December's quadruple witching option expiration turned into a quadruple flushing as all the S&P sectors sold off hard. Dow components Disney and Boeing received downgrades and Goldman Sachs crashed with a sector downgrade for a total of about -115 Dow points.
The Force was not with the markets on Friday as key stocks collapsed and forecasts were lowered. In addition to analysts applying their Lightsabers to earnings and price targets the first Fed head since the FOMC decision came out to trash the market with his comments.
Richmond Fed president Jeffery Lacker said four rate hikes in 2016 "would be gradual" and the Fed could hike at any meeting. He also said the rate hike forecast was the sign of an improving economy but unfortunately that is not what the economic reports are saying.
Shortly after Lacker's comments the San Francisco Fed president John Williams said the Fed will hike gradually in 2016 but will not follow any predictable pattern. "Every meeting will be live in terms of adjusting policy one way or another." Also, "There was a value to having the first hike at a (quarterly) press conference meeting but in the future I don't think that is as much of an issue."
Analysts had been troubled by the multiple uses of the word gradual in the Fed statement but the implication of four hikes in the dot plots. Analysts thought the dots would move lower over 2016 to signal fewer rate hikes. The dots come from the individual expectations for interest rates from each of the FOMC members.
The dot plot today is showing an average estimate for 1.4% at the end of 2016. Ten of the 17 FOMC members are expecting 1.5% or higher by the end of 2016. The market is expecting slightly less than 1%.
The Lacker/Williams comments caused another wave of selling in the afternoon.
The economics on Friday continued the recent trend of weakness. The Kansas Fed Manufacturing Index for December declined from +1 to -9 and a four-month low. The rebound to positive territory in November was completely erased and we are back to the June lows.
Production declined from +3 to -8, new orders from +5 to -5 and inventories fell from -6 to -17. Employment declined from -8 to -17 and the eighth consecutive monthly decline. The only positive improvement was the backorders, which rose from -17 to -2 and a nine-month high even though it is still in contraction.
I do not understand how the Fed can claim the economy is improving when the economic reports are worsening. The Kansas manufacturing above is just one example. The Philly Fed manufacturing report on Thursday declined from +1.9 to -5.9 and to the lows for the year, down from a high of 15.2 in June. Industrial production for November on Wednesday fell from -0.2% to -0.6% and the steepest monthly drop in four years. Wholesale Trade declined from +0.5% to -0.1%.
The Atlanta Fed's real time GDPNow forecast for Q4 GPD is now predicting +1.9% growth and will probably be lowered when it is updated again on the 23rd.
Since 1948, the Fed has hiked rates 118 times. For 112 of those hikes the GDP was over 5.5%. Only 2 times was it below 4.5% growth. One of those was in 1982 when the Fed had to reverse course almost immediately because they hiked in a slowing economy.
They have never hiked rates with economic growth this low until now. There have been 55 meetings with no hikes since the rate was lowered to zero exactly seven years ago in December. It has been 11 years and 6 months since the prior series of rate hikes began. One out of five money managers in the business today has never managed money in a rate hike cycle.
The calendar for next week is headlined by the Q3-GDP revision. Analysts are expecting no change but I would be very surprised if that came to pass. This is the last revision for Q3 and large adjustments sometimes appear. We will get the first look at Q4 GDP on January 29th.
There are quite a few economic reports next week but nobody will be paying attention. With Christmas on Friday and the market closing early on Thursday, it creates a long holiday weekend for traders. Normally they will try to extend it even further by taking the first three days off as well. This is going to create a very low volume environment and volatility could either be extreme or nonexistent.
Nike, Ensign Group and Empire Resorts will all split on December 23rd. Of the three, the only one I would buy after the event would be Nike. They also report earnings after the close on Tuesday.
For the full split calendar click here.
Disney (DIS) shares crashed despite the record setting news about ticket sales for Star Wars. Rich Greenfield of BTIG moved to the dark side of the force and downgraded Disney to a SELL rating with a $90 price target. His downgrade was clearly scheduled to take advantage of any sell the news event on the day Star Wars opened. He said the trouble with ESPN cord cutters would linger and Disney's cable business that includes ESPN makes up 45% of their revenue.
Multiple analysts came out to rebut the BTIG view but it did not help the shares. Rosenblatt Securities provided a conflicting outlook with a buy rating and price target of $130.
Star Wars ticket sales for Thursday previews broke a record at $57 million. The previous record was $43.5 million for Harry Potter Deathly Hallows part 2. Globally the previews totaled $130 million and also a record. Tickets for this weekend are sold out and they are selling for as much as $200 online. The faithful have been lining up by the tens of thousands at theaters around the country to score a good seat when their ticketed show arrives. Analysts believe the opening weekend receipts will easily exceed $200 million. The current record is $208.8 million for Jurassic World.
One company with 800 employees chartered 19 buses, rented 10 screens at one multiplex, and took everyone to see the movie.
The Rotten Tomatoes review site has a near perfect 95% score with many fans calling it the best film in the series since the 1983 Return of the Jedi. That would not be hard since the 3 prequels were not serious movies.
I still believe any sell off is a buying opportunity on Disney. The company has more than 30 movies on the calendar over the next three years and that includes two more Star Wars installments. They will open Shanghai Disney this spring and the cruises are still selling out. The ESPN problems will be resolved when people resubscribe ahead of the Olympics in 2016.
Invest with the Force and add some Disney shares to your long-term portfolio. At Friday's close of $107.56 there is risk to $98 but there is also upside potential to $130. Disney paid $1.37 in dividends in 2015.
Shares declined -$4.29 to knock about 30 points off the Dow.
Boeing (BA) was downgraded from outperform to market perform at Wells Fargo. The analyst said Boeing might lower guidance when it reports earnings in January. Investors should be aware of price cuts on 777s and weak demand for 747s. Higher interest rates will also make leasing the planes more expensive. Boeing is also in the design phase of a 757 replacement and that could boost R&D spending through 2018 and "crowd out share buyback programs" according to Wells Fargo. Shares declined -$6 to knock about 45 points off the Dow.
Dow component Goldman Sachs declined on general weakness in the banking sector. Shares have been declining for over a month despite expectations for a rate hike. The major banks have announced increased loan loss reserves because the drop in oil prices has severely weakened the credit quality in the energy sector. Add in the high yield problem from last week and the huge withdrawals from the bond market and Q4 earnings are likely to be under pressure. Shares declined more than $7 to knock about 50 points off the Dow.
One stock overcoming Friday's market volatility was Darden Restaurants (DRI). The company posted earnings of 54 cents compared to estimates for 42 cents. They raised guidance for the full year to $3.35 and up from a prior estimate at $3.30. Same store sales are now expected to be +3% compared to prior estimates for +2.5%. They said Olive Garden customers are spending more money on the newly invigorated menu that includes a new line of "breadstick sandwiches." Shares rallied $4 on the news.
Homebuilder Lennar (LEN) posted earnings of $1.21 that beat estimates by 10 cents. Revenue rose +16% to $2.95 billion. Home deliveries rose +10% to 7,657 homes. New orders also rose +10% to 6,053 homes. The order backlog rose +14% to 6,646 with a value of $2.48 billion. The average home price rose +6%. For the full year, Lennar earned $3.46 on revenue of $9.47 billion. Shares fell on the news in a bad market.
Remember BlackBerry (BBRY)? The company had nearly faded from view after it fell to penny stock status back in October. Shares rallied +10% after the company reported a loss of only 3 cents compared to estimates for a 14-cent loss. Revenue of $548 million rose +12% quarter to quarter after nine consecutive quarterly declines. Software revenue more than doubled and device sales rose for the first time in four quarters. BlackBerry has a new secure Android phone called the Priv. They sold 700,000 in the quarter with the average price rising from $240 to $315. It is not often that you see the price of a smartphone go up. CEO Chen said this was the turnaround quarter with the Priv hitting over 30 countries this quarter.
CarMax (KMX) dropped more than -6% after the company posted earnings of 63 cents compared to estimates for 68 cents. Revenue of $3.54 billion also missed estimates for $3.63 billion. Revenue rose +4.1% and the slowest since the quarter ended on May 2012. In the year ago quarter sales rose +7.4%. They could not blame it on the weather with the warmest October on record and November not much colder. They blamed the earnings miss on higher advertising expenses in a "challenging quarter."
Fossil Group (FOSL) was downgraded by Goldman to a "sell" from hold. Goldman put a $26 price target on the stock with a close at $37 today. The bank lowered earnings estimates -20% to $2.86 for 2016 and -28% to $2.47 for 2017. Goldman said organic sales growth would decline to mid-single digits over the next two years. The flurry of new watches from competitors including Apple is going to depress prices in general.
Apple shares cannot catch a break. Jabil Circuit (JBL) reported lowered guidance for the current quarter. Jabil manufactures the casings for iPhones and gets about 25% of its revenue from Apple. Stifel Nicolas warned that Apple sales were probably behind the lowered guidance. RBC analyst, Amit Daryanani also pointed to the Jabil warnings when he cut Apple earnings estimates for the March quarter from $2.59 to $2.37 and lowered the price target from $150 to $140.
In the last couple of weeks Raymond James, Bank of America, Baird Equity Research, Needham and Morgan Stanley have cut estimates for iPhone shipments citing reductions in build rates from Asian suppliers.
Apple shares closed below support at $107.50 on Friday with a -$2.95 drop to $106 and putting the stock in a bear market. The high close was exactly $133 and Friday's close was a 27-point decline or -20.3%.
Apple has lost more than $160 billion in market cap since the highs. That decline is larger than 477 companies in the S&P-500. Currently Apple's market cap if $591 billion and it is still the largest company.
Amazon (AMZN) continues to expand its reach and capabilities. News broke on Friday the company was in talks to lease 20 Boeing 767 jets that would be added to its existing fleet of 5 that I wrote about a couple weeks ago. Apparently, that test run for those five over the last several months has worked out for the retailer. Baird analyst said Amazon would eventually create its own logistics service and have excess capacity they could sell during non-peak seasons. Amazon would not comment directly but they have a policy of not disclosing news until the deals are done.
The current five planes are being managed by Air Transport Services (ATSG) out of an old DHL facility in Wilmington Ohio. Amazon is not licensed to operate aircraft on commercial routes so they have to contract with a third party. Amazon is increasing their capabilities because FedEx and UPS cannot keep up. A Bizrate study found that on-time deliveries had fallen from 93.3% on Dec 1st to 89.9% on Dec 15th. One percent equates to 300,000 packages out of the 30 million UPS has been delivering each day in December. Since FDX and UPS have added capacity each year in an effort to keep up with the growth of online shopping it appears they are not keeping up. That is an opportunity for Amazon to develop its own infrastructure capacity and depend on UPS and USPS only for the local deliveries.
I reported a couple weeks ago that Amazon said it was building a fleet of "several thousand" trucks to ship between warehouses and hubs in 69 U.S. cities. They are starting to show up in public and they are labeled "Amazon Prime" for obvious advertising reasons.
Slice Intelligence said Amazon captured 39.3% of e-commerce spending from November 1st through December 6th. That was up from 37.9% in the same period in 2014. That is more than the next 21 retailers combined including Walmart, Target, best Buy, Macys, Home Depot, Nordstrom and Costco.
Forrester Research said online spending was on track to rise +11% in November and December to $95.5 billion. More than 2,900 merchants that use Channel Advisor software to sell their products on Amazon saw sales rise +19.5% in the second week of December. That was more than the overall e-commerce growth rate of 15% in the same period.
Crude oil closed at $34.55 after dipping intraday to $34.29 and a 12-year low close on a weekly basis. Inventories rebounded +4.8 million barrels after "supposedly" dropping -3.6 million the prior week. I seriously doubt the prior week number was correct since refinery utilization declined -1.4% to 93.1% and refiner inputs of oil declined -150,000 bpd while imports rose +257,000 bpd for that week. I suspect it was an error in the numbers and somewhere in the hundreds of reports that are submitted one was overlooked. That error was corrected this week when the new weekly data was collected and that caused the spike in inventories.
The rise in inventories weighed on prices all week. On Friday, we were facing the expiration of the January contract on Monday and anyone holding a long position needed to close it.
There was a bump in mid-afternoon when the active rig counts were reported from Baker Hughes. You may remember active rigs declined -23 the prior week. This week they were flat overall but there was some number confusion here as well. Oil rigs rose +17 and active gas rigs declined -17 while the total remained flat at 709. Does that strike anyone else as strange that after seeing oil rigs decline -21 last week that they would suddenly shoot back up +17 this week while gas rigs plunged -17? While I cannot prove it, I suspect some of the classifications were messed up the prior week and corrected this week. This is another weekly collection of hundreds of documents and the numbers tallied and reported. It would have been very easy to accidently categorize some oil rigs as gas rigs and when the new reports were collected this week that was magically reversed.
The intraday spike in oil prices on this data was quickly sold as I expect other astute investors assumed the same number confusion.
The gain in crude inventories to 490.7 million puts the total only -212,000 barrels below a historic high. The inventory levels are expected to continue higher over the low demand winter months.
Natural gas declined to $1.76 for the week and a 16-year low. With gas prices this low and warm weather still with us because of El Nino the outlook for prices is grim. Some analysts believe we could see $1.50 in the coming months. This is a very good reason why active gas rigs are falling and are now at an 18 year low. The shares of gas producers are also at post recession lows.
Swift Energy (SFY) traded as high as $68 in 2008 and the company was delisted last week at 16 cents. The company is in talks with bondholders after it skipped an $8.9 million interest payment on December 1st. Normally a company does a reverse split to lift its stock price to avoid being delisted. Swift Energy appears to have given up or maybe they wanted the large number of outstanding shares to trade for debt forgiveness. Many energy companies are now doing that is order to get some breathing room. The short story is that shareholders, that have hung on are now going to be wiped out in any debt/share exchange.
The December quadruple witching options expiration is the strongest of the four quarters. Investors and fund managers have positions that took them to year-end and now they either have to be exercised or closed. Volume across all the exchanges was the second strongest of the year at 12.65 billion shares, second only to the 14.2 billion on August 24th. That was about 3:1 declining volume over advancing volume while declining stocks were 2:1 over advancers. New 52-week lows were 494 compared to 1,073 on Monday. Stocks rebounded during the week and many did not return to their lows in the Thr/Fri sell off.
In the unbelievable column, the yield on the ten-year treasury declined to 2.19% after topping out at 2.33% after the Fed announcement. This is even more surprising because outflows from bond funds were at near record highs ahead of the Fed meeting. Something changed minds after Wednesday's close and suddenly treasuries were being bought in significant volume, probably as a safe haven investment since the Fed is not expected to hike again until March or April.
The market should have gotten a boost from the stimulus moves in Japan overnight. The BOJ added 300 billion yen to its program to purchase equity ETFs. That is roughly $2.5 billion in dollars with the yen at 121.29 to the dollar at Friday's close. The Dollar Index closed down on Friday after a sharp spike on Thursday as a result of the Fed move. The Friday decline was probably due to anticipation it would be at least three months before the Fed hiked again. The dollar was up strongly for the week so there was some profit taking involved as well.
The global economy is not likely to improve soon because the Baltic Dry Shipping Index closed at a historic low at 477. That is down from 2,337 in 2014 and 11,793 high in 2008 before the global recession. This indicates the cost to ship dry goods along the various ocean shipping lanes. The index declines when there are more empty ships bidding on the next cargo and rises when there is more cargo than ships. Closing at a historic low suggests the volume of goods being shipped around the world is also at a multi year low.
The CRB Commodity Index ($CRB) closed at 172.16 and a 41 year low. Commodities have not been this cheap since 1973 and I am sure quite a few people reading this commentary were not even born in 1973 and the vast majority were not investing in 1973. This is another indicator of the weakening global economy and another reason why the Fed should not have hiked rates. The Fed claims the commodity deflation is transitory but it looks pretty pronounced to me. Prices are already well below the 2009 recession lows.
Over the last ten years the global GDP has risen from $28 trillion to $78 trillion (+178%) Over the same period, the total global debt has risen from $40 trillion to $225 trillion (+462%). Comstock said not only is this not sustainable but it is why global growth is so slow. Debt requires payments that reduce the amount of money available to grow. Corporate debt issuance in the U.S. rose more than $1 trillion in just the first nine months of 2015. Comstock also said the global deflation in commodities is screaming a warning of a global recession ahead. Comstock Article
Historically commodities and the equity markets tended to trade relatively in tandem. Since the beginning of 2013 that has changed. Equities rose and commodities crashed. That relationship must return and that means either the stock market will crash or commodities are about to experience a huge rally. Since commodities are not going to rally until the global economy recovers that is not good news for the equity markets.
The Dow Transports ($TRAN) closed at a two year low. This is the worst performance outside of a recession and could be a signal that one is coming. The railroads, airlines and trucking companies have all warned about slowing traffic. The airlines have plenty of traffic but they have to discount the prices so low their revenue per passenger mile is falling. Some are bringing back snacks in an effort to entice passengers to use them instead of another carrier. Low oil prices should help them but most are not benefitting from the drop. They hedged the high prices a year ago and now they are suffering from hedges that are twice the current price of oil.
The S&P is down -2.6% for the year with eight trading days to go. To close in the green for the year it has to close over 2,059. We were there last week but Friday's flush could mean we are going to have a tough time regaining that level.
Personally, I think Friday was mostly options expiration, post Fed portfolio adjustments and some end of year exits. Literally tens of thousands of traders have now closed up shop until after Christmas. Expiration Friday was the punctuation to a year of tough trading. 2015 has seen the worst performance for mutual fund returns since 1998. Fourteen of the last 16 days have seen triple digit moves on the Dow in mostly alternating directions.
To confirm my idea that the downdraft was mostly options related the S&P-500 SPY ETF traded 46 million shares in the last 30 min and closed exactly at $200. This would have been the max pain trade. We have not talked about that much in recent years because of the increased volume in options and in high-frequency trading. Some 48% of the volume in December has been high-frequency trading.
There were 165,737 Dec $200 calls traded on Friday and 314,338 Dec $200 puts. That was the highest volume strike on both puts and calls. It was the strike where the most options above and below that level expired worthless. However, because of the sharp decline there were a lot of higher puts that expired in the money.
SPY December Calls
SPY December Puts
Unfortunately, the S&P-500 chart has confirmed another lower high and lower low and that is negative regardless of what caused it. The 2,020 support failed again and we could easily retest the strong support at 1985-1990.
The chart is negative and even if we do get a Santa Claus rally, the overhead resistance becomes stronger on every lower high. With the very low volume expected for next week, I think it will be very difficult to overcome the negative chart.
Support is 1985-1990 and resistance 2,060.
The Dow had only one stock in positive territory and that was Caterpillar. Why it was positive is a puzzler. They said before the open that total global machine sales were down -11% in November. Global resource industries sales were down -28% and global construction industry sales were down -7%. Shares dipped on the news to a two-month low but rebounded later in the day. The minor 32-cent gain did little to offset the major losses from Goldman, Boeing, Disney and others.
The last three declines saw the Dow stop on the 100-day average, currently 17,151. The sell on close orders pushed it slightly lower to 17,128 but close enough for our purposes. This is a two-month low. Horizontal support at 17,130 caught the falling knife.
Support at 17,050 and psychological support at 17,000 will be the defensive levels for monday. Any break below 17,050 will likely signal a major washout in progress and we could be headed back to the September lows at 16,000.
While I do not expect a move below 17,000, I did not expect this two-day -670 point crash from 17,800 either. The market is not behaving rationally and that makes it dangerous. When indexes move slowly either up or down investors have a chance to form opinions and strategize about new plays. When the Dow plunges nearly 700 points in two days there is no strategy other than sell fast to preserve profits and limit losses.
The Nasdaq Composite declined -79 points or -1.6% compared to the -2.1% on the Dow and -1.3% on the Russell 2000. Tech sentiment was supported by the Biotech sector with the $BTK losing only .7% and finishing the week with a gain of +3.5%. The BTK had two days of major gains on Tue/Wed and gave back very little on Thr/Fri. This kept the Nasdaq from joining its brethren at two month lows.
Apple's -7 point drop for the week was a major weight on the Nasdaq and the losses accelerated as the week progressed. With so many analysts cutting estimates it is not likely to improve significantly next week.
The Nasdaq came close to strong support at 4,900 with a close at 4,923. The intraday decline on Monday dipped to 4,871 but rebounded instantly. That 4888-4900 support level should be decent but with any material negative volume we could see a collapse.
The Russell 2000 did not give back all its gains since the Monday low but it came close. The +36 point two day rally was followed by a -31 point decline. That makes Monday's support low at 1,112 the level to watch this week. Since the next two weeks are supposed to be dominated by small cap buying, ANY further decline below 1,112 would be a sell signal. The seasonal norms for December have been trashed and the lack of any small cap buying next week would be market negative.
The NYSE Composite closed at a two month low. The NYSE did dip below this level on Monday but did not close here. The NYSE appears destined to retest 9500-9600 from the August/September crash. With a high percentage of commodity and energy stocks, the index is fighting an uphill battle.
The S&P-400 Midcap Index ($MID) is also at a two month low and very close to the 1,350 support that appeared in the Aug/Sep crash. Midcaps have been performing worse than small caps and I would not be surprised to see this support retested.
While I believe the majority of the selling on Thr/Fri was related to quadruple witching, it may be wishful thinking to expect a rebound next week. Monster declines like those we have had for the last two weeks produce confusion and timidity. Investors are afraid to go back into the market because there is no trend and they are still in pain from being knocked out of their positions.
Add in the low volume from most traders being away from the market and it can cause even more volatility OR no volatility at all. With fund managers now out of the market for the rest of the year, their volume is also missing. I would be cautious about launching new positions in either direction until a trend develops.
Despite the volatility, the analyst community is not backing off their estimates for yearend 2016. Cannacord is the highest at 2,350 followed by RBC Capital at 2,300, Bank America at 2,250, Wells Fargo at 2,245 and Morgan Stanley at 2,175. Just because they put out an estimate does not mean that is where the market is going. I will publish On January 1st the results from the 2015 estimate contest and the majority missed their targets by a mile.
The S&P has not been down two years in a row since 1980-1981. That means it has been 34 years since we had a back-to-back loss and the odds are good 2016 will finish higher. Typically, when we have a down year the following year is positive.
A survey of multiple strategists by Barron's suggests the equity markets will rise about 10% in 2016. The strategists gave their reasons in an article last week. David Kostin, Goldman's chief strategist believes the Fed will hike 4 times in 2016 to raise rates to 1.25% to 1.5%. His comments echo the feelings of the majority of analysts. Full Article
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Billionaire investor Sam Zell said "I think the economy is closer to falling over than it is to going up. I think there is a high probability we are looking at a recession in the next 12 months."
Last week I reported that JP Morgan said there was a 76% chance of a recession within the next three years and 55% over the next 12 months. Former fund manager Raoul Pal said the odds were 65% there will be a global recession. Citigroup also forecast a recession over the next 12 months.
Chinese officials finally admitted they faked the economic data. However, they claim they are not faking it now but did so in years past. They say that is why the current numbers are falling so sharply because the big numbers in the past were faked. So, do we believe them now or not? Some numbers were reported at levels that were twice the actual activity level. One county in the Liaoning province reported economic activity that was 127% higher than actual. They reported a GDP of 9.5% compared to the first three quarters of 2015 at 2.7%. Fortune Article
This year is on track to be the first losing pre-election year for the Dow since 1939. With the Dow down -3.9% for the year it will take about a 700-point rebound to return to positive territory. Santa needs to show up in a hurry with a sleigh full of bullish investors. "If Santa Claus should fail to call, bears may come to Broad and Wall." The Santa rally was defined by Yale Hirsch in 1972 as the seven-day trading period that covers the last five trading days of the year and the first two days of the New Year. Stock Trader's Almanac
While that "Santa failing to call adage" has been around for a long time it is not accurate. There is no evidence that it is true and actually some decent evidence to the contrary. Santa Adage Fails
More people shop on Dec 26th than shop on Black Friday according to American Express. As many as 66% of Americans will shop on the 26th compared to 45% on Black Friday and 47% on Cyber Monday. In a survey from Ebiquity 38% of Dec 26th shoppers will be shopping for themselves to take advantage of discounts. Some 25% said they will be using gift cards they received for Christmas. The survey also found that 76% of respondents think re-gifting is acceptable and 57% plan to do it this holiday season.
With the announced Dow-DuPont merger and the plan to split into three separate companies, we could see DuPont removed from the Dow 30. Amazon has been pegged as the next addition to the Dow with Alphabet also a potential candidate. However, Amazon would have to announce a major stock split of 6:1 or even 8:1 to be included. Since the Dow is a price weighted index they would never add Amazon at $665 but a $110 price after a 6:1 split would be acceptable. Apple split 7:1 before it was included in the Dow. Google at $750 would need an 8:1 split to be eligible for inclusion. However, with Google's dual share status (GOOG, GOOGL) they might not be included until one class is eliminated. Berkshire Hathaway (BRK.B) is another possibility but that dual share class problem exists there we well. They split the B class shares 50:1 several years ago so they could be included in the S&P-500.
There have only been 60 changes to the Dow since it was started on May 26th, 1896. Its longest stretch without a change was 17 years between 1939 and 1956.
There were 257 hedge funds closed in Q3, up from 200 in Q2. The total for the first nine months of 2015 is 674, compared to 661 in the same period in 2014. Decreasing investor risk tolerance was blamed for the two-year flood of closures. Money managers have been crushed by the market and geopolitical events like the 4% devaluation of the Chinese yuan in August. Hedge fund assets fell by $95 billion in Q3 to end at $2.87 trillion. That is the biggest decline since 2008-Q4 when $314.4 billion was withdrawn as the markets collapsed.
However, there were 269 new hedge funds opened in Q3 compared to 252 in Q2 and 785 for the first nine months of 2015. Bloomberg Report
Star Wars is grabbing all the headlines this weekend so it is not a surprise that the political cartoonists are merging politics and the movie theme. Cartoons
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