Below is an updated look at the total return performance of the 10 Dogs of the Dow for 2019 versus the 20 non-Dogs.  As shown, the 10 Dogs are up 16.34% so far this year, which is 150 basis points less than the gain of 17.8% for the non-Dogs.  Procter & Gamble (PG), IBM, and JP Morgan (JPM) have been the best performing Dogs, while Pfizer (PFE) has been the only loser with a YTD decline of 14.34%.  Of the non-Dogs, Apple (AAPL) is up the most at +40.74%, followed by Microsoft (MSFT), Home Depot (HD), Visa (V), and Goldman Sachs (GS).  Walgreens (WBA) is down the most of any Dow stocks with a YTD decline of 18.17%, while 3M (MMM) and UnitedHealth (UNH) are the only other names in the red.

Below is a look at total return performance for Dow members so far in 2019 as well as over the last 12 months.  Year-to-date, these stocks are up 17.35%, but they’re up just 5.91% over the last 12 months.  Apple (AAPL) is the top performing Dow stock in 2019 with a total return of 40.74%, but its total return over the last 12 months is just +2.24% because of its horrific performance in Q4 2018.  Other stocks with big YTD gains but low or negative 12-month returns include Goldman Sachs (GS), United Tech (UTX), IBM, and JP Morgan (JPM).

There are three Dow stocks down 10%+ YTD (MMM, PFE, WBA) while there are six stocks that are down 10%+ over the last 12 months (XOM, CAT, UNH, MMM, PFE, WBA).  Start a two-week free trial to receive our market research and access our interactive tools.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

While you’re here, join Bespoke Premium for 3 months for just $95 with our 2019 Annual Outlook special offer.

Green Energy

Longi brings forward manufacturing capacity plans by a year by Max Hall (PV Magazine)

Chinese solar wafer giant Longi now expects to produce 65 gigawatts worth of wafers by the end of 2020, 12 months faster than had previously been estimated and a sign of how rapidly solar technology is scaling. [Link]

Is this Australia’s first utility to acknowledge death by solar? by Michael Mazengarb (Renew Economy)

The utility owned by Australia’s Northern Territory government reports it faces an “existential risk” thanks to consumer solar energy deployment. The company says the cost of producing solar power is below the marginal cost of producing power from natural gas at the company’s plants. [Link]

This Week In Tech

Google’s quantum bet on the future of AI—and what it means for humanity by Katrina Brooker (Fast Company)

The story of how one of the largest tech companies in the world is deploying billions in pursuit of artificial intelligence which may challenge the human brain’s capacity. [Link]

Amazon Changed Search Algorithm in Ways That Boost Its Own Products by Dana Mattioli (WSJ)

Searches for specific products on Amazon have been tweaked to more prominently feature the company’s own-brand products, a practice unlikely to be welcomed by US anti-trust regulators. [Link; paywall]

Politics

American Migration Patterns Should Terrify the GOP by Derek Thompson (The Atlantic)

Hundreds of Americans are flowing out of large, blue states and into the metropolitan areas which dominate traditional red states, potentially accelerating a shift in demographics which is already tilting the tables against a GOP in national contests. [Link]

This drawing explains a surprising amount about your political views by Matt Yglesias (Vox)

An abstract piece of modern art is a better predictive variable for how voters think about the President than other metrics, including the impact of whether or not a voter holds a college degree. [Link]

Labor Markets

The Labor Market Effects of Legal Restrictions on Worker Mobility by Matthew S. Johnson, Kurt Lavetti, Michael Lipsitz (SSRN)

An increase in enforceability of noncompete agreements from the 10^th to the 90^th percentile lowered annual earnings by 3-4% and resulted in a 9% decline in the likelihood a worker would change jobs. [Link]

Army meets recruiting goal for 2019 after revamping how it attracts prospective soldiers by Corey Dickstein (Stars & Stripes)

After lower its recruiting target, the Army was able to hit its number this year, adding over 68,000 enlistees to active duty this year. [Link]

Food

Pizza Hut debuts a gigantic Cheez-It stuffed with even more cheese by Megan Lavey-Heaton (The Oregonian)

Do you like Cheez-Its? Head over to pizza hut for a bite of a jumbo homage to the snack food stuffed with delicious cheese and even pepperoni. [Link]

Makeup

Wroxeter ‘pendants’ turn out to be Roman make-up tools (BBC)

Roman artefacts uncovered recently in the UK suggest that ancient Roman Britons were fond of makeup, using specialized tools to prepare and apply the cosmetics. [Link]

Scandal

The fake French minister in a silicone mask who stole millions by Hugh Schofield (BBC)

Using a silicon mask and a Skype account, a fraudster was able to convince marks to wire millions of dollars to his accounts, putatively to support anti-terrorism activities. [Link]

Carcinogens Have Infiltrated the Generic Drug Supply in the U.S. by Anna Edney, Susan Berfield, and Evelyn Yu (Bloomberg)

Obscure chemicals that can cause cancer have made their way into the US drug supply, a byproduct of the processes used to make drugs and lax quality assurance. [Link; soft paywall]

Beer Money

‘Beer money’ sign still chugging along for charity by Tom Vanhaaren (ESPN)

A gag sign asking viewers to send a college football fan beer money ended up with tens of thousands in donations via Venmo; the proceeds are being passed on to charity. [Link]

Long Reads

Complication and Complexity: Need They Be Feared? by Dr Ewan Kirk (Cantab Capital)

Fear of the unknown can be paralyzing, but the author argues that complicated and complex are not the same thing; the risks of complexity are emergent, unlike those of complicated systems. [Link]

How Adam Neumann’s Over-the-Top Style Built WeWork. ‘This Is Not the Way Everybody Behaves.’ by Eliot Brown (WSJ)

A large read on the zany founder of WeWork, which pushed off its IPO to October or possibly later this week. [Link; paywall]

Tide’s Going Out

One in Four of New York’s New Luxury Apartments Is Unsold by Stefanos Chen (NYT)

The high end of the New York real estate market is in deep trouble, with more than 4000 apartments among the 16,000 built in new buildings since 2013 unsold. [Link; soft paywall]

Boston Fed’s Rosengren: Lower rates could expose co-working companies like WeWork by Brian Cheung (Yahoo!)

One of the hawkish dissenters from the most recent FOMC meeting thinks that highly speculative business models like WeWork could proliferate further in a world with lower rates. [Link]

Lim Chow Kiat, one of the world’s top investors, rings the alarm, again by David Ramli (Business Standard)

The head of Singapore’s massive sovereign wealth funds is worried about the stability of financial markets, economic growth, and the global political framework that is showing signs of stress. [Link]

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Have a great weekend!

The streaming media device manufacturer Roku (ROKU) has had quite the move lately.  As shown in the chart below, ROKU took the stairs up from late 2018 through early September, and it has taken the elevator down ever since.  Just 11 days ago on September 9th, ROKU hit an intraday high of $176.55.  At that point, the stock was up 70% since the start of August, +476% since the start of 2019, and +571% since its intraday low in Q4 2018.

Since its high on September 9th, ROKU has lost 41% of its value, and it’s down 20% today alone after Pivotal Research Group slapped a $60 price target on the stock this morning.  Analyst price targets don’t normally cause 20% drops, but ROKU is a prime example of the unwind we’ve seen for a lot of high-growth, high-valuation momentum stocks that have taken it on the chin this month.  Yesterday, ROKU managed to hold support right at its 50-day moving average, but today that support has completely broken down, and there are seemingly no bids in sight.  Traders will now be looking for support at $100, and if that doesn’t hold, $80 is the next level.  Start a two-week free trial to Bespoke Institutional to access all of our market research and interactive tools.

Overnight, India’s SENSEX benchmark recorded a 6.6 standard deviation move (versus the 2 year distribution of changes). The index’s 5.3% gain was its biggest one-day rally since May 2009.

Behind the move was a new set of stimulus policies from India’s government. The Finance Minister announced a corporate income tax cut from 30% to 22%, with additional levies bringing the total effective corporate income tax rate to 25.2%. Newly-formed companies will pay even less, 15% (17% effective), which is as low as a jurisdiction like Singapore. Notably, this tax cut is in large part retroactive to April of 2019, which has dubious economic value but is rocket fuel for the index. Banks and other financials led the charge on the index with other cyclicals like Tata Steel, Tata Motors, and Maruti Suzuki also surging.

As shown below, the 5%+ gain for the SENSEX came at a time when the index was further breaking down within a multi-month downtrend.  Instead of being oversold at new lows and well below its 50-day and 200-day moving averages, the SENSEX heads into the weekend in overbought territory and back above its major moving averages.  When surprise fiscal policy moves hit the tape, you can throw technicals out the window!  Start a two-week free trial to Bespoke Institutional to stay up-to-date on all the latest developments in global financial markets and economics.