Week of Sept 1 2017 Weekly Recap & The Week Ahead
Friday, September 1st, 2017“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.” — George Soros
1. Tropical Storm Harvey Effects on Market — Floodwaters from Tropical Storm Harvey rose with forecasts for another 10 to 20 inches of rain in the coming days. Insured losses could be as much as $10B-$20B, according to JPMorgan, putting it among the top 10 costliest hurricanes to hit the U.S. Impact on stocks. Furthermore, U.S. fuel prices continue to rise as more Gulf Coast refiners cut output, leaving more than 13% of the country’s refining capacity offline. Gasoline for September delivery climbed as much as 2.77 cents to $1.74 a gallon, while crude prices dipped slightly to $46.50/bbl.
2. Renault-Nissan building EVs in China — tapping into a boom for “new energy” vehicles, Nissan (OTCPK:NSANY) and its alliance partner Renault (OTCPK:RNLSY) are setting up a new joint venture with Dongfeng Motor (OTCPK:DNFGY) to design and build electric cars in China. The project will be called eGT New Energy Automotive. It follows a similar move by Ford, which announced a comparable joint venture last week with Anhui Zotye Automobile.
3. Buffett Exercises BofA Warrant Makes Berkshire Biggest BofA Shareholder — Warren Buffett has become the biggest shareholder in Bank of America (NYSE:BAC), with a 6.6% stake, after exercising an option to take hold of 700M shares at a heavy discount. The move was signaled in June to take effect after BofA officially raised its quarterly dividend to $0.12 from $0.075. That translates into annual dividends of $336M for Berkshire Hathaway (BRK.A, BRK.B).
4. S&P500 Index Moving Averages “Sloped Down” On The Downturn — according to BIG, the S&P500 Index has really deteriorated in the last few weeks. After getting as high as 95.8% earlier this year, at the June and August peaks, the percentage only reached as high as 88%. But after that second peak in early August, the percentage of industry groups with rising 50-DMAs has come crashing down to just 33.3%. That’s the weakest reading we have seen since the days just after the election.
The week ahead — Economic data from Econoday.com: