Succinct Summation of Week’s Events 7.29.16 (plus Trump)

It's time for the weekly eye-shot and, this time, IMHO, it's a wash.  In fact, this time, I think the difference between the positives and the negatives are so slight that any item could easily have been in the other column.  Which is to say that the week mostly went quite well.  This Sunday's bonus is ... well, let's just say that not everyone on Wall Street is a Trump supporter.  In fact, most are not.  First I present Barry Ritholtz's hilarious indexing of all the ridiculous insults Trump has hurled against his opponents since Day One.  Second, another frequent Wall Street Journal contributor publishes his own take on how to defeat the billionaire -- in a few words, Hillary might lose unless she stops playing nice.  Oh well, the real campaign hasn't even started.  I doubt that in a month anyone's going to be accusing anyone of playing nice.  Hope everyone is dealing nicely with the heat and had a great weekend.

Can We Educate Investors? (Not really) - The Big Picture

This is something I've been talking about for a long time.  This is the reason I am studying to be a Financial Planner.

Tech shares and muted GDP growth push S&P 500 to record

This week has certainly been an excellent illustration of the fickleness of the market as, for five consecutive days, the Dow dropped like a rock right out the gate and then, due to an onslaught of good news, all but fully recovered by close.  Today it was more of a surprise though since after the "after the bell" great reports from Amazon and Alphabet yesterday, you'd have thought there'd have been a big rally this morning right out the gate.  Instead, bad reports from McDonald's and Exxon sent the Dow plunging once again, again almost a hundred points, before the day's big rally resulted in a close just 24 points down, all on relatively high volume of 7.3 billion.

Wall St. edges up; Alphabet and Amazon rise after the bell

Four consecutive days now that the Dow dropped over a hundred points right out the gate only to almost fully recover late in the session to close only 15 points down.  Today's trigger was a bad report from Ford and the latter impetus was due to a good report from Apple.  Unemployment benefits also rose more than expected.  Volume was right in line with recent averages at 6.6 billion shares.

Wall St. ends lower after Fed keeps rates unchanged

For the third consecutive day, the market dropped like a rock right out the gate, this time to the tune of 130 points, only to recover almost completely by close to end the session just 1 point down.  This time trigger was the announcement from the Fed meeting that the economy was going along okay with few worries about the possible shocks that could knock things off course, which is good news.  This of course opened the door to another rate hike later this year, which is bad news.  The bad news was compensated by another string of very good Q2 reports, particularly from Boeing.  The news was sufficiently positive that Q2 results have once again been upgraded, this time from a negative 3.3% to a negative 3 percent, quite a change from the negative 5% of just one month ago.  Volume wasn't bad either at 7.3 billion.

Wall St. mixed, Apple impresses and Twitter disappoints

A very strong housing report triggered fears that the Fed might raise rates after all on this, the first day of the two-day July meeting, and that in turn, just like yesterday, sent the Dow diving right out the gate though, due to more positive Q2 reports, the index recovered to close down just 19 points.  Investors still expect companies to do better in Q2 than has been forecast.  At 6.5 billion, volume was a little closer to recent averages than it has been.

Wall St. declines as earnings take center stage

Mon, 7-25-16

Worries over a global crude glut caused the market to drop like a rock right out the gate, but things did recover moderately before close to shutter at 77 points down.  The drop in oil made everyone a little more cautious today so most remain on the sidelines awaiting an onslaught of more Q2 reports.  Thus, volume was very light at 5.9 billion shares.

Succinct Summation of Week’s Events 7.22.16 (plus a debt graphic)

This is the Sunday between the two big weeks that are defining a whole new chapter in American politics.  But it is apparent from this week's succinct summation that the tumult on the electoral front is not having any particular impact on the markets as they all hit new all-time highs this week.  But since we're on the topic of national debates, this week's bonus is a reading list containing a very informative graphic about the debt and about the best investments of the past three decades.  Two big surprises here: first, what's leading the pack and, second, well see for yourself.  Let's just say that if you think the U.S. debt is bad, it's nothing compared to the rest of the world.  Interesting reading includes a New York Times article explaining the irony about how green energy is actually thwarting climate change policy and what we can learn from sex workers about courtesy and truth on the Internet.  Hope everyone had a great weekend.  Try to stay cool.

Long Way To Go . . .

Another very curious graphic on this very hot July Saturday evening -- an eye-shot survey of what investment advisers are defining as the best investments for the next ten years.  As Mr. Ritholtz points out, it's very surprising that stocks rate so low, even more so that the typical consumer-investor seems very content to ignore this advice and stick with old fashioned index funds during this, the second longest running bull market in history showing no signs of letting up.

Wall St. rises, racks up fourth straight week of gains

After a one-day respite, both the Dow and S&P are back on top again, the S&P with still another all-time record.  A trend of generally good reports combined with the sentiment that the market has absorbed the Brexit has pushed the index up another 53 points.  Once again, Q2 earnings forecasts have been revised upwards, today now at a minus 3 percent, up from a minus 3.3 yesterday and a minus 5.0 at the beginning of earnings season.  At this rate, we may actually be in positive numbers by the end.  But there is still a lot of money on the sidelines awaiting more reporting, reflected in the low volume of 5.6 billion, way below the 7.5 billion average.

Intel, transports sap Wall Street's strength

A nearly two week long streak of setting new all-time records was broken today when a series of less than stellar Q2 reports, namely from the transportation and technology sectors, hit the market and brought the Dow down 77 points, not nearly enough to neutralize the recent rallies but plenty enough to erase some of the recent records, which isn't necessarily bad.  After such an extensive rally, it was time for some pullback.  Still, despite this modest retreat, forecasts have been revised upwards again.

Microsoft helps Wall St. to another day of record highs

"Twas still another day of record highs, the 7th in so many days for the Dow (and about the same for the S&P) with the index up another 36, the S&P 9.  Modest yes, but still very significant that the major rallies of the last couple weeks are holding and will likely go higher as more positive Q2 reports flow in.  Microsoft kept everything afloat today with an outstanding report boosted by its very successful cloud business.  The Q2 forecast last week was for a minus 5%.  Two days ago that was adjusted to a minus 4.5, yesterday to a minus 4.3 and today to a minus 3.8 percent, all signs pointing to increased confidence as attested to by the 6.2 billion share volume, still not quite up to averages but a lot closer as more money comes off the sidelines.

S&P pulls back from record; Dow notches eighth day of gains

Today the Dow hit its sixth consecutive all-time high with a boost of another 25 points riding on continued Q2 optimism.  This optimism had a bit of water thrown on it today with some companies like Netflix coming in with poor reports and the IMF with a less than stellar global growth forecast.  Yesterday the forecast for a 5% drop in Q2 was adjusted upwards to a 4.5% drop and today adjusted upwards again to 4.3 percent.  However, most of the money remains on the sidelines awaiting more results as reflected in the anemic volume of 5.6 billion shares traded, way below the 7.5 billion average.

Wall St. sets records again, led by tech, bank stocks

Q2 and general economic optimism continues to maintain the market at record high levels.  Today the Dow reached a fifth consecutive record high when it bumped up another 16 points and the S&P, after a very slight 2 point sputter Friday, got another 5 point boost and record high itself today.  The recent surge is causing companies to upwardly revise their Q2 numbers with analysts now believing more companies than not will end up beating estimates and the recent forecast of a 5% drop in earnings is now adjusted to a 4.5 percent drop.  It's a fair bet we'll see that number continuing to adjust to the positive side.  One thing that seems to be agreed upon is that the market has shaken off the Brexit.  Still, volume was light, at 5.6 billion way below the 7.7 billion average, and indicative that investors are still awaiting more Q2 results.

Succinct Summation of Week’s Events 7.15.16 (+ 5,000 Year History of Urbanization)

It's been quite the tumultuous week, the markets having done very well while the rest of the world not so well.  Four major disasters in one week, has this ever happened before?  And to show how we got from there to here, this Sunday's bonus is a terrific 3 minute animation from YouTube showing the complete 6,000 year history of the city-state.  Hope everyone had a great weekend.  Hopefully, with the coup in Turkey having been put down over the weekend, tomorrow's market will hold no major surprises.

France Terror Timeline

An intriguing graphic showing the entire history of all the terrorist attacks on France during the last four years.  There have been terror attacks all over the world but France has gotten more than its fair share.

Wall St. ends flat but futures slip after Turkey coup reports

The S&P dipped a bit thereby breaking four consecutive sessions of new all-time highs but the Dow shot up for a fourth consecutive session to another new all-time high with an extra 10 points to its credit.  Q2 still has everyone feeling quite confident but everything ground to a halt with the news of the military coup in Turkey, still entirely unresolved at close.  Developments will be closely watched over the weekend while the market bets that the coup fails.  I am writing this at 1:20 a.m.  It was announced on MSNBC at about 11:45 p.m. that the coup had failed but, even at this hour, CNN has not accepted that stance, still reporting that it remains unknown who is really in control in Ankara.  It will be an interesting weekend.  Volume was below average at 6.1 billion.

Wall Street sets another record as JPMorgan leads banks higher

Q2 just keeps getting better which today pushed the Dow up another 135 big points, making this the third consecutive day that the index has reached a new all-time high and, with the S&P up another 11, the fourth consecutive all-time high for that one.  JP Morgan came in with a report much higher than expected and so did Delta, bring the VIX "fear gauge" down to its lowest in 11 months.  The Bank of England announced no change in rates and kept open the prospect of additional stimulus, their own version of QE.  Unemployment benefits are at a 43 year low while producer prices gained.  All in all, a recipe for continued growth and improved prosperity though, at 6.5 billion shares, it's obvious there's still money on the sidelines awaiting more Q2 news.  Tomorrow, six more big banks report.

Wall Street ticks up to extend record streak

For the second day the Dow has seen another all-time new high even if it's just to the tune of a modest 24 points.  And ditto for the S&P on a third consecutive day, all on continued upbeat Q2 and a belief in the continuing strengthening of the economy.  Tomorrow the Bank of England meets to talk about their own version of QE so volume was a little bit on the light side at 6.5 billion in anticipation of that outcome.  Generally speaking, Q2 is expected to be in good shape, and Q3 & 4 in better.  But before we have too big a party, let's just keep in mind that there are a few minor things in our future such as the presidential election that can potentially change everything.

S&P and Dow hit records as growth bets boost Wall Street

Yesterday the S&P reached a new all-time high and the Dow was lagging just 70 points behind another all-time high.  With the S&P gaining another 15 today and the Dow up 120, both are now at new all-time highs.  Investors are sending a strong message that the U.S. economy, despite a slow start to the year, is on solid footing.  Q2 is underway and while some believe it will be a repeat of Q1 with another 5% decrease in earnings, others believe that Q1 was the bottom and that Q2 is bringing bright news.  This was bolstered by United Continental, Seagate, and Western Digital all turning in good reports.  Energy also came in with a more than 2% gain with crude leading with 5 percent.  Part of the rally is attributed to the belief that the central banks here and globally will keep interest rates low due to the Brexit.  7.6 billion shares were traded which is right in line with recent averages.

Strong economy, earnings bets propel S&P 500 to record high

7 more points on the S&P finally sent that index to another all-time high, something it's been flirting with for several weeks now.  80 more points on the Dow, now also just 70 points shy of its all-time high reached 3 years ago.  With global markets pretty much at a standstill, the strong U.S. market is being lauded as proof of the remarkable resilience of our economy.  The debate still rages whether the stock rallies are being artificially triggered by low interest rates or legitimately by improving industry performance.  (I personally subscribe to the latter view.)

How the American Revolution Trashed the British Markets 1770-1790

So we begin this Sunday's edition with the bonus which is a fascinating graphic showing how the American Exit from the British Empire (Amexit) wreaked havoc on their financial markets for 20 years.  This actually appeared in The Economist on July 4th so we're a week behind picking it up.  But it's worth the pickup.  The summary of the week's events is presented below the graph with all the great post-Brexit comeback news the week had to offer.  Hope everyone had a great weekend.

Hedge Funds Worst First Half Since ’11 on Turmoil

Our Saturday kernel of wisdom this week is the graph below that shows not surprisingly that hedge funds seem to do well mostly only in falling markets.  When things are going well, hedge funds seriously underperform, which makes a certain amount of sense in view of the fact that the only really big secret about these kinds of funds is that they do a lot of short selling, a strategy that can be hugely profitable but that works best in a falling market and can be fraught with calamitous risk otherwise.  This has been especially true in the last six years when there's been so much wild seesawing on practically a daily basis.  When the market goes down triple digits one day, then up again triple the next day, and this happens over and over ... let's just say these are not exactly ideal conditions for successful hedge fund management.

S&P 500 brushes record high after blowout jobs report

Well, this morning's payroll report came in boffo and that caused another huge rally shooting the Dow up a big 250 points putting the index now back a big 135 points above the pre-Brexit level and the VIX "fear gauge" at its lowest level since late May.  It wasn't just a big number, it was huge, coming in with a hundred thousand more jobs than predicted, 287,000 new jobs or 65% higher than the forecast.  There is now much more confidence that the poor Q1 performance was a fluke and that we are back on track with the growth we had enjoyed in prior quarters.  Q2 earnings season begins next week and then we'll have a whole new ballgame.  Meanwhile, today's volume was just a little below recent averages at 7.1 billion.

Energy weighs on Wall St. but Costco shines

Another mild correction today and it actually was looking more like a major correction as the Dow fell over a hundred points throughout most of the session only to rebound near the close to regain all but 22 points.  Crude fell again, this time 5 percent on reports that inventories were still higher than expected.  And with the market becoming more and more comfortable with the Brexit, the safe havens of gold and utilities which everyone had initially rushed to are now taking a downturn.  The bright spot was the employment report showing 13,000 more jobs than forecast.  But the real report, the monthly payrolls report, comes in on Friday and, if it's in agreement, that should boost things further.  The new job numbers have placated concerns about the weak May data and has everyone hoping the Fed will be reassured.  At 6.7 billion shares, volume was below the 4-week average of 7.8 billion.

Wall Street up on cautious Fed, upbeat data

So we had a bit of a correction yesterday and we had a bit of a rally today as the minutes of the June Fed meeting revealed that, as expected, the Brexit has injected a considerable amount of uncertainty into the global economic outlook and that therefore interest rates would stay on hold for a while.  It is exactly what investors wanted to hear and shot the Dow up 78 points.  Crude also rose over 2 percent, mostly on news that the service industries had hit a 7-month high spurring more hiring and adding more fuel to the argument that Q2 was picking up.  Trading was right in line with recent averages at 7.4 billion shares.

Economic growth worries, oil slump drag Wall St. lower

It seems we've started a mild correction after last week's huge post-Brexit rally with the Dow steadily sinking all day long to settle 108 points down.  It seems that after last week's huge gains that investors are taking a breath and wondering if the "Brexit effect" really is over.  I think they can take it to the bank that it isn't and that there will be further selloffs.  So there was a little of what they call "risk-off" trading today, aggravated by an almost 5% drop in crude and a new report showing that factory orders fell in May.  But most investors are apparently still waiting it out as reflected in the below-average volume of 6.9 billion.

Succinct Summation of Week’s Events 7.1.16 (+ college bonus)

The long holiday weekend has come to an end so tomorrow it's back to business as usual and we find out whether the post-Brexit rally continues or withers.  Meanwhile, here's the convenient snapshot of the past week's events.  This time it's mostly all positives due to the flexibility U.S. markets have shown regarding the Brexit, with all the negatives being in Europe and Asia with all the fallout and chaos from the Brexit.  The holiday bonus is a stunning graphic showing that there is still quite a premium to be enjoyed by those who hold a college degree, the job market participation rate among degreed workers being much higher than those without a degree in an economy where unskilled labor is gradually becoming obsolete and unmarketable.  Hope everyone had an enjoyable Independence Day!

S&P 500 vs. VIX: Are Stocks Too Low?

Another fascinating graphic for this 4th of July holiday that shows further evidence that this market may very well be ripe for an ideal buying opportunity.  Afterwards enjoy the 22 minute TED video where mathematician Jim Simon is interviewed about how he cracked the Wall Street code.  Enjoy your 4th!

10 Weekend Reads (+ graphic ROI on college degrees)

The 4th of July of weekend has gotten off to a very pleasant start so for those of us who are sunning and funning, here is another interesting weekend reading list courtesy of our friend Barry Ritholtz.  On this list is a very interesting article about the nature of modern cultures that seem to promote the endurance of bad ideas.  But the real winner this week comes from the New Republic: "The Foreclosure Sleuth:  How a Sports Agent Uncovered the Biggest Financial Fraud in American History."  A close runner up is today's graphic, courtesy of The Economist, which shows the 20-year financial return of various college degrees.  It seems to negate the popular notion that technical degrees provide for better careers than liberal arts degrees as one can easily observe most of the dots clustering right around the 5 to 15 percent mark, meaning they all return a fairly respectable positive ROI.

Wall St. ends higher for fourth straight day

Gains for the fourth straight session even if today was only to the tune of a modest 19 points.  The triple digit rallies may be behind us but that's okay.  It was a good run and it's gotten us almost all the way back to the pre-Brexit world.  Investors now feel that either the Brexit won't be a big deal after all or, alternatively, it may not happen at all.  Two years is a long time and already, after only one week of chaos, there is already talk of another possible referendum to reverse it.  Other good news includes an expansion of June factory activity and overall positive momentum for the U.S. economy.  After a week of very brisk activity, trading was a little more subdued today with 6.7 billion shares vs a 4-week average of 7.7 billion.  Have a great Independence Day weekend!

Wall Street rallies for third day as Brexit bruises fade

Thu, 6-30-16

Day #3 of the Great Comeback from the Brexit having pushed the Dow up another big triple digit increase, today 235 points.  So what's the tally now?  Lost 870 Fri & Mon, gained 790 Tue thru Thu.  So the rout from the Brexit has been almost completely neutralized.  Not that more downside is not likely to happen.  It likely is.  But at least today optimism is still running things.  We also had good news about factory activity showing its highest levels in 1-1/2 years and the S&P finishing its third consecutive quarter in the black, all this on very strong volume of 8.7 billion.  Let's keep those good vibes coming.