WSJ: Coupon Clipping Explained

By SIMON CONSTABLE

When you hear people talk about coupon clipping—that is, in an investment context—they typically mean they are collecting the interest payments from bonds.

These days bond interest payments are handled electronically, so there is no need for anyone to actually get the scissors out.Coupon clipping refers back to a time when these fixed-income securities came printed with coupons on them. To receive the interest payments, the bondholder would clip off each coupon as its payment came due and redeem it for cash. See original story here.

Barrons: Why Sunspots Will Warm Natural Gas Market

By SIMON CONSTABLE

A decline in the number of spots on the sun could warm up the market for natural gas.

These spots, which scientists have observed for centuries, are caused by changes in the magnetic fields on the solar surface, the National Aeronautics and Space Administration says. Scientists aren't sure why, but when the number of visible spots declines, temperatures on Earth tend to be lower. This matters for investors because the sun is entering another period of fewer spots.

You can profit from this situation if you focus on two things. See original post here.

Photo by Andrey Grinkevich on Unsplash

WSJ: What Are Doves and Hawks?

By SIMON CONSTABLE

When you hear finance people talking about doves and hawks, they usually aren't referring to our feathered friends. Most often they are describing the attitude of Federal Reserve policy makers toward inflation.

The Federal Reserve, aka the central bank of the U.S., has two mandates: full employment and a stable price level (i.e., low inflation). This dual mandate creates a tension—and a balancing act—because actions that focus on one side can worsen conditions on the other. See original post here.

Photo by Mathew Schwartz on Unsplash

WSJ: U.S. Oil Boom is Bad News for Tanker Business

By SIMON CONSTABLE

The approach of U.S. energy independence has becalmed an important part of the global maritime industry: the business of hauling crude oil across the oceans. What’s worse for investors is that the trade winds likely won’t pick up any time soon. See original post here.

Photo by Natalya Letunova on Unsplash

WSJ: What's the Difference Consumer Staples and Durables

By SIMON CONSTABLE

Stock strategists often talk about two groups of companies that sell goods to individuals: makers of "consumer staples" and makers of "consumer durables."

They sound similar but are in fact completely different in ways that matter to investors.
Consumer staples are the goods you buy for immediate, everyday use—like shampoo, toothpaste and soap. See original post here.

Photo by Joshua Hoehne on Unsplash

WSJ: Auction-Rate Securities Alive & Well

By SIMON CONSTABLE

Is it déjà vu all over again in the debt market?  You’d be forgiven for thinking so, especially if you remember the auction-rate securities debacle from 2008.

Those securities were and are used by some tax-exempt organizations as a form of inexpensive financing. They price using a Dutch auction at periodic (usually short) intervals.  Read more here.

Photo by Joshua Mayo on Unsplash

Barrons: Energy Boom Powers Up Shipping

By SIMON CONSTABLE

The North American energy boom should help power up an industry that's been stuck in the doldrums: marine transportation.

Shipping, the ugly stepsister of commodities, has been unappealing over the past few years. A massive shipbuilding boom created overcapacity, sending shipping fees into free fall. The Baltic Dry Index, a key benchmark for waterborne transportation fees, peaked at 11,793 in May 2008 before plunging to 663 in December that year, according to FactSet. By Friday it crept back to 933. See original story here.