Financial Floyd Blogspot

Good Morning or Afternoon (depending on your time zone), Labor Day weekend is upon us, and with this marks the end of summer. Since most people are out and about, I'll make this a short but informative post.  In a previous post, I highlighted how this could be an issue based on how China handles this issue. MarketWatch recently published an article that is worth reading because it provides some good updates on what has been going on. The unrest in Hong Kong has been going on for over three months and the longer it continues the more it creates issues it causes for China. Hong Kong has had a close relationship with China after British rule and is considered the financial capital of Asia. This unrest creates more tension in an already complicated relationship, so the longer it goes on the more strain it puts on their uneasy agreement. What is not mentioned in the article is that  China is trying to build a better relationship with Taiwan and that country sees Hong Kong as a pr...

Good Morning, We are in the middle of the dog days of summer, but the market is going crazy. Last week was a tumultuous as the market started down and finished the week with news that GE might be running a bigger accounting scandal than Enron. I planned on writing about another topic, but I happened to see an article in  MarketWatch  that was worth touching on. The article mentions 10 macro risks that are currently present in the global economy which could have ripple effects. A couple of key takeaways from the article are: 1. Europe is a mess 2. The threat of China deploying the military to Hong Kong is real 3. The possibility that the US military will be deployed is increasing There was a lot to unpack in the article but the pressures in Europe have created headwinds for their companies and it looks like more might be on the horizon. Between the UK leaving the European Union with no deal, Italy not conforming, and Tariff Man turning his sights to European cou...

Good Morning, If you have been paying attention to the markets, this has been a crazy week. Volatility picked up, and market swings were apparent throughout the week. While this week has been hectic, some new information about lending standards made waves during the latter part of the week. The Wall Street Journal and MarketWatch both reported about alternative data being utilized within the credit approval process. Pertinent information that worth noting from these articles were: Companies (such as Upstart) are incorporating the level of education into the credit approval process Other companies have considered using data based on the school attended Student loan delinquency rates for those that didn't finish college are four times higher than those that did Utilizing alternative data outside of traditional metrics can add additional light on the borrower, but this methodology has the same faults as the current method, which is it lacks context. Th...

Good Morning, Last week was supposed to be all about the Federal Reserve, but the interest rate cut played second fiddle to the return of Tariff Man. On Thursday, President Trump announced that the government was imposing more tariffs on China. CNBC wrote an article that covered this topic along with a summary of the week. A couple of statements that stood out from the article were; The S&P 500 (biggest US companies) and NASDAQ (Technology companies) indexes both had their worst weeks of 2019 The Dow (Industrial companies) had its second-worst week of 2019 The new tariffs are scheduled to start on September 1st but can be rolled back if China purchases more agricultural products Companies have been planning for these tariffs by either purchasing more inputs/goods from China in advance or switching production to countries like Vietnam. On the other side, consumers cannot stock up which forces them to bear the cost of the tariff because companies pass on the price increa...