Wall St. slips on renewed trade-war worries but posts monthly gains

“Sell in May and Go Away” didn’t work out this year as the Dow went up 300 points since May 1^st, 550 if you discount today’s 250 point drop as another selling spree was triggered by the move to impose tariffs on Canada, Mexico and the EU and the impending retaliation from the three.  It seems today that the market figured out that China is far from being the only trade war threat out there.  Volume was quite brisk at just over 8 billion. 

Wall Street rebounds as Italy worries ease; energy shares soar

Yesterday’s panic selling that took the Dow down nearly 400 points was sparked by concerns over Italy’s woes and the prospect of them leaving the EU.  Today those concerns were placated when the 5-Star Movement renewed efforts to form a coalition government, stay in the EU, and successfully sold enough bonds to finance the government.  This combined with a resurgence in the energy index with crude prices going up again sent the index up just over 300 points.  In fact, the S&P had enough of a buying spree to completely recoup its losses from Tuesday.  The risk of an Italian exit is now considered remote.  Private employment increased by 178,000 in May and Q2 GDP is now predicted to rise above 3 percent annualized.  Volume was again robust at 6.8 billion and above the 4-week average.    

Wall Street falls on Italy worries; bank shares drop

It was another day for geopolitical turmoil between the crisis in Italy and the Saudis increasing the supply of crude, thus forcing down the price of U.S. oil, had investors rushing to safe havens like U.S. Treasuries and bringing the Dow down nearly 400 points.  The rush out of equities in turn pushed Treasury yields down and triggered big losses for the banks, JP Morgan Chase down 4.3 percent, Morgan Stanley down nearly 6.  At nearly 7.6 billion shares traded, volume was strong and considerably above the 4-week average. 

Succinct Summation of Week’s Events 5.25.18 (and nothing else)

Sorry, my landlord was unable to install my A/C window units before he departed for northern Michigan for the holiday weekend so I've been sweltering in 90 degree heat in my house all weekend ... and tonight.  (He has phoned me tonight from his northern vacation home that he'll be back tomorrow and will do the install before dinner.)  I am melting here so I just don't have the energy to do anything except supply the usual succinct weekly summation, which I had prepared on Friday anyway.  Hope everyone had a much better weekend than did I.

Ignore the Millionaire Mindset; Try the Billionaire Behavior Set Instead - The Big Picture

Last weekend, I posted an entertaining article from Bloomberg on the subject of wealth, that is, how much money do people think they need before they can call themselves rich.  Today Bloomberg published another article on the same subject but from the opposite angle.  Instead of surveying people who don't have money about how much money they think they'd like to have, they surveyed people who do have money about how they know they got it.  Thus I present below, "Ignore the Millionaire Mindset: Try the Billionaire Behavior Set Instead," in which prominent billionaires are interviewed vis-a-vis their views on how to accumulate wealth.  I thought it would make the perfect holiday read.  Enjoy the rest of your weekend.

The Retirement Pyramid 2.0

To kick off the holiday weekend, I am always in search of cool concise little infograms that neatly sum up financial concepts in a way any layperson can understand.  I found a doozy tonight with this very nice graphic that in one eye-shot gives a complete course on investments.

S&P, Dow fall as oil drop hurts energy; chipmakers boost Nasdaq

Today it was not Trump who triggered the market drop but the Saudis when they announced that they would increase crude supply in a move to bring down the global price of oil, which it did.  The S&P energy index fell 2.6 percent, U.S. crude 4 percent.  But Trump did not help the uncertainty over North Korea when today he took back yesterday’s comments and now declares that the June 12th summit might still be on.  The Dow was actually down nearly 150 points most of the day only to rebound in the final hour to close down 58.  But due to the holiday weekend, volume was exceedingly light at only 5.8 billion so these swings can’t be taken too seriously at the moment.

Wall Street dips after Trump cancels North Korea summit; Netflix gains

It was Day #2 with a Trump statement bringing the Dow way down out the gate only for it to recover later in the session on more positive economic news.  Today’s statement was the cancellation of the June 12 meeting with North Korea with the cited reason being “open hostility,” which brought the index down almost 300 points.  But this was mostly reversed by Netflix emerging today as the #1 company in entertainment, overtaking even Disney and, later in the session, with overall investor sentiment being that the Pyongyang deal is merely postponed a few weeks, not canceled.  In the end, the Dow was 75 points down.  Volume was a little below average at 6.3 billion.  

Wall St. ends up as Fed seen keeping gradual approach to rate hikes

The Dow took a dive straight down right out the gate to the tune of almost 200 points after remarks from Trump signaled further skepticism about avoiding a trade war with China.  But later in the session the Fed minutes signaled that the time table for further rate increases this year might be slowed then caused the market to regroup regaining all the day’s losses plus 52.  Volume was in line with recent averages at 6.4 billion. 

Wall St. slips on U.S.-China trade talk uncertainty; energy falls

We’re back on the seesaw again with the Dow rocketing up almost 300 points yesterday when Steve Mnuchin said the trade war would be averted.  And as is so much his style, Trump contradicted him publicly today not only saying that there was no deal but even bringing North Korea into the dialogue and saying there was no deal with them either after so much rhetoric about the great deal he was going to give them.  All in all, it took the Dow down almost 180 points although steel stocks climbed on the suggestion that there would be steep tariffs on steel from China.  Volume was a little below average with 6.2 billion shares traded. 

Wall St. rises on trade war truce; industrials lead

Fears of a trade war with China have been dominating the headlines and driving the market down lately but today that all changed when the Dow shot up nearly 300 points with the weekend news that the tariff threats had been dropped and the trade war averted.  Boeing, with one-fourth of its sales going to China, was the big winner but the Russell small cap index also enjoyed its fourth consecutive record close.  Though not everyone is in favor of the truce with what is seen as troubling Chinese policies, certainly the steel and chip maker companies welcomed it.  Trading was lighter than usual, volume below average at 5.8 billion. 

Succinct Summations of Week’s Events 5.18.18 (plus "How Much Money Do You Need to Be Rich?")

It's that time for the weekly summation with the positives being lower jobless claims, lower crude inventories and industrial production above expectations.  The negatives are higher yields on 10-year Treasuries, higher gas prices and lower growth in retail sales.  The bonus this week is a Bloomberg article that surveys about how much money people think they need to qualify as being rich.  This survey adds a twist by being cross-generational.  It seems there's a consistent trend that people's perception of wealth, no matter what the age group, is almost exactly $1 million dollars more than how much they think they need to be comfortable.

The Quickest Way to Make Money in the Markets

There are a ton of financial web sites out there, most of them scams, that are constantly sending me emails with free literature, though it's really generally just a come-on to get you to buy a course, usually a pretty expensive one.  But there is the one place called "ExpireInTheMoney.com" which does occasionally send me something interesting.  Such was the case today with this free ebook, "The Quickest Way to Make Money in the Markets."  It is basically about options, trading forex, and a so-called foolproof way to time the market. 

Wall Street posts weekly loss as banks, chipmakers weigh

It was quite the choppy day with the Dow jerking back and forth in a 150 point range all day long only to end nearly even with a 1 point gain.  Again, it was investor anxiety over China trade talks compounded by rising bond yields, fears of inflation, and increasing oil prices that triggered the schizophrenic trading.  Boeing got a boost on hopes that the trade talks would go well and reduce the China trade deficit, an outcome that would favor the aircraft maker which sells one-fourth of its planes to China, while Google took a hit on precognition that “60 Minutes” will be airing an unflattering report on Sunday night’s broadcast.  Volume was a little below average at just under 6.2 billion as the market awaits more direction on trade talks. 

Wall St. ends down slightly on trade, oil price concerns

The same forces that took the Dow up 64 points yesterday brought it down 54 points today.  The market remains nervous about a possible trade war with China even though, by all accounts, everyone acknowledges the odds are very much against it.  But today’s comments from the White House have everyone now doubting that a tariff war can be avoided.  As today’s expert from Bell Investment Advisors said, “The trouble with tariffs is they’re always bad, they always increase the cost of almost everything for consumers and they destroy more jobs than they create.”  Add to that the problems in the Middle East which have cut supplies and sent crude to a 3-1/2 year high and a very good unemployment report that now makes it more likely that we’ll see another rate hike next month, and the market is starting to get into a mood.  Volume was a little below average at just under 6.4 billion. 

Wall St. gains as small-cap Russell 2000 hits record

The 10-year Treasury note hit 3.1 percent today for the first time in nearly seven years and at least for today that has produced a new environment where the safety of the bond market may at long last hold some attraction over the riskiness of equities.  And small caps continued the trend of outperforming large caps as the Russell 2000 reached a record high.  But investors continue to be haunted by jitters over a trade war with China. Though the consensus is that we won’t have one, it is also widely believed that it will be a while before we know that for sure.  So with the various pros and cons working against each other, the Dow swung back and forth in a 100 point range before settling 62 up at close.  Volume was a little below average at 6.2 billion shares traded. 

Wall St. drops as Treasury yields surge

It was a 90 point drop right out the gate and then just kept dropping the entire day until the Dow closed 193 down.  Just as the recent surges were attributed to optimism over trade talks, today’s sell off was attributed to a new reality check that those trade talks – and any benefits thereof – may be a long time coming after all.  There was also the added bit of market irony that good news about April retail sales translated into bad news about inflation, thus leading the Dow to its first loss in eight sessions.  At 6.6 billion, volume was right in line with recent averages. 

Wall St. ekes out gains as trade optimism pressured by defensive stocks

Up 130 early in the session, then a gradual sloping downhill to lose about half of that before closing 68 points up, the Dow was again responding to yet more signals that a trade war with China might be averted but then offset by defense contractors losing weight.  That is one of the great ironies of Wall Street – when geopolitical tensions ease, defense stocks suffer.  Put another way, sometimes what’s good for the rest of us is not good for them.  (But just wait until tomorrow when the market reacts to today’s turmoil in Jerusalem.)  91 percent of the S&P has submitted Q1 reporting and we’re still looking at a 26.1 percent increase in earnings over last year’s Q1, way above what was expected a couple months ago.  Another surprise was today’s Supreme Court ruling legalizing sports betting and now all kinds of gaming players are going to be jumping into that arena.  With all the tug of war going on, volume was considerably below recent averages at just under 6 billion shares traded. 

Succinct Summation of Week’s Events for 5.11.18 (plus Jim Chanos transcript)

As promised yesterday, Mr. Ritholtz did indeed today supply a written transcript (instead of listening to a 1 hr 10 min podcast) of his MIB interview with Jim Chanos, the king of the short. Aside from that the usual weekly summation is also supplied below, the positive being a record number of job openings in 18 years, the negative being a slight drop in the consumer comfort index.  Evidently this comes from Bloomberg and is a new one on me.  Enjoy the transcript and enjoy the warm week we're about to have.

Jim Chanos on Having an Edge

This morning I checked out the AAII webinar on options trading, the same presentation given in Troy on debit spreads.  The problem is options is an advanced topic that simply cannot even come close to being covered in one hour, and it wasn't.  Turned out it didn't have to be though since the whole purpose, revealed at the end, was to simply sell us a nearly $500 course on options trading.  It was really quite lousy, and that wasn't the worst of it.  The instructor was very rude to us, kept treating us like we were a bunch of high school kids, threatened a couple of times to pull the plug on the webinar and kick some of us out.  I hated high school the first time and this one was an hour of deja vu.  I will not be doing another one of these webinars.

Wall Street rises with healthcare rally after Trump's speech

Trump once again has moved the market with today’s comments about proposed policies for going after high drug costs, which resulted in the healthcare index jumping nearly 1.5 percent, and the Dow 91 points.  Apple, after 9 consecutive winning sessions, dropped a bit today with investors taking profits.  The Dow’s 91 points put it above its 100 day moving average as just happened with the S&P yesterday, adding more assurances to the market that valuations are likely to continue moving higher.  It’s looking like Q1 is coming in at 26 percent with strong underlying fundamentals belying concerns about stretched valuations.  Volume was below average at 5.8 billion. 

Wall Street rallies and Apple approaches $1 trillion value

Apple is already the biggest company in history but today it came within a stone’s throw (7%) of being the first company ever to be worth $1 trillion dollars.  That combined with Buffett’s earlier endorsement caused the market to jump, the Dow up almost 200 points.  Other good news included a CPI increase less than expected adding more reassurance that inflation is under control.  The S&P has had its strongest week since February and today reclaiming the 100 day moving average is fueling confidence that the market will continue to move higher.  Volume was in line with recent averages at 6.7 billion. 

Wall Street surges on higher oil after U.S. quits Iran deal

As mentioned yesterday, the sell offs of the last two days were due to Wall Street fears that pulling out of the Iran deal would disrupt the global oil markets.  When instead crude started going up yesterday, those fears were placated and a lot of late session buying began.  The buying spree continued in earnest today with the Dow going straight up all day to close 182 points in the green.  Funny how all the pundits are now claiming that this surge in oil prices is what they were expecting all along.  Q1 is almost wrapped up and it appears the final report card will come in at almost 26 percent, almost twice what was predicted two months ago.  Once again, the pundits are crediting the tax cuts though, just a couple days ago, they were saying the opposite.  Volume was above average at 7.1 billion. 

Wall Street erases losses after Trump quits Iran deal

Yesterday there was a big sell off as the market braced for the worst, expecting Trump to pull out of the Iran nuclear deal.  Then late in the session the market rebounded into positive territory.  The same exact thing happened today with the Dow dropping 200 points to hedge bets on Iran, then rebounding right after Trump’s announcement to break-even at close.  Part of the reason for the rebound was that the price of oil rose, thereby negating fears that the deal would disrupt global crude.  It also helped that Trump cushioned his remarks in leaving the door open for further negotiations.  Volume was a little above recent averages at 6.9 billion. 

Apple leads Wall Street higher; energy rally fades

The boost Apple gave to the market on Friday continued today with the Dow up over 200 most of the session but still settling up 94 at close.  It seems that when the Oracle of Omaha speaks, investors listen, and today they demonstrated they feel a lot of reassurance knowing that Buffett has so much faith in Apple.  Inflation concerns continue to overshadow an ebullient Q1 which is shaping up as the best quarter in seven years.  The drop in the index late session came from the energy sector as everyone waits to see Trump’s announcement tomorrow about whether the U.S. will be withdrawing from the Iran nuclear deal.  The market wants the deal kept so the down-slide indicates the market is bracing for the worst.  The other upside is that over 80 percent of the S&P has now reported and it is astonishing that almost 80 percent have beat their forecasts, giving investors another assurance that companies are doing well on their own even without the tax cuts, so the market may continue to do well even if the tax cuts do not have the desired impact.  Volume was below average at 6.1 billion. 

Succinct Summations of Week’s Events for 5.4.18 (plus Fibonacci and Amazon)

I was one of the 300,000 metro Detroiters who lost power over the weekend as a result of that horrific 50 mph wind storm on Friday so I had no Internet to send the blog with last night.  Even though DTE had told us that we wouldn't have power until 11:30 p.m. Sunday night (and it could be as late as Tuesday), my power was restored at 3:30 this morning.  Thankfully for that, below I can submit the usual Sunday night weekly summation, the positive being the lowest unemployment rate in 17 years but that being balanced by a lower labor participation rate.  In other words, unemployment is lower because more people have given up trying to find jobs.  But since payrolls are also lower than expected, the higher employment numbers are not stoking the usual inflation fears of higher wages.

Wall St. rallies as inflation fears ebb; Apple hits record high

In recent sessions investors have been selling off like crazy due to fears of inflation.  And ordinarily today’s news would have stoked those fears even more with the unemployment rate dropping to a 17-1/2 year low.  High employment puts upward pressure on wages which sparks inflation.  Then another report came out that wages had risen only 1/10 of 1 percent in April and that placated the market into another bull run of 332 points.  The index was also helped by Apple which got a big boost from Warren Buffett today when he purchased more shares.  Volume was a little below average at just under 6.4 billion. 

S&P drops as weak earnings offset strong economic data

Thu 5-3-18

Q1 did not go well today at all with several major companies turning in disappointing reports, enough to bring the Dow down about 300 points before it rebounded late in the session on more positive economic data and managed to just barely break even closing up 5 points.  Unemployment benefits are at their lowest since 1973, the trade deficit is down and factory orders up.  Still, investors seem most focused now on the prospect that corporate earnings may be waning in future quarters.  Trading was vigorous at 7.5 billion. 

Wall Street loses gains from Fed decision on China trade worries

Today the Fed did exactly what the market wanted and it worked for most of the day with the Dow climbing about 100 points.  But then late in the session fears of the trade war with China took center stage again and the index took a dive of 300 points to close down 174 on relatively heavy volume of nearly 7.3 billion shares. 

Wall Street rises on optimism on NAFTA deal and China trade

After a 300 point drop that started right out the gate and didn’t stop until mid-session, the Dow recovered most of the losses to close 64 points down.  As mentioned yesterday, investors were hedging their bets that Trump might not renew the tariff exemptions, which were due to expire today.  Early in the session there was still no word of renewal but then just a few hours before the expirations would have occurred, they were in fact renewed on optimism that trade agreements might be renegotiated.  The trade news placated the inflation concerns for today anyway and sent the market back up.  But worries about rising costs continue to plague investors despite the terrific Q1 reporting which is the strongest in seven years.  The market will become even more jittery if Wednesday’s Fed meeting ends with another rate hike.  But this is not expected.  Rather, the next hike is expected in June.  Volume was right in line with recent averages at 6.5 billion.