1.Investors Forget that 1 Year…The Stock Market is Only Up 2-4%…And the Nasdaq is Trailing S&P

Tech Bubble?

Investors are waiting and investing for a stock market crash but bonds have clobbered stocks 1 year.

www.franklintempleton.com

1.LIBOR-The Most Widely Used Global Benchmark for Short-Term Interest Rates….Rolling Over But Above Lows.

1 Year LIBOR Rate – Historical Chart

Interactive chart of the 12 month LIBOR rate back to 1986. The London Interbank Offered Rate is the average interest rate at which leading banks borrow funds from other banks in the London market. LIBOR is the most widely used global “benchmark” or reference rate for short term interest rates. The current 1 year LIBOR rate as of August 09, 2019 is 1.99%.

https://www.macrotrends.net/2515/1-year-libor-rate-historical-chart

Benchmark for $370 Trillion in Financial Products.

1.Euro Banks Break Thru 5 Year Lows.

EURO STOXX® Banks

• The STOXX Sector indices are available for global markets as well as for Europe, the Eurozone and Eastern Europe. Using the market standard ICB Industry Classification Benchmark, companies are categorised according to their primary source of revenue. This categorisation guarantees a professional and accurate classification of companies in their respective business environments. There are four levels of classification ranging from broad to very detailed: 10 industries are broken down into 19 supersectors, 41 sectors and 114 subsectors.

https://www.stoxx.com/index-details?symbol=SX7E

1.Bottom-Line Earnings Beat Rates Down This Season

Mon, Aug 12, 2019

The unofficial Q2 earnings reporting period comes to an end on Thursday when Wal Mart (WMT) releases its numbers.  More than 2,000 companies have reported earnings since the season began in early July, and 57.2% of them have beaten consensus analyst EPS estimates.  As shown in the chart below, this quarter’s earnings beat rate is down significantly from recent quarters where 60%+ was pretty much a guarantee.  If the current reading holds through Thursday, it will be the lowest beat rate since the Q1 2014 reporting period (April and May 2014).

Below is a look at earnings beat rates by sector this season.  Technology has the strongest beat rate at 66.1%, followed by Financials at 63.3%.  Utilities and Energy have the weakest beat rates at 33.3% and 38.8%, respectively.

Below we show this season’s earnings beat rates by sector versus the sector’s historical earnings beat rate going back to 2001.  All but two sectors have beat rates this season that are below their historical average.  The Financial and Real Estate sectors are the only two that have seen stronger-than-normal beat rates.  Start a two-week free trial to Bespoke Institutional to access our Trend Analyzer, Chart Scanner, Earnings Explorer and much more.

https://www.bespokepremium.com/interactive/posts/think-big-blog/bottom-line-earnings-beat-rates-down-this-season

1. Microsoft, Apple, Amazon, Alphabet, and Facebook Make Up Half of Tech’s Market Cap.

In late 2018, shares of Silicon Valley’s finest tanked some 16% in three months. Since then, Big Tech has been busy climbing back near record highs. And, as The Economist points out, listed tech firms now make up more than 25% of the value of U.S. stock markets. 

^{The Economist}

The last time tech was this important was 2000, when the sector briefly made up one-third of the value of all U.S.-listed equities. Back then, the concern was that tech firms were “too flimsy” for their valuations. We all know how the dotcom bubble ended, but…

Today’s a different story—tech’s big five (Microsoft, Apple, Amazon, Alphabet, and Facebook) account for 12% of pre-tax profits among the U.S.’ non-finance firms, up from 4% in 2010.

Zoom out: Those big five make up half the tech industry’s market value, meaning new worries for the new millennium. Today, the concern is less about financials and more about the idea that Big Tech has accumulated too much power.

Morning Brew

https://www.morningbrew.com/

1.Bond Volatility Grid.