Succinct Summation of Week’s Events 1.29.16 (+ bonus beauty)

Our weekly summation, and pay particular attention to #2 under "Negatives" where the recent Japanese action to implement negative interest rates is explained, thereby satisfying my query from Friday's post.  And this Sunday's bonus is not necessarily related to investing but does qualify as some serious eye candy as Sir David Attenborough of the BBC takes us on a two minute tour of some of the planet's most alluring wonders.  If they say that the purpose of work is so we can live and the purpose of art is to give us something to live for, then this video is an example of why we work.

10 Weekend Reads: Flint and Ted Cruz

Today's suggested readings courtesy of Barry Ritholtz include notable articles on the poisoned water crisis in Flint and insights into the man most responsible for igniting Ted Cruz's candidacy.  There are also interesting dissertations on hedge funds, Microsoft's plans for future global domination, and the history of employment statistics.  Happy reading!

Wall Street surges at end of awful January

Thur/Fri:
A stellar Facebook quarterly report coming in after the bell on Wednesday set the stage for what has become one of the most potent two-day rallies in history with the Dow bolted up 125 Thursday and a very big 396 today.  This was mostly on news of terrific Q4 reports from a number of companies but also oil getting its biggest help in a long time from speculation that the OPEC nations may cut production to help the global glut in crude.  (Hey, about stopping production all together until the glut is worked off?)

Wall Street sinks after Fed fails to impress

If yesterday was a case of irrational exuberance with the China stock market tanking and yet Wall Street surging, today was that of irrational panic to the tune of 222 points down on the Dow.  To think the Fed actually had the nerve to report good news -- despite the January turmoil, all objective U.S. economic indicators are in sufficiently good shape to make a change in Fed interest rate policy unwarranted.  Investors were really hoping for some dial-back and when instead the bank talked optimism, a massive sell off began.  This was despite the fact that more economic good news came in this morning, particularly for oil which surged when Russia agreed to discussions pertaining to taming the oil glut and additional data showed that demand would finally be on the rise again.  The good news is that we didn't lose as much as we gained yesterday.  And there may be more good news tomorrow since Facebook came out with a good Q4 report after the closing bell.  Volume was in line with recent averages at 8.8 billion.

Oil fuels 'schizophrenic' rebound on Wall Street

I'm not sure that "schizophrenic" is quite the right word or if it's more accurate to say that it's the same irrational exuberance (or panic) that has plagued the market for some time now.  It is evident that whatever happened yesterday to cause the market to plunge 208 points happened almost exactly the same today but in reverse, causing an amazing 282 point jump.  As they said yesterday - it was all about oil.  Today too -- all about oil.  Today's exuberance was indeed irrational since the Chinese markets plunged big time again overnight, which should have sent our markets reeling.  Instead, investors decided to shrug off the six percent China slump and instead focus on all the positive things happening right here in the U.S.  Q4 reports have started coming in strong with 3M, J&J, and P&G all landing unexpected KO's.  Crude rose 3.7% on news that the Arab nations might start cooperating on reducing production thereby helping to tame the global supply glut.  Q4 expectations remain low with profit forecasts down 4.9%, all of which will likely change in a positive direction day by day as more companies like J&J exceed estimates.  Today's volume was the same as yesterday's with 7.9 billion shares traded.

Wall Street resumes 2016 slide as energy stocks tumble

The slide was very consistent all day long as oil hit yet another major snag with news from Iraq that that country's oil output had reached a record high last month.  All three major indexes took a hit of over 1 percent including a 208 point slump in the Dow.  As it has been for some time now and as articulated by today's expert from L.A., "Today is all about oil" as crude fell another two dollars.  At least at 7.9 billion shares, volume was closer to more normal averages of late.  A number of heavyweight Q4 reports are due later this week along with more signals from the Fed regarding future interest rates so eyes will be wide open for awhile.

Succinct Summation of Week’s Events 1.22.16 (plus "Outcome vs Process")

It's time for the week's wrap up and fortunately this week wrapped up on a much more positive note than last week.  As a reward for those of you not panicking, today's Big Picture column featured a trip back to Finance 101, a refresher in the basic investment strategy of "outcome vs process" and why it is always better to be focused on the latter rather than the former.  Hope everyone had a great weekend.

Existing Home Sales, December 2015

Since one of the triggers of yesterday's big rally was a jump in existing home sales, here's a really instructive graphic of just how close real estate values have come in the past several months to catching up with pre-recession levels.  Also, since the crisis in Flint is suddenly hot in the news, today's Big Picture blog by Barry Ritholtz offers a timely analysis of the issue courtesy of a very recent issue of The Washington Post.  FYI, this week's cover story of Time, which just arrived in today's mail, is also all about Flint.

Wall Street rally stamps exclamation point on volatile week

The long awaited rally that began yesterday continued today in earnest with the Dow up over 250 points during the session and losing only modestly from that high to close 210 points positive.  The harsh winter has finally arrived so bad news for the East coast became really good news for oil as crude jumped a big 9 percent in one day, sending the entire energy index up an equally impressive 4.3 percent in one day.  Perhaps the prognosticators have finally found the coveted bottom (wouldn't count on it though) and perhaps the indexes are once again out of correction territory for good (don't count on that either.)  Outside of energy, other good news was a spike in existing home sales up nearly 15% after a 10% drop in November.  On today's performance, the expected 4.5% drop in Q4 earnings has already been revised upwards to 4.3 percent.  Volume again was quite vigorous at nearly 9.1 billion shares.

Badly bruised Wall Street finds solace in oil rebound

The oil rally that started late session yesterday that everyone hoped would continue today did indeed continue pushing the Dow up almost 350 points by mid-session followed by an afternoon decline to close up 116 points.  Since the index was just barely in correction territory to begin with, today's rally again lifted it out (though another sell off will put it right back there) while oil had its best day of the year, lifting it out of its 12 year low due to a new report showing that the inventory glut, though still quite serious, was not as bad as previously feared.  So the Dow has not yet entered seriously worrisome ranges but still remains at lows not seen since the big August/September sell off.  Q4 reporting is now getting under way and the sentiment is that earnings will be 4.5% lower (gee, didn't they say that about Q3 and Q2 as well, and weren't they wrong on both counts?)  However, removing the extraordinary slump in oil, earnings will actually grow by 1.6% so the picture is not as gloomy as may appear.  At 9.9 billion shares, investors were very anxious to buy in to today's rally.

Wall Street tumbles to 2014 low as oil prices sink

Everyone was wondering whether the buying spree that started late session yesterday would continue.  It didn't, as the sell off began right out the gate and the Dow lost over 560 points by mid session before rebounding in the afternoon to close 249 points off.  You know it's a bad day when, on all the exchanges, there are only three companies that make the list of 52-weeks highs.  Ironically, all three are utility companies, odd since as one might guess all the turmoil today was again rooted in energy which had a one-day drop of almost three percent.  Oil has still not seen a bottom, today hitting a level not seen since 2003 with a one-day drop of almost seven percent as the glut continues to burden the markets, though a late-session rally in crude saved the day from a considerably worse disaster and leaving investors once again hoping, as they were yesterday, that the buying spree will continue tomorrow.  The S&P has again entered correction territory, but another good rally will take care of that again.  At 12.5 billion shares, volume was extreme.

S&P 500 ends unchanged; more carnage in oil stocks

Yes, China's stock market took another big plunge overnight and that combined with oil reaching a 12 year low today sent the Dow spiraling downward right out the gate but not to the disastrous lows that were expected.  Indeed, the Dow initially went down only modestly before then zooming up almost 190 points by mid-morning before starting a steady descent to a loss of almost 90 points by 3 pm before rising again and settling to close a modest 28 points skyward.  So it was quite the choppy day but, by day's end, investors had decided that the session's bad news wasn't really all that unexpected after all so got into a buying mood just before the bell.  Will this continue tomorrow?  Volume has been very high of late and, with 9.4 billion shares, today was no exception.

The 62 Richest People On Earth

In honor of old Martin, everyone who works in banking or government got the day off.  Now let them give the rest of us the holiday and I'll start believing we're getting serious about equality.  On that theme, there was a good article today in Huffington about how much greatly richer just the top richest 62 people on the planet have gotten in just the last five years.  However, I don't find it terribly useful to compare the richest of the rich to the poorest of the poor when the wealth of the richest is mostly paper wealth from the stock market, especially if the poor are not invested, which they probably are not.

Succinct Summations of Week’s Events 1.15.16

As this has probably been the most significant week of the last two years, this week's summary is particularly useful.  For further usefulness on the events of the last two weeks (and particularly the last two days), this Sunday's bonus material includes an entertaining 10 minute audio program analyzing the financial crisis via the recent hit film, "The Big Short."  This weekend's additional bonus material includes two excellent articles, one from the Wall Street Journal, one from Market Watch, discussing why Friday's gigantic hiccup is almost certainly just that - a hiccup.  I am also providing representations of two dramatic graphics.  The first is the Bloomberg Carbon Clock showing the correlation between rising carbon emissions and global temperatures, the second the National Debt Clock showing ... well, everyone knows what that one shows.  The question I will now put to you is ... which one would you choose to represent the greater threat to our future?  For you bankers and federal employees out there, you get one more day this weekend.

Charlie Rose Appearance on Markets & Economy

Given the events of the past two weeks, and particularly of the past two trading days, today's "Big Picture" post featuring video from yesterday's Charlie Rose program is particularly relevant.  Are we having two distinct recoveries (or none at all?) and what is the connection (or disconnect?)  between the long-debated issue of China's economic woes and our future own?  Two videos (less than five minutes total) that explore these questions and are well worth viewing.

Charlie Rose Appearance on Markets & Economy - The Big Picture

Wall St. hemorrhages as oil tumbles and China fears deepen

How many times this past year has the Dow dropped more than four or five hundred points in a single day?  How many times in the past month has the Dow dropped more than 300 points in a single day!  How many times in the past year has the price of crude fallen five percent or more?  How many times has China looked like it's on the brink?  Well, I can tell you there's no investor out there with enough fingers to count them all.  But today is the day that the whole world decided to scream -- Armageddon!

Energy leads Wall Street rebound; S&P has best day since December

Put yesterday's Dow chart up to a mirror and what you'll see is almost exactly what happened today.  Just as yesterday was a consistent and quite dramatic slope downwards, today it was just as consistently and almost as dramatically sloping upwards, upwards to the tune of 227 points.  What happened?  Quite simply, oil finally had a really good day, good enough to send the entire S&P energy index up almost 5 percent.  This led many investors today to believe that maybe oil had finally hit a bottom and thus began a buying spree.  The S&P too gained a lot of ground rising again above 1900 and taking it out of correction territory (for the whole one day it was there), though just barely so at a 9.8 rather than 10 percent loss since the May 2015 high.  More important, today's market sentiment is that what we have seen so far this year is likely not the start of a new bear market at all and that Q4 earnings may be more positive than feared, and that will all lead to a stronger market yet.  So today there was a furious amount of buying to the tune of an amazing 10 billion shares.  Even Warren Buffett got in on the action investing heavily in oil.

Wall St. resumes selloff; S&P 500 lowest since September

Contrary to recent trends, there was absolutely nothing volatile about today's trading.  It was just one enormous consistent downward slope to the tune of an astonishing 364 point dive on the Dow.  Also contrary to recent trends, there was really nothing unpredictable about this.  The panic selling was basically driven by the oil inventory report which once again showed that we are way overstocked.  Yesterday, it was reported that the hope was that supplies were slimming down and that such news would pacify the market.  But anyone who has been seriously watching oil the past year should have given it 20% at best that the report would have good news.  Not only are inventories not being drawn down but we keep producing even more oil, oil there's no demand for, at least not at a desirable price.  There you have it.  Continuing disappointments over oil drove all the indexes down, the S&P now officially 11% off its May high (technically correction territory) but it was after all an all-time high so it doesn't really count.  Volume however was close to an all-time high at nearly 10 billion.

Energy, biotech lift Wall St. to second straight day of gains

Yesterday's modest rally turned into today's much bigger rally but, again, the intraday trading revealed a very different alternate reality.  In fact, the volatility was again huge and the session could have just as easily ended on an 80 point loss (as late as 2:15 p.m.) or the nearly 200 point gain that happened right out the gate.  So once again it was pretty much a random event when the low and high has a nearly 300 point expanse.  Today the price of crude came down still again, this time to below $30/barrel, the first time it's been below $30 in twelve years.  Investors are still looking for a bottom, with both oil and China, and until one makes itself apparent, confidence will be limited.  But the market is widely considered to be wildly oversold so a lot more buying is expected in near future days.  Our highs and lows today came on very vigorous trading of 9 billion, way above the 7.5 billion average of the past month.

Dow, S&P 500 end up in late turnaround; Alcoa dips after hours

Today's market is being called a "relief rally" or, as today's expert stated, "The market is very stretched to the downside.  Being oversold doesn't mean it's over, but nonetheless these things only go so far before you get at least some kind of relief rally."  So because the Dow finally ended in positive territory if only to the tune of some 52 points, it's being characterized as a rally.  Alas, as it usually does, the intraday trading tells us that it was nothing of the sort.

Succinct Summation of Week’s Events 1.8.16 ( plus tips on the week's crash)

Sunday is the day I deliver the goods on the week's events and this past week has been quite special in an historic way.  In some quarters it's been characterized as the worst first week of a new year in Wall Street history.  So here's the lowdown in one convenient eye-shot plus a handy companion piece in which Mr. Ritholtz in his Washington Post column today pointed out the do's and don'ts of how to react to a crash like we've had this week.  Nothing earth-shattering here, which is to say it's all pretty common sense stuff, but there's never a more important time for a reminder for common sense calm than during times of panic.  Hope everyone had a great weekend.

Wall Street has worst start to year ever

The federal payroll report came in nothing short of glowing today, with non-farm payrolls characterized as surging in December.  Yesterday, it had been hoped that a good jobs report today would put investors' minds at ease with a show of confidence that the U.S. economy was somewhat shielded from the problems overseas, particularly China.  No such luck.  Despite way over forecast data, the markets took their 5th major bath today out of six trading days, making it the worst first week on Wall Street in history and plunging the Dow down again another 167 points.  It seems good, let alone great, news at home is not enough just yet to convince investors that China's problems are not going to reach our shores.  Let's hope that week #2 does not also make history.  Volume was again was very heavy at 8.9 billion.  (Out of town this weekend so no posting tomorrow.)

Dow, S&P off to worst four-day Jan start ever as China fears grow

Another major bloodbath today, this time the fourth in the last five trading days making this officially the worst opening four days of a new year since the Dow was founded in 1928.  The Dow lost a remarkable 392 points.  Of course, there are numbers and there are numbers.  If you look at the last five days on a point basis, it's pretty bad; but on a percentage basis, not so bad.  The indexes have lost about 5% this week, not as bad as August, not as bad as July 2011, and not even in the same ball park as '08.  Hey as long as we're still flirting with 17,000 and these historic highs, no need to go overboard with the worries.  So what didn't go wrong today?

Wall Street drops to three-month low; China, energy weigh

The market certainly took another major bath today with the Dow diving three digits 252 points.  The problems remain the same.  Investors remain in a nervous selling mood over China, oil, and the feared impact both may have on future global economic outlook.  In other words, nothing new happened today to justify this reaction, just more of the same anxiety that has  been so typical of the market these past few years.  Bouncy bouncy as things go, the so-called anxiety indicator -- the VIX -- which shot up to 23.36 on Monday's really bad news came right back down again to 17 and change yesterday when good news once again prevailed.  But with no additional good news today, China and oil took over again and shot the VIX back up to 20.59.  Keep in mind this is still well below where it's been in the past and the market is still no where near correction territory.  The fact that today's private employment report showed new hiring above expectations did not brighten the somber mood at all.  As I have cautioned many times, these wild swings will likely continue until interest rates catch up with the market.  Volume was quite brisk at 8.2 billion.

Wall Street stabilizes after Monday's steep declines

The headline reads "Wall Street stabilizes after Monday's steep decline."  Oh really?  Hey, just because the day ends flat doesn't mean there wasn't any drama.  There was plenty, as is evidenced by the intraday trading.  The Dow was down over a hundred points shortly after noon and then shot back up over 150 points before settling down with a 10 point gain at close.  I would hardly call this stable.  Despite the worries over China, today the problems came from our own shores as Apple suffered still another big one-day drop impacting all three major indexes and crude suffered still another slide.  But the good news is that China pumped $20 billion into its banking system today to help out and, after all, 150 points is not 276 so today's decline was not nearly as bad as yesterday and, to prove the point, everyone started buying again like crazy in the afternoon session.  Stability, of course, is what everyone's after and until things settle down with China and the interest rate environment, we will continue to see plenty of the buying sprees on any hint of good news, and panicky selling on any hint of bad.  Today's volume was average as averages go these days at 7 billion shares.

Wall Street begins year sharply lower after China selloff

Today may have been a very bad day for the stock market but it was a very good day at the pump as I was able to fill my near empty tank for less than 19 dollars.  That's right, I got today's gas for only $1.76 per gallon and it's been a very long time since we've seen prices that low.  And once again, all this bad news (and good news) was despite the fact that crude (and the energy sector in general) had a relatively good day.  The bottom line is that they're calling this the worst first-day on Wall Street in eight years and the worst first-day percentage drop since 1932 as the Dow plunged 276 points on reaction to this morning's panic sell off in China!

10 Sunday AM Reads

Due to the holiday, once again there is no weekly summation.  But since the theme of this final holiday weekend has been to provide reading lists, here's one more that Ritholtz supplied this morning.  The article from The Economist about the impact of the Fed's December rate hike looks well worth a look as well as The Atlantic's analysis of the Trump phenomenon.  Tomorrow it's back to business as usual.

Both Sides of Taxation on the Wealthy

Yesterday, I posted a New Year's reading list that included a December 30th 5-page article from the Washington Post entitled, "Really rich people are suddenly paying quite a bit more in taxes."  Today's reading list contains a December 29th 11-page article from the New York Times entitled, "For the Wealthiest, A Private Tax System That Saves Them Billions."  I thought it was appropriate to begin this new year with a modest demonstration that, contrary to popular perception, the financial media is actually capable of some objectivity.

The Optimist Guide to 2016 ( & other thoughts for the New Year)

Happy New Year everyone!  The essay below was inspired by Barry Ritholtz's Christmas Eve post on his "Big Picture" blog which featured a bright little 7 minute video in which top economists discuss what they consider to be a very bright 2016 ahead.  It is well worth a view and is followed by a New Year's reading list which contains several articles offering a nice perspective on 2015.  The link to the video and the list of articles is at the end of the essay.  Meanwhile ...