Daily Top Ten – January 5, 2017

1.Yield Curve Steepening and Showing No Signs of Recession.


 The Yield Curve Reflects Good News

I find more reason for optimism in the yield curve – the plot of the yields on 3-month through 30-year Treasury securities. The yield curve has steepened since the election, and this is good news.

The slope of the yield curve has borne a consistent relationship with economic activity. The yield curve has predicted all U.S. recessions except one since 1950. Recessions, as you would expect, correlate positively with bear markets. When the yield curve flattens, or inverts, a recession usually looms and so does a bear market.

That’s not the case today. The yield curve is just the way we should like it – progressively higher with each maturity and upward sloping to the right. When the yield curve steepens, economic growth usually follows.

Yield Curve Slope


2.Short Term Sentiment –AAII Poll…The Historical Average is 38.5% Bullish and 30.5% Bearish. …45.6% Now.

 A month ago, these figures were flipped, with a plurality of investors being bearish.


Fear and Greed Index Aggressive but not Extreme.


Barrons Insider Transaction Ratio-Not Near Previous Highs.


3.Ford Cancels Mexican Plant for Michigan.

Canceling plans to build a new $1.6B plant in Mexico, Ford (NYSE:F) said it will invest $700M in Michigan instead, creating 700 new U.S. jobs. CEO Mark Fields said the investment is a “vote of confidence” in the pro-business environment being created by Donald Trump, but stressed Ford didn’t cut a special deal with the President-elect. The automaker was a frequent target of Trump’s election campaign for its “south of the border” manufacturing and payment of low tariffs. www.seekingalpha.com

Technology to Build a Truck in One Minute.




4.Bank Branches and Millennials.

HOWARD MASON, BANKS, THEME- The Millennials.  While the prospect for a steeper curve and rising short rates, along with regulatory and tax reform, has given a cyclical lift to bank stocks the more strategic significance of 2017 is likely to be a broad re-evaluation of the role of branches for customer sales and service.

The digital erosion of branch traffic has now made ~one-third of US bank branches economically non-viable on service alone and the opportunity for make-up through in-branch cross-sell will be limited by regulatory scrutiny of sales practices and by the potential to use the location-based and real-time capabilities of customer mobile devices to deliver more needs-based marketing solutions.

Over the next decade, we expect branch-density in the US to fall by one-third from the current level of just over 30 branches per 100,000 adults, and the shift from branch to direct-channels will disproportionately advantage large players as it did for card-lending in the 1990s. Specifically, national scale and brand, along with customer lock-in to bank apps, will encroach on the network effects of local branch-systems as digital platforms change increase industry fixed-costs and catalyze investment in “test-and-learn” behavioral technology.

One measure of the advantage of large-banks is provided by their disproportionate share of millennial customers who tend to be more mobile-oriented: JPM and BAC each have ~20% share of the segment with WFC at ~15%.  Howard continues to be overweight BAC and C with above consensus estimates.





5.Wall Street Strategists Playing it Safe in 2017…That Means it will be Big Upside or Downside Year?

HERD MENTAILITY– Wall Street strategists are abiding by a new motto these days: When in doubt, copy everyone else – A group of 15 Wall Street strategists expect the S&P 500, on average, to finish the year at 2356 – That is good for only about a 5% gain, the least optimistic this bunch has been since 2005, according to Bespoke.

At the high end is RBC’s Jonathan Golub, who forecasts 2500 by year-end. On the other side, David Kostin at Goldman Sachs Group Inc. and Bank of America Merrill Lynch’s Savita Subramanian are among several strategists with targets of 2300, just a slight rise from the end of 2016 – The gap between the most optimistic and pessimistic forecasts is just 9%, the smallest on record dating back to 1999, according to Jason Goepfert, founder of Sundial Capital Research.

 Thanks to Dave Lutz at Jones.

6.Consumer Spending at 15 Year High.

United States: According to the Conference Board, US consumer confidence is now at the highest level since 2001 (right before 9/11). Will this trend translate into spending?

7.Unleaded Gasoline Jumps 27% Since November Lows.

8. 3.8 Million People in the U.S. Drive for a Living.

Torsten Sløk, Ph.D.
Chief International Economist
Managing Director
Deutsche Bank Securities
60 Wall Street
New York, New York 10005
Tel: 212 250 2155

9. 250 New ETFs Launched in 2016.

Investors funneled a record $375B into exchange-traded funds in 2016, according to BlackRock (NYSE:BLK), compared with $348B in 2015. Best and worst non-leveraged perfomers: SILJ +150.6%, XME +112.5% RSXJ +105%, VXX -68.9%, VIIX -68.9%, VIXY -68.7%. Nearly 250 new ETFs were also launched during the year, with the dominant category being U.S. equities, representing 36% of new funds.

The following ETFs and ETNs have been launched in 2016:

12/21/2016WBI Power Factor High Dividend ETFWBIYNYSE Arca5/12/2016iShares Edge MSCI Multifactor Financials ETFFNCFBats
12/20/2016NuShares Short-Term REIT ETFNUREBats5/12/2016iShares Edge MSCI Multifactor Energy ETFERGFBats
12/20/2016BMO Elkhorn DWA MLP Select Index ETNBMLPNasdaq5/12/2016JPMorgan Diversified Return U.S. Mid Cap Equity ETFJPMENYSE Arca
12/19/2016Pacer US Cash Cows 100 ETFCOWZBats5/10/2016Global X Health & Wellness Thematic ETFBFITNasdaq
12/16/2016John Hancock Multifactor Developed International ETFJHMDNYSE Arca5/10/2016Global X Longevity Thematic ETFLNGRNasdaq
12/16/2016NuShares ESG Large-Cap Growth ETFNULGBats5/10/2016IQ Enhanced Core Bond U.S. ETFAGGENYSE Arca
12/16/2016NuShares ESG Large-Cap Value ETFNULVBats5/10/2016IQ Enhanced Core Plus Bond U.S. ETFAGGPNYSE Arca
12/16/2016NuShares ESG Mid-Cap Growth ETFNUMGBats5/10/2016Guggenheim U.S. Large Cap Optimized Volatility ETFOVLCNYSE Arca
12/16/2016NuShares ESG Mid-Cap Value ETFNUMVBats5/05/2016Global X Millennials Thematic ETFMILNNasdaq
12/16/2016NuShares ESG Small-Cap ETFNUSCBats5/03/2016REX VolMAXX Long VIX Weekly Futures Strategy ETFVMAXBats
12/9/2016WEAR ETFWEARBats5/03/2016REX VolMAXX Inverse VIX Weekly Futures Strategy ETFVMINBats
12/9/2016VelocityShares 3x Inverse Crude Oil ETNDWTNYSE Arca4/27/2016WisdomTree Fundamental U.S. Corporate Bond FundWFIGBATS
12/9/2016VelocityShares 3x Long Crude Oil ETNUWTNYSE Arca4/27/2016WisdomTree Fundamental U.S. Short-Term Corporate Bond FundSFIGBATS
12/8/2016Janus SG Global Quality Income ETFSGQINasdaq4/27/2016WisdomTree Fundamental U.S. High Yield Corporate Bond FundWFHYBATS
12/7/2016Deutsch X-trackers USD High Yield Corporate Bond ETFHLYBNYSE Arca4/27/2016WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond FundSFHYBATS
12/6/2016Virtus Newfleet Dynamic Credit ETFBLHYNYSE Arca4/26/2016CrowdInvest Wisdom ETFWIZENYSE Arca
12/2/2016iShares MSCI USA ESG Optimized ETFESGUNasdaq4/22/2016iShares Sustainable MSCI Global Impact ETFMPCTNasdaq
12/1/2016PowerShares S&P International Developed High Dividend Low Volatility PortfolioIDHDBats4/20/2016Amplify Online Retail ETFIBUYNasdaq
12/1/2016PowerShares S&P SmallCap High Dividend Low Volatility PortfolioXSHDBats4/19/2016Guggenheim Large Cap Optimized Diversification ETFOPDNYSE Arca
11/21/2016FlexShares Core Select Bond FundBNDCNYSE Arca4/19/2016Sprott BUZZ Social Media Insights ETFBUZNYSE Arca
11/18/2016Legg Mason Emerging Markets Low Volatility High Dividend ETFLVHEBats4/19/2016Deutsche X-trackers FTSE Emerging Comprehensive Factor ETFDEMGNYSE Arca
11/18/2016iPath Series B S&P GSCI Crude Oil ETNOILBNYSE Arca4/19/2016Global X Catholic Values ETFCATHNasdaq
11/17/2016Janus Short Duration Income ETFVNLANYSE Arca4/14/2016SPDR DoubleLine Emerging Markets Fixed Income ETFEMTLBats
11/16/2016JPMorgan Diversified Return U.S. Small Cap Equity ETFJPSENYSE Arca4/14/2016SPDR DoubleLine Short Duration Total Return Tactical ETFSTOTBats
11/15/2016Global X MSCI SuperDividend EAFE ETFEFASNasdaq4/14/2016First Trust RiverFront Dynamic Developed International ETFRFDINasdaq
11/08/2016USCF Restaurant Leaders FundMENUNYSE Arca4/14/2016First Trust RiverFront Dynamic Asia Pacific ETFRFAPNasdaq
11/03/2016WisdomTree Dynamic Currency Hedged International Quality Dividend Growth FundDHDGBats4/14/2016First Trust RiverFront Dynamic Europe ETFRFEUNasdaq
11/03/2016iShares Core 5-10 Year USD Bond ETFIMTBNYSE Arca4/07/2016WisdomTree Emerging Markets Dividend FundDVEMBats
11/03/2016Goldman Sachs Hedge Industry VIP ETFGVIPNYSE Arca4/07/2016WisdomTree International Quality Dividend Growth FundIQDGBats
11/03/2016Barclays ETN+FI Enhanced Europe 50 ETN, Series BFLEUNYSE Arca4/07/2016Direxion Daily Energy Bear 1X SharesERYYNYSE Arca
11/02/2016Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB)CWEBNYSE Arca4/07/2016Direxion Daily Financial Bear 1X SharesFAZZNYSE Arca
11/01/2016American Customer Satisfaction Core Alpha ETFACSIBats4/07/2016Direxion Daily Technology Bear 1X SharesTECZNYSE Arca
10/31/2016Oppenheimer ESG Revenue ETFESGLNYSE Arca4/05/2016REX Gold Hedged FTSE Emerging Markets ETFGHENYSE Arca
10/31/2016Oppenheimer Global ESG Revenue ETFESGFNYSE Arca4/05/2016REX Gold Hedged S&P 500 ETFGHSNYSE Arca
10/31/2016Oppenheimer ESG Revenue ETFESGLNYSE Arca4/04/2016JPMorgan Diversified Return International Currency Hedged ETFJPIHNYSE Arca
10/31/2016Oppenheimer Global ESG Revenue ETFESGFNYSE Arca4/04/2016JPMorgan Diversified Return Europe Currency Hedged ETFJPEHNYSE Arca
10/28/2016Premise Capital Frontier Advantage Diversified Tactical ETFTCTLBats4/04/2016Dhandho Junoon ETFJUNENYSE Arca
10/27/2016Natixis Seeyond International Minimum Volatility ETFMVINNYSE Arca3/29/2016John Hancock Multifactor Consumer Staples ETFJHMSNYSE Arca
10/25/2016Deutsche X-trackers Barclays International Corporate Bond Hedged ETFIFIXBats3/29/2016John Hancock Multifactor Energy ETFJHMENYSE Arca
10/25/2016Deutsche X-trackers Barclays International Treasury Bond Hedged ETFIGVTBats3/29/2016John Hancock Multifactor Industrials ETFJHMINYSE Arca
10/25/2016SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETFEEMXNYSE Arca3/29/2016John Hancock Multifactor Materials ETFJHMANYSE Arca
10/25/2016SPDR MSCI EAFE Fossil Fuel Reserves Free ETFEFAXNYSE Arca3/29/2016John Hancock Multifactor Utilities ETFJHMUNYSE Arca
10/20/2016Elkhorn Lunt Low Vol/High Beta Tactical ETFLVHBBats3/23/2016Victory CEMP Emerging Market Volatility Wtd ETFCEZNasdaq
10/12/2016Spirited Funds/ETFMG Whiskey & Spirits ETFWSKYNYSE Arca3/22/2016Principal Price Setters Index ETFPSETNasdaq
10/05/2016Franklin Liberty Investment Grade Corporate ETFFLCONYSE Arca3/22/2016Principal Shareholder Yield Index ETFPYNasdaq
10/04/2016Lattice Real Estate Strategy ETFRORENYSE Arca3/18/2016First Trust Dorsey Wright Dynamic Focus 5 ETFFVCNasdaq
9/30/2016AdvisorShares KIM Korea Equity ETFKORNYSE Arca3/10/2016PowerShares DWA Tactical Multi-Asset Income PortfolioDWINNasdaq
9/29/2016First Trust CEF Income Opportunity ETFFCEFNasdaq3/09/2016PureFunds Drone Economy Strategy ETFIFLYNYSE Arca
9/29/2016First Trust Municipal CEF Income Opportunity ETFMCEFNasdaq3/09/2016PureFunds Video Game Tech ETFGAMRNYSE Arca
9/28/2016TrimTabs Float Shrink ETFTTACBats3/08/2016SPDR SSgA Gender Diversity Index ETFSHENYSE Arca
9/28/2016ProShares K-1 Free Crude Oil Strategy ETFOILKBats3/04/2016Goldman Sachs ActiveBeta Europe Equity ETFGSEUNYSE Arca
9/22/2016Franklin Liberty U.S. Low Volatility ETFFLLVNYSE Arca3/04/2016Goldman Sachs ActiveBeta Japan Equity ETFGSJYNYSE Arca
9/22/2016Principal U.S. Small Cap Index ETFPSCNasdaq3/02/2016Vanguard International Dividend Appreciation ETFVIGINasdaq
9/22/2016PowerShares Variable Rate Investment Grade PortfolioVRIGNasdaq3/02/2016Vanguard International High Dividend Yield ETFVYMINasdaq
9/21/2016AdvisorShares Focused Equity ETFCWSNYSE Arca2/25/2016Janus Small Cap Growth Alpha ETFJSMLNasdaq
9/21/2016Elkhorn Fundamental Commodity Strategy ETFRCOMBats2/25/2016Janus Small/Mid Cap Growth Alpha ETFJSMDNasdaq
9/21/2016First Trust Nasdaq Transportation ETFFTXDNasdaq2/24/2016WisdomTree CBOE S&P 500 PutWrite Strategy FundPUTWNYSE Arca
9/21/2016First Trust Nasdaq Food & Beverage ETFFTXGNasdaq2/23/2016Pacer Global High Dividend ETFPGHDBATS
9/21/2016First Trust Nasdaq Pharmaceuticals ETFFTXHNasdaq2/23/2016Cambria Sovereign High Yield Bond ETFSOVBNYSE Arca
9/21/2016First Trust Nasdaq Semiconductor ETFFTXLNasdaq2/22/2016UBS AG FI Enhanced Global High Yield ETNFIHDNYSE Arca
9/21/2016First Trust Nasdaq Oil & Gas ETFFTXNNasdaq2/18/2016Etracs S&P GSCI Crude Oil ETNOILXNYSE Arca
9/21/2016First Trust Nasdaq Bank ETFFTXONasdaq2/18/2016ProShares Managed Futures Strategy ETFFUTBATS
9/21/2016First Trust Nasdaq Transportation ETFFTXRNasdaq2/16/2016UBS AG FI Enhanced Europe 50 ETNFIEENYSE Arca
9/21/2016Amplify YieldShares Prime 5 Dividend ETFPFVBats2/10/2016Guggenheim Total Return Bond ETFGTONYSE Arca
9/21/2016Elkhorn Commodity Rotation Strategy ETFDWACNasdaq2/09/2016Etracs 2xMonthly Leveraged Alerian MLP Infrastructure ETN Series BMLPQNYSE Arca
9/20/2016VanEck Vectors AMT-Free 6-8 Year Municipal Index ETFITMSBats2/09/2016Etracs 2xMonthly Leveraged S&P MLP Index ETN Series BMLPZNYSE Arca
9/20/2016VanEck Vectors AMT-Free 12-17 Year Municipal Index ETFITMLBats2/09/2016Credit Suisse X-Links WTI Crude Oil Index ETNOIILNYSE Arca
9/20/2016Recon Capital USA Managed Risk ETFUSMRNYSE Arca1/27/2016ProShares MSCI Emerging Markets Dividend Growers ETFEMDVBATS
9/15/2016NuShares Enhanced Yield U.S. Aggregate Bond ETFNUAGNYSE Arca1/14/2016SPDR FactSet Innovative Technology ETFXITKNYSE Arca
9/15/2016iShares iBonds Dec 2026 Term Corporate ETFIBDRNYSE Arca1/14/2016Reality Shares DIVCON Dividend Defender ETFDFNDBATS
9/15/2016Fidelity Core Dividend ETFFDVVNYSE Arca1/14/2016Reality Shares DIVCON Dividend Guard ETFGARDBATS
9/15/2016Fidelity Dividend ETF for Rising Rates ETFFDVVNYSE Arca1/13/2016Market Vectors Generic Drugs ETFGNRXNasdaq
9/15/2016Fidelity Low Volatility Factor ETFFDLONYSE Arca1/7/2016iShares Adaptive Currency Hedged MSCI Japan ETFDEWJBATS
9/15/2016Fidelity Momentum Factor ETFFDMONYSE Arca1/7/2016iShares Adaptive Currency Hedged MSCI Eurozone ETFDEZUBATS
9/15/2016Fidelity Quality Factor ETFFQALNYSE Arca1/7/2016iShares Adaptive Currency Hedged MSCI EAFE ETFDEFABATS
9/15/2016Fidelity Value Factor ETFFVALNYSE Arca1/7/2016WisdomTree Dynamic Currency Hedged Europe Equity FundDDEZBATS1/7/2016WisdomTree Dynamic Currency Hedged International SmallCap Equity FundDDLSBATS
9/15/2016JPMorgan Disciplined High Yield ETFJPHYBats1/7/2016WisdomTree Dynamic Currency Hedged Japan Equity FundDDJPBATS
9/14/2016Guggenheim BulletShares 2026 Corporate Bond ETFBSCQNYSE Arca1/7/2016WisdomTree Dynamic Currency Hedged International Equity FundDDWMBATS
9/14/2016Guggenheim BulletShares 2024 High Yield Corporate Bond ETFBSJONYSE Arca1/7/2016WisdomTree Dynamic Currency Hedged International SmallCap Equity FundDDLSBATS

10. A 4 Step Guide to Mental Toughness

In the 1930’s FBI agents needed mental toughness to hunt bank robbers like John Dillinger and mobsters like Al Capone.

As the world became more complex, FBI agents started working complex and sophisticated cases like terrorism, organized crime, cyber, and counterintelligence to better address the threats to American lives and interests.

It’s no secret that business and life are not as simple as they were, either—even a few years ago. It is no longer just a matter of knowledge, ability, and skill to succeed.

As entrepreneurs and business owners you need to be psychologically prepared to deal with strong competition, recover from mistakes and failure quickly, tackle tough situations, devise strategies, and collaborate with others.

In other words, you need mental toughness to manage the emotions, thoughts, and behavior that will set you up for success in business and life.

People define mental toughness in different ways. Often, they think it is plowing through obstacles and roadblocks. While that mindset might work in football, it is not an effective way to succeed in business and life.

Here is a complete beginner’s guide to mental toughness:


Most of the FBI agents I worked alongside would never sputter the phrase emotional intelligence—much less attribute their success to it. While they considered themselves mentally tough, they preferred words like competence and alertness to describe the skills they carefully honed over the years.

I prefer the term emotional competency rather than emotional intelligence. I know of lots of people who are intelligent but not necessarily competent. Competency requires more than just information; it requires the practical wisdom to put that knowledge to work in real life situations.

Let’s break emotional competency down:

  1. Self-Awareness—know what fuels you. I am not talking about fluffy ideals or stuff that gives you the warm fuzzies. Training at the FBI Academy at Quantico is constructed to filter out those who do not feel deeply attached to upholding our federal judicial system.

To be mentally tough, you must know what you feel down deep in your bones. If you are not pursuing something that really holds value and meaning for you, you will not have what it takes to keep going when the going gets tough.

If you are self-aware, you have clarity about your values, operate from a place of authenticity, and go after the things in life that are hard-wired to give you a purpose.

  1. Communication—you know how to interpret the words and body language of others. This means you are a good listener and know how to build genuine trust with others. An essential element of mental toughness is the ability to accurately read the emotions of others and then adapt your behavior accordingly.

To be successful, match your personality to your boss, employee, or client. Assess whether they are introverts or extraverts, analytical or a visionary, purpose-driven or security-driven, goal-oriented or people-oriented. If you’ve been a good listener, you will be able to make these distinctions.

  1. Empathy—it’s not feeling sorry for the other person; it is feeling their sorrow. If you can understand the emotions of others, it is easier to create empathy.

Sometimes we don’t really want to hear what other people have to say! We love our own opinions and thoughts and would prefer to shut out those of others.

Once we close down, however, we risk becoming judgmental and opinionated. More importantly, we miss out on what others have to share with us.


The ability to pick ourselves up when life knocks us down is called resilience. In today’s competitive culture, resilience has become a critical skill because it takes more than talent to succeed.

Resilient people do not blame others, whine, or complain about how unfair life is. Yes, life can be unfair but that is no excuse to give up.

As a new FBI agent, I learned to be bold, take risks, move into my discomfort zone, and put myself out there, even when scared to death of what I might face. The way in which we adapt to overcome our adversity determines how we will achieve success.

More than talent, more than education, more than experience, the ability to bounce back from setbacks determines who will succeed and who will fail. That is true in the classroom, in sports, and in the boardroom.

Here’s a breakdown of resilience:

  1. Confidence—if you don’t believe in yourself, how can others believe in you? When you’re knocked down in life, you must have enough confidence in yourself to get back up, find a way to move forward, and adapt to overcome.

Lack of confidence can rear its ugly head at any time. No one is immune because we are most vulnerable any time we’re out of our comfort zone or experience change in our life. We must face our fears. If we have confidence in ourselves we are not afraid of how others perceive us, afraid of commitment, or afraid of failure.

Confidence is a critical building block for a successful career because it is the one mindset that will take you where you want to go.

  1. Take Risks—most of us don’t know what we’re capable of until we’re truly challenged. And most of do not want to be truly challenged because we don’t want to fail.

But failure can be very beneficial for building confidence because it allows you a perfect opportunity to 1) learn why things went wrong, and 2) see how you can make adjustments next time.

When learning how to make an arrest or interview a terrorist I needed to take risks, fail, and learn from my mistakes as much as possible before I found myself in the actual situation.

If you think you never make mistakes, you are a narcissist—either that or stupid. But if you are humble and self-aware, you recognize that taking risks, making mistakes, and failing will help you understand that there is always something you can do to be better.

  1. Self-Limiting Beliefs—as children we think we can conquer the world, but somewhere between childhood and adulthood, our enthusiasm and natural inclinations to dream big are squashed. Parents and teachers start imposing their own beliefs—about what we can and can’t do in life—upon us.

It’s tempting to give up and not try for anything beyond the predictions and admonitions of others. While many of these people are well-intentioned, they feed negative, limiting, and inaccurate narratives about what it possible once you put your mind to it.

If the instructors at the FBI Academy were not pushing us past our self-limiting beliefs, they weren’t doing their job.

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