Wall Street ends worst quarter in four years with a rally

Today may have been the end of the worst quarter in four years but it sure ended with a huge bang, the Dow soaring a big 235 points, now having very nearly recouped all the losses from Monday's enormous thrashing.  Even biotech snapped back today up 4.5% or about one-third of the big losses from last week when investors got so panicked over Hillary Clinton's comments regarding drug price gouging and her plan to stop it if she's elected.  All in all, the Dow is down more than 7% for the quarter, the S&P just about as much.  Nevertheless, analysts still predict a big 11% bounce before January.  Good news for the day included a very good private sector job report, hopeful that the government report due Friday will also be positive.  But most of today's bump was just credited to good old-fashioned bargain hunting.  Or as today's expert noted, "When everyone gets bearish quickly, you tend to get these bounces."  The same expert said, "Investors will now focus on economic data" rather than panic at every blip.  That I'll believe when I see it. Trading was very heavy at 8.5 billion shares.

S&P 500 bounces back after nearing August low

One of the day's headlines read, "Is It Over Yet, or Will There Be More Tomorrow?," implying that the recent panic sell off continued today.  It seems obvious that it did not continue today but rather investors decided once again to pick up bargains, trading shooting the Dow up nearly 120 points by mid-morning to settle for a 47 point gain at close.  So this was not more panic as we've seen recently, but rather a lot of smart money once again taking advantage of low prices.  In fact, today the S&P very nearly pulled out of its low.  As today's expert from Schwab commented, "I would never have expected that we would take out that low and we haven't yet, but we sure are close."  So, just as things have been going so frequently lately, yesterday's very bad news was followed by today's considerably better news.  Even pharmaceuticals came back a bit, a modest 1%, but then after the drubbing they've had this past week, they had nowhere to go but up.  Apple is once again the mystery of the day, that despite a marvelous report of a record first-weekend sales of the new iPhone, the stock still fell 3 percent.  Anyway, today was a breather from yesterday's carnage and the above average volume of 7.9 billion meant a lot of bargain hunters were busy today.

Wall Street drops as anxious investors eye China

So the week before last investors were all in a twist over Fed uncertainty.  And the Dow tanked.  Then last week the Fed issued 3 clarifying statements to put the market at ease.  And the Dow soared.  But now that there's more clarity and we can now go to the bank over this rate hike, investors are once again panicked over the impact of a rate hike so today the Dow tanked -- a tank to the tune of 312 big ones!  But perhaps the major driver of this recent sell off was further Democrat protests over the soaring costs of pharmaceuticals which, following up on Hillary Clinton's leadership on this issue, has driven the biotech index down another 6% today, its worst one day drop in four years.  Today's report from China was also none too encouraging -- a nearly 9% drop in profits in their industrial sector.  All in all, not much good happened today.  And they say, "investors think the Fed is confused."  Well, the first thing we've got to do is to get real.  The Fed is not confused.  The problem is investors are confused about the Fed.  And the sooner they get educated, the sooner all this chaos will end.  But as of today, everyone is still in a tizzy and the very substantial volume of 8.3 billion was a testament to that.

Succinct Summation of Week’s Events 9.25.15 (& 2 bonuses)

This week's summation is particularly detailed, not quite consistent since it wasn't really a week too full of surprises.  And some of the positives should negatives (#7 for one shouldn't even be there since it was reported before the week's big bombshell) and some of the negatives positive (why is it a bad thing that Tsipras won reelection?) but, of course, much of this is and always has been just opinion.  But given the week's long laundry list, particularly in the negative, I thought I'd keep this Sunday's bonuses on the light side.  #1 is a humorous (but quite truthful) short video about the scientific differences between theory and law, a distinction that, if more people had paid attention in science class in their youth, we'd have a whole less silly debate in this world.  #2 -- even more to the light side -- a very entertaining vignette of a Steve Carrell film comedy about high finance coming this Christmas.  Since my other career is in film, I couldn't resist this one.  Hope everyone had a great weekend.

MiB: Art Samberg of Pequot Partners

For those of you who have the patience for it, from Ritholtz's weekend column, here's the inside scoop on a hedge fund that actually did it right.  It's from Bloomberg Radio, assume it's a one hour broadcast so ... if you have the patience for it.  But since we're all interested in hedge funds, I think this may be an hour well spent.  Enjoy your weekend.

S&P 500 ends flat as biotech selloff offsets Yellen comments

I noted yesterday that since Janet Yellen's conciliatory remarks about interest rates came after the market close, that we were bound to see a more positive reaction today.  Well, "positive" doesn't quite cut it.  Now that there was more clarity in the Fed's intentions, there was a huge rally of over 250 points that lasted until mid-afternoon, suddenly came crashing down losing all the gains by 3 p.m., but then in the final hour rallied again to close 113 points up.  So yes, the market liked what Yellen had to say last night, but then old news became new news when the whole biotech sector sunk 13% for the week, its biggest weekly decline in seven years, attributed to remarks made by Hillary Clinton on Monday attacking pharmaceutical price gouging.  Why there would be a sudden sell off in this industry due to a potential policy position from a candidate who cannot possibly do anything for at least 16 months, if ever, makes no sense.  So what's new?  At 7.2 billion shares, volume was quite closely in line with recent averages.

Wall Street ends lower as Caterpillar, health stocks weigh

Another wild day - this is sounding like a broken record - with the Dow down almost 300 points mid-day until it rebounded later to close just 78 points down.  It's all the same stuff causing the jitters -- uncertainty over the Fed, China, and none of this was helped today when industrial giant Caterpillar Tractor cut its sales forecast and announced 10,000 layoffs.  There should be a little more calm tomorrow since, after close, Janet Yellen gave a speech at U Mass basically confirming that there almost certainly will be a rate hike before year-end, likely December.  This is only the third speech by a Fed official this week that seeks to quell the suspicion since last Thursday's meeting that there may be no hike at all this year.  I think pretty much we can now discard that notion.  The good news for the day was that jobless claims barely budged and sales of new homes rose more than expected.  Volume was more in line with averages at 7.7 billion.

Wall Street ends lower as factory data adds to growth worries

Another really volatile day as China continues to weigh, and along with it materials (down more than 2%) and oil (down more than 4%).  And all this negativity was despite the fact that Boeing reported a whopping $38 billion dollar contract from China which, believe it or not, actually caused the aerospace giant's stock to drop.  Other bad news included U.S. manufacturing activity at a 2 year low and China's at a 6-1/2 year low.  All combined drove the Dow down almost 120 points by mid-day though it did eventually recover all but 50 of that.  But the day really should just be taken as a write-off as trading was very light due to Yom Kippur.  Volume was only 5.9 billion compared to the 8 billion average of the past month.

Wall Street slides with commodity-related stocks, autos

Volatility continues full swing with the difference between the day's low and high over 250 points, and at one point being nearly 300 points off yesterday's close but finally settling in at a more palatable 179 point loss.  Some of it was this ugly Volkswagen cheating scandal, which some pundits now fear may threaten the very survival of the auto giant.  But mostly it was just same old, same old -- continuing fears over China and today, those fears hit the copper and industrial metals markets particularly hard as an awful lot of our hard stuff goes there.  And there are always those who will argue that the real problem is continuing uncertainty over the Fed.  Just WHEN will that hike come?  Further comments today reinforced the notion that there likely will be a hike by December.  Janet Yellen will be adding more comments again on Thursday.  But the reality is that the S&P remains overvalued so there is still room to slide before we can really call it a correction.  And the CBOE Volatility index is just slightly above it's 20 year average and that is not bad news either.  The volume of 7.3 billion was a little below the 8.3 average of the last four weeks.

Wall St rebounds with financials; biotechs drop

The markets have now had a few days to process last Thursday's Fed decision not to raise interest rates in September (and possibly not at all for the rest of the year.)  Meanwhile Wall Street has swung back and forth between rallies and panics trying to figure out what it all means.  Today was another rally day with the Dow up 125 points, namely because the interest rate decision provided the predictable boost to the financial sector. Why the overwhelming sentiment out there is that there so little certainly about what the Fed is going to do is something that escapes me.  I think they've made very clear that rates will be gradually hiked when certain economic targets have been met, which have not yet been.  What is unclear about that?  But everyone seems to want something more concrete and, until that happens, volatility will continue.  Now we get to wait until October 16th when the Fed meets again.  Hang on for a fun ride.  At 6.5 billion, volume was below recent averages.

Succinct Summation of Week’s Events for 9.18.15 (plus Sunday reads)

This was quite the big week so this edition of the summary should be of particular value.  And to enhance what went down this week, the Sunday reading list contains more than one insightful article about the potential long-term impact of this week's Fed actions.  Hope everyone had a great weekend.

We’re Living Through the Greatest Period in World History

With markets up and markets down and volatility and strife the world over, it's hard to be an optimist these days.  Or is it?  Courtesy of yesterday's Big Picture column, for those of us who are "glass half full" people, here's a very inspiring 50 reasons why it's a wonderful life.  For those whose glasses are half empty, sit up and take notice.

Wall Street ends down after Fed stokes global economic fears

Today was yet another of a long line of examples of irrational Wall Street decision making.  After all, for months now investors have feared a September rate hike and found reassurance only from all the bad news from China and Europe in the hopes that would mean the Fed would hold rates steady.  So when yesterday that's exactly what happened, you would think the markets would be very happy.  And for a brief time they were, until they started to consider that the reason a rate hike was not imminent was because of all the bad news from China and Europe.  Now suddenly there's another wave of panic selling sending the Dow down a remarkable 290 points, all due to something they've known about for months.

Wall Street ends down after choppy session; Fed holds rates

And the verdict is ... no September rate hike!  And though the wording of the Fed's statement left open the possibility of a modest hike later this year, such language could also mean it's possible there will be no rate hike at all in 2015.  So the much feared September rate hike did not materialize (as most of the smart money had always said) but this did not stop the market from going berserk in the two hours following the 2 p.m. announcement, first rallying 200 points, then dropping 300 before settling in for a more modest 65 point drop at the close.  The Fed cited global concerns for its decision to hold rates steady for now so, after the initial elation of no hike, investors likely then began focusing on the reasons and thus started another panicked sell off.  Trading was heavy at 8 billion shares.

Energy stocks lift Wall St. on eve of Fed rate decision

After such a very long extended period of a glut in oil inventories, a glut that has much contributed to the crash in the energy markets, today it was reported that there has been an unexpected decrease in stockpiles.  This immediately triggered a 6% jump in crude, nearly a 3% jump in the energy index and still another triple-digit rally to the tune of 140 points on the Dow.  That's the way the market's reacting while still sitting on needles and pins awaiting the Fed's decision tomorrow about a rate hike.  What's going to happen if investors like what the Fed has to say?  The odds makers are continuing to increase the likelihood of a September hike.  It's gone from 1 in 5 on Monday to 1 in 4 yesterday to 1 in 3 today.  But 1 in 3 still isn't much so it seems most of the smart money is still betting on December.  We'll find out tomorrow.  Until that announcement, volume remains light at 6.6 billion.

Wall St. rallies as clock ticks toward Fed decision

Another tremendous rally today - and for no apparent good reason.  Sure, there was more positive economic data, but there has been all along, even - or by some measures especially - on the days of the panicky sell offs.  And nerves are still quite a titter with anxiety over tomorrow's Fed meeting and fears of a rate hike so we can only speculate on why the Dow suddenly jumped over 228 points today.  It could be that investors are finally getting some degree of comfort from the fact that there is certainly a rate hike coming in the foreseeable future.

Wall St. pushed down by Fed jitters, weak China data

There is just so much mixed data out there.  On the one hand, volatility continues unabated and China is still considered looming as a potential disaster, both conditions of which could easily justify no rate hike.  On the other hand, employment and other economic trends are all quite positive, all of which could easily justify the Fed finally deciding on the first rate hike in ten years.  Investors simply cannot decide on which side the ball will fall so, being conservative, ahead of Wednesday's Fed meeting they are all betting on the down side, thus driving the Dow to another loss, this time 62 points.  But it could have been worse.  Earlier in the session, the market was 3 digits off again.  However, the smart money is still betting that there will be no rate hike.  Economists are more or less 50/50 on the prospect but the bankers who work with the Fed and the futures trades who bet on it are still giving it very low odds, still expecting the hike to come in December.  The very light volume of a trifling 5.4 billion shares (vs recent averages of 8 billion!) also attests to the fact that most everyone is just sitting this one out until Wednesday.

Succinct Summations of Week’s Events 9.11.15 (& bonus)

It's time for the much vaunted eye-shot summary ending the week's volatile 4-day session but at least this time to the upside with job creation increasing and jobless claims decreasing.  Consumer sentiment fell a bit but is still close to 90% but that hasn't stopped the naysayers who are already ferreting out the negative and predicting a weak Q3.  It seems to me they also did that for Q2 (and Q1) and were ultimately proven wrong on both counts.  This Sunday's bonus is another one-page course on investment basics, but this time a course-in-reverse, a tongue-in-cheek summary of everything you should do if you want to go broke -- and it all fits rather neatly on a 4x6 index card.  Let's see if the news from the Fed next week can also fit on a 4x6 index card.  

Trump’s Wealth? Better Off Doing Nothing

Sorry, I do endeavor to keep each posting tied to something that was published somewhere that day but, in this case, Ritholtz's column from yesterday is a lot more interesting.  For months now, the financial media has been hinting that Donald Trump may not enjoy nearly the wealth he boasts of.  I'm sure that I've read articles in either or both Forbes/Fortune to this effect.  Since his is a privately held corporation, he is under no legal requirement to disclose his true financial holdings ... that is unless and until he becomes the nominee - and he certainly has not been volunteering.

Wall Street climbs, S&P 500 posts best week since July

With a boost of 102 points on the Dow, the markets have today seen their biggest weekly gains since July, now having recovered almost all of last week's enormous losses.  It's been a volatile several years to be sure but August saw even more extraordinary volatility due to the devaluation of the yuan.  Oil which has been particularly hard hit by the yuan took another plunge today when Goldman Sachs cut its oil price forecast, namely due to the long standing issue of oversupply.  All of these issues continue in earnest and may very well be the reason for the recent rallies, as they provide continuing justification for the Fed continuing the status quo.  In fact, it is widely assumed now that there will be no rate hike announcement at the Fed meeting next week and this buying spree reflects that confidence.  But before we get too overconfident, all of this was on volume of only 6 billion shares which remains considerably below recent averages.  Perhaps all the senior traders are still vacationing this week.

Wall St. rises with Apple, biotechs, but Fed jitters remain

As has happened so many times before, Apple announces a new product line to a less than enthusiastic reception ... and its stock plummets.  Within days or weeks, the world discovers it had misjudged the tech giant, that these new products might just change the world ... and the stock soars.  But this time it didn't take days or weeks.  Yesterday, the unenthusiastic reception of the new iPhone and Apple TV dissed Apple's stock a stunning 2% for a one-day loss.  Today investors sent their mea culpas to recoup all of yesterday's losses and then some with Apple up 2.2% and the entire biotech index rising 1.9%.  But it was still one hell of a bumpy and wild ride today, with the index bouncing around in a 230 point range before finally closing up 77 points, now recouping fully half of Tuesday's big rally.  There are still plenty of jitters around China and next week's Fed meeting.  Even though there is still an abundance of volatility and uncertainty to justify believing the Fed will not yet raise rates, the fact that the labor markets are getting close to the Fed's targets has given investors pause.  I have stated frequently my own position that there is no chance of a rate hike this month.  And though there are many who agree with me, there are some who do not -- not at all!  That's why I can't wait until this time next week.  Who's going to be proven right? ...  All these other geniuses ... or this lowly blogger?  At 6.8 billion, trading was still on the light side compared to the last four weeks.

Wall St. falls 1 percent, led by Apple, energy sector

It seems there were such high expectations building up to today's big announcement from Apple introducing a slew of new products that investors could not help but be underwhelmed, thereby driving the tech giant's stock down a rather substantial 1.9%.  The entire energy sector also fell by 1.9% (crude alone dropping almost 4%!) and the subsequent impact on the Dow was a loss of 239 points or nearly 1.5%.  This followed a week of losses last week totaling 3% and yesterday's subsequent rally of nearly 2% thus leaving the index still above last week's levels but not by much.  This was all despite recent reports of a strong July in the labor market and the positive developments from China of more aggressive actions in reenergizing their growth.  So it looks like still another day of profit-taking while investors remain nervous about the upcoming September Fed meeting and whether China's reforms will have the desired impact.  The volume of 7.2 billion was just below the month's average which so far has been lighter than usual due to vacations.

Wall St. jumps 2 percent as China gains fuel global rally

It wasn't so much that today's news from China was all that wonderful.  In fact, it was pretty much more of the same, with Chinese imports shrinking far more than had been expected for August, and its 10th straight monthly decline.  It's that today China took some more rather dramatic steps to tame its faltering economy, among which was the elimination of dividend taxes for long-term investors, and hints that there would be more stimulus coming.  These two events caused a sudden and dramatic buying spree among China's investors, which in turn jolted all the global markets skyward, including Wall Street with a whopping 390 point surge on the Dow.  That's a one day 2% increase to counterbalance the 3% lost all of last week, or 2/3 of a full week's losses recouped in one day.  So once again traders had a very nice buying opportunity, picking up bargains from last week's trouncing.  Volume was comparatively light -- 6.7 billion compared to last week's 7.6 billion -- but then the week has only gotten started.

Happy Labor Day!

Happy Labor Day!  Like most of my fellow American laborers, I took the day off to attend a family party.  Let’s hope that tomorrow begins a better week in the markets.  

Succinct Summation of Week’s Events 9.4.15 (+ bonus)

Another great summation of another tumultuous week.  For this Labor Day weekend, the bonus is a video made at MIT earlier this week and posted on today's Barry Ritholtz "Big Picture" column about one of the most successful hedge fund managers of the past fifty years, a one hour video which is sort of a good little course in unconventional investing in and of itself.  Even though he's a confirmed technician, his thesis here seems to be -- when the quantitative isn't working, go with the qualitative.  His instincts seem to have served him remarkably well.  Enjoy, and enjoy the rest of your holiday.

Where We’re Going

With the Labor Day week and weekend traditionally the heaviest vacationing period of the year -- evidenced by last week's wild market swings being attributed to light volume and senior brokers being away -- here's an interesting graphic showing what countries we Yanks prefer to vacation in, plus where those tourists from around the globe visiting the U.S. all come from.

Wall Street caps off tough week with a steep loss

It was another day of trouncing with investors not knowing what the hell to do so they did everything.  First there was a tremendous sell off and this was followed mid-afternoon by a tremendous rally only to be followed in the last half hour by another big sell off leaving the Dow down another big drop of 272 points.  Yesterday everyone was betting on a strong labor report and they didn't get it.  Not bad, but at 173,000 new jobs, not quite as good as the 220,000 that were forecast.  Unemployment also dropped to 5.1%, the lowest in 7 years, all of which should have been taken as good news, which was probably the trigger for the big afternoon rally.

Wall Street rises in volatile session ahead of jobs data

Indeed it was another volatile session with the Dow up 200 points by mid-morning only to lose it all again by mid-afternoon and then recover a modest 23 point gain by close.  The rally was all about the jobs report that's coming Friday morning and is expected to be very good -- 220,000 new jobs up 5,000 from last month.  That combined with the increasing volatility has lead most investors to believe that there will be no Fed hike when they meet on the 16th.  There was also the good news that the ECB may add more stimulus to the euro zone and that certainly will help boost U.S. stocks.  But by mid-afternoon fears over China came back to the front burner and caused the tumble.  All of this was on relatively light volume of 7.1 billion so most investors are either taking a break or are on vacation.  Next week's events will be far more telling.

Wall Street surges as turbulence becomes the norm

It was a day for picking up bargains as buyers shot the Dow way up another 293 points for a nearly 2% gain wiping out much of yesterday's 3% loss.  Today's columnist is calling the week's volatility the new norm, not a recovery but rather the acceptance of a new nervous environment.  I quite disagree.  This volatile market in which we find ourselves is not a new norm but an old norm that has existed for several years now.  Let the global economies settle down and the Fed slowly begin raising interest rates and we will then see a new normal that has not been part of our reality since before the Great Recession.  Until then, every little telltale sign of gloom will be met with fierce and panicky overselling followed quickly by cooler heads picking up profits.

Wall St. turbulence returns as weak China data magnifies fear

China is back in the news big time today.  As we all know, China is doing business while we sleep so, based on all the bad news coming overnight from Shanghai there was an immediate panic on Wall Street that dropped the Dow 250 points right out the gate.  A continuing stream of bad news from our own shores made the plunge progressively worse until the index was down a whopping 470 points at close, a royal trouncing and another historically bad day with all the major indexes down almost 3% in one day.