For the New Year, a 5 Minute Investing Course from the AAII

On this very frigid New Year's Eve I offer this little gift from the AAII, a five minute read with 19 investing resolutions for the New Year.  Hope everyone is staying warm this holiday weekend.

Favorite Wall Street Movies

For my second to final post this year, and given the fact that this holiday weekend is traditionally second only to Christmas night as the biggest movie of the year, I was pleasantly surprised to find that today's Barry Ritholtz blog was about all the best Wall Street movies.  He says he's giving you four flicks but there are really six.  I have seen them all, (own most of them) they are all excellent, ranging everywhere from the slappiest of slapstick comedy (Trading Places) to intense drama of Wall Street excess in Wolf of Wall Street, to the most starkly realistic portrayal of stock fraud (Boiler Room and Wall Street) to a most entertaining and somewhat angry explanation of how greed and corruption in the financial services industry brought on the Great Recession in both The Big Short and Margin Call. 

Wall Street quiet on last trading day of a strong year

On this the last trading day of the year, the commentaries have been retrospective.  This year the S&P has surged almost 20 percent and all the indexes have reached repeated record highs scoring the best annual numbers since 2013.  The VIX topped out at just under 16, well below the long-term average of 20.  Tech has been the best performer, telecom and energy the worst.  Today all the indexes fell on light trading, the Dow down 118.  One word of caution:  there is a lot of optimism built into this market which could reverse if expectations for the coming year disappoint.  Today’s volume was just under 5 billion, below the 6.4 billion average for the month, but well in place for the holiday week.  Happy New Year! 

Wall Street rises as financials, tech advance

The light trading of the holiday week continues with tech getting a little boost for the second consecutive day after a 5-day losing streak.  The good news is that the sector is up more than 37 percent for the year and the S&P is on track for its biggest gains since 2013, a trend expected to continue into 2018.  At 4.2 billion shares traded, volume is about 2/3 normal. 

Wall Street edges up as tech snaps skid

After losing 8 points yesterday in very light holiday trading of 4 billion the Dow was up again today, this time to the tune of a very modest 28 points, again in very light trading of 4.3 billion.  With tech being down, that sector had a little rally today but, as has been noted, all of tech is still way up for the year.  Energy lost a bit too but that’s okay since it hit a 2-1/2 year high yesterday. 

Wall Street slips on tech sector weakness

We are definitely on track for a slow week with everyone home for the holidays.  Tech once again pulled lower mainly due to tepid iPhone X demand but the sector is still up 40 percent for the year.  Energy was up again led by OPEC supply cuts and retail is on track for its best holiday period since 2011.  But all the pluses and minuses were just barely able to move the market with the Dow down less than 8 points and volume very low at 4 billion. 

Succinct Summation of Week’s Events 12.22.17 (plus the AAII CAN SLIM course)

One last Merry Christmas to one and all!  Below is the usual weekly summation with Q3 GDP rising over 3 percent and bitcoin losing over $100 billion dollars.  Yes, that's a "b," 1/10 of a trillion!  This holiday weekend's bonus is a beautifully concise explanation of the IBD CAN SLIM approach to investing.  No need to slog through William O'Neil's 500 page classic text, "How To Make Money In Stocks."  Just read this article instead.  We are a FastTrack group but it seems that by far the next most popular strategy out there is CAN SLIM so I submit this as a Christmas present to the group as an introduction to the IBD strategy for those who may not be familiar with or understand it.  Hope everyone continues to enjoy the holidays.  Today is Black Tuesday, the day we get the best deals on everything.

LPL loses $462,000 arbitration claim stemming from broker who ran Ponzi scheme

Keeping in the holiday spirit I started yesterday with entertaining stories about investment scams that would make great movies, I'll follow up tonight with another entertaining tale of financial chicanery from Investment News, only this one ends with the crook getting his comeuppance.  Merry Christmas everyone!

He Stole $100 Million From His Clients. Now He’s Living in Luxury on the Côte d’Azur

I tried really hard to find a warm and cheery article for this Christmas Eve weekend but came up flat.  Then I started thinking that Christmas is not only the season for comfort and joy but also the week that all the best movies of the year debut in theaters.  We are the only species of life on the planet that is not only attracted to good stories but really quite need them to help us make sense out of life.  So I finally came across this article from today Big Picture blog by Barry Ritholtz and Bloomberg about a financial/investment scam so intricate and clever that it would make a great movie. 

Wall Street slips heading into holiday

Anybody certainly could’ve seen this one coming since it happens before every holiday and Christmas is the biggest of all holidays.  So yes there was a big slowdown in trading today as investors began winding down ahead of Yuletide bringing the Dow down a very modest 28 points.  Nevertheless it was a very strong week namely due to the euphoria of the passage of the tax bill which the markets are hoping will trigger strong corporate earnings, stock buybacks and a flurry of M&A activity. 

Energy and financials power Wall Street's rise

Yesterday, with the passage of the tax bill, the market took a little breather with a 28 point dip.  Today the toes were back in the water testing the temps and, with a pick up in bank and energy stocks, investors got a little 55 point boost.  The market appears to be very optimistic about the coming year.  New Q3 data showing that the economy had grown at its fastest pace in more than two years helped the boost too.  At 6.1 billion shares, volume was below the 6.9 billion 4-week average. 

Wall Street edges lower, pauses as tax bill clears Congress

Since today’s passage of the tax bill was pretty much already considered a done deal, the markets took a breather today with all three indexes pulling back ever so slightly, the Dow down 28, the S&P 2.  Energy got a boost from an unexpected drop in crude inventories as did telecoms which are seen to be the future biggest beneficiaries of this bill.  At 6.1 billion, volume was a little lower than recent averages. 

Wall Street eases as investors look past tax revamp

There was a little hiccup in the Senate today and the bill had to be sent back for parliamentary corrections, which means the final vote will have to be repeated in both the Senate and the House which means a delay of another day or two.  Naturally the market reacted with just a little bit of trepidation and though the major consensus is that it’s still going to pass, it did cause a brief pullback bringing the Dow down 37 points.  The experts aren’t at all concerned as they believe that the bill is already priced in.  At 6.6 billion, volume was very close to the 4-week average. 

Tax plan optimism propels Wall Street to record highs

So tomorrow’s the big day that everyone expects a vote on the tax bill … and expects the vote to pass, making this the first piece of major legislation passed by the Trump administration with Republicans in control of both branches of government. This expectation alone was enough for another triple digit gain and another record close as the bill is expected to be big boost for stocks.  Since the boost to stocks is in turn expected to provide a boost to M&A activity, today there has already been a flurry of announcements of new deals – Hershey buying SkinnyPop, Campbell buying Pretzel and Cape Cod, Penn Gaming buying Pinnacle Entertainment.  7.1 billion shares were traded, slightly above the 4-week average. 

Succinct Summation of Week’s Events 12.15.17 (plus No Silver Bullets)

Once again I submit the usual Sunday night succinct summation of the week with the indexes once again making new all-time highs based on a combo of strong economic data plus anticipation over the tax bill with the negatives on the minor side such as producer prices rising 0.1% more than expected.  I submit two bonuses this Sunday, both from Barry Ritholtz's Big Picture Sunday reading list.  The first is an 81 frame slide presentation, "No Silver Bullets," about proposed strategies for maximizing fixed income returns in a low return environment. 

Wall Street closes at records with tax overhaul in sight

Yesterday there were seven Senators leaning towards a no (two strongly leaning) on the tax bill and the Dow dropped 77 points.  Today it seems all seven have had their concerns assuaged and are now either leaning or committed to yes.  Investors responded with great relief and enthusiasm pushing the index once again to a triple digit gain.  

Wall St falls as investors fret about tax bill passage

With at least two more Republican senators now threatening a no vote on the tax bill, and as many as seven considering a no, what was thought to be a sure thing just two days ago now has a cloud over it which has investors worried enough to bring all three indexes down, the Dow to the tune of 76 points.  The narrative of the bill benefiting mostly the wealthy is gaining traction and that has some lawmakers concerned.  So stocks fell even though reporting remains positive with retail sales increasing more than expected.  There is also the monkey wrench of the repeal of net neutrality, very much protested by the public, which has the market struggling to evaluate that potential impact.  Almost 6.7 billion shares were traded putting volume slightly above the four-week average of 6.5 billion. 

Wall Street mixed as financials drag after Fed rate hike

Today the Fed did exactly what it was expected to do and the market responded in kind with the Dow up 80, and Nasdaq 13.  The only laggard was the S&P, up initially but took a late session pullback for, of all reasons, investors thinking the Fed was not being aggressive enough now.  For years they’ve been complaining that the Fed has been too aggressive.  There’s no pleasing some people.  The Fed GDP growth forecast was boosted a big 25%.  The big focus now is whether the tax bill will go to Trump’s desk for signature before Christmas.  A big step was made in that direction today when the Republicans in the House accepted the new bill.  Volume was a little above recent averages at 6.7 billion shares traded. 

S&P, Dow rise with help from banks; Nasdaq lags

The Dow up three digits again and reaching another record with good news about consumer prices easing concerns about low inflation and thus continuing to push up financial stocks.  Investors are becoming more comfortable with the recovery so cash is coming off the sidelines and into equities, the outlook for ’18 being very upbeat.  There is now a forecast of 88 percent of the Fed raising rates again tomorrow.  Volume was in line with recent averages at 6.5 billion. 

Wall Street ends higher with help from tech, energy

All the indexes closed higher again today as tech and energy continued their comebacks, suggesting investors have grown weary of sector rotation.  There is once again the cloud hanging over all the optimism that as rates go up growth might slow, meaning good news for the economy may not be good news for the market.  Bitcoin started trading on the exchanges this morning which has shot its price way up while investors shrugged off today’s terror attack on the Port Authority.  At 5.8 billion shares traded, volume was below the 6.5 billion average. 

Succinct Summations for the week ending December 8th, 2017 (plus GQ article on savings)

Below is provided the usual weekly summation with the terrific payrolls report and low unemployment figures.  This Sunday's bonus from the usual source (Barry Ritholtz's Sunday reading list) is a remarkable succinct article from, of all places, GQ magazine, about the best strategies for building savings.  And since our savings are what finance our investing, it also a good primer on investing.  A short read, enjoy, and hope everyone had a great weekend.

Wall Street closes higher after payrolls report

A great payrolls report announcing 228,000 new jobs against a forecast of 200,000 boosted the Dow 3 digits again and shot tech stocks up enough to completely erase the nearly 2 percent decline from early week.  The market has now priced in 96% odds of a rate hike at the Fed next week, which will further cement confidence in the economy and continue to boost financial stocks.  At 5.8 billion, volume was down a bit from recent averages. 

Wall Street rising: Facebook, Alphabet, Lululemon gain

Tech is rallying back after losing almost 3 percent in recent sessions, but today pushing the Dow up 70 points.  The market does not seem particularly concerned about a possible government shutdown as economic data continues to be positive, the latest that filings for unemployment benefits unexpectedly fell.  All that aside, eyes will be on tomorrow’s payroll report to gauge the real strength of the labor market.  At 6.4 billion shares, volume remains in line with the 4-week average. 

Tech recovers, but not enough to push Wall St. higher

The tech sputter has been momentarily stalled as the big players rose more than a percent partially offsetting the recent selloff as investors rotate into financial stocks.  But the Dow still dove a modest 39 points (the S&P a very modest 0.3) as the market continues to ponder uncertainty over the tax bill.  But the YTD news remains strong with the S&P trading at more than 18 times earnings for the first time in 15 years.  With last week’s exuberance fading, volume is back to more normal levels at 6.3 billion shares traded. 

Tech rally burns out, leaves Wall Street lower

Tech continued to lose ground today as profit-takers dominated the trading pushing the Dow down 109 points.  The AMT on the tax bill will be a major point of contention between the Senate and the House, the Senate wanting it kept, the House wanting it gone, so though investor sentiment remains that tax reform will get done, it’s still likely to be quite a fight.  Because of the unusually high volume of the past few days, today’s lower volume of 6.9 billion was still enough to stay slightly above the 4-week average of 6.7 billion. 

Stocks fade after record run as U.S. tax bill digested

Since the Senate passed its version of the tax bill in the wee hours of Saturday morning, investor enthusiasm had the entire weekend to fire up, and fire up they did with the Dow blasting up 300 points right out the gate.  But this was quickly tempered with the reality check that there was still a long battle and two more major votes ahead so profit takers soon dominated and brought the lead down to a 58 point push for another record close.  The S&P also had an intraday record before pulling back as the market is clearly in rotational mode out of the tech arena and into financials.  The already strong dollar also rose as the tax bill is seen as encouraging more Fed rate hikes.  And oil pulled  back again on yet another sign of increased production despite this years-long glut.  Volume was again very high at 7.9 billion shares traded. 

Succinct Summations for the week ending December 1st, 2017

Below please find the usual Sunday night weekly summary with the broken record continuing that again all indexes have reached new all-time highs.  Economic data remains strong and what did not make this report since it didn't happen until ten hours after this was posted, was that the tax bill passed in the Senate in the wee hours of Saturday morning by a 51-49 vote, though there remain weeks of negotiations ahead between the House and the Senate. 

House vs Senate Tax Code

Courtesy of  today's post on Barry Ritholtz's Big Picture blog, this is a very nice summary of the competing Senate and House tax bills, the ultimate outcome of which will very likely impact the market.  

Whipsawed by Washington, Wall Street ends modestly lower

So once the announcement was out that Flynn had pleaded guilty and was now cooperating, news of the tax bill got knocked off the front page.  Given the greatest blow yet to the Trump presidency, the future of the bill is not nearly as assured tonight as it was this time last night, but there is still a fair amount of procedure in the future.  There remains high confidence that the votes are there but, as we all know, in Washington anything can and often does happen.  But investor confidence has fallen a tad bringing the Dow down 40 points.  But volume today was still way above average at 8.2  billion. 

Wall Street gains, Dow tops 24,000 as tax bill gains steam

Investors are certainly betting big that the tax bill will pass and thus pushed the Dow up past the 24,000 mark with a huge 331 point gain.  This is all fine and good except that, according to UBS, there is only a 20 to 40 percent chance that tax cuts will actually happen.  Due to this combo of the anticipation of tax reform plus quite optimistic economic data all year, the S&P and Dow have registered eight straight months of gains.  Should we be preparing for a correction in the event the tax bill fails?  At least today, not.  Enthusiasm is high and volume is way above average at 9 billion. 

Nasdaq falters as investors flee tech for banks

The Senate took still one more step today inching tax reform a little closer to reality and, though the final outcome is still anything but certain, it was enough to boost the Dow another 103 points as there remains much anticipation among investors that lower taxes are in the future.  With tech taking a momentary beating, there has been a flight to financial stocks as these will be the biggest beneficiaries of tax reform if and when it happens.  Confidence zoomed up today with volume way above average at 8 billion shares.  Even the bad news from Amazon helped boost the market as it was taken as good news for brick-and-mortar retailers with stocks like Target and Macy’s way up.  Why?  It was the “thought that Amazon isn’t going to kill every retailer out there.” 

Surging banks lead Wall Street to highs as tax plan advances Lewis Krauskopf

The Senate committee in charge of doing the first vetting on the tax bill gave it a green light and, despite the fact that there remains many concerns among Republicans about certain provisions in the bill, the green light was enough green for the market to zoom over 250 points.  However, much of this boost as stated by a local strategist right here in Troy was due to overall positive economic data.  “Unemployment and interest rates are low, confidence and asset prices are high.”  Confidence in fact is near a 17 year high.  Volume was above average at 6.7 billion. 

Energy slumps, Amazon shines as Wall Street ends flat

For Cyber Monday, just a little nudge up on the Dow, an even littler nudge down on the others.  Once again, gains in retail were counterbalanced by losses in energy as, once again, stockpiles of crude are suspected of being larger than previously reported thus continuing to compound this very long-lived glut problem.  The good news – best news really – is that all the fundamentals continue looking very positive so no one is predicting the end of this bull market any time soon.  Volume continues to lag below average, which means there’s still more cash out there, which is yet another indicator that this market still has legs. 

Succinct Summation of Week’s Events for week ending 11.24.17 (plus Warren Buffett movie)

Once again below please find the usual Sunday night weekly summation with all three indexes once again reaching new record highs.  Not sure why Americans' concerns about the economy being at an 18 year low is in the negative column.  The bonus this weekend is from HBO.  There is a great HBO produced documentary on Warren Buffett which would ordinarily require a subscription to HBO but I found it on YouTube this weekend and supply the link.  Advise to get one of the many programs that can be used to download YouTube videos to your hard drive because HBO is likely to have this removed as soon as they discover it.  Hope everyone had a great holiday weekend.  

Tech leads S&P above 2,600; Amazon, other retail stocks gain

For Black Friday there was only a half-session with volume at only 2.8 billion so, as usual, nothing that happened today can be taken to the bank.  Wait until Monday.  What did happen today?  Black Friday went very well with shoppers spending near 3 billion and another nearly 7 billion expected on Monday with the retail index reaching an all-time intraday high.  Though much of this was online, even brick-and-mortar did well today and the volatility index is also near an all-time low.  For the kickoff to the holiday season, not a lot of nerves out there right now. 

James Simons: Conquering Wall Street with Mathematics

Happy Thanksgiving everyone and I can't think of a better way to honor the occasion than to present yesterday's Ritholtz column which should very much appeal to all the techies in our group.  This was yesterday's entry but it should appeal to all the engineers in the group who like the purely mathematical approach to stock picking.  Hope everyone is having a great holiday. 

Wall St. flat ahead of holiday; ISPs rise on net neutrality bets

A minor correction in the air as trading remains exceedingly light for the holiday week with the likely repeal of net neutrality dominating market news and driving ISP stocks up.  The day’s shock came by way of Meg Whitman’s surprise stepping down from HP, which sent shares down over 7 percent. Volume at just under 5.2 billion is way below the month’s average, as was expected. 

Tech gains help propel Wall Street to record highs

The Dow up 3 digits again on more better than expected Q3 as the latter winds down.  Cash that’s been sitting on the sidelines all year is starting to move back into the market as confidence increases with the VIX at historic lows and pushing all three indexes to new highs.  Volume was stronger than yesterday but is expected to be well below average all this week. 

Wall Street ticks up, lifted by Verizon, chipmakers

With today’s 72 point boost we are just about back on track to where we were before I went on vacation.  Q3 reporting is more or less over and the fact that most companies exceeded forecasts is what’s kept the bulls running.  Because of the upcoming holiday weekend, volume was quite light and is expected to remain so all week. 

Succinct Summation of Week’s Events 11.17.17

Today I attempt to reboot the Marias blog with the usual Sunday night weekly summation.  Lou Ruckeyser on the old PBS Wall Street Week program used to joke that he had a consistent history of the stock market going down every time he went on vacation.  So the Dow took roughly a 300 point dive during the week I was in PA even though it did recover most of that on Thursday (only to lose much of it again on Friday.)  There is bound to be a correction once it becomes evident that tax reform is going to fail, and lately there are not too many economists who believe it won't.  Anyway the new AOL desktop browser is a complete flop so I have moved to AOL Mail to get my work done now and will endeavor to keep this going on a daily/nightly basis once again. 

Succinct Summation of Week’s Events 11.3.17

So I've been offline since October 19th since AOL discontinued its free desktop browser that I've been using for many years and its new and improved AOL Gold desktop (which you now have to pay for) does not work.  Isn't it often the case that "new and improved" usually translates as "ruined."  So I've been forced to use AOL Mail on the web site and, though it's not nearly as good as the old free desktop browser, it's a whole site better than the new, which is practically useless, and still a whole lot better than the other browsers such as GMail, Yahoo, and Comcast.  I'm getting used to it now so I may well soon be doing this daily blog again.  I will be visiting relatives in Philly for the next ten days or so but will likely resume publishing upon my return.  Meanwhile, tonight I am providing the usual succinct Sunday night summary.  Have a great week everyone! 

Dow closes above 23,000 for first time; IBM soars

IBM had a really good day, up 9 percent on a really good Q3 report, and that gave the Dow a super good day, up 160, of which 90 is credited to IBM.  With this steaming bull market, hesitant retail investors are pouring back in, balancing out the $33 billion that has been pulled out of stocks just in Q3.  Since the S&P and Nasdaq were positive, they were also at new records.  Investors await the White House decision about the next Fed chair.  The market wants Yellen to stay, Trump does not.  We’ll see who wins.  As has been the trend lately, volume was on the light side with 5.6 billion as investors await more Q3.

Dow pierces 23,000 but finishes below milestone

Because of continuing strong Q3 reports, today from UnitedHealth and J&J, the Dow inched up another 40 and closed within a breath of 23,000.  Once it does, it will be the fourth landmark this year.  The health sector did better on the news of a bipartisan deal to reinstate the bulk of Obamacare subsidies.  IBM was up on a good Q3 and Goldman Sachs down even though it had a good Q3.  Volume remains below average at 5.5 billion as investors wait for more good Q3 to justify the high valuations.

Wall St. inches up with financials; earnings in focus

Still another day of all three indexes reaching new record highs with the Dow ratcheting up another 85 points, now just 43 points shy of 23,000.  Q3 reporting is underway with financials doing well … ditto for Netflix and Apple.  Healthcare fell almost ½% due to the scrapped subsidies.  Investors will be looking closely at Q3 results to see if they can justify this extended bull market.  Volume was below average at 5.5 billion.   

Succinct Summation of Week’s Events 10.13.17 (plus the flip side of FAANG)

Below please find the usual weekly summation, the positives being yet another week of new all-time records and drop in jobless claims, the negative being retails sales being a tad below expectations.  On the Ritholtz Sunday reading list is this New York Times article that offers a different perspective on the whole FAANG phenomenon.  FAANG is the acronym that has been used of late in the financial news to describe the coalition of tech companies – Facebook, Amazon, Apple, Netflix, and Google, which together make up a rather disproportionately large percentage of the market.  The article offers the point of view that maybe FAANG is not doing investors or the economy at large such a great service after all.  Have a great week.  

Saving Twitter, Big Bets, and Catching Hackers

Friday the 13th had to come in October this year.  It's not that often that it comes in the Season of the Witch and, in that spirit, Barry Ritholtz has offered several freaky titles for our consideration including an analysis of Vanguard success from Bloomberg, an IBD expose on the hidden story behind wages paid to Walmart employees and, for those who really want to lurk in the dark shadows, there is a tale of Israeli espionage and how it lead to the discovery of the Russian hacking.  Enjoy the rainy weekend.  

Wall St. ends up after economic data; S&P up for a fifth week

The end of week 2 Q4, and week 1 of Q3 reporting, had all the indexes seeing new gains, the Dow and the S&P both seeing their 5^th straight week of gains, all on positive economic data demonstrating continuing market strength and the VIX remaining historically low at 9.6.  Bank of America came in above forecast, Wells Fargo below forecast, consumer prices up and the healthcare sector taking a hit over Trump’s latest executive order.  Volume was close to recent averages at 5.8 billion.

Wall Street slips as banks fall after results, AT&T sinks

Thu 10-12-17

It is the beginning of Q3 reporting and today the indexes retreated from recent records with the Dow down 31 points and AT&T was the reason, with a loss of 60,000 video customers during Q3 due to cord cutting.  Oddly, though investors have been awaiting Q3 reporting to find out if the bulls would keep running, both JPMorgan Chase and Citigroup fell despite the fact that their reports exceeded forecasts.  S&P Q3 earnings forecasts are now at 4.4%, down from 5.5% last week.  6 billion shares changed hands, which was in line with recent averages.

Wall Street ticks higher to record close; eyes on earnings, Fed

There were records set again yesterday so with nothing but positive numbers again today, it was another one for the books.  The Dow is 42 points higher attributed to a lot of sector rotation with investors moving to defensive stocks.  There’s also talk of Trump replacing Yellen, and the good news that the likely candidate will be close to her in philosophy.  However, as has been stated repeatedly, the market likes the status quo, wants Yellen to continue, and is likely to react negatively to any replacement, which is good enough reason to leave it alone.  The 5.6 billion share volume is still below average as the markets await Q3 reporting, due to begin tomorrow.

Wal-Mart rally pushes Dow to all-time high

I completely forgot about Columbus Day yesterday, which may have been part of the reason why trading was so light at 4.4 billion shares, though since only banks are closed I’m not sure why this would impact trading.  And it may not have since today’s volume was not much better at 5.6 billion.  Nonetheless, with another 69 points notched on its belt, the Dow saw another record today due mostly to Walmart forecasting a 40% increase in online sales next year.  Oil also got a boost from Saudi export cuts and OPEC continuing talk of rebalancing after years of oversupply.  The market seems to be shrugging off all the negatives, the only fear being the fear of missing out.  We’ll see.

Wall Street recedes from highs as quarterly reports loom

After so many records being set last week the market took a breather today with not much action and volume at a very anemic 4.4 billion.  Modest gains in tech were offset by a drop in healthcare leaving the Dow down 12, the Nasdaq down 10 and the S&P down 4.  The S&P is now expected to have earnings increased by 4.8 percent in Q3 but that’s a downgrade from 5.5 percent last week.  Everyone everywhere seemed to be feeling the downward pressure today, the most likely sentiment being that investors are on the fence until they see some Q3 results.

Succinct Summation of Week’s Events 10.6.17 (plus the other side of deficits)

The ever so popular weekly summation is once again below for your review.  The economic data was mostly positive with the obvious negative being the massacre in Las Vegas and payrolls being down, mostly attributed to the fact that 1-1/2 million people did not show up for work in September due to the hurricanes.  It was more difficult than usual this weekend to find a Sunday bonus but I think this article from Thursday's New York Times may qualify as it is an excellent explanation of deficits and why they're not necessarily a bad thing.  I got this same lecture in my first econ class in the MBA at the University of Southern California in 1979 and I can see that the basic principles remain unchanged.

Change in Inflation-Adjusted Incomes Since 1999

For your viewing pleasure on this wet weekend, I offer this informative graphic from Barry Ritholtz's weekend reading list showing the significant rise in incomes at all levels since 1999, and the particularly sharp rise in all levels since 2014.  This has been true whether we're talking the top 5% or the bottom 20, and everything in between.  I also offer an intriguing article about where the majority of the world's billionaires come from.  It may be a good reason to open an account at UBS.  The link to the 16-page article is attached below the opening paragraph.  Enjoy what will likely be the last balmy weekend of this year.

S&P 500 breaks record run on jobs data, drug chain drop

A very quiet day of trading with the Dow creeping down 50, then back up 50 to close almost even, breaking its six-day run of records though the Nasdaq hit its 9^th straight record.  Today’s driver was a down jobs report, a loss of 33,000 attributed to displaced workers from the hurricanes and thus considered temporary.  However, wages rose more than expected and the VIX, after hitting a record low yesterday, rebounded sharply today.  Volume was again below average at 5.7 billion, probably just a sign that most investors are awaiting Q3 results.

S&P 500 sets sixth record high close on tax overhaul optimism

Today the House Republicans passed a procedural measure allowing them to more easily circumvent the Democrats in passing tax reform.  The market reacted to this with great enthusiasm pushing the Dow up another 113 points.  All three indexes gained making for a sixth consecutive record for the S&P, which hasn’t happened since ’97.  The VIX was also at a record low of 9.19.  There was an array of other positive reports but suffice it to say that this is the fourth consecutive day of records for all three indexes.  So it’s a little puzzling why the forecast for Q3 earnings was lowered today to 5.3 percent from yesterday’s 5.5 percent.  Volume was also below average at 5.9 billion.

Wall St. extends run of record highs; services data upbeat

With the indexes at all time record highs yesterday and all three being up again a few more points today, this is yet another all-time record as more positive data concerning the all important services sector flows in expanding at its fastest pace in 12 years.  At 5.8 billion, volume is still a bit subdued as investors await Q3 and the hoped for earnings growth of 5.5 percent, which would put Q2 and Q3 at double-digits, to justify the high valuations and keep the bulls running.  Manufacturing, considered a close second to services in terms of importance to economic growth, was reported yesterday to be expanding at a 13-1/2 year high.

Major indexes hit record highs second day; autos, airlines jump

For the second day of Q3 the market is again stimulated by the combo of strong data and hopes for tax reform, push all three indexes again to new highs.  The Dow is up 84 (for a combined two-day total of +258!), the Nasdaq up another 15, the S&P 5.  Automakers got a boost from a rush to replace flood-damaged cars and Q3 earnings are looking very favorable with an expect 5.5% growth.  Still, investors will be looking toward a good Q3 to determine if the bull market remains sustainable.  Volume was below average at 5.9 billion.

Wall Street starts quarter higher; data signals strength

A terrific Q3 gave the market a big boost for the first trading day of Q4.  Optimism about tax reform contributed but strong data, particularly from the services and manufacturing sectors, were the real drivers.  Investors are certainly optimistic about the future and willing to believe there’s something good coming.  All three indexes are again at new record highs, the Dow gaining 152, the Nasdaq 20, the S&P 9.  The Grim Reaper was even in the mix with gun stocks being way up in the wake of Las Vegas.  The 6.3 billion share volume was in line with the averages.

Succinct Summations for Week Ending 9.29.17 (plus political reading preferences)

The usual Sunday night summation for the week is below with the positive being all the indexes again reaching new all-time highs, Q3 GDP rising to 3.1 percent, corporate profits rising to 7.4 percent.  The negatives include home sales down a bit and jobless claims up a bit.  I always find it very interesting to read about analyses of political preferences and this Sunday's bonus is a terrific graphic illustrating the different reading preferences from right to center to left.  The point is that the books that are enjoyed by both the right and the left are few, but these titles are also there.  Enjoy, and hope everyone had a great weekend.  Warmer temps coming.

Another Take on Valuation - It's Not As Bad As You Might Think

Now that the temps have cooled I am offering some weekend reading giving a contrarian view of the currently elevated levels of the indexes, offering in effect the view that these high valuations may not be all that unusually high after all, at least not in an historical context.  For those who may be leaning towards the bears (if not already hibernating), this article from Heritage Capital Research may provide some balance.  Enjoy what's left of the weekend.

S&P 500, Nasdaq hit records on tech lift

Third straight records for both the S&P and Nasdaq, eight straight quarters of gains for S&P and Dow, five for Nasdaq.  The bull market seems alive and well with the Dow up 23 points for the day.  There is talk of Trump replacing Yellen as Fed Chair but with the cautionary note that the market has already priced in Yellen staying on and that valuations will surely change if she leaves.  For a market that values predictability, that’s not good.  Volume was close to recent averages at 6 billion.

S&P ekes out record on healthcare gains, tax plan hopes

A third tumultuous day with first a 50 point drop out the gate followed by a hundred point rise to close 40 up.  For the second day, the driver has been hopes for tax reform which gave a boost to financials as among the expected beneficiaries.  Healthcare also got a boost plus the news that Q2 growth had been better than previously reported.  S&P P/E is still 20 percent higher than historical long-term averages.  The bears say a major correction is coming, the bulls say things will keep going as long as there’s no other reason than historical averages for them not to.  Volume was below average at 5.8 billion.

Wall St. gains on financials boost, tax hopes

Another very turbulent trading day with the Dow zooming up over a hundred right out the gate, then falling just as precipitously about 110 soon after before regaining ground to close 56 up.  There are days when the market sells off over the threat of rate hikes, and other days when investors decide that rate hikes will be good for the banks.  The latter was the case today with the financial sector getting a boost aided by anticipation of tax reform, though details as always remain scant.  Other good news included an increase in factory orders.  Volume was above average at 6.5 billion.

Wall St. ends flat after Yellen; tech shares bounce

A turbulent trading day with the Dow zooming up 90 points right out the gate only to drop like a rock again almost immediately and lose everything plus another 11 before day’s end.  After four straight losses, Apple finally had a good day that boosted the tech sector but Yellen affirming the likelihood of a December hike balanced all that out.  Consumer confidence for September and home sales for August also fell.  Volume was back to below average at 5.8 billion.

Wall St. declines on tech selloff, North Korea concern

In all these years, investors have not yet figured out that whenever Apple introduces a hot new product, there are always bumps in the road.  So beyond the continuing noise surrounding North Korea, the market continues to get hit by Apple stock dropping due to problems with the release of the new iPhone.  The market was down 140 points mid-day before recovering to a 53 point loss with safe-haven assets like gold picking up as often happens when crisis lurks.  The VIX was up to just over 11 (so it’s worse than it was, but keep in mind that anything under 30 is considered good) and the losses from Apple were more than made up for by gains in oil which enjoyed its 16^th gain in a month and a two-year high with global suppliers finally committing to cutting down the glut.  Volume was above average at 6.4 billion.

Succinct Summation of Week’s Events 9.22.17 (plus Green Assets)

The usual Sunday night weekly summation is below with all three indexes again making new all-time highs.  The bonus this Sunday is a Bloomberg article exploring the issue of ethical investing.  No, this doesn't mean insider trading.  Rather it refers to a developing trend where the stock market can represent an opportunity to support the issues and companies that you feel are ethical, that indeed there are ways to be an activist citizen beyond the ballot box.  This particular article focuses on companies that have active environmental policies for investors who agree with that position.  WealthTrack had an episode on this same topic a few weeks ago entitled, "Socially Responsible Investing," and I will plan to make a brief presentation on this at the October meeting.

There's Nothing Old About This Bull Market

You read about it almost every day, certainly every week -- this bull market has lasted for eight years, stocks are dangerously overvalued, it is the second longest bull in history, we are long overdue for a correction, a crash is coming and coming soon.  On the weekends, I try to bring you articles of interest and this weekend stands out particularly as Barry Ritholtz's Friday column in the Washington Post argues that this bull market has not been very long at all and those cynics who insist it is are using faulty data and flawed methodology.

Wall Street edges up, shaking off healthcare, North Korea worries

The market was all jitters over the possible repeal of healthcare sending the Dow straight down 60 points.  Then McCain registered his “no” vote and everything immediately rebounded to close just 9 points down.  Insurance stocks took the worst beating until the McCain announcement sent them back up to close 0.1 percent higher.  Energy closed up a tad higher too with North Korea still on everyone’s radar.  Some investors are worried enough to go to the safety of gold, others confident that the market will cope just fine.  Volume is again below average at just under 5.3 billion.

Wall Street pushed down by rate expectations, North Korea, Apple

What goes up must come down and after 7 consecutive record highs the Dow finally came straight down today to the tune of 53 points.  It is a pattern that has repeated often – investors just can’t seem to decide whether they want a full recovery or not.  We need rate hikes and normal inflation to get back to normal.  This has been the Fed’s position all along.  Yesterday applauded for getting on the path to normalization, today not quite so comfortable since rising rates also means less ease of borrowing and less equity.  Did anyone really believe rates should remain near zero forever? 

Wall St. closes slightly higher after Fed policy decisions

Janet Yellen has been saying for quite some time now that a balance sheet reduction program would begin as soon as the data supported it but investors apparently didn’t believe it until today when she announced an actual timetable.  Since the market was expecting this anyway, the Dow only rose a modest 41 points but it was another consecutive record high.  Financial stocks rose on the prospects of higher rates as the odds makers now put it at 67 percent for a December hike.  She made the hawks happy by announcing the program, the doves happy by insisting it would still be data dependent.  Volume was higher than average at 6.7 billion shares.

Wall Street edges higher; U.S. Fed meeting in focus

Like yesterday, in anticipation of good news from the Fed tomorrow, the Dow inched up 39, the Nasdaq 6, the S&P 2 today.  The modest boost was because of more fence-sitting until the Fed actually says its piece, but even a tiny boost added to the already record highs puts all three indexes at still new records.  The Dow is now running 6 in a row, the S&P 3.  As noted, volume remains on the light side at 5.8 billion.

Wall St. clings to records, helped by banks; tech falters

It was another session straight up with the Dow putting on another 63 points on anticipation that the Fed will announce this week how it’s going to pay down its portfolio.  (I seem to recall the Fed has already laid out its plans in previous meetings.)  But this hope for good news has sent the Dow to its fifth consecutive all-time high and the S&P to its second.  As has been true for a long while, there is still a lot of cash sitting on the sidelines and it’s expected these hesitant “retail investors” will get back in the market and keep the bulls running. At almost 6 billion shares, volume was in line with the 4-week average, which is diluted by the very weak August trading.

Succinct Summation of Week’s Events 9.15.17 (plus Ray Dalio)

The usual Sunday night weekly summation is below.  It was a very good week for the markets with all three major indexes reaching new all-time highs, job openings also higher than expected, up almost a full percentage point since June.  The negatives of retail sales and industrial production down are being dismissed as transitory events caused by the hurricanes.  I guess we'll have a better idea of this in a few weeks.  Meanwhile, the Sunday bonus this week is a two-hour audio conversation with Ray Dalio, the founder of Bridgewater Associates, who started his investments firm in his apartment 42 years ago and now has $160 billion dollars under management which makes Bridgewater the fifth most important private company in the U.S. and Dalio among the 100 wealthiest people in the world.  Bridgewater is a name that comes up frequently in research so this two hour recording may very well be a very worthwhile condensed course in successful investing.  Hope everyone had a great time this beautiful weekend.

How To Find The Best Stocks To Buy BEFORE They Breakout [slides]

For your weekend pleasure, courtesy of Deron Wagner and his Morpheus Trading Group website, I offer below a quick slideshow containing a tutorial on buying stocks before they breakout.  We've studied plenty of timing strategies.  Here's another one.  It's only 22 slides so it should be a quick study.  Who knows?  There might be something useful in there.  Enjoy the rest of your weekend.  It'll be pleasant.

Wall Street hits record highs, S&P 500 pierces 2,500

Today the S&P reached the symbolic benchmark of 2,500 (even if it was just by ¼ point.)  Even though many experts don’t put a lot of stock in any index, let alone benchmarks (yes, it’s quite true that almost as many stocks go up vs down on any given day and an index is just an average), what they ignore is the  basic reality that investing is a whole lot more about emotions than mathematics.  These benchmarks are very important for psychological reasons. 

Dow strikes record high as broader market weakens

Another record high as the Dow shot up another 45 points though there was mixed news on the inflation front that brought the S&P down a peg.  Inflation is higher than expected which increases the odds of a December rate hike to 50 percent today.  Investors wonder whether next week’s Fed meeting will point to this as a concern or not.  Crude is also up today.  For the year, the Dow is up 12 percent, the S&P 11, and today’s volume of 6 billion shares is just slightly above the 4-week average.

Wall Street hits record high - without help from Apple

Despite a second day of losses at Apple due to problems with the new iPhone, there were enough gains in consumer and energy stocks to lift the Dow another 39 points.  And despite Apple’s problems, it is up 37 percent for the year so some analysts are advising a “sell” to take profits.  The S&P reached new highs both Monday and Tuesday.  Today the Dow and Nasdaq recorded new highs.  The S&P continues to trade considerably above its 10-year average.  What’s amazing is that all this is happening despite all the problems with D.C. and North Korea.  At 6.2 billion shares, volume is still a little above the 4-week average.

S&P ends at record high led by banks while Apple drag

For the second straight day with the aftermath of Irma being far less damning than originally feared, the market was on a straight up trajectory with the Dow gaining another 61 and the S&P reaching a 2^nd consecutive all-time high.  Even bad news from Apple delaying the new iPhone (when ever has Apple introduced a hot new product that did not go bumpy at first?) could not dampen investor relief and enthusiasm.  With both North Korea and the hurricanes on the back burner, investors could focus on fundamentals which are strong.  Volume at 5.9 billion shares was just a tad  above the four-week average, the month average being weak because of light late summer trading.

S&P 500 chalks up record high as fear gives way

With Hurricane Irma not being nearly as nasty as feared, making landfall as a Category 3 instead of 5, relief swept the markets today and shot the Dow straight up, way up, right out the gate where it kept going all day to close up 259 points.  Another point of relief was that the commotion expected from North Korea on Saturday did not materialize.  In the wake of the hurricane, feared one of the worst in history, insurers got a big boost.  Volume remains above recent averages at 6 billion shares traded.

Succinct Summation of Week’s Events 9.8.17 (plus putting investor fears into perspective)

The usual weekly summation is below.  Last week the market didn't have too much trouble adjusting to the bad news surrounding Harvey.  Let's see if we have the same reaction this week to Irma.  This Sunday's bonus is for the glass half-full crowd.

YouTube Options Course

As we are into Managed Risk Investing, options are not exactly at the top of our list as they are considered risky.  Of course, risk is a relative term.  For instance, jumping out of a plane can be very risky as there are many things you can do wrong while preparing a parachute.  One thing out of place and it's curtains.  But for trained and experienced skydivers, there is virtually no risk because they know what they're doing.  The same could be said for any kind of speculative investment strategy and those who believe in them (commodities, short selling, options, etc) believe in them strongly by arguing that you just really need to know exactly what you're doing.

S&P 500 slips as Hurricane Irma nears Florida; tech falls

Like yesterday, the Dow swung in a hundred point range again as investors try to size up the pros and cons of all the competing interests out there.  On the negative, there is of course Irma (and lest we forget, North Korea) plus a decline in the usually bullish tech sector.  On the positive the market has decided that these massive storms may be good for the insurers after all with the sector getting a 2 percent boost.  The S&P is still within 1 percent of its all time high.  All in all, the negatives and positive seem to cancel each other out with the Dow rising a trifling 13 points.  At 6 billion shares, volume is still a little above recent averages.

Wall St. ends flat as media stocks slump, healthcare gains

Today was a return to business as usual with the market being less concerned about Korea and hurricanes and more about industry as the Dow swung in a hundred point range over slumps from both Disney and Comcast.  On the positive side of the ledger was healthcare, strong earnings growth and solid economic data.  In the end, the two sides balanced with a mere 22 point loss on the index.  For the third day, trading is closer to normal averages with 6.4 billion shares.

Energy shares lead broad rebound on Wall Stree

A day of panic followed by a day of bargain shopping with the Dow shooting up right out the gate and staying that way all day to close 54 up.  Part of the boost came from the easy deal Democrats reached with Trump today to pass an extension on the debt limit.  That’s one problem that was on everyone’s worry list yesterday that got checked off the list today already.  Much of the rest was the reopening of the Gulf coast refineries in the wake of Harvey providing an immediate spike to oil prices.  Despite many troubling issues, fundamentals are still saving the day and preventing a breakdown of the market.  For the second day volume was higher than recent averages (and closer to normal averages) at 6.3 billion shares.

Fresh North Korea tensions hit Wall Street

Being that it was a relatively non-news day with no major positive developments on which to focus, all eyes turned to North Korea, as they always do on the non-news days.  Their test of a hydrogen bomb sent the Dow down, straight down, all day long to close off 234 points.  There were of course a few other more minor reasons to be gloomy.  September is historically a bad month for the market and this particular September is shadowed by the threats of a budget showdown in D.C. and the federal debt ceiling.  Trading has been light for the past four weeks, but not today, when 6.7 billion shares changed hands.

Succinct Summation of Weeks Events 9.1.17 (plus How Work has Changed)

Concluding this Labor Day is once again the offer of the weekly summation.  Among the positives are Q2 GDP and ADP employment getting a substantial boost.  The more prominent negatives include nonfarm payrolls coming in way below expectations.  The bonus this Labor Day is a look at the changing intensity in the workplace, that in the last 44 years more than 4 times the percentage workers are now working considerably more than a 40 hour week, up to 26% in 2016 from 6% in 1973.  More Americans are working harder for fewer benefits.  How long can this be sustained?  Hope everyone had a great holiday.

One Of The Best Ways to Manage Risk Is...

Last week, Heritage Capital Research posted on their web site a short course on managed risk investing.  It is a fairly short read and a very good summation.  That is your bonus on this Labor Day Sunday.  The weekly summation will be published tomorrow night at the end of this 3-day holiday weekend.  Enjoy Labor Day!

Equity Factor-Based Investing: A Practitioners Guide

For your weekend reading this Labor Day holiday, there is a special treat, a 24 page manual on a new strategy called Equity Factor-Based Investing.  It must be pretty special because the web page it came from is designed so that it cannot be reproduced, as I will note below.  It certainly is worth a look and, if it's as special as it appears, I will read it and make a presentation on it at a future meeting.  Enjoy the holiday.

Wall Street edges up as rate-hike bets in check after jobs data

This was once again the odd case that can only happen on Wall Street where bad news is taken as good news with the jobs report coming in below expectations.  But this was greeted as a positive since fewer jobs means the Fed might not raise rates again this year after all.  But rate stress relief was not the only good news that shot the Dow up 39 points.  There was also factory activity at its highest since 2011 and various other economic indicators supporting further growth.  One of the negatives was a fall in construction spending but we can bet that with the Harvey rebuilding that will reverse itself quite quickly.  This is the second week that all the indexes registered gains.  As it has been for the past month, volume remains light at 5.1 billion.

Wall Street gains on data and Mnuchin tax reform remarks

So Steve Mnuchin says today that tax reform is definitely on the books and will be a reality by year-end.  This sends the Dow up a modest 55 points.  It probably would have been a lot more except that investors have heard this so often that it’s now a matter of “see if they can deliver.”  Meanwhile volume was a little higher today due to traders coming back from vacation and discovering that, despite North Korea and Harvey, the market is still doing fine.  As one expert said, “the bull market is still intact.”  Now everyone is looking to tomorrow’s jobs report for clues on the Fed’s next move.  6.2 billion shares were traded.

Upbeat U.S. growth revision drives Wall Street higher

There was plenty of reason to sell today when Trump dismissed North Korea in his tweet “talking is not the answer,” a policy position almost immediately reversed by Mattis who made clear that there was still plenty of room for talk.  And of course the news from Harvey gets worse by the hour, but the market has decided that might be good news after all in terms of all the stimulus for rebuilding.  The much bigger news and what drove the Dow up a modest 27 was a substantial upward revision to Q2 GDP to 3 percent as well as the report of the biggest hiring increase in five months.  As today’s expert stated, there are still “plenty of excuses to remain invested.”  But volume still remains quite light at 5.1 billion.

Wall Street ends higher as fear over North Korea dissipates

There was over a 130 point drop in the Dow right out the gate this morning over fears of escalations with North Korea when the president said, “all options are on the table,” but as the day progressed these fears dissipated as concerns focused more on Texas.  Throughout the day the index rose 200 points and finally settled 56 points up at close.  As before, insurers fell but the market sectors associated with rebuilding all rose to offset it.  There is still much uncertainty which continues to be dutifully reflected in the very light volume of 5.3 billion.

Wall Street closes little changed as Harvey pummels Texas

The Dow traded in a hundred point range today as investors grapple to determine whether Hurricane Harvey will be a positive or negative for the market.  There are numerous pros and cons, the cons being the mammoth devastation and the huge hit insurance companies will be taking in handling all the claims in cleaning up this mess.  There’s also the problem of all the gulf refinery shutdowns which will only add to the already overburdened crude glut.  But the positives will be the enormous amount of stimulus that will be poured into the area for rebuilding which is why Home Depot stock rose today.  The haranguing over whether we’re looking at a net positive or a net negative is why the Dow only dropped 5 points.  Because of the uncertainty volume was very light at just over 5 billion.

Succinct Summation of Week’s Events 8.25.17 (plus Octogenarians Rule the Rich)

The customary weekly summation is below with the S&P still a stone's throw from all-time highs despite all the recent turmoil and jobless claims near all-time lows.  This Sunday's bonus is another very interesting graphic, this time illustrating the concentration of the nation's wealth vis-a-vis age demographics.  Certainly it should come as no surprise to anyone that the eldest in our population possess the most wealth (proportionate to their own group that is).  Certainly it is logical that those who have wealth would continue to accrue more as they age, the old rule of compounding.  Hope everyone had a fruitful weekend. At least we're not in Texas.

Understanding Moscow: The Mysteries of the Russian Mindset

With the recent tensions between Russia and the U.S. escalating, this article seems particularly timely in regards to helping the average American understand the underlying cultural issues.  Not that this is directly relevant as a topic for investors except of course that all geopolitical conflicts, and this one is certainly near the top of the list, impact the market and our money.  Hope everyone is having a constructive weekend.

Wall Street rises modestly following Yellen speech

Fri 8-25-17

The market started with a bang this morning zooming more than 120 points with Gary Cohn’s statement that the White House would begin its quest for tax reform as early as next week, but quickly began to taper down as investors began pondering the likelihood of it ever becoming reality, the Dow ending the day 30 points up.  Meanwhile the long awaited Fed meeting ended with pretty much no new news except for a little drama when Yellen vigorously defended the Fed’s policies and criticized Trump for criticizing the Fed.  This prompted sudden speculation that Trump may replace her when her term expires in February.  Of course, this has been widely speculated ever since the election.  At least for today, the market is satisfied that the Fed’s tone is not hawkish.  Volume was exceedingly light ending the day just a hair over 4.8 billion.

Wall Street edges lower with Jackson Hole meeting in focus

The Dow swung in a hundred point range today as investors continue to struggle to make sense out of the contradictory messages from the Republican leadership versus the Republican President vis-à-vis the budget.  Can the President have any success with his agenda?  The only answer everyone seems agreed on is “that is not going to be simple.”  So the market is looking more to tomorrow’s Fed meeting trying not to get too caught up in the Washington “noise,” though admittedly nothing new is expected from the Fed.  The Dow is down 28 points and volume continues below average at just under 5.3 billion shares.

Wall Street falls as Trump threatens government shutdown

Yesterday Mitch McConnell assured the nation that there was “zero chance” that the debt ceiling would not be raised so the new fed budget could be passed.  Today Trump threatened to shut the government down and refuse to sign off on the new budget unless it included his border wall.  Needless to say, these two completely contradictory messages sent the market reeling straight down for the Dow to close 87 down.  Fortunately, as the experts are saying, the markets don’t care that much about the “noise” coming out of Washington.  But it does increasingly point to investors’ concerns about Trump’s ability to legislate.  All eyes remain on this Friday’s Fed meeting.  And whatever concerns there may be about the “noise,” volume remains quite light at just a shade over 5 billion shares.

Wall Street rallies on optimism about tax reform

Today two major events in Washington D.C. got investors off the fence to start piling money into stocks again pushing the Dow up 196 big ones.  The first was Paul Ryan’s statement that tax reform would be easier to pass than healthcare was (it only took them eight months to figure that out?)  The second was Mitch McConnell asserting his leadership by declaring a “zero chance” that the U.S. will default on its debt next month by not raising the debt ceiling.  All eyes are still on Friday’s Fed meeting looking for positive news and even oil had a good day.  Still, not everyone shares the enthusiasm as volume remains very light at under 5.3 billion shares.  

S&P 500 index gains after recent selloff; energy stocks fall

As the market continues to reel from last week’s tumult, there was little activity though the Dow did at least go into positive territory for the first time since Wednesday though, like Wednesday, it was to the very modest tune of a couple dozen points.  Now investors are looking towards the monthly Fed meeting in Wyoming this week in hopes there will be further indications of a delay in rate hikes.  Korea continues to weigh and oil once again took a dive but, all in all, most traders are in wait-and-see mode on the sidelines, reflected by the light volume of 5.3 billion.

Succinct Summation of Week’s Events 8.18.17 (plus robots)

The weekly summation is here again and, despite the very obvious negative of the market having its worst week since the election, there are still the significant positives of several major economic indicators -- industrial production, capacity utilization, and Empire state manufacturing -- all coming in stronger than expected.  Since tonight's "60 Minutes" broadcast featured a very compelling story about military drones, it seemed quite timely to share this blurb from the Brookings Institution about the state of industrial robots, including an eye-popping national graphic.  Isn't it interesting that so much of the national robotic activity seems concentrated right here in Southeastern Michigan?  Hope everyone enjoyed the weekend and look forward to the eclipse tomorrow.  Protective eye-wear please!  Don't want any stories on tomorrow night's news about all the foolish people blinded by this twice in a lifetime event.

How Much Does the Tax Man Take From Your Paycheck?

For your weekend viewing pleasure, I present the following graphic of personal income tax rates all around the world.  As can be easily seen, the U.S. charges its citizens less for taxes than most other countries, though not much less.  Of course, all of these "averages" are meaningless since they do not take into account progressive tax structures.  And I do believe that tax rates in the Scandinavian countries are higher than 30 percent, quite a lot higher.  But it still makes for an interesting graphic.  Hope everyone is enjoying this very pleasant weekend.  The heat is coming back next week.

Wall Street ends down after more White House turmoil

Though the market remains on needles and pins over the suspected imminent exit of Gary Cohn, the head of the National Economic Council, today’s departure of Steve Bannon was taken as both negative and positive – negative that the Trump White House remains in chaos, positive that the one person viewed as being most (or at least 2^nd most) responsible for the chaos is now gone.  This has pushed the Dow down another 76 points, the 8^th straight day with stocks making more new lows than highs and the first time since the election that the market hasn’t risen the day following a 1 percent drop.  This mini-correction is seen as just more evidence that investors increasingly doubt Trump’s ability to make reforms.  Volume was again above average at 6.8 billion shares.

Washington's mounting woes push S&P to biggest loss in three months

On the second day after the disintegration of the two White House corporate advisory councils, the American Manufacturing Council and the Strategic and Policy Forum, due to mass resignations of the executive members, Wall Street has lost sufficient faith in the President’s ability to lead and triggered a 274 point sell off.  This is the first time since the election that there have been two one-percent declines within a week.  Stocks have long been considered overvalued (despite considerably above average quarterly performances) so is this just more profit-taking or is it the Trump rally turning into the Trump correction? 

Wall Street ends up but off highs after Trump announcement, Fed minutes

“Twas another day of good news being just about equal with bad news so the Dow was only bumped slightly up 25 points.  The bad news is that the Fed is still wary of weak inflation, the good that this may mean a delay to more hikes, which would be good for the market.  It also didn’t help at all when Trump disbanded his two corporate advisory councils when the executives involved resigned over the Charlottesville remarks, giving pause once again whether he’ll be able to push anything through.  But investors didn’t really know which side they wanted to come down on so we had another day of thin volume with only 5.8 billion shares traded. 

Wall Street ends flat; economic data offsets retailer results

The market is pretty much just not reacting to North Korea or Trump now and with the day’s news being equally divided between good (great retail sales) and bad (retail stocks not so great) the Dow didn’t move much at all (up 5 points) and volume was at its lowest for the year (5.3 billion.)  They say no news is good news.  There is anticipation about tax reform, but not high hopes.

Wall St. jumps as North Korea tensions wane; S&P 500 up 1 percent

I’m not clear on what U.S. officials did yesterday to play down the risk of war with North Korea, but the media reports that something happened to calm things down and thus investors began a big buying spree today that shot the Dow back up 135 points.  Since the market went down 270 last week and that was calculated as being valued at $1 trillion dollars, today we made half of that back.  The VIX has also fallen 3 points and the general consensus seems to be that any potential for disaster is already priced into the market, which is to say that Wall Street’s view today is that the potential for disaster is now off the table.  Nonetheless, not all share this view, reflected in the light volume of 5.5 billion shares traded.

Succinct Summation of Week’s Events 8.11.17 (plus richest people in history)

It's summation time again with jobless claims remaining low but stocks having an unusually rough week, the S&P especially hit hard and having its biggest weekly decline since March as a reaction to "fire and fury."  It does disturb me a bit that "nuclear war postponed (for now)" is listed as a positive, as such a postponement is neither a done deal nor anything to be taken lightly.  For this Sunday's entertainment I present a fun article profiling the richest people in history which shouldn't surprise anyone would include such iconic figures as Caesar Augustus and the Medicis.  Enjoy perusing the detailed graphic provided as we launch into a new week of sun and fun (and hopefully more nuclear war postponement.)

Being a Stock-Picker Is Just So Hard

Again, Barry Ritholtz of "The Big Picture" blog presents us with one of those rare articles advocating for active investing.  Yes, it's hard, but there is a place for it.  There are areas in which it is superior to passive investing, especially for those among us who don't mind expending the time and energy to learn how to do it right.  He hits the nail on the head in the very first sentence -- forget costs, the real problem is achieving goals.  That's what I say.  Why are we so tightly focused on keeping costs low?  As Warren Beatty said in the classic film "Heaven Can Wait" -- "We don't care how much it costs, just how much it makes."  That's what investing is supposed to be all about -- what's the yield at the end of the year?  And what's wrong with higher costs if it results in higher yields?  It's a short article.  Enjoy the read and enjoy the weekend.

Wall Street rises on Fed bets but North Korea mutes gains

After three consecutive losing sessions triggered mostly by the tensions with North Korea, the market decided to focus on better news today, namely Fed statements hinting at slower rate hikes.  Because of the Fed’s welcome tone, the Dow gained a modest 14 points though most experts agree that number would have been higher except that the heated rhetoric between Trump and North Korea once again escalated.  But as one expert said, “If earnings can stay strong and interest rates remain low, investors can look beyond North Korea and continue to rally equities.”  The downside is that $1 trillion dollars in equities have been lost this week due to “fire and fury.”  The 6.15 billion share volume was slightly below the 6.29 billion average.

S&P falls 1.4 percent in safety flight on North Korea tensions

On this the third day following the “fire and fury” comment, Wall Street finally decided it was time to get nervous about North Korea with everyone fleeing stocks and rushing into safe assets again.  The Dow dropped 80 points right out the gate and continued the downward plunge all day to close 204 down.  The S&P did worse losing nearly 1.5 percent of its value, the biggest drop since May 17^th.  The VIX closed at its highest since the election.  If we’re heading for war, this pullback will be the least of our problems.  If not, the market will come back soon.  Volume was considerably above average at 7.5 billion.

S&P closes barely lower despite North Korea tensions

The market has reacted with amazing calm to the melee Trump triggered yesterday with his “fire and fury” response to North Korea or, as one expert expressed today, “You’d need to see something more tangible than just rhetoric for a broader pullback.”  Instead it was a day of bargain hunting on Tuesday’s sell off with a particular lift to U.S. defense stocks.  The Dow, which opened 63 down right away and kept going down all day to a low of 89 down came back in the last hour with the bargain hunters to close 36 down.  Volume was again above average at nearly 6.5 billion shares.

Wall Street swings lower after Trump warns North Korea

It started as a typical boring summer day what with the Congress being in recess and all, no big news coming and the market reacting accordingly.  Then the Japanese shook things up with their report that North Korea might actually have nukes now.  Still the market took it in stride until Trump came out with his very aggressive comments about “fire and fury” and that made everyone nervous and sent investors racing for the exits.  The Dow, which had been up as much as 60 points on shallow volume now plummeted 120 to close 33 down.  Talk of war does not encourage risk-taking.  Overall for a sleepy summer day volume ended at 6.2 billion, just slightly above average.

Wall Street ends higher as Dow edges to latest record

It is now the 9^th consecutive session for the Dow closing at a record high having added another 25 points to the index.  Actually it was a rather boring day with investors neither selling nor buying as there is no big news coming down the pike this week.  The market continues to be buoyed by a strong July employment report and a Q2 S&P earnings growth now expected to be 12 percent.  That’s a 50 percent increase from a month ago.  Oil got hit again because Libya has increased production in a world glutted by crude.  But all in all still a boring day with only 5.3 billion shares traded, well below the recent averages of 6.1 billion.

Succinct Summation of Week’s Events 8.4.17 (plus Columbia U prof on the Fed)

It's summation time again.  Euro employment is at a 9 year high, U.S. payrolls came in 29,000 higher than expected, and unemployment is down to 4.3 percent while personal income remained flat with just a tiny bump in consumer spending.  The bonus this Sunday night is a 90 minute podcast from Columbia University Professor Richard Clarida providing a different perspective on the Fed's QE program, positing first that it was absolutely necessary for rescuing the economy from the Great Recession, something we don't all agree with (but I do), but then arguing that it's overstayed its welcome and the Fed is long overdue in "normalizing" interest rates.

Successful Investing Requires Coping With Some Discomfort

As Chair of the Troy SIG group for the AAII, I was required to join this national organization and so now have access to a wealth of investment information from them too.  So here is the latest from the AAII, an essay on the one characteristic that all investors must have to be successful, which is the ability to endure some short-term discomfort for the sake of long-term gain and how to acquire this ability.  It's not a long read and one that is on a topic that is near and dear to all of us.

Dow chalks up eighth record close in a row

It was the 8^th consecutive record high as the Dow climbed another 66 points with the banking sector getting a boost and the payroll report showing 209,000 new jobs, 26K more than expected.  This has the market feeling more comfortable that the expansion is still on and Q2 S&P expected earnings are now up to 11 percent, quite a change from 8 percent a month ago.  More new highs are expected in the coming week.  The 6 billion share volume was just a tad below recent averages.

Dow hits record high as Amazon, Apple pull down S&P 500

Today’s announcement of the federal grand jury was said to dampen the market but the session’s low was only 16 points down from the open (which itself was only 9 points down from yesterday’s close) so that really points more to some modest profit-taking, especially from two stellar days from Amazon and Apple, than anything more sinister.  The Dow closed 9 points higher and now boasts its 7^th consecutive record high.  Q2 continues swimmingly with the forecast now raised to 11.8 percent, up from 10.7 a week ago and 8 percent a month ago.  The solid Q2 earnings are supporting the market and, per at least one expert, “no bubbles in sight.”  Tomorrow is the much awaited payroll report.  Volume was above average at 6.6 billion shares traded.

Dow cracks 22,000, Apple hits record high

Just a few points shy of 22,000 yesterday and with Apple coming in after the bell with a great report, we knew the Dow was going to push higher today, which it did right out the gate, to the tune of 52 points and the sixth consecutive record high.  The index has risen 11 percent this year despite winnowing confidence in Trump but, as today’s expert says, “The Trump agenda getting done or not is not the difference between positive or negative GDP … potential tax changes are [merely] the icing on the cake of an already improving economy.”  It was just one month for the Dow to hit 21,000 after 20,000 and it has taken just five months to move the Dow from 21,000 to 22,000.    The jobs report came in just a few thousand below the forecast of 185,000 and volume again was a little above average at 6.5 billion shares traded.

Dow ascends to record high and nears 22,000

Within striking distance of 22,000 reaching its fifth consecutive record high notching another 72 big ones, the Dow closed just 36 points shy of the landmark.  The banks are what pushed the index this time and Apple, coming with expected good news after the bell, will likely push it further tomorrow.  Tech is up 22 percent so far this year, the Dow up 11 percent despite a rapidly declining confidence in Trump’s agenda.  Q2 reporting is two-thirds complete with 72% beating forecasts compared to the historical average of 64 percent.  (Why do investors believe these forecasts when they are wrong two times out of three?)  If the market was looking to Q2 to justify the high valuations, the wish is being granted which means this bull market still has legs.  Volume was slightly above average at 6.2 billion shares. 

Dow hits record high while tech retreats

Investors seems to have become numb to the ever-changing landscape in Washington as the bad news there is not infecting Wall Street at all as the Dow reached still another record high today to gain another 60 points.  Since Friday was also a record high, even a 6 point gain would have made a new record.  Boeing is being credited not to mention that July was a great month, the S&P up nearly 2 percent, the Dow 2.5 percent, the Nasdaq 3.4 percent.  Other than that, the only real news was a lot of profit-taking, especially in tech, which brought the Nasdaq down for the day 26 points.  Volume was a little above average at 6.3 billion shares. 

Succinct Summation of Week’s Events 7.28.17 (plus The Best Investment Writing)

It's time for the weekly summation with Q2 GDP growing at 2.6% but existing home sales falling nearly 2 percent.  I sent everyone quite a pile of reading last night and I'm doing the same thing tonight for today's post on The Big Picture was our guru Meb Faber publishing a great new book which is a compilation of all the best books on investing.  The author of The Ivy Portfolio's new book should be well worth adding to our library and will be available on Amazon tomorrow.  Hope everyone had a great weekend.

Freakonomics: The Stupidest Thing You Can Do With Your Money

So we're back to the old "active is stupid, passive is smart" argument again which, in my opinion, is rooted in the reality that active requires smarts that few people have, whereas anybody with the IQ of a turnip can do quite well using passive strategies.  This is not to say that smart people can't do very well being passive as well but it is saying without any doubt that if you're going to be an active trader, you'd better know what you're doing.

S&P 500 dented by earnings; Dow hits record high

For the second day in a row, the market is up, today to the tune of 33 points on the Dow, even though there was once again nothing but bad news, at least not much else reported.  But the 33 points was enough to put the Dow at another record high, mostly on positive results from Chevron.  But Amazon, Exxon, Starbucks and the entire tobacco sector disappointed.  The Q2 earnings forecast is now up to 10.8%, up from 10.7 yesterday.  The rest of the history is in yesterday’s report but just a reminder that it was at 8 percent just a couple weeks ago.  The market is widely feared to be overvalued so investors are depending on a strong Q2 to justify prices and continue confidence that this bull run still has legs.  Last night’s healthcare failure has investors concerned about the rest of the Trump agenda and we may see that reflected in Monday’s data.  Meanwhile, volume is back to recent averages at 6.1 billion.

Tech, transports drag on Wall Street; Dow hits record

Thu, 7-27-17

Today’s reporting did not offer much in the way of clarity for even though the market had a good day with the Dow up nearly 3 digits again, all the news was bad.  Transportation, tech, Facebook, UPS, FedEx, Amazon, Bristol-Meyers, AstraZeneca, Twitter – all down.  So what caused the big buying spree?  Was it just bargain hunting?  Whatever it was, it again gave the market a renewed confidence for the third consecutive session and with volume considerably above average at 7.7 billion shares.  Once again, the Q2 forecast has been raised.  It is now 10.7 percent.  Yesterday it was 9.9, Tuesday 9.1, and a few weeks ago 8.0 percent earnings growth.  Do they deliberately estimate low so the market will go up?

Wall Street mints records after Fed, strong earnings

Just like yesterday, the Dow shot up right out the gate this morning, this time a hundred points, and staying there pretty much all day to close 97 points up.  The impetus is continued strong Q2, this time from Boeing and AT&T, a Fed statement maintaining the benchmark rate and repeating the commitment to a slow path of money tightening.  The statement also indicated that growth was moderate but solid and job gains good.  It was enough to once again raise the Q2 earnings growth forecast, today to 9.9 percent , up from yesterday’s 9.1, up from 8.0 earlier in July.  For the second consecutive day, optimism was again reflected in the above average volume of 6.6 billion.

Earnings, bank shares propel S&P 500 to record high

It was a big shot straight up 100 points on the Dow today and the S&P reached another all-time high with good reports from McDonald’s and Caterpillar.  Consumer confidence is also up and trading reflects the optimism that the Fed will remain dovish.  One expert summed it up very well, “You have low rates, low inflation, good earnings and we’re up 100 points.”  What’s not to like?  Q2 is going so well that the forecast is now at 9.1% growth, up from 8.8% just yesterday and 8% earlier in the month.  And for the first time in a while, volume is finally reflecting the optimism with 6.9 billion shares traded, above average for a change. 

Nasdaq, tech shine as earnings pick up; Dow, S&P lag

Another day of wait-and-see for more Q2 even though Q2 so far has been very positive, earnings now expected to have grown 8.8 percent, up from 8 percent earlier in July.  Tech continues to lead the day with the Nasdaq up 23 but the Dow down 66 due to difficulties at J&J.  The next event on the horizon is Wednesday’s new Fed statement and continuing wait-and-see with volume still well below average at 5.5 billion.

Succinct Summations (plus "I Wish You Bad Luck")

The weekly summation is here with all three indexes reaching new all-time highs and jobless claims down.  The Sunday bonus this week is Chief Justice John Roberts issuing words of wisdom as commencement speaker at Cardigan College's June graduation.  It's not long, it is inspiring, and you have the option of either the printed text or the 18 minute video.  Hope everyone had a great weekend.

Jesse Eisinger on Why No One Went to Jail

For your Saturday reading (or listening) this week is a stirring podcast from Barry Ritholtz's column this morning about the financial meltdown and why, despite the massive abuses, no one was ever prosecuted.  Of course this topic has already been covered exhaustively by the financial press and PBS and everything I've ever read and heard boils down to one simple truth:  No one was ever prosecuted because, after an incredibly thorough analysis, investigators were forced to conclude that no laws were broken.

Wall Street dips as GE, energy shares weigh

GE had a very bad day announcing a 60 percent slump in profit, which in turn sent the entire industrial sector downwards – Caterpillar, 3M falling, but Honeywell going opposite and reaching a record high.  Oil got hit again with OPEC upping production again despite a pledge to the contrary.  The overall impact brought the Dow down 31 points but only after an initial slump out the gate of over a hundred points.  Still Q2 continues to go well, well enough in fact that profits are now predicted to be up 9.6 percent, up from the previous forecast of 8.7 percent.  As it has been for several sessions now, volume remains still below average at 5.7 billion. 

Wall Street flat as home improvement retailers get Amazoned

Another relatively quiet day on lower than average volume with the Dow slumping about 29 points.  The day’s biggest event was the marriage between ailing Sears and giant Amazon, sending the whole traditional retail sector spinning as it was just another move towards a brave new world that will probably not include traditional retail as Home Depot, Lowes, Best Buy and Whirlpool all took substantial dives.  Confidence in the Trump administration continues to weaken.  Even today’s move to remove over 800 proposed regulations impressed no one, the sentiment being, “It’s not going to make things any better, it just won’t make them worse.”  Q2 continues to go well but most investors continue to wait for more results so volume remains below average at 5.9 billion shares.

Wall Street at new highs as tech breaches dot-com era record

Today was just a very boring straight shot up 66 points on the Dow and again on very light volume of 5.7 billion shares but tech continues to be the top performer pushing the Nasdaq up 40 and now clocking in a nearly 23 percent advance for the year.  The Q2 GDP estimate has been raised to 2.5 percent annualized and analysts are still looking for a market rise of 8.7 percent.  The market is performing according to expectations.  This will continue only if Q2 forecasts become reality, which they probably will since past Q’s have.

Nasdaq hits record on Netflix boost; Dow dragged by Goldman

They characterized today's market reaction to the Republican healthcare defeat last night as “muted” but all the indexes took a dive right out the gate this morning, the Dow to the tune of 160 points so I’m not sure that “muted” is accurate.  But all the markets recovered throughout the session and the Dow closed 55 points down.  Netflix had great news after the closing bell last night so it led a rally today that took the Nasdaq to another record high.  But investors have obviously decided to ignore the rumblings in Washington as just noise that’s not going away anytime soon and instead focusing on Q2, which is still expected to be up 8.5 percent.  Q1 had the best growth since 2011 so hopes are high.  The market does however have very muted expectations for any business friendly bills anytime soon and such progress is already all but priced out of equities.  Volume remains very low at only 5.7 billion so everyone is still waiting for more Q2.

Wall Street ends flat; Netflix jumps after the bell

Another very slow start to a new week with the lowest volume of the year, just over 5 billion shares, with investors on the sidelines waiting to see what happens with Senator John McCain and the revised healthcare bill.  The indexes barely blinked, the Dow down a trifling 8, the Nasdaq up less than 2, the S&P dead even. 

Succinct Summation of Weeks Events 7.14.17 (plus $829 bonus)

It's time for the ever popular weekly summation with the Dow boosting Yellen speech being first in the headlines and the biggest negative that small business optimism fell less than 1% off a 12-year high.  The Sunday bonus this week is, continuing on the topic of Ed Thorp introduced yesterday, his 1967 classic text "Beat the Market" which currently sells for $829 on Amazon, I discovered last night available as a free pdf at the link below, a link posted two years ago by Thorp himself.  Enjoy, and hope everyone had a great weekend.

MiB: Ed Thorp on Beating Vegas & Wall Street

Anyone who has ever seriously played blackjack knows about Ed Thorp, the MIT math whiz who, during the 1950s and with the aid of several years of work with one of the world's first supercomputers, minutely dissected the game and came up with a statistically valid solution that became a global sensation.

Dow, S&P notch record closes on dimmed rate hike prospects

A day of steady up and up as the first Q2 reports come in driving the Dow northward 84 points.  Ironically, though the three big banks reporting today beat their forecasts, their stocks still fell and it was a decline overall in the financial sector that kept the market from rising further though both the Dow and S&P hit record highs anyway.  Yellen’s dovish comments have the market substantially more confident that there will be no more rate hikes this year.  Three more big banks reporting next week, and 8.1 percent Q2 growth is still expected.  Volume continues considerably below average at just 5.3 billion.

Wall Street rises as financials lead before earnings

‘Twas another rather uneventful day as investors obviously remain on the sidelines awaiting Q2 results.  In her second day of testimony, Yellen did opine that the Trump administration’s goal of 3 percent GDP growth is likely unrealistic.  With McConnell’s newly revised healthcare bill being published today, the healthcare index didn’t budge, indicative that the market was not counting on passage.  Insurers and hospital groups have been very vocal against the proposed Medicaid cuts.  Wall Street just wants it to go away so Congress can get on with tax reform.  But nobody’s expecting anything anytime soon.  Q2 starts tomorrow with three major banks reporting.  Volume is still considerably below average at 5.8 billion.