1--Stocks soar while billionaires hold cash Falling confidence in Fed-engineered rally
A further piece of research from Wealth-X Billionaire Census showed that the world's billionaires are holding more than $1.7 trillion in cash. The report said that billionaires are taking money off the table where available, while uncertainties in the economy and the historical highs found in deals have resulted in cash-flush portfolios.
"Holding cash is surely a bad sign for investor confidence but it is perfectly rational," Alastair Winter, chief economist at Daniel Stewart told CNBC via email.
"Equity and bond prices are largely being propelled by central banks both directly through their loose monetary policies and indirectly by market expectations that those policies will be maintained indefinitely.....
More and more investors are starting to hoard cash thanks to an ultra-low interest rate environment and negative bond yields.
While the current run in the global equity markets has seen some investors enjoying the highs, there are still a number of investors who prefer to hold on to cash or invest in other alternative forms of investment.
A survey conducted by Bank of America Merrill Lynch in last month found that cash levels were at 5.8 percent of portfolios and at the highest levels since November 2001.
"Globally, sentiment remains weak. Global asset allocators are holding the highest average cash balance since November 2001, while equity allocations have dropped to four-year lows," BAML said in a note...
One analyst told CNBC via email that investors opting to hold cash rather than invest in equities at a time when equities are performing well is a sign that confidence in the market to sustain the run is deteriorating.
"It's one of the early signs that a market is looking overextended as moves are simply not being backed up with volume
2--Japan's economy stalls in April-June, casts doubts on Abe's policies Failed monetary policies produce zero growth, zero jobs, zero inflation, zero business investment
Japan's economic growth ground to a halt in April-June as weak exports and shaky domestic demand prompted companies to cut spending, putting fresh pressure on premier Shinzo Abe to come up with policies that will produce more sustainable growth.
The weak reading underscores the challenges policymakers face in ending two decades of crippling deflation, as an initial boost from Abe's stimulus programs, dubbed "Abenomics", appears to be quickly fading.
The world's third-largest economy expanded by an annualized 0.2 percent in the second quarter, less than the 0.7 percent increase markets had expected and a sharp slowdown from a revised 2.0 percent increase in January-March, Cabinet Office data showed on Monday.
"Overall it looks like the economy is stagnating. Consumer spending is weak, and the reason is low wage gains. There is a lot of uncertainty about overseas economies, and this is holding back capital expenditure," said Norio Miyagawa, senior economist at Mizuho Securities.
3--Continued expectations of easy monetary policies, meant that global equities are trading near a one-year high
Continued expectations of easy monetary policies, meant that global equities are trading near a one-year high as evidence of uneven growth in the world’s biggest economies fuels optimism that central banks will come to the rescue by way of additional stimulus and looser monetary policy. ...
“Interest rates will stay low and the dollar should be quite stable,” said Hertta Alava, the head of emerging markets at FIM Asset Management Ltd. in Helsinki. “That is supportive for emerging-market currencies. The oil price recovery is supportive for sentiment too.”
Brick-and-mortar retail sinks artfully into coma.
It’s been a tough quarter for Macy’s. Again. Sales dropped 4% to $5.87 billion in the second quarter, it reported today. It had already closed 41 “underperforming Macy’s stores” in its fiscal year 2015. So among the remaining company-owned stores, comparable sales fell 2.6%. Operating income plunged 73% to $117 million. Net income plummeted 95% to a nearly invisible $11 million, or 3 cents a share.
The first quarter, on a year-over-year basis, was even worse. So for the first half, sales dropped 5.7%, operating income 53%, and net income 82%....
It will shutter “approximately” 100 Macy’s full-line stores, or about 15% of its current 675 full-line stores. Final decisions which stores to close haven’t been made yet, it said. Most of this will happen in early 2017.
5--Here’s Why Wages Have Stagnated——–And Will Continue to Stagnate (The libertarian view?)
... wages are only rising significantly for the top 5%, while workers between the bottom 81% who have seen their household incomes decline and the top 5% are experiencing stagnant earnings.....productivity gains have accrued to the top 5%. This chart shows that while productivity has advanced, household income has remained flat...
If earnings and household incomes for the bottom 95% stagnate, these households cannot afford to borrow and spend more money–and that’s why demand is tepid except when the purchases are financed at 0%...