- Friday afternoon: The headline graveyard
- Tim Sykes discovers how to take advantage of buried leads…
- For big payoffs Monday
- S&P 500 keeps on tickin’
- Big winner from Supreme Court sales-tax decision
- Taking a loan out for… vacation?!
- More Social Security missives: One millennial’s appraisal and a boomer asks: “Will I ever collect what I contributed?”
There’s an old saying — we’ve cited it here before — about how if you want to “bury” bad news, you release it late on a Friday afternoon.
Makes no difference if you’re a government official or a corporate executive. If you have to spill the beans about something, best do it when it will get the least amount of attention.
Release the bad news just before the close of business on Friday. Nosy reporters calling with follow-up questions will get only voicemail.
Meanwhile, everyday people are gearing up for the weekend and paying less attention to the news. Website page views go way down. In the pre-internet era, newspaper readership was always lowest on Saturdays.
An infamous example we cited two years ago was the “28 pages” — a classified section of the joint congressional inquiry into the Sept. 11 attacks. The Bush and Obama administrations suppressed the document for 14 years. And no wonder: At the risk of oversimplifying, the pages trace a relatively direct money trail from the San Diego cell of hijackers who crashed into the Pentagon… to Prince Bandar, Saudi Arabia’s longtime ambassador to the United States.
When the time finally came to make the document public, it was late on a Friday. Buried and quickly forgotten.
There’s a different kind of “Friday phenomenon” that’s little-known. This one mostly has to do with good news. And it can generate huge gains within only 72 hours.
Case in point: January 2014, a small biotech called 22nd Century Group (XXII). “Shares had been going nowhere for a while,” recalls Agora Financial penny stock guru Tim Sykes.
Then on a Friday, something flashed across his screen — a press release announcing the firm had taken a procedural step toward listing on a major exchange. “That meant big Wall Street investors like pension funds would soon be able to buy shares,” Tim explains.
But none of the major financial news outlets picked up on the story. The company was too small, and the announcement too obscure.
In our current day and age, good news travels fast even when the media overlook it.
Blogs, message boards, social media — they all amplify tiny announcements like the one from XXII. Tim knew that’s what would be going on all weekend. By Monday morning, demand for XXII shares would be going ballistic… at which moment he would cash out.
And that’s exactly what happened. The share price jumped 33%. In on Friday, out on Monday. Tim collected $8,780.
This is only one example. Tim has many others that generated even bigger gains — as high as $15,820. And every one of them played out over just a single weekend.
This week, Tim’s ready to show you how to cash in on these weekend trades. As an Agora Financial reader, you have access to an exclusive event he’s hosting this Wednesday at 1:00 p.m. EDT. Please note: Access is first-come, first-served. We can’t guarantee your spot indefinitely. Here’s where you can claim your spot while it’s still available.
To the markets, where the Dow’s respite from trade-war jitters lasted all of one day.
On Friday, the Dow broke an eight-day losing streak. This morning, the Big Board might be starting a new one — down more than 1% as we write at 24,300. If that holds by day’s end, it’ll be the lowest close since early May.
This morning’s Wall Street Journal reports the president is looking at “barring many Chinese companies from investing in U.S. technology firms, and by blocking additional technology exports to Beijing.” Supposedly an announcement will come by week’s end.
Curiously, the tech-heavy Nasdaq and small-cap Russell 2000 — whose companies are less vulnerable to the ups and downs of global trade — are selling off even harder than the Dow.
Gold remains stuck at $1,266. Crude is inching higher at $68.87, adding to Friday’s huge gains after the OPEC nations announced they were easing up on their production caps, but not as much as traders were counting on.
One economic number of note — new home sales rising 6.7% in May, better than expected. Perhaps that’s because new construction became marginally more affordable; the median price slipped 3.3% to $313,000.
The latest sell-off notwithstanding, the stock market rally dating back to late 2016 remains intact.
That’s the takeaway from a chart passed along by our resident quant Jonas Elmerraji. Jonas is focused these days on his proprietary Archimedes trading platform, but now and then he’ll still look at old-fashioned chart action. Check out this chart of the S&P 500, and take note of the solid blue line…
“Late last year, things started to get overheated,” he tells us. “As you can see, the S&P moved further above its trendline than it had at any time in 2017. Then we saw the nasty correction earlier this year that spooked lots of investors. After all, they’d become accustomed to the stock market only moving up and to the right.”
And now? “The uptrend that propelled the S&P higher for all of 2017 is back in play here, after being successfully tested three times since February.”
For all we know, a fourth test is on the way. But even so, the S&P sits as we write at 2,722. From here it would have to tumble another 2% before the post-Election Day rally would possibly be in danger.
For the record: Turkey’s president Recep Tayyip Erdoğan won reelection outright yesterday — he won’t be facing a runoff.
We mentioned on Saturday how the elections took place amid the backdrop of a plunging Turkish lira and accelerating inflation. It wasn’t enough to derail Erdoğan’s reelection hopes, and now he’ll begin a new term with vast new powers under a referendum approved last year.
But the currency crisis still looms — the sort of crisis that can set off “contagion” in asset classes all over the world, even U.S. stocks. We’ll stay on top of it…
Presenting the biggest beneficiary of the Supreme Court’s sales-tax ruling last week…
Avalara Inc. (AVLR) is a maker of software that could help small online businesses comply with the crazy-quilt of state and local sales taxes. It went public on Friday, June 15. The court’s ruling came on Thursday the 21st. Good timing, huh?
Under the ruling, states can now require online retailers to charge sales tax based on where the buyer lives. It’s complicated enough given the existence of 10,814 state and local sales tax jurisdictions across the country. Even more complicated is this: Different states are sure to set different thresholds for when an online retailer must start collecting tax.
In South Dakota — the state that won its case before the justices last week — a retailer is exempt if sales in the Mount Rushmore State are lower than $100,000 (manageable) or fewer than 200 items of merchandise (uhh, maybe not so manageable).
But who’s to say other states will do likewise? In addition, different jurisdictions exempt different goods. “Part of the biggest challenge for the sellers is to know in each particular state if its goods and services are subject to sales tax, because there’s no uniform definition,” says Darcy Kooiker from the Ryan tax firm.
The other big winner in addition to Avalara? Amazon, which is set to expand its already vast network of third-party sellers. “It is easy for a seller using Amazon’s platform to collect and remit sales tax,” University of Wisconsin management prof Hart Posen tells NBC News. “This should further push small retailers toward Amazon’s platform.”
Another sign we’re in the late boom stage of the boom-bust cycle: People are taking out installment loans for their vacations.
“In recent years,” says a MarketWatch story, “companies have increasingly allowed travelers to book airfare, hotels and amusement park tickets, with the promise they’ll pay later.” The article spotlights an outfit called Affirm, whose interest charges are imposed as a flat fee at the start of the payment process. (Which sounds nice, but in practice it can work out to a 30% interest rate.)
The article had the good sense to quote a financial adviser who says, “If you can’t afford to pay for your vacation out of cash on hand, don’t take a vacation.”
Oy. The only thing that would make this situation more insane is if Wall Street figured out how to securitize these vacation loans — you know, bundling them up like subprime mortgages back in the day and selling them to investors.
To the mailbag: For a change, let’s hear from a millennial about Social Security.
“I feel this is just one more lie the government has put in place to keep people complacent while the ship sinks and our population grows.
“Now, and even while I was younger, I remember talks about Social Security and how my generation would never see the money collected, and that was at least two decades ago. I have never once thought about collecting Social Security, but I would like for my parents to take advantage of whatever’s left before it falls.
“I work in health care and see what programs like Social Security and Medicare do for individuals collecting from the government tit — it’s absolute garbage. I am not ignorant enough to think that a private company or our government would have the ability to solve these massive issues of ‘social programs,’ but what we have now is completely useless and will only serve as an example of what not to do in the future.
“And universal basic income? That’s a surefire way to just divide us, the people, even more than we already are.”
“I am now 75 and a half,” writes our final correspondent today. “I worked full time to age 74 and a half making a yearly salary in low six numbers.
“I loved working and didn’t want to stop but my wife thought it was time — she’s 79 and started collecting at 62 and a half.
“I waited until age 70 to collect and would have delayed even further since SS income added to my full-time pay put us into higher tax bracket and caused additional Medicare Part B payments. Wife was not happy about that since her SS monthly payments are much lower than mine. But she was hit nonetheless.
“SS grossed up my monthly SS payment each year I worked beyond age 70 by the amount I contributed from my yearly earnings amortized over my projected life span. So I get the age 70 SS monthly payment in addition to the yearly bumps from my earnings each year past age 70 until I retired.
“Will I ever collect what I contributed? Depends on how long I live and if they ever start means testing. At my age I may be safe, but I’m not sure. Fortunately, there are enough boomers behind me that would be impacted and we may be able to convince the powers that be to leave our SS alone – maybe.”
The 5: Doubtful they’ll mess with benefits for anyone currently collecting. As we said a few weeks ago, anyone currently over 50 will probably collect what’s promised at what’s now considered “full retirement age,” although they might mess with spousal benefits.
We’re not even sure means testing is a sure thing. But the cap on income that’s subject to the FICA tax is probably a goner whenever the next round of “reform” is enacted. (And no, those added contributions will not add to your future benefit, else what would be the point?)
The 5 Min. Forecast
P.S. We’re now less than 48 hours away from Tim Sykes’ next big event — where he’ll reveal how you can collect “weekend payouts” — big gains from buying on Friday and selling on Monday.
We’re talking payouts of $8,780… $9,100… even $15,820. And all while you’re enjoying your weekend.
This event is Wednesday at 1:00 p.m. EDT. Access is free, but limited: Click here to learn more and secure your spot now.