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.