Will the stock market’s real rate of return please stand up? It’s an important question. Depending on your frame of reference, the U.S. stock market is either performing fantastically or dismally.

For example, the dividend-adjusted S&P 500

SPX, -2.59%

  has an annualized real (inflation-adjusted) return of 26.5% this year through Aug. 19 — including a full percentage point increase on Monday of this week.

Not bad. If we extrapolate that return into the future, we can all retire early. Extend your frame of reference by just a few months, though, and a far different picture emerges. The S&P 500’s dividend-adjusted and inflation-adjusted return over the past 12 months is 2.4% — less than a tenth as much as its year-to-date performance. Extrapolate that return and we will have to postpone our retirement for many years.

Nor is this stark contrast just a product of the past year’s extraordinary volatility. The U.S. market’s comparable annualized return over the past 10 years is almost triple that of the market’s trailing 20-year return — 11.7% versus 4.2%.

Want an even longer perspective? Consider the S&P 500’s return between 1909 and 1984. Over that 75-year period, the S&P 500’s return on a price-only inflation-adjusted basis was precisely zero.

To be sure, I’ve cherry-picked these comparisons to make a point. You could have picked others over the past two centuries that tell a far different story.

But that is precisely my point. Even if the future is like the past and equities’ average dividend- and inflation-adjusted return over the next 200 years is equal to its historical average of 6.7% annualized, there still will be lengthy periods along the way in which returns are much better or worse — periods that far exceed any of our investment horizons.

What are the investment implications? First, stock-market risk is probably much higher than you think. If the S&P 500’s inflation-adjusted price can go nowhere over a 75-year period, we need to rethink the confidence we otherwise have that the long-term will ultimately bail us out.

Second, this long-term perspective provides at least some vindication for the Cyclically-Adjusted Price-Earnings Ratio (CAPE) that was made famous by Yale University finance professor (and Nobel laureate) Robert Shiller. The CAPE has been widely ridiculed for being almost universally bearish for most of the past two decades and therefore having failed to anticipate the strong bull markets of 2002-2007 and from 2009 to date. But a longer-term perspective shows those bull markets in large part as recoveries from the bear markets preceding them.

The CAPE hit its all-time high at the top of the 2000 internet bubble, and as you can see from the chart below, the S&P 500’s inflation- and dividend-adjusted return over the 19-and-one-quarter years since then has been barely half the historical average — 3.5% versus 6.7%. According to calculations I made using data provided on Shiller’s website, the stock market’s return over this 19.25-year period is lower than 82% of comparable returns since 1889.

Unfortunately, the CAPE is only marginally more bullish today than at the top of the internet bubble. It currently stands at 29.0, versus 44.2 then. But that still is far higher than its historical mean: over the past 50 years, for example, the CAPE has averaged 20.3; over the past 75 years its average has been 19.0. Since the 1880s its average has been 17.0.

The bottom line? Enjoy this year’s stock market’s gains as long as they last. But don’t count on the market’s rate of return being anywhere near as good in the future as it has been so far this year.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

Read: Stocks could fall another 8% as ‘Trump put’ and ‘Fed put’ expire

More: Here’s why U.S. stocks could fall further

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President Donald Trump said he would increase tariffs on Chinese imports in an escalation of a trade war between Washington and Beijing that rocked stock markets on Friday. See full story.

Dow ends more than 600 points lower as U.S.-China trade war intensifies

U.S. stocks fall sharply Friday as President Donald Trump says he’s “ordering” U.S. companies to start looking for “an alternative to China” after Beijing imposed more retaliatory tariffs on U.S. goods. See full story.

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‘With my limited time left, I want to invest in a new kitchen — both as a gift to my wife and as something positive and new to lift my spirits, since I’m largely confined to our home.’ See full story.

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The bond market sent a warning, and this time the stock market listened. Investors will be looking for clues in the week ahead that policy makers are listening, too.

The yield on the 10-year U.S. Treasury note on Wednesday briefly traded below the yield on the 2-year note, marking an inversion of the yield curve — a phenomenon seen as an often reliable recession indicator, albeit with an average lag of more than a year. In fact, the 10-year yield has traded below the 3-month T-bill yield since late May — an inversion of that portion of the curve is seen by economists as an even more reliable recession indicator.

Read: 5 things investors need to know about an inverted yield curve

But the latest twist came amid a run of downbeat economic data out of Asia and Europe, as well as an intensifying U.S.-China trade war.

‘Headline warning shot’

The latest inversion doesn’t guarantee doom, but it is “a headline warning shot about what’s been going on over the last few months,” said Joe Mallen, chief investment officer at Helios Asset Management, which manages $16 billion in combined adviser assets, in an interview.

“At a very high level, people are really now genuinely concerned about a recession in the U.S. in the next two years, and I think that’s fair,” he said.

Related: For stocks, ‘buying the dip’ is now likely to be a ‘losing proposition,’ says UBS

It was a volatile week for the stock market. The Dow Jones Industrial Average

DJIA, -2.37%

 slumped 800 points, or 3.1%, on Wednesday for its biggest one-day percentage fall of 2019, while the S&P 500

SPX, -2.59%

 tumbled 2.9% in the inversion-inspired selloff. Equities ended mostly higher Thursday and then reclaimed a sizable chunk of ground Friday, but still ended lower for the week. The S&P 500 saw a 1% weekly decline, while the Dow fell 1.5% and the Nadsaq Composite

COMP, -3.00%

 was down 0.8%.

Stock-index futures pointed to a higher start Monday, buoyed by upbeat comments by President Donald Trump on trade talks, along with a move by China over the weekend to lower borrowing costs for companies.

The 10-year/2-year measure of the curve ended the week with a small upward slope after Wednesday’s brief inversion. But stock-market investors were also spooked by the size and speed of the rally in Treasurys, a popular haven during periods of uncertainty. Yields, which move the opposite direction of bond prices, fell sharply to multiyear lows or, in the case of the 30-year Treasury bond

TMUBMUSD30Y, +0.00%,

an all-time low, dipping below 2% for the first time ever before ending the week at 2.001%.

A global story

Of course, the moves in the Treasury market aren’t all — or perhaps even mostly — about the U.S. economy. That speaks to ideas the Treasury rally is overdone, and vulnerable to a pullback that could see yields rebound in the near term.

“The bond market rally is as much a global story as a U.S. one,” said Kit Juckes, global macro strategist at Société Générale, in a Thursday note, observing that weak data in Asia and Europe were the culprits in sparking the Treasury rally that dragged down yields on Wednesday. “But at some point, U.S. data need to justify the fall in U.S. yields, or at least a bigger part of them than recent data have.”

The burgeoning supply of debt around the world that offer negative yields — the entire German government bond yield curve is now in subzero territory — means Treasurys remain attractive, even if their yields are near or at all-time lows.

See: ECB prepared to deliver ‘very strong’ stimulus package, policy maker says

That factor is one reason some investors argue the inversion of the yield curve might not offer as reliable of a signal about the economic outlook as it has in the past. But those external factors might be of limited comfort.

Interview: Central banks ‘racing to the bottom’ means the stock market will do ‘very well’: Mark Mobius

“The bottom line here is that markets fear the U.S. is being sucked into the very low/negative rate vortex that is consuming European sovereign debt,” said Nicholas Colas, co-founder of DataTrek Research, on Thursday. “The signal that sends: Japan-style deflation and eurozone-like economic stagnancy. Not good.”

On the other hand, low Treasury yields should be a positive for stocks, in general, from a valuation perspective. And a record low 30-year bond yield should be a positive for housing.

Focus on the consumer

But the main worry for stock-market investors rests with the U.S. consumer, who remains a pillar of the economy, said Mallen.

Indeed, stronger-than-expected July retail sales data and upbeat results from Walmart Inc.

WMT, -0.97%

 were credited with stabilizing stocks after Wednesday’s inversion-inspired rout. But heightened recession fears can become a self-fulfilling prophecy if consumers pull back on spending.

All eyes on Jackson Hole

That puts the onus on the Federal Reserve and Chairman Jerome Powell. Fed officials and some of the world’s other top monetary policy makers gather in Jackson Hole, Wyoming, beginning Thursday.

Analysts and investors said the Fed could go a long way toward calming the nerves of consumers as well as investors — though probably not Trump, who constantly bashes the Fed for what he sees as insufficient speed in cutting rates — if Powell and fellow policy makers engage in some market-oriented hand holding.

Also see: Investors might be disappointed in the Fed’s message from Jackson Hole

A quarter-point rate cut by the Fed in September would likely be a disappointment, Mallen said. A signal that the Fed is prepared to be “a little more aggressive” in light of the recent developments in the yield curve would offer reassurance.

“The comments, or lack thereof, from the Fed are probably going to move the markets one way or the other,” Mallen said.

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A rhesus monkey on a calorie-restricted diet (left) and a control group monkey (right) who were subjects in a pioneering long-term study of the links between caloric restriction and aging at the University of Wisconsin’s Wisconsin National Primate Research Center.

Jeff Miller/University of Wisconsin-Madison

Researchers who use laboratory monkeys to study human diseases are worried that President Donald Trump’s new tariffs on China will damage U.S. biomedical research and send animal testing labs to China.

The Trump administration is set to impose a 15% levy on $300 billion worth of Chinese imports as part of the escalating U.S.-China trade war. The first of those tariffs will go into effect Sept. 1 with the remainder imposed Dec. 15.

The new tariffs are a concern for U.S. researchers who are struggling to acquire live animals in the midst of intense scrutiny from animal rights groups and continued bans by airlines on transporting them. Animal rights activists, in contrast, view the tariffs as a temporary victory that could slow down the imports of monkeys.

“Subjecting nonhuman primates to increased tariffs would severely damage vital primate research in the United States, [and] create a strong incentive for U.S.-based research and development to migrate to China,” said Matthew R. Bailey, executive director of the National Association for Biomedical Research.

Roughly 80% of all imported nonhuman primates used in scientific research in the U.S. come from China, according to the NABR. Monkeys are used to develop treatments for illnesses like AIDS, Ebola and Parkinson’s.

As demand for lab monkeys continues to rise, U.S. scientists are reporting delays in research projects because they can’t obtain enough animals, according to the National Institutes of Health.

Since most U.S. research projects are constrained by grant-dependent budgets, they would be unable to absorb a 5% to 25% cost spike for monkeys, according to the NABR. While some researchers will be forced to scale back projects due to the tariffs, others might cease U.S. operations and move research to China.

“The proposed tariff would hand China an even greater cost advantage, which will incentivize many researchers to conduct studies in China instead of the United States,” Bailey wrote in a letter to U.S. Trade Representative Robert E. Lighthizer.

For instance, when the U.S. restricted research on chimpanzees in 2015, research moved to China, where scientists obtained the primates for substantially less money — $1,500 in China compared with $6,000 in the United States, according to the NABR.

China is a big biotech competitor

While some of the monkeys are imported from Mauritius, Cambodia and Vietnam, not enough of them pass research standards in those countries to meet U.S. demand. Some U.S. researchers argue that they cannot develop treatments without the cheap access to Chinese primates.

The number of nonhuman primates tested in U.S. labs increased by 22% from 2015 to 2017, according to the Department of Agriculture. In 2017, U.S. researchers experimented on 75,825 nonhuman primates, mostly rhesus macaques, the Chinese- and Indian-derived monkeys with brown fur and a reddish-pink face.

Under scrutiny from animal rights organizations, researchers have long argued that nonhuman primates are essential for developing treatments for human diseases. This includes the polio vaccine, blood transfusions and organ transplants as well as developing treatments for malaria and improving existing treatments for Parkinson’s.

Charles Roberts, a research director at Oregon National Primate Research Center, which has more than 4,000 primates, said that tariffs were less of a concern for academic research, and more of a problem for pharma researchers.

“The bigger picture is that in terms of utilizing nonhuman primates to make advancements in medical treatments, that momentum is shifting to China. They are putting huge investments in, whereas the U.S. isn’t,” he said.

“In China, they don’t have issues with animal rights extremists, whereas in the U.S. we are always justifying why we are using nonhuman primates. That has an effect on research, whereas in China they are not worried about that.”

In the U.S., there are seven federally funded U.S. primate research centers that are partnering with the National Institutes of Health. In the U.S., about two-thirds are rhesus macaques, but others study cynomolgus macaques, baboons and other species, according to the NIH.

A pseudo victory for animal rights groups

The new tariffs come as primate research centers in the U.S. struggle to acquire live primates from China, facing intense scrutiny from animal rights groups and bans on transportation.

Harvard University shuttered its national primate research center in 2015 following an investigation into four animal deaths. That same year, the NIH ended funding for all invasive chimpanzee studies and said those animals were no longer needed for research.

The People for the Ethical Treatment of Animals, which advocates for animal rights, says it would like a total ban on monkey imports, or higher tariffs, in order to slow breeding in China. PETA has lobbied major airlines to stop transporting live animals for research, forcing some primate suppliers to use charter flights instead.

For animal rights activists, the potential for tariffs to slow down breeding in China and primate imports to the U.S. is a partial victory. But they point out that testing will inevitably continue, whether it’s in China or other countries with less restrictive research regulations.

“To the extent that tariffs prevent the shipment of monkeys from coming to the U.S., it’s a good thing, since it keeps the animals out of the laboratories,” said D.J. Schubert, wildlife biologist at the Animal Welfare Institute.

“But it won’t persist for an extended period of time,” he added. “The use of animals in biomedical research has moved from the U.S. — where labs think they are subject to restrictive regulations — to Asia, Latin America and Africa.”

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Enrique Torrendell joined LinkedIn as a software developer in the company’s Reach engineering apprenticeship program in 2017, and he remains with the company more than two years later.


Enrique Torrendell was stumped.

It was 2017, and Torrendell, who previously managed a food truck business in New York, had just started a new gig at LinkedIn as a software developer. Days into the new job he couldn’t figure out the correct code to write.

“At one point I thought, ‘I’m just going to go back to HR and be like thank you but I think we all made a mistake,'” Torrendell, who’s now 35, told CNBC.

The former food industry worker was part of Linkedin’s inaugural Reach initiative, an engineering apprenticeship program for people with non-technical backgrounds, including veterans, teachers, mothers who left the workforce and athletes. As part of a push to create a more diverse workplace and train people for other jobs in technology, LinkedIn has since introduced two more apprenticeship programs.

One of them attracted former NFL kicker Derek Dimke, who still works at the company.

The practice isn’t limited to LinkedIn, which is owned by Microsoft. Apprenticeship programs have gained popularity across the tech industry in recent years. In July, Twitter launched an engineering apprenticeship aimed at women and minorities. Amazon is looking to bolster technical talent internally, and announced earlier this month that it will invest $700 million to train about one-third of its U.S. workforce in “high-demand areas like medicine, cloud computing, and machine learning.”

There are more than 500,000 unfilled computer science jobs across the U.S., according to Code.org. Those positions have become harder to fill with foreign workers since 2017 due to the Trump Administration’s policies that have limited immigration and cracked down on H-1B visa approvals.

At the same time, there’s an increasing number of ways for people to learn programming skills, whether through a host of online courses or from coding bootcamps, which have produced more than 15,000 graduates a year in the U.S. since 2015, according to Course Report.

“We want to create economic opportunity for every member of the global workforce,” said Brendan Browne, LinkedIn’s vice president of global talent acquisition, in an interview. “I’m not sure how we can really execute on that vision fully unless we actually live up to it by bringing the most diverse talent from a variety of walks of life into the company.”

Browne summed up the strategy this way: “Just bring in a bunch of people who don’t look like me, train them and just get out of their way.”

‘This can be learned’

In late 2016, Torrendell quit his food service job and enrolled in Flatiron School, which provides software and design programs and coding bootcamps, to pursue a career in technology. After completing the program, Torrendell was hired by LinkedIn for the Reach program and was initially working with the team that focuses on profile pages.

Despite his initial struggles, Torrendell didn’t quit on Reach, a multi-year program. He bought himself a massive whiteboard and drew out every step of the process he needed to code to finish the project until it all finally clicked.

“If everyone else that is working here can do it — I mean, they’re all working fine and we’re all humans — then this can be learned,” Torrendell remembers thinking.

Source: Flatiron School

More than two years later, Torrendell is now one of the lead iOS engineers at LinkedIn in Mountain View, California, and proof that people without background in computers can learn the ropes and be successful. Last year, LinkedIn introduced Unlock, an eight-week apprenticeship program geared towards people switching careers to sales, and Ramp, a nine-month program designed for those interested in working in recruiting.

Since the launch of the programs, LinkedIn has hired dozens of its apprentices into more permanent jobs.

There are currently 36 people going through the Reach program. Of the 29 graduates, 15 are software engineers at LinkedIn, the company said. Another works for the company in product operations and two moved to technical program manager roles at Microsoft. Six others are now software engineers at different companies.

LinkedIn said it hired the 28 apprentices who went through its Unlock program, though four have pursued non-sales roles. The company also hired eight of the 12 people from the inaugural Ramp apprenticeship, with two of the other graduates taking recruiting roles at other tech companies.

“These folks with non-traditional backgrounds help us understand our customers better because they come from industries that our customers are in,” said Annie Whetstine, Unlock’s program manager.

LinkedIn is currently accepting applicants for its next batch of Reach and Unlock apprentices and will kick off its next Ramp program in September.

Ivy Hopkins, a 43-year-old mother of two, had spent four years trying unsuccessfully to get back into the workforce before she was accepted into the Ramp apprenticeship in June 2018. After the program, LinkedIn hired her as a campus recruiter.

“This changed everything,” Hopkins said. “Any person with any background that is not standard, we bring so much experience” and many different points of view, she said.

WATCH: Here’s how to see which apps have access to your Facebook data — and cut them off

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R2-D2 and BB-8 attend Go Behind The Scenes with Walt Disney Studios during D23 Expo 2019 at Anaheim Convention Center on August 24, 2019 in Anaheim, California.

Frazer Harrison | Getty Images Entertainment | Getty Images

Disney is the king of the box office. The company, which houses a half dozen studios under its film umbrella, has hauled in nearly $8 billion globally since January, and still has three more film releases before the end of the year.

On Saturday, the company gave fans more to feast on. In addition to providing information about already announced and upcoming releases like “Frozen II,” “Star Wars: The Rise of Skywalker” and “Black Widow,” Disney shared details about previously unannounced projects like “Raya and the Last Dragon” and “Black Panther II” during a panel at its D23 Expo in Anaheim.

The panel was packed with more than 7,000 Disney fans eagerly awaiting every scrap of a detail or glimpse into Disney’s upcoming catalog of feature films.

Here’s a breakdown by studio of what movie audiences can expect from Disney in the coming years.


Co-chairman of Walt Disney Studios Alan Horn was the host of the panel Saturday. He began the presentation showcasing the titles from 20th Century Fox that Disney had acquired and would be released in the next year and beyond.

“Ford v Ferrari” will hit theaters in November; “Spies in Disguise,” an animated feature comes in December; “The King’s Man,” arrives in February of next year; and the first sequel to “Avatar” will be released in 2021.

The recent Fox acquisition is just another feather in Disney’s cap and the work of CEO Bob Iger. Horn praised Iger’s 14-year tenure at the helm of the company saying, “three of the studios we are celebrating today wouldn’t be possible without Bob Iger.”

Fox marks the fourth major studio acquisition that Iger has completed during his time with the company.

Star Wars

“The Rise of Skywalker,” the final film in the Skywalker saga arrives to theaters in December. The much anticipated film has been kept under wraps by the folks at Lucasfilm. A teaser trailer was released in April at Star Wars Celebration in Chicago, but very few stills, clips or videos have been released since.

Fans got a brief glimpse at another teaser which received deafening applause and chants for it to be played again.

In the footage was a duel between Rey and Kylo Ren, C-3PO with red eyes, a glimpse of General Leia and shots of the group of heroes standing on a cliff above a bustling desert city. However, the shot that truly made the crowd roar was a quick scene with Rey in a hooded black robe unfolding a red double-sided lightsaber.

“It’s hard for me to understand the story is ending,” said Anthony Daniels, the actor behind C-3PO said on stage at the Expo. “But what an ending. You’ll love it.”

Fans are still eagerly awaiting an official trailer for the upcoming film, but these new visuals will keep them buzzing until one is released.


The 23 film epic that is the “Infinity Saga” has ended and Marvel is headed toward a new beginning. Old favorites and new faces met at D23 as the studio announced a sequel to “Black Panther” due out in May 2022, as well as the cast behind the upcoming “Eternals.”

“Game of Thrones” alum Kit Harrington was announced as the character Dane Whitman, aka the Black Knight, and Angelina Jolie was revealed as the warrior Thena.

Other cast members include Richard Madden as Ikaris, Gemma Chan as Sersi, Salma Hayek as Ajak, Brian Tyree Henry as Phastos, Barry Keoghan as Druig, Kumail Nanjiani as Kingo, Lia McHugh as Sprite, Dong-seok Ma as Gilgamesh and Lauren Ridloff as Makkari.

Also during the panel, Marvel revealed footage from “Black Widow,” which teased that fans will finally get to see exactly what happened in Budapest all those years ago.


Following the monumental success of the “Pirates of the Caribbean” franchise, Disney will release a film based on the iconic Jungle Cruise ride.

The film features Dwayne Johnson as the skipper and Emily Blunt as a scientist looking for a magical tree with healing properties.

The company also provided more context for its upcoming sequel to “Maleficent.” “Maleficent: Mistress of Evil” takes places several years after the first. Aurora is now older and she and her adoptive mother must deal with a world that wants to keep them apart.

Jolie, who reprises her role as Maleficent, said the film explores how family is not just defined by blood, but love.

Still from Disney’s remake of “The Lion King” featuring Mufasa and a young Simba on Pride Rock.


Disney showed several clips from “Mulan,” which hits theaters next year. The scenes detail the epic battle sequences and costuming for the reimagining. The film will blend together elements of the original ballad of Mulan with the animated Disney feature.

The studio also revealed an image of Emma Stone in “Cruella,” but not much else was revealed about the film. Stone did reveal via a video that the movie is set in 1970’s London.


Next year, Pixar will release two original features “Onward” and “Soul.”

“Onward,” which will arrive in theaters in the spring, centers around two elf brothers who lost their father at a young age. The pair are given a chance to see him via a magic spell. However, when they attempt to perform the spell, something goes wrong.

The brothers now must travel on a quest to complete the spell and reunite with their dad. The story takes place in a mythical realm where centaurs, unicorns and gnomes roam.

The second film, due out in the summer, is “Soul.”

The feature focuses on the question “why am I here?” and tells the story of how each person on the planet received their soul. Souls are trained in a place called the “You Seminar,” and only after completing the course are they placed into a body.

Pixar executives explained that the film details how souls earn their personalities, traits and quirks.

The story centers around Joe Gardner, a middle school band teacher who dreams of becoming a famous jazz musician. Gardner has a misstep on the streets of New York and is accidentally transported back to You Seminar. There he meets a soul named Twenty-Two, who has been at the Seminar for years, and is terrified of Earth.

Jamie Foxx, Tina Fey, Ahmir “Questlove” Thompson, Phylicia Rashad and Daveed Diggs are all lending their voices to the film.

Walt Disney Animation

To end the presentation, Disney revealed its Thanksgiving feature for 2020: “Raya and the Last Dragon.” The animated adventure film centers around Raya, a warrior in search of the last dragon in the fictional world of Kumandra. The production team pulled inspiration from South East Asia.

However, when she finds this creature, it’s not quite as she had expected. Sisu is trapped in human form and needs help to reclaim her power and transform into her true form.

Cassie Steele voices Raya while Awkwafina voices Sisu.

Disney releases Frozen II trailer to hit theaters in Nov. 2019.

Source: Disney

The studio also revealed the first glimpses of “Frozen II,” including three new songs. If you thought “Do You Want to Build a Snowman?” and “Let It Go” were catchy — just wait. Bobby and Kristen Lopez, the Academy Award-winning duo behind the music of the first film, have returned with gusto.

The film will answer questions like “why does Elsa have powers, but Anna doesn’t?” “Where did Elsa get her powers?” and “Where were Anna and Elsa’s parents going when they died?”

The creative team revealed that Evan Rachel Wood would voice Anna and Elsa’s mother in a flashback and Sterling K. Brown would voice Lieutenant Mattias, the leader of a group of people who have been trapped in an enchanted forest for decades.

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Bonds issued by home builders are signaling a pretty upbeat tone for the U.S. economy, even as U.S. recession fears linger.

Wage growth has been on the rise while borrowing costs have fallen, with the average 30-year fixed-rate mortgage plunging this week to a three-year low of 3.55%, helping to partially offset the affordability crunch for would-be homeowners. That all should be music to the ears of home builders, which operate cyclical businesses and often rely heavily on debt to construct homes for future buyers.

“Last year, home builders were under considerable pressure because of rates and affordability, which go hand and hand,” said Matthew Kennedy, head of corporate credit at Angel Oak Capital Advisors, in an interview Friday.

“But with Powell pivoting and rates starting to come down,” Kennedy said, “that was an impetus of change.”

Federal Reserve Chair Jerome Powell kept rates steady for the first half of 2019, while vowing to keep a close eye on signs of a potentially slowing U.S. economy. But as the U.S.-China trade war marched on, the central bank in July opted for a quarter percentage point “mid-cycle adjustment” to help support household and business confidence.

In a July report, Moody’s Investors Service said it expects the home-building industry to be stable with 2% to 4% top-line growth over the next 12 to 18 months, but with stronger revenue growth at home builders with a focus on entry-level homes and lower prices.

“Public companies that showed positive growth of above 5% during the first calendar quarter were generally the ones weighted more heavily toward affordable offerings, including Meritage Homes

MTH, -1.78%,

LGI Homes Inc. 

LGIH, -1.62%

and Century Communities Inc.

CCS, -4.65%,

” wrote Moody’s analysts led by Natalia Gluschuk.

See also: Huge pile of negative-yielding global debt could be a cash cow for some bond investors

Kennedy said he preferred the bonds of builders with a focus on affordability that can attract millennials and others looking for a starter home, or the next step up.

The high risks associated with home builders often land them in the high-yield, or “junk-bond,” category of corporate debt because new homes can sit on the market unsold when sentiment shifts.Like stocks, high-yield bonds also can be vulnerable to bouts of volatility and market shocks.

Friday housing data came out weaker than expected, showing that new-home sales in July fell almost 13%, but with a key caveat that June had a “ridiculously large revision” higher of its sales figure.

Yet, on Friday, the closely-tracked ICE BofAML U.S. High Yield Homebuilders & Real Estate index closed at $101.76 per share and held its 8.78% gain year-to-date, or better than the 6.97% gain of the broader ICE BofAML U.S. High Yield index, according to FactSet.

“You wouldn’t think this would be defensive,” Kennedy said of home builder bonds. “It is just that right now the consumer is very strong, household formation is picking up and affordability is easing.”

Check out: Bank of America’s CEO has one simple reason why he doesn’t see a recession looming

Stephen Percoco, founder of Lark Research, said that Friday’s lower new-home sales report was unlikely to lead to volumes falling below his 6% annual growth target. Sales of new U.S. homes were still 4.3% higher in July than a year ago.

“This year is continuing at a real solid pace, which as long as the economy doesn’t fall back dramatically, the momentum in housing should continue,” the former Salomon Brothers junk-bond analyst, told MarketWatch in an interview.

“But we have to be cautious, because when certain sectors of the economy start slipping, eventually that will affect the consumer and housing will follow.”

Major U.S. stock indexes ended lower on Friday, with the Dow Jones Industrial Average

DJIA, -2.37%

 losing more than 600 points amid an intensifying U.S.-China trade war. The S&P 500 index

SPX, -2.59%

 shed almost 76 points after President Trump called for American firms to seek alternatives to China after Beijing imposed retaliatory tariffs.

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The Federal Reserve has now stopped its monetary tightening, yet the most vulnerable emerging market currencies are still falling like flies.

The reason why monetary tightening pressures weaker currencies of countries with inadequate foreign-exchange reserves is that it tends to push the dollar higher via higher U.S. interest rates. If the host country has been on a dollar-borrowing spree, higher U.S. rates and stronger dollar tend to make those debts harder to service and roll over. (For more, see “The emerging-markets crisis might just be getting started.”) What is most intriguing is that the countries most impacted by the now-completed Fed monetary tightening — namely Argentina, Turkey and China — have a new major challenge in the face of political risk.

Argentina’s election debacle

The worst performer is the Argentine peso

USDARS, +0.1089%,

which traded as low as 62 to the dollar on the nation’s surprising election results two weeks ago. For all intents and purposes, the peso lost about half its value in 2018, catalyzed by the Fed’s monetary tightening, and it is on track to halve again in 2019, with the political landscape shifting against Argentina’s current president, Mauricio Macri.

The populist opposition candidate — Alberto Fernandez, with former center-left ex-President Cristina Fernandez de Kirchner as his running mate — was 15 points ahead of Macri in the primaries. This leaves the Fernandez/de Kirchner ticket as the favorite to win the October election without a second round.

It is entirely another matter that de Kirchner’s policies put Argentina in this terrible economic state of affairs, which Macri was trying to clean up. As is often the case, trying to make painful reforms necessary to fix the country can get you thrown out of office, which is what appears to be happening with Macri.

The Argentine peso went down on the news of the election result and so did Argentina’s stock market. When compounding the move in the stock market by the depreciation rate of the Argentine peso, the stock market ended up losing 48% in a single day last week. This is like having two back-to-back 1987 “Black Mondays” on Wall Street compressed into a single day.

With the trade friction between the U.S. and China dominating the front-page news here, who’s going to worry about Argentina, right? This is why so little has been reported about this lower-hemisphere event.

I do not believe the Argentine currency crisis is over, as there is another leg lower if the Fernandez/de Kirchner ticket wins in October. With the October election some time away, the Argentine country ETF got so bombed out that there may be a trade for short-term speculators. There may be a rebound in the AGT ADR “to close the gap” in the country’s iShares and in more than half a dozen Argentine ADRs that are listed on NYSE or Nasdaq. One of the more liquid ADRs is Telecom Argentina

TEO, -4.03%,

which looks similarly bombed out to the country’s iShares.

That said, any rebound should be short-lived, for if Fernandez takes over, he may default on the IMF loan, and go through the standard Argentine meat-grinder economic procedure for the country to inflate away its debts. The Argentines sure know how to borrow money and default on their debts. They have perfected that procedure many times over in the past 100 years. Total external debt stands at $275.8 billion as of March 31, while the central bank’s foreign-exchange reserves stand at $58.6 billion. The present situation is not a buy-and-hold opportunity until the new Argentine administration is in and has managed to roll out its new peso-bastardization plan (see chart).

Is Turkey next?

Turkey is in a similar situation to Argentina. While there are no parliamentary elections anytime soon, there were local elections this year and President Erdogan’s political party lost both Istanbul and Ankara mayoral races. This says a lot about Erdogan’s grip on power. The Turkish lira

USDTRY, -0.1543%

 was under serious pressure in 2018, with a range of 3.72-7.08 against the dollar. The lira is again under pressure as the country is struggling under heavy debt loads, inadequate foreign-exchange reserves and a slowing economy. There is likely a second leg lower in the Turkish lira, particularly if a eurozone recession, which seems to be on the horizon, pressures its economy further (see chart).

The yuan is the hardest to call

While identifying the Argentine peso and Turkish lira is not hard to see under heavy external dollar borrowing and inadequate forex reserves, the Chinese yuan

USDCNY, +0.1736%

 is harder to forecast, but the geopolitical pressure is the greatest due to the trade war with the U.S. Further trade confrontation means a further slowdown in the Chinese economy under a heavy debt burden, which means more pressure on the Chinese to devalue the yuan. (For more, see “How to play the trade war’s worst-case scenario.”)

One could say that devaluing the yuan would be a strategic choice of the Chinese central bank and not necessarily an inevitability, and least not yet, like it is the case with Argentina and Turkey. A big yuan devaluation means that the Chinese have given up on making any trade deal — and perhaps they never intended to make one — but have rather opted to inflate away their domestic debts.

Ivan Martchev is an investment strategist with institutional money manager Navellier and Associates.

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Bob Iger attends the World Premiere of Walt Disney Studios Motion Pictures ‘Avengers: Endgame’ at Los Angeles Convention Center on April 22, 2019.

Jeff Kravitz | FilmMagic, Inc | Getty Images

Disney is set to reveal new information about its upcoming streaming service’s shows and films during its Disney+ panel at D23 Expo in Anaheim, California.

The video streaming service will go live on November 12 and draw on Disney’s deep catalog of content and offer up new shows featuring favorite characters from “Monsters Inc.” to Marvel to “Star Wars.”

The service will cost subscribers $6.99 per month, or $69.99 per year, which is at the high end of what many analysts had expected. For attendees at D23, Disney is offering $23 off per year for three years.

In the first year of its service, Disney+ will have the entire collection of Pixar films, animated classics, Marvel and Star Wars, Kevin Mayer, chairman of direct-to-consumer, said during the panel. 

Disney has said it expects it will spend about $1 billion in 2020 on original content for the platform and $2 billion by 2024.

The Disney Channel

Disney+ will be home to more than 5,000 episodes of content from The Disney Channel as well as more than 100 Disney Channel Original Movies, Gary Marsh, head of Disney Channel, said during the panel.

The company announced Friday that it will be launching a “Lizzie McGuire” show on the streaming service and will bring back Hillary Duff in the starring role. Lizzie is now nearing age 30, working in New York and still dealing with that pesky animated Lizzie.

Additionally, the company will release a new “Phineas and Ferb” movie called “Candace Against the Universe,” as well as all of past episodes of the show.

“High School Musical The Musical The Series” will also debut on Disney+. The show revolves around the students attending the high school in which “High School Musical” was filmed putting on a production of “High School Musical.”


“Forky Asks a Question” is one of several new original Pixar series coming to Disney+. The show is a series of shorts in which Forky, the new character from “Toy Story 4” asks questions about the world around him.

“Monsters at Work” is a show based on “Monster’s Inc.” It’s a work-based comedy set at Monsters Inc. Ben Feldman voices the lead character Tyler Tuskman, a scarer who arrives to his first day at work to discover that the company had swapped from scream power to laugh power.


Kevin Feige, head of Marvel, said “Avengers: Endgame” will be available to stream on Disney+ on Dec. 11.

From the minds of the Marvel creators comes an animated series called “What If.” It will explore hypothetical questions like: what would have happened if Peggy Carter had been given the super serum instead of Steve Rogers?

Almost the entire cast of the Marvel Cinematic Universe will lend their voices to their characters in the series.

One of Marvel’s four live-action series is called  “Loki.” The series will answer where Loki went after stealing the Tesseract from “Avengers: Endgame” and will take place over the course of six hours. 

“The Loki story has just begun,” Feige teased.

Marvel Studios

“The Falcon and The Winter Soldier” will explore the past and future of both characters as well as reintroduce Sharon Carter, Peggy Carter’s neice. A new character appearing in the series is John Walker, played by Wyatt Russell, Feige teased. The series will launch in the Fall of 2020.

“WandaVision” is a TV show billed as part classic sitcom and part epic Marvel adventure. Still, not much is known about exactly what the premise will entail. Elizabeth Olsen has described it as “wacky fun” while Paul Bettany has said that writing is “extraordinary.” 

Kat Dennings will reprise her role as Darcy Lewis and Randall Park will reprise his role as Agent Jimmy Wu from “AntMan and the Wasp,” “WandaVision,” Feige disclosed Friday.

Kathryn Hahn will appear as the “nosy neighbor” that lives next door.

Feige also announced three new shows: “Ms. Marvel,” “Moon Knight” and “She Hulk.”


Unscripted shows are another big part of Disney+’s original content.

The company is coming out with “One Day at Disney,” a series with more than 50 short videos ranging from 4 to 7 minutes. These episodes profile a single person and their job. Episodes will be doled out on a weekly basis.

A docu-series following Jeff Goldblum is also coming to the platform. The show will follow Goldblum as he explores mundane objects and reveals scientific and historical information about things from tattoos and ice cream to RVs and denim.  “The World According to Jeff Goldblum” will have 12 episodes.

“Encore!” is a show hosted by Kristen Bell brings together old high school classmates to create original theatrical performances.

Feature films

Disney+ will also be home to a number of original feature films. A live-action film remake of “Lady and the Tramp” will be exclusively available on the platform.

“Noelle,” a Christmas film starring Anna Kendrick as the daughter of Santa Claus, is set to arrive on the platform on launch day. Noelle goes on a mission to find her brother, who is next in line to be Santa, after he panics and leaves the North Pole.

Star Wars

Lucasfilm head Kathleen Kennedy spoke during the panel Friday. She said the new season of “Star Wars: Clones Wars” would debut in February 2020.

Kennedy also introduced Alan Tudyk and Diego Luna, who will reprise their roles as K2-SO and Cassian Andor from “Rogue One: A Star Wars Story,” in a yet untitled prequel show. The series has been described as a spy drama that will follow the pair of rebels.

The previously announced “The Mandalorian” will debut on Disney+ on launch day. The show is being produced by Jon Favreau ( “Iron Man”) and Dave Filoni (“Star Wars Clone Wars”) and star Pedro Pascal (“Game of Thrones”), Gina Carano (“Deadpool”) Taika Waititi (“Thor Ragnorak”) and Carl Weathers (“Rocky”).

The series, set just after the events of “Return of the Jedi,” revolves around a mysterious gunfighter making a name for himself during the transition from Imperial rule to a New Republic. Favreau said that much of the inspiration of the series came from spaghetti Westerns and samurai films, particularly from Sergio Leone and Akira Kurosawa films.

At the end of the panel, Ewan McGregor appeared on stage and told the audience that he will be reprising his iconic role as Obi-Wan Kenobi for Disney+.

Kennedy said that all of the episodes have been written and they will begin shooting soon.

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Marvel Studios president Kevin Feige speaks during a fan event at in Los Angeles, Oct. 28, 2014.

Getty Images

On Friday, Marvel head Kevin Feige announced three more Marvel series would be coming to Disney’s streaming service Disney+.

Shows based on Ms. Marvel, She-Hulk and Moon Knight are going into production, he said.

The news comes after Marvel had set launch dates for four live-action series — “Loki,” “The Falcon and the Winter Soldier,” “WandaVision” and “Hawkeye” — and an animated show called “What If…?”

Feige didn’t reveal much about the three new shows during the Disney+ presentation at Disney’s D23 Expo in Anaheim other than title cards. Fans cheered for each reveal.

While Captain Marvel’s Carol Danvers was once called Ms. Marvel, the mantle is now held by a teenager named Kamala Khan, a Pakistani American living in a religious family in New Jersey. She has the ability to stretch and change her shape.

Marc Spector, a soldier left for dead, struggles with multiple personalities as the cloaked avenger known as Moon Knight.

Then there is She-Hulk. In the comics, Jennifer Walters receives an emergency blood transfusion from her cousin Bruce Banner, thus acquiring a mild version of the Hulk condition. She retains her intelligence and emotional control, but appears large, green and powerful.

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