Bespoke Brunch Reads: 10/15/17
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.
See this week’s just-published Bespoke Report newsletter by starting a no-obligation two-week free trial to our premium research platform.
Money
New York Fed President Sent Puerto Rico a Jet Filled With Cash by Jonathan Levin (Bloomberg)
Liquidity is the lifeblood of activity, and when the New York Fed realized how devastating Maria would be to Puerto Rico, it immediately took steps to insure there would be enough cash available on the island. [Link; auto-playing video]
Bitcoin is fiat money, too (The Economist)
While bitcoin and other blockchain-based currencies claim to remove the interference of central banks and other interventions in the money supply. But consensus-built code platforms have the same foibles; nothing is new. [Link]
Disaster & Tragedy
In a smoldering California winery, a boiling river of red wine emerges by AJ Willingham (CNN)
As well as the tragic human toll (more than 30 deaths) the horrific wildfires in California have also laid waste to local commerce, sometimes in near-biblical metaphoric terms. [Link; auto-playing video]
Lawsuit Over Las Vegas Shooting Tests Gun Industry’s Immunity by Polly Mosendz (Bloomberg)
While Congress has granted immunity to gun makers and ammunition sellers, the maker of the bump stock that allowed for high rates of fire in the Las Vegas mass shooting may become a test case. [Link; auto-playing video]
Natural Disasters and the Measurement of Industrial Production: Hurricane Harvey, a Case Study by Kimberly Bayard, Ryan Decker, and Charles Gilbert (FEDS Notes)
An assessment of the impact of Hurricane Harvey on national industrial production, with special focus on the petroleum and refining industries so concentrated in Houston. [Link]
District Chaos
Is Washington bungling the Census? by Danny Vinik (Politico)
The state of federal statistical agencies is dire, and it’s entirely due to neglect of funding. High value data is a fantastic return on investment for public dollars, and it’s being brutally neglected. [Link]
An old-school pharmacy hand-delivers drugs to Congress, a little-known perk for the powerful by Erin Mershon (Stat News)
A seemingly benign story filled with some frankly concerning details about the state of lawmakers’ health. [Link]
Demographic Change
A Town’s Dilemma—Find a Savior, or Just Move On by Shibani Mahtani (WSJ)
A survey of the impact of closing public housing in relatively small towns that benefit from labor supply, labor demand, and the flow of money that comes from SNAP, Medicaid, and other programs that many public housing residents depend on. [Link; paywall]
First Evidence That Online Dating Is Changing the Nature of Society (MIT Technology Review)
More than one-third of American marriages started as online dates; for some demographics, it’s a much more dramatic story with nearly 70% of same-sex couples meeting online. There are some interesting effects, including drastically higher rates of interracial marriage. [Link]
USDOT Releases 2016 Fatal Traffic Crash Data (National Highway Traffic Safety Administration)
Data released this week by the DOT shows a concerning uptick in road fatalities including a 5.6% uptick in total deaths. Most subcategories rose by less than that amount, with decreases in drowsy and distracted deaths (so cellphones aren’t to blame). Pedestrian fatalities soared by 9% to the highest count since 1990. [Link]
Cybersecurity
Computer virus hits US Predator and Reaper drone fleet by Noah Shachtman (Ars Technica)
The machines which allow Air Force personnel to operate drones across the world have been infected with viruses, and data could have potentially been breached. [Link]
New Financial Products
Goldman Has a New Way for You to Bet on the Next Banking Crisis by Alastair Marsh and Tom Beardsworth (Bloomberg)
Goldman and JP Morgan are ramping up trading in total return swaps based on indices of bank bonds which can be marked down or converted to equity during periods of financial stress. [Link]
Sports
California’s Breakup With the NFL by Andrew Beaton (WSJ)
After moving up from San Diego, the LA Chargers can’t fill a 27,000 seat soccer stadium, while LA Rams and San Francisco 49ers fans are similarly disinterested this season. [Link]
Social Media
Weibo in meltdown over heartthrob Luhan’s new girlfriend by Laurie Chen (South China Morning Post)
Weibo isn’t very popular outside of China, but the network is massive behind the Great Firewall and its users went absolutely wild over a pretty germane piece of news this week. [Link]
Have a great Sunday!
The Bespoke Report – Nothing Scary About This Friday the 13th
S&P 500 Quick-View Chart Book: 10/13/17
Each weekend as part of our Bespoke Premium and Institutional research service, clients receive our S&P 500 Quick-View Chart Book, which includes one-year price charts of every stock in the S&P 500. You can literally scan through this report in a matter of minutes or hours, but either way, you will come out ahead knowing which stocks, or groups of stocks, are leading and lagging the market. The report is a great resource for both traders and investors alike. Below, we show the front page of this week’s report which contains price charts of the major averages and ten major sectors.
As seen in the charts below, the only major average that didn’t hit an all-time high this week was the Russell 2000, but it remains at extremely extended levels. In terms of individual sectors, Industrials, Materials, and Technology all hit new highs.
To see this week’s entire S&P 500 Chart Book, sign up for a 14-day free trial to our Bespoke Premium research service.
The Closer: End of Week Charts — 10/13/17
Looking for deeper insight on global markets and economics? In tonight’s Closer sent to Bespoke clients, we recap weekly price action in major asset classes, update economic surprise index data for major economies, chart the weekly Commitment of Traders report from the CFTC, and provide our normal nightly update on ETF performance, volume and price movers, and the Bespoke Market Timing Model. This week, we’ve added a section that helps break down momentum in developed market foreign exchange crosses.
The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!
See tonight’s Closer by starting a two-week free trial to Bespoke Institutional now!
September 2017 Headlines
The Closer — Demographic Yield & PPI — 10/12/17
Log-in here if you’re a member with access to the Closer.
Looking for deeper insight on global markets and economics? In tonight’s Closer sent to Bespoke Institutional clients, we review the impact of demographics on yields around the world and across time. We also take a look at today’s BLS release on producer prices.
The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!
See today’s post-market Closer and everything else Bespoke publishes by starting a no-obligation 14-day free trial to our research platform!
ETF Trends: International – 10/12/17
Crypto-corns
The price of bitcoin surged over 8% today and in the process smashed right through the $5,000 level as well as the prior highs from September 1st. Where this run ends is anyone’s guess, but trying to call the top in the past has been like stepping between a politician and a microphone.
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With bitcoin breaking through another 1,000 point threshold today, you may be wondering, “just how much bitcoin is there?” Courtesy of @CoinMktCap, we found that with just over 16.6 million bitcoins in circulation, the total value of bitcoins in circulation is over $87 billion which is larger than the market cap of all but 62 companies in the S&P 500. Behind bitcoin, though, there are also another 11 crypto-currencies with a total circulation valued at more than $1 billion! In the startup world, companies with a valuation above $1 billion are called unicorns, so along those lines, below we list the 12 digital currencies that currently qualify as “Crypto-corns” with circulation values of more than $1 billion.
Chart of the Day: 2017 Commodity Performance
Bullish Sentiment Approaching 40%
This week’s sentiment survey from AAII showed an increase in bullish sentiment back near 40% and back near the recent high of 41.29% from mid-September. While 40% is hardly an extreme reading by any stretch of the imagination, this year there have only been four weeks where bullish sentiment actually topped 40%. With 40% being hard enough, an actual majority is a long way off, and that should keep the current streak of 145 straight weeks below 50% safe for the foreseeable future.
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As you might expect, bearish sentiment declined this week, falling from 32.8% down to 26.9%. That’s the lowest reading in five weeks and sixth lowest weekly print in bearish sentiment this year.
