Cover story: By 2050, one out of every six people—or 1.6 billion—will be over the age of 65, according to the UN’s latest estimates, creating a major problem for graying countries that must find fiscally sustainable ways to support longer life spans without bankrupting governments, overburdening the young, or abandoning those who need care; Japan is at the leading edge of the trend, forcing it to tackle the challenge head on, while China has more time.
Tech Trader: Positive on ATVI: Company’s King division just released the 5,000th level for Candy Crush Saga, and well over half a billion unique users have played the game since its 2012 launch, making it the fifth-biggest revenue generator in mobile gaming.
Trader: “While good low-volume performance used to be a leading indicator of economic and general stock market weakness, in more recent years it has become a ‘contrarian indicator’ like other measures of investor sentiment,” says Jim Paulsen of Leuthold Group—and that augurs well for stocks during the next six months; Pension expenses could rise because interest rates are falling, a small negative for corporate earnings, but the impact on each sector of the market will differ widely; BA investors have largely focused on when the troubled 737 MAX jet will return to service, but like with most issues related to the plane, the process may not be as simple as investors would hope.
Profile: Bob Bergson, manager of the Northern Small Cap Core fund, uses a factor-based approach to give investors exposure to the broader small-cap universe—minus the worst of the worst (top 10 holdings: WWD, EXPO, HAE, MMS, FCFS, PRI, COUP, IDA, PLNT, FIVE).
Interview: Jens Nordvig, a top-ranked currency strategist on Wall Street before he founded Exante Data, a macro research consulting firm, talks about the dollar, the trade war, and the euro.
Features: 1) Positive on DHI, MCK, T: Barron’s searched for inexpensive stocks with some recent price momentum, looking for flawed companies that are showing signs of improvement but that aren’t perpetual turnaround candidates that never seem to do better; 2) Accepted accounting practices allow companies at times to present numbers that, while accurate, may not provide the clearest picture to investors—which means investors need to learn to ask the right kinds of questions and look in the right places in the financial statement; 3) “Eight years after a radical pension overhaul, Italy is still trying to find the right formula to satisfy its citizens’ retirement expectations while meeting European Union fiscal requirements.”
European Trader: Positive on Balfour Beatty: London-based infrastructure company “could provide a solid foundation for investors looking to diversify internationally,” and shares seem to be overly discounting negative scenarios, such as the company’s U.S. housing business.
Emerging Markets: The International Monetary Fund must soon decide whether to lend Argentina another $5.4B—and a decision to not open the coffers could turn an emergency into a catastrophe on the ground, and signal failure for the biggest bailout in the fund’s history.
Commodities: “U.S. benchmark oil has outperformed the global benchmark this year, leading prices in recent weeks to the narrowest spread in more than a year—and analysts say the move isn’t about the trade war.”
Streetwise: Positive on LULU, NKE, VFC: Amid shifting consumer taste, the “athleisure” trend is here to stay and not a fad, says columnist Jack Hough, which is good for shareholders of the big players in the sector, and a problem for “office fashion” companies such as RL, HBI, and PVH.