Wall St. ends off day's highs as Fed sees inflation rising

The big correction of the last two days has momentarily begun to reverse as the Dow gained 72 points on news that the private sector added 49,000 more jobs than expected and Boeing beat its full-year profits forecast.  There is still fear of inflation from Fed statements confirming further gradual rate hikes, though this month anyway, no action was taken.  And for a second day, the healthcare sector took another big hit, this time 1.5%, which added to yesterday’s 2.1% drop makes a two-day total decline of 3.6 percent.  Yes, higher rates means more inflation and a cooling of equities but it has been the goal for a couple years now to do just that as inflation is so low and equities so hot to begin with.  Also today the forecast for Q4 earnings growth has been raised to 13.7% from 13.2 yesterday and 12 a few weeks ago.  Volume is still roaring at 8 billion. 

Wall Street stumbles as bond yields rise, health stocks fall

Yes, it’s true – when bonds go up stocks go down; but I’d say that 362 points is a bit ridiculous … except when three of the biggest powerhouse companies in history gang up to create their own healthcare system.  Investors evidently saw this as a big enough threat to conventional health insurance companies that they sold the sector something fierce, dropping it over two percent and driving the market as a whole to its second biggest one-day drop since the election.  It also incidentally shot the VIX to its highest since last August.  Will the State of the Union placate investors, or make them even more nervous?  But Q4 remains on target, the forecast remains at 13.2 percent, and volume was very strong and considerably above average at 8.1 billion. 

Dow, S&P 500 suffer worst one-day fall in five months as Apple drags

After all, there are those who feel that equities are quite overvalued so it really should be hailed as good news whenever there is a pullback such as occurred today, as they said the “worst one-day fall in five months.”  The Dow dropped 177, the others had similar percentage declines, and the VIX “anxiety” index went up 25 percent on heavy volume of 7.1 billion shares.  But really, isn’t this just letting a little air out of the tire so shouldn’t it be a source of relief for investors?  This is just the beginning of a very event-filled week.  Let’s see how it all unfolds. 

Succinct Summations of Week’s Events for 1.26.18

Sun, 1-28-18

I almost forgot about this tonight so, at this late hour, I will restrict this post to just the usual Sunday night succinct summary for the week.  Saturday night I was out until past 3 a.m. so I decided to skip this blog.  I have spent the bulk of this past week and weekend researching all my options for pursuing the CFP and so a few minutes ago I registered for the 2018-19 cohort program at Oakland University.  I had decided pretty much for sure a couple weeks ago that I was going to do my studies online instead of at OU but after reviewing the online offerings I finally decided a few days ago that the best way to find out if this is the right path for me is just to take the first class at OU which begins a week from Wednesday.  I may not make it past the first class; I may not even make it through the first class.  But the exposure should give me a much better idea of whether this is the right choice for me.  Hope everyone had a great weekend. Brace yourselves, winter is coming back. 

Intel, healthcare shares boost lift Wall St. to record

Yesterday’s very mild correction was greeted today by yet another round of strong Q4 reporting which sent all the indexes soaring again, the Dow up another 223.  We are now up to nearly one-quarter of the S&P reporting and almost 80 percent topping expectations.  Results are sufficiently positive that the forecast for earnings growth has now been raised to 13.2% up from 12.4 a few days ago.  GDP increased 2.6% annualized though that was below the 3.0% forecast.  Volume remains vigorous but just slightly below the 4-week average at just under 6.6 billion shares traded. 

Dow and S&P 500 reach records; market cools after Trump talks up dollar

Ordinarily a strong dollar is considered a good thing but, in this day and age with so many U.S. companies doing business abroad, a weak dollar has become more desirable as it helps multinational companies show bigger profits.  Whether that’s good or bad can be debated at length.  But the markets were going very strong today until Trump’s speech in Davos calling for steps to make the already very strong U.S. dollar even stronger.  The immediate reaction was a massive sell off with both the Nasdaq and S&P losing all its gains.  The Dow had been up 200 but fell 60 on the news.  Today’s experts also voice two opposing opinions – that we’re heading for a  massive and bloody correction … and that we’re not!   Volume again was quite vigorous and above average at 7.2 billion shares traded. 

S&P 500 dips after choppy session; chipmakers drag Nasdaq

In this raging bull market where all it takes is the slightest hint of bad news to make things tumble, it seems that all it took today was the hint of another war, this time a trade war with China.  It put an ever so slight dent in both the Nasdaq and S&P but the continuing solid Q4 reporting was enough to push the Dow up another 41 as Trump prepares to participate in the World Economic Forum in Davos, Switzerland.  The indexes keep trending higher and, according to today’s expert, a meaningful pullback is not likely as investors don’t want to miss out.  So far just under 20% of the S&P has reported and almost 80% have topped forecasts.  Trading continues to be rigorous and above average at 7.6 billion. 

Netflix lifts S&P, Nasdaq; J&J, Procter hold Dow in check

The Dow equally up and down all day to end even what with the gains from the FAANG companies being checked by the losses from consumer products.  But the S&P remains on its longest winning streak on record and Q4 is still looking rosy with 76 percent of companies so far topping expectations.  Volume remains vigorous and just a little above the 4-week average at just under 6.8 billion. 

Stocks hit record as senators reach deal to end shutdown

Ordinarily a government shutdown would spook investors but it did not seem to do that this time around and that has been attributed to the overall underlying strength of the stock market.  Today, even though the end of the shutdown was announced before market close, that underlying strength manifested itself in spades with Halliburton turning in a sterling Q4 report and the whole biotech sector rallying over three percent for its best day since last June.  All in all, it was good for another 3-digit gain in the Dow with new records all around.  It would have been even better except that GE continues to decline, now at its lowest since 2011, still suffering the impact of the announcement of its gigantic write-off last week.  It is down 8% for the year, much of that in the past week.  But despite the otherwise euphoric session, volume was just a little higher than average at 6.5 billion. 

Succinct Summation of week’s events 1.19.18 (plus 30 minute video on Value Investing)

It's that time of the week again with the succinct summation once again recording new all-time highs on all indexes, jobless claims at their lowest in 45 years and an increase in industrial production about double what was expected.  Gold going up as equities boom (it's supposed to be the other way around) and consumer sentiment coming in 3 points lower than expected are the potential worry points.  The bonus this week is a 30 minute YouTube video posted on The Big Picture blog today giving us a 30 minute mini-course on Value Investing.  Hope everyone had a great weekend as we enjoy our January thaw ... at long last! 

Of Money and Morals

The weekend is time for pleasure reading and today's post from Barry Ritholtz's Big Picture blog has a thoroughly captivating article about the evolution of lending that really puts quite a new light on the famous Shakespearean quote from Hamlet, "Neither a lender nor a borrower be." It is entitled "Of Money and Morals," and is a fascinating history from ancient times to present of the practice of money lending.  This is a result of extensive research and book writing that has been done since the Citigroup debacle of 2014.  Enjoy, and now that it's finally above freezing, enjoy the rest of the weekend too. 

Wall Street ends higher despite government shutdown threat

As I write this, the news has broken that the government has shut down as of 90 minutes ago.  But as far as the market was concerned today, no sweat.  After yesterday’s breather, investors were in a buying mood again today and took the Dow up another 53 and the Nasdaq and S&P to more record highs.  There did not seem to be much concern about the shutdown at market close today but, now that it actually has shut down, let’s see what the reaction is come Monday.  Volume was quite healthy and remains above average at 6.3 billion. 

Wall St. pauses rally as utilities, industrials fall

For a second day this week, after a tremendous rally yesterday, investors are taking a breather awaiting more Q4 and trying to gauge the impact of the new tax bill.  All three indexes dropped a little, the Dow more than just a little at 97 points.  GE had its third drop in a row as investors continue to digest the huge write off announced earlier this week.  Morgan Stanley beat estimates, Alcoa missed, and the government shutdown looms.  To be continued, but volume remained above average at 6.9 billion. 

Dow ends above 26,000 on earnings optimism

Q4 continued with a blaze today sending investors back into equities with great force as more than three-quarters of the companies that have thus far reported have exceeded forecasts.  After a brief and very minor breather yesterday, today saw a huge buying spree sending all three indexes way up and the Dow up over 300 to close above 26,000 for the first time.  For the second day, volume is considerably above average, today to the tune of 7.4 billion shares traded. 

Wall St. eases as oil prices, General Electric fall

The market’s been on fire lately so a little water was thrown on the flames today as investors took a breather with market anxiety over valuations rising to a one-month high and GE causing concerns after announcing an $11 billion write-off.  So the Dow, after briefly tackling the 26,000 mark, reversed course and ended the session with a very minor 10 point deficit, as did the other indexes.  This was all counter-intuitive since the day’s Q4 news was downright jubilant, United Health beating estimates and Merck announcing its drug Keytruda has been proven an effective cancer treatment.  The bottom line remains that Q4 is going well and as long as that remains the case there will continue to be a general move into equities and the indexes will continue moving up.  Finally volume is reflecting the enthusiasm with a considerably above average 8.3 billion shares traded. 

A Game-Theory Solution for a Fractured America - Bloomberg

In honor of MLK Day and being that we are all entranced by the notion of finding technical-mathematical solution to complex problems, in other words gaming theory, I offer below this fascinating article posted today on The Big Picture website about using gaming theory to fix the country's divisions.  Since one of the major objectives of MLK was to address divisions in this country, particularly racial divisions, I could not think of anything more appropriate.  Of course, as always, also included is the usual weekly summation with once again the good news being yet another week of all-time highs for all three major indexes, and the bad news being an ever so slight increase in unemployment claims over the forecast.

Stocks AAII Members Follow ...

For this holiday weekend (at least for banks, government, and the stock market), I offer today's email from the AAII regarding the favorite stock picks of the organization's membership.  The essay also serves as a pretty good primer on investing including how to use value and momentum to achieve maximum gain.  For those of you who work in finance or government, enjoy your holiday.  For those who don't, enjoy your week and, as always, stay warm.

Good News / Bad News for Hedge-Fund Investors

On this very cold weekend, I offer the Saturday edition of Barry Ritholtz's Big Picture blog, one of the many articles featured today is on one of our favorite topics -- hedge funds.  Enjoy and stay warm! 

Wall St. hits new highs on earnings optimism, data

Yesterday the Dow shot up a big 205 on expectations of a terrific Q4, reporting of which started today.  Today it kicked off with a bang which sent the index flying up another 228 points with the S&P and Nasdaq correspondingly registering both their 8^th consecutive highs.  Q4 forecast has now been raised from an 11.8% increase two days ago to 12.1% today, 13.2% for the financial sector.  Again, at 6.8 billion, volume was a little higher than the recent average, but you’d think that with all this wild optimism it’d be going much higher.  There obviously remain concerns that valuations are way too high and a correction is in our future. 

Wall St. rises with oil prices, earnings optimism

The market is betting big on Q4 reporting, which begins tomorrow, and that shot the Dow up another big 205 points today.  Another contributing factor was oil benefiting from a surprise drop in production and lower inventories, something that has been a continuing issue for a few years now as the decline in oil prices has been the primary factor in deflation.  There remains some small concern that equities are priced too high but that always seems to be belied by almost daily reports of positive economic progress.  The week’s trend continues with volume being a little higher than recent averages with 6.7 billion shares traded today. 

Wall Street falls on China, NAFTA concerns

This is the way the market works when the bulls are running – that is the slightest negative headline has investors running to the sidelines.  So today China announced it would start buying fewer U.S. bonds and then Canada announced that they believe Trump will soon be exiting NAFTA.  After six straight days of new records, it was enough to cause a pullback, but just a minor one with the Dow dropping a mere 16 points.  Another likely cause is that Q4 reporting starts in two days so everyone’s in wait-and-see mode until Friday.  And as one expert pointed out today, “It’s a reflection of investor weariness and awareness that the market has risen for four straight months without seeing a major pullback.”  The forecast for Q4 is for an 11.8% increase in earnings.  Once again, volume was a little above average at 6.9 billion. 

Wall Street climbs with boost from healthcare, banks

After a minor pullback yesterday, another major 3-digit rally today with the Dow zooming 102 points to yet another new record and the Nasdaq and S&P both scoring six consecutive records.  Part of the boost came from the hopeful prospects of the cooling of the tempest in North Korea with the talk of first talks.  And with each day that we get closer to Q4 reporting, there remains great anticipation that the news will terrific, currently with a forecast of an 11.8% rise versus 2016’s 8% Q4.  At 6.7 billion, volume continues just a little higher than recent averages. 

S&P keeps New Year's rally alive, Dow eases

After Friday’s big 220 point boost, it was time for investors to take a breather today and that’s exactly what happened.  The main cause of concern that brought the Dow down a trifling 12 points is waiting to see whether Q4 earnings are going to favor the banks after all or not.  The verdict on this will be coming in the next few weeks.  Meanwhile, the three indexes have had their strongest opening week in more than ten years, the Dow since 2003 and the S&P since ’06.  This is especially encouraging since historically the opening week has proven a reliable indicator for the whole year.  Volume was a little above recent averages at just under 6.4 billion shares traded. 

Succinct Summation of Week’s Events 1.5.18 (plus predictions for 2018)

Below is the usual Sunday night weekly summation.  This week's bonus is an article from a recent issue of Investment News in which their guru, Bob Doll, makes his 10 predictions of what's going to happen to the market in 2018.  Prognosticators are always entertaining.  Hopefully this severe cold snap is over now and we can enjoy the coming week.

Dow tops 25,000 milestone; Wall St extends New Year's rally

With today’s strong reports re the manufacturing and service sectors plus private hiring being up, the Dow passed the 25,000 mark with a big 152 point boost.  Remember at the bottom of the recession when the Dow had dropped from 14,000 to just under 7,000 and everyone was saying it would never reach 10,000 again?  Remember the pundits predicting that the S&P might drop so precipitously that the graph lines for it and gold would soon cross?  And though some experts believe that stocks are dramatically overvalued, today’s expert says it better, “As long as you have economic growth and earnings moving higher, there’s still a solid underpinning.”  Volume remains above average at 7 billion. 

S&P 500 tops 2,700 on tech advance; Dow, Nasdaq hit records

The minutes from the Fed’s last meeting surfaced today and with their statement of support for continuing gradual rate increases which investors are now taking as “steady as she goes,” all three indexes shot up again with the S&P climbing over 2700 for the first time.  And since all 3 indexes were already at record highs, once again today they have tabulated new records.  Other good news included an increase in factory activity and the tech sector bouncing back after the recent selloff.  The VIX also closed at 9.15 just glancing the record of 9.14 set on November 3^rd.  Volume was quite healthy and above average at 7.1 billion. 

Wall Street starts year on strong note; Nasdaq ends above 7,000

Just as all the prognosticators said, the trend continues with bullish sentiment into the new year, the Dow up 104 points and the Nasdaq breaking 7,000 at close for the first time.  This reflects all the optimism investors had throughout the latter half of ’17 which is expected to continue through the first half of ’18.  Today it was driven largely by gains in tech which had seen some pullback in the last couple weeks. And volume, as expected, returned to normal levels with 6.7 billion shares traded on the first market day of the year with everyone back from vacation. 

Charley Ellis and Burton Malkiel: “The Elements of Investing”

Barry Ritholtz has offered a particularly exciting New Year's present for all of us with this 1-1/2 hour YouTube presentation of a discussion of the past ten years of market developments with none other than those gurus of gurus, Charley Ellis and Burton Malkiel.  Yes, 1-1/2 may seem like a big investment in time but just look at it this way instead -- instead of getting an MBA, just watch this video instead.  It's a lot easier than getting an MBA ... and possibly just as informative.  Happy New Year everyone!   (Oh, and by the way, included below is also the weekly summation,)