No BS Investor

No BS summary of the top stories of the past 24 hours.

“Earnings bonanza: A mix of financial services, entertainment, transportation and technology companies are reporting earnings this week.
New Chinese government data show the country’s economy grew 6.9% in the second quarter, the same pace as the previous three months and marginally higher than most forecasts.
New U.S. stock market records are in sight on Monday.
U.K. and European Union officials are kicking off a second round of Brexit talks on Monday.”

“Some investors think they have now found the next “big short” in the retail industry.
The reshaping of how Americans shop by the internet is accelerating. The US retail industry faces a growing headache, with 10 companies pushed into bankruptcy already in 2017, according to Standard & Poor’s. Even Sears, a once mighty department store chain founded in 1886, is now tottering.
The relentless rise of online shopping is posing a huge challenge for US shopping malls, developers and investors who own shares and bonds in household names. The core problem is a dramatic overbuilding of stores, coupled with the rise of ecommerce
The concern is that this could cause collateral damage to the broader commercial and even residential real estate market, as shuttered shops, malls and stores are redeveloped for other uses.”

“China’s economic growth held steady in the latest quarter, boosted by unexpectedly strong trade and consumer spending, despite fears tighter lending controls aimed at cooling a surge in debt are weighing on commercial activity.”

“It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud.
Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017.
A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.
Wall Street has rewarded lax lending standards that let people get loans without anyone verifying incomes or job histories.”

“Now, “with the weight of a heavily handed Fed lifted,” the Macro Tourist’s Kevin Muir says, “stocks, and financial conditions, in general, will explode higher.”
“Given that the market is now convinced the Fed’s on the sidelines, the last remaining potential bearish catalyst has suddenly evaporated,” he wrote, admitting he’s “not smart enough to know how the Fed will react” or how far stocks could rally from here.”

“Goldman Sachs says investors have been getting increasingly wary of tightening corporate profit margins.
The firm’s response: don’t worry about it.”

Relevant Reads: Will the death of US retail be the next big short?