Showing posts with label buying. Show all posts
Showing posts with label buying. Show all posts

Saturday, October 13, 2018

The fall in the us exchanges accelerated in the last minutes of trading. Why?

The fall in the us exchanges accelerated in the last minutes of trading. Why?

The fall in the us exchanges accelerated in the last minutes of trading. Why?


Us stock indices sharply accelerated the decline before the closing of trading. This was due to passive investment funds. They began to sell shares before the closing of the exchange.

Journalists Wall Street Journal (WSJ) drew attention to the anomaly in yesterday's trading on the new York stock exchange (NYSE). On Thursday evening, October 11, the sale of shares accelerated sharply in the last minutes before the closing of the trading session. S & P 500 for these five minutes fell from 2737,38 to 2728, 37.

The culprit was the index funds ETF, writes Wall Street Journal. We are talking about exchange-traded investment funds that copy the dynamics of a particular index. Their task is to minimize the so-called tracking error, that is, the difference between the ETF dynamics and the tracked index dynamics. The error occurs when the money deposited or withdrawn from the ETF is not quickly converted into shares.

To match the index, many ETFs try to perform operations before closing trades-at the very moment when the final value of the index is formed. As a result, since 2012, according to the WSJ, the volume of transactions before the closing of the trading session increased to 26% of the total volume of transactions.

How to manage investments


Operations of index funds to rebalance portfolios at the last moment can distort the actual results of the day, the article says. This is a continuation of the old discussion between the supporters of active and passive ways of investment management.

The active approach involves self-selection of stock for investment, while the passive shifts the responsibility for selection on the index of operators — that is, those who composes the bonds, blue chips and other stocks by industry, thereby influencing the ETF.

Proponents of active management, who have been steadily losing ground due to too high a Commission in recent years, argue that passive strategies are good as long as they are followed by a relatively small proportion of investors. When their share becomes dominant, following the indices begins to bring additional volatility and even distortions to the markets that do not correspond to the true intentions of investors and the market situation. This is what happened at the end of trading on Thursday, October 11.

When is it better to buy a new computer?

When is it better to buy a new computer?

When is it better to buy a new computer?


Over the past few weeks, received a lot of news from the world of computer hardware, many of which point to the imminent end of dark times for PC gaming, and though small, but the rollback of prices for components to more comfortable and familiar to us values. I tell you why I decided to, and when it happens.

Memory


The gloomy period of acute shortage of DRAM this year, most likely, will end. Thanks for this is the Chinese memory manufacturer Nanya Technology, which currently ranks fourth in terms of production of RAM after Samsung, SK Hynix and Micron. The fact here is that as part of the flare-up trade war between the US and China, the Chinese authorities have limited the presence of micron memory in the territory of their country, which clears the market for Nanya. Obviously, this will entail an overabundance of RAM and, as a result, the desire of manufacturers to sell the surplus as quickly as possible.


In addition, next year is expected to reduce the demand for PC components and smartphones, which is also somewhat cripple the price of DRAM. The Wall Street Journal, referring to analysts from DRAMeXchange, predict a decline in prices for RAM up to 16%. The growth in the production of memory chips will also have a significant impact on the pricing of solid state drives, which, according to the forecasts of the same DRAMeXchange should fall by 37%. Everything should happen before the end of 2018.

Video card


Here everything is quite obvious and classic. According to some rather plausible rumors, the new generation of Nvidia GTX will start on August 30 this year with the release of GTX 1180. The GTX 1170 and GTX 1160 will go on sale on September 30 and October 30, respectively. As is usually the case, the output of the new generation of graphics cards significantly drop the price of the previous one. According to preliminary data, GTX 1080Ti will fall by $ 100, and GTX 1080 by $ 50.

Of course, our native domestic retailers will do everything that we would not have seized a heart attack from the sharp decline in the cost of video cards, but as new models arrive they will have nowhere to go – the prices will have to be reduced.

In short, before November or December 2018, it is better not to think about buying a new video card – there is a chance to throw away up to 5 thousand rubles.

Processors


With processors, unfortunately, no price movements are observed. But it is necessary to understand that the prices for processors are not as frightening as for graphics cards or RAM. In the middle price segment, we now have an excellent and inexpensive Ryzen 5 2600 (≈15 000r.) and for more steep configurations still good INTEL Core i7 8700K (≈26 000r.). Looks not as scary as the recent GTX 1070 50 000..

Subtotal


At the beginning of next year it will be possible to collect an excellent gaming PC for adequate money. Economical configuration on Ryzen 5 2600 with GTX 1070 and 16GB of RAM is enough for another two or three years of comfortable play in the new AAA-titles. If the budget issue you have is not so acute, the INTEL Core i7 8700K in conjunction with GTX 1080Ti and 32GB of memory will reveal all possible graphic dances for a very long time. Plus, for a long time have become an integral part of the game machine SSD-drives should fall in price in the most radical way that will save even more hard-earned.

Cloud over wall street. Is it worth buying us stocks now

Cloud over wall street. Is it worth buying us stocks now

Cloud over wall street. Is it worth buying us stocks now


The s&P 500 index is now close to historical highs, and in the foreseeable future we can expect volatility and a new wave of correction in the us stock market. What should a private investor do in such conditions?

The us stock market is considered to be a place where dreams come true, including among Russian investors. More than 5,000 shares from 11 sectors of the economy and ADR of foreign companies, as well as about 1800 exchange-traded funds (ETFs) are traded on us exchanges. The s&P 500 broad market index covers about 500 of the largest issuers by capitalization, most of which are transnational corporations.

Many of them have become a part of everyday life of many people, it is enough to mention only Apple smartphones, Facebook feed, a Cup of coffee from Starbucks. If you follow the precepts of Warren Buffett, the company with a clear business is the best option for a"reasonable investor."

But in the current conditions, it is hardly worth rushing with active purchases of American shares. The s&P 500 index is now close to historical highs, and in the foreseeable future, it is possible to predict a high probability of volatility growth and a new wave of correction in the us stock market.

Caution above all


The main factor playing against active investments in us stocks is the fed's monetary tightening cycle, which has made it a rule to increase the key rate by 25 basis points once a quarter. Add to this the increased risks of trade wars and the currency crisis in emerging markets, which was the first sign of imbalances in the financial system.

At the same time, the yield of U.S. Treasury bonds (Treasuries) is growing, that is, in fact, market interest rates in the United States. The yield of two-year securities for several months exceeds the dividend yield of S & P 500, which makes us stocks less attractive compared to government bonds.

Intermediate elections in the United States, which will be held on November 6, will also contribute to the acceleration of volatility. There is a significant risk that the Congress will become fully controlled by the Democrats, which will increase the political split in the country. This could rock global markets.

As a medium-term target for the s&p 500 index, I would indicate the level of 2650-2550 points at the current value of more than 2900 points. At the same time, it is too early to talk about the upcoming trend change and signs of a recession in the US. The American economy is developing steadily, and the Federal reserve is quite cautious about the process of raising rates. According to the estimates of the research organization FactSet, at the end of 2018, you can expect an increase in consolidated earnings per share of S & p 500 by 20.6% year — on-year, and in 2019-by 10.3%.

Ideas for tomorrow


To reduce the risks associated with the growth of fed rates, it is necessary to adhere to simple rules:

- avoid stocks of enterprises with high debt load and weak operating performance and securities with inflated multipliers;

snoring to treat traditional dividend sectors;

- look for interesting long-term stories and papers-the beneficiaries of the growth rates.

Securities that can be bought in the expectation of long-term growth are less dependent on fluctuations in economic cycles and are focused on breakthrough ideas. Some shares have already fallen well in price — most of the external negative factors played their quotes, and the potential for further decline is limited.

Such actions may include, for example, paper Facebook. The company is the undisputed leader in the market of new media, is financially stable and constantly innovates. Her Instagram service is popular among young people, the number of Its users has reached 1 billion Ahead — the monetization of WhatsApp messenger.

No less interesting option is the manufacturer of semiconductors Micron Technology. Recently, investors have been concerned about the possible oversaturation of the microchip market and the risk of a full-fledged trade war with China, which will hit the export of Micron products. But in fact, we have a company with strong balance sheet indicators, serious prospects for income growth and low multipliers. In the spring, the Corporation announced a stock repurchase program by $10 billion Also worth noting is the shift of demand in the market of chips and semiconductors in the direction of more expensive solutions in cloud, mobile and autosegment.

Another attractive paper traded in the US market is the stock of Alibaba Group, the leader in e-Commerce in China. China's population exceeds 1.4 billion people, with 57% of citizens using the Internet. For comparison-in the US we are talking about 83% of the population. This opens up broad prospects for e-Commerce in China. In addition, Alibaba is expanding beyond the country, including India, whose population is about 1.3 billion people.

In the us market, you can find "protective" shares, which are less subject to fluctuations in turbulent conditions. First of all, these are papers of traditional pharmaceutical companies and manufacturers of essential goods.

It is worth paying attention to the shares of American banks. The balance sheets of many financial institutions are designed so that with the growth of interest rates increases the interest margin, and hence the interest income. Citigroup shares look interesting in terms of a set of factors, including market multipliers. JPMorgan & Chase securities seem to be a good investment, although now these shares are clearly overheated.

Despite the growth of the fed's rates, it is not necessary to completely discard dividend stories, because it is a good alternative to Bank deposits. You can look at the shares of Telecom giant AT&T, retailer Macy's and the leader of the American automotive industry General Motors. Their dividend yield is very solid 4-6%. However, before you buy these shares, you need to wait for their drawdown. At the same time, their dividend yield will grow.

Among the exchange-traded funds (ETF) it is worth paying attention to Vanguard Total World Stock, the portfolio of which includes 8109 securities of companies from developed and developing countries. In the sectoral context, the Fund of biotechnology companies iShares Nasdaq Biotechnology is quite popular — this industry can survive the second Renaissance against the background of population aging in developed countries. To earn dividends allow paper funds SPDR S&P Dividend Vanguard High Dividend Yield. There are also quite "local" ideas, for example, investments in the sphere of artificial intelligence, but these market sectors require careful study based on the analysis of fundamental factors.