U.S.
stocks have powered back to record highs, and they could benefit more from a
relatively expensive fixed income market.
As shown in the LPL
Chart of the Day, Stocks Appear
Historically Cheap Relative to Bonds, S&P 500 Index stocks
are at their most attractive valuations relative to Treasuries in nearly three
years. This data is based on a metric we track called the equity risk
premium (ERP), which compares the earnings yield on equities (or company
profitability as a percent of share price) to the 10-year Treasury yield.
There
are several different ways to view stock and bond valuations, so the ERP is
only one piece of the puzzle. However, the ERP’s recent ascent shows how much
global buying pressure has crimped U.S. yields this year.
There are several different ways to view
stock and bond valuations, so the ERP is only one piece of the puzzle. However,
the ERP’s recent ascent shows how much global buying pressure has crimped U.S.
yields this year.
1. Private equity firms
poised to sign record number of deals
The Bain & Company data showed multiples
for companies being bought in the US and Europe are close to 11 times earnings
before interest, tax, depreciation and amortisation.
Among tech companies, SAP, ASML and
Ericsson are scheduled to report this week, which might signal what’s next for
the shares of Europe’s best-performing industry this year – The
region’s technology sector is up 26% in 2019, keeping up with the Nasdaq 100, while the Philadelphia Semiconductor Index SOX
has soared more than 30%
Dave Lutz at Jones Trading.
2.P/B and P/E Spreads Touch 1999 Levels for S&P 500 vs.
Value.
Value stocks are trading at the steepest discount in
history
7.Dividends
and Buybacks Have Exceeded Free Cash Flow Since 2013
The Capital Group
source: Capital Group. Universe is made up of
2,902 non-financial U.S.-based companies that represent more than 98% of the
U.S. public equity market. As of 12/31/18.
While Wall Street is still
drooling over Beyond Meat, researchers are looking one step ahead to the next
generation of meat cultivation: cellular agriculture.
What it is: Cellular
agriculture uses cultures to build cell-based products outside of an organism.
This can include animal-derived products, such as meat, eggs, and dairy, as
well as byproducts like silk, leather, and fur.
The foundations—biotechnology and tissue engineering—have
already been established in clinical settings (think regenerative
medicine). But unlike a “lab-grown” kidney, you don’t have to
worry about putting the lab-grown filet mignon into the cow. Just
don’t overcook it.
The first hamburger grown in a
lab burned the roofs of taste-testers’ mouths in 2013. But it cost $330,000, and that
was before guac. Researchers are betting that in a few years, similar meat
products will 1) be affordable and 2) taste and feel even more like the
“real” thing.
The warm reception of plant-based
meat alternatives (like Beyond Meat) is a good indicator of future demand for
cellular agriculture products. Consumers want clean, ethical, and sustainable
food, and meat farmed in a lab setting could change what it means to be
“vegetarian” or “vegan.”
Prepare to debate what counts as
meat. Plant-based products have already received pushback from the
meat and dairy industries over labeling. Even cauliflower rice has not
emerged unscathed.
Actually, let’s debate it right
now. Should cell-based, lab-developed meat count as real meat? Vote here.
Boil it down
The promise: Clean,
sustainable, safe meat products, without any of the ethical or environmental
problems that plague today’s livestock and aquaculture industries.
The roadblocks: Cellular
agriculture has never been conducted on a commercial scale or with price
constraints. Customers also have to get on board.
The projected timeline:
Researchers are betting that in a few years, cellular agriculture-derived meat
products will be affordable and taste and feel even more like the
“real” thing.
The major players: Meat
(Aleph Farms, Mosa Meat, Memphis Meats), seafood (Finless Foods, BlueNalu), and
animal-derived products (Clara Foods, Perfect Day Foods, Modern Meadow).
Workplace
stress, while commonplace, is incredibly damaging — which means we shouldn’t
just accept it.
Addressing
stress will make both your quality of life and your workplace better.
Ironically,
things like too much free time can add to your stress. Dealing with stress is
often about focusing on results and planning well.
Last year, my
company, Skylum, experienced some tough times. We grew
sizably, but we were also navigating new markets and facing unexpected
challenges. Ultimately, we had to ask — and answer — some hard questions of
ourselves. Today, the company is more successful than it’s ever been. But our
year of growth and adjustment also had another side effect: Everyone in the
company — myself very much included — struggled with new and
difficult levels of stress.
This doesn’t make us
unique. According to The American Institute of Stress,
80 percent of employees today experience stress at their job. CEOs and company
leaders suffer the most, with a majority reporting feeling regularly overworked, exhausted,
and anxious. The problem is so pervasive that it now feels
commonplace and almostrequired of working and keeping a good job.
The truth, however, is
that workplace stress is remarkably damaging — both to our health and to our general
effectiveness in the office.
It’s the ultimate
distraction. It tires your brain and prevents you from applying 100 percent of
your mental energy to whatever task is at hand.
So if you’re attempting to
achieve any kind of goal, stress is something you need to combat
rather than accept. Here are the four primary types of stress — and how to manage them.
Stressor 1: Having too much work
Focus on results, and prioritize from there. Nattakorn_Maneerat/Shutterstock
Problem: Company
leaders and managers constantly have things to
do, along with people who rightfully need our attention and time. Trying to
complete all these tasks runs us down and drains our focus and happiness.
Solution: Focus on
results, not the workload itself. Many of us — CEOs included — tend to focus on the amount of work we have, as if
the number of nights we spend at the office is indicative of our success. Guess
what? It’s not. So instead, prioritize your individual responsibilities in
accordance with your short-term and long-term goals. This will help you
determine what you actually need to do today in order to achieve your
most pressing goals. If you have a new product you’re launching in two months,
for example, ensuring that launch is successful is likely your most important
goal. You should make sure that everything you do furthers your progress in
achieving that end. To help you make such determinations, use metrics and data.
Then eliminate, delegate, or ignore processes and tasks which won’t contribute
to your growth.
Stressor 2: Having too little work
It may seem paradoxical, but more free time can add to
stress.funkyfrogstock/Shutterstock
Problem: One of the
ways CEOs manage major influxes of work is by delegating tasks. But with
delegation comes more free time. I experienced this first hand. As Skylum grew,
suddenly I had roughly 70% more free time, and I had to figure out how to best
spend it. As I discovered, this can be even more stressful than having too much
work; I felt like I wasn’t adding as much value as before, and I feared
employees might get frustrated.
Solution: Focus your
energy on new and specific goals. One of those goals in my case was building
and managing highly effective teams. Sure, I wasn’t running PR and marketing by
myself anymore, but I could help ensure those who were now in charge had
everything they needed to be successful. Once you’ve identified your new areas
of focus, apply yourself to add as much value in those verticals as you can. As
you grow, this is what your role as a CEO or manager will always look like:
identifying areas of weakness at your company, and then applying yourself to
address those as best you can.
Problem: You always
want to stay connected with your team, but as a company leader, this isn’t
always possible. I’m reminded of this whenever I’m on the road for long
periods. You worry about whether your team will suffer without direct access to
their leader. You also worry that without you managing or directing things,
productivity, engagement, or happiness might dip.
Solution: It’s
threefold:
Utilize a variety of
channels to maintain communication — Slack, email, Skype.
Identify “opinion
leaders” and “influencers” within the company you can partner
with to relay your messages and help you manage morale from afar.
Get feedback from outside
sources, such as your family or other founders. Your situation is not unique,
so solve it by talking with folks who’ve gone through it before.
Stressor 4: Things not happening as fast as you’d like
It can take time to see progress on big projects. Shutterstock
Problem: This one,
again, is especially hard for company leaders; you want things to grow and move
along quickly, but often, they don’t. And you won’t always have control over
that.
Solution: Take time
to reflect and evaluate the effectiveness of each individual component of your
company. Determine whether disparate teams are putting in maximum effort toward
delivering the result you want. If they’re not, weigh potential solutions, and
decide whether those folks may need a bit of a nudge. If folks areworking
hard, recognize that sometimes, progress simply can’t be rushed. I find that
with big projects, you often don’t see results for more than six months or a
year after you start working. So in those moments, turn your attention to
something else — something
that is in your control and that you can have a tangible
impact on.
At the end of the day,
stress management is necessary. And the best way to go about doing it is
to look at your sources of stress objectively, and work smart to identify
solutions. Your solutions may look different than those which I ultimately
employed, but I’m confident the methodology will be the same.
Central
banks are back in easing mode, to the dismay of coupon-clipping fixed income
investors.
As shown in the LPL
Chart of the Day, Global Central Banks Back in Easing
Mode, central banks around the world are embarking
on a marked policy shift as trade tensions pressure the global economy and
government becomes more intertwined with policy decisions.
Two of the world’s most influential central
banks, the Federal Reserve (Fed) and the European Central Bank (ECB), are
eyeing looser policy in the months ahead. We expect the Fed to implement a 25
basis point (0.25%) “insurance” rate cut at its July meeting, and policymakers
have already announced plans to end balance sheet runoff in September. The ECB
has all but promised a new wave of accommodation, likely through asset
purchases.
