For a very hot Saturday ... (Plus Q2 graphics)

Sat 6-30-18

For this very hot Saturday -- I've been particularly overwhelmed since we had a power outage today and the house quickly rose to 92 degrees.  Fortunately I do have a very cool subterranean basement, one of the reasons I chose this house, to which I could claim refuge just for blazing hot days like today when the power goes so I have a place to claim for refuge.  The power came back on at 7:20 p.m. and with the AC going full blast I have now lowered the interior temp to a much more comfortable 85 degrees. 

Wall Street ekes out gain as Nike surges

I actually did write this thing up on Friday, I just neglected to post it:

Fri 6-29-18
For the second consecutive session the market has decided to put trade war anxieties aside and focus instead on fundamentals and another day of bargain hunting. And though the Dow was up more than 250 through much of the session and settled later to close up only 55, the quarter news was nothing less than ebullient.  For Q2 the Dow was up almost one percent, the S&P almost 3, the Nasdaq over 6, and the Russell 2000 over 7 percent.  At over 7 billion, volume remains in line with the 4-week average. 

Wall Street advances with help from technology, financials

Thu 6-28-18

Last night I completely lost myself in learning how to use the latest version of Quicken so that I can do a cash flow analysis of the last few years.  Thus I neglected to check on the market and send this report.  I neglected to notice that the Dow had seesawed in a 300 point range before closing 98 points up as, once again, the market found cause to put trade war concerns on the back burner and instead focus on the good news coming out of tech and doing some bargain shopping in the financial sector.  The overall sentiment was that the sell offs of the last few sessions were overdone, largely the result of mixed signals from Washington, and not justified by the fundamentals.  But Amazon hit the pharma sector hard when it entered that arena by buying PillPack.  Amazon rose, brick-and-mortar pharma got blasted.  At just over 7 billion shares traded, volume was close in line with the 4-week average. 

Wall Street tumbles on renewed U.S.-China trade jitters

After zooming up nearly 300 points early in the session, the other shoe dropped.  At first investors were very encouraged when the White House seemed to be taking back the earlier statements about blocking Chinese ownership of U.S. firms, but then later in the day economic adviser Kudlow took to Fox to emphatically clarify that the stance on China had not softened, that the hardline approach has not waned.  The Dow dropped nearly 500 points ending the session 165 down.  Volume was vigorous at 7.7 billion. 

Energy leads Wall St rebound as trade worries ease

All the market needed was some good news outside the trade wars to shoot the Dow back up again and today that came in the form of a strong performance from the consumer discretionary sector reassuring investors that fundamentals are still solid.  GE in fact had its best day in three years.  But the trade war news was helped too with Canada’s announcement that they too would seek tariffs against China.  The war news was also hurt though with Trump threatening to punish Harley-Davidson with higher taxes in retaliation for their move.  The Dow shot up 130 points through most of the session only to lose ground in the last hour and close just 30 points up.  Volume was a little below average at 6.7 billion. 

Wall Street pummeled by escalating trade threats

Today the trade war comes home with Harley-Davidson’s decision to move its European motorcycle production out of the country.  Today investors got the message – “escalation of (rhetoric) on trade is leading to real-world consequences.”  Compounding this was the report that the Treasury Dept would block firms with at least 25 percent Chinese ownership from buying U.S. tech firms.  This combo signaled that the trade war was real and triggered panic selling that brought the Dow down 500 points, though it did recover some of this to close 328 down.  Still, it was quite a blood-letting and on very high volume of 7.7 billion shares.  

Succinct Summations of Week’s Events 6.22.18 (plus "Big Mistakes)

It is time for the weekly summation, the positives being that housing starts from May were revised higher than previously reported and the trade deficit was revised downwards.  The negatives were same old, same old -- trade war anxieties continue to push the market and virtually all indicators in a southerly direction, the Dow losing over 500 points this week.  The bonus this Sunday evening is selected from Barry Ritholtz's Sunday reading list as posted on his Big Picture blog.  This article is a commentary on a new book on investing that's getting a lot of buzz, "Big Mistakes: The Best Investors and Their Worst Investments."  The thesis here is that it is far more constructive and critical to investment success to analyze and understand the failures of our best and brightest rather than to go down the (almost certainly doomed) path of trying to emulate their successes.  Hope everyone had a great weekend. 

Paul McCartney: 23 minutes of delightful carpool karaoke

For this first weekend of what will hopefully be a beautiful summer, I am offering something that has nothing to do with finance or investing, just something that is quite delightful and charming; pure nostalgia and escapism!  It's 23 minutes but I'm sure you'll find you can't pull yourself away from it.  Enjoy your weekend. 

Dow snaps losing streak on energy lift

In contrast to the last few sessions, today instead of dropping like a rock right out the gate, the Dow zoomed up right out the gate and then gradually settled down just ever so slightly to end up 119 points.  OPEC’s decision to increase crude output to check rising global demand was met with a sell off yesterday but today was greeted as good news and Exxon and Chevron both got a good boost as well as giving the energy index its best day this month.  But Trump added more fuel to the trade war fears today with a new threat of more tariffs on China.  This trade spat has been the primary driver that has lead the Dow to eight consecutive losses, a trend that was finally broken today.  Volume was very high – 9.7 billion – but again like last Friday, it’s a fiction.  But this time it’s not quadruple-witching but the Russell’s reconstitution of its indexes that caused the distortion.  Once again, we’ll get the real picture on Monday. 

Dow drops eighth straight session on trade worry; Amazon slips

It was another really bad day with the Dow losing almost 270 points until late in the session when it recovered 196 points down.  Once again, just like yesterday, investors seem to finally be taking it to heart that this trade war may very well be for real.  Caterpillar and Boeing, the main trade war barometers, lost again for the 7^th session in eight and lost big.  But today’s Supreme Court ruling allowing at long last for states to collect sales tax from online retailers hit Amazon, Overstock, and Ebay hard.  Energy also fell as OPEC is expected to boost output.  This trade war anxiety is not going away.  Volume was close to the 4-week average at just under 7 billion shares. 

Nasdaq closes at record; pressure remains on Dow

Once again trade war worries have investors spooked and there was again a 180 point swing in trading except that today at least the Dow closed down only 42 points.  This was the seventh consecutive losing session for the index even though the S&P did manage to break its three-day losing streak today.  Part of the reason the Dow recovered most of the day’s losses was because Boeing finally started coming back after six consecutive declines.  And it’s not just China that’s ringing alarm bells; the EU is also plotting its own retaliation against U.S. products.  Stalwarts like Starbucks and Oracle took big tumbles.  At 6.6 billion, volume was just a little below average. 

Trade fears rattle Wall Street, Dow gives up 2018 gains

It was bound to happen sooner or later as was so clearly articulated by today’s expert from John Hancock in Boston, “Investors are waking up to the idea that all the rhetoric on trade could be more than just a negotiating tactic.”  Just as yesterday the Dow took a huge 270 point dive right out the gate over trade war anxieties before recovering to a 103 point loss; today the index took a much bigger 400 point loss right out the gate over trade war rhetoric before recovering nearly 300 down.  The trigger today was Trump’s new threat of even more tariffs against China in retaliation for their retaliation against the first threat.  And just as has happened on prior occasions, Boeing and Caterpillar took the big hits with each losing more than 3 .5 percent in a single day.  The chipmakers faced a similar fate.  Volume was high – over 7 billion.  Yes, it does look like the market is finally waking up to the reality that this rhetoric may be more than just rhetoric. 

Wall Street ends modestly lower but energy shares rise

Continuing concerns over trade wars dropped the Dow like a rock – 270 points right out the gate, with the rest of the session struggling for a recovery and ending down 103.  Boeing once again as the biggest exporter to China got hit hardest falling almost a full percent.  Chipmakers also lost while oil gained as the market lowered forecasts for OPEC’s increase in production.  Since Friday’s volume data was distorted by quadruple witching, today’s volume painted a clearer picture at a more normal 6.4 billion. 

Succinct Summations of Week’s Events 6.15.18 (also more on quant funds and Barry Ritholtz in Investment News)

The customary Sunday night weekly summation is below, the positives being business as usual, the negatives dominated by the continuing anxieties over trade wars.  For this week's bonus, in Friday's post I included an article from The Big Picture blog about why quant funds don't work.  To provide balance, today I include the link to an article from the recent issue of AAII as to why quant funds do work.  It's a 4,000 word article so I'm including only the link.  I also mentioned that Barry Ritholtz's blog made the big time this week in meriting a column in Investment News and that I would be providing that column tonight.  The link and text to that article is also below.  Another bonus embedded within that article is a link to "20 Financial Advisers To Follow On Twitter."  Hope everyone survived the steamy weekend.

Why Most Quant Funds Fail

For this very steamy June weekend I have found a very informative three minute video posted on Barry Ritholtz's Big Picture blog today about why most quant funds fail and how to side step the traps.  Ritholtz actually made the cut at Investment News this weekend for being one of the most reputable financial web sites out there. 

Wall Street ends high-volume session lower on trade jitters

We have now had three consecutive sessions where investors are still not giving the financial sector its due rewards on the heels of this week’s Fed rate increase, which is supposed to benefit banks.  Instead, the Dow plunged another 84 points today (after a rather riotous session which saw it plunge almost 300 until nearly closing) with energy being the biggest loser with oil down more than 2 percent.  The continuing negativity today was the result of the market once again focusing on trade wars, which had been conveniently ignored in sessions earlier this week, but with today’s renewed tariff threats against China and China’s renewed threats of retaliation, the companies most vulnerable to trade war worries all plunged.  Then there was the triple whammy of the so-called “quadruple witching” effect as the simultaneous expiration and repurchasing of options and futures contracts caused volume to artificially soar to the highest point since February with nearly 10 billion shares exchanging hands.  So Monday will prove a more accurate picture of the effects of these tariffs and tariff retaliations on the market. 

Nasdaq hits new closing high, S&P 500 gains after ECB decision, U.S. data

It was yet another erratic day with the Dow up about 130 through much of the session and down as much as 60 late to have a very late recovery to close 25 down at close.   Despite closing down a bit, there was generally good news all around:  the Nasdaq hit another record, retail sales way up, the ECB will not hike rates any time soon but will end its bond purchasing this year, unemployment rolls at a 44-1/2 year low and Comcast outbidding Disney on Fox with a 20 percent premium.  Even the Fed’s decision yesterday to likely to have four hikes this year was greeted with optimism since four hikes only means the economy is doing great.  So it was another crazy day with nothing but good news but the index still sank, and the financial sector is still not feeling the good vibes that should be coming from an interest rate hike.  Well, tomorrow is another day.  Volume was right in line with recent averages at just over 6.7 billion. 

Wall Street falls as Fed signals two more hikes this year

Despite the 120 point drop in the Dow today after the Fed announced another rate increase and made it likely there will be four increases during 2018 instead of the hoped for three, but the fact is the index was up 40 points as late as 3 pm before plummeting drastically in the last half hour.  This just means that investors are digesting a lot of information and that, with the swings being what they’ve been we could just as easily see a 3-digit rise tomorrow as not, especially since the impact of the rate increase has not yet hit the financial sector.  It does however look now like the Fed will finally hit its 2 percent inflation target this year, and that is very good news.  The sooner that happens, the sooner the market volatility will start to calm down after over ten years of schizophrenia.  Volume was above average at 7.1 billion. 

S&P 500, Nasdaq end higher; investors turn focus to Fed

Just as yesterday was a 100 point swing day ending just a couple points in the black, today was a 100 point swing ending just a couple points in the red.  The market seems to have shrugged off the Korean summit, though it was unclear from the report whether the agreement reached in Singapore came before or after press time.  Perhaps there will be a market reaction to it tomorrow after all.  But as for today, it was a repeat of yesterday with investors much more concerned about the central banks than any other single factor.  We’ll know a lot more about that tomorrow but – spoiler! – don’t expect any earth-shattering news.  Volume was very close to the 4-week average at 6.4 billion. 

Wall Street ekes out gains ahead of Singapore summit

Don’t let the small advance fool you; the Dow was almost a hundred points ahead in mid-session before settling at close at near break-even.  The contentious G7 meeting has been shrugged and now investors try to decide whether to bet on good news or bad news in Singapore.  But as stated before, expectations are so low that unless we actually go to war there won’t be much disappointment.  The positive takeaway is that North Korea is actually willing to talk.  But the market is really looking much more to how things will go down with the central banks in the U.S., Japan and Europe this week.  Volume was below average at 6 billion. 

Succinct Summation of Week’s Events 6.8.18 (plus Social Security and happiness)

It's time for the week's summation which this week includes that for the first time in history household net worth in the U.S. is over $100 trillion dollars.  The flip side of that is the almost equally big negative, that being that there are 6.7 million U.S. jobs which cannot be filled due to lack of qualified workers, pointing to a failing in both the educational system and immigration policy, problems that have long been debated and will continue to be so.

Wall Street rises, investors eye Fed decision, summit fears ebb

Tonight is the post I was too tired and too late to make last night with the 75 point bump in the Dow … and now I know why.  It seems expectations for both G7 and the Korea summit are so low that the market is just shrugging them off and focusing once again on the overall strength of the economy.  At just 6 billion, volume is a little on the light side ahead of next week’s meetings of both the Fed and the ECB.  The Fed is expected to announce another rate hike, but the real drama will be looking for clues about what the Fed has in mind for the rest of the year.  And the question from Europe that will be debated at the June 14^th ECB meeting is whether their bond purchases will end this year or continue into next.  Enjoy your weekend. 

Dow rises ... again

Today I was in Chelsea all day spending some quality one-on-one time with my ailing uncle who has just turned 100.  The official family party is on Sunday but, anticipating that the weekend celebration will exhaust him, I went today to have private time with him.  He is my last surviving uncle; I lost my last surviving aunt a few months ago in Kansas City where she passed away quietly at 96.  It’s been quite an exhausting day and I got home much too late to recover the daily Reuters market report so, for tonight’s entry, I am including only the numbers.  From the chart it looks like the Dow was in the red most of the day but recovered to close 75 up.  I will endeavor to find a report for tomorrow’s entry. 

S&P, Nasdaq fall as tech rally loses steam; Dow rises

There was profit-taking in the tech sector that brought the Nasdaq and S&P down after a fairly incredible week of three consecutive record highs.  But on the Dow, a flight to safe assets such as consumer staples, utilities and telecommunications due to continued tensions over global trade took the Dow up another 95 points.  That’s a surge of over 600 points so far this week.  Crude was also up 2 percent over renewed concerns on diminishing supplies.  Volume was above average at 7.2 billion. 

Wall Street rises on economic data, easing trade worries

Some days the market decides to focus on the trade wars and the indexes plummet.  Other days the focus is on all the strong economic news that is out there and the tariffs go on the back burner – and the indexes soar.  Today was an example of the latter with the Nasdaq reaching a third consecutive high, but it also helped that China is making an offer to defuse a trade war.  Treasury yields also rose which generally signals accelerating economic growth.  All in all, it was enough to boost the Dow a big 346 points.  Volume was a little above average at almost 6.9 billion. 

Nasdaq ends at record close, S&P edges higher on data

It was a day of selling with investors, despite relatively good economic news from the services sector and political news from Italy, still ran for shelter against the impending trade war which saw the Dow drop 110 points before rising again and finishing almost even.  Amazon boosted the Nasdaq but U.S. food packagers suffered with Mexico’s tariffs.  The VIX closed at 12.4, its lowest since January.  At just under 6.6 billion shares, volume was close to the 4-week average. 

Tech rally helps Wall Street push higher, Nasdaq has record close

A second consecutive session with a 3-digit rise in the market with strongly performing Apple and Microsoft pushing the Dow up 178 and the Nasdaq to an all-time record, continuing to signal strong economic growth.  Also the market continues to ride high on Friday’s good job data so, for today, trade war fears were on the backburner.  Volume was right in line with the 4-week average at 6.5 billion shares traded. 

Succinct Summation of Week’s Events 6.1.18 (plus the price of gas)

It is time for the weekly summation, the positive being that average weekly wages rose 3 percent, the best in 7 years.  But this sort of goes along with payrolls being 33,000 higher than forecast, a 2.2% growth rate in GDP and unemployment falling to 3.8 percent.  The negative is the flip of the low unemployment rate, that is that nearly 20 percent of those unemployed constitute the long-term (more than six months) unemployed.  So there's still work to do and the guru who commented a few weeks back that "everyone who wants a job has one" had better look a little deeper at the facts.  This Sunday's bonus is a very informative graphic that clearly shows in a single eye-shot why the price of gas is so much lower in the U.S. than virtually every other country in the world.  Hope everyone had a great weekend.

Hedge Funds Bear the Blame for Looking Bad

In our little group, we often talk about hedge funds so today's Big Picture post from Ritholtz was rather timely.  He interviews the manager who is regarded among the best with hedge funds in the business and in a rather informative and concise space, gives a pretty good primer of how hedge funds really work, what's right with them ... and what's wrong with them.  It's a brief and entertaining read.  Enjoy, and enjoy the weekend. 

Tech leads Wall Street's advance after strong jobs data

After yesterday’s 250 point drop over trade concerns with Mexico, Canada and Europe, the Dow rebounded today nearly 220 points with trade concerns seeming a little less urgent with calmer signals coming from Italy and the possible resumption of talks with North Korea.  This was coupled with a strong jobs report and other indicators of accelerating economic growth.  All of this points to the likelihood of four rate increases this year, something that would ordinarily spook the markets and drive stocks down but, today at least, nobody got spooked.  Volume was above average at just over 7 billion.