Kindness, Human Spirit.

7-7   Market Highlights,  (August 27 – September 02, 2017) 

Unimaginable human tragedies are unfolding in Texas, Louisiana, and in many parts of southern states in USA as Hurricane Harvey continues to devastate people, home, business, and infrastructure. Through these tragedies, however, beauty of human spirit glows like a beacon in the darkness. People from all around the country and other nations around the world are coming together to assist saving lives, recovering what they can, and preparing for the eventual recovery. There are numerous heartwarming images of old, young, and animals being rescued from the devastation. Human being is inherently good, I see many are. Natural disaster is not unique to America. India, China and many other countries around the world are facing life and death struggle as the nature unleashes rain, wind, fire, and seasonal storms ravaging the country, people, and business. These countries may not, however, have similar support. Blessed are the Americans with big heart and high human spirit, and with rich resources.

Glowing human spirit is matched by the America’s seemingly growing positive economic sentiment as well.  DOW, once again, nearing 22,000 and NASDAQ hitting record high at 6,435.33.  And, some are saying that US economy may be growing well above 4% with low inflation and business investment momentum building. Making money in investment is good thing. Perhaps it may be opportune time for you to think about digital currency as six global banks are organizing to facilitate use of it. Pharmaceuticals may also be a good place for your investment growth as number companies are finding success in cancer treatment R&Ds.  And, US Food and Drug authorities are approving these therapeutic advances. Why not save lives and make money too.  Win-Win. No?

I’ve been lecturing, consulting, and preaching “Think for Yourself” for decades in military, business, and in academia. “Think for Yourself. Do it Your Own Way.” Well, sixteen Ivy League college professors are sending out advise for the incoming freshmen to “Think for Yourself.” Their advise argues that “open-mindedness, critical thinking, and debate” are “our best antidotes to bigotry.”  Be aware, though, of traditional orthodoxy, politically correct behavior expectations. You analyze and make your final decision by thinking genuinely from your heart and soul.  You will distinguish yourself and earn respect.

Market closed on Friday, 9/01/2017 @:       DOW: 21,987.56; S&P: 2,476.55; NASDAQ: 6,435.33;  Gold: $1,330.50; Oil: $47.31

Here are the highlights of the 34th week of 2017:  

1.  Kindness, Human Spirit Amid Devastation. Unimaginable tragedies are unfolding in hurricane devastated area in Texas, Louisiana, and many parts of United States. Is there a Silver lining?  Often, tragedy brings out the best in people. Beauty of kindness and high human spirit for helping highlights ordinary citizens, companies, celebrities reaching out to help however they can. These are times ordinary people doing extraordinary things to help people without concern for their own safety and resources. And, people, companies, celebrities are saving the most vulnerable.  Texas A&M has dispatched more than two dozen members of its Veterinary Emergency Team to help care for pets that have been injured, abandoned or displaced. The Houston Independent School District will serve free Lunch/Breakfast. A 5-year old boy in Philadelphia is donating his lemonade proceeds, Bass Pro and Lowe giving boats for rescue, Abilene laundromat giving free cleaning services, restaurants providing free food for the responders, Disney, Walmart and other companies, business owners, celebrities donating $$$...  Helping spirit from all Americans are everywhere. Private citizens, companies, state and federal agencies are working well together to save the people.  Social media is helping broadcast help needed where and when.  The White House is too preparing an initial $5.9 billion package in Harvey aid.  It may be likely a fraction of an eventual Harvey recovery package that could rival the $100-billion-plus in taxpayer-financed help for victims of 2005's Hurricane Katrina. But, people, young and old, business, and government are coming forward to assist in saving lives, recovering, and eventual rebuilding from devastation. 

2.  Mumbai, India’s Poor Coping With Floods.  Mumbai, India, for many of the poor in this city, each year contains just two seasons: the demolition season and the rain. Every winter, when Mumbai is dry, the police come with wrecking crews and rip down countless slum homes. And every summer, when the monsoon hits, many of these same areas get flooded. Filthy water, swirling with oil stains, rushes into houses and sweeps away the few possessions, leaving behind plastic bottles, coconut husks, rocks, sticks and bundles of rags. On Tuesday night, an especially heavy storm lashed Mumbai. In India’s financial capital, epic floods are part of the landscape. This megacity of 18 million sits on a peninsula surrounded by the sea. Many of its sewers and drains were built more than 80 years ago, when Mumbai was a small fraction of its current size. In 2005, in this same area, more than 1,000 people died during the monsoon season. The rains on Tuesday were bad, estimated to be more than 10 inches in 12 hours, but nowhere near the deluge of 2005. Most of the adults are illiterate. Families of six survive on $10 a week. Their homes are considered illegal, and when the weather is good, the police and demolition crews show up. Nobody in the colony on Wednesday was talking about the flooding half a world away in Houston, or even seemed aware of it. But the comparison has not escaped Indian intellectuals, including those in the news business. After news agencies reported that a curfew had been imposed in Houston to stop looting, many Indians posted proud Twitter messages saying nothing of the sort was happening in Mumbai, even in the poorest parts. 

3.  U.S. Economy Growing Above 4% Now?     An economic report released Friday, and overshadowed by the higher-profile nonfarm payrolls number, points to GDP gains in excess of 4% in the third quarter, according to Andrew Hunter, U.S. economist at Capital Economics. The Institute for Supply Management's manufacturing index jumped to 58.8 in August, above Wall Street expectations. President Donald Trump's hopes for growth as high as 4% may come true, at least for one quarter. Hunter said the most recent figure shows the economy likely is growing at an even faster pace than expected. "The rebound in the ISM manufacturing index to a six-year high in August illustrates that, despite the softer pace of payroll employment growth, activity continued to expand at a healthy pace last month," he said in a note. That was some good news to offset a disappointing jobs report, which showed payroll growth of just 156,000 in August. Low inflation, increase in business investments all may be pointing to the future growth and demonstrating the soundness of economic fundamentals. Also, China, Canada, and other emerging markets are growing at record rate. 

4.  Six Global Banks Joining Forces to Create Digital Currency.     Six of the world's biggest banks have joined a project to create a new form of digital cash that they hope to launch next year for clearing and settling financial transactions over blockchain, the technology underpinning bitcoin. Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have teamed up to work on the "utility settlement coin" which was created by Switzerland's UBS to make financial markets more efficient. The move comes as the project shifts into a new phase of development, in which its members aim to deepen discussions with central banks and to work on tightening up its data privacy and cyber security protections. Blockchain technology is a complex set of algorithms that allows so-called cryptocurrencies, including bitcoin, to be traded and verified electronically over a network of computers without a central ledger. Many are still skeptical about it because of worries over fraud, banks are now exploring how they can exploit the technology to speed up back-office settlement systems and free billions in capital tied up supporting trades on global markets. Are you planning for digital currency? It’s coming whether you are ready or not, I am certain.

5.  North Korean Missile Over Japan.    The North Korean missile flew over the northern island of Hokkaido and landed in the sea, after a flight of nearly 1,700 miles. Public television programs in Japan were interrupted with a rare warning screen announcing the missile’s flight over the country. Several bullet train lines were temporarily halted, and the government spoke of the missile, only the third North Korean projectile to fly over the country since 1998, in unusually dire terms. “North Korea’s reckless action of launching a missile that passed over Japan is an unprecedented, serious and grave threat,” said Japan’s prime minister, Shinzo Abe. He later told reporters that he had spoken by telephone with President Trump. “Japan and the U.S. stances are completely matched,” he said on North Korea. North Korea has conducted more than 80 missile tests since Kim Jung-Un came to power in late 2011, after the death of his father, but it has not sent any of those missiles over Japan.  Can you trust irrational and provocative North Koreans trusted? But the missile fires are real. Japan, South Korea, USA ready for nuclear attack? DOW plunged 135 points but recovered the day with 64 points emphasizing the soundness of economy.

6.  Cure for Cancer, and Make Profit?      U.S. regulators this week approved the first drug for a new type of cancer treatment, confirming a theme some stock pickers have found in biotech. "There is a revolution taking place in the practice of medicine, particularly cancer therapy, and most of that innovation is taking place in the biotech companies," said Chris Sassouni, health care specialist and co-portfolio manager, at Eagle Asset Management. On Wednesday, the U.S. Food and Drug Administration approved Novartis' Kymriah, the first drug for a new kind of cancer treatment called CAR-T cell therapy.CAR-T cell therapy is a form of immunotherapy uses patients' own immune cells to attack tumors. Juno Therapeutics also working on CAR-T, spiked 6% but settled back and was up 3.4% Thursday, while Nektar Therapeutics, rose nearly 8%. An estimated 1.7 million people were diagnosed with cancer in the U.S. last year, according to the National Cancer Institute, and almost 600,000 people died from the disease.  Well, pharmaceutical companies have the highest percentage of unrepatriated profit by industry group at roughly more than 15%, UBS said in a May 3 report. S&P 500 health-care companies overall had $541 billion in profit held overseas in 2016, second only to technology, the report said. The UBS report also listed Bristol-Myers Squibb as the top beneficiary to repatriation. Understand, immunotherapy is still in the very preliminary stages of development, and not proven. Perhaps investors need to take a "higher risk-return approach within this immunotherapy theme. Related companies and tickers are: KITE, GILD, BLUE, IBB, MRK. Perhaps you may want to take look if these fit your strategy.

7. Think for Yourself. Do It Your Way. Be a lifelong truth seeker, and do not conform to orthodoxy. "Think for Yourself", though it may require self-discipline and courage. Ultimately, higher education should be truth seeking. But the tyranny of public opinion often discourages students from prevailing view. And, many students do not want to be viewed as crank, the easy, lazy way to proceed is simply by falling into campus orthodoxies. I recommend not to do that. "Think for Yourself." As fall semester begins 16 professors from Yale, Princeton, Harvard advises new students to "Think for Yourself." (I have been lecturing, advising, and emphasizing "Think for Yourself" for decades.) This advise argues "open-mindedness, critical thinking, and debate" are "our best antidote to bigotry;" that a bigot is a person "who is obstinately or intolerantly devoted to his or her own opinions and prejudices." What refreshing, simple advice for our future leaders. The full letter and list of signatories may be found at: https://jmp.princeton.edu/announcements/some-thoughts-and-advice-our-students-and-all-students .  

Again, these are my researched and analytical thoughts on the highlights of the week. Perhaps you should take a closer look at them, do additional research and analysis, if these are interest to you. This “7–7 Market Highlights” is presented for your general knowledge, resource for management, and perhaps as a tool for career development, and building wealth. As always you decide with your own final analysis and position. 

Mahalo. I welcome your thoughtful comments, “like” notes, and share.

~ S. Vincent Shin

  www.dhirubhai.net/in/vshin

Image credits to:  vShin, Bloomberg News, Getty image, AP Photo, Reuters, ABC News, CNBC, and special thanks to Image & Visual Consultant @U.Y.