Wall St. drops but S&P, Nasdaq register quarterly gains

Another crazy day with nothing but good news, yet the Dow took a big 200 point dive.  The good news included both the S&P and Nasdaq registering their 9th consecutive quarterly advance, the S&P on its longest winning streak since 1998, the Nasdaq on its longest in history.  The Dow even came in pretty respectfully despite today's downturn, registering only a slight 47 point drop for the quarter.  Actually if the meter had been read a week ago, the Dow too would have been nearly 200 points ahead for the quarter, not to mention that it's been consistently ahead for the past 7 quarters (and that's just as far back as I checked.)  But today investors were looking with a nervous eye more to the future than the past, nervous about the March jobs report due Friday, and continuing nerves over the strong dollar and weak oil.  The negotiations with Iran which now look promising to result in a nuclear deal, but the downside of that is more oil imports from that energy rich country, none of which puts our own oil markets in a better place.  Today's expert from Boston commented that today's plunge was a reflection of everything bad that happened in Q1.  I think an argument could just as credibly be made that Q1 is going to be just fine and that today's numbers are just more of the same profit-taking that has been going on for quite some time now.  Volume was about average at 6.3 billion shares.

Wall St. rebounds from recent losses; deals help

A flurry of merger activity, generally a sign of an improving economy, combined with stimulus news from China which shot the stocks of the world's 2nd largest economy to 7 year highs today, bolted the Dow up big time.  After the big sell offs last week, the index was up 263 points today, 1.5% in a single day after losing more than 2% last week.  At 5.8 billion shares, volume was still comparatively light suggesting many investors are still on the sidelines awaiting upcoming earnings data.  This may be a choppy week because the all important jobs report due Friday will be interrupted by the Good Friday holiday.

Succinct Summation for Week’s Events 3.27.15 (+ bonus)

Presenting again the usual week ending eye-shot summary of the events that have shaped the market and economy in the past seven days.  The bonus this Sunday is Barry Ritholtz's Sunday reading list which includes a New York Times article about how to get financial advice on getting financial advice.

Interest Rates Aren’t Going Anywhere . . .

Here's another perspective on the Fed's actions vis a vis interest rates and the longterm impact on the economy and the recovery, courtesy of Ritholtz's column yesterday in Bloomberg View.  You may have all figured out by now that Mr. Ritholtz frequently does not entertain the same views of the market in specific and the economy in general as many of his colleagues in the financial media.  That's one of the reasons I like him and find reading him very worthwhile.  Also because he's really smart!

Wall St. ends four-day skid on late tech rally

A flurry of M&A activity gave the market a modest boost today to the tune of 34 points on the Dow.  Additionally Fed Chair Janet Yellen made a speech in San Francisco reiterating the Fed's position that there was no hurry on interest rates and hikes were not likely until late in the year.  However, this latter episode seemed to already be factored into the market as it left investors relatively unfazed.  Besides all that, the healthcare sector got a bounce and though the market was lifted a rather modest amount, at least it was the first day in five that was in a positive direction.  But - and this is a big but - everyone is still on the fence awaiting the Q1 earnings reports.  Volume was very light at 5.6 billion.

Wall St. ends down in choppy session, but off lows

Looks like we didn't have to wait two weeks.  We didn't have to even wait two days.  Q1 earnings estimates have already started coming in and, as in prior quarters, they are once again glowing, considerably beyond expectations in spite of the fears of the strong dollar hurting profits.  Other good news included a rally in crude prices due to the Saudi strikes on Yemen, jobless claims falling more than expected and a report of a six-month high for the services sector.  But today, none of this mattered as the Dow dropped 140 points right out the gate but did ultimately recover all but 40 points.  Translation: a few earnings reports do not a trend make so everyone's still on the fence waiting for more data.  It's all coming soon.   Volume was quite active at 7 billion.

Wall St. drops as biotechs, semis sink Nasdaq

Today the powers-that-be decided that stocks were as high as they are going to be for a while and this triggered a massive selloff as everyone took their profits.  There remains some consternation that the strong dollar will lead to weak Q1 reports so some of the selling is in anticipation of that bad news.  However, only some of it since the harsh winter has already  been factored into the forecasts so if there's any good news at all from Q1, everything will be going right back up again, just as it has for the past several quarters.  Also today the dollar weakened again which should have been good news for the Q1 skeptics so my guess is that the selloff today, which was to the tune of almost 300 points, was more about profit-taking than anything else.  Volume was very active at 7 billion shares.

Wall Street down for second straight day; energy weak

Another day of consolidation as investors continue to anticipate earnings season expecting the strong dollar to have a negative impact.  This became a self-fulfilling prophecy with the Dow tanking 105 points.  The good news was that a wide range of economic data showed nothing but strong fundamentals with the recovery remaining solid, but not too strong to give the markets more hints that the Fed may change direction after all.  Most are staying on the sidelines until things shake out and this was reflected in the exceedingly light volume of 5.3 billion.

Wall St. slips after rally as dollar swings

Investors took a breather today with just modest swings back and forth after the big gains last week following the Fed's welcome announcement concerning interest rates.  Worries over the continuing oversupply of crude brought the Dow down just  11 points, which means everyone is just consolidating now and considering the next move.  As today's expert said - the focus now is on earnings and how they may be adversely impacted by the strong dollar.  Q1 reports start coming in about two weeks.  This is an old song that has repeated itself the last few quarters.  Everyone's expecting poor Q1 earnings so there will likely be a selloff until this is proven otherwise, as it has been consistently for the last few quarters.  Of course, the harsh winter has already been a harbinger of poor Q1 earnings so the market is expecting it on that basis alone, strong dollar or not.  With everyone in wait-and-see mode, volume was very light at 5.4 billion.

Succinct Summation of Week’s Events 3.20.15 (& bonus)

I once again submit the easy one-page eye shot of the week's events in the markets.  For the bonus this time, the most interesting article I've found this weekend is Barry Ritholtz's Friday column discussing the distinction between cyclical bear markets and secular bull markets, which one are we in now, or is it possible that we could experience (or soon to be experiencing) both at the same time.  And is this a good thing or a bad thing?  Hope everyone had a great weekend.

Life Happens With Mebane Faber

On this first full day of spring we have two particularly good offerings from Barry Ritholtz's weekend blog postings.  The first is an essay entitled, "Life Happens When You're Not Paying Attention," a fascinating recap of the past few decades of techological progress with particular emphasis on the revolutions started by Bill Gates and Steve Jobs and how all the powers-that-be at the time completely failed to understand their visions for the future.  It's a bit longer than our usual postings (3-1/2 pages or 1400 words) but well worth the five minutes it will take to digest it.

Life Happens While You’re Not Paying Attention | The Big Picture

The second is this week's edition of "Masters In Business" featuring one of our favorite gurus Mebane Faber.  This is a one-hour plus radio podcast in which Ritholtz interviews Mr. Faber about his investment strategies, behavioral economics, and a whole lot of other financial goodies.  I remind everyone that Faber was one of the geniuses that Bert has always encouraged us to study, the author of "The Ivy Portfolio," and an expert we  have discussed frequently in our seminars.

MiB: Meb Faber, Cambria Investments | The Big Picture

This link provides several ways to listen to the podcast but, at least as of this writing, Mr. Faber's interview does not yet appear to be posted to the archive.  The last program was from March 15th and it looks like they post every seven days so we might have to wait until tomorrow before we can listen to it.

Wall St. rises on Nike, lower dollar; snaps three-week string of losses

The dollar was up yesterday which caused everything to crash, but back down again today so the Dow zoomed another 168 points as investors once again took stock and decided it liked what the Fed had to say on Wednesday, signaling a less aggressive approach to interest rate hikes than had been feared.  With interest being held near zero, the Fed has basically made even an unstable stock market look far more attractive than  treasury bills and bonds and so stocks are expected to continue their longtime ascent.  In even better news the biotech sector got a big boost from a company called Biogen for a very promising new Alzheimer's drug, the S&P broke a three week losing streak and the Nasdaq hit a 15 year high.  Volume was very robust at 9.2 billion shares.

S&P 500 ends lower in Fed rally reversal

That party didn't last very long.  Usually these wonderful Fed announcements leave the market on a high for at least few days, but not this time around.  One day this time.  That's all it took, the dollar once again got stronger, oil once again got weaker and the market tanked 117 points.  Looking at the daily chart, it was certainly a choppy day, showing once again that nobody knows what the hell is going on and are just reacting wildly to any little piece of news, good and bad.  But the labor market seems on reasonably solid footing, the weak 1st quarter has been written off to the harsh winter and 2nd quarter looks very positive.  What's left is for everyone to again start wondering what comes next.  Volume was just a little below recent averages at 6.2 billion.

Wall St. surges as Fed statement relieves rate worries

It was another totally irrational day on Wall Street.  After all the brouhaha during the last few weeks of how the sky was going to fall in if the Fed removed the word "patient" from its policy statement today, when that indeed happened, instead of calamity there was ecstasy with the Dow exploding a whopping 227 points.  The daily chart was quite interesting as things dropped like a rock 150 points right out the gate this morning and stayed there until the Fed announcement at 2 pm, then went crazy in the other direction.  Why the jubilation over a move everyone had been dreading?  It was because the Fed's March statement surprised everyone by actually being a very smart one.  In addition to removing the word "patient" and thus allowing itself some breathing room, the central bank also issued a fairly declarative statement "sending a clear signal that it was in no hurry to push rates higher" while offering additional reassurances of its firm acknowledgement that the economy was "growing only moderately."  It was exactly what everyone wanted to hear despite the feared editing of patience.  Though there are still those who believe an interest rate hike might come as early as June, most now believe that the soonest we will see action is September.  This is why I call it irrational.  Until today, the expectation was October and the great fear that had been so severely roiling the market was that it would come much earlier.  Mind you, the Fed gave no date, nor any indication of any date other than that there would likely be no announcement in April either.  All the Fed said was there was no hurry, which is exactly consistent with all of its statements in the last couple years.  But now investors are elated by the assumption that the hike won't occur until September, just one month sooner than previously assumed.  So the market soared.  Crude oil also rallied, the dollar dropped, and the energy index added almost 3%.  Volume was exceptional at 7.9 billion shares.

Dow, S&P 500 fall on Fed nervousness; Nasdaq inches up

Even today's decline in the materials sector was not enough to stave off market nervousness over tomorrow's anticipated Fed statement where, at best, investors expect the posit of a harder line by removing the word "patient" from their policy language and, at worst, are bracing for the long feared annoucement of an earlier than planned interest rate hike.  At mid-morning the Dow was down as much as 200 points and recovered almost to even by 3:30 p.m.  In that final half hour panic again set in pulling the Dow down 128 points.  So once again, as happens every month at this time, all eyes are on tomorrow.  Though an interest rate hike is actually good news indicating a message to the world of a strengthening U.S. economy, investor sentiment is overwhelming that we cannot take the burden of increased borrowing costs just yet.  Volume has remained steady at 6.1 billion shares.

Wall St. bounces as dollar drops, Fed worries ease

Several negative reports including but not limited to a small drawdown in manufacturing and modest decline in consumer confidence was greeted once again as great news and sent the Dow soaring 228 points, all because these bad reports gave the markets increased confidence that the Fed would not on Wednesday announce an interest rate hike after all.  However, expectations are now quite strong that the Fed will change its policy language this week and, for the first time in many years, eliminate the word "patient" from their statement on Wednesday.  Of course, the Fed has made zero gestures to indicate that anything along that line will happen and, as was pointed out by Barry Ritholtz in his Saturday column, the Fed actually has a very long history of taking a "patient" approach to its policies.  However, if it does happen, it will likely send the market into a tailspin even if there is no rate hike announcement since the elimination of the word "patient" will be taken that hikes will not only come sooner than later but will probably not be in small increments.  So on Wednesday (or Thursday) we will have either euphoria or panic.  This will last for a few days and then we will once again be back to business as usual with everyone sitting on pins and needles now speculating on the Fed's meeting in April.  Volume was average at 6.2 billion shares.

Succinct Summations of Week’s Events 3.13.15 ( + 2 bonuses)

It's time for the Sunday night eye-shot again.  Tonight there are two very fascinating bonuses that have popped up this weekend.  From Mr. Ritholtz's Saturday column, a very cool two-page course on stock valuation and picking.  We've talked a lot about avoiding losses as the first commandment of investing.  "Three Commandments of Stock Valuation" examines the other side of the coin -- how to avoid missing out on the significant longterm gains in U.S. equities.  Bonus #2 is a terrific pictorial course on the history of the Dow from 1896 to present, the complete evolution of the index in six easy charts.

Fed Actions In 2004 (“Patience”)

On the heels of yesterday's market panic over an expected and quite dreaded interest rate hike announcement next week, I hereby submit Barry Ritholtz's very concise take on this topic.  It's really just one sentence.  When the Fed says it intends to take a "patient" approach to interest rates, you can take this to the bank because they did the same thing in 2004 (and several times before and several times since.)  I mentioned that, based on prior Fed statements which have been quite consistent, I did not believe there would be a rate hike announcement next Wednesday but that most investors did not share this opinion.  So I was somewhat gratified this morning to read Mr. Ritholtz's column and find that there was at least one other voice out there that did.  The following graphic quite convincingly demonstrates that we will both likely be vindicated next Wednesday.

Art Cashin: Fed Actions In 2004 (“Patience”) | The Big Picture

Dollar powers to fresh highs; stocks and oil fall

The party lasted just one day.  The dollar has already gone back up with a new report today showing inflation near zero, once again portending a very healthy recovery and bad news for those fearing an interest rate hike announcement from the Fed next week.  The strengthening dollar is not only bad news for U.S. companies doing business in international markets (thus threatening their profits), but also caused oil to plummet again, today falling 4.4% with crude now back to $45/barrel.  Investors are pretty convinced at this point that the Fed next Wednesday will announce a June interest hike, whereas the hopes have been that it would come much later in the year.  This anticipation has caused so many jitters that the inflation report caused a 300 point crash in the Dow by mid-day, though it did recover half of that loss by the end of the session to close 145 points down.  Obviously, if this announcement does not happen, if indeed the Fed sticks to its oft stated position that there will be no interest rate hike until the underemployment picture has substantially improved, then the market will be soaring again mid next week.  Though I don't think the rates will be increased next week, I personally hope they are since we have been burdened with this very jittery market for way too long.   The recovery is coming along nicely.  It is time for the Fed to allow interest rates to go up again.  It is the only way to prove that the recovery WILL continue and that the market WILL adapt without the dire consequences so many fear.  My personal opinion is that this is the only way to end these wild day-by-day swings and, once these swings end, the recovery will pick up even more steam.  But that's just my opinion.  With 6.8 billion shares traded today, it's obvious most investors do not share my opinion.  So I will leave everyone on this Friday the 13th with one important question:  If we lost 300 points during the day and then recovered fully half of that by 4 p.m., is this really investor fears of the Fed or is it actually just old fashioned profit taking?

Wall St. bounces back in broad rally; bank shares gain

I have written frequently of late of how the current market often takes good news as bad.  Today the opposite happened - bad news was taken as good and it sent the Dow soaring 260 points, recouping the recent pullback and once again putting both the Dow and S&P back in positive territory for the year.  The impetus this time was a poor February retail report. This was all it took to weaken the dollar against the euro for the first time in 12 years.  As the weakened dollar was taken as a hope that the Fed might not raise interest rates so soon after all, investors were jubilant even though a bad retail report would ordinarily be cause for worry rather than celebration.  Why this report came as a surprise is anyone's guess since all other February sector sales have already come in weak due to the harsh winter, just as it did last year.  But a surprise it was and much to the delight of Wall Street.  Volume was solid at 6.5 billion shares.

Wall St. falls on rate concerns; Citi up after the bell

At one point during today's trading, there was enough good news, or at least the sentiment that it was a good time to buy in on a low, that the Dow was up over 100 points, only to then plummet again on continuing fears of a possible interest rate hike announcement from the Fed next week which many investors fear will kill this long-standing historic bull market, even though the Fed has been very clear that it intends to be very careful to be slow and gradual in its actions so as to avoid that very outcome.  In the end, the market lost all the earlier gains plus an additional 27 points to boot.  The strengthening dollar (also rooted in the prevailing low interest rates) also added to concerns.  Ordinarily a strong dollar would be good news but, again, we are in irrational times where good news is often taken as bad news since, in this new era of global economies, though a strong dollar is very good for domestic health, it is a bane for the many U.S. companies doing their business overseas.  Volume was quite respectable at 6.6 billion.

S&P 500 posts worst day in two months on rate worries

Panic strikes the market again, the Dow plunging a whopping 333 points wiping out all the gains for the year. Once again the culprit is investor fears of what might happen at the Fed next week regarding interest rate hikes in the aftermath of the really strong February jobs report.  Of course most experts expect this to be quite temporary.  And today's pullback may very well prove to be a good thing if the Fed really does take the feared action next Tuesday.  But if instead it continues to do what it's been doing all along. which is almost certainly what it will do, then some smart people are going to be making a lot of money buying in on the low. Volume was above average at 7 billion.

Wall St. rebounds on deal activity; Apple up after watch news

After Friday's panic over the great jobs report, today rational decision making finally took the front seat with the Dow gaining 139 points on increased merger activity.  I got a bit of chuckle from today's expert opining that the market's Monday snapback was due to "reversion to the mean" trading, especially in light of Ritholtz's recent column refuting this and other similar strategies.  But it doesn't take much of an expert to figure out that when the market plummets for irrational reasons, a not too distant snapback for rational reasons is inevitable.  Volume was fair at 6.2 billion.

Succinct Summations of Week’s Events (3.6.15) (+ fun if irrelevant bonus)

It's that time of week again.  And this Sunday I am providing a different kind of bonus.  I'm not really a drinker at all; I might have one or two glasses of wine each year.  The same with coffee.  But I've always been fascinated with wine, especially when I read about people being willing to spend several hundred dollars for a single bottle (and swearing it really is ten times better than a $30 bottle) and even occasionally reading about some outrageous vintage in Europe that sells for hundreds of thousands per bottle (that's not a typo - a bottle, not a case!  Speak of redefining conspicuous consumption!)  I mean how can anyone in good conscience spend as much on a bottle of wine that will be gone in an hour as they would on a (really nice) house?  I've already had a 30 year career as a Main Street corporate manager and now as I prepare to enter a new career as a manager on Wall Street, I am reminded of the oft-used expression "wining and dining clients," a phrase that is not at all metaphorical.  So if an important part of procuring clients is knowing your high class wines and dines, then the graphic that Barry Ritholtz published on his blog on Friday is a must study.  If we've been getting a nice benefit from these weekly eye-shots on the market, I thought it would be fun to take a look at this one-page tutorial on everything (kind of sort of) that you need to know about wine, even if it is only very tangentially relevant to our interests here.  Bon vivant!

What the Fed Will Be Looking at in Friday's Employment Report

For today's entry, Barry Ritholtz's Friday column is an excellent dissection of yesterday's jobs report that sent the market into a 300 point panic.  He reads between the lines and elaborates on the critical parts of the report that the Fed will likely be giving its greatest focus.

Wall Street ends lower as jobs data may bring rate hike sooner

Yesterday I mentioned that if the bad jobs report came in today as expected, it would probably give the market a boost.  I should have added that if it was a good report, we could expect another big sell-off.  Today's jobs report was in fact exceptionally good and Wall Street responded in kind with a major plummet to the tune of  279 points.  Investors were hoping for no more than 240,000 new jobs in order to quell interest rate fears.  The actuals came in at 295,000 or 55,000 more jobs than forecast, and this sent the market into a panic.  As Fortune magazine noted, "A strong jobs report is supposed to be good news, but investors did not appear to get that memo Friday, as U.S. stocks suffered a broad sell-off."  Though the Fed has been quite consistent in its position that there would be no interest rate hikes until the economy was on very solid ground and, even then, they would be small and gradual, investors just don't seem to want to believe this.  And today had the additional wrinkle that, due to the very strong report, unemployment is now down to 5.5 percent, a full 0.2 percent drop from January, and the watershed level at which the Fed has always said that it might take action.  So the 5.5% reported today, the lowest in ten years and the official definition of "full employment," was not good news for investors, yet another irrational case where good news for the economy translated to bad news for stocks.  Every one is now on pins and needles awaiting next week's Fed meeting.  It doesn't seem to matter that the Fed recognizes that there are still too many Americans underemployed and that action will not be taken until that issue is resolved.  Other really good news is that Apple finally reached its own watershed moment, today becoming so large that it was dropped from the Nasdaq and added to the Dow, with longtime icon AT&T being dropped from the Dow to make room.  Predictably Apple's shares rose and AT&T's fell.  Volume was robust and considerably above recent averages at 7.2 billion.  

Wall Street closes up slightly ahead of jobs report

A modest uptick today to the tune of 39 points as investors remain on the fence waiting for the big February jobs report tomorrow. My guess is that the modest gain was because yesterday's private employers report was a little under forecast so bets are that so will be tomorrow's report.  This is what Wall Street wants - a slowdown in hiring so that the Fed votes to keep interest rates low at the March meeting.  This was typified in today's prediction that "people are anticipating some fireworks tomorrow."  If that does indeed happen, there should be another boost.  Adding to this scenario is today's jobless claims report coming in 25,000 over estimate.  The fence sitting was also demonstrated by the lower than average volume, which today was 5.7 billion shares, down from recent averages of 6.5 billion.

Wall Street down for second day after rally; healthcare gains

A second consecutive day of consolidations and profit-taking sent the Dow down another 106 points.  No worries is the consensus though since a bit of selling off had to be expected after such a great February.  Even the latest great challenge to the ACA failed to rile anybody as the market bets that the Supreme Court will continue to uphold the administration.  The selloff can be better explained as a hedge against possible bad news later this week as more reports come in.  As always, investors' interest is focused on the jobs report and, as has happened so many times before, it will be considered bad news if we get a strong report as that will be taken as a sign of an impending Fed interest rate hike.  Once again, good news for the economy will be considered bad news for Wall Street.  Go figure.  The economy continues to improve across most regions and sectors and this is reflected in the 6.3 billion share volume, which is in line with recent averages.

Wall St. falls from records, led by technology stocks

After a fabulous day yesterday and even more fabulous month in February, the market pulled back a bit today to consolidate and ponder, bringing the Dow down 85 points.  Part of it was soft auto sales numbers, attributed to the very harsh wintry February we've now endured for the second consecutive year.  Part of it was just good old fashioned profit taking after reaching landmarks highs.  But most of it was just more fence sitting as investors await a battery of economic reports later this week including the all important payrolls report.  The consensus is that optimism is very high and this was reflected in the slightly lower than average volume of 6.3 billion shares.

U.S. stocks rally; Nasdaq hits highest level since 2000

Everyone had a really great day today, the Dow and S&P reaching new records and the Nasdaq having its best day in 15 years, today up over the 5,000 mark for the time since before the dot.com bubble burst in 2000.  What's behind this flurry of activity that pushed the market up 155 points?  No great mystery, unless it's considered a mystery why investors are finally figuring out what we've known for some time -- companies are healthy not because of any artificial props but because of real productivity, real products and real profits. As today's expert says, "Real earnings and revenue are driving the Nasdaq now."  So we had a really terrific day.  But don't hold your breath.  No sooner was all this good news in hand when everyone jumped back on the fence again and you can guess why.  All eyes now are on a report due Friday that is expected to give more hints about the Fed's intentions regarding interest rates.  How many times does the Fed have to state its position before the market will believe it?  Volume was in line with recent averages at 6.43 billion.

Succinct Summations of Week’s Events 2.27.15 (& bonus)

Presenting your usual Sunday night eye-shot of all the significant macro and micro economic events that shaped the world of finance this week. Every now and then in his weekend column, Barry Ritholtz gets back to basics and writes about essentials.  Friday he did just that with excellent and concise musings about rational approaches to the markets aimed squarely at the individual investor.