Download IMIFC Newsletter What happened in the competition this week?

January 25th, 2016
IMIFC Newsletter
Vol. II Issue 8
Current Leaderboard
- TOP 15 YTD
1.timothysamir
35.13%
2.tadrosre
14.23%
3.mAsad
9.39%
4.kimjon26
9.09%
5. OmarAliOsman
7.59%
6.Valentin229
5.54%
7. Zhaoyu3
4.21%
8. Sadaana
1.79%
9. aleyanal
1.54%
What happened in the competition this week?
10.ApoorvaDaneva123 1.23%
11. huangy93
1.18%
12. WahabK
1.01%
13.NFatima
0.94%
Trader fitzpa59 bought 475 shares of Starbucks Corporation (NASDAQ: SBUX) at $57.66/share.
14.Salmanii
0.56%
15. LisaSu
0.39%
Shares of Starbucks have been performing great over the past 12 months - racking up a 42% gain However, the stock has
since pulled back, 11% from its highs, despite recent expansion news about China. Because of the pullback, despite no real
deterioration to its business, now is the time to take advantage.
Remember, there will be
numerous prizes awarded for
participants, ranging from
most risky trader to most
diversified portfolio. So even
if you don‟t place in the top
20, there‟s still a chance you
will get an award!
By Arooj Shakeel, SMA
Trade of the week
Starbucks is an incredibly well-managed company with strong margins, high quality products, and lots of future growth
ahead of it. Unfortunately, it is also one of those companies where the business is firing on all cylinders, but the stock's
valuation is higher than many investors would like to see. However we have to remember that a high quality company
with strong growth rarely comes with a low valuation.
Growth scares out of China are concerning investors, and coupled with falling commodity prices (coffee included) - these
catalysts are driving the broader stock market lower. This is a buying opportunity for investors, as Starbucks' business
continues to benefit. Lower oil prices are good for consumers, especially when it comes to disposable income at places like
restaurants and convenience stores. It may also provide a spark for customers to purchase higher margin products, which
could have an obvious benefit to Starbucks.
I think investors with a long term view will greatly benefit by buying Starbucks at these levels.
By: Anwar Khan, UFA
IMIFC Newsletter
Page 2
What happened in the markets this week?
Macroperspective
Blizzard
A large snowfall such as the one that
blanketed the east coast this weekend in
the US may not only be bad news for
many New Yorkians, but for the economy as a whole. A professor at Johns
Hopkins University said that “for the
month of December 2015, higher-thanaverage temperatures appear to have a
significant effect on jobs, with warmer
weather likely boosting construction
employment above its seasonal norms”.
He suggested that about 23,000 jobs
more than the Labor department had
predicted had been created due to the
warm weather and average payrolls were
higher than expected in October, November, and December. Another Study
by being brought in during the weekend instead of a weekday and
that surveys from the Labor Department for January showed that
showed that in 2015 almost business and households are more prepared for the upcoming cold
50,000 less jobs were missed times. The US economy has bounced back from previous storms, so
due to great weather in De- instead of worrying about the economy you can inform your family
cember, which all had a rela- and friends in the eastern coast of the US to continue building their
tively large positive impact to
snowmen and toboggan all they want.
the local economy. But, with
this new large snowstorm
the bad weather could be an By: Brandon Black, UEC
added weight to our already
depressed economy, and
even worse than previously
imagined because of our
good weather in the past few
months. Luckily the impacts
of the blizzard were drastically reduced
Microperspective
GENERAL MOTORS HIGH HOPES
2016 MODEL
What's Going On Here?
General Motors (GM), America‟s 2nd
most valuable auto company, increased
its expected profit for 2016. On a day
when most of the US stock market sold
off precipitously (again), GM‟s shares
outperformed by about 2.5%.
it pays each quarter to its
shareholders (a.k.a. its
„dividend‟) – both of those
actions are clearly beneficial to existing investors
and helped boost the
stock.
consumers (things like cars, clothes and electronics). But others
are nervous that slowing overall economic growth will hurt consumers‟ willingness to spend money in 2016 (it‟s one of the biggest
current debates in investing right now).
For stocks: Stocks of auto companies have underperformed US
auto sales. That‟s partly because China is most automakers‟ largest market – and last year it was more difficult to generate profits
Why Should I Care?
in China than previous years as selling prices suffered from overThe bigger picture: If GM supply and weaker demand. It‟s also feared that higher US interis right, it will probably
est rates will cause US auto sales to fall: it will lead directly to
mean consumers are doing increased monthly costs for people that borrow money to buy new
What Does This Mean?
GM has benefitted from a great year for well. Many companies and cars/trucks (which is a huge proportion of sales). GM stock is down
investors are expecting
10% so far this year, while Ford is down 13%.
US auto sales and some cost-cutting
that low inflation and
which has resulted in higher
By: Ruslan Nazyrov, UCS
“margins” (meaning more profit for each rising wages will lead to
increased consumer spenddollar of revenue it generated). The result is higher profits. Consequently, GM ing in 2016. Such a scenario would almost certainly
wants to reward its shareholders. It‟s
going to buy back more of its own stock benefit companies that sell
(think: less quantity, higher price) and it “discretionary” goods to
will increase the amount of money that
This Week’s Economic Calendar
MON [25]
TUES:
[26]
McDonald’s Corporation (MCD)
Quarterly earnings
Sprint Corporation
(S)
Quarterly earnings
EIA Petroleum Status report
10:30AM
Alibaba Group Holding Limited (BABA)
Quarterly earnings
Chevron Corporation (CVX)
Quarterly earnings
Packaging Corporation of America
(PKG)
Quarterly earnings
Kimberly-Clark Corporation (KMB)
Quarterly earnings
Procter & Gamble
Company (PG)
Quarterly earnings
Boeing Company
(BA)
Quarterly earnings
Amazon.com, Inc.
(AMZN)
Quarterly earnings
Colgate-Palmolive
Company (CL)
Quarterly earnings
Johnson & Johnson
(JNJ)
Quarterly earnings
Canon, Inc. (CAJ)
Quarterly earnings
Electronic Arts Inc.
(EA)
Quarterly earnings
Whirlpool Corporation (WHR)
Quarterly earnings
WED:
[27]
THURS:
[28]
FRI:
[29]