10 Weekend Reads (plus Warren Buffett's portfolio)

Among this week's notable "Weekend Reads" are an interview with IMF head Christine LaGarde, an analysis courtesy of The Atlantic of the decline in the U.S. crime rate during the past 25 years and, last but not least, a definitive portrait of the real Donald Trump brought to you by the five people who know him best.  Politico brought them all together for a conversation.  Since it looks more and more likely with each passing primary that he may very well be the Republican nominee, this is an opportunity to cut through all the campaign PR and get the facts right from the source.  In addition to all the above, I would urge everyone to study the very revealing graphic at the bottom of the list showing, sector by sector, all of Warren Buffett's holdings.  To me at least, it came as quite a surprise that he was so lightly invested in financial firms and so heavily in railroads and manufacturing.   And, of course, the insurance industry, though the whole point of the graphic is to illustrate how he has been steadily cutting back on insurance and building up his manufacturing investments.   Thus, according to the Gospel according to Warren, U.S. manufacturing is coming back.  Start buying! Submitted for your consideration, as following his lead may not be unwise.

Wall Street falls as earnings weigh; Dow, S&P up for month

Apple has lost ten of the past eleven sessions and a total of 11.3 percent of its market value this week alone.  Gilead, Corning, Goodyear, and Xerox all came in this week with double-digit declines in Q1 earnings.  The Dow and S&P are both down 1.3% for the week and Nasdaq 2.7 percent.  These combined forces are what triggered yesterday's 210 point sell off which continued today to the tune of another 57 points.  The good news is that the materials sectors gained 4.9% in April making it the third consecutive month of increases totaling 20 percent, the largest of any sector in the past seven years.  Amazon also brought in a stellar Q1 report which jolted its stock nearly 10% in one day.  Volume was very high at 9 billion.

Wall Street sinks on BOJ fears, Icahn comments

Today's really good news could not even begin to outweigh the bad news as the Dow plunged 210 points and the S&P had its worst day in three weeks.  As Facebook's stellar Q1 report came in after yesterday's bell, it was expected to create a rally this morning, which it did for a short while.  But this was quickly followed by a string of shocking announcements including the Bank of Japan's call to cap stimulus, which sent the global markets reeling.  But this was nothing compared to investor Carl Icahn's statement that he had divested himself of his Apple holdings considering the giant company along with the rest of the market entirely too risky and issuing the dire warning of "a day of reckoning."  Keep in mind he's done this before and his predicted cataclysm never materializes.  But it was more than enough to send the ailing Apple's stock down yet another 3 percent and the indexes reeling all the more.  The good news that all the indexes remain at near record highs and that the stock market is now in its second longest bull run in history was not enough to stem the sell off.  The lesson for the day is how important central bank policy is to the market so any hint that the policy might change sends everyone running to the exits.  Volume was high at 8.1 billion shares.

Wall Street ticks up as hawkish Fed fears ebb; Apple weighs

A modest 51 point gain today as investors rested a bit easier on Fed assurances that there would be no interest rate hikes in the near future and that, despite that, the economy continues headed in a positive direction.  Apple was the big drag because of the big slump in their iPhone sales but then, when two-thirds of your business comes from a single product and demand suddenly drops for that product, it's going to make an impact.  Facebook had an excellent day but not until after close so we'll be seeing the impact of that in the next couple days.  Exxon also hit its highest level in a year.  The Fed's reassuring statements seem to have sparked a little more enthusiasm as volume was above average at 7.4 billion.

S&P500 index buoyed by commodity sectors; Apple drags futures lower

What looked like a lackluster session with the Dow gaining a modest 13 points actually had quite a lot of tumult as the index jumped 50 points right out the gate, then dumped a hundred by midday only to recover in the afternoon session to close modestly up.  So though it ended nearly even, there was lot of tug-of-war in between.  The main drags were Apple, Twitter, 3M and P&G all of which had either or both disappointing Q1 revenues and earnings.  The good news is that the bulls are still very much in control with the S&P holding near its record high from a year ago, impressive after the January drubbing.  More bad news included declining demand for such staples as cars, computers and appliances.  This decline in durable goods has weakened the dollar which in turn has been good for oil which was up over 3 percent.  Every cloud has a silver lining.  But there's still a lot of money on the sidelines as investors wait for more news.  This was evidenced by the continued below average volume of 6.5 billion shares.

Wall St. ends slightly lower on energy, earnings

The Q1 reports keep pouring in and they are now veering more towards the forecasts of the pessimists, which took the Dow down almost 150 points right out the gate but then steadily recovered throughout the session to close just 26 points down.  At near record-highs, investors are having a hard time justifying pushing the market still higher.  As of today, a quarter of the S&P has reported and 59% are above expectations with 60% being the average.  Just last week, 77% had exceeded expectations putting it way above average, so there's been quite a let down the last few days.  Still, with three-quarters left to go, there's still a lot of wiggle room left.  This is reflected in the relatively light volume of 6.0 billion against recent averages of 6.9 billion.

Succinct Summation of Week’s Events April 22nd 2016 ( + Index Funds & Breaking the Banks)

It's time for the weekly eye-shot again, and this time it's a lengthy list with the positives and negatives just about even, though I'm not sure why the death of Prince makes it into the negative column in the grand scheme of global market economics.  This Sunday's bonuses include Barry Ritholtz's informative Friday column about index funds as they relate to efficient market theory ... AND ... fresh off the presses from today's The Big Picture, a fascinating April 4th paper from the Federal Reserve outlining how all the biggest banks might be broken up.  A longer than average read but, it's not just an intriguing look into a possible future, but also a pretty instructive overview of how banking works.  Hope everyone had a great weekend.

10 Weekend Reads

This weekend's reading list includes an article on the importance of that one indefinable denominator we call "luck," courtesy of The Atlantic, an analysis of the FBI/Apple controversy from Charlie's Diary, and a short course in modern art.  For those of you interested in some really high falutin stuff, this week's Masters In Business interview is an in-depth discussion on the Charter Financial Analyst designation and exam.

Wall Street ends flat; Alphabet and Microsoft tumble

The Dow finished over 20 points up today but not before it went 120 points in the red for most of the session.  Intel and Facebook both fell, Microsoft dropped over 7 percent and became the biggest drag on the S&P while Alphabet/Google had its worst day in four years.  Oil got a 1% boost from stronger U.S. demand and lower global production.  Last week the Q1 forecast was for a 7.7% loss in profits.  Yesterday that was revised to 7.2%.  So far the reporting companies have averaged a 7.1% loss.  Volume was a little above recent averages at 7.1 billion.

Wall Street cedes ground after mixed bag of earnings

Today's good Q1 came from American Express, Mattel, Under Armour, and General Motors. Bad Q1 came from Verizon, Microsoft and Travelers, the latter coming in particularly bad with a 17% decline in profits. But it was the combine of Travelers, and Verizon's warning that their strike would likely hurt them (isn't that the whole point?), that sent the Dow on a steady 113 point dive all day long almost directly from the open.  Alphabet's (formerly Google) bad Q1 also came in but after the bell so we will see the impact of that tomorrow.  The day's good news included the fact that so far 77% of all companies have beaten profit estimates compared to the 63% surprise in a typical quarter.  Again, the dire forecasts may have something to do with the fact that results are better than expected.  And even though oil was down one percent today, it is still at a five-month high.  In fact, despite all the doom and gloom, all the indexes hover near historic highs.  Volume was above average at 7.3 billion shares.

Wall Street flirts with record high levels as companies report

Today's Q1:  VM Ware, Discover, St. Jude Medical good; Coca-Cola bad.  Qualcomm very bad.  But home resales rose more in March signaling a continuing real estate recovery and oil also had another very good day with reports again that inventories were lower than expected.  (Who wants to bet that in the next few days there will be another report that inventories are higher after all?  That seems to be the trend the last few months.  Again, how difficult can it be to count barrels?)  Bottom line - the Dow up a modest 42, but it was up over 100 points as late as 3 p.m.  Trading was above average at 7.5 billion.

Wall Street nears record as quarterly reports roll in

J&J came in today with solid Q1.  So did Yahoo and Goldman Sachs.  IBM came in poorly.  But the most surprising news of the day is that oil got a boost from, of all places, the current strike by oil workers in Kuwait.  Couldn't get the oil producers to cut back so now good old fashioned unionism is forcing a cutback and one that is much welcome on Wall Street.  There is just so much room for irony in this business.  The net result was a 49 point bump in the Dow but the daily chart shows actually a 100 point range in peaks and valleys.  At 7.1 billion, volume was a little above recent averages.

Dow reclaims 18,000 as quarterly scorecards start to flow

Oil and the Dow should have been hit today, but instead both went up a good deal, the Dow a very handsome 106 points after Sunday's talk among major oil producers to trim greatly excessive inventories collapsed.  Disney and Hasbro saved the day with very good Q1 reports, bringing the Dow back over the historic 18,000 mark for the first since July.  But investors remain cautious awaiting more Q1, many more coming this week.  Volume was below recent averages at 6.1 billion.

Succinct Summation of Week’s Events 4.15.16 (plus "Looking Smart" plus Pt II on the National Debt)

Once again it's time for the weekly eye-shot.  This Sunday's bonuses include a particularly insightful set of tips on how to master that all important art of the first impression and make people (like interviewers, bosses, clients, reporters) think you're smart (from a source no less respected than The Atlantic), plus the second of two articles I've found this weekend on the pros and cons of the national debt, this one courtesy of Slate via The Big Picture.  Hope everyone had a great weekend.  Looking forward to New York on Tuesday and what impact it may have on the presidential race.  Will it cement the current front runners for good, or completely change the direction of all the campaigns?

The Pros and Cons of Being Super Rich (plus Time Magazine LOL)

Our bonuses this weekend begin with this interesting article pulled from LinkedIn concerning super wealth and an even more interesting article critical of those who are critical of the national debt.  These both provide interesting perspectives on these issues that you're not likely to find in the more traditional financial media, and for that reason alone are well worth a look.

Apple, energy shares weigh on Wall Street, but week shows gains

Yesterday gave us a modest 18 point gain and today it was a nearly just as modest 28 point loss on the Dow as investors continue playing wait-and-see on Q1 earnings, the market still digesting B of A's very sharp drop in profits yesterday.  But of course, next week there will be a lot more reports, so stay tuned.  Also to put things in perspective, this is the 7th week of gains out of nine so, though there is caution evidenced by the lower than average volume of 6.6 billion, we're still approaching 18,000 so we're at historic highs.  There are more than a few analysts out there who feel we're in for a rally since, just as banking rose above expectations vs the dire forecast, it is more than a remote possibility that there will be pleasant surprises from other sectors as well.

Financial shares mint fifth day of gains; indexes close flat

The gains continue, though today only to the very modest tune of 18 points as the markets take a breath after two big rallies and wait for more Q1 reports.  B of A came in strongest with profits, though down, only down as far as expected.  Wells Fargo's earnings were also down and, though not as much as B of A, but due to bad energy loans that they've had a difficult time covering.  The relatively low volume of 6.7 billion indicates investors are awaiting more reports.

Indexes gain at least 1 percent as financial shares lead

Yesterday's rally in energy turned into today's rally in the financial sector with JP Morgan turning in Q1 earnings exceeding the dire forecasts, thereby sending the Dow up 187 points and JP Morgan shares up 4.2 percent.  It was quite enough to boost the S&P to a four month high (and once again in positive territory for 2016), the Nasdaq to a 2016 high, and the Dow to a five month high.  There was even good news from China showing exports returning to growth for the first time in nine months, doubly good news since this is being taken as a sign that the world's second largest economy is finally stabilizing.  And we're just getting started.  Reporting from B of A and Wells Fargo due tomorrow.  Volume was above recent averages at 7.6 billion shares.

Surging energy shares boost Wall Street as earnings kick off

So everyone's busy buying up shares since the very pessimistic Q1 profits forecast is almost certain to result in some short term rallies, even if the first company to report in yesterday, Alcoa, did disappoint.  But what really buttressed today's market and shot the Dow up 164 points was the new agreement announced between Russia and Saudi Arabia to at long last freeze oil production in this badly overextended and glutted energy environment.  And that's in addition to this Sunday's meeting of oil producers where it is expected that a similar deal will be brokered.  The short term effect has been to shoot crude to a 4-month high today and oil, down in the 30's just a couple weeks ago, was up to $45 per barrel today.  The rallies have already begun and Q1 is just barely getting started.  Volume was a little above recent averages at 7.5 billion.

Wall Street closes lower as investors ready for earnings

It was another wild rollercoaster ride with the market swinging back and forth in a 175 point range as investors debate what Q1 is going to look like.  The first hint came after the bell with Alcoa reporting lower profits, which should have come as no surprise as, after all, they are an aluminum company and commodities have been hit hardest lately.  Next up are the big banks including JP Morgan, Citigroup and B of A, all of which should fare better since, generally speaking, what's bad for commodities is good for the financial sector.  But with volume below average at 6.5 billion and the ultimate hit to the day's Dow being only 20 points, all indicators are that most are still sitting on the fence waiting for more Q1.  As has been very consistently the trend lately, the actuals will almost certainly exceed the very pessimistic forecast so there are likely rallies in our future.  Start buying.

Succinct Summations for Week’s Events April 8 2016 (plus Pain Management)

It's that time for the weekly big picture according to "The Big Picture."  The week's bonus includes an article on legal ways to hide income per The New York Times and a very instructive chart explaining pain management (investment pain that is) per the (not always wonderful) changes going on in China during the past few years.  (The graphic will not transfer to this blog so you'll have to click on the link to see it.)  Hope everyone had a great weekend.

How Imminent is a Recession?

Lots of talk about looming recession lately.  Just what are the odds?  Here's Barry Ritholtz's take on the whole question.  It may surprise some of you.

How Imminent is a Recession? - The Big Picture

Wall St. ends higher but indexes post weekly losses

"Twas another day of rollercoaster madness with the Dow swinging back and forth in a 160 point radius before closing 35 points up.  What went on was more Wall Street lunacy.  I've mentioned it before and I'll mention it again -- is it really that hard to count barrels?  Two days ago we were up 112 because stockpiles were said to be drawn down.  Yesterday we were down 174 when data showed inventories were higher again.  Today they're back to reporting lower counts again and oil shot up more than six percent.  But it doesn't matter much.  Whatever is going on with oil is soon to take a back seat.  Volume was very light at 6.3 billion shares as investors wait for Q1 reports which begin next week when Alcoa and four major banks chime in.  The expectation is for a 7.6 percent loss, so if the actual picture is better than that, we'll see more rallies, just as we've seen in the last four quarters.

Wall St. falls amid global growth worries

It seems the market has digested the recent good news concerning oil so today it was back to worrying once again about China, Europe and the rest of the world, especially with the statement from the ECB declaring that the global economic outlook had gotten worse and that central bank policy would likely have limited effect.  This all sent investors into a selling spree sending the Dow down 174 points and wiping out all S&P gains for the year thus far.  Naturally, crude oil settled lower too.  Curiously yesterday's reports stated that there had been significant drawdowns in U.S. crude stockpiles but today another report stated exactly the opposite driving the black stuff down 2.7 percent.  This seems to be happening with an odd regularity. One day they say we're depleting, the next it's a glut.  Is it really that hard to count barrels of oil?  Q1 still weighs heavily on everyone's mind with expected losses looming.  This also happens with an odd regularity, commented on today that "the recent drop in earnings forecasts could result in more positive surprises," just as it did all last year.  Is this just a trick to drive up stock prices?  Volume was right in line with recent averages at 7.2 billion shares.

Wall Street rises with healthcare; oil rallies

Yesterday the good news from Kuwait concerning oil stockpiles didn't make a dent in this anxiety-ridden market, investors instead preferring to obsess over expected anemic Q1 earnings.  Today, the Q1 picture suddenly takes a back seat as the market reevaluates the crude crisis with new data showing an unexpected drawdown in stockpiles.  This combined with good news from the pharma sector -- the Pfizer/Allergan merger went kaput -- sent the Dow up 112 big ones.  (Ordinarily, mergers are taken as good news, but not in this case.)  All in all, investors are still on the fence waiting for the Q1 numbers to start rolling in but, at 6.9 billion, volume was still close to recent averages.

After rally, earnings gloom takes hold on Wall Street

Since yesterday's modest drop was attributed in some circles to another drop in oil due to continuing doubts over a production freeze, you'd think that today's news from Kuwait that the freeze may very well happen after all (which incidentally helped stabilize crude for the day), that the market would react positively.  Instead we saw a 133 point drop in the Dow, which can only now be blamed on the fickleness of the market.  Wishes change hour by hour and now that oil is getting some much needed help, the market has moved on already to a new problem -- Q1 earnings, which are expected to be poor.  But since that same forecast was made during the last four quarters and, in each case, proved to be false, this may be the time to buy as almost certainly profits will be better than expected, shooting prices up again.  At 7.2 billion, volume was just about even with recent averages.

Wall Street pulls back after recent rally

Okay, I guess you can call this a pullback even though the chart shows that the index fell almost a hundred points before rallying again to close just 55 points down.  Is one person's pullback another's rally?  Whatever it was, it was on relatively modest volume of 6.4 billion with relatively modest results so maybe it wasn't much of either.  What did happen is that investors became ever more doubtful that the deal among oil producers to freeze production is ever going to happen, which sent oil down over 2 percent again today and, as oil goes lately, so goes the market.  But since the index only went down 1/3%, it doesn't go as much.  In other words, not a terribly eventful day.  Everyone is waiting for Q1 results, expecting a 7.1% loss.

Succinct Summation of Week’s Events April 1 2016 (plus Recession & Kasich)

It's that time for the most popular post each week, the one-page eye shot.  Our bonuses this Sunday include  another wonderful article why the doomsayers really should be ignored ... for the obvious reason that they have an abysmal track record, something that never seems to bother either them or their fans. And though Trump supporters believe he's a shoo-in to be the next President and continue to predict rioting in the streets if he's squeezed out in a brokered convention, here -- straight from the heart of Wall Street, the head wizard of them all, Barron's, gives its take on why Kasich, the only Republican candidate I can stomach (let alone respect, as does The New York Times) still has a (good) chance of emerging as the nominee from (what will now almost surely be) a brokered convention.  Spring break is over.  Back to work tomorrow!

Barron’s: Whose Better for Investors, Kasich, Cruz or Trump? - The Big Picture

Overestimating Recession Odds - The Big Picture

Invest With The House: Hacking The Top Hedge Funds eBook: Meb Fabe

For this first Saturday of April, I will share a brand new book by one of our favorite gurus, the author of "The Ivy Portfolio," none other than Mebane Faber himself.

Amazon.com: Invest With The House: Hacking The Top Hedge Funds eBook: Meb Fabe

Wall Street off to a solid start in April

Good news from the job front and factory output put investors a little more at ease today about upcoming expected poor Q1 profits, the good news indicating solid gains that may speak much better for earnings after all.  Unemployment rose a tad from 4.9 to 5.0% but even this was good news since it means that workers who had previously dropped out of the market are now reentering it due to the progressing recovery.  All in all, it was enough to boost the Dow another 107 points though, once again, the naysayers nearly ruined it all by trying to hedge their bets at open with a selloff that cost the index a hundred points right out the gate, all of which was later recovered with 107 points to spare.  But it would have been 200 if there had been more faith.  Oil once again had a bad day though, dropping 4 percent on news that the expected deal to freeze production may not happen after all.  Volume was 7 billion, not too far from the 7.6 4-week average.