1.Tech Saw Revenue Growth Q2 2020.
From Nasdaq Dorsey Wright www.dorseywright.com
2. Two Charts on International Valuations From Invesco.
3. Global Stocks vs. S&P 500
https://twitter.com/CiovaccoCapital
4. Dow Industrials Kicks Out Exxon in Biggest Shake-Up Since 2013..Out with Energy in with Cloud.
Sarah Ponczek and Katherine Greifeld
Dow Industrials Kicks Out Exxon in Biggest Shake-Up Since 2013
More
(Bloomberg) — Exxon Mobil Corp, Pfizer Inc. and Raytheon Technologies Corp. were kicked out of the Dow Jones Industrial Average as part of the stock benchmark’s biggest reshuffling in seven years, actions that will boost the influence of technology companies that have dominated the 2020 stock market.
Salesforce.com, Amgen Inc. and Honeywell International will enter the 124-year old equity gauge a week from today, its overseers said. The moves were prompted when Apple Inc.’s stock split effectively reduced the sway of computer and softward stocks in the price-weighted average.
While any change to the Dow is notable, the ejection of Exxon Mobil — the world’s biggest company as recently as 2011 — marks a particularly stunning fall from grace, reflecting the decline of commodity companies in the American economy. Worth $525 billion in 2007 and more than $450 billion as recently 2014, the stock had fallen in four of six years before 2020 and is down another 40% since January.
“Those changes are a sign of the times – out with energy and in with cloud,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
The latest reshuffling is more testament to the ascent of technology companies, a trend amplified by this year’s Covid 19 lockdowns. While the Dow average is still 4.2% off its February record, the tech-heavy Nasdaq 100 is almost 20% above the pre-pandemic all-time high.
https://finance.yahoo.com/news/dow-industrials-kicks-exxon-biggest-220032220.html
5. 4 Out of 5 Working Age Households Have Retirement Savings of Less Than 1x Annual Income
Zerohedge
Lastly, only 4-0ut-of-5 working-age households have retirement savings of less than one times their annual income. This does not bode well for the sustainability of living standards in the “golden years.”
The 4% Rule Is Dead. What Should Retirees Do Now? https://www.zerohedge.com/personal-finance/4-rule-dead-what-should-retirees-do-now
6. The Big Short on Malls.
‘The Big Short 2.0’: How Hedge Funds Profited Off the Pain of Malls–As the pandemic accelerated the demise of some brick-and-mortar retailers, a group of investors profited handsomely from their travails.
The CMBX 6 index is intended to track a basket of bond products, each of which contains bundles of individual mortgages to commercial borrowers, more than 2,000 in total. Those products are then sliced into brackets, known as tranches, and assigned credit ratings ranging from AAA to BB, according to their perceived level of risk.
The CMBX 6, which tracks the performance of mortgages issued in 2012, has been a target for short-sellers because of its relatively strong exposure to malls. According to an analysis by Trepp, 40 percent of the property loans tracked by the CMBX 6 are in the retail sector, giving it the highest exposure to retailers of any CMBX index. (The balance of the mortgages are in the lodging, residential, office and industrial sectors.) Of the retail mortgages the CMBX 6 tracks, 39 are in American malls, many of which have 10-year mortgages coming due in 2022.
Deer Park Road’s Mr. Burg, who specializes in complicated bond investments and said his firm had done well by betting heavily on risky home borrowers in the aftermath of the 2008 financial crisis, adopted the mall short before the virus hit. His research suggested similarities between the lax way that home loans were signed in the run-up to the last crisis and the underwriting of many retail mortgages. He also thought there were too many malls.
By the middle of May, the portion of the CMBX 6 with a BBB– rating, which had begun the year trading strongly but was especially popular with short-sellers, had fallen more than 30 points. It has recovered only a few points since then.
“It’s an absolute perfect storm, unfortunately, for the commercial real estate market,” Mr. Burg said. “We see very little that the Fed or government can possibly do to prop this up when there’s so much excess supply.”
Scott Burg of the Deer Park Road fund compared the underwriting of many retail mortgages to the way home loans were approved before the 2008 financial crisis.Credit…Caleb Santiago Alvarado for The New York Times
To short any CMBX index — there are 13, each tied to a different origination year for commercial mortgages — investors pay various fees, including an annual amount to hold what is essentially an insurance policy that pays out if the mortgages the index tracks default. Those fees might be $300,000 to $500,000 a year for every $10 million of insurance the investor wants to hold.
Before making their bets, some investors who shorted the CMBX indexes engaged in labor-intensive research. Mr. Mudrick and his analysts walked all 39 malls in the CMBX 6 index, from the Northridge Fashion Center in Los Angeles to the Town Center at Cobb in Kennesaw, Ga. Wearing casual clothes, his group paced the perimeters and food courts, snapping photographs and taking notes.
7. New York and San Fran Only Places Where Home Inventory Increasing
John Burns
https://www.linkedin.com/in/johnburns7/
8. Boise ID Turning into Brooklyn.
People are flocking to Idaho during the pandemic. I spent 4 days in its capital city last fall, and a walk through downtown made it clear why it’s so popular.
Boise is having a moment. Katie Warren/Business Insider
· -While some states have seen population losses during the pandemic, people are flocking to Idaho.
· -194% more people moved into Idaho than left the state since March, according to data from moving marketplace HireAHelper.
· -Its capital, Boise, was becoming a hot destination even before the pandemic: Its population grew by 18.2% from 2010 to 2018, and Forbes named it the fastest-growing city in the US in 2018.
· –Microbreweries, luxury condos, and Brooklyn-esque coffee shops have been popping up in the Pacific Northwest city of 229,000 people.
· -In November 2019, I spent four days in Boise’s thriving downtown area, which is full of locally owned bars and restaurants, microbreweries and cider houses, and new luxury apartments.
Everybody wants to live in Idaho right now.
While states like New York and California have seen mass exoduses during the pandemic, others have seen a more people moving in than out. In Idaho, 194% more people moved in than left the state since March, according to data from moving marketplace HireAHelper.
Well before the pandemic, its capital city was experiencing a major growth spurt. Forbes named Boise the fastest-growing city in the US in 2018. Its population grew by 18.2% from 2010 to 2018, and by more than 3% from 2017 to 2018.
Most out-of-state transplants have been coming from California, primarily from the Los Angeles metro area. Almost 80,000 people moved to Idaho in 2018, and more than 21,000 of them were from California, according to US Census data.
According to locals, people are finally figuring out how great of a place Boise is to live. In 2019, Boise was named the best place to live for millennials, as well as the best US city to buy a house.
Last November, I spent four days in Boise exploring the city and talking to business owners and residents. As someone who lives in Brooklyn and works in Manhattan, I was curious to get a feel for Boise’s downtown and see what kind of lifestyle it offers for big-city transplants. After four days, I can, for starters, say this: Boise does not disappoint.
Keep reading for a look at its vibrant downtown area, which is bustling with breweries, farm-to-table restaurants, coffee shops, and new luxury apartments.
Boise, the capital of Idaho, is one of the fastest-growing cities in the US.
Katie Warren/Business Insider
Boise saw an 18.2% population jump from 2010 to 2018 and was the fastest-growing city in the country from 2017 to 2018, according to Forbes.
Roughly 25% of out-of-state transplants in Boise came from California, followed by Washington, Utah, Oregon, and Texas, according to the Boise Valley Economic Partnership’s marketing manager.
While many welcome Boise’s growth, some say the influx of new residents is pricing out longtime locals. The average home price in Boise jumped almost 12% from 2017 to 2018, and average rent has increased by roughly 7% in the past year. But wages haven’t kept up, leaving many residents struggling to afford their living costs.
Some also say the growth has brought with it big-city-like traffic.
https://www.businessinsider.com/boise-idaho-downtown-breweries-coffee-shops-restaurants-2019-11
9. These schools have the largest endowments in the country — yet they’re still raising tuition during the COVID pandemic
A MarketWatch analysis indicates that many colleges are going forward with planned tuition increases this year
In this photo provided by Jason Koski, Bryan Maley, right, a graduate student in the Master of Public Health program at Cornell University, interviews a student on campus about mask-wearing experiences as part of a public health survey, Friday, July 30, 2020, in Ithaca, N.Y. (Photo: Jason Koski/Cornell University via AP)
Christian Baran has been thinking about the value his college tuition is supposed to be buying since the spring.
Baran, 21, was a sophomore at Cornell University when the school, like most others, rushed students home and into online classrooms in March as the reality of the pandemic began to set in. Baran thought his family might get some sort of tuition refund, given that the experience was so different from what he thought his tuition was buying.
“But we didn’t get anything,” Baran said. Like almost every college in the country, Cornell didn’t give back any tuition money, but the school did provide rebates for housing and dining contracts.
Now, as the start of the fall semester at the school approaches, the school is moving forward with a planned tuition increase of 3.6% that was approved in January before the pandemic. Cornell, which is planning to bring students back to Ithaca and offer some in-person classes, is expecting to increase the amount of financial aid it awards, and will be drawing more than typical from its endowment in fiscal year 2021 to generate an additional $15 million.
Still, it’s not enough for Baran. “It seems ridiculous to keep paying the same amount for what seems to be an inferior hybridized education,” he said. And that’s a best-case scenario, assuming the school doesn’t end up shifting completely to remote instruction, as some have already done.
So instead of paying Cornell tuition, Baran decided to enroll in community college for the fall semester and hopefully return to Cornell in the spring. “I don’t think that it’s worth it,” he said.
Cornell is one of at least 39 U.S. institutions whose endowments are in the top 100, that is going ahead with a planned tuition increase for undergraduates this upcoming academic year, according to a MarketWatch analysis. We found that 35 others are planning to keep tuition the same as last year and five are discounting tuition from previously announced levels. (Of the other institutions in the top 100 endowments, four are based in Canada, four are institutions serving only graduate students and several did not provide the requested information by press time. We will update when we hear back).
Colleges’ tuition policies for the fall
Some schools are cutting tuition, while others are moving forward with planned increases. See the full list here:
10. The Simplest Ways To Make The Best Of Your Life.
https://www.pinterest.com/pin/422281201654500/
Disclosure
Lansing Street Advisors is a registered investment adviser with the State of Pennsylvania..
To the extent that content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security as information is provided for educational purposes only. Articles should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any securities or asset classes mentioned. Articles have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed may not be suitable for all investors. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results.
Material compiled by Lansing Street Advisors is based on publicly available data at the time of compilation. Lansing Street Advisors makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to the use such data.
Material for market review represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Indices that may be included herein are unmanaged indices and one cannot directly invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The index information included herein is for illustrative purposes only.