Monthly Archives: February 2018

Meet the Mueller Risk Index, Wall Street’s newest fear gauge

Wall Street needs help deciphering the turbulence in Washington — especially the Russia investigation.

Hedge funds and other sophisticated investors are adept at analyzing the latest economic and financial trends. Think: Earnings, unemployment, bond yields.

But how do you model for indictments that may move markets? Apparently, with artificial intelligence.

GeoQuant, a New York start-up that analyzes political risk in real time, launched a first-of-its kind gauge on Tuesday to measure the risk to the Trump administration from Special Counsel Robert Mueller’s probe. Fittingly, it’s called the Mueller Risk Index.

GeoQuant’s machines sift through a range of metrics — everything from political polls and news headlines to social media and legal proceedings — to come up with a new score each day. Even though it’s an “index,” it doesn’t track stocks or bonds. Like the VIX (VIX) volatility index, it tracks the perception of risk, in this case political risk.

Currently, the Mueller Risk Index is sitting at its highest level since GeoQuant began tracking on March 2, the day Attorney General Jeff Sessions recused himself from any investigation pertaining to Russia.

“It’s been creeping up,” said Mark Rosenberg, a political economist who co-founded and leads GeoQuant. “The most appropriate comparison would be Watergate.”

GeoQuant has no stated political agenda. Its founder received his PhD from UC Berkeley and currently teaches political risk analysis at Columbia University.

The new tool is part of a software platform that GeoQuant sells to hedge funds, asset managers, insurers and other investors for about $40,000 a year. GeoQuant is backed by $4 million of seed funding from two venture capital firms: Israel-based Aleph Venture Capital and XL Innovate, a Silicon Valley fund that invests in products for insurers.

GeoQuant found a “clear pattern”: Rising trouble for the Trump administration sparks a small but noticeable downturn in the stock market and a bounce for the U.S. dollar.

“The stock market loves Trump and the dollar hates him,” said Rosenberg, who previously worked at consulting firm Eurasia Group

Although the Dow has surged about 40% since President Trump’s election, the dollar has lost about 8% of its value against rival currencies.

Rosenberg said this diverging reaction reminds him of what happens when a populist government takes power in an emerging market nation and promptly stimulates the economy — by adding to the deficit.

“There is declining confidence in the currency and the debt,” he said, “but it fuels an equity boom because of the super-charging of the economy.”

The Mueller Risk Index was driven by demand from hedge funds and other clients, showing how even sophisticated investors are struggling to understand the drama in Washington.

Two “huge issues loom” in March for investors: pending U.S. trade tariffs and “The Big One: the near-certainty of more indictments from Robert Mueller,” Greg Valliere, chief global strategist at Horizon Investments, wrote in a note on Monday.

Others think the focus on Mueller is misplaced — for now at least.

Ben Phillips, chief investment officer at political-themed ETF firm EventShares, urged investors in a report on Monday to focus instead on policy like infrastructure spending, deregulation and talks on renegotiating NAFTA.

Unless Mueller “successfully links the Trump campaign to Russia,” Phillips said the “probe is all noise.”

The good news for the stock market is that GeoQuant predicts that the Mueller index will cool off in the coming months.

However, the Mueller Index will spike dramatically if Democrats take control of the House of Representatives in the midterm elections in November.

“The impeachment threat would go up significantly,” said Rosenberg.

Top 5 High Tech Stocks To Invest In 2018

If there was any doubt about the interest the Internal Revenue Service takes in your cryptocurrency income, the agency sent a clear message last fall: You must pay tax on those earnings.

The admonition came last November in the form of what is called a John Doe summons to Coinbase to give the IRS the information the San Francisco-based cryptocurrency wallet and exchange had on all of its users for three years, including everything from a user’s confirmed devices to every line of correspondence between Coinbase and its users, which at the moment, total 6.4 million. (Don’t panic — Coinbase hasn’t handed over any data yet.)

“That’s a warning sign to taxpayers that they need to stop underreporting their bitcoin income, because it will become a point of enforcement by the IRS in the future,” says Tyson Cross, tax attorney and founder of Cross Law Group and

While the specifics of the Coinbase/IRS case get worked out, you should, in the meantime, get your records in order if you’re a user or holder of bitcoin and other cryptocurrencies such as ether (used in Ethereum), Litecoin, Monero, Zcash, and any other protocol token or app-coin such as Golem, REP tokens, SiaCoin, Filecoin, etc.

Top 5 High Tech Stocks To Invest In 2018: Culp, Inc.(CFI)

Advisors’ Opinion:

  • [By Ben Levisohn]

    Our analysis around past CEO transitions shows that in the absence of an inherited bubble, or milked portfolio, both of which are factually absent here when looking at the numbers, balance sheet matters ((Danaher (DHR)) from Culp (CFI) to Joyce/3M (MMM) from Buckley to Thulin), and here incoming CEO Adamczyk has a bazooka at his disposal, a dramatic differentiator. With these resources, stepping away from the 10% EPS growth target would be unnecessarily conservative, and a major misstep early on, as we see plenty of smart ways to enhance long term growth while at the same time maintaining earnings visibility, the most important determinant of a premium multiple in this sector. Honeywell is our top pick.

Top 5 High Tech Stocks To Invest In 2018: GlobalSCAPE, Inc.(GSB)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Wednesday, our Under the Radar Moversnewsletter suggested going long on small cap sofware stockGlobalSCAPE, Inc (NYSEMKT: GSB):

    As for Globalscape, this one’s a little more straightforward, and obvious. GSB shares pushed up and off of their 200-day moving average line last week, and are making higher highs this week. What you can’t see on the chart is how this has been a pretty reliable pattern for Globalscape for years now. The upper edge of the rising trading range is nearing $6.00, though it would take some time to get there.

Top 5 High Tech Stocks To Invest In 2018: Arrow Electronics, Inc.(ARW)

Advisors’ Opinion:

  • [By Brian Mathews]

    Arrow Electronics Inc. (NYSE: ARW) is one of the world’s largest distributors of electric components and computer products. During 2015, ARW struggled primarily due to unfavorable currency fluctuations. However, the company has been seasonal toward the end of the year, especially in Europe, and is expected to carry that positive momentum into the New Year. Arrow has packaged its core products and value-added services into a comprehensive solution that lowers the cost base over a product’s lifetime, yet adds higher client engagement. With a diversified product line and successful current strategy, Arrow is well positioned to grow to a target price of $65.

Top 5 High Tech Stocks To Invest In 2018: Molson Coors Brewing Company(TAP)

Advisors’ Opinion:

  • [By Seth McNew]

    It isn’t the only beer company facing hardships now, and in fact, it’s still growing faster than its largest competitors — Sam Adams parent Boston Beer (NYSE:SAM) and Molson Coors Brewing (NYSE:TAP). Boston Beer’s total sales fell 5.4% in 2016, year over year, and Molson Coors’ sales were down 2.3%.

  • [By Jayson Derrick]

    The Canadian beer market, much like the American beer market, is seeing a growth in craft products at the expense of established players. And one of the biggest established beer makers in Canada is Molson Coors Brewing Co (NYSE: TAP), Bereneberg’s Javier Gonzalez Lastra and Matt Reid commented in an initiation note.

  • [By Mark Fritz]

    Price Target: 116 euros.

    Molson Coors Brewing Co (NYSE: TAP): Sell.
    Price Target: $78.

    Boston Beer Company Inc (NYSE: SAM): Sell.

    Price Target: $124.

Top 5 High Tech Stocks To Invest In 2018: American DG Energy Inc.(ADGE)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Thursday, our Under the Radar Moversnewsletter suggested small cap green energy stock American DG Energy (NYSEMKT: ADGE) as a long trade:

    As for American DG Energy, today’s push above a technical ceiling at $0.34 is telling, though that clue is made more telling when you see the short-term moving average lines have given us key bullish crosses over the course of the past couple of months; the undertow is turning bullish. What you can’t see on the daily chart is that this is the first time in years we’ve seen higher lows logged for ADGE.

When Will Renewables Become The Dominant Source Of Energy? It May Be Sooner Than You Think

&l;p&g;&l;img class=&q;dam-image bloomberg size-large wp-image-41903517&q; src=&q;×0.jpg?fit=scale&q; data-height=&q;1390&q; data-width=&q;960&q;&g; A rainbow arcs over wind turbines at a wind farm in Scotland. Mike Wilkinson/Bloomberg

As the amount of renewable energy in global electricity networks continues to surge, a new question arises &a;ndash; when will renewables become the dominant source of energy?

A new report, the &l;a href=&q;; target=&q;_blank&q;&g;Lloyd&a;rsquo;s Register 2018 Technology Radar&l;/a&g;, examines this issue and also looks at which technologies are likely to have the biggest impact in different countries and what are the key drivers and barriers to success.

A survey of 800 key industry figures found that China would be the first country to achieve grid parity, in 2022, followed by Spain and the United Arab Emirates two years later in 2024. This is the same year that Germany and the UK are expected to see grid parity for wind power, followed a year later by Denmark and the USA. The International Renewable Energy Agency (IRENA) &l;a href=&q;; target=&q;_blank&q;&g;said recently&l;/a&g; that clean energy sources will be cheaper than fossil fuels by 2020.

Although a tenth of respondents said that renewables have already overtaken fossil fuels in their country, or will do so in the next two years, more than half (58%) believe that renewables will not be cost-competitive with conventional electricity generation until after 2025.

And while the cost of building utility-scale solar facilities has more than halved in the last decade, some 62% of respondents told the engineering and technology consultancy that the high cost of renewables was still the main barrier to expanding clean energy capacity.

In addition, while in many places onshore wind is already the cheapest form of energy, more than 45% of respondents said that opposition to onshore wind turbines in their countries was too strong to allow the sector to grow significantly. In Europe, 55% offered this view, even though in the UK, for example, support for onshore wind regularly tops 70% in surveys on the issue.

There was strong agreement in the report (71% of those questioned) that the business case for renewables will be boosted more by technological advances in the next five years than by policy or regulatory changes . Indeed, more than a third of those surveyed said that policy inconsistency is one of the biggest barriers to the sector&a;rsquo;s growth. Demand-side technologies such as advanced metering infrastructure, demand response management (DRM) systems, networked sensors and accurate asset monitoring data to are among the technologies that are expected to bring the biggest improvements in performance.


Digitization will also drive performance improvement, with companies looking to use predictive analytics, demand management and even machine learning to improve the operational performance and economics of energy transmission.&a;nbsp; There is also a need for more standardization. &q;In newer renewable energy technologies, such as wave and tidal, experts believe that significant improvements in economics await industry convergence around the design of key technologies,&q; the report says.

However, 37% of respondents said that the biggest factor holding back renewable energy is the slow development of storage technologies, such as batteries and hydrogen. &a;ldquo;Utilities need to be able to call on energy producers for additional power whenever it is required, whether for load balancing or meeting surges. Green hydrogen provides an alternative form of storage to electrochemical batteries as hydrogen fuel cells can store power for considerably longer,&a;rdquo; said Alasdair Buchanan, director of LR&a;rsquo;s Energy business.

There was also considerable support for the view that grid parity will not, on its own, be sufficient to lift investment in renewable technologies, with subsidies seen as still being critical to supporting growth in most markets.

One impact of the advance of renewables is that oil majors such as BP, Total and Shell – even ExxonMobil – have started to take the sector much more seriously, in some cases returning to sectors, such as solar and wind, that they abandoned when, at a time of record high oil and gas prices, technology costs failed to fall as quickly as anticipated, in part because of the lack of a meaningful carbon price.

Such a price would boost investment in the sector significantly, said Karl Ove Ingebrigtsen, director of LR&s;s Low Carbon Power Generation business. &a;ldquo;For oil and gas producers a standardized carbon price scheme for emissions provides a financial incentive to seek solutions through efficiency and innovation in lower carbon technologies.

&a;ldquo;We are seeing a real shift in thinking by the oil and gas majors as they increase their renewable energy portfolio and diversify their offering in the market. The halcyon days of high oil prices scuppering renewable energy growth and development is a distant memory; the energy industry is on a new low-carbon growth and efficiency drive which will change the source of our energy supply forever, &a;rdquo; says Ingebrigsten.


Libya Oil Field Halt Slows Exports, Sending Crude Prices Rising

Libya’s oil exports from the Mellitah terminal will be “modified” after protests disrupted production at the key El-Feel deposit for the first time in two months, putting the OPEC nation’s crude production at risk of a decline again.

Crude loadings at Mellitah, the export terminal for El-Feel, will be “modified” after force majeure was declared on deliveries from the deposit on Feb. 23, the state-run National Oil Corp. said in a document obtained by Bloomberg. NOC said Saturday guards at the field were protesting over pay and other benefits. Force majeure is a legal clause protecting a party from liability if it can’t fulfill a contract for reasons beyond its control.

Production at El-Feel, operated by a joint venture of NOC and Italy’s Eni SpA, was last disrupted for one day in December due to a power outage. The field has production capacity of 90,000 barrels a day but it’s not clear what output was before the outage. NOC officials were not immediately available to comment.

Libya, a member of OPEC, was allowed to increase oil production while other nations in the group cut output to curb a global glut. The North African nation’s output earlier this month was 1.1 million barrels a day, the highest since June 2013, a person familiar said Feb. 15. Oil finished a second week of gains on Friday after news that El-Feel was shut and American supplies drained.

Mellitah was set to load four cargoes this month, each holding about 600,000 barrels, according to a loading program seen by Bloomberg. One vessel was scheduled to be loaded Feb. 21 to Feb. 23.

With a fragile political accord barely holding the country together, Libya faces an array of challenges preventing its return to the output levels of about 1.8 million barrels a day pumped in 2008. Pipelines and other facilities are targeted by armed factions and tribal groups jostling for political control and a share of oil revenue. El-Feel was briefly shut in August after an armed group closed its pipeline, prompting the NOC to declare force majeure back then.

NOC Chairman Mustafa Sanalla said El-Feel guards were under the Ministry of Defence and it needed to respond to their demands. The shutdown and evacuation of employees from El-Feel came after the "deterioration of the security situation as members of Fazzan group from the Petroleum Facility Guards threatened workers, entered the administrative offices in the field and tampered with official papers of the field administration and firing in the air," the NOC said Saturday.

Top Dividend Stocks To Invest In Right Now

Korn/Ferry International (NYSE:KFY) files its latest 10-K with SEC for the fiscal year ended on April 30, 2017. Korn/Ferry International provides talent management solutions that help clients to attract, develop, retain and sustain their talent. Korn/Ferry International has a market cap of $1.97 billion; its shares were traded at around $34.63 with a P/E ratio of 23.57 and P/S ratio of 1.21. The dividend yield of Korn/Ferry International stocks is 1.17%. Korn/Ferry International had annual average EBITDA growth of 4.60% over the past ten years.

For the last quarter Korn/Ferry International reported a revenue of $419.6 million, compared with the revenue of $417.2 million during the same period a year ago. For the latest fiscal year the company reported a revenue of $1.6 billion, an increase of 20.4% from last year. For the last five years Korn/Ferry International had an average revenue growth rate of 14.8% a year.

The reported diluted earnings per share was $1.47 for the year, an increase of 153.4% from previous year. Over the last five years Korn/Ferry International had an EPS growth rate of 2.4% a year. The Korn/Ferry International had an operating margin of 7.06%, compared with the operating margin of 3.91% a year before. The 10-year historical median operating margin of Korn/Ferry International is 9.61%. The profitability rank of the company is 6 (out of 10).

Top Dividend Stocks To Invest In Right Now: Luby's, Inc.(LUB)

Advisors’ Opinion:

  • [By Monica Gerson]

    Luby’s, Inc. (NYSE: LUB) is expected to post earnings for the latest quarter.

    Simulations Plus, Inc. (NASDAQ: SLP) is estimated to post its quarterly earnings at $0.07 per share on revenue of $5.00 million.

Top Dividend Stocks To Invest In Right Now: Synta Pharmaceuticals Corp.(SNTA)

Advisors’ Opinion:

  • [By Lisa Levin]

    Synta Pharmaceuticals Corp. (NASDAQ: SNTA) shares were also up, gaining 61 percent to $0.393. Synta Pharmaceuticals announced plans to merge with privately-held Madrigal Pharmaceuticals.

Top Dividend Stocks To Invest In Right Now: EP Energy Corporation(EPE)

Advisors’ Opinion:

  • [By Andrew Efimoff]

    WTI crude oil plunged 3.11 percent on Friday to $48.99 a barrel. Below are the biggest energy losers for the day:

    California Resources Corporation (NYSE: CRC): -19.22%
    Dynamic Materials (NASDAQ: BOOM): -12.39%
    Clayton Williams Energy (NYSE: CWEI): -11.45%
    Dynergy (NYSE: DYN): -11.91%
    EP Energy Corporation (NYSE: EPE): -11.20%
    Mexco Energy (NYSE: MXC) -10.90%
    Whiting Petroleum (NYSE: WLL) -10.79%
    Southwestern Energy Company (NYSE: SWN) -10.79%
    SM Energy Company (NYSE: SM) -10.38%
    Real Goods Solar (NASDAQ: RGSE) -10.34%

    Posted-In: Commodities After-Hours Center Markets Movers

  • [By Paul Ausick]

    EP Energy Corp. (NYSE: EPE) posted a new 52-week low of $1.85 Tuesday, down nearly 22% after closing at $2.37 on Monday. The 52-week high is $7.49. Volume was about 3.2 million, around 5 times the daily average of around 600,000. The oil and gas exploration and production firm has launched an exchange program extending the maturity date to 2024 on $1.2 billion in 9.375% notes due in 2020.