Opinion The Big Crunch


  Tuesday, 11 Jul 2017 | 12:23 PM ET

School shopping shifts earlier thanks to Amazon Prime Day

Posted ByNick Wells
Jamie Grill | Getty Images

The school year starts early these days, and you have Amazon to thank for that.

Retail shoppers are taking advantage of the online giant's Prime Day to get a jump on back-to-school shopping for the fall semester. Amazon's annual event offers subscription members various deals over a 30-hour period in July.

Fresh data provided to CNBC show how shopping for back to school is starting earlier in in the year. Online-only shopping for back-to-school peaks the week of Prime Day, long before many brick-and-mortar stores have rolled out their displays, according to Cardlytics, a firm that tracks purchasing data.

"Retailers should start marketing their online channels at the beginning of the summer, to capture the early online spend," said Dani Cushion, chief marketing officer at Cardlytics, "and their in-store channels mid-summer through the start of the school year."

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  Thursday, 13 Oct 2016 | 12:03 PM ET

The numbers are staggering: Harry Potter and the $25 billion franchise

General view of atmosphere of fans at the 'Harry Potter And The Deathly Hallows: Part 2 An IMAX Experience' release party at AMC Loews Kips Bay 15 theater  in New York.
Getty Images
General view of atmosphere of fans at the 'Harry Potter And The Deathly Hallows: Part 2 An IMAX Experience' release party at AMC Loews Kips Bay 15 theater in New York.

In anticipation of the latest film in the Harry Potter franchise, "Fantastic Beasts and Where to Find Them," the full lineup of Harry Potter will be returning to theaters for a week beginning on Thursday.

Time Warner is looking to further cash in on an eight-film franchise that has already earned more than $7 billion in box office revenue since 2001. Scholastic, which sold more than 160 million copies of the seven Harry Potter novels in the U.S., also published the screenplay for the film. At $24.99 for the hardcover, that adds to the nearly $8 billion in book sales that have already been wrung out of the series.

As in the Star Wars franchise, the value of toy sales shouldn't be underestimated. Hasbro and especially Mattel have both made money on Potter games and toys, and total sales so far are estimated at over $7 billion. All told, the total value of the franchise so far has been around $25 billion.

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  Sunday, 11 Jun 2017 | 12:55 PM ET

There's a fight brewing in academia over which political party is better for the stock market

Posted ByNick Wells
A pedestrian passes in front of the New York Stock Exchange.
Getty Images
A pedestrian passes in front of the New York Stock Exchange.

Does the stock market perform better under a Democrat or Republican president? The answer might not be as simple as you'd think.

For years, researchers have found that a Democrat in the White House is correlated with strong excess market returns over the past century. A new paper questions that belief, and suggests that previous results in the literature were the result of reporting bias, data mining and selection bias. Those are serious allegations in the impartial world of academic research.

The most recent evidence showing a correlation between a Democratic president and strong market returns was from earlier this year, when a working paper from two University of Chicago researchers was put out by the National Bureau of Economic Research. Lubos Pastor and Pietro Veronesi's research — which expanded upon a 2003 paper — found that in the period 1927 through 2015, the stock market saw average excess returns of 10.7 percent under Democratic presidents and negative 0.2 percent under Republicans.

Pastor and Veronesi explain that nearly 11 percent difference — the so-called "presidential puzzle" — with a model for time-varying risk aversion through occupational choices and presidential elections. When risk aversion is high, like during economic crises, voters flock to Democratic candidates, they argue. When risk aversion is low, during boom times, voters select the Republican candidate.

Not so fast, say researchers at Research Affiliates, a quantitative and "smart beta" fund manager run by Rob Arnott. The new paper argues that previous studies — including Pastor and Veronesi's — on stock markets under different parties overstate returns under Democratic presidents because of two unique occasions that throw off the average.

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  Wednesday, 7 Jun 2017 | 1:26 PM ET

Why quant investing beats humans: Computers don't mind boring stocks

Quantitative funds are all the rage lately, trading billions of dollars in assets and making headlines in recent weeks. But we were curious how portfolios run by computers and algorithms differ from those in fundamental-driven trading firms.

We studied data provided to us by eVestment, and the results were surprising. The institutional investor data firm looked at U.S. large-cap growth stocks and compared active strategies that take a fundamental approach to those that use a quantitative approach to security selection.

It turns out fundamental-driven active managers are much more likely to be drawn to big, household names. Think Visa, MasterCard, Alibaba, Alphabet, Priceline and Starbucks. Those stocks are skewed way to the fundamentals side, with comparatively little love from the quant shops.

"There are hundreds of stocks you could buy," said Mark Scott, vice president of corporate communications at eVestment. "For humans, those decisions could be impacted — consciously or subconsciously — by many factors outside of the numbers."

Look at the companies on the other side: Public Storage, Cintas, PNC Bank, Waste Management, John Deere and F5 Networks. Those stocks are the most heavily skewed to quant funds, relative to fundamental investors.

So it seems like quant funds tend to stay away from big brands, instead looking to find value in smaller, less commonly discussed companies.

That makes sense: Some experts think fundamental managers have to convince their clients with a good story, and picking big names like Facebook is an easy conversation to have. Quant funds on the other hand can focus more on mean-reversion stocks, risk-adjusted returns and high turnover.

There's also the matter of exchange-traded funds. About 40 percent of quant funds own the S&P 500 ETF, compared with 1 percent of fundamental funds. That suggests that quant funds own some of the broad market through index holdings, rather than the big popular stocks.

Quantitative hedge funds returned about 5.1 percent annually the last five years, compared with 4.3 percent for the average hedge fund, according to The Wall Street Journal. The higher returns have caused many in the investment business, including the head of BlackRock Larry Fink, to turn to computers to handle more investing duties.

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  Saturday, 3 Jun 2017 | 1:00 PM ET

What Twitter thinks it knows about you is often wrong. Here's why

CNBC's Wilfred Frost is retired, and Landon Dowdy makes over half a million running her own business. Those are some of the conclusions drawn by Twitter's newly available demographic inferences, which are based on behaviors outside of the social media site.

In May, Twitter made some updates to their user data controls and privacy settings. The changes were designed to give users more access to their information, and more control over how it's used, the company said in a blog post. In essence, the changes allowed users to see how Twitter and its advertisers had been categorizing them based on their social media usage and other, often offline, behaviors.

You can find out and edit what Twitter knows about you in the "Your Twitter Data" section of your account's settings section. It's broken down into two parts: what Twitter gleans about you from your use of the social media site and what it's "partners" know about you. That's based on what you do off the site, like making online purchases attached to your email address, and offline behavior like in-store purchases.

It's that third-party data that users often find speculative or at worst, flat-out wrong. CNBC's Eric Chemi checked in with some of the network's on-air talent to see where Twitter's partners fell short on their inferences.

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  Friday, 2 Jun 2017 | 9:01 AM ET

The government says unemployment fell to 4.3% in May, but here's a more realistic rate

Posted ByNick Wells

The unemployment rate fell to 4.3 percent in May, according to the Labor Department. But relying on that one number as an indicator for the economy as a whole ignores a lot of important information just below the surface.

Each month on "Jobs Friday," the Bureau of Labor Statistics releases a slew of economic data, each point providing its own perspective on the employment situation. Economists look past that one headline number — that 4.3 percent figure, also known as the "U-3" rate — to other measures of jobs in this country.

One of those indicators is the U-6 rate, a measure of unemployment with a broader definition than the U-3 rate. In May, that figure fell two-tenths of a point to 8.4 percent, its lowest level since mid-2007.

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