Daily Archives: September 21, 2020

The Media Research Center has launchedCensorTrack,a website dedicated to#FreeSpeechAmerica, a campaign designed tofight online censorship of conservatives.

Our position is that if they can do it to the president of the United States, they can do it to anyone, and in fact that is exactly what is happening... everyplatform in Silicon Valley today is censoring conservatives, MRCfounder and president Brent Bozell told attendees of a virtuallaunch event on Sept. 17.

WHAT IS SECTION 230 OF THE COMMUNICATIONS DECENCY ACT, AND WHY IS IT UNDER FIRE?

The Media Research Center has launched CensorTrack, a website dedicated to #FreeSpeechAmerica, a campaign designed to fight online censorship of conservatives.

Were going to be coordinating our effort with those on Capitol Hill, trying to work in a bipartisan manner to take our concerns,Bozell added.

MRC vice president Dan Gainor saidCensorTrack.org is the first initiative of Free Speech America and will featureanalysis of tech companies,a look at fact-checkers, an examination of specific censorship issues, a breakdown ofpoliticians, pundits and media figures who helpthe tech industry censor conservatives, and potential remedies.

Weve gone back to the basics and are working actively, proving the problem. Weve done that by creating an archive of incidents of bias, as well as a resource for people interested in the issue or writing about it, Gainor said.

What we are seeing in the tech world right now is the greatest danger and encroachment to freedom of expression and thought, I think, in the history of our country,First Liberty Institute CEO Kelly Shackelford said.Tech companies are now an information highway, common couriers. And they control this information, and theyre engaging in extensive censorship.

NBC NEWS UNDER FIRE FOR APPARENTLY PUSHING GOOGLE TO REMOVE CONSERVATIVE SITES FROM AD PLATFORM

Sen.Marsha Blackburn, R-Tenn., attended the virtual launch event, telling listeners thatSection 230 of the Communications Decency Act (CDA) should not be used as an opaque shield by the tech industry.

Section 230 states that "no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."

The section has been pivotal in the rise of today's social media giants by allowing not only Internet service providers but also Google, Twitter,Facebook, YouTube and others to be shielded from liability from content posted on their platforms by third parties, in most cases.

Critics says Section 230 gives tech companies too much power over what is and is not allowed on their sites. Supporters including a wide range of Internet companies, free-speech advocates and open-Internet proponents say that without the law, online communication would be stifled and social media as we know it would cease to exist,Washington Post's Rachel Lerman wroteearlier this year.

Blackburn plans totake action, althoughSection 230 has many defenders inits current state, and President Trump's attempts to alter how social media platforms are regulated have been met with resistance.

HAWLEY INTRODUCES BILL TARGETING BIG TECH COMPANIES OVER POLITICAL CENSORSHIP CONCERNS

What we are doing with Section 230 reform is clarifying who can use it, when they use it, how they are going to use it, and what it can apply to. And were changing language, removing that otherwise objectionable language that has caused or allowed big tech to say, 'Well we find this, thator the other objectionable,'Blackburn said.

Bozell agreed, telling attendees that Section 230 needs to be addressed.

We are going to be advancing the ideas of Section 230. We think it's time for this to be addressed. These are not impartialplatforms,these arepublishersand they have to betaken into account, he said.

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Fox Business' Evie Fordham contributed to this report.

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Conservative group launches website to battle big tech companies over online censorship - Fox News

A rally in the wilting Tech sector prevented a complete Monday washout. Still, at the end of the day, the week is off to a rough start as concerns about the virus, politics, and banks ganged up on most of Wall Street.

That turnaround in Tech does raise some hopes going into Tuesday. Consider keeping an eye on futures trading overnight to get a sense of whether any of that strength can flow into tomorrows open.

Having theNasdaq(COMP) go positive at one point in the last few minutes was quite a statement, even if COMP couldnt hold those gains at the close. The area the market depended on so much during the long rally (Tech) came back, with stocks likeApple Inc.(NASDAQ: AAPL),Netflix Inc(NASDAQ: NFLX),QUALCOMM, Inc.(NASDAQ: QCOM), andMicrosoft Corporation(NASDAQ: MSFT) all having nice days.

On the other end, Financials continue to get beat up. Theyre deep in the red, and Industrials got hammered too. Most of the big banks fell 3%, and industrials likeHoneywell International Inc(NYSE: HON),Lockheed Martin Corporation(NYSE: LMT), andCaterpillar Inc.(NYSE: CAT) all finished sharply lower amid fears of the virus spreading in Europe. Leading the indices lower was the small-capRussell 2000(RUT), which finished the day down 3.35%not too far off the lows, relative to the other indices (see chart below).

That said, there are still plenty of positives out there and not necessarily any reason for investors to panic. Consider these positive signs from Mondays session:

Ironically, resurgence of the virus in Europe and parts of the U.S. could be a positive force for stocks if it brings buying interest back into the stay at home stocks in Tech that helped lead momentum in July and August. Some of the quarantine names likePeloton Interactive Inc(NASDAQ: PTON) andZoom Video Communications Inc(NASDAQ: ZM) are up pretty sharply over the last week. Whether the FAANGs and semiconductors can regather their former glory remains a question.

Some analysts, however, dont think thats necessarily bound to happen. They see the current turbulence as a sign of the market trying to find leadership outside the Tech sector. Today was a bad day for that argument because Financials, Materials, and Industrialsall sectors youd expect to be doing better if theres a shift back toward cyclical sectors going ongot crushed. The selling in Financials might have reflected concerns over reports in the media about possible money laundering in parts of the industry, however.

Another industry taking it on the chin was travel, where investors seemed spooked about talk of a new virus-related lockdown in the U.K. after 4,000 new cases were reported Sunday. AirlinesincludingDelta Air Lines, Inc.(NYSE: DAL) andUnited Airlines Holdings Inc(NASDAQ: UAL)were among the hardest hit, but cruise lines and hotels suffered too.

Selling at the height of Mondays weakness was pretty dramatic. At one point, there was more than 91% down-volume on the New York Stock Exchange (NYSE), the strongest selling pressure since June 26 on a volume basis and since June 11 on a breadth basis.

Any time the down volume exceeds 90%, its considered a Major Distribution Day (MDD). Typically, these are considered contrarian events, but context is key for the indicator, according to my fellow TDAmeritrade Network* contributor Michael McKerr,Sr Strategist, Institutional Trading Education.

Typically, he writes, when a MDD occurs near a recent high, they often come in clusters as additional length and momentum need to be worked off, typically with a lower low. But when they occur after a prolonged period of selling, they often can be one and done. How will this time play out?

Though things did bounce back a bit in the late going, most of the session was characterized by risk-off trading. That was evident in the dollar index, which slugged its way to a one-month high above 93.50. This could be a sign of investors flocking to perceived safety, as seen back when the pandemic first slammed markets. Keep an eye on the dollar over the next few days to see if it keeps attracting new interest, as that could be a sign of more risk-off action to come.

Still, bonds didnt do much to write home about Monday, with the 10-year yield falling only a couple basis points to 0.67%. Thats historically low, but yields have generally been holding in there. The yield curve isnt really showing much change over the last few months, though 30-year yield is down slightly from recent highs.

Technically, we talk a lot about moving averages being potential support for the major indices. Admittedly, they didnt do much to help when the market cratered back in March. What happened then was just way too few people interested in buying when stocks fell, meaning they had to fall lower, despite whatever moving average had just been pierced. Ultimately, it took a drop back toward the late-2018 lows before things found a stopping point.

You never can tell, as the old song goes, but its a little harder to see that happening this time. First of all, theres just too much Fed support in place. Second, people remember how fast the market popped back off the floor after the March knock-out punch, and might not want to be sitting on the sidelines if theres a repeat.

If the 200-day moving average of 3,100 for the SPX cant hold, look for potential further support at the psychological level of 3,000. Thats where theres a double-bottom on the charts from back in June. The level held very nicely then, though thats no guarantee it happens again.

Another level to remember is 3226, which would represent a 10% pullback from the all-time highs hit in August. Any 10% drop represents an official correction for the SPX, something the COMP is already in.

Theres nothing particularly rare about a market correction. They typically happen once or twice a year, at least. If this latest move down from the August peak has you worried, remember not to make decisions based on fear. Instead, consider carefully thinking through whether anything really material happened in the last month thats changed how you want to be positioned for the long term. Stocks dont always go up in a straight line.

CHART OF THE DAY:A SMALL CAP CONFLUENCE.The Russell 2000 Index (RUTcandlestick), like the rest of the market, saw a massive selloff as its low got very close to its 100 day simple moving average of 1461 (blue line). Whats interesting here is that the 200-day moving average (purple line) is just a few ticks lower at 1455.Data Source: FTSE Russell Indexes.Chart source: Thethinkorswim platform from TDAmeritrade.For illustrative purposes only. Past performance does not guarantee future results.

TD Ameritrade commentary for educational purposes only. Member SIPC.

Photo by Michail Sapiton on Unsplash

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Big Comeback For Apple, Netflix, And Other Big Tech Names Softens Some Of The Pain - Benzinga

Collectively, the stocks that make up the S&P 500 are trading at a value not seen since the peak of the dot-com bubble, and you can peg that rise to a similar cause tech stocks.

While this bubble too may burst, it's not likely to do so in as dramatic a fashion or have as prolonged an effect, said Barclays analyst Maneesh Deshpande. The tech companies that have driven the rally since the selloff this spring are much bigger, more stable, more mature and profitable organizations than those that spurred the dot-com boom, and investors have much more muted growth expectations for them than they did for the dot-com counterparts, he said.

Unlike the dot-com boom, "there's no sort of really wild optimism here," Deshpande told Business Insider in an interview on Friday. "The valuations are substantially higher" than they've been in the past, "but the downside is not going to be that substantial."

Still, in a research note on Thursday, Deshpande downgraded the biggest tech stocks Facebook, Amazon, Netflix, Microsoft, Apple, and Google parent Alphabet, collectively dubbed by Deshpande as FANMAG to a market weight rating from overweight on the potential that they could be sold off in coming months.

Deshpande made the comparison to the dot-com era in his research note. The S&P stocks are trading at 18.7 times their expected earnings for the year-long period that begins a year from now. He chose to look at that later timeframe because the near-term earnings of many companies are expected to be poor, thanks to the recession, and investors are widely understood to be looking past those numbers.

That ratio of price to year-out earnings for the index is the highest it's been since 2000, according to Barclays' research. By contrast, over the last five years, the median ratio for the S&P has been 15.2 times expected year-out earnings.

But those broad numbers obscure the reality that much of that rise in valuation is being driven by the FANMAG stocks and a small group of companies built around ecommerce. That's different from the dot-com boom, when the S&P benefitted from a much wider spread rise in valuations.

This time around, those select few tech and ecommerce companies Deshpande dubbed them the "resilient" stocks are trading at 29.2 times their expected year-out earnings. That valuation exceeds the overall S&P 500's peak ratio in the dot-com boom. It's also 50% above the median valuation ratio those stocks have posted over the last 5 years and 25% above their previous high.

"Our worry is that current valuations are quite elevated and in bubble territory," Deshpande said in his research note. "While a bubbly rally might continue, it could equally burst."

There are good reasons why the resilient companies' stocks have performed so well during the pandemic. Most notably, the companies have been able to take advantage of it, gaining market share against their non-digital rivals.

In a normal recession, investors would largely rotate out of growth and cyclical stocks and into defensive plays companies like consumer staples or healthcare providers that are more insulated from the effects of a downturn, Despande said. But this recession has been unusual because of the degree to which it has shifted consumer spending, boosting the businesses of certain companies that are able to cater to citizens who have been hunkered down in their homes.

Seeing that, investors particularly everyday ones have been buying up shares in these resilient companies.

"This time, these guys are the new defensive" stocks, Deshpande told Business Insider.

But as good as business might be for those companies, at least relatively speaking, they are looking overvalued, he said. Bubbles can go on for a while, but eventually they deflate, one way or another.

What might pop the balloon this time around is a vaccine, Deshpande said. The widespread release of an effective vaccine would help spur the broader economy, allowing people to return to offices, restaurants, and movie theaters and to decrease their reliance on video conferencing software, food delivery services, and streaming video providers.

When that starts to happen, investors will likely rotate out of some of the big tech stocks and into some of the cyclical stocks that are likely to see their revenue and earnings start to surge, Deshpande said. Given their relative valuations, those cyclical stocks are likely to look cheap compared with the resilient ones despite what will likely be similar growth expectations.

"You have to look at valuations" of the resilient stocks, particularly the FANMAG group, he said. "At some point," he continued, "you have to say this is too much."

That said, Deshpande isn't expecting a huge selloff when the rotation comes and the bubble pops. He doesn't expect a repeat of the dot-com bust, where it seven years for the S&P and the Dow to regain their lost ground and 15 years for the Nasdaq.

The dot-com boom was led by a bunch of younger, immature companies, many of which were losing money. That's just not the case today, Deshpande said. The FANMAGs in particular, which comprise 73% of the market cap of the resilient stocks, are stable and mature, he said.

"These are solid companies," he said. "There's no doubt that they're making money."

Got a tip about the tech industry or tech investing? Contact Troy Wolverton via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

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BARCLAYS: Tech stocks priced at dot-com bubble levels are at serious risk of bursting. Here's why the next meltdown will be far less severe than in...

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Here are a couple of fascinating facts for retail bankers to chew over: First, nine out of ten 90% of Gen Z respondents would consider obtaining a banking account from a nonbank company, and more than half (53%) of consumers overall would do so.

Second, 85% of Gen Z consumers say that for certain types of financial accounts they would only apply for them in person. For consumers overall almost two-thirds (64%) say the same.

While its true these are attitudinal would you questions, not descriptions of actual behavior, the sheer size of the numbers on two sides of the digital banking question coming from the same respondent base is eye opening.

Veteran financial services researcher Bill McCracken, President of Phoenix Synergistics, which fielded the national research, has a couple of key takeaways from this pair of statistics:

Two large retail banks that currently are getting this new digital/physical formula right are Bank of America and Capital One, says McCracken. Another, smaller, institution he singles out is Umpqua Bank with its signature Go-To banker program that enables every customer to have their own personal banker, reached digitally through its mobile app.

The Phoenix Synergistics survey, based on detailed online responses from 1,500 consumers collected in August 2020, focused on how the customer journey in banking has been changed by the rise of digital banking. In an interview with The Financial Brand, McCracken elaborated on several of the most significant findings.

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The research does not contradict the importance of digital transformation among financial institutions. If anything, the willingness of a majority (53%) of all consumers to obtain a banking account from a nonbank company affirms its importance.

More than that, the fact that nine out of ten Gen Z respondents are willing to turn to nonbank companies for banking accounts is more than eye-opening, its an overwhelming number, as the report states.

Amazon topped the list of specific nonbank companies consumers would be willing to do banking with, followed by PayPal and Walmart. Clearly youth reigns here as just under a quarter of Baby Boomers feel comfortable banking with big techs. As McCracken observes, even though older consumers use these digital platforms, Millennial and Gen Z users are much more comfortable with them. Younger consumers apply the same mindset for buying a new mobile phone case online in under five minutes to acquiring a checking account or a credit card or a mortgage, he states.

Baby Boomers, on the other hand, sometimes have difficulty online knowing where to go next or what to click, says McCracken.

Theyre thinking, A mortgage is a complicated product, do I want to do that on Amazon? Its a whole different mindset between those two generations, he observes.

Overall, the main reasons why so many consumers are willing to consider doing banking with big tech firms are more advanced technology and faster/easier processes, according to the survey.

All this should be a message in neon to financial institutions, McCracken states. Hes not sure how many have gotten the message, however. There are so far only a handful of what he calls technologically progressive financial institutions, including the ones named earlier. Bank of America is trying to be very close to an Amazon type of experience, the researcher states.

A telling statistic is that the average customer age at these institutions is much lower than the industry average: 38 at Capital One and 39 at BofA compared to the overall industry average of 44, according to McCracken. Credit unions as a group have an average customer age of 47, and some banks have an average age over 50, he says.

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The other striking statistic from this study, as noted earlier, was that 64% of consumers overall say that for some type of banking accounts they would prefer to apply in person and would not consider any other method. And again, Gen Z respondents stood out here with 85% agreeing with that statement. McCracken believes consumers are saying: Dont take away from us the ability to meet face-to-face or at least speak with a human by phone, video or live chat.

McCracken admits to being shocked by the fact that the type of account consumers most often prefer to open in person is the checking account. He and his team had expected it to be retirement accounts or mortgage-related accounts.

The more we thought it through, says McCracken, the more we realized that banks have done a tremendous job in making the checking account sticky. Today consumer checking accounts are tied into many products including direct deposit of payroll and ACH payments for mortgages, auto loans, credit cards and utilities.

Theres a level of complexity and importance with checking accounts that goes beyond simply signing the application and making a $25 deposit to open the account, McCracken points out.

By contrast, digital has become the preferred channel for opening credit card accounts and this is beginning to creep into lending products secured by homes.

In a separate survey during the summer of 2020, Phoenix Synergistics found that while a majority of consumers dont expect to change their branch or digital banking behavior post-pandemic, just over a quarter (27%) say they will use branches less. The figure is 40% among Gen Z respondents.

The results of the customer journey survey, however, indicate that consumers, and especially younger consumers, still do want to use every channel. To eliminate the branch channel altogether, McCracken believes, would be shortsighted for most institutions. You would be telling individuals that need or want face-to-face interaction that thats not an option, he states.

That said, the researcher suggests that institutions cant get by with the same branches of ten or 20 years ago. Self-service options and universal bankers who can knowledgeably handle a wide range of financial issues are examples of what is needed, McCracken believes.

Younger consumers need branches for different reasons, he states. I dont think Gen Zers go to a bank to deposit a check. Theyve got their phone for that. But theyre also not going in to meet with Sally or John sitting behind a wooden desk. Thats not their idea of a physical interaction, McCracken maintains. Something closer to an Apple Store experience would be, he says.

Banks and credit unions may not need as many branches as they have, but rather than closing all or most of them, McCracken suggests they should ask What do our branches need to be? What does our staff need to be? And then look at the digital banking elements and ask How should we integrate all of that?

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If the competitive challenge seems daunting and for many institutions it is , consider that the research also found that incumbent primary providers of banking services have an edge in getting additional business from existing customers.

However, once again, age is a major factor. While a minority of older and middle-aged consumers (and even Millennials) comparison shop among multiple financial institutions when looking for a new product, more than half of Gen Z do this.

See the article here:

Gen Z Says They're Eager to Use a Big Tech for Banking But Will They? - The Financial Brand

Following Trump's threat to ban TikTok in the US, the app has announced plans to become a standalone US company, with Oracle, a US software company, taking a minority stake. ByteDance, TikToks Chinese parent company, will remain the majority stakeholder.

After a lot of toing and froing, the latest update is that Trump has given his 'preliminary approval' of the deal, though he also announced that TikTok would be creating a $5 billion patriotic education fund, which they later denied.

As tension rises between China and the US over who has access to the data generated by the app, a gap is emerging between social media and politics. Instead of connecting people across nations, the TikTok circus has inflamed geopolitical tensions and highlighted a potential split between eastern and western internet infrastructure.

While TikToks announcement is a big story, Betsy Sigman, professor at Georgetown Universitys McDonough School of Business, points out that its far from a done deal.

Partnering with Oracle makes some sense, since Oracle CEO Larry Ellison is one of the only Silicon Valley tech leaders to vocally support Trump.

This could also help position Oracle well for the ongoing period of trade wars between China and the US, and expand into cloud operations and advertising, Betsy adds.

After a series of U-turns, its still hard to know wether the proposed deal actually satisfies the Whitehouse. Both Trump and the Committee for Foreign Intervention in the United States (CFIUS) want to ensure TikTok wont be passing any data from its many young American fans back to China, or posing any threat through malware.

In a recent stipulation, China insisted that TikToks algorithm counted as sensitive information that cant be shared with the US, adding further complications to any deal being made.

Kislaya Prasad, professor at Robert H Smith School of Business, believes this stipulation was made in order to delay a distressed sale. My guess is that they will stretch out the finer points of the deal until after the US election, he says.

Though Microsoft was tipped as the more likely partner, they turned down a deal after TikTok refused to give them end to end control of US data. It's possible the Oracle deal may have too lenient in this crucial area, causing further complications and doubts.

TikTok may appear nothing but a mindless, if addictive app, but the platform has become a battleground for ongoing political tensions between Washington and Beijing. There is an element of wrong place, wrong time, says Kislaya.

In a way, TikTok is a victim of its own success, he adds. There are over 100 million monthly active US users on the app.

Chinese tech companies may be more at risk of becoming pawns in the trade war with the US, since Chinese manufacturing is so hard to compete with. As the home to Amazon, Google, Facebook, and Microsoft, America can afford to throw its weight around in this arena.

Just as tense are concerns over data sovereignty, privacy, and security. When it comes to state access to information, China is playing by a completely different rulebook, says Kislaya.

State control of information is enshrined in Chinese law, and all Chinese companies are required to cooperate with any intelligence operation and request for data from the Chinese Communist Party.

The professors remain divided over the level of threat TikTok actually poses. Kislaya believes its alarmist to see TikTok as a huge threat to American security in its current state.

Betsy is more cautious, having already advised her American students to delete the app. There is a threat of software malfeasance if apps are connected to a company controlled by a country whose leadership has a past record of disregarding human rights, she says.

Both Betsy and Kislaya predict tensions will only continue to rise, as neither China nor the US show signs of backing down.

The drama over TikToks sale comes at a critical time for big tech, and in the wake of Silicon Valleys CEOs facing a grilling from the US congress anti-trust panel.

The issue is that tech giants have monopolized the market, but monopolization is often baked into the very premise of social media apps. Facebook becomes more valuable if there are lots of people on it, as does TikTok, says Kislaya.

Big tech will want free movement of data with no constraints at all, he adds, which is at direct odds with increasing government concerns over data protection.

In India, where TikTok is already banned, there has been a goldrush of new startups creating social media apps to fill the nations sudden vacuum.

Since ByteDance has had to break up its company to keep TikTok in the US, it may be that the age of establishing a new giant tech company is over. New companies may find it tough to break into different countries amid government tensions.

The whole situation highlights that there are really two different internets, Chinas, and Americas, says Kislaya. It seems increasingly unlikely any one company will ever operate in both America and China successfully.

Betsy also highlights how US tech giants have been quick to launch competitors to TikTok, such as Instagram Reels and YouTube Shorts. If such apps take off, the strength of the American tech giants may grow stronger still.

For both professors, the most important takeaway from the drama with TikTok is the need to regulate tech better, though this is a huge challenge in the current political climate.

For regulation around data sovereignty to work effectively, Kislaya suggests an international, institutional framework which sets out clear rules about how data is used and transferred between nations.

But if Trump wins in November, it may be a while before progress is made in this area.

Given the level of sophistication and constant developments in modern tech, its a difficult sector for politicians to keep up with. Awareness is increasing, but it may take a generational shift until those in power have the technical knowledge necessary to regulate properly.

For Betsy, this is too long to wait. The U.S government has to work harder to stay on top of cybercrime, data security, and the threat to digital misinformation. Too much is at stake to risk.

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Stock investors focused on new worries about the coronavirus and economy, selling into a market Monday that was already technically shaken and set for further declines.

But Monday's sharp sell-off was different than the September slump that has centered on tech and growth stocks. Instead it was led by the cyclical names that had been gaining on expectations for a recovering economy, and not so much by the frothy growthnames that have been correcting.

"Things had to have changed for investors to be so nervous," said Sam Stovall, chief market strategist at CFRA. "With Europe starting to see a sharp increase in Covid cases, does that mean they 're going to reimpose shutdowns?" The U.K. government's top scientists warned the country could expect to see almost 50,000 new coronavirus cases per day in mid-October if no action is taken.

Another factor is the political uncertainty following the death of Supreme Court Justice Ruth Bader Ginsburg, with Republicans moving to replace her immediately and Democrats pushing for a delay until after the inauguration in January. That has intensified an already contentious divide, increases election uncertainties, and makes it less likely Congress will be working together on a stimulus package to support the economy, analysts said.

"Because the recovery from the earlier Sept. 8 low was so anemic, it was an indication that the market needed to go through more backing and filling before it's ready to advance," said Stovall.

Technical analysts say the market has seen a breakdown that could take the S&P 500 to its 200-day moving average at 3,104 or even lower.

Scott Redler, a technical strategist and partner with T3Live.com, said the S&P could test the psychological level of 3,200. "I would say there's a high probability we at least test 3,200 if not the 200-day," said Redler.

The S&P 500 was already down more than 7% from its early September high as of the closing bell Friday . The 200-day moving average is is a technical indicator broadly watched by many investors, not just technical analysts. It literally is the average closing price of a stock or index over the past 200 days and is looked at as a momentum indicator. It often acts as support in a declining market, but if it is broken, it could be a sign of more selling.

After a sharp sell-off during the trading day, the major indexes recovered much of their losses into the close, with the Dow off 1.8%. The S&P 500 was down 1.2% at 3,281, and tech-heavy Nasdaq, which had been leading the selling previously, was off just 0.1%. The Nasdaq was helped by a recovery in Apple and Amazon.

Apple, already in a 20% bear market decline, found its footing Monday and was slightly higher, as was Tesla. Strategists had expected tech to be a battleground in the market this week, with dip buyers looking for opportunities to buy the market favorites.

"I think Apple gave a little bit of confidence for tech to have some dip buying. It helped lift the overall indices off the lows. Does that give us confidence that we've seen the low of the week or next week? No, it was just a trade," said Redler, adding Apple was 22% off its highs. "If it continues, maybe it's better for the overall market, but for now it's hard to have a lot of confidence."

As for major sectors, materials were the hardest hit, followed by energy and industrials, all more than 3% lower. They were followed by financials, off about 2.5%. Airlines were down 7%. Tech turned positive, and was up 0.7% in the final hour, after being down most of the day. Communications services, including Alphabet and Facebook, was down 1.2%.

"I think some of it is that [cyclicals] had a good month. I think you have the algorithms that say to buy the stay-at-home names after the drubbing that went on in Europe, with the possibility of the U.K. crackdown again, and what that means for growth," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. "To me, this is an allocation shift. Let's go back to buying Zoom, Walmart and Peloton and selling anything that's leisure or travel-related. The sell-off in tech that started in early September started a very different tenor in the market. We were on a much more vulnerable footing going into today."

Redler said the S&P 500 chart also appears to be forming a head and shoulders chart pattern, a negative sign for stocks."That would give us a measured move down to 3,136," he said.

He said the market has been warning a bigger sell-off was in store."There are four or five things that are nipping at the heels of the market," he said. "In the last two weeks there have been many signals that this kind of action could happen and overall, it could be healthy," he said.

Redler said a move from the Sept. 2 high of 3,588 back to the 3,140 area would not be surprising since it started the rally in March at 2,190. "It's a way for people to buy the dip without thinking they're chasing it," he said.

Stovall said the market is in a seasonally negative time, with September the worst month of the year on average. The end of the month and quarter end is also approaching, though some analyst say that may be good for stocks as big investors rebalance stock and bond holdings.

"October tends to be a capitulation month," said Stovall.

Fundstrat technical analyst Rob Sluymer said he expects as bottom to be formed by October, and the market could see a move higher into the election. He said there are signs that tech stocks are ready for a bounce for a period, but then they and the market could continue to be choppy.

"A lot of the short-term indicators are starting to get oversold. Certainly names like Amazon and Apple, and a lot of the tech names are reaching short-term oversold levels," he said. "I think you're going to have this ebb and flow between technology and cyclicals into October."

Stovall said he still expects a shakeout in growth names which are still highly valued relative to value. The majority of the name in the tech sector are growth.

"The 12-month return for S&P 500 growth minus the 12-month return for S&P value at the end of August was at an all-time high of 35 percentage points," he said. As of Friday, that number was 29.6, lower but the highest since during the tech bubble in 2000. Stovall said he expects valuations to come more in line.

Paul LaRosa, chief market technician at Maxim Group, said he expects the S&P could go to 3,100, and Nasdaq could slide under 10,000, if it breaks support at 10,639. He said the Dow should see support at 27,450 but could see downside to 26,000.

"We don't see it as a market correction. You could see it more as a rotation than a broader market 'everything's going down' correction," he said. He noted that Apple is in a correction.

"I think Apple is in that small universe of companies that have just outperformedWe see it as a potential shift out of those namesinto some that haven't participated," he said.

Continued here:

Stock sell-off accelerates and is expected to get worse before it gets better - CNBC

AUSTIN (KXAN) The Longhorns truly start the 2020 season with the Big 12 opener at Texas Tech after the dismantling of UTEP in the season opener.

Normally, a trip to Lubbock would prove to be very difficult due to an intimidating environment of Red Raiders fans. However, this year, fan capacity will be limited due to restrictions during the COVID-19 pandemic.

Texas Tech struggled in its opener against Houston Baptist, fighting off a potential two-point conversion to hold off the Huskies for the 35-33 win in Lubbock on Sept. 12. The Red Raiders have also been battling COVID-19 outbreaks throughout its locker room. Last week, Texas Tech head coach Matt Wells said the Red Raiders had six active cases.

Its a 2:30 p.m. kickoff in Lubbock between the Longhorns and Red Raiders on Saturday.

Texas head coach Tom Herman met with the media on Monday to breakdown the match-up with Texas Tech.

I hate to even talk about it because I dont want to jinx it. We could certainly be next. I dont think anyone has a secret formula. I think our guys are really bought in. I dont know that were doing anything magical. I think part of it is that we got our rash of them out of the way early, but other than that I think our guys have bought in which is not easy thing to do in Austin at the Univeristy of Texas having to to live the life in order to stay safe and COVID free. For the most part, our guys have continued to be diligent because they believe and understand for us to have a successful season, theyre going to have to go above and beyond and its up to us to make sure that we continue that level of diligence.

I think even distribution is what were after and in 2020 youre going to make sure that these guys stay safe and healthy. I dont know how more emphatic I can be thatI know you guys want to judge whos on the first line in the two-deep and who jogs out on the first time. To us and those guys, its irrelevant.

I think supposed to is very subjective. You guys get to decide what supposed to looks like. As long as we play to the best of our abilities, we feel very confident. We have watched the HBU game numerous times. Its difficult to get a beat on Texas Techs defensive philosophy simply because we know how potent HBUs passing attack is. Any time a team is heavy on one side, run or pass, thats going to affect your defensive game plan. This will be a good test of in game adjustments for us, I think. Id imagine theyre going to play us different. Theres a quiet confidence. I think our guys know what they are capable of. With the veterans being around here and the make up of this team, I do believe theres a lot of confidence in that locker room.

I like the fact that we threw the ball in the upper 40s and had zero sacks. I didnt like that our quarterback got hit a couple of times. When we decided to run, we didnt exert our will necessarily maybe in the way we did in the throw game, but Im not too concerned when you only attempted 10 or 12 runs. Its going to be tough to get in a rhythm. I think some of that is to be understood.

I think one of the reasons we do what we do at home isso its not different on the road. Youre going to sleep in a hotel bed. Youre not going to have a roommate80 something beds to check last week. That took a while. I think what Ive learned with the contact tracing on an airplane. If a kid tests positive within 48 hours of being on that airplane, the two rows behind him and in front of him are going to be wiped out and thats regardless of wearing a mask. Thats going to be difficult in how we seat the team on the airplane. We had to make a lot of changes. We didnt have a team meal on the night before the UTEP game. Felt a lot different and it stinks.

I think its important to praise small victories. I think any time you see anything that is a shining example of what youre expectations are, you need to celebrate them in a new program. Theres probably 100 stories but off the top of my head. Stay consistent, never relent and celebrate small victories.

He kept his head down and mouth shut and came to work everyday. He was the best player on the scout team last year and he did it with a smile on his face. The biggest thing with him and his return was his attitude. Did he make everything in terms of where he was supposed to be? Sure he did that. The hard part is doing it with a smile on your facegetting pushed around a little by the defense. Not just what he did but the way he did it.

Youve got to start fast when youre on the road on both sides of the ball. If you give them momentum on either side of the ball, I think thats something that you can feed off of at home. The formula is not too different. Normally, youve got to weather the crowd noise but crowd noise shouldnt be an issue this year. When you take the crowd out of the equation, there is no difference to playing on the road or at home. Weve been afforded a slight advantage that we dont have to contend with the home teams crowd.

Any time you throw for 430 and lead your team to 600 yards of offense, youre doing a good job. Weve felt when hes healthy, hes one of the better quarterbacks in the conference. He is more than capable, hes one of the better ones in our league.

I dont know that his success at Utah State has anything to do with his success at Texas State. I think hes the right guy for the job. I worked with his brother Luke for three years at Iowa State. The cool thing about Matt istheyre going to be innovative offensively but theyll never stray from the physicality and toughness I think that he wants from his program and Ive always admired that. You can see the beginnings of that start to take shape in Lubbock, as well.

Our training camp was so unique and so different we felt like we needed the extra work. Introduced a little scout team on Wednesday and Thursday/Friday were more Texas Tech centric, if you will. We went from a two and a half work week to a four day work week. You dont want to give 120 18 to 22 year olds, you know, 72 hours off, but we needed the work too. We missed so much regularity of training camp that it was important for us to continue to work.

I think theyre always going to be involved in the pass defense. Im happy that weve got some pretty athletic guys there. Guys that can run and change direction and cover a lot of ground. We feel good about those guys in covering a pass offense.

I thought they graded out really well. I thought three or four graded out as champion. I feel good about the four guys there. Brayden Liebrock rolled his ankle in practice, but hell be back today. I think youll see more 12 personnel and our guys are versatile enough to do it, but they can also stick their face in there and block.

A lot. We havent done anything yet. We beat UTEP. Thats good, it beats the alternative. We won the game and we did it the way we set out to do it, but at the end of that day that was our scrimmage. I think our starters played 30 plays. We understand this is a huge test on the road. The level of competition ratchets up significantly and I think were all crazy if, in 2020, we want to judge a team in 2020 off a game one performance. I think were going to be in for some really poor predictions moving forward if we judge a team off of one game. Were not doing it. I know that. Were going to see a much-improved Texas Tech team. I would like to think well be improved, as well. It will be a team that will provide a much stiffer competition and we know that. We know that every week is different. Just because a team won by two points in week one doesnt mean theyre not capable of beating you by 21. I would caution everyonelets not jump to too many conclusions after one game in the craziest offseason in the history of college football ever.

That decision is out of my control and Im not going to waste a brain cell even forming an opinon about it. Im happy for those players that will get an opportunity to play especially for those juniors or seniors that this might or will be their last time playing college football. I think they got that right. I dont even know the format. So chalk it up to something out of my control and were pretty focused on controlling the things we can control and worrying about the things we can control.

That was how many the team decided. We took a vote where everybody was eligible and these seven guys were head and shoulders above the rest of the team. Within these seven guys, to cut it to four wouldve been a vote or two. We had six last year so it felt like the right thing to do that the team was pretty adamant that these were the seven guys and I think its the compliment to all of them that their team isI guess, divided on who should represent them. A cool thing to see that many guys receive that many votes.

More:

Longhorns coach Tom Herman on the Big 12 opener against Texas Tech - KXAN.com

Katie Koch of Goldman Sachs.

Clouds could be forming on the horizon for FAANMG stocks, a portent that theyll potentially struggle to continue producing the growth rates investors have been accustomed to, argues Katie Koch, co-head of the fundamental equity business within Goldman Sachs Asset Management.

Hence, she recommends that investors seek out tech leaders with prospects of becoming the mega-cap tech names of the future, including those in high-growth emerging markets that, she says, could become local tech titans.

Inan interview, Koch indeed urges to look further than the FAANMGs Facebook, Apple, Amazon, Netflix, Microsoft and Googles parent Alphabet and talks specifics, pointing out that the pandemic has helped some tech-enabled innovators.

The GSAM FE team Steven Barry is co-head manages portfolios for institutional and individual clients globally, with $65 billion in assets under management.

Nearly 90% of the teams strategies are outperforming year-to-date, with net inflows of about $5 billion vs. peers, Koch says.

She maintains that at this juncture since the steep March decline, a lot is happening underneath the rally; for example, an adjustment between growth and value stocks. In the interview, she forecasts that this will increase and is therefore focused on a balanced portfolio thats not overexposed to growth.

Koch, 40, who started as an analyst at Goldman upon graduation from the University of Notre Dame in 2002, has spent her entire career at the firm. She became a partner at age 36.

She is a champion of gender diversity, believing that diversity drives better performance. To be sure, nearly half of GSAM FEs assets are managed by female portfolio managers.

In our conversation, Koch discusses why and how her team influences its portfolio companies to be gender-diverse as well.

She began in Goldman Sachs Private Wealth Management, then during a decade-long stint in London, led several of the firms businesses. She was named head of the global portfolio solutions group for institutional business and in 2011 became a managing director.

ThinkAdvisor interviewed Koch, speaking by phone from New York City, on Sept. 10, with a follow-up email the next day.

She has a big family as well as a big career: She and her husband are parents of three children, 5, 3 and 1; and she is expecting a fourth in November. In 2018, Working Mother magazine named her Working Mother of the Year.

Reflecting on her choice of career, Koch says: I always thought of investing as the art of predicting the future. Thats an audacious thing to do and believe that you can do to imagine a future thats different from the past and allocate capital around that. It was always exciting to me as a concept.

Here are highlights of our interview:

THINKADVISOR: Technology companies led a broad selloff on Sept. 3 and 4. Was that something of a prelude to the long-overdue correction?

KATIE KOCH: Obviously, a lot of the market strength has been led by tech and the FAANMGs Facebook, Amazon, Apple, Netflix, Microsoft, Googles parent Alphabet which are collectively still up about 48% year-to-date, with the other 495 [stocks] in the S&P 500 down about 1%.

The markets up, but theres a lot happening under that; and some of these trends are relevant to the decline [of two weeks ago].

Such as?

The growth part of the market is up around 24%, and the value part is down 10%. The trend that stands out to me most concerning the [9/3 and 9/4 selloff] is the compression between growth and value. The spread narrowed about 5%. So youre seeing some adjustment, but its off one of the historically widest extremes.

Will we see more of that?

I think were going to experience some compression of growth vs. value. Were trying to make sure we have a balanced portfolio and that were not overexposed to growth [stocks], which has had such strong performance.

What opportunities do you see for investing in tech?

We like tech a lot but strongly believe investorsneed to hunt beyond the largest, most well-known names to appropriately reflect the best future opportunities.

Why?

Investors are significantly over-exposed to the mega-cap tech names the FAANMGs but their dominance may be coming under threat. We continue to like several of them. However, after10 years of [these stocks] dominance, the next10 years could look very different.

What will be the cause?

The FAANMGs may struggle to continue to produce the growth rates that investors have become accustomed to. Clouds could potentially be forming on the horizon for them. Therefore, we believe investors should seek out future tech leaders.

How do you characterize those, and where may they be found?

[Theyre] the most innovative and differentiated smaller-cap tech names and rapidly emerging tech opportunities outside the U.S. Local companies applying proven business models in new high-growth markets are becoming local tech titans.

What are some specific areas in where you see the most opportunities?

Cloud-enabled software, digital payments, online entertainment, e-commerce. The pandemic has driven a big acceleration in adoption rates for many of these tech-enabled innovations.

Please elaborate.

We see many opportunities in the content-delivery companies, which provide technology to streaming games and movies. We believe that e-commerce leaders in emerging markets, where online retail penetration is still incredibly low, present strong long-term secular growth opportunities. Many of these companies have the potential to become the mega-cap tech names of the future.

Whats your investing strategy as it relates to the upcoming presidential election?

We need to think about running balanced portfolios because one way or the other, the [election] outcome will move markets. One of the most important qualities of successful investing is humility and knowing whether you have an edge. For us, its at the individual company level, allocating capital to companies that are going to outperform over the long term.

Whats your edge concerning the election?

We have zero edge in predicting whos going to win the election. Therefore, we try not to take risks around it. We have to run a portfolio that will be balanced and able to outperform regardless of the outcome.

Lets talk about another of your high priorities: gender diversity. The assets managed by female portfolio managers on your team total nearly 50%. Did you spearhead a diversity initiative?

As the leader of this business, I focused a lot on diversity, and then my co-head Steven Barry was in lockstep with me and also in pushing it with our portfolio of companies. It reflects the broader ethos of Goldman Sachs.

How do you push diversity with companies you invest in?

Were passionate believers that diverse teams will outperform and it also happens to be the right thing to do. Diversity by bringing in different perspectives drives better performance. Thats why we have [a number of female portfolio managers] and why wed like the portfolio companies to reflect diversity. We connect our highly gender-diverse team to the way we invest and the way we look at companies.

How do you influence the portfolio companies to practice diversity?

[One way is that] we work with their boards and management teams to give them suggestions of board-qualified women. And we have a policy of voting against the nominating chairs of any public company in the U.S. that doesnt have at least one woman on the board. Last year we voted against over 200 companies; and in less than 12 months, 40% of them added a woman to their board.

Whats the likelihood that your diversity strategy will be put in place by other investment firms?

If people get to the point where they can authentically believe in diversity aligned with performance, over the next10 years were going to make unbelievable progress on the issues of gender and race.

So you deliberately built your team to have 50% female portfolio managers. How did you go about that?

We hired talented women and put them in risk-taking seats, and weve also promoted women within the group into risk-taking seats. We were very deliberate about building a team that was representative of global demographics. Its really tough to pick great consumer stocks, for example, if you dont have some female representation and reflect the female perspective, given that women control or drive the decisions on 90% of daily shopping, according to Nielsen.

Some firms say their goal is to employ a certain quota of women in specific jobs. Is that a good way to boost diversity?

I dont think its a very sustainable strategy. You have to have diversity, which is representation. But you have to have inclusion, which is bringing out the ideas and perspectives of the diverse individuals. Independently the two are rather worthless; but together theyre extremely powerful. Just trying to hit a [number] target isnt going to be an advantage.

Whats required, then?

[First, the issue] is getting diverse people around the table, but the real art is pulling out their perspectives and creating a culture of inclusion where peoples voices can be heard. Thats the hard part, but its the part that has the return on investment, for sure.

Youve forged a highly successful career in the male-dominated financial services industry. Has being a woman posed any challenges?

I dont think so. Because in the investing world, you can use that to your advantage by bringing a unique perspective to the discussion. Its enabled me to be in a position to recognize the benefits of diversity. Its not accidental that half our assets are run by women: Because Im a woman, I was focused on that element of diversity perhaps more than others in the marketplace. So given that I think diverse teams outperform, its been an advantage for us.

When you were in Goldman Sachs Private Wealth Management, what were your responsibilities? Were you a financial advisor?

No. I started as an analyst, a long time ago, on one of the largest private wealth teams in Chicago. Id been an English and economics major; so I had to [acquire] financial literacy and learn how to think about a clients portfolio holistically and what individual clients care about. It was a great training ground for the rest of my career. I wanted to be on the institutional side of asset management, and Ive spent 80% of my career in that space.

Youve been with Goldman Sachs your whole career. What did you do after working in Private Wealth?

I lived in London for 10 years and got exposure to international markets. I ended up running our multi-asset-class investing team focused on international clients in Europe and Asia. A couple of years ago, I was brought in to co-lead our equity business.

Whats your reaction to Jane Frasers recent appointment as Citigroup CEO?

Shes eminently qualified for that role given her successful 16-year run at Citi, and especially the last year running the Global Consumer Bank. I think they had a pretty clear succession plan. It happened a little bit earlier than the market expected, but she has all the relevant experience and qualifications to be extremely successful at running Citi. Its really exciting to have the first woman at the helm of a [major] U.S. bank, and I know therell be more of that over time. Its great and good for the industry.

You and your husband have three young children and youre expecting a fourth in November. In 2018, you were named Working Mother of the Year by Working Mother magazine. How do you juggle your demanding career with raising a family?

My family is by far the biggest priority in my life. At the same time, I obviously care about my career; so its not possible for my family to come first every hour of every day. But they need to come first over time. Its [similar] to what I say about picking companies.

Whats that?

Were not going to get it right every time or outperform every day or every month. But weve got to outperform for our clients over time. Thats the horizon from which I integrate my family and my work.

Related on ThinkAdvisor:

Originally posted here:

Goldman Sachs Partner Has a Warning on Big Tech Stocks - ThinkAdvisor

The post-COVID landscape could see increased collaboration among insurers, insurtechs and Big Tech, Capgemini says in a new study.

The consultancy says more than 60% of insurers and insurtechs interviewed for its annual World Insurtech Report expressed interest in working with technology firms such as Facebook and Google.

Capgemini says the findings reflect the industrys awareness that it needs to lift its digitalisation efforts.

During the pandemic technology players have raised the bar in terms of operational crisis handling, earning even more customer trust as a result.

Whether subliminal or explicit, consumers superior Big Tech experiences are affecting the insurance industry, the report says. In every business in which success depends on consumer confidence and a wealth of customer data, Big Tech set the tone for defining the customer experience north star.

Customers cant unsee their Big Tech experiences.

The report says COVID-19 has exposed gaps around the technology, systems, products and processes of both insurers and insurtechs.

Responses from insurers and insurtechs indicate they intend to focus on improving the digital experience and crisis-proofing processes.

More than 80% of insurers and insurtechs say responding in real-time to client needs is a key focus area, and more than 90% say they want to improve their crisis-proof processes.

When it comes to digital experience, 94% of insurers ranked it as a priority and 89% of insurtechs expressed similar thoughts.

Capgemini says the pandemic has upped the ante for both insurers and insurtechs.

Insurers have to look beyond other insurance companies as their competitors, and instead include Big Techs and other new non-traditional players, which are often offering a superior customer experience,Financial Services Strategic Business Unit CEO Anirban Bose said.

Forming scalable relationships with insurtechs will help insurers digitise faster and more efficiently, deepening their customer relationships and helping them to fend off these new entrants.

For insurtechs, their biggest challenge is sustaining business operations while effectively managing more demand than they have ever seen.

The World Insurtech Report is based on insights from surveys and interviews with more than 175 senior executives from insurers and insurtechs in 26 markets. The markets include Australia, the US, Japan, Hong Kong and several European economies.

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Pandemic prompts more insurers to collaborate with Big Tech - International - Insurance News