These money and investing stories were popular with MarketWatch readers over the past week. Rebecca Nakamanya rolls her eyes, dismissing a question about school fees. What really worries her is how to feed three children and a jobless partner on a daily wage of less than $3, minus transport to and from her job as a cook. Israeli regulators on Sunday announced they ordered a U.S.-based evangelical broadcaster taken off the air, saying the channel hid its missionary agenda when it applied for a license. Key questions for the second half include how much more can be expected of the expensive growth-stock goliaths in pushing the indexes forward as investors wait for the recovery to gain traction?
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These money and investing stories, popular with MarketWatch readers over the past week, offer ideas about how to manage your financial portfolio when investors are concerned about rising U.S. coronavirus cases, continued business shutdowns, and the potential for unwelcome economic- and corporate earnings news as the second quarter wraps up.
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Author Nassim Taleb offers the notion that investors should be hedged against so-called tail risk, which refer to extreme events that also have a low probability of happening in a distribution of outcomes.
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Women ‘on precipice’ in developing countries amid COVID-19
KAMPALA, Uganda (AP) – Rebecca Nakamanya rolls her eyes, dismissing a question about school fees. What really worries her is how to feed three children and a jobless partner on a daily wage of less than $3, minus transport to and from her job as a cook.
“We have not even started thinking about school fees,” she says. “When we don’t have what to eat? When the landlord is also waiting?”
In the usually bustling labyrinth of shops surrounding a bus terminal in Uganda’s capital, Kampala, she and other women sit idle in their open-air restaurant, waiting for customers who rarely come.
They are fortunate to be working at all. Business has been so poor under coronavirus lockdown measures that their nearest rivals have shut down. Their restaurant remains open mainly because the landlord deferred rent payments, a rare gesture of goodwill.
The COVID-19 pandemic means that millions of women in Africa and other developing regions could lose years of success in contributing to household incomes, asserting their independence and expanding financial inclusion.
Often they are paid at the end of each day, a hand-to-mouth existence that has consequences for the whole family when business is bleak. Now many are increasingly under pressure as they deplete their savings and landlords threaten eviction.
The impact of COVID-19 “has the face of the women,” especially in Africa, Bineta Diop, an African Union special envoy, told reporters this month.
Although lockdown measures have affected 81% of the global workforce, “women’s economic and productive lives will be affected disproportionately and different than men,” the United Nations said in April.
“Across the globe, women earn less, save less, hold less secure jobs, are more likely to be employed in the informal sector. They have less access to social protections and are the majority of single-parent households. Their capacity to absorb economic shock is therefore less than that of men.”
More than 70% of African women in non-agricultural jobs are employed in the informal sector such as street and market vending, work that requires no diplomas, resumes or formal approval. They don’t pay taxes, but in difficult times that means they’re not likely to benefit from government relief.
In Uganda, which had 848 confirmed coronavirus cases as of Sunday, authorities say restrictions on close-contact businesses such as beauty salons are necessary to prevent a sharp rise in infections. Many men also work in the informal sector but vehicle mechanics, metal fabricators, taxi operators and carpenters – who are often men – are now allowed to operate.
The sectors seen as being at high risk of job losses this year – accommodation and food services; real estate, business and administrative services; manufacturing and the wholesale/retail trade – employ 527 million women worldwide, representing 41% of total female employment, compared to 35% of total male employment, the International Labor Organization said last month.
The numbers suggest “women’s employment is likely to be hit more severely than men’s by the current crisis,” it added.
Many women face further distress as some local authorities in Africa, claiming to be improving infrastructure and protecting citizens, tear down dilapidated markets and restrict access to public spaces in which women are more likely to work. Such demolitions have been reported in Congo, Zimbabwe and Kenya.
In a report this month the humanitarian group CARE said the pandemic has “a disproportionate impact on the very women entrepreneurs who have worked hard so hard to lift themselves out of poverty.” It cited Guatemala, where 96% of women entrepreneurs benefiting from the group’s programs can no longer afford basic food items.
The international response to the pandemic “needs to include a strong focus on the economic justice and rights of women” to retain progress made over decades in gender equality, said Reintje van Haeringen, a CARE official.
Grace Twisimire, 25, operates a once-thriving shop in Kampala. She said she now can go hours without selling even a pair of plastic clogs that go for less than $2. She quickly rises to her feet when a potential customer passes by, then slowly settles into her seat when they walk away. Dust has settled over the jeans hanging by the doorway.
“There is no money now,” she said. “There are no people. I don’t know, but if business does not improve I may go back to the village.”
In the streets of Kampala women squat on curbs, selling everything from passion fruit to undergarments. But they must look out for law enforcement officials who occasionally swoop in to confiscate goods sold in undesignated markets. Recently there was public anger after men in military uniform were seen whipping women carrying baskets of fruit on their heads.
“We just run. Otherwise they will take our things,” said Gladys Afoyocan, a basket heaped with passion fruit in her lap. “I do this for my children. Our children must stay alive.”
The mother of five now needs a week or longer to sell a single bag of fruit. Before the outbreak, two days were usually enough.
“What can I do now?” she said. “This is my business.”
Even relatively comfortable entrepreneurs such as Marion Namutebi, who runs a restaurant specializing in local delicacies, have shut down operations and furloughed workers until further notice. This is the first time she’s had to close since since the restaurant opened in 2014.
“Business was just not adding up,” she said. “For many people, going to the restaurant is now a luxury.”
Copyright © 2020 The Washington Times, LLC.
Author: The Washington Times http://www.washingtontimes.com
Israel orders U.S.-based Christian TV channel off air
JERUSALEM — Israeli regulators on Sunday announced they ordered a U.S.-based evangelical broadcaster taken off the air, saying the channel hid its missionary agenda when it applied for a license.
In his decision, Asher Biton, the chairman of the Cable and Satellite Broadcasting Council, said he had informed “GOD TV” on Thursday that it had seven days to stop broadcasting.
“The channel appeals to Jews with Christian content,” he wrote. “Its original request,” he said, stated that it was a “station targeting the Christian population.”
The decision was first reported by the Haaretz daily.
The controversy over GOD TV’s “Shelanu” station has put Israel and its evangelical Christian supporters in an awkward position, exposing tensions the two sides have long papered over.
Evangelical Christians, particularly in the United States, are among the strongest supporters of Israel, viewing it as the fulfillment of biblical prophecy. Some see it as the harbinger of a second coming of Jesus Christ and the end of days.
Israel has long welcomed evangelicals’ political and financial support, especially as their influence over the White House has risen during the Trump administration, and it has largely shrugged off concerns about any hidden religious agenda.
But most Jews view any effort to convert them to Christianity as deeply offensive, a legacy of centuries of persecution and forced conversion at the hands of Christian rulers. In part because of those sensitivities, evangelical Christians, who generally believe salvation can only come through Jesus and preach the Gospel worldwide, rarely target Jews.
In a statement, Shelanu said it was stunned by what it called Biton’s “unprofessional decision.”
It said its existing license “stated unequivocally” that it would broadcast its content in Hebrew to the Israeli public. Most Christians in the Holy Land speak Arabic. “Therefore it is not at all clear what was wrong beyond political considerations,” it said.
Ron Cantor, Shelanu’s Israeli spokesman, said the station would reapply for a license. He said the station’s management hopes the council will approve the request “and thus avoids a severe diplomatic incident with hundreds of millions of pro-Israel evangelical Christians worldwide.”
When GOD TV reached its seven-year contract with Israel’s main cable provider earlier this year, it presented itself as producing content for Christians.
But in a video message that was later taken down, GOD TV CEO Ward Simpson suggested its real aim was to convince Jews to accept Jesus as their messiah.
“God has supernaturally opened the door for us to take the Gospel of Jesus into the homes and lives and hearts of his Jewish people,” Simpson said in the video.
In a subsequent video, Simpson apologized for any offensive remarks and said GOD TV would comply with all regulations.
Freedom of religion is enshrined in Israeli law, and proselytizing is allowed as long as missionary activities are not directed at minors and do not involve economic coercion.
GOD TV was founded in the U.K. in 1995 and eventually grew into a 24-hour network with offices in several countries. Its international broadcasting licenses are held by a Florida-based non-profit. It claims to reach 300 million households worldwide.
Author: The Washington Times http://www.washingtontimes.com
Here are the key questions for the stock market heading into the second half of the year
Halftime of the year 2020 is nearly here, and the bulls are tired after mounting a furious comeback to narrow what was a deep deficit after the first quarter.
Fatigue was to be expected after the best 11-week sprint in market history, a gain of 44% in the S&P 500 from March 23 through June 8. And under normal circumstances, stocks giving back one-sixth of a headlong rally, as the index has the past three weeks, would be viewed as utterly routine. And, chances are, it is a routine if uneasy pullback.
But very little about this year has been typical, even if some of the rhythms are familiar. In a normal year, the S&P 500 being down 6% halfway through would have investors asking, “What went wrong?” rather than “Why isn’t it down a lot more?” And in fact it’s not too common for the market to be sitting on such losses near midyear.
Here is the 2020 course of the S&P 500 against the path from the only three years of the past 16 in a similar spot at this point: One year when a grinding bear market turned catastrophic (2008); the next year (2009) when a powerful new bull market began after a climactic March bottom; and a third (2010) when worries about a weak recovery and debt indigestion caused the first gut check of what would become a decade-long uptrend.
Of course, the trajectory of the Covid pandemic and consumer and business adaptations to it will be the main headline driver of how markets act from here.
But in more market-specific terms, the way things go in the coming months comes down to a few key questions:
- Can this market continue acting like an early (or thoroughly renewed) bull phase, with broad strength, cyclical-stock leadership and an ability to look through near-term economic struggle?
- How much more can be expected of the expensive growth-stock goliaths in pushing the indexes forward as investors wait for the recovery to gain traction?
- Is there still enough cash and caution lying about the market to buffer the downside and serve as fuel for rally-chasing in coming months?
The powerful March-June rally ticked several of the boxes for those who try to certify important, durable market lows and recoveries. The persistence of the price gains, the amount of losses recouped in a brief time and the rare breadth of the stocks showing extreme momentum had technical strategists calling it an early bull market. The forward returns after the kind of upward lunge we saw into June are, historically, strong over the subsequent six to 12 months, but in the nearer term often lead to retrenchment and choppiness.
Over the past three weeks, the median stock in the market is down some 12% and the core service-sector-revival plays in airlines, hotels, casinos and retailers are off 20% or more from early-June highs as investors have been forced to re think assumptions for a strong, linear restart of the economy once the Street’s “free pass” neared expiration.
For most of June, cyclically geared sectors have fallen back while defensive growth stocks held things together. And one issue with the idea of a new bull market is, no valuation excesses were wrung out of equities. Truthfully, it was more an event-driven crash mitigated by an overwhelming and rapid policy rescue. Stocks never for a moment got cheap, nor were balance sheets cleansed in any respect.
Right now, the median S&P 500 stock trades at 20-times forward earnings – pricey in the abstract, forgivable if the profit crash is brief, justifiable largely only in comparison with compressed corporate debt costs.
Which brings us to the question about what more can be requested of the mega-cap growth leaders, the five largest now nearly a quarter of the S&P 500. This group was not spared last week’s modest selloff, serial share-price-target increases by analysts on Apple and Amazon failing to generate fresh impetus for investors to commit new money into them aggressively. For now, at least.
While these winning digital platforms have been celebrated as consolidating their dominance in the stay-at-home, on-demand economy, the market mostly treats them as sources of scarce, durable cash flows akin to bonds with upside price potential.
Here is the free-cash-flow yield of the Nasdaq-100 against yields for Treasuries, high-grade corporate debt and the S&P 500 dividend yield over the past five years. All compressed along a similar curve.
Does this mean this group of stocks would have a hard time holding its value in a higher-bond-yield environment? Does that even seem a scenario worth anticipating at this point?
As for the supply of cash and caution, by most measures it’s ample enough to keep equity pullbacks from growing too deep or disorderly for now. Measures of hedge-fund positioning and traditional institutional exposures suggest professionals are not overcommitted to stocks in leveraged or momentum strategies.
Citi equity strategist Tobias Levkovich Friday released results of a new institutional fund manager survey revealing significant wariness. They maintained cash levels twice the long-term average, most figure 2021 corporate-profit forecasts are too high, only a third think the S&P will be back to early-June levels above 3200 by year end and, when asked whether a 20% market drop or 20% rally was more likely, 70% of managers chose a 20% decline.
This kind of caution is a plus for the market, if not an automatic catalyst for the S&P to snap back up to the June highs – which after all, sit on an island on the charts a 7.5% rally up from here as the days tick down to halftime.
Author: Michael Santoli