Wall Street ends bumpy week, strong 1st half with modest gain

Yes, bumpy week is one way of putting it.  Bumpy year is another way.  Tech up one day, tech down the next.  Today the Dow took a straight shot up a hundred points before diving in the final minutes to close 62 up.  Tech was down a hair today but still up over 16 percent for the year vs S&P’s 8.2 percent.  The S&P has had its biggest first half since 2013, the Nasdaq since 2009.  The day’s drivers were a modest rise in consumer spending coupled with cooler inflation, signaling a slow but steady expansion.  There’s also the heavy expectation of Q2 coming in with 8 percent growth.  We’ll find out about that in the coming weeks. Volume was a little below average at 6.6 billion.

Wall Street hit hard as tech softness continues

In a day of very heavy trading in which nearly 8 billion shares changed hands, panic once again hit the market with a whopping 300 point dive right out the gate which then began a recovery in mid-session to close 167 down, after yesterday’s big run up of 143 points.  Is this profit-taking, sector rotation, Q2 nerves or a little bit of all the above?  What is plain is that it is more of the same.  One day tech is up, the leading catalyst for the year’s gains, the next day tech is down.  And as tech goes down, the contrary sectors such as financials and energy go up. 

Wall Street stocks surge as banks, tech sectors spark rebound

After the massive sell off yesterday due to the delay (and by some reports demise) of the Republican health bill, cooler heads prevailed today as investors decided the delay (or defeat) may not be such a terrible thing after all.  It seems that bad news does not last long in this market and yesterday’s downturn just means today’s buying opportunity.  That is apparently what happened with tech and financial taking off right out the gate and staying there all day to close 143 points up after yesterday’s 98 point drop.  Q2 very much looms on the horizon with the market quite anxious to see if earnings can justify the current high valuations and thereby keep this bull market going.  Volume was below average at 6.7 billion.

Wall St. falters as Senate delays health vote

Investors are looking for any sign that the Republicans are able to govern and, for some reason, have made the health bill a litmus test for all future gains.  Thus, whenever there is a Republican defeat, investors sell.  When the announcement came down that the vote would be delayed until after the holiday, the Dow dropped 130 points, but did recover by end to close down 99.  It doesn’t really make a lot of sense why the failure of an unpopular bill would prevent the success of a popular bill like tax reform.  But that’s the thinking.  It wasn’t just the delay though.  Tech took another drubbing today with Google getting a gigantic fine from the EU.  And there was even good news.  Consumer confidence rose and Fed Chair Yellen opined that, due to the lessons learns from the Great Recession, there would be no other major econ crises in her lifetime.  (Here’s to your health, Janet, and a good long life!)  Volume was right around the 7 billion mark, in line with recent averages.

S&P 500, Dow edge up; tech weighs on Nasdaq

The Dow zoomed up 120 points right out the gate which started a steady sell off in the tech sector that lasted all day for the index to close almost even with a slight 14 point gain.  It seems tech is up and down from one day to the next these days but it’s still the strongest market driver out there while oil continues the opposite effect.  But as money goes out of tech from time to time it just goes into other more defensive sectors so the end result is a wash.  Depending on who you read, it’s either profit taking or sector rotation.  However, if it’s the latter it seems to be switching every other day.  The 6.4 billion share volume was below recent averages which it would be while everyone sits on the fence.   

Succinct Summation of Week’s Events 6.23.17 (plus inflation)

Here we are at summation time again with the S&P making another all-time high but more or less everything else remaining static as watchful eyes remain fixed on the healthcare theater playing out in Washington the next week or two.  This week's bonus is a report from our friends at Heritage Capital Research that does a pretty decent job of explaining the inflation problem.  I've commented several times why it doesn't make sense that the market takes the recent Fed rate hike as bad news because it will make our low inflation numbers even lower.  When I went to school, higher interest rates meant higher inflation so this complaint struck me as irrational.  This report more or less agrees that it's irrational.  I'll only take issue with their remarks that the Fed has been unclear (perhaps deliberately so) about the inflation goals of all this quantitative easing.  Well, I for one have been reading the monthly Fed reports for years and I think they've been very clear from the beginning.  We need to raise inflation back to normal pre-recession levels.  Perspectives.  Hope everyone had a great weekend.  

10 Weekend Reads (plus student loans)

It's been a while since I've supplied a weekend reading list and this one looks pretty good, the most interesting picks being an unconventional explanation of market bubbles and an article about the Wall Street detective who goes after corporate fraud, two topics that should be of value to any investor.  There's also a very revealing graphic showing the explosion in student loans over the past ten years.  In my travels I've run across many a soul who believes that loans for college and grad school have gotten considerably more inaccessible in recent years.  This picture shows a very different story.  Hope everyone is enjoying this very pleasant weekend.

Wall Street ends higher on technology, energy boost

Yesterday’s premature enthusiasm over healthcare stocks faded quickly today as investors started to more seriously question the odds of the Republican bill passing.  Today the Republican count of senators opposed rose to nine, making passage seem less likely.  There was quite a rally today with 10.4 billion shares traded but most of this was fiction resulting from the usual monthly rebalancing so we’ll have to wait until Monday to get more accurate volume numbers.  Oil prices were up a bit but the annual decline YTD is 20 percent.  Tech stocks are up again despite recent skepticism.  It seems they’re still the place investors want to be.  Despite all the repositioning, or perhaps because of it, the Dow barely budged, ending down just 2 points. 

Healthcare stocks jump after Republicans unveil plan; banks, staples slip

The Senate finally made public their bill to replace the ACA and the market responded with an upward jolt to the biotech sector as the proposed legislation, though passage is far from certain at this point, is at least taken as being kinder than expected to drug stocks.  However, this momentary exuberance was ultimately tamed by a fifth day of dropping oil prices combined with an increase in jobless claims and the consensus that the market remains overvalued.  Investors now look forward to Q2 for signs of whether it is overvalued or still has legs.  Overall these latter realities outbalanced the healthcare speculation bringing the Dow down a modest 12 points.  All of this was on relatively light volume of 6.6 billion meaning it was really just a day of watching from the sidelines.  There will be a great many developments in the next two weeks and everyone will continue to watch.

S&P, Dow hurt by energy, banks; biotech boosts Nasdaq

The market has once again proven itself fickle as a decline in oil inventories, something the energy industry has been striving for a good long time, was instead taken as bad news by contributing to the weak inflation outlook.  The low inflation also hit bank stocks which should be benefiting by the rate hikes but instead went down almost a percent today.  In 2017 so far the energy index has fallen 15 percent even though the overall S&P has risen 9.  Volume was a little above average at 7.1 billion.  (Wasn’t it just yesterday that oil got hit 2 percent down from news that supplies have increased?  How can both reports be accurate?)

Wall St. falls on oil tumble, consumer sector and Fed worries

Yesterday it took just a few kind words from the Prez of the NY Fed to reassure investors and shoot the Dow up 144 points.  Today it took just a few words of caution from the Prez of the Dallas Fed to get everyone nervous again and shoot the Dow down 61 points.  (Does anything good ever come out of Dallas?)  To be sure it wasn’t just the Fed but oil once again raising its ugly head as producers reported yet another increase in supply shooting the black stuff down 2 percent.  Other than that, it does look like tech is going to continue to both run and run down the market for a while yet.  Volume was a little above average at 7.1 billion shares traded.

Wall St. hits record highs on strong technology, health stocks

My my how fickle the market!  Last week there was a big panicky sell off in tech because investors were convinced that tech had peaked.  Now everyone’s buying tech again like crazy pushing the Dow up a big 144 points.  Last week there was chaos when Amazon’s purchase of Whole Foods was taken as the death knell for all of retail.  Now everyone thinks the rumor of the sector’s demise was highly exaggerated.  And all it took was a simple remark from New York Fed Prez William Dudley that the underlying strength in the economy is a-ok and is simply not being reflected in the current data.  There are still inexplicable concerns about low inflation and no comments about how the rate hikes are likely to solve that problem.  As for tech, it remains the S&P leader pushing the index up 9.6 percent so far for the year.  Volume was a little below average at 6.3 billion shares.

Succinct Summation of Week’s Events 6.16.17 (plus 9 Rules of Research)

The end-of-the-week summation is here with interest rates up and unemployment claims down.  Following up on yesterday's post, the bonus this Sunday is a nice little eye-shot of 9 bullet points that tell you everything you need to know about proper investment research.  A second bonus this weekend is an equally nice little eye-shot graphic showing which industries make the most money per employee, or to put things in perspective after this week's historic acquisition of Whole Foods by Amazon, what are the most profitable industries to be in ... or put another way ... to invest in?  Does it surprise anyone that energy is way out front and consumer products considerably down the list.  Food for thought.  Hope everyone enjoyed this nice summery weekend one week before summer actually begins.

The Web Makes It Harder to Read Market Sentiment

This weekend's supplemental reading courtesy once again of Barry Ritholtz is a commentary that is certainly topical exploring how the "information overload" and "information bias" phenomena that has been so prevalent in this so-called Internet Age has indeed made it more difficult to get quality news, especially about investing.  So on this very warm June weekend, I hope this article proves to be of some value.

Amazon-Whole Foods deal roils Wall St.; energy shares gain

The whole market went crazy today when Amazon purchased Whole Foods for $13.7 billion, making its first foray into brick-and-mortar … and throwing the entire brick-and-mortar sector into turmoil as questions abound whether this is the beginning of the end for conventional retail.  Many retailers took a big hit – Walmart, Target, Walgreens, Costco all over 5 percent, and Kroger the biggest loser with a whopping 9.2 percent loss.  But Whole Foods surged a huge 29 percent.  Tech also entered its second week of declines giving more credence to the assessment that this isn’t mere profit-taking but a major sector rotation.  Despite all this, the Dow recovered its losses and had even gained 28 points by close.  Volume was way above average with 9.7 billion shares.

Tech sputters again, dragging Wall Street lower

Right out the gate this morning was another panicky sell off of tech driving the Dow down over a hundred points but, throughout the session, it gradually recovered to an almost complete wash to close only 14 points down.  So Wednesday’s assessment of the Friday/Monday sell off being psychological now seems to be debunked with the market clearly now seeing tech as being overbought.  Not that it matters much since tech remains the best performing sector of the year and largely responsible for the S&P’s 8.6 percent gain in 2017.  There remains concern that the Fed rate hike is going to hurt growth but I don’t think anyone thought rates could remain near zero indefinitely.  In this environment, deflation is more toxic than inflation.  Volume remains a little below average at 6.5 billion.

Wall St. dips after Fed rate hike; tech slumps again

Exactly as expected the Fed raised interest rates today ¼ point and the market responded with another sell off in tech giving the reason about concerns regarding weak inflation numbers.  Hey, don’t higher rates translate to higher inflation?  Don’t get this one except just as another example of irrational investor behavior.  But though the Nasdaq took a dive, the Dow poked up another 46 points, this despite the fact that, once again, we found too much gasoline in our inventories bringing the price of crude down again.  Then again, what with the shootings in both Alexandria and San Francisco, today has been a day of irrational behavior.  Volume was above average at 7.1 billion.

Tech recovery sends Wall St. to records with Fed next

After two consecutive sessions of massive sell offs in tech, today investors decided to buy on the dip and shot the Dow up 92 points, allowing the entire sector to regain its losses.  Now the wizards are saying the selling was due to psychology rather than fundamentals, even though that’s certainly not what they were saying yesterday and Friday.  As it’s now taken as a virtual certainty that Janet Yellen will announce a rate hike at 2 p.m. Wednesday, the market is rushing in to buy financials.  Volume was just a little below average at 6.4 billion.

Wall St. falls as Apple drags tech shares lower

When the market does well, sometimes Apple gets the credit; when poorly, sometimes the blame.  That was the case today as the rotation out of tech that began last week continued in force with the computer giant dropping 2.4 percent sending the entire tech sector down nearly an entire percent, and the Dow a modest 36 points.  As the Fed considers a rate hike this week, we might be in for a correction but that’s likely already priced in.  There’s just a lot of rotation going on and it’s to the rather vigorous tune of 7.9 billion shares.

Succinct Summation of Week’s Events 6.9.17 (plus Why Nations Fail)

It's time for the weekly summation again showing that, for a change of pace, not a whole lot changed this week, not much unexpected good news, not much unexpected bad news.  Thus leaves room for some reflection and Barry Ritholtz yesterday submitted an excellent topic for discussion, being a book by MIT economist Daron Acemoglu titled, "Why Nations Fail: The Origins of Power, Prosperity and Poverty."  Much food for thought here.  Hope everyone had a great weekend.

The Detroit Connection

Detroit got some press this weekend when Barry Ritholtz gave tribute to a concert given at the Fox a couple weeks ago as Nora Jones sang "Black Hole Sun" in memory of musician Chris Cornell who was found dead a couple weeks ago in his hotel room at the MGM Grand following a concert at the Fox.  This has nothing to do with finance, of course, but every now and then it's good to step back and take a breath.  Hope everyone is enjoying this very warm weekend.

Tech stocks tumble, taking down Nasdaq as big names sink

The tech index took a 114 point dive while the Dow shot up 89, a move the experts are calling sector rotation as the S&P and Nasdaq are seen peaking out a strong rally causing investors to shift back into more traditional stocks.  And it was quite dramatic with such icons as Apple, Facebook, Alphabet, Microsoft and Nvidia taking substantial hits and the software company Cloudera taking the biggest hit shedding over 15 percent.  The Conservative Party in England lost its majority in yesterday’s snap election which will make the whole Brexit issue a good deal more complicated.  All of the above is also by way of saying that investors are not particularly upset with the way the week has turned out for either Comey or Trump.  The shift from tech to traditional was done with particular gusto with a considerably above average volume of 8.7 billion shares.

S&P 500, Dow flat after Comey testimony; futures dip after UK vote

First up 90, then down 90 for the Dow to close just about even, a slight 8 point bump on what was likely one of the most eventful days of the year.  The triple header of Comey, Britain, and ECB did not disappoint – apparently either side.  Investors have taken the view that Comey either did no harm or may have even exonerated Trump, even though there is many a Wall Street analyst who feel this view is very mistaken.  But the optimists first won the day with the stance that no worse news now means no worse news ever, thus boosting financial stocks.  Then the skeptics took over returning the market to a previously held consensus that Trump’s agenda, if it happens at all now, will at the very least be greatly scaled back and delayed.  Late news has shown that the election in Britain is not going the way Wall Street would hope with a seeming outcome of Theresa May’s party losing its majority.  Tomorrow will tell.  There was lots of activity today with 7.1 billion shares traded.

Comey relief buoys Wall Street; energy falls with crude

Yesterday the market sold off on fears that Trump would not fare well with Comey’s testimony tomorrow.  Today Comey submitted a written preview and since it contained no surprises and nothing that in some circles is considered incriminating, investors relaxed a bit and gained confidence that Trump and his tax/regulatory agenda might still survive all this.  Even though this was just a preview and may all change radically tomorrow with the actual testimony, for today the market chose optimism and the Dow rose 37 points.  However, tomorrow will be the trifecta with Comey’s testimony combined Britain’s general election and the ECB policy meeting.  All eyes are on all three and all with baited breath.  Stay tuned.  Volume was average at 6.6 billion.

Wall Street slips ahead of UK vote, ECB, Comey testimony

Today at least some investors got off the sidelines as optimism fades over Trump’s prospects for overcoming the scandals that challenge him, thus continuing to erode confidence that his tax reform plans will ever happen.  There are three major events coming on Thursday and the market doesn’t feel that any of these will go Trump’s way so a sell off began bringing the Dow down 47 points.  The difference between today’s selling and the draw downs of more recent days is that today’s 6.4 billion share volume was heavier, almost up to recent averages.  There will probably be a lot of shorting between now and Thursday.

Wall Street dips; 2017's laggards tick up, Apple slips

The 5.5 billion share volume said it all today, a day in which investors are staying on the sidelines keeping an eye on political developments and moving the Dow a mere 22 points down.  The slight downward pull was mainly due to a drop in Apple but the general sentiment remains strong that an interest rate hike is coming at the June Fed meeting so financial stocks are the ones in which to be.

Succinct Summation of Week’s Events 6.2.17 (plus U.S. Wind Projects)

It's time for the weekly summation with all indexes making new all-time highs and unemployment near an all-time low.  With environmental policy making all the headlines this week, this Sunday's bonus is a rather intoxicating graphic showing all the many wind projects currently existing in this country.  Whatever the politicians do or do not do, green energy is the future and it doesn't look like there's much out there that's going to stop it.  Hope everyone enjoyed this very pleasant weekend.

Defending Vanguard’s Low Fees

It's Saturday so it's time for a bonus article courtesy of Barry Ritholtz and his "Big Picture" blog.  Since we're all big fans of paying as little as possible for investment transaction fees, here's a very timely article defending the brokerage that provides perhaps the lowest fees in the industry -- Vanguard.  Hope you find it informative.  Enjoy this beautiful weekend we're having.

Tech leads Wall Street higher; jobs data falls short

Yesterday’s jobs report showed 68,000 more than forecast.  Today’s federal payroll report showed 47,000 less than forecast.  To me that’s still a net gain of 21,000 more new jobs than forecast but the market’s still calling it bad news.  No matter, unemployment is at a 16 year low and gains in techs and industrials more than made up for it all pushing the Dow up 62 points. One other thing they said today was that the economy needs to create 75,000 new jobs each month.  So 138,000 new jobs in May is bad news … for why  again?  At 6.4 billion, volume was close to recent averages.

Wall Street rises as data points to accelerating economy

Before Trump made his announcement about the Paris Accord, the Dow had already zoomed way up and stayed there to close 135 points positive due to a stellar jobs report in which the private sector added a stunning 68,000 more jobs than forecast, also priming expectations that Friday’s government payrolls report will also be stellar.  This will mean an almost certain rate hike in June, currently putting the odds at 89 percent, with likely two more later this year.  Volume was relatively strong at 6.9 billion.  Tomorrow will be interesting as the market reacts to the combo of Trump’s announcement plus the federal payroll report.