Stock Investing

We are downgrading our recommendation on Federated Investors, Inc. (FII) to Underperform from Neutral based on expected downward pressure on assets under management (AUM), flows and margins. Regulatory backdrop, waning equity markets and sluggish global economic growth are expected to keep earnings under pressure.

Federateds lowered AUM has resulted in a negative organic growth in the core business as investors are transferring cash from money market funds to higher yielding bank deposits or investments across the fixed income universe and equities.

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I’m always on the lookout for things to write about and subscriber questions are always an interesting place to begin. For example, someone wrote this morning asking the following:

“Japan has now raised their reactor crisis to Level 7, the highest level and equal to the Chernobyl disaster. Is there any chart information from the Chernobyl disaster that might help us?”

At first I thought linking a nuclear reactor disaster to the US stock market was unusual but, after giving it some more thought, I realized that actually there was value in looking back to see how the market reacted then and comparing it to what might happen in reaction to the current one.

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June Jobs Report
Like a bad moon rising, the Employment Situation Report for June produced an ominous warning for traders in the premarket Friday. After yesterday’s ADP Private Employment Report offered hope with its estimate for 157K in private nonfarm payroll growth, the Department of Labor pulled the rug right out from under our feet today. The news dominated the business wire, but we’ve got it all covered for you here below.

The DOL reported that June’s unemployment rate worsened to 9.2%, up from 9.1% in May. Economists expected the rate to stick at 9.1% in what was clearly a poor period. Many found worse news in the Nonfarm Payrolls number, which indicated just 18K jobs were created on net in June. Aga

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Medical technology giant St. Jude (STJ – Analyst Report) reported that the U.S. Food and Drug Administration (“FDA”) has permitted the company to expand a study evaluating the effectiveness of its deep brain stimulation (“DBS”) system in treating severe depression.

The study dubbed “Brodmann Area 25 Deep Brain Neurostimulation (BROADEN)” is investigating whether stimulation of a region in the brain, called Brodmann Area 25 (BA25), with the company’s Libra DBS system, is safe and effective in treating patients with severe depression who have failed multiple therapies.

The FDA approval allows the BROADEN study to reach a maximum of 20 sites across the U.S. and enroll up to 125 patients. Prior to this

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The Weekly Applications Survey, produced by the Mortgage Bankers Association (MBA), today offered bad news on the headline but a mixed message for those interested in a fuller read. I suppose that’s what you have me for…

The Mortgage Bankers Association’s weekly report of mortgage activity showed another decline. Last week’s data produced a decline as well, which came even despite improved mortgage rates. This week, a sharp spike in mortgage rates drove down refinancing activity and the overall metric. We suspect this nascent rising rate trend from a June trough could also be behind last week’s drop in mortgage activity, as the interest rate data are derived by a simple average of contracted fixed rate mortgages. The ris

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