Istanbul. Whoa. A Look At Emerging Markets

(SoberLook)

For the week, US assets were the place to be…

And with Treasury yields falling, Growth outperformed Value.

(Through 08/10/18)

US High Beta’s recent two-year run is now being tested…

(@JLyonsFundMgmt)

Among sectors, the Growth areas of Biotech, Consumer Discretionary and Tech led last week….

(Through 08/10/18)

I couldn’t agree with Liz Ann Sonders more…

Better or worse matters more than good or bad

Investors have a tendency to focus more on the absolute than the relative. But inflection points in the data matter and stocks tend to sniff those out before it becomes obvious in the levels of the data. It’s growing more likely that an upcoming “second derivative” change in US economic growth will be of the negative variety, which could mean today’s suppressed volatility will become a thing of the past.

( )

Inflation data hit last week and Core CPI continues to eat away at wage gains…

Speaking of inflation, go talk to your friends in the construction industry…

(WSJ/Daily Shot)

The Redfin conference call was very interesting if you have US housing exposures…

Year-over-year US home sales declined in June. We expect US home sales growth to have improved slightly in July, then to weaken again in August and September.

What’s striking about this change is that it seems to have been driven by dissident demand from home buyers, not just a low supply of homes for sale. Nationwide, there were still 5% fewer homes for sale in July 2018 than in July 2017. But in Seattle, Portland and San Jose where prices have increased the most, the percentage of homes selling in the first two weeks on the market declined in June from 61% to 52%.

And the percentage of listings that dropped their prices increased from 31% to 33%. June sales were down in these markets by double-digits and inventory was up also by double-digits. The trend is continuing in July and reports are now coming in from Washington D.C., Boston, Virginia and parts of Chicago as well, that homes there are getting harder to sell…

( )

Important to highlight that Zelman & Associates notes that large slowdowns in homebuilder new order growth tends to persist into future periods…

“To put this quarter’s 500 basis point deceleration in order growth into perspective, over the last 28 years spanning 113 quarters, order growth has decelerated at least 500 basis points in 32 other quarters, or 28% of the time. In 69% of these instances, order growth decelerated further in the subsequent quarter, by an average of 1,000 basis points. In other words, periods of large deceleration in order growth more times than not are followed by additional periods of weakness.”

)

Either: 1) Chain Restaurants are losing to the Independents or 2) Americans have cut back on eating out this summer

The restaurant industry took a vacation in July. Again.

Same-store sales rose 0.5% in the month, according to the latest Black Box Intelligence index.

That was a slowdown of 0.5 percentage points from June. Worse, it came despite some easy comparisons from a year ago, when same-store sales fell 3%.

The numbers suggest that consumers are shifting their restaurant behavior in midsummer, or perhaps they are indicative of an overall industry slowdown that has been ongoing for three years now. There were no factors such as weather or other issues that could have pulled down sales during the month.

“We’re not able to solve the real underlying issues, where we keep losing traffic to competitors,” said Victor Fernandez, vice president of insights and knowledge at Black Box parent company TDn2K.
The biggest problem is a persistent decline in guest counts. Same-store traffic fell 1.8%. But on a two-year, stacked basis, it’s far worse than that: down 6.6%.

)

Student loans might be a problem in the future…

But would be more worried about the 50% jump in auto loans happening at the same time as the seismic shift in vehicle ownership demand.

(@PlanMaestro)

Grain supplies UP. Grain demand DOWN…

A tough week for grain farmers…

How fast can you say “Poof”?

A fast-growing digital currency that claims to be backed by US dollars has become a cornerstone of the volatile cryptocurrency market. The problem: There isn’t hard evidence the cash supporting it exists.

Tether, whose main selling point is its tie to the US dollar, has grown dramatically over the past year—its daily trading volume of around $3 billion trails only bitcoin’s $5 billion. Tether has also become a “crypto bank” for cryptocurrency businesses that have trouble maintaining real-world banking relationships, providing liquidity and a place to park assets, according to a new study from blockchain research firm Chainalysis…

Tether has never produced an audit showing it has the purported reserves. The company that controls tether maintains it has the reserves, yet it has never named the banks it uses to hold these funds, nor said where they are based and regulated.

The information presented here is for informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful. The hyperlinks included in this message provide direct access to other Internet resources, including Web sites. While we believe this information to be from reliable sources, 361 Capital is not responsible for the accuracy or content of information contained in these sites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers. The views expressed by these external providers on their own Web pages or on external sites they link to are not necessarily those of 361 Capital.

Written By: Blaine Rollins