Author: Dorian Holden

Saudi Aramco – the world’s largest IPO has already crushed expectations.

On its first day, shares listed on the Saudi Tadawul were up 10%, giving it a valuation of $1.88 trillion.  That’s also well above its earlier valuation of $1.7 trillion announced when the share pricing was disclosed days ago.  Unbelievably, $1.88 trillion was still below estimates.

Crown Prince Mohammed bin Salman was hoping for $2 trillion.

Still, “We are happy on the results today. And you have seen the market responds to our results, the company will continue to be the leader globally when it comes to the energy sector and at the same time we are looking at sustained and growing dividends to our investors. At the same time, we continue our growth strategy, increasing profitability across cycles,” said Aramco CEO Amin Nasser, as quoted by CNBC.

At the moment, the stock only trades in Saudi Arabia.

According to CNN, “The vast majority of buyers for the stock are in Saudi Arabia. Samba Capital, which managed the IPO, said Tuesday that 97% of retail investors who received shares were from the country. More than 75% of shares sold to institutional investors went to Saudi companies, funds and government institutions.”

While there are hopes it’ll eventually list in the U.S., it shelved at the moment with concerns over lower oil prices, climate change, and geopolitical risks.

At the moment, the company is more valuable than Exxon M0bil, Chevron, and BP combined.

It’ll be interesting to see if the momentum can continue for the stock, and if it’ll reach the U.S.

Earlier this week, House Democrats moved forward with impeachment.  

In fact, they charged President Trump with abuse of power and obstruction of justice on Congress.  They allege they’re “charging the president of the United States, Donald J. Trump, with committing high crimes and misdemeanors,” as quoted by CNBC.

“Unlike President Trump, we understand that our duty, first and foremost, is to protect the Constitution and to protect the interests of the American people,” Judiciary Chairman Jerrold Nadler said.  “That is why we must take this solemn step today. Trump’s pressure campaign on Ukraine “compromised our national security and threatened the integrity of our elections.”

However, even if it Passes the House, It’ll Fail in the Senate

Republicans are not likely to support impeachment in the Senate — where two-thirds majority is needed to remove a sitting President.  Plus, Republicans may skip witnesses altogether in the impeachment trial by January 2020.

While the White House wants to call House Intelligence Committee Chairman Adam Schiff, Hunter Biden and the whistleblower, Republicans really don’t want to drag the U.S. through a drawn oil trial.  

“I think a protracted period where there are motions to call witnesses offered by both sides and lots of votes is not going to be terribly popular with either side. I think there’s going to be a desire to wrap this up in at least somewhat of a timely way,” Sen. John Thune said, quoted by The Hill.   

“When 51 of us say we’ve heard enough, the trial is going to end,” Sen Lindsey Graham, as quoted by Fox News. “The president’s going to be acquitted. “He [President Trump] may want to call Schiff, he may want to call Hunter Biden, he may want to call Joe Biden. But here’s my advice to the president: If the Senate is ready to vote and ready to acquit you, you should celebrate that. And we can look at this other stuff outside of impeachment.”

At this point, it’s all a wait-and-see.  Stay tuned for more on this developing story.

The House is moving forward with impeachment.

Moments ago, Democrats announced they will vote on whether to remove President Trump on two specific articles – abuse of power and obstruction of justice on Congress.  They allege they’re “charging the president of the United States, Donald J. Trump, with committing high crimes and misdemeanors,” as quoted by CNBC.

“Unlike President Trump, we understand that our duty, first and foremost, is to protect the Constitution and to protect the interests of the American people,” Judiciary Chairman Jerrold Nadler said.  “That is why we must take this solemn step today. Trump’s pressure campaign on Ukraine “compromised our national security and threatened the integrity of our elections.”

In return, Trump tweeted, “To Impeach a President who has proven through results, including producing perhaps the strongest economy in our country’s history, to have one of the most successful presidencies ever, and most importantly, who has done NOTHING wrong, is sheer Political Madness!” 

However, even if it Passes the House, It’ll Fail in the Senate

Republicans are not likely to support impeachment in the Senate — where two-thirds majority is needed to remove a sitting President.  Considering that GOP leaders have already dug in, and that not one House Republican voted in favor of impeachment, this “show” will go nowhere.

However, once it does make its way to the U.S. Senate, President Trump already said they would call on Pelosi to testify, along with House Intelligence Chairman Adam Schiff, former Vice President Joe Biden and his son, Hunter.  

In addition, Trump wants the House to push a “fast” impeachment, so it can move to the Senate.  “They have no Impeachment case and are demeaning our Country,” Trump said, as quoted by NBC News. “But nothing matters to them, they have gone crazy. I say, if you are going to impeach me, do it now, fast, so we can have a fair trial in the Senate, and so that our Country can get back to business.”

This should be interesting. Stay tuned for more on this developing story.

Investor heads are spinning.

Earlier today, futures were down more than 100 points after the South China Morning Post said China and the U.S. were unlikely to reach a trade deal ahead of the Sunday deadline.  

Then, futures raced higher on reports the U.S. and China are planning to delay the 15% tariffs set for December 15, as noted by The Wall Street Journal.  All as both sides continue to “haggle over how to get Beijing to commit to massive purchases of U.S. farm products.” 

However, nothing is set in stone.

It’s all up to President Trump if he’ll extend the Sunday deadline.  

What we do know is that the U.S. wants China to guarantee its pledge to buy more American soybeans, poultry, and agricultural products, which appears to have happened.  In fact, between September and November 2019, China imports of soybeans increased 13 times year over year.

 “Trump has made clear that more farm buys from China are his top priority for a near-term deal with Beijing. Other issues at the heart of the trade war include Chinese subsidies to domestic companies and pressure on U.S. firms to hand over technology,” says The Wall Street Journal.

At the same time, China may have guaranteed a tariff delay, as well.

All after removing some tariffs on U.S. agricultural goods, including soybeans and pork.  

“The goal (of this move) is to expand purchases and reassure the United States,” said a Chinese source who advises Beijing, as quoted by CNBC. “It should be interpreted as a positive signal. Despite the many political difficulties, the two sides face, economic and trade cooperation and moves to stop the escalation of the trade war are in the interest of both parties.”

China has also said it hopes to make a trade deal with the U.S. as soon as possible.  

At this point, no one has any idea what may happen.  It’s all a wait-and-see.

The Trump Administration’s December 15 deadline is just days away.  

While many analysts expect for them to be delayed, that’s not a guarantee. 

“That’s the biggest thing in the room next week. I don’t think he’s going to raise them. I think they’ll find a reason,” said James Paulsen, chief investment strategist at Leuthold Group, as quoted by CNBC. Unfortunately, there’s no real clarity on what may happen.

While some say there’s progress, Trump has said, “It may be better to wait until after the 2020 presidential election to strike a trade deal.  “I have no deadline,” he said, as quoted by CNN. “In some ways I think it’s better to wait for after the election, if you want to know the truth.”  

Trump even noted that if “we don’t make a deal with China, I’ll just raise the tariffs even higher,” as noted by Markets Insider.  “They’d like to have a rollback.  I haven’t agreed to anything,” referring to China’s claim the U.S. agreed to life some tariffs.

At the same time, China may have guaranteed a tariff delay, as well.

All after removing some tariffs on U.S. agricultural goods, including soybeans and pork.  

“The goal (of this move) is to expand purchases and reassure the United States,” said a Chinese source who advises Beijing, as quoted by CNBC. “It should be interpreted as a positive signal. Despite the many political difficulties, the two sides face, economic and trade cooperation and moves to stop the escalation of the trade war are in the interest of both parties.”

China has also said it hopes to make a trade deal with the U.S. as soon as possible.  

At this point, no one has any idea what may happen.  It’s all a wait-and-see. The only certainty with the trade war is that folks are exhausted from it.

Goldman Sachs has an interesting trading strategy for 2020.

“Buy 2019’s laggards as they will likely be 2020’s early leaders,” they say.

“The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman. The prior year’s bottom-third stocks have outperformed the S&P 500 in the first quarter for 11 times out of the past 17 years with an average 1.4% extra return on the benchmark, the bank said. In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said, as quoted by CNBC.

Some of those top stocks so far include Westlake Chemical, L Brands, and Under Armour.  

In short, it’s like buying the Dogs of the Dow.

While the 2020 Dogs haven’t been released to the hounds just yet, the strategy is simple.  You’re buying toe 10 top Dow dividend-paying stocks that fell out of favor at the start of the year.  You then cash out by the end of the year, and repeat.

For 2016, the Dogs of the Dow returned 16%. 

In 2017, 19%.  In 2018, they eked out a 1% win, as the Dow lost nearly 6%.

For 2019, the Dogs of the Dow are off to the races, as we noted in a previous article.

• IBM ran from $108 to $136 with a dividend yield of 4.77%
• Exxon Mobil ran from nearly $65 to $69 with a yield of 5.05%
• Verizon ran from $53 to nearly $60 with a yield of 4.14%
• Chevron ran from $107 to $121 with a yield of 4.03%
• Pfizer didn’t do too well so far, falling from $41 to $38.  PFE yields 3.76%
• Coca-Cola ran from $46 to $53 with a dividend yield of nearly 3%
• JP Morgan Chase ran from $93 to $131 with a yield of 2.75%
• Procter & Gamble ran from $87 to $121 with a yield of 2.46%
• Cisco ran from $41 to $45 so far with a yield of 3.08%
• Merck ran from $73 a share to $86 with a yield of 2.82%

Both are great strategies that could very well pay off – with a good deal of patience.

Speaker Nancy Pelosi just asked the House to proceed with articles of impeachment.

“The president’s actions have seriously violated the Constitution,” Pelosi, D-Calif., said in a statement, as quoted by CNBC.  “Sadly, but with confidence and humility, with allegiance to our founders, and our heart full of love for America, today I am asking our chairmen to proceed with the articles of impeachment.”

“The facts are uncontested,” Pelosi added. “The president abused his power for his own personal political benefit at the expense of our national security by withholding military aid and crucial oval office meeting in exchange for an announcement of an investigation into his political rival.”

Her announcement comes just a day after three of four witnesses testified that President Trump did commit impeachable offenses, including a campaign to pressure the Ukraine over Biden.  

However, the Democrats are well aware of the tough road in front of them.

Republicans are not likely to support impeachment in the Senate — where two-thirds majority is needed to remove a sitting President.  Considering that GOP leaders have already dug in, and that not only House Republican voted in favor of impeachment, this “show” will go nowhere.

However, once it does make its way to the U.S. Senate, President Trump already said they would call on Pelosi to testify, along with House Intelligence Chairman Adam Schiff, former Vice President Joe Biden and his son, Hunter.  

In addition, Trump wants the House to push a “fast” impeachment, so it can move to the Senate.  

“They have no Impeachment case and are demeaning our Country,” Trump said, as quoted by NBC News. “But nothing matters to them, they have gone crazy. I say, if you are going to impeach me, do it now, fast, so we can have a fair trial in the Senate, and so that our Country can get back to business.”

This should be interesting. Stay tuned for more on this developing story.

The trade war has reached peak insanity.

Just yesterday, the Dow Jones plunged more than 680 points after President Trump said it may be better to wait until after the 2020 election to strike a deal.  

“I have no deadline,” he said, as quoted by CNN. “In some ways I think it’s better to wait for after the election, if you want to know the truth.”  

Even Wilbur Ross said Trump is “serious” when he said trade talks could last beyond the 2020 election, as reported by MarketWatch. Worse, Ross said Trump would impose another round of tariffs on Chinese goods on Dec. 15 unless there was “some real reason to postpone them.”

Now, just a day later, Dow futures are up 146 points on a report the U.S. and China may complete a phase one agreement before the tariff deadline on December 15, says Bloomberg. “Outstanding issues in the talks include how to guarantee China’s purchases of U.S. agricultural goods and exactly which tariffs to roll back.”

But wait, there’s more.

CNBC’s Eunice Yoon just poured cold water on that Bloomberg report.  

In fact, per a tweet, she noted, “My sources here say China thought it had an agreement in principle on tariff rollback in early Nov but President Trump backed away from it.  So unclear how “close” two sides really are.

Now,  no one has a clue who has the story right.  But it’ll be interesting to see what happens next.  Stay tuned for more on this developing story.

Markets continue to melt up, even with bad news.

Job growth slowed to a crawl, as private payrolls increased by just 67,000 jobs.  That was well below expectations for 150,000.  

“The job market is losing its shine,” Mark Zandi, chief economist for Moody’s Analytics, as quoted by CNBC. “Manufacturers, commodity producers, and retailers are shedding jobs. Job openings are declining, and if job growth slows any further unemployment will increase.”

“The slowdown is more significant than I would have thought, and I do think that goes to the trade war,” he added. “The trade war is doing damage to the economy and the jobs market.”

But wait, there’s more.

On top of that, CEOs are concerned about delivering earnings growth thanks to economic uncertainty, slowing global growth, that pesky trade war, and presidential election uncertainty, according to JP Morgan Chase, as noted by CNBC.  

Consumer confidence just fell for the fourth straight month in November on concerns over business conditions and employment issues, as highlighted by Reuters.  “The economy is growing, but it would take a politician to say it is in good, let alone great shape,” said Joel Naroff, chief economist at Naroff Economic Advisors.

Then, just this morning, Bloomberg reported the U.S. and China may complete a phase one agreement before the tariff deadline on December 15, according to Bloomberg.  But there’s just one problem. CNBC just denied progress.  

In fact, CNBC’s Eunice Yoon just poured cold water on that Bloomberg report, tweeting, “My sources here say China thought it had an agreement in principle on tariff rollback in early Nov but President Trump backed away from it.  So unclear how “close” two sides really are.

Hopefully, things will improve.  But this news doesn’t exude confidence.  

In October 2019, Johnson & Johnson plunged on asbestos concerns from the US FDA.

Investors feared the worst.  All after the company recalled a single lot of Johnson’s Baby Powder.  In fact, according to the company’s press release:

“Out of an abundance of caution, Johnson & Johnson Consumer Inc. (JJCI) announced that it is initiating a voluntary recall in the United States of a single lot of its Johnson’s Baby Powder in response to a U.S. Food and Drug Administration (FDA) test indicating the presence of sub-trace levels of chrysotile asbestos contamination (no greater than 0.00002%) in samples from a single bottle purchased from an online retailer.”

They were taking precautionary steps.

However, it appears the US FDA was wrong, as Johnson & Johnson said recent tests on its Johnson’s Baby Powder was free of asbestos.  According to Reuters, “A total of 155 tests were conducted by two different third-party labs using four different testing methods on samples from the same bottle tested by the FDA’s contracted lab, the company said.”

“The tests are the latest effort by J&J to prove the safety of its widely used consumer product after the test by the FDA prompted J&J to undertake a nationwide recall of one lot of Johnson’s Baby Powder in October.”

Shares of JNJ are now up more than 1.4% on the news to $139.10.