Todd Capital Monday Market Update: 8/6/2018

A very Happy First Manic Monday of August! My, My seem like the summer weeks have just flown by in the blink of an eye. And now we’re in the closing stretch of the summer session and then we’ll be gearing up for the holiday madness that will be upon the market in the Sept-Dec months. At the present moment of writing this email all the major indexes are positive and there some interesting details to get into.

The two major stock indexes in China have lost one-quarter of their value from highs this year. The the sentiment coming out of China is this will not deter the nation from its current trade war course with the U.S. On Today, China’s Shanghai composite fell 1.3 percent, extending its losing streak to four consecutive trading sessions. The index is down about 18% so far this year compared to the S&P 500’s 6% gain.

At 26% of the S&P 500, technology stocks are a much larger component of the index than weightings in other top U.S. equity benchmarks.

Alphabet and Facebook both are moving to a new communication services sector from technology, but will together represent close to 45% of it. I’m not sure why an index is taking steps to stem the influence that technology is having on its daily average movements. We are increasingly becoming a tech society globally, it will come a time where 80% of the influence on the averages will be tech driven. It will soon be the new normal and nothing can stop it now.

A looming Federal Communications Commission deadline could spur telecom companies to hurry up deal talks before restrictions on their discussions tie their hands. The FCC said in a public notice that it would stop accepting applications on Sept. 18 for two planned wireless-airwave auctions later in the year. The deadline could also prevent telecom companies from holding broader talks about acquisitions, partnerships and other deals unrelated to the auction.
Starting Friday, customers can get T-Mobile Essential, a $60-a-month plan with unlimited data and standard-definition video. A second line will cost $30, and additional lines are $10 if enrolled in an auto-payment plan. The Essential offer is $10 less than the company’s current unlimited plan, which comes with a Netflix subscription and covers fees and taxes.

The new lower price from T-Mobile matches Sprint Corp.’s unlimited plan and is $15 less than the base offer at Verizon Communications Inc., the market leader. It’s also $10 less than AT&T Inc.’s base unlimited plan.

Sprint reported its fiscal Q1 2018 results on August 1. Sprint’s strong fiscal Q1 2018 financial results suggest that the company’s turnaround is on track and that it is indeed holding its own in an intensely competitive wireless space. The company reported better-than-expected earnings and revenues. It posted its third consecutive quarter of net income, its tenth consecutive quarter of operating income, and its highest adjusted EBITDA in the last 11 years. The company also posted its 12th consecutive quarter of postpaid phone net additions.

This morning’s top story was the surprise announcement that longtime PepsiCo PEP CEO Indra Nooyi is planning to leave the company’s top position in early October. The widely-praised executive has grown PepsiCo’s sales by 80% in her 12 years at its helm, and her departure leaves just 24 women in charge of Fortune 500 companies. Pepsi has has been losing market shares are customers are moving to more health centric habits. It will be interesting to see how the company pivots in this new environment.

Information from this weekly email is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for analysis  purposes only. Be sure to understand all risks involved with each strategy, before attempting to place any trade.

Per usual hope you all have a great and prosperous week and an even better investment week. Will talk to you soon!!

 

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Jamaal W Vetose

Todd Capital Investments

Director of Research & Analysis

 

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