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Tag Archives: Companies & Markets

iPhone Sales Croak, China’s Economy Deteriorating Faster than Expected, Apple Warns. Shares Plunge

“We did not foresee the magnitude of the economic deceleration.” Oh dude, starting the year out on the right foot. On Wednesday after the market closed, Apple released a letter to shareholders in which it said that revenues are going to be a lot worse in the quarter ended December 29 than its guidance two months ago, that iPhone revenues have dropped year-over-year, that China’s economic problems are deeper than expected, and that iPhone revenues are hurting elsewhere too. This...

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Long-Term “Buy & Hold” Crushed Stockholders in Largest Markets Except US & India. But for the US, Luck’s Running Out

Ugly long-term charts that Wall Street doesn’t want us to see. And now US stocks are infected too. How well does a buy-and-hold strategy work in the stock market over the long term – as measured in years and decades? In the largest markets around the world, it has crushed investors. There are two exceptions: the US and India. And the US is infected too. The Everything Bubble in the US, a period of nearly 10 years when just about all asset classes have skyrocketed, was perhaps the most...

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THE WOLF STREET REPORT

How the Corporate Debt Bubble Will Crush Stocks. Corporate debt, after years of encouragement by the Fed via artificially low interest rates, has reached historic levels. Now even the Fed is worried about its handiwork. Many of these companies will default over the next few years. This is a cleansing process that is part of the business cycle – only this time, it’s so much larger (12 minutes). Instead of “bubble” or “collapse,” it uses “valuation pressures” and...

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“Leveraged Loans” Bite: Record-Bad Year-End for Loan Mutual Funds & ETFs

Forced selling by loan funds in the once red-hot $1.3-trillion “leveraged loan” market. Part of the $1.3 trillion in “leveraged loans” — loans issued by junk-rated overleveraged companies — end up in loan mutual funds and loan ETFs. These funds saw another record outflow in the week ended December 26: $3.53 billion, according to Lipper. It was the sixth outflow in a row, another record. Over the past nine weeks, $14.8 billion had been yanked out, another record. These outflows are, as...

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China’s Startup Bubble Runs Aground

Bike-share companies, among the hottest startups, are wiping out investors. “It now appears bike sharing is the stupidest business, but the smartest brains of China all tried to get in,” Wu Shenghua, founder of 3Vbike, one of the many collapsed bike-sharing companies in China, told Reuters. “It really now seems ridiculous.” Afterwards, a lot of the ingenious must-not-question stuff that happened during a bubble is considered “ridiculous.” Bike-sharing companies are just an example....

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Government Shutdown Stops Nasty Housing Data in its Tracks

Homebuilders, a bedraggled bunch recently, breathe a sigh of relief, but get crushed anyway. “NOTICE: Due to a lapse in federal funding this website is not being updated,” the Commerce Department’s website says currently on the page where the Census Bureau would have published this morning’s data for new-home sales, inventory, and prices for the month of November. The main page of the Commerce Department’s website explains: “Due to the lapse in Congressional Appropriations for Fiscal...

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My Theory About Gold as Diversification to the Busted “Everything Bubble”

And over the long term? It gets complicated, as they say. Since October 1, the S&P 500 index has plunged 19.6%, to 2,351 as of Monday’s fiasco. Over the same period, the price of gold has risen 7.3% to $1,271/oz. Over this short period, gold was an effective diversification. For the year so far, the S&P 500 index is down 12.1%, gold is down 1.6%. For the past two years, the S&P 500, despite the huge volatility, is up 4.2%, and gold, also with some volatility, is up 9.7%....

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Nasdaq, “Tech,” & IPOs are in for Gut-Wrencher

Nasdaq down 24% already. Renaissance IPO ETF down 31%. But Uber and other unicorns are planning record IPOs in 2019, à la dotcom-crash-debut in 2000. The IPO hype machine has produced some very successful companies and a lot of spectacular wealth transfers from the hapless public to early investors selling their shares. Here are two of the standouts that I covered: Snap [SNAP], purveyor of the Snapchat app and must-have sunglasses with a built-in camera: Shares peaked at $29 on the...

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The Global Battle over Subsidies for Money-Losing Airlines

The US and EU slug it out with the United Arab Emirates and Qatar. By MC01, a frequent commenter, for WOLF STREET: In March 2014, EU Transport Commissioner sought a mandate from EU members to open talks with unspecified “Persian Gulf States” over “unfair airline subsidies,” following a formal joint request by the Dutch, French, and German governments. This wasn’t granted until December 2015, when the Transport Commissioner was given a new mandate to “negotiate” with extra-EU...

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Nothing Goes to Hell in a Straight Line, Not Even Stocks

But a whole generation of investors has never been through a Nasdaq-bubble unwind, and they’re shocked. I just dug out my “Dow 20,000” hat, but I might not need it for a while because nothing goes to hell in a straight line. And I still have my “Dow 10,000” hat somewhere just in case, though I doubt I’ll need to go look for it anytime soon for the reasons I’ll explain in a moment. I have to admit, this was a beauty of a Santa rally. We were promised a Santa rally by the buy-buy-buy...

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