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Dow climbs 130 points as market rally shows no sign of abatement

U.S. stock benchmarks on Wednesday traded in record territory, extending a solid start to the year for Wall Street equities on the back of better-than-expected earnings.

What are the main benchmarks doing?

Dow Jones Industrial Average
DJIA, +0.66%
gained nearly 134 points, or 0.5%, to 26,345, while S&P 500 index
SPX, +0.43%
tacked on 6 points, or 0.2%, to 2,845. The Nasdaq Composite Index
COMP, +0.22%
meanwhile, was trading at break-even levels at 7,459, less than 0.1% lower, pulling back after setting an intraday record at the open.

All three equity benchmarks opened at an all-time intraday high.

On Tuesday, the S&P 500and Nasdaq Composite notched all-time closing highs again, while the Dow edged back from its record close hit on Monday.

The three equity gauges are up between 6% and 8.1% so far in 2018, adding to last years sizable gains as investors cheer the expanding U.S. economy and growth in corporate profits.

What are strategists saying?

The S&P 500 really is up more than 6% so far this month and shows no sign of abatement, said Voya Investment Management strategists Doug Cot茅 and Karyn Cavanaugh in a note.

What could possibly go wrong? Well, one risk to the market could be global trade, they added, noting that President Trump late Monday approved tariffs on imports of solar panels and washing machines.

Which stocks look like key movers?

Shares in Qualcomm Inc.
QCOM, -0.37%
traded 0.7% lower after the chip company was hit with a $1.2 billion antitrust fine by the European Union. The EU said Qualcomm made illegal payments to Apple Inc.
AAPL, -0.92%
for exclusively using its chips in iPhones and other products.

Conglomerates General Electric
GE, -0.36%
saw its stock drop 1.3% it said the Securities and Exchange Commission was probing the process that led to a sizable increase in its insurance reserves last week. The industrial conglomerate also reported weaker-than-expected quarterly results but offered a rosier revenue projection for its power and oil-and-gas business.

Comcast Corp.s stock
CMCSA, -0.24%
gained 0.6% after reporting earnings boosted by its broadband business and after announcing plans to repurchase $5 billion in stock in 2018.

Puma Biotechnology Inc.s shares
PBYI, -28.31%
slumped by 28% after its price target was lowered, notably by J.P. Morgan Chase, as the company said a European Medicines Agency committee completed a negative vote for its breast cancer therapy neratinib.

Shares of United Technologies Corp.
UTX, +0.69%
rose modestly, up 0.3%, after its fourth-quarter results, which revealed charges stemming from the new tax law.

Texas Instruments Inc.
TXN, -5.39%
appeared on track to decline 6.4% after the chip company delivered in-line results and a modest outlook late Tuesday.

United Continental Holdings Inc.
UAL, -10.22%
rose 0.1%F after the airline posted earnings late Tuesday.

Ford Motor Co.
F, +0.29%
results are due to report after the close of trade. Shares were up about 0.3%.

What are other assets doing?

The ICE U.S. Dollar Index
DXY, -0.92%
was trading at a fresh three-year low as U.S. Treasury Secretary Steven Mnuchin said a weaker greenback is good for trade while speaking at the World Economic Forum in Davos, Switzerland. European
SXXP, -0.13%
and Asian stocks have been a mixed bag.

Gold futures
GCG8, +1.34%
were jumping by more 1.2%, while oil futures
CLH8, +0.26%
were slightly higher, up 0.1%.

What economic data could help drive markets?

At 9:45 a.m. Eastern Time, Markit was slated to deliver January readings for its purchasing managers indexes for manufacturing and services.

A December report on existing home sales is due to arrive at 10 a.m. Eastern.

Check out: MarketWatchs Economic Calendar

Related Topics U.S. Stocks Markets NY Stock Exchange NASDAQ

Quote References DJIA +171.75 +0.66% SPX +12.07 +0.43% COMP +16.12 +0.22% QCOM -0.25 -0.37% AAPL -1.63 -0.92% GE -0.06 -0.36% CMCSA -0.10 -0.24% PBYI -25.73 -28.31% UTX +0.94 +0.69% TXN -6.46 -5.39% UAL -7.97 -10.22% F +0.04 +0.29% DXY -0.83 -0.92% SXXP -0.51 -0.13% GCG8 +17.90 +1.34% CLH8 +0.17 +0.26% Show all references
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Are Advisors Cyberdefenses Strong Enough? Dalbar-ThinkAdvisor Survey Seeks Answers

Lincoln Financial Agrees to Acquire Liberty Mutual Life Unit

ACA Tax Blocker Measure Stalls in Senate

5 Notes on GE’s $15B in LTCI Reserve Contributions

At least 12 major cybersecurity breaches affecting hundreds of millions of people took place in 2017. These major breaches were largely caused by hackers getting through inadequate or relaxed technical barriers.

The credit agency Equifax breach, finally made public in September, months after it happened, involved 143 million people, whose private data — from Social Security information to driver license numbers — were stolen.

In December, Alteryx, a data analytics firm that had purchased data from Experian — another large credit-reporting agency — exposed the data of some 120 million American households.

Today, experts estimate that personal information for more than half the adults in America already is in the hands of cyberfelons. What can be done by broker-dealers and other financial-services companies?

“Authentication is now the primary defense, since the felons have already stolen the data,” said Lou Harvey, CEO of Dalbar, an independent financial-services market research firm, in an interview with ThinkAdvisor.

The speed at which cybercriminals launch attacks means the industry has no choice but to be more vigilant in protecting the precious information it keeps for its investors, so it can give more peace of mind to advisors and their clients.

The public already sees cybercrime as a major threat. Research by Bitdefender, a cybersecurity technology provider based in Bucharest, Romania, finds U.S. citizens are more concerned about stolen identities (79%) than email hacking (70%) or home break-ins (63%).

One major problem for the financial-services industry is that authentication methods are “severely outdated,” according to Harvey. “Many institutions have not yet recognized that cyberfelons already have the data to beat these practices. Millions of clients’ assets are at risk.”

Survey Time

To determine the state of current authentication practices today, Dalbar, a Boston-based research firm; ThinkAdvisor; and 15 major financial-services firms are working together to study and locate the real threats in cybersecurity authentication and then will “create a roadmap to improving protection,” Harvey says.

By surveying broker-dealers, RIAs, mutual fund and insurance companies, and retirement plan providers on current practices, this confidential study will gauge current authentication methods and hence shape ways to improve them.

Findings will be shared with participants, so they can “be made aware of the state of readiness and can compare their own practices to that of the industry,” explains Harvey.

“Advisors also can use the survey questions in an RFP to select product and survey providers. This might be particularly useful in the retirement area,” Harvey said.

Current Practices

Today’s authentication practices largely rely on the of use private data, such as passwords, PINs and Social Security numbers — information that cyberfelons already possess.

Companies also have moved toward two-factor or multi-factor authentication, which include both a password and security questions. There also are different levels of access with certain data, Tier 1 being non-personal data, such as bank balances, and Tier 2 being transactional and/or related to changes in the profile of account-holders.

More recently biometrics, such as fingerprint, facial and voice recognition, are being used by financial firms after such practices took off on smartphones.

Still, criminals also are breaking through these protections.

“The threat [has changed] from the inconvenience of data loss to the economic impact of the loss of personal wealth,” Harvey said.

“The ability of felons to pass through traditional authentication practices with the data they have requires a total re-think of how authentication is done,” he explained.

The Dalbar-ThinkAdvisor survey is an important step in this much-needed process.

It will be followed by a private forum in which institutions can discuss the details of their practices and other plans that are underway, Harvey adds.

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McDonalds Corporation Stock Still Has Plenty of Growth Left

McDonald’s Corporation (NYSE:MCD) is back. Well, at least it seems that way when you look at the past couple years of performance for MCD stock.

From $115 in the early days of 2016, to trading at $177 today, that is impressive performance for any company, much less a retail food business in a recovering global economy.

Yes, the U.S. is its largest single market, but MCD only derives about a third of its revenue from America. The other two-thirds comes from beyond the borders. And that means the health of the global economy is a key factor to MCD stock’s continued growth.

Also bear in mind that in many places around the world, McDonald’s food isn’t just cheap fast food, but a special outing for family or friends. The Big Mac Index was invented by The Economist magazine and it shows the purchasing power of an economy based on the price of a Big Mac.

There’s also the statistic of how many hours of work at minimum wage it takes to buy a Big Mac in various countries. Here’s a chart from a couple years ago.

The point is, MCD has firm foundation in the world of consumer dining. It’s in the top 10 consumer brands in the world, according to Forbes. Yet just a few years ago, MCD stock seemed doomed.

It was no longer trying to keep with changing palettes and dining trends. It was getting dangerously close to ignoring its base and allowing insular corporate branding to stay safe and consistent.

How MCD Stock Is Making a Comeback

Fortunately, a change in leadership along with some vocal stockholders got this burger behemoth back on track. And now it’s tearing up that track.

Reshuffling its menu offerings, has been a big hit and adding fresh, quality beef to select burgers has been paying off. It’s also planning on launching a vegan burger and a new, exclusive soft drink developed by Sprite, called MIX.

These types of menu changes will allow MCD to draw in customers its traditional menu hasn’t really catered to in the past. Also, given these unique items, the prices are likely to be higher, which will help boost MCD margins. And growing margins in this low margin sector is a big deal.

Also, 2018 should see a growth in technology-enabled ordering and services. MCD is hoping to roll out mobile ordering to 20,000 of its restaurants by the end of this year.

So, after two solid years of growth, is the run over for MCD stock? Not a chance.

Granted, so far this month it hasn’t done much, although its 3% rise would be in line with the kind of growth it has seen annually for the past couple years. On Jan. 30, its Q4 results will be posted and they should be just as strong as its previous quarters.

That kind of growth, along with its rock-solid 2.3% dividend will keep the Golden Arches untarnished for quarters to come.

Richard Band’s Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.

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CRYPTO CRASH: You Wont Believe What Just Happened to Bitcoin

Bitcoin broke below $10,000 during a wild trading session yesterday, briefly sending the king of cryptos 50% below its December highs. Thats crash territory, folks…

But bitcoin speculators didnt capitulate. A new buying frenzy helped bitcoin recover most of its losses by the late afternoon. As of early this morning, one bitcoin fetched almost $12,000.

The gyrations took the digital token across a trading range of more than $2,600 over 18 hours, Bloomberg reports. Its tumble to a low of $9,186 pushed a monthlong rout past 50 percent and raised the specter that last years 1,400 percent rally was giving way to what many considered an inevitable bursting of the bubble.

Talk about a wild ride!×193.png 300w” sizes=”(max-width: 540px) 100vw, 540px” />

I sensed more crazy price action was to come in the crypto world as the price of bitcoin jumped toward $20,000 in December. Thats when I predicted that bitcoin would crash and lose at least half its value at some point in the next 12 months.

To be clear, I dont think the crypto crash were witnessing right now is the beginning of the end of bitcoin. I dont know if bitcoin is ultimately worth $1 or $1 million, or whether a faster and better cryptocurrency technology will replace it at some point in the future.

My bitcoin crash prediction had nothing to do with the hurdles bitcoin and blockchain technology might face or the fate of decentralized transactions.

I needed only two pieces of information to make my crash call: price action and sentiment. Thats it!

Everything we witnessed in the crypto world leading up to this months hard reset told us bitcoin mania had reached dangerous levels.

Just think back to the dot-com boom of the 1990s. Internet stocks were soaring higher every month. Companies would add dot-com to their name just to attract new investors. Thats exactly what we started seeing in the markets recently as left-for-dead stocks added blockchain to their names to juice shares.

Price acceleration was also getting out of hand. It doesnt matter how hot or hyped an investment becomes it simply cant go straight up forever. With bitcoin going parabolic late last year, it was only a matter of time before a hard reset knocked the price back down and sent speculators running.

Its clear that bitcoin and other cryptos have entered the Wild West phase all speculative assets go through as they mature. The rules and regulations are fuzzy. Rapid price appreciation attracted scammers and hackers. For many investors who are just learning the bitcoin basics, it feels like crypto outlaws are looking to rip off anyone to make a quick buck.

But its also possible that bitcoins most recent tumble has could eventually strengthen the crypto market in the long-term. All manias eventually come to an end. And somewhere along the way, highflying assets will get hit with a hard reset or two before consolidating and moving higher. Thats just how markets work.

So its not totally insane to assume this wont be the last major correction in the life of bitcoin or any other popular cryptocurrency. Remember, bitcoin endured short-term plunges of 20% or more on four separate occasions in 2017. Whos to say we wont see more action like this in the months ahead?

The cryptocurrency market is going to have to start dealing with some growing pains this year. That will lead to wild price swings, hacks, attempts at government regulationyou name it.

And if my hunch is correct, well see more big crashes and rallies in the weeks and months ahead. Buckle up!


Greg Guenthner
forThe Daily Reckoning

6 Home Improvement Projects That Will Pay Off the Most in 2018

The number of opinions on the value of a particular home remodeling project is at least as large as the number of remodeling projects homeowners might want to tackle. One constant, though, is how the project enhances the value of a home and, ultimately, its resale value.

Remodeling projects can be large (for example, adding a second floor to an existing house) or small (replacing the main entry door). On average among 20 projects included in a recent survey by remodeling magazine, the average residual value one year after a project is completed was 56.8% of the project’s 2017 cost. That’s slightly below the 2016 average of 57.9% return.

As a result, all projects are not created equal. According to the ‘Remodeling 2018 Cost vs. Value Report’ from, on a national basis only two remodeling project return more than 90% of the cost of the project. The other 18 projects return anywhere from around 83% of the cost to around 48% of costs.

According to remodeling magazine, returns slipped because project costs rose and resale values fell:

The 3% to 5% gains in cost that we report here were calculated before fall hurricanes and fires began fueling what one building products distributor calls a freight train of extraordinary demanddemand certain to keep elevating the prices for many building materials.

Expect, as well, an even greater shortage of skilled workers in disaster-struck markets as those workers struggle to fix up their own homes and employers feel pressure to respond with pay hikes.

Project costs are divided into two groups: mid-range costs are based on typical quality materials and the estimates were generated from identical specifications for the work to be done; upscale projects call for work that is more expansive and complicated and uses more expensive materials than the baseline mid-range projects.

Among the mid-range projects is one that returns more than 90% on the homeowner’s investment and three that return more than 75% but less than 90%. Among upscale projects, only one returns more than 90% and only one returns more than 70%.

Here are the six projects that give the best return.

Garage door replacement (upscale)
> Cost: $3,470
> Resale Value: $3,411
> Return: 98.3%
Remove and dispose of existing 16×7-foot garage door and tracks. Install new 4-section garage door on new heavy-duty galvanized steel tracks; reuse existing motorized opener. New door is high tensile strength steel with two coats of factory-applied paint, and foam insulated to minimum R-12, with thermal seals between pinch-resistant panels. Windows in top panel are 陆-inch insulated glass. Hardware includes galvanized steel hinges and ball-bearing urethane rollers.

Manufactured stone veneer (midrange)
> Cost: $8,221
> Resale value: $7,986
>Return: 97.1%
This project replaces 300 square feet of vinyl siding from the bottom third of a house with manufactured stone veneer, two separate layers of water-resistive barrier laid over bare sheathing, corrosion-resistant lath and fasteners, and a nominal 12-inch-thick mortar scratch coat and setting bed.

Deck Addition — wood (midrange)
>Cost: $10,950
>Resale value: $9,065
>Return: 82.8%
Add a 16-by-20-foot deck using pressure-treated joists supported by 4×4 posts anchored to concrete piers. Install pressure-treated deck boards in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing system using pressure-treated wood posts, railings, and balusters.

Minor kitchen remodel (midrange)
> Cost: $21,198
> Resale value: $17,193
> Return: 81.1%
In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new shaker-style wood panels and drawer fronts, including new hardware. Replace combination cooktop/oven range and slide in refrigerator with new energy-efficient models. Replace laminate countertops; install midpriced sink and faucet. Repaint trim, add wall covering, and remove and replace resilient flooring.

Siding replacement (midrange)
> Cost: $15,072
> Resale value: $11,554
> Return: 76.7%
Replace 1,250 square feet of existing siding with new siding. Include factory trim at all openings and corners.

Window replacement — vinyl (upscale)
>Cost: $15,955
>Resale value: $11,855
>Return: 74.3%
Replace 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite vinyl windows. Simulated wood-grain interior finish; custom-color exterior finish. Trim exterior to match existing; do not disturb existing interior trim.

Visit the remodeling magazine website for the complete listing of project, costs, and specifications.

ALSO READ: 6 Home Improvement Projects That Will Pay Off the Most in 2018