Succinct Summation of Week’s Events 9.9.16 (plus The History of Index Funds)

It may come as no surprise that I am still without a computer but the good news is that my tech informed me on Thursday that my new super-desktop should be ready on Tuesday.  It may take another week or so to get it set up but next weekend should be the last of these unsolicited distributions.  Meanwhile, September 21st remains my big day, the day I am informed whether I have passed the introductory course for the CFP and therefore qualify for the internship which is a prerequisite for entering the formal academic program next February.  I expect to qualify and even have high hopes to get a very rewarding internship but, if things do not go my way, I may have to be reevaluating my career plans after next Wednesday.


My new desktop will be optimized for video editing and I have ordered new software which should make it a snap to quickly produce training videos on investment topics which I will then post to this blog and to YouTube.  Meanwhile, my commitment to deliver a summary of the week's events is fulfilled below as well as a listing of my daily recaps.  The bonus this Sunday is a dividend paid to me by the CFP, an article taken from Investment News, a daily e-newsletter that is required reading in the program.  This article details the fascinating history of how John Bogle invented the index fund, a little known strategy introduced as long ago as 1960 and that no one thought would ever take off.

Tim Hudson has invited me to make a brief presentation at our monthly MRI meeting on Monday night so I will see you all then.  Hope everyone had a great weekend.

The secret history of index mutual funds

Succinct Summation of Week’s Events 9.9.16

September 9, 2016 4:30pm by Barry Ritholtz

Succinct Summations for the week ending September 9th 2016

Positives:

1. Durable goods rose 4.4% in July, up from a -4% reading previously.

2. Job openings came in at cycle highs of 5.871M, up from 5.624M previously.

3. JOLTS to Job Seeker ratio falls to 1.3, lowest since 2001

4. Jobless claims fell to 259k, down from 263k previously.

5. Redbook same store sales were up 0.8% y/o/y, the largest gain since early July.

Negatives:

1. U.S. stocks fell 1% for the first time since Brexit and had the worst week since early February.

2. ISM non-manufacturing fell to 51.4, down from 55 previously and below the 55 expected.

3. Gallup U.S. consumer spending fell to $91/day, down from $100 previously (which was the highest reading since 2008)

4. PMI services index fell to 51, slightly down from the previous reading of 51.4.

Wall St. ends up on views Fed will hold off on rates

By Caroline Valetkevitch    Tue, 9-6

Still another volatile day with the Dow swing over a hundred points as sentiments swayed between good and bad news and whether the Fed may hike rates this month.  By session’s end the consensus seemed to settle on more bad news than good which had investors deciding against a near term high and ultimately sending the Dow up 46 points.  Volume was a little above recent averages at 6.6 billion.  

Wall Street ends flat as investors assess U.S. rates outlook

By Caroline Valetkevitch  Wed, 9-7

The trend continues with once again a 60 point drop right out the gate but recovering by session’s end to a 12 point drop.  The Nasdaq had a good day up 8 points to a new all-time record.  But investors remain nervous about a September rate hike placated by the recent weak jobs report.  Volume at 6.5 billion is a little above recent averages.  

Apple weighs on Wall St; energy shares a boost

By Caroline Valetkevitch  Thu, 9-8

True to recent trends the Dow once again dropped right out the gate some 80 points before again rallying to a final close down 46.  Apple’s the main driver behind the decline with the new iPhone sales failing to impress.  (Not that this hasn’t happened before and Apple always bounces back.)  It’s probably a more realistic assessment that the market decline is driven by continued nerves over impending Fed rate hikes.  The last hike triggered a mini-market crash and there are fears the same will happen again.  (Of course, initially the market will go down due to the naysayers who believe the higher interest rates will ruin the economy.  As soon as investors find this is not so, the market will normalize, and so will the volatility.)  The volume of 6.8 billion is inching higher over the averages and possibly indicating more investor confidence.  

Wall St. drops amid worries over North Korea test, rate outlook

By Caroline Valetkevitch | NEW YORK  fri, 9-9

Of course the threat of a nuclear attack would be more than enough of a trigger to trip a massive selloff in the market.  So when North Korea had its fifth and biggest test today, the market reacted by dropping over 400 points throughout the day and close down 394.  Aside from the nuclear threat, there is still much to be nervous about, especially with today’s warning from the Fed that a rate hike needs to come sooner rather than later or the economic may be hurt.  However, most of these concerns have been with us for a while without a 400 point hit so it’s more likely that North Korea’s move sparked the panic.  So unless we actually do have WWIII, it should all bounce back, a good time to buy.  Volume was relatively vigorous at 8.5 billion shares.