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.

Dow sets record-high close; Fed signals gradual rate hikes

Putting aside all the political theater in D.C. for the moment, Wall Street is a lot more interested in the Fed and Q2 than anything else right now.  So with Yellen’s dovish comments this morning before the Congress, the Dow shot way up and stayed there most of the session to close 123 points up.  Real estate proved the big mover today and airlines did pretty well too.  The Fed’s Beige Book showed the economy growing at a “slight to moderate” pace.  Volume is still below average at 6.1 billion shares traded.

Wall Street ends flat as politics drive stocks

First there was the bad news about Trump Jr’s Russian emails that sent the Dow spinning down 130 points right out the gate.  Then there was the good news about the delay in the Senate’s August recess directing some sunshine onto a gloomy day with a hint that the delay might result in some legislative progress.  This latter bit of optimism sent the index slowly up again to break-even by day’s end.  Investors are still looking to tomorrow’s Congressional testimony by Janet Yellen and the beginning of Q2 reporting hoping for some good news.  Volume remains quite light at 5.9 billion.

Wall Street starts week upbeat, boosted by tech shares

Despite the headline, it was really a pretty quiet day with the Dow up and down within about a 30 point range but ending just about even and the other indexes up a tad.  Tech continues to do well and is expected to be the strongest sector for Q2, reports starting later this week.  As usual, investors will be eyeing Yellen’s Congressional testimony Wednesday for hints of the next rate hike.  But overall it was a quiet beginning of the week with a  very light volume of 5.6 billion shares.

Succinct Summation of Week’s Events for 7.7.17 (plus the state of the Internet)

It's time for the week's summation with nonfarm payrolls coming in ahead of forecast and global interest rates moving higher.  The bonus this Sunday for those of you who have the ambition is a 33 minute video presentation of Mary Meeker's lecture on the 2017 Internet trends.  Her entire outline is displayed in the first 30 seconds.  There is a mention that all the slides are available so there may be a mention of a link at the end of the video.  Hope everyone had a great weekend.

How to Call a Market Top

We all know that when it comes to market timing, the #1 magic trick is how to call a top.  Many believe it's not really possible.  For your weekend's amusement, Barry Ritholtz's column offers a tongue-in-cheek step-by-step guide on how to call a market top, while sending the real message about how not to.  Clearly he falls into the category of those who believe it's not possible, and his cautionary notes about how to avoid the problem of calling a market demise when there isn't one are well worth noting.  Keep enjoying this beautiful July weekend.

Wall Street climbs after jobs data as tech, financials rise

Yesterday the Dow plunged 158 points because the ADP private employment report came in with 27,000 fewer new jobs than forecast and this was taken as a predictor of today’s nonfarm report also being weak.  I did mention that this is not always the case and, as we saw today, it was not the case with the economy adding 222,000 new jobs last month which was 43,000 more than expected.  So today the Dow zoomed back up again 94 points and now investors’ main concern is finding all the bargains that have sold off recently.  Tech was up over 1.2 percent again today but netting a minus 3 percent for the week though for the year it’s still one of the market’s biggest winners with a 17 percent gain.  Volume was well below average at 5.7 billion, probably because many traders are still on extended vacation from the 4^th of July.  

Wall Street drops on labor market data, North Korea concern

The Dow dove 158 points today and there’s lots of finger pointing – employment coming in 30,000 below forecast, jobless claims up, nervousness over the Fed and, of course, North Korea.  Naturally the private employment number is taken as a harbinger of the nonfarm report coming tomorrow but that is not always the case.  The 6.6 billion share volume was again below average.

Tech lifts Nasdaq; energy curbs Dow, S&P gains

Okay, I don’t quite get this one.  For two years now I’ve been reading that the oil industry is in a very bad slump due to abundant oversupply.  That’s why gas is only $2.50 per gallon and why inflation is so low.  There have been continuing and failed attempts to cut back production and deplete inventories so that price of crude will go up but for some reason the industry can’t make that happen.  The mystery now is why below they are reporting that crude, down 4 percent today, has now ended its longest bull run in five years.  How could there be a bull run when crude has been dropping like crazy for some time now?  At any rate, the Dow took a big nosedive this morning down a hundred points but recovered it all by close to end even.  Tech had another very good day and manufacturing is showing moderate growth.  Volume remains below average at 6.5 billion.

11 Perfect Podcasts for the Fourth of July

For those of you who are truly ambitious, here are several hours of podcasts courtesy of The New York Times covering 11 different topics of Americana for this 4th of July.  Another offering for this anniversary of the nation's birth is an interesting graphic showing that, for the first time since the Carter years, there are more Americans (though just slightly more) favoring bigger government over smaller.  Fluke or trend?  Back to business tomorrow.

Dow, S&P advance but tech weighs on Nasdaq

With less than 4 billion shares traded, nothing that happened today really means much despite the Dow moving up almost 130 points.  Crude got a boost from yet another report that shows production may be moderating and banking stocks gained, as they will continue to, with interest rates on the rise.  Still, with the holiday, hardly anyone was home to vote today so these results have to taken in the spirit of incompleteness.  Have a great 4^th everyone!

Investing Successfully is Really Hard | Above the Market (plus weekly summation)

It's time for the weekly summation again and though it's technically a holiday weekend, banks and the market are open tomorrow so tonight you get it even if hopefully most of us have better things to do during the next two days.  Confidence continues on the rise and jobless claims continue on the fall.  Tonight I found an article that may prove to be an excellent primer on investing.  The link below is very brief though the actual paper, supplied in pdf form, is 110 pages, but may be worth archiving for future reference.  Continue enjoying the holiday.

10 Weekend Reads

It's time for some weekend reading and this Saturday list contains articles on counter-terrorism, Peter L. Bernstein interviewed by Jason Zweig, and an unconventional analysis of political power from The Atlantic.  It's the first of a four-day holiday for those of you with nice employers.  For the rest, enjoy your second half tomorrow.  We are nation of immigrants and there are many very fine immigrant-themed films on cable all weekend.  I also love the 4th of July for all the classic Revolutionary War films of which there will be several on Tuesday.  We all need this annual reminder that the signers of the Declaration held no illusion about winning.  They knew they were going up against the most powerful military in world history and would almost certainly lose, and thus fully expected to be hanged when it was all over.  They did it anyway.  That's courage!