Website Hosting

S&P 500 Weekly Update: A Good Dose Of Fear And A Void In Common Sense

“The most important consideration when investing in the stock market is the primary trend of the equity markets.”Richard Russell (Dow Theory Letters)

As we enter the final month of 2018, it is a good time to take a peek back at this very unique year. It’s hard to remember a year that started out of the gate so strong only to see a correction of 10% from record highs within weeks. Then, shortly after rebounding all the way back to new all-time highs again, the S&P 500 dropped another 10%.

Bespoke Investment Group tells us that in the S&P 500’s history dating back to 1928, there have only been four other periods where the S&P 500 had two 10%+ corrections from an all-time high within a 12-month stretch. Of those four prior periods, there was only one where the two 10%+ corrections occurred in the same calendar year. That was in 1990.

While 1990 saw the S&P decline by 3% and close the year at 334, there wasn’t another down year until 2000. In the interim, the S&P rallied and closed 1999 at 1,248, some 373% higher. Now I’m not suggesting that will happen this time around. I simply posted that today as a gentle reminder to the Bears that are nipping at the heels of the Bulls, nothing is certain.

I have always stressed the importance of having a strategy, a process, and of course sticking to it. Completing the first part is much easier than the second. The up and down emotional market swings this year have posed unique challenges to investors. Buy these corrective dips, sell these new highs?, or watch and wait. Investment plans were surely tested.

It is one thing when personal situations arise that may change your investment ideas. That is understandable, and when those issues arise, priorities can and will change.

a plan.gif

In the last few years, however, many seasoned investors have altered their plans for no other reason than being caught up in the worries. This year leads the pack in that regard. A run to new highs early in the year met with the first mention of trade issues. A correction that was said to be the start of the next bear market. A run back to new highs and then it’s time to complain that the Fed is on a mission to bring the economy to recession and more trade talk added to that conclusion. The complaining continues now with the chant that nothing seems to be working.

Well, I am not so sure about that. Perhaps for those that make calls for S&P 3,000, then change to S&P 2,200, and now reverse course again, nothing is working. If they actually followed that whipsaw strategy for the first eleven months of the year, it is easy to see their frustration. On the other hand, anyone that has been patient, watched the price action, never getting too high or low with their emotions has survived the extremes.

There is no shortage of strategies and/or indicators to follow. Successful investors should lean to one that will not have leave them prey to emotional swings on every 5-10% move in the indices. It also means they should employ the traits every successful investor possesses. Flexibility in an approach, be open minded and confident. When I see a plan change because of ONE issue or because ONE indicator has changed, it tells me blinders are in place.

The investment community has this penchant for taking the easy way out. That leads to mistakes. Of course, then it becomes routine to blame the issues for their mistakes. That would not happen if their plan was grounded instead of being influenced by every headline and every indicator.

My approach is centered around consistency. Eliminating the tendency to make major changes in investment strategy until the primary trend in place is indeed changing. It avoids extrapolating any issue to an extreme positive or an extreme negative, and there is never any guessing that a trend is about to change. It’s not infallible, but in my view, it beats what many other profess as the “only way to proceed”.

In the last 5 years or so, we have seen many of those pundits disappear. The stock market has a way of neutralizing those that like to flow with the wind.

U S economy.jpg


Scott Grannis shares his wisdom in his recent article discussing the yield curve and the thought of an impending recession. For years market participant have been hearing about the onset of the next recession. Suffice to say that we will continue to hear warning after warning now about the state of the economy.

In addition to all of the signals that investors have and will continue to hear about the onset of the next recession, we all need to realize that recessions are born to take out the excess that have built up during the expansion that preceded them. Therein lies the issue that the naysayers will have to deal with. There are none. I am of course referring to excesses. Well, none that would suggest a bubble like backdrop, or a feeling that “all is so good what could possibly go wrong” mentality. In fact it is just the opposite, it’s more like what could possibly go right?

No reason at all to jump to any conclusion now. After all the yield curve hasn’t even inverted yet, and I’m not one to listen to the “its inevitable” talk. Sure there could be an imminent inversion, but there are many times in history where the curve stayed flat for months on end. While market participants should not put their heads in the sand, it may be worthwhile to wait until it actually happens before any significant changes to an investment strategy are pursued.

U.S. Markit manufacturing index fell 0.4 points to 55.3 in November for the final reading (55.4 preliminary), after inching up 0.1 point to 55.7 in October. The index has faded from its cyclical high of 56.5 in April, but remains at a robust level.

Chris Williamson, Chief Business Economist at IHS Markit said:

“Despite the headline PMI slipping to a three-month low, November saw manufacturers enjoy another encouragingly solid month of improving business conditions. Dig deeper behind the headline number and the picture brightens further. New orders rose at the fastest rate for six months, prompting manufacturers to continue to expand capacity to meet demand. The pace of job creation remained among the highest seen over the past decade.”

“The survey acts as a reliable guide to the official manufacturing data, and suggests that factory output is growing at an annualized rate of around 1.5% so far in the fourth quarter, providing a material but by no means impressive contribution to GDP. As such, the data corroborate the flash PMI’s signal that the economy will likely see growth slow to a 2.5% rate in the fourth quarter.”

The bounce for ISM Manufacturing to 59.3 in November reversed the October drop to 57.7 from a slightly higher 59.8 in September and a 14-year high of 61.4 in August. Analysts saw a prior 14-year high of 60.8 in February, and a 9-month low of 57.3 in April.

Construction spending was much weaker than expected in October falling 0.1%, with downward revisions to prior months.

U.S. factory data tracked estimates with 0.3% October non-durable increases for shipments and orders after a September trimming to 0.5% from 0.6%.

A flat Michigan sentiment reading at the same 97.5 seen in November left the index still between the 14-year high of 101.4 in March and the 7-month low of 96.2 in August.


Sentiment towards the present is increasing, and feelings about the future in decline, the spread between the two indices remains at extremely high levels. In prior periods when this spread topped 50, it quickly reversed and a recession wasn’t far behind.

Source: Bespoke

The only exception was in the late 1990s/early 2000s where the spread reached stratospheric levels before finally reversing. When this spread starts to reverse in the future, it will be a signal that a recession is likely on the horizon, especially if it is accompanied by a turn lower in the Jobs Plentiful index.

Friday’s headline jobs number missed the mark, and the trend of job creation reported by the BLS is definitely slowing. It’s important to emphasize that slowing job growth does not mean this report was weak. The wage growth story has continued to gather steam, with wage growth for non-managerial positions hitting new cycle highs and another solid month for total private wages. Slower jobs growth combined with higher wage growth is not a sign of a weakening economy.


Bespoke Investment Group reports:

“With housing indicators starting to roll over, it naturally raises concerns that a recession could be around the corner. Throughout history, New Home Sales have typically started to roll over, not right before the onset of a recession, but usually years before. Therefore, as a timing tool, New Home Sales is not a very good recession indicator.”

“Another important point to keep in mind is that at their peaks so far in this recovery, most residential housing indicators barely reached their historical long-term averages, which suggests that the downside is a bit more limited.”

Source: Bespoke

Global Economy


Markit Eurozone Manufacturing PMI showed the weakest growth of the manufacturing economy since August 2016. Final Eurozone Manufacturing PMI at 51.8 in November (Flash: 51.5; October Final: 52.0). Chris Williamson, Chief Business Economist at IHS Markit:

“November’s PMI data underscore the extent to which manufacturing conditions have become more challenging, indicating that production could act as a drag on the eurozone economy in the fourth quarter. Manufacturers reported that demand is now falling in Germany, France and Italy, while only modest growth was recorded in Spain. The darker outlook is linked to trade wars and tariffs as well as intensifying political uncertainty and has led to increased risk aversion and a commensurate cutting back on expenditure, notably for investment. Producers of investment goods such as plant and machinery reported the steepest drop in demand in November, with reduced capital spending by companies compounded by ongoing disruption of business in the autos sector.”


Caixin China General Manufacturing PMI output remains stable in November. The headline seasonally-adjusted Purchasing Managers’ Index, a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy, was little changed from October’s reading of 50.1 at 50.2 in November. This signaled a further fractional improvement in the health of China’s manufacturing sector.

Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group:

“The Caixin China General Manufacturing PMI inched up to 50.2 in November from the previous month. The sub index for new orders continued to rise, pointing to improved demand, which may be due to a recent raft of government policies aiming to support the private sector. The gauge for new export orders dropped further into contraction territory in November, indicating the impact of the Sino-U.S. trade friction on exports.”

“The employment sub index likewise dipped further into negative territory. The output sub index dropped to the dividing line of 50 that separates expansion from contraction, marking its lowest level since June 2016, which implied production was facing a slowing trend. One key reason for the slowdown may be the obvious increase in stocks of finished goods.”

The Caixin China Composite PMI data (which covers both manufacturing and services) pointed to a stronger rise in total business activity across China in November. Notably, the Composite Output Index rose from a 28-month low of 50.5 in October to 51.9 in November to signal a modest rate of expansion.

Rising from 53.0 in October to 54.5 in November, the seasonally-adjusted Nikkei India Composite PMI Output Index pointed to the fastest expansion in private sector activity since October 2016. Growth was stronger in manufacturing than in services, though quicker increases were noted across both sectors. The seasonally-adjusted Nikkei India Services Business Activity Index rose from 52.2 in October to 53.7 in November, signaling a solid upturn in output that was the strongest since July.

Pollyanna De Lima, Principal Economist at IHS Markit:

“Growth in India’s dominant service sector increased to a four-month high in November, thanks to solid increases in new work at home, which in turn led to a continued rise in job numbers. The welcoming news complement similar upbeat results in the manufacturing industry, released earlier in the week, and so far suggest that the private sector economy will provide impetus to Q3 FY18 GDP results.”

“Keeping up with levels of new work and increased activity, additions to the workforce were maintained for the sixteenth month running. So far, 2018 proved to be the strongest year for employment growth for a decade.”


The headline Nikkei Japan Manufacturing Purchasing Managers Index, a composite single figure indicator of manufacturing performance, fell from 52.9 in October to 52.2 in November, therefore pointing to a slower rate of improvement in business conditions. The latest reading for the headline index was the lowest since August 2017. Joe Hayes, Economist at IHS Markit:

“The fall in Japan’s manufacturing PMI tells us that October’s bounce-back was indeed a transitory jump back to normality following weather-related disruptions in September. The underlying picture remains subdued, with momentum tilting towards a slowdown. New orders rose at just a slight pace as goods producers raised concerns about the demand environment. Subdued sales performances reflected fragile conditions both domestically and abroad. According to firms, weak demand from China and parts of Europe hampered export growth.”

“As such, expectations for future growth were reduced, with business confidence towards the year-ahead sliding for a sixth straight month to the lowest in two years.”

Weaker service activity growth in tandem with a slower rise in manufacturing production resulted in the Nikkei Composite Output Index edging slightly lower to 52.4 in November from 52.5 in October.

The slowdown in business activity growth was highlighted by a fall in the headline seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index to 50.4 in November. This was down from 52.2 in October and the lowest reading since July 2016.


Brexit has turned ugly. Another issue is the fact that the UK’s Brexit agreement looks very unlikely to pass Parliament, meaning the UK will be forced to either unilaterally revoke Article 50 and end the current process of exiting the EU, try and negotiate a better deal (unlikely to succeed), re-try the bill under the pressure of collapsing asset markets, or crash out in a hard Brexit

Monday, the EU’s top court released an advisory opinion indicating that Article 50 can be unilaterally revoked, giving the UK a potential emergency out if Parliament is unable to agree on the transition arrangement negotiated by Prime Minister May.

On Tuesday, British House of Commons voted 311 to 293 to hold May’s government in contempt. Theresa May’s government will now have to turn over the legal advice to Parliament. It will then be looked over to make sure that it doesn’t contain any confidential information before being released to the public. Critics of Brexit suspect that these documents must contain predictions that Brexit will not go as well as May’s government has been predicting since they were not released immediately.


Canadian Manufacturing PMI reached the highest level in three months. The index registered 54.9 in November, up from 53.9 in October. Christian Buhagiar, President and CEO at SCMA:

“Canadian manufacturers enjoyed an overall rebound in growth during November, with business conditions improving at the strongest pace for three months. Stronger rises in output and new orders were supported by the fastest upturn in employment numbers since the survey began in October 2010. The latest robust increase in staffing levels was widely linked to capacity pressures and a subsequent rise in investment spending across the manufacturing sector.”

“Survey respondents commented on a boost to sales from improving U.S. economic conditions. However, there were also signs that worldwide trade frictions continued to hold back client demand, with new export order growth still weaker than seen on average in the first half of the year. Canadian manufacturers signaled that business optimism remained close to the lowest seen over the past two years, which many linked to heightened global economic uncertainty.”

Earnings Observations

FactSet Research Weekly Update:

Earnings Scorecard: For Q3 2018, with 99% of the companies in the S&P 500 reporting actual results for the quarter, 77% of S&P 500 companies have reported a positive EPS surprise and 62% have reported a positive sales surprise.

For Q4 2018:

  • Estimated earnings growth rate for the S&P 500 is 13.4%. If 13.4% is the actual growth rate for the quarter, it will mark the fifth straight quarter of double-digit earnings growth for the index.

  • Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.4. This P/E ratio is below the 5-year average (16.4) but above the 10-year average (14.6).

For 2019, the bottom up EPS estimate, which reflects an aggregation of the median EPS estimates for all the companies in the index, is $176.51. If $176.51 is the final number for the year, it will mark a record high EPS result. The question that investors want an answer to, what is the likelihood that $176.51 will be the final EPS number 2019?

Over the past 20 years (1998-2017), the average difference between the bottom up EPS estimate at the beginning of the year (December 31) and the final EPS number for that same year has been 8.3%. In other words, industry analysts on average have overestimated the final EPS number by 8.3% one year in advance. However, during that time period, there have been outliers like the 9/11 tragedy, and of course, the 2008/2009 financial crisis.

If one applies the average overestimation of 8.3% to the current 2019 EPS estimate, the final value for 2019 would be $161.81. If we do exclude those outliers, the average overestimation would be about 3.5%. S&P 500 Earnings would then be in the range of $170. EPS of $170 would reflect a record high EPS for the S&P 500. Simple math using a conservative multiple of 17 yields an S&P value of 2,890, suggesting stocks are fairly valued today.

Political scene.gif

The Political Scene

No sooner than the U.S. delegation plane landed back here in the U.S., rumors, innuendos, tweets, etc. became the norm. People wanted details. Apparently they wanted to see how much every item on every grocery shelf in the country was going to increase by.

It has always been common sense that when leaders of their respective countries sit down to talk on ANY topic, it is at the HIGHEST level of discussion. The details are left for later, as is the situation now. Hence the 90-day halt on more trade tariffs until the crux of a deal is forged. The stock market didn’t seem to like that at all. At the moment, common sense is not part of the equation. Market participants threw a tantrum taking down all of the indices this week.

Believing that years of trade issues between China and the U.S. will be solved in a matter of weeks/months is simply not a reasonable approach. The entire trade tariff issue remains overblown. All of the media rhetoric is pure NOISE. Including the arrest of a Chinese national whose company may have been involved in bank fraud and possible violations of sanctions against Iran. Somehow that is being viewed as a negative to the ongoing trade negotiations. It is what it is, and nothing more. An incident that has come to fruition after a long investigation that more than likely started before there was a hint of trade tariffs being imposed.

All of this fits PERFECTLY with a backdrop where every piece of news is extrapolated to the worst possible outcome, and we wonder how and why emotion plays a big part of the trading action. I have NOT HEARD ONE viable news story come out of any news agency on this topic since last week. Instead it is “this means that”, “they said this“, “apparently this means something“, “we don’t have details, so it has to be bad news“, and on and on.

At times it is like listening to a room full of 5-year-old children, that can’t figure out when recess begins, and they start flailing their arms in frustration. The media is feeding into the fear factor with commentary that amounts to complete nonsense.

NOTHING has changed on the trade front since the end of the G20 meeting. That is unless one is buying into the pundits hammering innuendo, their personal agendas, and rampant speculation. Did anyone actually think we were going to get what the new tariffs will be on each and every item, the day after the high level meeting?

The current state of affairs on trading with China has been in effect for so long, it is NOT about to be figured out in days, weeks, or even months. Here is the bottom line, per the Office of the United States Trade Representative, tariffs will cost the average American family $127 per year.

Now that can be construed as an agenda as well. I suppose we are somewhere between that and the average American eating eat cat food to survive because of the tariffs being imposed. It’s time for a reality check. Investors eagerly await the arrival of the adults entering the room to apply some common sense to the situation.

Federal reserve 2.jpg

The Fed and Interest Rates

The yield curve has flattened, the yield curve has flattened!! The article in the link is a little dated (December 2017) and makes my point that it isn’t necessary to overreact just yet. However, they are words that start many conversations about the state of the financial markets these days.

Wait a minute, I thought the most common sense way to measure a true yield curve inversion was to measure the difference between the 2-year and 10-year yields. That difference now is 12 basis points. That is called a flat yield curve. A flat yield curve does NOT mean lower stock prices. There were many instances during the secular bull market in the 1990s where stocks rose with a flat curve backdrop.

However, today it has been deemed that we all MUST look at the difference between the 2- and the 5-year or the 3- and 5-year Treasury yields primarily because they have indeed inverted and easily makes the Bear case. Prescribing to the 3-year versus 5-year spread as a reason to be concerned is walking out on a ledge. If one wants to use that as their holy grail, be my guest. There have been 73 unique instances of inversion of those two data points in the past 64 years and only 9 recessions.

A yield curve inversion (short rates above long rates) has foreshadowed a recession with near flawless predictive abilities for the past 50 years. Historically, it’s taken about a year to go from current levels to an inverted curve, with the market rallying in the interim on every occasion.

It’s still early to use this one data point to start making portfolio changes. A wait-and-see attitude is what I believe to be the best course of action. First Trust Economics agrees when speaking to the angst over the shape of the yield curve:

“These concerns are overdone. It’s true that an inverted yield curve signals tight money, but inversions typically don’t happen until the Fed pulls enough reserves out of the system to push the federal funds rate above nominal GDP growth. Right now, that’s about 3.5%, which means the Fed is likely at least two years away. And, the banking system is still stuffed with over $2 trillion in excess bank reserves. Monetary policy, by definition, is not tight until those excess reserves are gone.”

Recent history suggests that the greatest risk of recession occurs if the Fed continues to tighten after the initial inversion of the yield curve, which happened prior to the last two recessions. The Fed’s rapid policy reversal in 1995 prevented the tightening cycle from evolving into a recession. What economists will now debate is how much tightening remains before the Fed inverts the yield curve. Please remember by definition the yield curve that is used to measure the possibility of recession has NOT inverted just yet.

Over a year has gone by and we have come full circle, right back to this topic. Every pundit wants to be the person that sniffs out the exact time to be out of stocks, the hero, the genius. Of course, they look at the yield curve and say that will be their signal. But staying invested has actually proven to be the more rewarding approach.

Historically, in the year before yield curve inverts, global stocks have always posted gains and those gains have almost always been in the double digits.

An inverted yield curve is not a sell signal. Recessions aren’t automatically around the corner. And it takes a while for them to arrive after the inversion, during which time stocks often rally.

Moreover, the spread between the federal funds rate and 2-year Treasury yields remains close to 50 basis points, not flat, but rather accommodative.

Sentiment negative.jpg


Individual investor’s outlook on markets from the AAII survey actually saw a bump in bullish sentiment this week. Bullish sentiment rose for the second week in a row to 37.94% from last week’s 33.88%. This is off of one of the lowest readings of the year from only a few weeks ago.


Crude Oil

Crude oil’s decline over the last 40 trading days has been nothing short of extraordinary.

Source: Bespoke

In the span of just 40 trading days, WTI traded at a multi-year high and then proceeded to lose more than a third of its value in what can only be described as a relentless decline.

The EIA weekly inventory report showed the first decline in inventories in 10 weeks. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.3 million barrels from the previous week. At 443.2 million barrels, U.S. crude oil inventories are about 6%, above the five-year average for this time of year. Total motor gasoline inventories increased by 1.7 million barrels last week and are about 4% above the five-year average for this time of year.

Crude oil dropped initially, then rebounded as OPEC met this past week and decided to cut production. WTI closed the week at $52.64, up $2.00. Traders and investors will continue to look at the $50 level as support.

Technical view.gif

The Technical Picture

The week started off in rally mode, then ran into the resistance we spoke about last week, the 2,750-2,760 level. The rally off the lows (6% in 6 trading days) had left the index slightly overbought in the short run.

Chart courtesy of

Half of that rally was corrected in one day with a 90-point drop in the S&P on Tuesday, and most of what was left of that rally wiped out as the week went on. One positive, the sell-off stopped just above the late November lows.

The trading range for the S&P that has been with us since the beginning of the year remains in place, but the index is back to testing the lower end of that range. It feels ugly BUT nothing has changed for the short to intermediate view as far as support or resistance. S&P 2,815 is the level to watch on the upside. A decisive break and close above that level portends good things can follow for the Bulls. The lower support area that is a key remains at S&P 2,603.

The back and forth trading will continue. Investor sentiment is at lows, there is little to no direction in any sector as many are paralyzed by trade discussions, and the over-hyped incorrect talk of an inverted yield curve.

We wait and see, never jumping to conclusions, BUT if the lows that we just saw this past week hold, then I will be leaning to having more conviction on the BUY side. A break below support and we reassess. Stay tuned.

Buy-Sell logo.jpg

Individual Stocks and Sectors

I look around and I hear that the semiconductor cycle is over and of course that is a precursor to a slowing economy, then recession. I do wonder then how do we explain the comments that we are hearing from some executives in the industry. For sure, there are pockets of weakness here, but there are also pockets of strength.

Consider the recent earning report this week from Broadcom (AVGO). A beat on both the top and bottom line, a 50% dividend increase, and a $6 billion share repurchase program. Forward yield on the stock is now 4.6%.

Hock Tan, President and CEO of Broadcom Inc.:

“Strong operating performance in the fiscal fourth quarter caps a year of solid results that continues to reinforce the sustainability of our business model. Revenues grew 18% to nearly $21 billion on the back of strong demand for our networking, enterprise storage, wireless and industrial products while operating margin continued to progressively expand to 50%.”

“Looking forward to fiscal year 2019, we expect another year of double digit revenue growth. Sustained demand within our semiconductor segment will be augmented by the newly acquired mainframe and enterprise software businesses to our infrastructure software segment. We also expect operating margin to hit another record in fiscal year 2019 driven by improved operating leverage.”

Tom Krause, CFO of Broadcom Inc.:

“Free cash flow from operations grew 50% in fiscal year 2018 to $8.2 billion. As a result, we are raising our target dividend by 51 percent to $2.65 per share per quarter for fiscal year 2019.”

“Looking ahead for the year, we expect sustained revenue growth and improving operating leverage to accelerate cash generation from operations. Our capital allocation strategy remains unchanged for fiscal year 2019. We plan to return 50% of our prior fiscal year free cash flows to stockholders in the form of dividends and use the balance of our free cash flows to buy back stock and support additional acquisitions, while remaining focused on maintaining our investment grade credit rating.”

Hardly an outlook that presents an industry in decline. Please allow me to add. Intel (INTC) the 800-pound gorilla in the room has beat earnings estimates and raised its forward guidance for THREE straight quarters.

A weakening economy, the semiconductor cycle is dead? I scratch my head. Final Thoughts.jpg

How quickly markets can change these days. Last week, I wrote about a positive tone that started to emerge; this week it is anything but a positive tone in the markets. The rally off the lows has for the most part been taken back. Volatility in times of uncertainty. Now it all depends on how much uncertainty is real and how much is being conjured up. The investors that arrive at the correct answer to that question will wind up reaping rewards in the near term.

With the S&P now 10% from record highs, many will argue that it is time to pull out, and not be an owner of equities. I’m being told there are issues out there that I may be ignoring. Pundits are still calling to ramp up the downside protection. For sure there are “some issues” for an investor to monitor, and then there is the bushel basket of concerns that are simply NOISE. Of course, investors can extrapolate these issues and the technical picture to become a major concern. If an investor decides to base an investment decision based on a “feeling,” they may be in for a rude awakening.

One situation that is very real and has been discussed here for months now is the weakening of global economic data. Before we jump to a conclusion, the period of 2015/2016 was mired in troublesome data. We survived that time period without an “official” bear market. The outcome this time around is still up in the air. One thing we are well aware of, we will need to see the global picture improve if we can expect higher stock prices here in the U.S.

With all of the negativity around, investors need to stay grounded. There are positives and they should also be acknowledged.

  • Inflation remains in check.

  • The Fed is not acting in a hostile manner.

  • Everyone is looking over their shoulder. There is NO euphoria.

  • Earnings growth will slow BUT earnings are still growing.

  • Consumers represent 70% of the economy and they are in good financial shape.

Unless this time is different, these are not signs that appear at the END of a BULL market.

At the end of any bull market, the primary trend will flatten then roll over. The evidence for that is quite obvious in the 2000 and 2008 time periods. No such evidence exists today. A successful investor will monitor, then react, not react then monitor.

A moment to reflect the passing of our 41st president, George H.W. Bush.

I would also like to take a moment and remind all of the readers of an important issue. In these types of forums, readers bring a host of situations and variables to the table when visiting these articles. Therefore, it is impossible to pinpoint what may be right for each situation. Please keep that in mind when forming your investment strategy.

Thank you #2.jpg

to all of the readers that contribute to this forum to make these articles a better experience for everyone.

Best of Luck to All!


My portfolios are ALL positioned to take advantage of the bull market with NO hedges in place.

This article contains my views of the equity market, it reflects the strategy and positioning that is comfortable for me. Of course, it is not suited for everyone, as there are far too many variables. Hopefully it sparks ideas, adds some common sense to the intricate investing process, and makes investors feel more calm, putting them in control.

The opinions rendered here, are just that – opinions – and along with positions can change at any time.

As always I encourage readers to use common sense when it comes to managing any ideas that I decide to share with the community. Nowhere is it implied that any stock should be bought and put away until you die. Periodic reviews are mandatory to adjust to changes in the macro backdrop that will take place over time.


I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Slack Hires Goldman Sachs to Lead Its IPO Planned for 2019, Report Says

Slack hired investment bank Goldman Sachs as the lead underwriter for its highly anticipated initial public offering, Reuters reported Friday.

Slack is talking with investment banks to help underwrite an IPO, which could end up valuing the chat and workplace-collaboration software maker as high as $10 billion, Reuters said, citing unnamed sources.

In August, Slack raised $427 million in a private round of financing led by General Atlantic and Dragoneer. At the time, the investment valued the company at more than $7 billion. The company has raised a total of $1.2 billion in seven funding rounds since 2010, according to Crunchbase, which tracks financing rounds of private companies.

Last month, Stewart Butterfield, Slack’s co-founder and CEO, told Fortune that the company had “no specific timeline for an IPO,” although he also said that “We’ve been on a path to public company readiness for several years now and we’re continuing on that path.”

Slack offers a popular work-collaboration platform that allows co-workers to chat and message each other. The nine-year-old company now has more than 8 million active users, although Butterfield said in the Fortune interview that the actual number could be well above that.

The market for technology IPOs had been sluggish for several years before picking up somewhat in 2018. So far in 2018, 188 companies have gone public on U.S. exchanges, up from 160 in all of 2017. Around 40 of the IPOs this year were tech startups, including Sonos, Dropbox, and SurveyMonkey.

2019 is expected to bring bigger names to the IPO market, not just Slack, but also Uber, Lyft, and Airbnb. On Thursday, Lyft confidentially filed paperwork with the Securities and Exchange Commission for its planned IPO.

U.S. accuses Huawei CFO of Iran sanctions cover-up

VANCOUVER/LONDON (Reuters) – Huawei Technologies Co Ltd’s chief financial officer faces U.S. accusations that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions, a Canadian prosecutor said on Friday, arguing against giving her bail while she awaits extradition.

The case against Meng Wanzhou, who is also the daughter of the founder of Huawei, stems from a 2013 Reuters report here about the company’s close ties to Hong Kong-based Skycom Tech Co Ltd, which attempted to sell U.S. equipment to Iran despite U.S. and European Union bans, the prosecutor told a Vancouver court.

U.S. prosecutors argue that Meng was not truthful to banks who asked her about links between the two firms, the court heard on Friday. If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, the court heard, with a maximum sentence of 30 years for each charge.

Meng, 46, was arrested in Canada on Dec. 1 at the request of the United States. The arrest was on the same day that U.S. President Donald Trump met in Argentina with China’s Xi Jinping to look for ways to resolve an escalating trade war between the world’s two largest economies.

The news of her arrest has roiled stock markets and drawn condemnation from Chinese authorities, although Trump and his top economic advisers have downplayed its importance to trade talks after the two leaders agreed to a truce.

A spokesman for Huawei had no immediate comment on the case against Meng on Friday. The company has said it complies with all applicable export control and sanctions laws and other regulations.

Friday’s court hearing is intended to decide on whether Meng can post bail or if she is a flight risk and should be kept in detention.

The prosecutor opposed bail, arguing that Meng was a high flight risk with few ties to Vancouver and that her family’s wealth would mean than even a multi-million-dollar surety would not weigh heavily should she breach conditions.

Meng’s lawyer, David Martin, said her prominence made it unlikely she would breach any court orders.

“You can trust her,” he said. Fleeing “would humiliate and embarrass her father, whom she loves,” he argued.

Huawei CFO Meng Wanzhou, who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing in a drawing in Vancouver, British Columbia, Canada December 7, 2018. REUTERS/Jane Wolsak

The United States has 60 days to make a formal extradition request, which a Canadian judge will weigh to determine whether the case against Meng is strong enough. Then it is up to Canada’s justice minister to decide whether to extradite her.

Chinese Foreign ministry spokesman Geng Shuang said on Friday that neither Canada nor the United States had provided China any evidence that Meng had broken any law in those two countries, and reiterated Beijing’s demand that she be released.

Chinese state media accused the United States of trying to “stifle” Huawei and curb its global expansion.


The U.S. case against Meng involves Skycom, which had an office in Tehran and which Huawei has described as one of its “major local partners” in Iran.

In January 2013, Reuters reported that Skycom, which tried to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator, had much closer ties to Huawei and Meng than previously known.

Slideshow (9 Images)

In 2007, a management company controlled by Huawei’s parent company held all of Skycom’s shares. At the time, Meng served as the management firm’s company secretary. Meng also served on Skycom’s board between February 2008 and April 2009, according to Skycom records filed with Hong Kong’s Companies Registry.

Huawei used Skycom’s Tehran office to provide mobile network equipment to several major telecommunications companies in Iran, people familiar with the company’s operations have said. Two of the sources said that technically Skycom was controlled by Iranians to comply with local law but that it effectively was run by Huawei.

Huawei and Skycom were “the same,” a former Huawei employee who worked in Iran said on Friday.

A Huawei spokesman told Reuters in 2013: “Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the U.N. We also require our partners, such as Skycom, to make the same commitments.”


The United States has been looking since at least 2016 into whether Huawei violated U.S. sanctions against Iran, Reuters reported in April.

The case against Meng revolves around her response to banks, who asked her about Huawei’s links to Skycom in the wake of the 2013 Reuters report. U.S. prosecutors argue that Meng fraudulently said there was no link, the court heard on Friday.

U.S. investigators believe the misrepresentations induced the banks to provide services to Huawei despite the fact they were operating in sanctioned countries, Canadian court documents released on Friday showed.

The hearing did not name any banks, but sources told Reuters this week that the probe centered on whether Huawei had used HSBC Holdings (HSBA.L) to conduct illegal transactions. HSBC is not under investigation.

U.S. intelligence agencies have also alleged that Huawei is linked to China’s government and its equipment could contain “backdoors” for use by government spies. No evidence has been produced publicly and the firm has repeatedly denied the claims.

The probe of Huawei is similar to one that threatened the survival of China’s ZTE Corp (0763.HK) (000063.SZ), which pleaded guilty in 2017 to violating U.S. laws that restrict the sale of American-made technology to Iran. ZTE paid a $892 million penalty.

Reporting by Julie Gordon in Vancouver and Steve Stecklow in London; Additional reporting by Anna Mehler Paperny in Toronto, David Ljunggren in Ottawa, Karen Freifeld in New York, Ben Blanchard and Yilei Sun in Beijing, and Sijia Jiang in Hong Kong; Writing by Denny Thomas and Rosalba O’Brien; Editing by Muralikumar Anantharaman, Susan Thomas and Sonya Hepinstall

Why You Need to Start Tracking Your Time Every Day

Time tracking is a controversial topic. It evokes images of teams clocking in and out of a factory floor or being tethered to their desks for 60 hours a week. Of course, those scenarios are awful. I don’t want to dismiss the very real ways that time tracking can become a horrible way to run a team, but I do want to tell you why I believe it should be used–and how.

Before we get into the rationale, I want you to question your assumption that time tracking makes you a control freak or a micromanager.

For a brief moment, let’s imagine together an alternative way of looking at this, in which you have time tracking set up not because you don’t value your team’s time (and their ability to finish their days on time and have a life afterward), but because you do. Time tracking is the path toward work-life balance, not away from it. The only way to do that is by understanding how their time is being spent–and what it’s being spent on.

Still with me? Here are three reasons you should use time tracking–not just for your business’ benefit, but also for your employees’ benefit.

1. Tracking your employees’ time helps you make good spending decisions.

Businesses often view the use of internal resources as “free” and the use of external resources as an investment. I believe that’s foolish. Let’s say you have an employee who has never built a website before, and your business needs a website built. If you aren’t considering the value of your employee’s time, you could easily assign them this job, and then they spend 100 hours learning, tweaking, and finally refining a project that an outside specialist could have done in 10 hours.

Assuming your internal and external resources receive about the same hourly rate, this is a huge mistake for your business from a return on investment perspective, and an error that is all too common. And, it’s not great for productivity.

Now, take that one step further. Imagine you decide to do a content marketing campaign, which will mean your employee is writing two articles per week for 10 weeks. In order to acquire the same number of customers, you could also run a Google AdWords campaign for $500. How will you know what’s the best spending decision if you aren’t tracking time?

2. Time tracking means better management of working hours.

The natural assumption is that managers use time tracking to see if their team is working enough. In my experience, that’s never the issue. But, if you think your team isn’t working enough, time tracking isn’t going to solve or diagnose that problem–you’ve got a deeper underlying problem that starts with either motivation or poor hiring technique.

In an office environment, it wouldn’t be uncommon for a manager to walk around the halls in the evening and encourage the team to go home if they felt that people were working too hard. But in a remote setting, there is no similar way to know if work hours are getting out of hand. Time tracking provides early warning signs for burnout or the need to hire additional resources.

3. Time tracking will help you pinpoint priorities.

What’s most interesting to me is not how much people are working (unless, of course, we’re worried about burnout), but the potential of each individual to manage their own use of time.

Time tracking allows me to hold myself accountable to whether or not I have focused on my most important work each week. Without monitoring, there’s no real way to see that. Giving employees the power to see this for themselves grants them agency over their workday which naturally increases productivity.

With great data comes great responsibility. If you do set up time tracking, you need to make sure you are using it for good, not evil. Time tracking has a bad rap because some micromanagers use it to push people to work more or turn the business into a (virtual) face time culture. What they should be doing is using it to foster work-life balance for members of their team.

So, if the reason you want to use time tracking is to get more hours out of your team or catch someone using Facebook, this is not the tool for you. However, if you buy into Stephen Covey’s belief that “the key is in not spending time, but investing it,” then the natural solution is to get better visibility of how your business uses time, which can only be done effectively through time tracking.

Kroger Just Made the Sort of Massive Decision That'll Make Competitors Scramble In Panic

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

There’s panic in the supermarket aisles.

For once, it’s not a vegan who can’t find the right strain of cabbage.

No, this is the panic of supermarket chains worried that the game has changed and no one will tell them the new rules.

Amazon‘s tentacles seem to be wrapping themselves around everything and everyone and the more traditional chains need to react. But how?

In Kroger’s case, the answer seems to be to stop people shopping at Kroger.

Or, rather, to make it not entirely necessary.

The chain has announced that it’ll be perfectly happy if you go to Walgreen’s instead.

In essence, this supermarket within a drugstore will contain “a curated assortment of 2,300 products” that’ll take up around a third of the space in your average Walgreen’s.

Which wise people will do the curating, I hear you cry. 

Oh, not so much people, but “customer data and insights provided by Kroger subsidiary 84.51.”

In 13 Northern Kentucky Walgreen’s, you’ll be able to pick up essentials such as chicken or beef. Or, for the especially adventurous, Home Chef meal kits.

Some might see this as two big brands feeling threatened and huddling together for a little warmth.

This is your number 2 and number 6 biggest American retailers getting together.

But if you’re up against the twisted might of Amazon and Whole Foods, what are you going to do?

You’re going to think about where people regularly go and try and make things easier for them to buy your wares. 

People are lazy. They’re getting lazier. Help them solve their own little daily problems that, for so many, tend to involve surviving more than thriving.

Other chain stores have found it harder to find huddle-partners.

It’s trying to get foot traffic, after all.

And who’s next? Safeway and CVS? 

How about Costco and H&M? 

You have to think creatively about these things. Amazon’s getting into food and fashion. It’s creeping its way into your kitchen, living room and bedroom with its Echo.

There are only so many means of escape.

Qualcomm says China comment will not revive NXP deal

(Reuters) – U.S. chipmaker Qualcomm Inc (QCOM.O) said on Monday it was not looking to revive its abandoned $44 billion acquisition of Dutch peer NXP Semiconductors NV (NXPI.O), a day after the White House said China would reconsider clearing a deal if it was attempted again.

Qualcomm, the world’s biggest smartphone-chip maker, walked away from its agreement to buy NXP in July, after failing to secure Chinese regulatory approval. The planned deal was first agreed between the two companies in October 2016.

Qualcomm, headquartered in San Diego, California, and NXP, based in Eindhoven, the Netherlands, needed China’s blessing for their deal because of their presence in that country.

After high-stakes talks on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping in Argentina, the White House said in a statement that China was “open to approving the previously unapproved” deal for Qualcomm to acquire NXP “should it again be presented”.

But Qualcomm said there was no prospect for the acquisition to be revived.

“While we were grateful to learn of President Trump and President Xi’s comments about Qualcomm’s previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal,” a Qualcomm representative said via email.

“Qualcomm considers the matter closed.”

NXP declined to comment.

On Monday, White House economic adviser Larry Kudlow told reporters that President Trump put the issue of the acquisition on the table in the talks with the Chinese president.

Kudlow added that the Chinese president’s openness to the deal was a sign of further cooperation on multiple issues, including corporate mergers. Xi’s reported comment could embolden some potential acquirers in the semiconductor space to explore transactions, corporate dealmakers said.

“Although that acquisition cannot be resuscitated, Xi’s comment reveals in plain sight that Chinese antitrust policy is inherently politicized,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies in a blog post.

FILE PHOTO: A sign on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited bid to buy peer Qualcomm Inc for $103 billion, in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake

Qualcomm shares closed up 1.5 percent at $59.14 in New York on Monday, while NXP shares ended up 2.75 percent at $85.67.

Qualcomm and NXP did not lobby for the Trump administration to bring up the abandoned deal in its meeting with Xi and other Chinese officials on the sidelines of the G20 summit in Buenos Aires on Saturday, which was dominated by negotiations over trade tariffs, according to sources close to the companies.

The two companies were surprised to see that the terminated deal resurfaced as an issue, the sources added, requesting anonymity to discuss confidential deliberations. Qualcomm was given just an hour’s notice by the Trump administration about Xi’s comment on the NXP deal, and its inclusion in the White House statement, according to two of the sources.

The Trump administration had unsuccessfully lobbied the Chinese government earlier this year to give its blessing to the deal.

China’s foreign ministry declined to comment on Qualcomm during a regular media briefing on Monday.

Qualcomm had sought to purchase NXP because of its market position as a dominant supplier to the automotive market, as car makers add more chips to vehicles each year. Qualcomm is now focused on developing its own chips for the automotive market, according to one of the sources.

Qualcomm had to pay NXP a $2 billion fee to terminate the deal. To appease its shareholders, Qualcomm has also embarked on a $30 billion stock repurchase plan to return to them most of the money that would have been used for the NXP deal. It has spent more than $20 billion in share buybacks in the last 12 months. NXP has also announced its own $5 billion share buyback program.


Several deals by semiconductor companies were put on ice after the Qualcomm/NXP deal fell through, simply because they had a footprint in China and required regulatory approval there. Now, chip companies may be more optimistic about their regulatory chances in China.

One example could be Xilinx Inc (XLNX.O), a U.S. provider of chips used in communications network gear and consumer electronics that has a big presence in China. Xilinx is currently vying to acquire Israeli chip maker Mellanox Technologies Ltd (MLNX.O) after it decided to run an auction to sell itself, according to people familiar with the matter. A successful acquisition of Mellanox could prove an important test of China’s appetite to approve such deals. A representative for Xilinx declined to comment. Mellanox did not immediately respond to requests for comment.

A more near-term test being watched by dealmakers is KLA-Tencor Corp (KLAC.O) pending acquisition of fellow semiconductor equipment maker, Israel’s Orbotech Ltd (ORBK.O). The $3.4 billion deal, announced in March, is still awaiting Chinese regulatory approval. KLA-Tencor’s CEO said on the company’s last earnings call that he expects the deal to close by year end.

Thus far, other high-profile mergers and acquisitions involving U.S. companies in other sectors have received Chinese approval. Last month, China approved United Technologies Corp’s (UTX.N) $30 billion purchase of aircraft parts maker Rockwell Collins Inc and Walt Disney Co’s (DIS.N) $71.3 billion deal to buy most of Twenty-First Century Fox’s (FOXA.O) entertainment assets.

Acquisitions of U.S. companies by Chinese companies, on the other hand, have been few and far between in the last year, after the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinizes deals for potential national security risks, shot down more of these deals, such as Ant Financial’s plan to acquire U.S. money transfer company MoneyGram International Inc (MGI.O). U.S. lawmakers also passed reforms earlier this year that increased CFIUS’ scrutiny of deals.

Reporting by Liana B. Baker in New York and Kanishka Singh in Bengaluru; Aditional reporting by Greg Roumeliotis in New York, Michael Martina in Beijing and Jeff Mason in Washington, D.C.; editing by Diane Craft

Google workers demand end to censored Chinese search project

SAN FRANCISCO (Reuters) – More than 200 engineers, designers and managers at Alphabet Inc’s Google demanded in an open letter on Tuesday that the company end development of a censored search engine for Chinese users, escalating earlier protests against the secretive project.

FILE PHOTO: Google’s booth is pictured at the Global Mobile Internet Conference (GMIC) 2017 in Beijing, China April 28, 2017. REUTERS/Jason Lee/File Photo

Google has described the search app, known as Project Dragonfly, as an experiment not close to launching. But as details of it have leaked since August, current and former employees, human rights activists and U.S. lawmakers have criticized Google for not taking a harder line against the Chinese government’s policy that politically sensitive results be blocked.

Human rights group Amnesty International also launched a public petition on Tuesday calling on Google to cancel Dragonfly. The organization said it would encourage Google workers to sign the petition by targeting them on LinkedIn and protesting outside Google offices.

Google declined to comment on the employees’ letter on Tuesday as Alphabet shares fell 0.35 percent to $1,052.28.

Google has long sought to have a bigger presence in China, the world’s largest internet market. It needs government approval to compete with the country’s dominant homegrown internet services.

An official at China’s Ministry of Industry and Information Technology, who was unauthorized to speak publicly, told Reuters on Tuesday there was “no indication” from Google that it had adjusted earlier plans to eventually launch the search app. However, the official described a 2019 release as “unrealistic” without elaborating.

About 1,400 of Google’s tens of thousands of workers urged the company in August to improve oversight of ethically questionable ventures, including Dragonfly.

The nine employees who first signed their names on Tuesday’s letter said they had seen little progress.

The letter expresses concern about the Chinese government tracking dissidents through search data and suppressing truth through content restrictions.

“We object to technologies that aid the powerful in oppressing the vulnerable, wherever they may be,” the employees said in the letter published on the blogging service Medium.

The employees said they no longer believed Google was “a company willing to place its values over profits,” and cited a string of “disappointments” this year, including acknowledgement of a big payout to an executive who had been accused of sexual harassment.

That incident sparked global protests at Google, which like other big technology companies has seen an uptick in employee activism during the last two years as their services become an integral part of civic infrastructure.

Reporting by Paresh Dave in San Francisco; Additional reporting by Cate Cadell in Beijing; Editing by Jonathan Oatis and Tom Brown

U.S. top court leans towards allowing Apple App Store antitrust suit

WASHINGTON (Reuters) – U.S. Supreme Court justices on Monday appeared open to letting a lawsuit proceed against Apple Inc (AAPL.O) that accused it of breaking federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay.

A woman uses her mobile phone, an iPhone 6 by Apple in Munich downtown, Germany, January 27, 2016. REUTERS/Michaela Rehle

The nine justices heard an hour of arguments in an appeal by the Cupertino, California-based technology company of a lower court’s decision to revive the proposed class-action lawsuit filed in federal court in California in 2011 by a group of iPhone users seeking monetary damages.

The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company’s App Store and then taking a 30 percent commission from the purchases.

The case may hinge on how the justices apply one of the court’s past decisions to the claims against Apple. That 1977 precedent limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.

Apple was backed by Republican President Donald Trump’s administration. Some liberal and conservative justices sharply questioned an attorney for Apple and U.S. Solicitor General Noel Francisco, who argued on behalf of the administration on the company’s side, over their argument that the consumers were not directly affected by purchasing the apps from Apple.

Liberal Justice Elena Kagan, explaining how an App Store purchase is handled, said, “From my perspective, I’ve just engaged in a one-step transaction with Apple.”

Some conservative justices, including Trump appointee Neil Gorsuch, wondered whether the 1977 ruling was still valid in a modern marketplace.

Conservative Chief Justice John Roberts’ questions suggested he agreed with Apple’s position. Roberts expressed concern that, for a single price increase, Apple could be held liable by both consumers and App developers.

The iPhone users, including lead plaintiff Robert Pepper of Chicago, have argued that Apple’s monopoly leads to inflated prices compared to if apps were available from other sources.

Though developers set the prices of their apps, Apple collects the payments from iPhone users, keeping the 30 percent commission on each purchase. One area of dispute in the case is whether app developers recoup the cost of that commission by passing it on to consumers. Developers earned more than $26 billion in 2017, a 30 percent increase over 2016, according to Apple.

Apple spokeswoman Rachel Wolf Tulley said in a statement after the arguments that the App Store has fueled competition and promoted innovation in software development, leading to millions of jobs in the sector.

A woman uses her smart phone in front of an apple store in Beijing, November 2, 2015. REUTERS/Kim Kyung-Hoon

“We are hopeful the Supreme Court will recognize Apple’s critical role as a marketplace for apps, and uphold existing legal precedent by finding in favor of Apple and the millions of developers who sell their apps on our platform,” Tulley said.


Apple, also backed by the U.S. Chamber of Commerce business group, has argued that a ruling siding with the iPhone users who filed the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars annually in U.S. retail sales.

The plaintiffs, as well as antitrust watchdog groups, said closing courthouse doors to those who buy end products would undermine antitrust enforcement and allow monopolistic behavior to expand unchecked. The plaintiffs were backed by 30 state attorneys general, including from Texas, California and New York.

The plaintiffs said app developers would be unlikely to sue Apple, which controls the service where they make money, leaving no one to challenge anti-competitive conduct.

Along with Gorsuch, conservative Justice Samuel Alito raised the reluctance of app developers to sue Apple in questioning the 1977 precedent.

Justice Brett Kavanaugh, another conservative Trump appointee, pushed back against Francisco’s contention that Apple’s actions are not the direct cause of higher prices for consumers, because app makers set the final prices. Kavanaugh pointed out that “consumers are harmed then, too.”

Kavanaugh later suggested that the plaintiffs would have a more clear-cut right to sue if Apple bought the apps from the developers and sold them to consumers with its 30 percent commission.

Apple has said it is acting only as the agent for app developers who sell the apps to consumers through the App Store.

Liberal justices Sonia Sotomayor and Stephen Breyer seemed certain that the iPhone buyers’ claims should go forward.

“They’re claiming their injury is a suppression of a cheaper price,” Sotomayor told Apple’s attorney, Daniel Wall.

The company sought to have the antitrust claims dismissed, arguing that the plaintiffs lacked the required legal standing to bring the lawsuit. A federal judge in Oakland threw out the suit, saying the consumers were not direct purchasers because the higher fees they paid were passed on to them by the developers.

The San Francisco-based 9th U.S. Circuit Court of Appeals revived the case last year, finding that Apple was a distributor that sold iPhone apps directly to consumers.

Reporting by Andrew Chung; Editing by Will Dunham

Inside Netflix’s Oscar Factory

When her movie Private Life screened for the first time at the 2018 Sundance Film Festival, Tamara Jenkins says she experienced something she never had in her 27 years as a filmmaker.

“I heard someone behind me laughing, loving the movie,” says Jenkins, who wrote and directed the Netflix-financed film about a New York couple struggling with infertility. “I turn around and it’s Ted Sarandos. He was reacting to it like a film lover. It was startling to see an executive have a visceral reaction like that.”

Sarandos, Netflix’s chief content officer, loved Private Life so much that he added the movie to the streaming giant’s slate of nearly a dozen films it’s pushing during this long Oscar awards season. For the first time in its 20-year history, Netflix’s awards hopefuls are showing in theaters en masse, receiving unprecedented runs ahead of their stream dates. Among them: Private Life, Paul Greengrass’s 22 July, Andy Serkis’s Mowgli, the Coen Brothers’ The Ballad of Buster Scruggs, the Sandra Bullock–starring Bird Box, and director Alfonso Cuarón’s Spanish language Roma. The Cuarón film, Netflix’s Oscar-contender crown jewel, may appear in up to 20 countries theatrically by the time its 130-million-plus subscribers can stream it on Dec. 14.

Director Alfonso Cuarón, won the Oscar for directing and editing "Gravity" in 2014. A feat that Netflix hopes "Roma" will equal.

Director Alfonso Cuarón, won the Oscar for directing and editing “Gravity” in 2014. A feat that Netflix hopes “Roma” will equal.

Jason Merritt—Getty Images

Such a massive rollout bucks Sarandos’s long-standing rule against releasing movies in theaters ahead of their stream dates. It’s a history that one insider says has frustrated theater owners who have been eager to show Netflix films for their cinephile-leaning audiences. It has also opened the door for streaming competitors to establish their own awards-season presence at the multiplex: Amazon’s 2016 film Manchester by the Sea had a three-month theatrical run before it streamed online and went on to earn Best Picture and Best Director nominations and statues for Original Screenplay and Lead Actor.

“Netflix is now prioritizing winning Oscars as a branding benefit for the company,” says Anne Thompson, a veteran film reporter who serves as editor-at-large for the trade publication IndieWire. She says Netflix’s doubling-down on awards was cemented when Sarandos hired Hollywood’s most in-demand Oscar-campaign strategist, Lisa Taback (La La Land, Moonlight), last summer to work in-house for Netflix. Another Hollywood insider, who declined to be named citing active business relationships, estimates the company’s annual awards budget could now be as high as $20 million. “Ted is doing for movies what he’s done for TV,” says Thompson. “And Hollywood is running scared.”

Whether scared or strategic, precious few of the Hollywood executives, campaign strategists, agents, Academy voters, and producers that Fortune asked about Netflix’s awards efforts were willing to speak on the record. (“No one wants to show their hand, especially this year,” one consultant says.) ­Sarandos and Taback also declined to comment for this article, but a Netflix spokesperson did confirm details of the company’s Oscar-season rollout strategy.

Netflix’s luck at the Academy Awards has ebbed and flowed. In 2015, the company positioned Beasts of No Nation as a Best Picture hopeful, but the film failed to connect with voters and performed poorly in theaters. Netflix earned consecutive Best Documentary nominations in 2016 for What Happened, Miss Simone? and in 2017 for Ava DuVernay’s 13th; in January, the critically acclaimed Mudbound earned four major nominations but failed to break into the Best Picture pool.

Sarandos’s hopes this year are pinned on Roma, Cuarón’s love letter to the nanny who helped raise him in Mexico City’s Roma neighborhood in the 1970s. It also may be one of the biggest Best Picture gambles of all time. It features no known actors (lead Yalitza Aparicio is a preschool teacher from Oaxaca), it’s filmed in black and white, and it’s in a mix of Spanish and indigenous languages. One Academy member says Roma risks being favored more by voters in “below the line” Oscar categories like cinematography and sound design and may not connect as easily with the Academy’s largest contingent of voters—actors—because the performances are so natural. Cuarón shot Roma in the expansive 65-millimeter format using Dolby Atmos sound technology, all making it likely to attract an audience that’s more art house than Avengers.

Yalitza Aparicio as Cleo, Marco Graf as Pepe, and Daniela Demesa as Sofi in still from Roma.

Yalitza Aparicio as Cleo, Marco Graf as Pepe, and Daniela Demesa as Sofi in still from Roma.

Alfonso Cuarón—Netflix

Netflix, according to one executive, therefore will likely employ a “four wall” release strategy for Roma, a tactic in which studios essentially rent out theaters to make films immune to poor box-office performance. Another insider notes that Netflix is “easily” the business’s largest awards advertiser. “It’s all working, because that early sense of elitism among film Academy voters about a ‘TV company’ making Oscar movies is gone,” says Rich Licata, a veteran awards strategist and CEO of Licata & Co. “There was a fallacy of voters being too old to understand Netflix. But the sentiment is positive now. There’s been a need to innovate the awards business. That’s what Netflix and Amazon are both doing. They’re attracting talent, and talent runs Hollywood.”

For Jenkins, whose film Private Life earned nominations for Best Screenplay and Lead Actress from the Gotham Independent Film Awards this fall (often a harbinger of Oscar’s favorites), the idea that a character-driven Netflix movie like hers would land on the big screen across the U.S., in the U.K., and in Canada—let alone be in the mix for Oscars—is still sinking in. “I thought we’d be in one or two theaters total,” she says. “I could have never imagined 21. It actually felt like a real release. It’s been the best of both worlds.”

A version of this article appears in the December 1, 2018 issue of Fortune with the headline “Netflix’s Oscar Factory.”

A Driver Returned to His Car to Find a Note and An Incredible Lesson on Doing the Right Thing. The Note Was From a 6th Grader

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

A grasp of ethics is becoming slightly more popular in business these days.

Well, we can thank the Valley’s abject disregard for ethics, one that’s finally caught up with many of its companies. Why, even Stanford has begun to discover the concept.

Still, when you run a business you don’t always — often? ever? — expect people to do the right thing.

Which is, perhaps, why the story of Andrew Sipowicz and his car has moved so many this week.

He returned to his car last Monday, parked in Buffalo, New York, to experience a sinking feeling. 

He also experienced something he never expected.

His car, you see, had endured a substantial dent in its front left side. It seemed as if there had been a hit and a run. 

Yet perched inside his windshield wiper was a note. A very detailed note, as it happened, from a 6th grader.

The spelling wasn’t perfect. The sentiment certainly was.

It read: 

If your wondering what happen to your car.

Bus: 449 hit your car It stops here everyday to drop me off.

At 5:00pm.

What happened? She was trying to pull off and hit the car. She hit and run. She tried to vear over and squeeze threw but couldn’t. She actually squeezed threw. She made a dent and I saw what happened.


-Driver seat left door

-A lady in the bus driver seat 499.

-Buffalo Public School bus

-A 6th grader at Houghten Academy

It sets a good example for a lot of students. Not just students, but just people in general.

What resulted is that the bus company is covering the cost of repairs and giving Sipowicz a loaner car. The bus driver, reports CNN, will be fired.

We get wrapped up in the bad deeds of companies because they appear to have such large consequences.

At heart, though, the bad deeds of companies are merely the bad deeds of individuals, written in capital letters and involving large amounts of capital.

Yet simple stories of goodwill also spread around the web, as this one has. 

It’s almost as if people want to be reassured that, in the midst of a world that seems to bathe delightedly in corruption, there still are good people. 

That story led to unexpected consequences and national attention. 

These days, we watch as so many who could say something, end up saying nothing.

We’re told that kids don’t bother with anything but themselves, buried as they are in their phones. 

Here, though, is a simple lesson of a 6th-grader who stopped, looked around and did the right thing. A generous thing.

Perhaps we should all do that a little more often.

Unique Premium WP Themes Free is a site dedicated to procure for you free Wordpress themes and/or uniquely designed premium Wordpress themes for your blogs. Though exclusively designed themes normally have a cost, for most cases, we are able to find a company willing to sponsor the theme; hence you will have it for free. Contact us for more info.
Cloud Computing Tutorials