Daily Top Ten – October 3, 2016

1. A Couple Energy Charts.

Light Crude +78% Since 2016 Low $27

Light Crude +78% Since 2016 Low $27

XLE Energy SPDR +45% Since Jan. 2016 Low $49

XLE Energy SPDR +45% Since Jan. 2016 Low $49


2. First Half of 2016 Stock Losers Dominate 3rd Qt. Performance.

Q3 Rotation Out of What Worked in First Half

Sep 30, 2016

The average stock in the S&P 500 gained nearly 4% in the third quarter of 2016, but we found an interesting performance divergence based on performance in the first half of the year.  Below we’ve broken the S&P 500 into deciles (10 groups of 50 stocks each) based on first half performance.  The 50 stocks that did the best in the first half are in decile 1 (marked “Best” in the chart), while the 50 stocks that did the worst in the first half are in decile 10 (marked “Worst” in the chart).  As shown, the top two deciles of the best performing stocks in the first half of 2016 both averaged declines in the third quarter.  At the same time, the 50 stocks that did the worst in the first half gained an average of 11.8% in the third quarter.  Judging by this data, investors clearly rotated out of winners in the first half and into the losers.

If you would like to see more Q3 analysis plus our thoughts on Q4, please choose a monthly or annual membership option now and check out our just-published Q4 outlook report.

Q4 outlook report.


3. Three-month Libor has risen by more than 50 basis points (one-half of a percentage point) over the past year

Libor is the base rate for many U.S. loans, including some home mortgages. Three-month Libor has risen by more than 50 basis points (one-half of a percentage point) over the past year, to 0.8456%, while the Fed has boosted its federal-funds target range just 25 basis points, to 0.25-0.5%.

That’s real dollars and cents for U.S. homeowners. In a commentary, David Kotok of Cumberland Advisors quotes Madeline Schnapp, whom he describes as a “superb economist and researcher of the housing market in the West”:

Taking a $700,000 adjustable-rate mortgage tied to Libor, a 25-basis-point rise in the loan rate to 3.5% from 3.25% would increase the monthly payment about $100, to $3,150, which would be “tolerable.” But if Libor jumps to 1.5%, the resulting rise in the adjustable rate mortgage to 4.25% would boost the monthly payment to around $3,500. “Yikes!” she writes. As for loans that were as much as 97% of the original purchase price, what happens to high-priced San Francisco Bay Area properties bought on that kind of shoestring?




4. Saudi Supply Announcement Rallied Energy Last Week, but We have Discussed the Kingdom Borrowing in Bond Market for the First Time…..Now Stocks and Banks Under Pressure.  Diversifying Economy Away from Energy is Secular  not Cyclical Problem.

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5. Holdings in ETFs backed by silver climbed to the highest since they were created about a decade ago, according to data compiled by Bloomberg. This quarter, investors poured $625.5 million into iShares Silver Trust, the most since 2010

Silver Outshines

Thanks to Dave Lutz at Jones for Chart.

6. Nate Silver has Almost a Dead Heat.

Chart o’ the Day: A Dead Heat

Posted September 26, 2016 by Joshua M Brown

Open a Fidelity IRA: A tax smart, flexible way to save.
Regardless of which mendacious sociopath you’re pulling for, today’s update from Nate Silver makes it clear that this last stretch of the race will be a battle for the ages.

Here’s the FiveThirtyEight odds and how things have evolved. The site is now calling this race a dead heat.

image008Head over for more on how these odds have been calculated.

2016 Election Forecast (FiveThirtyEight)
Full Disclosure: Nothing on this site should ever be considered to be a

7. 10 million self-driving cars will be on the road by 2020

John Greenough, BI Intelligence

Estimate of Self Driving Cars

BI Intelligence

Self-driving cars are no longer a futuristic idea. Companies like Mercedes, BMW, and Tesla have already released, or are soon to release, self-driving features that give the car some ability to drive itself.

Tech companies are also trying to pioneer the self-driving car. Recently, Google announced that it would be testing its prototype of a driverless car on roads this summer in California.

In an in-depth report from BI Intelligence, we analyze the self-driving car market by analyzing the current state of the self-driving car and provide an in-depth analysis for how we see the self-driving car progressing over the next five years. Our in-depth analysis describes the economic impact that self-driving cars can have and look at the current barriers preventing the self-driving car from coming to market.

Here are some of the key takeaways from the report:

  • Self-driving cars are not some futuristic auto technology; in fact there are already cars with self-driving features on the road.  We define the self-driving car as any car with features that allow it to accelerate, brake, and steer a car’s course with limited or no driver interaction.
  • We divide the self-driving car into two different types: semi-autonomous and fully autonomous. A fully autonomous vehicle can drive from point A to point B and encounter the entire range of on-road scenarios without needing any interaction from the driver. These will debut  in 2019.
  • By the end of the forecast period, we expect there will be nearly 10 million cars with one of our defined self-driving car features.
  • Fully autonomous cars are further divided into user-operated and driverless vehicles. Because of regulatory and insurance questions, user-operated fully autonomous cars will come to market within the next five years, while driverless cars will remain a long ways off.
  • The biggest benefits of self-driving cars are that they will help to make roads safer and people’s lives easier. In the UK, KPMG estimates that self-driving cars will lead to 2,500 fewer deaths between 2014 and 2030.
  • But the barriers to self-driving cars remain significant. Costs need to come down and regulations need to be clarified around certain self-driving car features before the vehicles fully take off among mainstream consumers.

In full, the report:

  • Explains our definition of a self-driving car and breaks down the self-driving car into five levels of possible capabilities
  • Sizes the current and expected self-driving car market, including shipment forecasts and expected installed base
  • Analyzes how both car and tech companies are approaching the self-driving car
  • Determines the benefits of the self-driving car
  • Assesses the costs and regulations preventing the self-driving car from coming to market

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  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
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8. Contribution of Housing to GDP….See the Size of 2008 Housing Bubble Anomaly on Chart.

The contribution of housing to US GDP is now at a multi-decade average. While some continue to reminisce about the good old pre-recession days, it’s important to remember that it was an anomaly.

housing related share of outputSource: Deutsche Bank, @NickatFP, @joshdigga


9. Read of the Day…..Key facts about the world’s refugees

By Phillip Connor and Jens Manuel Krogstad5 comments

With the number of displaced people in the world at more than 60 million in 2015 – a total that counts both those living inside and outside of their home countries – the plight of refugees has gained new prominence as countries, including the U.S., have taken in displaced people. To address the issue, the United Nations General Assembly will host a summit on refugees and migrants on Sept. 19, and President Barack Obama will hold his own Leaders’ Summit on the topic the following day.

Here are 10 key facts about the world’s refugees as well as those entering Europe and the United States.

1. Nearly 1 in 100 people worldwide are now displaced from their homes, the highest share of the world’s population that has been forcibly displaced since the United Nations High Commissioner for Refugees began collecting data on displaced persons in 1951. Displacement levels are higher in some regions of the world than others. For example, more than one-in-twenty people living in the Middle East (5.6%) are displaced. Meanwhile, about one-in-sixty people living in continental Africa (1.6%) are displaced (not including Egypt, which is considered part of the Middle East). In Europe, 0.7% of the population is displaced, similar to levels following the collapse of Eastern Bloc countries in the early 1990s.

Nearly 1 in 100 people worldwide are now displaced from their homes

2. Six in 10 Syrians are now displaced from their homes, a number unprecedented in recent history for a single country. The Syrian conflict has displaced millions of citizens since protests against the al-Assad government began more than five years ago. Today, an estimated 12.5 million Syrians are displaced, up from less than 1 million in 2011, according to a Pew Research Center analysis of global refugee data. Displaced Syrians worldwide include those internally displaced within Syria, refugees living in neighboring countries or relocated to other countries like Canada and the U.S., and those in Europe awaiting a decision on their asylum application.

Displaced Syrians

3. European Union countries plus Norway and Switzerland received a record 1.3 million refugees in 2015, accounting for about one-in-ten of the region’s asylum applications since 1985.

4. The foreign-born shares of populations in several European countries have dramatically increased since mid-2015, as more than 1 million migrants applied for asylum in Europe between July 2015 and May 2016


5. Europe has seen a rise in the number of unaccompanied minors seeking asylum, with almost half coming from Afghanistan. Between 2008 and 2015, about 198,500 unaccompanied minors entered Europe seeking asylum, with nearly half (48%) arriving in 2015 alone. Nearly 7% of all first-time asylum applications in 2015 were from unaccompanied minors, the highest share since data on accompanied minors became available in 2008.

10. My 10 Rules for Living an Extraordinary Life

Here are my rules that hang in my office: Craig Ballantyne

My 10 Rules For Living An Extraordinary Life

“Once you have determined the spiritual principles you wish to exemplify, abide by these rules as if they were laws.” — Epictetus

  1. My #1 priority is to create a life where Libby and I have maximum freedom to contribute in our own unique ways to the world.
  2. I live with a respectful disregard for the opinions, beliefs and ideals of others. I consciously define my own beliefs and live life true to them, allowing others that same freedom.
  3. I prioritize my relationship ahead of my business and my career. It is the foundation that makes everything in our lives possible.
  4. I start every day with gratitude, intention, and connection with self. I end every day with gratitude, reflection and connection with self. Every single day.
  5. My free time for rest, recovery, and creative space is equally as important as my focus time for action and execution. I balance my intense, focused energy with my relaxed, open, creative energy. I know I’m the most ‘on’ when I honor both.
  6. My mornings are sacred and reserved for my most important, creative work. I never take phone calls or meetings before 11 a.m.
  7. Asleep by 11. Awake by 7. I prioritize getting 8 hours of sleep per night because it is one of my most important habits for staying healthy, happy, and high vibes.
  8. I do my best to not make assumptions about others or their experiences. I do my best to welcome everything that happens in my life. I do my best to trust fully in myself and my experience. When I get stressed, scared, angry, or upset, I feel my feelings fully. And I come back to my breath and back to my body. I know all my power resides in this present moment, when I’m connected to my body.
  9. I love my body and take care of it. Ninety percent of my meals are paleo (no gluten, no dairy, and minimum sugars.) I work out and exercise regularly so I consistently feel energized, healthy, magnetic, and powerful.
  10. I take full 100% responsibility for everything in my life. The good and the bad. I accept the consequences of my actions with both humility and dignity, honoring my mistakes AND honoring my achievements.

Those are my rules. What are yours?