Currently Obsessed With...Serena Williams

COMMENTARY FOR WEEK OF July 16, 2018


Dear Serena,

Thank you. We know you played for us at Wimbledon and you were amazing.

No woman has ever accomplished what you have on and off the court and you continue to inspire us. So, please take the weekend to hold your baby, let your hot husband hold you and enjoy the love...then get right back on your grind on Monday because we are all holding and lifting you up...to win!

The hard-working Mom and most marketable professional athlete in the world, according to a 2017 Nielsen report, is not a publicly traded company, but the sponsors who support her are. Nike (NKE) stock can be yours for about $77.59. You can also invest in Beats by Dre , now owned by Apple (APPL) for about $191.40 per share.

#InMyFeelings

S&P, do you love me? Are you riding?”...in our Drake voice. Stocks were definitely doing their version of the Drake “In My Feelings” challenge as they rallied for the second week in a row. All the major equity indices were grindin’ this week. The S&P (Broad index of the U.S. stock market) finished stronger than it has since February 1st, and the DOW (indicator of the U.S. economy) and NASDAQ (Tech index) did their part for the team also closed strong.

LET'S BE CLEAR...

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The S&P was clearly inspired by Serena at Wimbledon because it staged a comeback to break through its 2800-point level. What? There are levels to this ish? Yep! Experts monitor each index daily and based on the level try to read into the current state of the overall stock market and economy. The big three: S&P, the Dow and the NASDAQ are watched closely. The S&P index failed on numerous occasions to get past 2,800 but finally got past the Jedi mind trick noise for the win!

Twinning with Serena, the S&P had multiple obstacles to maneuver to get to the finals. Here are a few.

First, The gap between short-term and long -term interest rates is closing in. The interest rates of varying maturities of Treasury bonds are plotted on a line which Wall Street nerds called the yield curve. The 2-year and 10-year Treasuries are the most widely watched because when the curve shape shifts like a Teen Wolf cast member and becomes inverted, a recession is soon to follow. Don’t trip, we’re not there yet.

Second, the Federal Reserve is totally acting like a Kardashian momager and trying to chill out interest rates without butting in too much. The Federal Reserve has the ability to ease and tighten U.S. monetary policy by raising and lowering some interest rates. They try not to be too quick to pull rank because if they meddle too much, the outcome will be fixed and the kids won’t make it on their own.

Finally, trade is still trending on social media, literally. The U.S. announced another round of potential tariffs on Chinese imports. These tariffs would put a 10% tax on about $200 billion of goods coming in from China. This is lower than the tariff that was just implemented on $50 billion of goods, which was 25%. But let’s not get all Kanye at the MTV Video Music Awards when he went a little crazy on Taylor Swift. These tariffs won’t be going into effect immediately. First, public comments have to be heard and those hearings are scheduled on August 20th. A final decision on the fate of our iPhones will be made after August 31st.

PBDs (Pretty Big Deals)

  • Apple (APPL) – Apple Music is coming for Spotify (SPOT) and could have more U.S. subscribers by the end of the year.

  • Microsoft (MSFT) – Microsoft is trying to step to Apple and will be launching new, low-cost Surface devices to compete with Apple’s iPads.

  • Google (GOOGL) – may face the music as early as next week in Europe. They might get slapped in the face with a multi-billion dollar anti-trust fine.

  • Uber - Uber is cutting more than 100 test-driver jobs from its autonomous vehicle program in Pittsburgh and San Francisco. This comes after a fatal crash with one of the bots.

The Lux List

  • The World Cup finals was really about Nike vs. Adidas not France vs. Croatia. Nike cleats were worn for 94 of the 150 goals scored leading up to the finals. Nike is playing for both teams as they sponsor both France and Croatia. Adidas spent about $100 million on sponsorships in 2014 and saw a big boost in sales afterward.

  • Uniqlo (Fast Retailing Co.) posted a record high quarterly profit after Roger Federer hit the Wimbledon court decked out in Uniqlo whites. The company’s second quarter operating profit is up 37% from a year ago.

  • LVMH – Our fave lux lister will release its second quarter earnings with a conference call on July 24th. We’ll be listening with a glass of Veuve!

Squad Goals

We Ask and Our Squad Answers
Our squad is comprised of ten Wall Street experts from the top asset management firms. Each week we ask them a question, and they poll in!

Do you think the U.S. economy is solid enough to absorb the impact of impending tariffs?
Our squad says...yes.

Agree with the squad? Tell us on Twitter #SavvySquadPoll

Weekly Moves

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Heads Up

Marlon Bovell