Goldman’s seven highest-conviction investing calls for 2018

In 2018, Goldman Sachs Group Inc. is doubling back on the international economy.

“Late-cycle optimism” is the main theme of the bank’s seven top trade theses, as outlined in a note Thursday by Francesco Garzarelli, co-head of international macro and markets.

Goldman’s stance is far from “America First.” In danger assets, its strategists favor emerging markets; in foreign market, commodity-linked currencies and the euro are favored.

By comparison, last year’s trade thoughts were dominated by concerns about the capacity of newly elected U.S. President Donald Trump to disrupt international trade. read more

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Markets love tax cut hype, not the reality

Buy the rumour, sell the information.

The term may get tossed around a reasonable amount, but that is precisely what’s happened when previous presidents have implemented tax cuts. Case in point: The Samp;P 500 index’s response to virtually every tax-relief bill signed into law because president John F. Kennedy. Taking a look at the Samp;P 500’s performance throughout the year prior to previous tax cuts, the market returned more gain than during the year after the bill signing. read more

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General Electric stock continues steep Dip as Investors pan CEO’s turnaround strategy

General Electric Co.’s stock plunge deepened because its top leaders failed to soothe shareholder concerns about the turnaround strategy for its embattled icon of American business.

Chief executive John Flannery acknowledged that it is “show-me time” for investors as the company seeks to show concrete results from the overhaul he summarized a day ago. In an interview Tuesday on CNBC, he said he was not surprised with the negative stock response after “we frustrated people with some difficult news,” including a dividend cut and a lesser 2018 earnings forecast. read more

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Among the world’s biggest funds is slashing its exposure to stocks

The California Public Employees’ Retirement System, the biggest U.S. pension fund, is contemplating more than doubling its bond allocation to decrease volatility and risk since the stock bull market approaches nine decades.

Calpers is considering a menu of choices for its fixed-income target which range from the current 19 percent to up to 44 percent, according to a demonstration for a board workshop in Sacramento on Monday. Equities could be cut to as little as 34 per cent from 50 per cent. Stocks were the best-performing asset category in financial 2017, returning nearly 20 percent. read more

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MLPs poised for year-end rebound, but it could be short-lived

Master limited partnerships (MLPs) have been beaten down in 2017, but conditions could be turning in their favor for a short term bounce by year-end.

An MLP is a limited partnership that is publicly traded and, as such, enjoys the advantages of paying no tax at the business level in addition to the liquidity that comes with being traded on a major stock market.

They generally deal in the manufacturing, processing, storage and transportation of commodities like petroleum and natural gas, making them sensitive to changes in the purchase price of the underlying commodity. A high dividend yield also makes them attractive in low interest rate environments. read more

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In 2017, investors can either buy bubbles or be left far behind

The best way to crush the audience in 2017? Purchase the things everyone insisted would not keep going up.

A portfolio stuffed with supposedly over-inflated assets could have returned more than 120 percent up to now in 2017, trouncing the Samp;P 500 Index and underscoring the struggle for investors facing a plethora of expensive securities.

The hypothetical ‘Bubblicious’ portfolio consists of Chinese property and net names, a set of U.S. technology behemoths, a cryptocurrency finance, the ETF business, bonds which mature decades from now, and a dash of volatility stakes merely to make things more interesting. read more

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Emerging-market rally is really all about Technology

Home-market bias is still one of the fantastic inefficiencies in several portfolios. By way of instance, although almost half of U.S.-listed exchange-traded funds are committed to foreign stocks and bonds, some 67 percent of the total assets are invested in U.S. stocks and bonds.

There is a relatively simple explanation: American investors are so accustomed to U.S. technology firms dominating the world stage that we think owning Apple/Google/Amazon/Facebook is just like a well-stamped passport concerning exposure to global markets. Tech stocks are the single largest weighting in the Samp;P 500, after all, and they’ve worked well in 2017. read more

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Explaining the wide gap between analysts’ price targets and Enbridge’s depressed stock price

With Enbridge’s shares sinking last week amid growing concerns about its dividend growth outlook, now I am introducing a Qamp;A to assist investors place the pipeline giant’s challenges into context.

Analysts nevertheless have lofty price targets for Enbridge shares, even after the stock got crushed last week when the company failed to reiterate its 10- to 12-per-cent dividend growth advice. Do you believe these cost targets are realistic?

It’s a fact that analysts have been largely unfazed by the recent pullback in the stock. In accordance with Thomson Reuters, of the 16 analysts that follow the company, you will find nine buy evaluations, seven retains and no sells. The typical 12-month price target is $60.73 — or almost 30 percent greater than Enbridge’s closing price of $46.95 in Toronto on Tuesday. read more

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Bitcoin’s Controversial bid for Validity: Mohamed A. El-Erian

Rather than bringing clarity, an impressive price surge last week highlighted the differences within the financial sector about the future of this bitcoins. Opinions vary from those asserting that we’re seeing the birth and maturation of a new international currency to people who argue that the occurrence is a “fraud,” with a large middle either reserving judgment or asserting it is going to last but now may risk being in the middle of a speculative price bubble.

Your position in this discussion will depend to a substantial extent on where you come out on the next three issues. read more

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