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Archive for April, 2020

Another typical Amazon quarter–revenue beat and earnings miss–despite corona virus

Amazon reported first quarter earnings today and fell $1.10 a share short of Wall Street estimates for $5.01 a share (GAAP earnings). That was a 30% year over year decline. Revenue, however, of $75.5 billion was up 26.5% year over year and beat estimates by $1.41 billion. Amazon's cloud unit, AWS, saw revenue of $10.2 […]

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Adding Coke to my Dividend Portfolio

Today's shocking announcement from Royal Dutch Shell (RDS-A) that it would cut its 10% dividend, to 16 cents a share is a brutal reminder of one of the big challenges facing dividend investors. Royal Dutch shares were down 12.02% as of 3 p.m. Nw York time today, April 30. A drop like that wipes out […]

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Just what we need right now: Another trade war with China

Senior Trump administration figures are to meet today to begin mapping out a strategy for retaliating against China for its handling of the coronavirus pandemic, the Washington Post reports, citing four senior administration officials as sources. In recent days President Donald Trump has fumed about China, blaming the country for withholding information about the virus. […]

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Another 3.8 million new claims for unemployment in past week and job losses shift to white color jobs

The job losses continued, as expected, with 3.84 million people filing new claims for unemployment in the week that ended on April 25. That follows on 4.44 million new claims for unemployment in the prior week. Economists surveyed by Bloomberg had projected 3.5 million new claims. In the past six weeks 30.3 million people have […]

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Here’s why stocks went up today even with news that the economy contracted by 4.8% in the first quarter

My explanation. See if this makes sense to you. Nothing in the rear view window matters to Wall Street right now.  Not first quarter earnings. Not economic growth or the lack thereof. Nothing in the second quarter matters either. Forecasts of a 30% or more drop in annualized GDP in the quarter that ends on […]

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Fed keeps policy stable, says 0% rates as far as the eye can see

As expected the Federal Reserve left interest rates at their current level of 0%-0.25%. And there were very few changes in the central bank's language. But a few subtle shifts are worth noting, I believe. The Fed said in early April that “We have also committed to keeping rates at this low level until we are […]

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What if the helicopter trillions don’t work this time?

Drop money from the sky. Lots and lots of it. Enough to shock a struggling economy out of a deep slump. Milton Friedman coined the term. In Friedman's scenario the helicopters appear unexpectedly ( I don't know if they play Wagner) and just dump money on the economy. The strategy is different from a central […]

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So much for the 2014 economic rally: U.S. GDP fell annualized 4.8% in the first quarter

The U.S. economy contracted at a 4.8% annualized pace in the first quarter. That's the worst slide since 2008 and the first down quarter for growth since 2014. Consumer spending, no surprise in days of coronavirus shelter at home orders, led the decline (with a 7.6% drop) and business investment continued its pre-virus weakness. The […]

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Notes You Need for April 28: Mall re-openings, Macao casino traffic, consumer confidence drop, reverse split for USO, China GDP target, TSLA vs Xpeng, Samsung forecasts drop, $565 expected in infrastructure stimulus in China

In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don't justify a full post. I've decided to start compiling these notes here each day in a kind of running mini blog that I'm calling Notes You Need. I launched this new […]

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Are we headed into an era of longterm deflation? Will the Fed say it’s worried about deflation after tomorrow’s meeting?

As long as I can remember (which is only back about 40 years when it comes to the economy) the worry has been inflation. From the stagflation of the late 1970s, to Paul Volcker's brutal but successful assault on inflation in the early 1980s, to the seemingly endless obsession about whether too much economic growth […]

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