors see nothing that will stop this relentless bull market

A man runs past the New York Stock Exchange (NYSE). Bloomberg

There already have been six new all-time highs for stocks in the 12 trading days of 2020, putting the S&P 500 up close to 3% since the year started. After a 2019 in which the equity index gained over 30%, is it too much too fast? Not according to hedge fund billionaire David Tepper. He may have used the wrong beast to refer to the raging bull market, but he told CNBC on Friday, “I love riding a horse that’s running.” He is far from the only one who sees no reason the relentless bull market has to end. A new survey of Americans with at least $1 million in a brokerage account and who trade stocks regularly on their own shows that the majority are upbeat on the U.S. economy and stocks. Just a quarter ago that was not the case. In Q4 of last year, even as stocks gained, millionaires were cautious and possibly worried about a repeat of the plunge in the fourth quarter of 2018. Now 76% of these wealthy investors grade the U.S. economy highly, and there has been a 16% increase in investors who expect the market to rise by as much as 5% this quarter, according to an E-Trade Financial quarterly survey provided exclusively to CNBC. The fears of a recession stoked by the inverted yield curve, sluggish global growth, and the ups and downs in the trade war headlines that created uncertainty for much of 2019, are no longer weighing on the investor outlook. Rather than viewing the continued gains as a reason to pull back, something closer to fear of missing out has taken hold of the market. The percentage of investors who indicated a belief that the business cycle is currently in an expansion went up to 34%, from 20% in Q4 2019. The majority continue to describe the cycle as being at a peak (54%).

Investors in risk-taking mode

“Investors are more open to risk taking at this point,” said Mike Loewengart, vice president of investment strategy at E-Trade. “If the environment is encouraging and conducive to additional gains, they want to be part of it.” Twenty-nine percent of these investors said they plan to make changes to their portfolio allocations in Q1, up from 21% in Q4 2019, which Loewengart attributed primarily to annual rebalancing, though he added, “it’s encouraging to see investors not just hiding out in cash.” Loewengart said while it is hard to ignore the fact that the record expansion run for stocks is now over a decade, there are reasons why investors are more comfortable. While an election year can introduce volatility, it also should lead the Federal Reserve to be consistent in messaging in an effort to stay out of politics. “The Fed will be in an accommodative posture for the year and you couple that with other elements — progress on the trade war and a tight labor market, decent consumer metrics — and all of it points to additional opportunities in equities,” the E-Trade official said. “And millionaire investors don’t want to miss out.” The E-Trade survey was conducted between Jan. 2 and Jan. 10 among an online U.S. sample of 909 self-directed active investors. The millionaire data set, provided exclusively to CNBC, is comprised of 197 investors with $1 million or more of investable assets.

Reasons to be cautious

Billionaire Tepper told CNBC on Friday that at some point, “the market will get to a level that I will slow down that horse and eventually get off.” And to be sure, there are reasons to be cautious. The S&P 500 has not been valued this richly since 2002 (by at least one measure, it has never been so high). Much of last year’s gains were fueled by multiple expansion rather than improved business performance. And it has been running red-hot, up 11% in the past three months. “You can’t keep on expanding multiples. You have to have earnings follow in a meaningful way,” said long-time bull and Wharton financial professor Jeremy Siegel to CNBC on Friday. “At this point, we have not seen earnings following a meaningful way.” Siegel said the market is becoming more and more vulnerable to a 10% sell-off. “Any little thing could trip things up. You know, earnings disappointments. … whatever bump that happens. Is Iran completely over? Is it solved? Do we have nothing to worry about in Europe or anywhere else internationally?” More than 8% of the S&P 500 index has reported quarterly results so far, according to FactSet, and 72% of those companies posted better-than-expected earnings. “We didn’t have much in the way of earnings growth last year,” Chris Marx, senior investment strategist for equities at AllianceBernstein, told CNBC on Friday. “But we do expect to see reasonable earnings growth if people’s confidence holds up, and that should be constructive for the market.”

Loewengart said there are signs of cautious optimism in the E-Trade survey response. While the percentage of millionaires who expect the market to rise this quarter reached 58% (up from 42% in Q4 2019), the vast majority of the bulls (45%) expect at most a 5% gain. “To me that’s a realistic take,” he said. Market watchers have been closely eyeing a “massive rotation into value” and out of momentum stocks — value stocks have outperformed growth stocks in recent months after years of underperformance. The wealthy investors surveyed by E-Trade indicated increased interest in dividend stocks (up from 34% to 41%) and slightly less interest in fixed-income exposure (down from 31% to 26%). “Millionaires are more experienced and recognize dividend payers will be more fundamentally sound stocks. We see investors wanting to participate in the market after the considerable gains we’ve had, and they want to do it in the fundamentally strong franchise names,” Loewengart said. But the survey does find investors turning away from some of the most defensive stock market plays. On a sector-by-sector attractiveness basis, the biggest declines in interest quarter over quarter were in utilities and consumer staples. And information tech (49%) and health care (48%) remain the sectors that investors think have the most potential. Millionaire investors by the numbers 69%: Of millionaire investors describe themselves as bullish. 69%: Of all investors age 55 and older are bullish. 53%: Of all investors age 25-34 are bullish. 58%: Of millionaires expect the market to rise in Q1, up from 42% in Q4. 40%: Are interested in markets outside the U.S. in Q1, up from 29% in the final quarter of 2019. 65%: Of all investors age 25-34 are interested in markets outside the U.S. 28%: Of all investors age 55 and older are interested in markets outside the U.S. 17%: The decline among investors saying consumer staples offered the most potential, from 38% in Q4 to 21% this quarter. 49%: Say the information technology sector offers the most potential this quarter. Health care (48%) is second. Gains have been dominated by a handful of big tech stocks — Alphabet became the latest to reach a trillion-dollar valuation on Thursday and some on Wall Street expect that trillion-dollar march to slow from here. Loewengart said concerns about a rally led by stock multiple expansion rather than earnings strength should be taken into account, but those fears can be countered by a market now led by dominant technology companies and a technology industry that did not exist a few decades ago and continues to experience significant growth. “The dominant tech names are still growing. … For now, with accommodative conditions in place, it stands to reason these dominant companies are well-positioned to produce.” He said the sector data “speaks to the fact that investors want to take more risks now. There’s still interest in tech, if a little less,” the E-Trade official said. The E-Trade survey does find investors pursuing a relative valuation strategy when it comes to international equities, which were out of favor last year. Forty percent of millionaires said the health of markets outside the U.S. appeals to them this quarter, up from 29% in Q4 2019. “Overseas we’ve got accommodative policy from central banks around the globe mitigating some risks, progress on the Brexit front and the trade deal in the U.S., and let’s not forget the fundamental metrics for international are compelling when compared to the U.S.,” Loewengart said. Over the past 12 months, the U.S. stock market has roughly doubled the rest of the world’s stock market return. Private equity giant KKR recently wrote that there are opportunities elsewhere as U.S. investors already have priced in a “robust economic recovery” while its models suggest “only a modest recovery” for corporate earnings that have been in recession for what could be the fourth straight quarter to start 2020.

Fear of missing out


Company: cnbc, Activity: cnbc, Date: 2020-01-18  Authors: eric rosenbaum
Keywords: news, cnbc, companies, stop, survey, relentless, market, bull, quarter, stocks, loewengart, earnings, 2019, etrade, wealthy, investors


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Airbnb to hold stakeholder day

Airbnb to hold stakeholder dayAirbnb announced it will change its corporate governance structure to involve all stakeholders, not just investors. CNBC’s “Squawk Box” crew reports.


Airbnb to hold stakeholder dayAirbnb announced it will change its corporate governance structure to involve all stakeholders, not just investors.
CNBC’s “Squawk Box” crew reports.
Airbnb to hold stakeholder day Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17
Keywords: news, cnbc, companies, day, investors, involve, stakeholders, squawk, reports, dayairbnb, stakeholder, airbnb, governance, hold, structure


Airbnb to hold stakeholder day

Airbnb to hold stakeholder day

Airbnb announced it will change its corporate governance structure to involve all stakeholders, not just investors. CNBC’s “Squawk Box” crew reports.


Company: cnbc, Activity: cnbc, Date: 2020-01-17
Keywords: news, cnbc, companies, day, investors, involve, stakeholders, squawk, reports, dayairbnb, stakeholder, airbnb, governance, hold, structure


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The US is running a $1 trillion deficit, but politicians and investors don’t see a problem

The U.S. Treasury released eye-popping numbers this week that show the federal budget deficit is on course to cross $1 trillion in fiscal 2020, yet nobody seems to care. The government ran a deficit of $357 billion in the fiscal quarter ending in December and is on track to reach $1 trillion this fiscal year for the first time since 2012. Strategists and economists say the ballooning deficit doesn’t really matter, as much as it did when unemployment was high and the economy was weaker. Just seve


The U.S. Treasury released eye-popping numbers this week that show the federal budget deficit is on course to cross $1 trillion in fiscal 2020, yet nobody seems to care.
The government ran a deficit of $357 billion in the fiscal quarter ending in December and is on track to reach $1 trillion this fiscal year for the first time since 2012.
Strategists and economists say the ballooning deficit doesn’t really matter, as much as it did when unemployment was high and the economy was weaker.
Just seve
The US is running a $1 trillion deficit, but politicians and investors don’t see a problem Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: patti domm
Keywords: news, cnbc, companies, fiscal, unemployment, deficit, spending, politicians, high, investors, dont, treasury, problem, trillion, theyre, running, rates, deficits


The US is running a $1 trillion deficit, but politicians and investors don't see a problem

The U.S. Treasury released eye-popping numbers this week that show the federal budget deficit is on course to cross $1 trillion in fiscal 2020, yet nobody seems to care.

The government ran a deficit of $357 billion in the fiscal quarter ending in December and is on track to reach $1 trillion this fiscal year for the first time since 2012. On a calendar basis, 2019 was the first year to touch $1 trillion since 2012.

As a result, the Treasury Department has been expanding its debt issuance to cover a deficit that has been rising every year since 2016, including a plan to issue a new 20-year note.

If interest rates “went up for a couple months, … people would say this is getting more expensive,” said Michael Schumacher, director rates strategy at Wells Fargo Securities. “Right now, they’re not focused on it and that’s one of the reasons why you have none of the political candidates focused on it. … They don’t care. The market is not penalizing them for it.”

Strategists and economists say the ballooning deficit doesn’t really matter, as much as it did when unemployment was high and the economy was weaker. Unemployment is now at five-decade lows, and U.S. interest rates are historically low, though higher than most other countries, making U.S. Treasury yields quite attractive.

“The deficits are big, but I don’t think at this point they are problematic because you’ve got this relatively high global savings rate, and even though the U.S. deficits are large, they’re still much lower than where they are in other parts of the world,” said Joseph LaVorgna, chief economist Americas at Natixis. He said the deficit normally does not grow when the unemployment rate is low.

Just several years ago, politicians would have been bickering about high spending and high deficits, and in the past administration, squabbling over spending and deficits shut down the government.

“First, deficit hawks are now an endangered species in Washington. During President Obama’s administration, Republicans worked hard to contain the deficit, insisting on rigid caps on spending,” wrote Bank of America economists. “More recently not only have the caps been raised, but the recent tax cuts were funded mainly with additional borrowing.”


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: patti domm
Keywords: news, cnbc, companies, fiscal, unemployment, deficit, spending, politicians, high, investors, dont, treasury, problem, trillion, theyre, running, rates, deficits


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As stocks hit more and more records, there are signs traders may be getting way too euphoric

The S&P 500 has already jumped nearly 3% for 2020, rising more than 1% this week to reach fresh record highs. Historically, the S&P 500 has lost an average of 5% annually since 2006 when the composite is above 62.5, or showing excessive optimism. The S&P 500 has also gone a long time without posting a big drawdown. Still, overall S&P 500 earnings are still forecast to fall by more than 2% for the fourth quarter following last week’s reports. The forward S&P 500 price-to-earnings ratio — a widely


The S&P 500 has already jumped nearly 3% for 2020, rising more than 1% this week to reach fresh record highs.
Historically, the S&P 500 has lost an average of 5% annually since 2006 when the composite is above 62.5, or showing excessive optimism.
The S&P 500 has also gone a long time without posting a big drawdown.
Still, overall S&P 500 earnings are still forecast to fall by more than 2% for the fourth quarter following last week’s reports.
The forward S&P 500 price-to-earnings ratio — a widely
As stocks hit more and more records, there are signs traders may be getting way too euphoric Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: fred imbert
Keywords: news, cnbc, companies, way, stocks, euphoric, hit, earnings, does, signs, 500, trading, investors, market, markets, trade, traders, records, getting, davis


As stocks hit more and more records, there are signs traders may be getting way too euphoric

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 15, 2020. Brendan McDermid | Reuters

Wall Street may be getting a bit too excited about the stock market’s hot start to the new year. The S&P 500 has already jumped nearly 3% for 2020, rising more than 1% this week to reach fresh record highs. But as the market keeps going up, traders are becoming overly optimistic about equities, data compiled by Ned Davis Research shows. The Ned Davis Daily Trading Sentiment Composite — which measures how optimistic or pessimistic traders are — currently sits at 80, squarely in “excessive optimism” territory. The measure also hit its highest level since June 2018 recently. Historically, the S&P 500 has lost an average of 5% annually since 2006 when the composite is above 62.5, or showing excessive optimism.

Ned Davis Research’s data is not the only one showing potential euphoria in the market, either. Other experts point out that valuations are at historic highs on some measures while earnings expectations are lackluster at best. Some also note trade tensions between China and the U.S. could flare up once again even after the signing of a phase one agreement. If investors are not careful, they could suffer steep losses after the market’s recent rally. “Shorter-term sentiment is extremely optimistic,” Ned Davis, senior investment analyst and founder of Ned Davis Research, said in a note. “Investors tend to be optimistic entering a new year, with lots of inflows to IRA’s and pension plans, but this still shows very high and rising short-term risks.” Equities have largely refused to go down in 2020 thus far. Through 12 trading days this year, the S&P 500 has closed lower just four times. The biggest of those four declines came on Jan. 3, when the broad average slid 0.7%. The S&P 500 has also gone a long time without posting a big drawdown. The average’s last one-day pullback of at least 1% happened Oct. 8, when it plunged more than 1.5%. That amounts to 70 trading days since the market’s most-recent 1% drop.

Make no mistake, this market move is NOT normal, and is NOT something which should be able to continue technically into and through February without a major hiccup. Mark Newton managing member, Newton Advisors

Investors have been lifting stock prices since mid-October amid hopes that China and the U.S. would strike some sort of trade deal. Those expectations materialized on Wednesday, with both sides signing a so-called phase one trade agreement. However, the deal does not remove existing U.S. tariffs on Chinese goods. It also lets the Trump administration raise tariffs targeting China if the country does not hold up its end of the deal. These aspects of the agreement have led some market analysts to call it “fragile” as the possibility for more levies remains. Still, the market continues to notch record highs. “There’s a lot of momentum in the market right now. I think people are looking for something to kind of bring us down a little bit,” said Christian Fromhertz, CEO of The Tribeca Trade Group. “How does that end? We don’t really know.” That momentum has been provided in large part by mega-cap stocks such as Microsoft, Apple and Google-parent Alphabet. Microsoft and Apple are both trading around record highs, while Alphabet’s market capitalization broke above $1 trillion for the first time on Thursday. “Risk wise there is not necessarily any fundamental that could tip things, but I do think sentiment has gotten a bit frothy,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “That in it of itself doesn’t suggest a problem for the market, but it does establish some vulnerability than if investors were more skeptical.”

Strong earnings needed

This recent run-up also puts more pressure on corporate earnings. The corporate reporting season kicked off last week with big banks such as J.P. Morgan Chase, Citigroup, Morgan Stanley and Bank of America all posting quarterly numbers that exceeded expectations. In all, about 8.7% of S&P 500 companies have reported earnings thus far. Of those companies, 72% have posted calendar fourth-quarter earnings that beat analyst expectations, FactSet data shows. Still, overall S&P 500 earnings are still forecast to fall by more than 2% for the fourth quarter following last week’s reports. Without solid earnings growth, it will be hard for investors to justify the market’s high valuations. “While equities are clearing enjoying a strong period of momentum and investors obviously seem comfortable w/higher multiples, it’s hard to see the present ~19x valuation sustaining,” wrote Adam Crisafulli, founder of Vital Knowledge.

The forward S&P 500 price-to-earnings ratio — a widely used valuation metric on Wall Street — currently sits around 18.6, its highest level since January 2018. Meanwhile, the market cap-to-GDP ratio — which measures the stock market’s size relative to the economy — is at an all-time high. To be sure, Piper Sandler’s Craig Johnson points out that just because the market is overbought, it does not mean this bullish trend will end any time soon. “Historically, overbought conditions can persist for meaningful periods before either a time or price correction develops,” he said.

January 2018 redux?


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: fred imbert
Keywords: news, cnbc, companies, way, stocks, euphoric, hit, earnings, does, signs, 500, trading, investors, market, markets, trade, traders, records, getting, davis


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Davos elite back corporate social responsibility, but ‘their words are bigger than their actions’

They will talk about how their companies have tackled societal issues — from diversity to climate change. Issues like climate change are more tangible, due to disasters like the wildfires in Australia. Shareholder advocacy groups like As You Sow are pushing for shareholder votes on issues including climate change and human rights. Muilenburg was a board member of the Business Roundtable until he was ousted as Boeing CEO in December. But the minimum wage debate — like climate change, board divers


They will talk about how their companies have tackled societal issues — from diversity to climate change.
Issues like climate change are more tangible, due to disasters like the wildfires in Australia.
Shareholder advocacy groups like As You Sow are pushing for shareholder votes on issues including climate change and human rights.
Muilenburg was a board member of the Business Roundtable until he was ousted as Boeing CEO in December.
But the minimum wage debate — like climate change, board divers
Davos elite back corporate social responsibility, but ‘their words are bigger than their actions’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: lauren hirsch
Keywords: news, cnbc, companies, business, roundtable, funds, elite, actions, ceo, issues, investors, social, words, corporate, bigger, change, companies, davos, climate, shareholder, responsibility


Davos elite back corporate social responsibility, but 'their words are bigger than their actions'

Klaus Schwab, founder and Executive Chairman of the World Economic Forum (WEF), addresses a news conference ahead of the Davos annual meeting in Cologny near Geneva, Switzerland, January 14, 2020. Denis Balibouse

The world’s most influential executives will soon swarm the World Economic Forum in Davos, Switzerland, where they will embrace the idea that corporations no longer exist simply to funnel profits into the pockets of shareholders. They will talk about how their companies have tackled societal issues — from diversity to climate change. Powerful politicians, potentially including President Donald Trump, will also be at the five-day event, which begins Tuesday, laying out the way they have held companies accountable, all while populist rhetoric remains a heated topic during this year’s campaign for the White House. In the often-snowy Swiss village, stakeholder capitalism — a movement that redefines a company’s purpose from serving only its shareholders to all stakeholders, including customers and communities — will be the dominant theme. It will be the first Davos meeting since the Business Roundtable, a group representing the CEOs of nearly 200 companies, embraced stakeholder capitalism as its new purpose in August. But conversations with corporate advisors, investors and experts paint a more nuanced picture of how corporate America is taking on the issues. It is one in which Congress’ ability to force corporate change is dwarfed by state governments. And the biggest driver of change originates from where it always has — investors. As some investors have shifted their focus to the public good, so have companies. Yet there will be limits to change as long as the largest investors care most about making money. “So far, at most companies, their words are bigger than their actions,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business. “The other wordy people, politicians in an election year, aren’t as big a force as socially activist stockholders are. Stockholders like endowments and pension funds, who are more interested in stakeholder effects than are stockholders who look solely for returns, are the ones the corporations cannot ignore.” Setting the stage for Davos and corporate America over the past few years is a generation for which social and economic issues have become nearly unavoidable. Issues like climate change are more tangible, due to disasters like the wildfires in Australia. Homelessness is more apparent to young urbanites as the problem swells in cities like Seattle and San Francisco. Income inequality is rising as technology and globalization alter the employment landscape. With that, public pension funds are asking more questions — like whether private equity contributed to the demise of Toys R Us. Shareholder advocacy groups like As You Sow are pushing for shareholder votes on issues including climate change and human rights. The country’s biggest investors have joined in as well. Powerful names like ValueAct, Jana Partners and BlackRock have launched new funds that promote environmental, social and governance causes, known as ESG. The funds espouse the idea that investments that line up with public values are rewarded by the market place. Investing in alternative energy, for example, could be rewarded as countries move toward shifting their power standards.

Larry Fink David Orrell | CNBC

It was with that view that BlackRock CEO Larry Fink announced that the world’s largest money manager will exit investments with a high sustainability-related risk like coal. He attributed the move to “a fundamental reshaping of finance” and warned that climate change is a “defining factor in companies’ long-term prospects.” He also said the group will join the Climate Action 100+ investor coalition, which focuses on tackling greenhouse gas.

Limits and profits

But for funds like BlackRock, profit will always be the driving goal. To that end, there are reasons beyond the public good for ESG funds. As passive investing overtakes active, they offer a way to stand out to the Street. ESG funds may also endear the big investors who back them to proxy advisory agencies like the Institutional Shareholder Services when they agitate for seats on company boards. It is with that caveat that some question how far funds like BlackRock and Vanguard are willing to go. As an example, the Sierra Club’s Michael Brune applauded BlackRock’s announcement, while also noting that the firm voted against every single resolution backed by the Climate Action 100+ investor coalition. And behind the scenes, large funds like BlackRock are less focused on some of the demands that could create the most drastic change — like tying pay to ESG performance — than they are on shareholder return. “When companies have to talk to their shareholders about ESG issues, risk management and culture are among the top topics,” said Bill Anderson, global head of Evercore’s Activism Defense business and Strategic Shareholder Advisory practice. “Despite the heightened focus on stakeholders, most companies provide near-term guidance and compensation continues to focus on short-term total shareholder returns.” Some executives argue that improved shareholder returns can help CEOs benefit society in other ways, like through charitable endeavors. But so long as CEOs’ pay is tied to Wall Street performance, there is room for examples of discord between what benefits wallets and the world. Boeing’s former CEO Dennis Muilenburg, who was fired last month for his handling of the 737 Max crisis, walked away with more than $60 million, despite being denied severance. In 2018, the majority of his compensation was tied to performance-based bonuses linked to short-term incentives, like sales, cash-flow and earnings-per-share and longer-term metrics like its 3-year profit goal. “Yeah, you killed 346 people,” Rep. Peter DeFazio, D-Ore. recently told reporters, arguing that a disproportionate focus on share price “somehow has got to change.” Muilenburg was a board member of the Business Roundtable until he was ousted as Boeing CEO in December. At a press conference earlier that month, then-Business Roundtable Chairman Jamie Dimon, the CEO of J.P. Morgan, scoffed at the notion that there was a disconnect between the Business Roundtable’s stakeholder capitalism and Muilenburg’s board-seat. The Business Roundtable is “not an enforcement group,” Dimon said. “[…] And yes, companies are going to make mistakes and have problems and that’ll never end — truthfully like any institution you’ll ever see on the planet — including the press.”

Disclosure as enforcement

Business Roundtable CEO Joshua Bolten said at the same press conference that “every single one of the CEOs who are members” of the group is already engaged in supporting their customers, employees and communities, as well as shareholders. Its new purpose is a challenge to its CEOs to “do better and more,” he said. From the Business Roundtable’s standpoint, that means engaging in policy debates like its push for a federal increase in the minimum wage. But the minimum wage debate — like climate change, board diversity and privacy — is already being tackled by the states, far ahead of federal regulation. While the federal minimum wage has held steady at $7.25 an hour since 2009, nearly half of states raised their minimums in 2019. In turn, companies are already responding, with everyone from Walmart to Amazon having already announced plans to raise their wages. “I think every CEO of a large company knows that it would be difficult to have big changes at the federal level, because most corporate law is done at the state level,” said Michigan’s Gordon. “It costs nothing for a CEO to throw out a bill proposal. You can’t accuse them of doing anything other than what politicians try to do — you hold hearings — its Kabuki theater.”

A general view shows the congress centre, the venue of the World Economic Forum (WEF) in Davos, Switzerland January 13, 2020. Arnd Wiegmann | Reuters


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: lauren hirsch
Keywords: news, cnbc, companies, business, roundtable, funds, elite, actions, ceo, issues, investors, social, words, corporate, bigger, change, companies, davos, climate, shareholder, responsibility


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Treasury yields move higher as investors await economic data

U.S. government debt prices were lower Friday morning, as investors await a fresh batch of economic data. ET, the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.8285%, while the yield on the 30-year Treasury bond was also higher at around 2.2972%. Industrial production figures for December, capacity utilization data for December, a preliminary reading of consumer sentiment for January and job vacancies data for November will all follow slightly later in t


U.S. government debt prices were lower Friday morning, as investors await a fresh batch of economic data.
ET, the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.8285%, while the yield on the 30-year Treasury bond was also higher at around 2.2972%.
Industrial production figures for December, capacity utilization data for December, a preliminary reading of consumer sentiment for January and job vacancies data for November will all follow slightly later in t
Treasury yields move higher as investors await economic data Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: sam meredith
Keywords: news, cnbc, companies, worlds, data, yields, higher, economy, fed, treasury, investors, economic, figures, 2019, await


Treasury yields move higher as investors await economic data

U.S. government debt prices were lower Friday morning, as investors await a fresh batch of economic data.

At 2:45 a.m. ET, the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.8285%, while the yield on the 30-year Treasury bond was also higher at around 2.2972%.

Market focus is largely attuned to economic data, after China reported on Friday that its economy expanded by 6.1% in 2019, even amid a trade dispute with the U.S.

Analysts polled by Reuters had expected the world’s second-largest economy to have grown 6.1% in 2019, compared with 6.6% in 2018.

It should be noted that although Beijing’s official gross domestic product (GDP) figures are tracked as an indicator of economic health, many external observers have long expressed skepticism about the veracity of China’s reports.

Stateside, housing starts and building permits for December will both be released at 8:30 a.m. ET.

Industrial production figures for December, capacity utilization data for December, a preliminary reading of consumer sentiment for January and job vacancies data for November will all follow slightly later in the session.

Philadelphia Fed President Patrick Harker and Fed Vice Chair Randal Quarles will also comment on the world’s largest economy at separate events.

There are no major U.S. Treasury auctions scheduled on Friday.

— CNBC’s Huileng Tan contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: sam meredith
Keywords: news, cnbc, companies, worlds, data, yields, higher, economy, fed, treasury, investors, economic, figures, 2019, await


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The most common investing regret is one you can limit just by getting started

The sooner you start investing, the easier it is to grow wealth for the future. Which is why the most common regret among investors is that they didn’t start sooner, according to a new poll from MagnifyMoney. Nearly one-third (31%) said they wished they had started saving for retirement sooner, while 24% lamented not investing in stocks sooner. The sooner you start investing, the more time your money has to grow, and the less you need to contribute from each paycheck to meet your retirement goal


The sooner you start investing, the easier it is to grow wealth for the future.
Which is why the most common regret among investors is that they didn’t start sooner, according to a new poll from MagnifyMoney.
Nearly one-third (31%) said they wished they had started saving for retirement sooner, while 24% lamented not investing in stocks sooner.
The sooner you start investing, the more time your money has to grow, and the less you need to contribute from each paycheck to meet your retirement goal
The most common investing regret is one you can limit just by getting started Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: ben jay
Keywords: news, cnbc, companies, younger, limit, investing, started, sooner, regret, interest, youre, common, investors, retirement, grow, getting, start


The most common investing regret is one you can limit just by getting started

The sooner you start investing, the easier it is to grow wealth for the future. Which is why the most common regret among investors is that they didn’t start sooner, according to a new poll from MagnifyMoney. Procrastination regrets affected 3 in 4 investors, according to Brianna Shoaf, a consumer research specialist at MagnifyMoney. Nearly one-third (31%) said they wished they had started saving for retirement sooner, while 24% lamented not investing in stocks sooner. Even 69% of Gen Zers, which the survey defined as those between the ages of 18 and 22, had regrets about not investing earlier, despite being about 45 years away from retirement. And the advice those investors would offer younger Americans? More than half (54%) say younger people should begin investing as soon as possible, and 16% recommended that they prioritize retirement savings.

An early start harnesses the power of compound interest

Time is a powerful asset for investors, thanks to compound interest. Compounding helps your money to grow at a faster rate because you earn interest on your savings as well as interest on the interest you’ve earned. The sooner you start investing, the more time your money has to grow, and the less you need to contribute from each paycheck to meet your retirement goals. “Millionaires are made in their 20s and 30s, not their 50s and 60s,” Fred Creutzer, president of Creutzer Financial Services told Grow last year. “If you wait until you’re 50, you’re never going to catch someone who started at a young age. When it comes to investing, the early bird always gets the worm.”

For example, say you’re 31 years old and earn $50,000 each year. You need to set aside 15% of your salary, or $643 each month, if you want to retire by 67. However, if you start saving at 29, you’ll be able to set aside about $61 less each month, or you can save the same amount and consider retiring closer to 66.


Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: ben jay
Keywords: news, cnbc, companies, younger, limit, investing, started, sooner, regret, interest, youre, common, investors, retirement, grow, getting, start


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China’s ZTE plans $1.7 billion A-share sale to fund 5G research and development

ZTE said it was looking to raise 11.51 billion yuan ($1.7 billion) from a private placement of A shares, and that it plans to use the proceeds for research and development (R&D) of 5G networks as well as working capital. That represents a discount of 18.2% to ZTE’s A-share closing price of 36.92 yuan in Shenzhen on Wednesday. None of the subscribers will become a substantial shareholder upon completion of the share sale, the company said, without providing further details. “Our fundamental view


ZTE said it was looking to raise 11.51 billion yuan ($1.7 billion) from a private placement of A shares, and that it plans to use the proceeds for research and development (R&D) of 5G networks as well as working capital.
That represents a discount of 18.2% to ZTE’s A-share closing price of 36.92 yuan in Shenzhen on Wednesday.
None of the subscribers will become a substantial shareholder upon completion of the share sale, the company said, without providing further details.
“Our fundamental view
China’s ZTE plans $1.7 billion A-share sale to fund 5G research and development Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-16
Keywords: news, cnbc, companies, zte, price, shares, ashare, investors, billion, share, stock, sale, period, confidence, development, plans, chinas, fund, research, yuan


China's ZTE plans $1.7 billion A-share sale to fund 5G research and development

The ZTE logo is seen on an office building in Shanghai on May 3, 2018.

ZTE said it was looking to raise 11.51 billion yuan ($1.7 billion) from a private placement of A shares, and that it plans to use the proceeds for research and development (R&D) of 5G networks as well as working capital.

The Chinese telecom equipment maker said on Thursday it planned to issue 381.098 million A shares, or 8.27% of the total issued share capital on completion of the deal, to independent third party investors at 30.21 yuan apiece.

That represents a discount of 18.2% to ZTE’s A-share closing price of 36.92 yuan in Shenzhen on Wednesday.

The A shares, which are subject to a lock-up period of 12 months from the date of listing, will be issued to 10 independent professional or institutional investors in China.

None of the subscribers will become a substantial shareholder upon completion of the share sale, the company said, without providing further details.

The company had not responded to an email request for comment on details and identity of the investors.

“We believe the successful fund raising will remove a key overhang for the stock, and would give investors more confidence in ZTE’s R&D efforts and thus potential share gain in 5G,” brokerage Jefferies said in a research note.

“Our fundamental view remains negative, but near-term stock price could have support,” Jefferies said, adding it worried about margin pressure and market share pressure on 5G.

ZTE’s Shenzhen-listed shares rose as much as 4% to 38.10 yuan in early trade. Hong Kong-listed stock briefly rose 3.7% to HK$28.05, the highest since March 2018.

“It is because of the lock up period which give investors confidence of a stable stock price during the period, and that support the shares from advancing despite the discount,” said Steven Leung, a sales director at UOB Kay Hian in Hong Kong.

“Its a vote of confidence to the prospect of 5G and related companies,” Leung added.

ZTE said the deal will enable it to maintain its high level of investment in R&D, ensure its technological competitive edge, develop its main products and businesses, as well as help increase its market share in the mainstream markets.


Company: cnbc, Activity: cnbc, Date: 2020-01-16
Keywords: news, cnbc, companies, zte, price, shares, ashare, investors, billion, share, stock, sale, period, confidence, development, plans, chinas, fund, research, yuan


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