Highlights from Barron’s newspaper dated December 12, 2016. See online edition here ($)
For the serious investor, Barron’s weekly newspaper is the single best financial publication out there. It is comprehensive, inexpensive, and focused on a single topic: the financial markets. Each issue is loaded with specific investment ideas. These ideas can come from Barron’s own research, or outside research sources. Most are both timely and topical. Barron’s makes the assumption that its readers are familiar with investing analysis and terminology. The target audience includes senior managers and executives, institutional investors, finance professionals, and serious individual investors.
Most of the articles in Barron’s are interesting and informative, and even if you don’t follow its trade recommendations, you will probably learn something useful. Barron’s is an excellent read for anyone interested in solid investing news and analysis. Due to its exclusive focus on investing, I would recommend it as a core resource for anyone who wants to stay fully-informed. For a pure publication on the financial markets, Barron’s is tough to beat.
Up & Down Wall Street
In this week’s issue, Barron’s goes all-in for the sustainability of the Trump rally. That’s fine with me, as long as you keep in mind that the editorial slant of this publication is decidedly pro-business, and politically right-of-center. After adjusting for this editorial bias, the pro-Trump articles still contain some interesting and useful information.
Get Ready for Dow 20,000. Up 13% so far this year, the Dow is outpacing both the S&P 500 and the Nasdaq. Powering the 30 Dow issues in the past month have been the index’s four financial stocks, Goldman Sachs Group (ticker: GS), JPMorgan Chase (JPM) American Express (AXP), and Travelers (TRV). Goldman’s Dow-leading 33% gain since the election has accounted for about a third of the index’s total advance.
Two Charts – the history of Dow milestones, and the YTD contributions of each Dow stock.
Business Rolls Over, as Usual
Investor appetite has sagged this year, most notably since the U.S. presidential election, when the “reflation trade” led investors to rush into stocks. Silver coin and bar sales are projected to fall by 24% year on year in 2016, says metals consultancy GFMS, a unit of Thomson Reuters. Bullish bets on the Comex division of the New York Mercantile Exchange have been slashed, while exchange-traded funds, including the iShares Silver Trust (ticker: SLV), have also recently posted outflows, albeit from near-record levels.
But HSBC precious metals analyst James Steel doesn’t see the distaste lasting for the “poor man’s gold.” Economic and political concerns, whether linked to China’s slowing economy, European weakness and discord, or the election of Donald J. Trump, haven’t disappeared and could prompt a quick boost in prices at any time. “Any revival in investor uncertainty, combined with price-sensitive buying at these levels and limited supply growth, is likely to be conducive to higher prices,” says Steel. Silver is often bought as a hedge against uncertainty.