Wall Street rises on trade hopes; S&P, Nasdaq post best weeks in 7 years

The market has evidently made up its mind that Saturday’s meeting between Trump and China in Buenos Aires is going to end the trade war and responded enthusiastically by shooting the Dow up another 200 points.  The spark was triggered by a Chinese official who commented that “consensus is steadily increasing” and that, combined with this week’s dovish comments from Fed Chair Powell set the tone for a late session rally.  Volume was again quite vigorous at nearly 8.4 billion.   

Wall Street edges down as tech, bank stocks weigh

It was up and down a lot through nearly a 300 point range but in the end the Dow closed nearly even, just 27 down.  There was optimism over the newly dovish remarks from the Fed concerning a possible pause in future hikes but that was overshadowed by trade jitters.  And though there was hope about rates, the rate-sensitive financial sector still took a hit.  Friday and Saturday with the G20 summit, we’ll have a clearer picture of what’s going on with trade.  Meanwhile, volume was a little below average at 6.8 billion. 

Wall Street jumps as Powell hints interest rate hikes may taper off

I guess the market really, really doesn’t want more rate hikes as Powell’s statement today that the policy rate is now “just below” the ideal sent the Dow soaring a whopping 617 points.  There are still cautionary remarks regarding the trade war and other global tensions but overall the consensus was “there was a great deal to like” about U.S. prospects.  Other good news was that Q3 GDP had grown at a 3.5 percent annual rate.  All in all, every sector but utilities showed gains and volume was back at the fevered pitch of just over 8 billion shares traded.  

Wall Street reverses losses after White House adviser's trade remarks

It was another 3-digit gain today with the Dow rising another 108 points after yesterday’s 354 point buying spree.  But the day didn’t start that way but rather with a 200+ point dive right out the gate over GM issues and trade war issues.  Then came another White House announcement from Kudlow hinting at optimism over the coming meeting later this week at the G20 summit and it was all on the rise for the rest of the day after that.  It is hoped the trade war issues will be put to rest at the G20.  Eyes are also very much on Fed chair Powell’s upcoming speech on Wednesday.  GM took another hit today with Trump threatening to cut subsidies if the planned plant closures go forward, but analysts largely believe this is empty rhetoric.  The sentiment is that GM is doing what it must be doing to survive and Trump of all people should get this.  Volume is still considerably below the 4-week average at just under 6.8 billion, probably because the market is waiting to see what happens with both the Fed and the G20. 

Wall Street rallies as Cyber Monday shoppers log on

There is always a cautionary note on a short holiday week not to take market movements that week too seriously and that certainly proved to be the case for last week when today, with everyone on Wall Street back from vacation, it was a buyer’s market that shot the Dow back up 354 points.  Today we had the biggest Cyber Monday on record with $7.8 billion spent in the U.S. and Amazon and the retail sector coming back.  Even crude was back up as last week’s worries about the glut has now turned into this week’s concerns about a shortage.  But the biggest news came from GM with its biggest cuts, plant closures and layoffs since its bankruptcy a decade ago.  (And my dreams for my next car being a Buick LaCrosse have now been crushed.)  Q3 is just about over with 78 percent of the S&P beating forecasts.  Next up is the Buenos Aires G20 Summit this Friday which the market heavily hopes will result in an end to the Chinese trade war.  But as the White House announced today that more tariffs are coming against China, we might see another sell off tomorrow as that’s what happens every time a new tariff is even hinted. So let’s not celebrate too early.  Today’s rally was on volume of just under 6.7 billion which is well below the 4-week average of 8 billion.  So the jury is still out. 

Succinct Summation of Week’s Events 11.23.18 (plus the fall of FAANG)

Below please find the usual weekly summation with not a lot of positive on the list and the big negative being the biggest weekly percentage losses on both the Dow and the Nasdaq since March and the S&P officially entering correction territory having lost this week 10.1 percent of its value since hitting its high in September.  But since this was an abbreviated week with light volume, these figures don't really reflect the whole story and we will need to wait for everyone to get back from vacation next week to see if things are as dire as they look.  If history is any indicator, things will be looking up.  The bonus this week is a scary picture of what's happened to all the FAANG stocks since early September.  This graphic sort of goes hand-in-hand with all the bad news this week.  Hope everyone enjoyed the relatively nice holiday weekend because it looks like a mess of a wintry mix coming our way starting tomorrow. 

The Market’s Been Falling. I’m Putting My Money in Stocks Anyway.

Given the bath the market has taken in the last couple of weeks, I thought it might be appropriate on this long holiday weekend to put some perspective on this "calamity."  Below please find an article from the November 16th issue of the New York Times which may offer some comfort to the afflicted.  The title explains it all.  Enjoy the rest of the weekend.  Sunday is likely to be the last pleasant day we have for a long while. 

Wall Street drops, S&P 500 confirms correction

There was another 3-digit sell off today in a shortened session that ended at 1 p.m. as the few traders who are not on holiday continued to struggle with the question of slower growth next year.  The Dow closed down 178 and both the Dow and Nasdaq suffered their greatest weekly losses since March.  The S&P now down today officially 10.2 percent from its September 20^th high is officially in correction territory.  The good news is that a big chunk of this dive was due to the continuing fall in oil due to supply glut, but that may be very temporary as major producers are in the midst of talks about cutting output.  The better news is that holiday volume is down to a piddling 3.4 billion shares so it’s safe to ignore what happened today.  A clearer picture will come next week when everyone gets back from vacation. 

Cryptocurrency has no place at the table…

Happy Thanksgiving everyone!  And for a little humor on this kickoff to the holiday season, may I present the following graph posted this morning on Barry Ritholtz's Big Picture web site showing the disastrous trend that bitcoin has taken since last Thanksgiving when it was being hailed as the next gold mine.  Of course the running joke on this and every Thanksgiving by the late night comics is that the big meal is always the milieu for big family arguments.  Thus we are being cautioned this Thanksgiving that perhaps it would not be wise to bring up the subject of cryptocurrency at the dinner table this year. 

S&P 500 gains with energy, tech but ends near day's low

The day actually got off to a very promising start, the Dow being up almost 200 points all day long until the last hour when everything came crashing down again and the index ended even.  Yesterday, there was the prediction that the sell off was near an end and that’s what it looked like all day.  Apple again was what was driving the buying spree and with tech coming back so did retail and even oil.  Then Apple lost all its gains at the end as did the entire Dow for the day.  But energy did well rising 1.6 percent with the push from oil and retail surged, especially Footlocker which got kicked up nearly 15 percent.  And there was yet another new report going back to the original optimist scenario that the Fed might be pausing the rate hikes in the spring.  But as is always the case for the day before Thanksgiving, volume was light at just 6.5 billion.  At least there was no further sell off today so maybe yesterday’s prediction was not that far off.  Maybe Friday will give a clearer picture; or maybe not. 

Wall Street sells off again as retail, energy struggle

For the second day in a row things got really ugly with all the indexes falling enough to wipe out all the year’s gains, the Dow alone plunging a whopping 551 points.  Apple alone dropped nearly an additional 5 percent making its losses since its October 3^rd high $250 billion dollars, or down nearly 25 percent.  And as Apple goes, so goes the rest of tech.  Retailers also got hit hard as a consequence of giants Target and Kohl’s putting out bad profit forecasts.  This added to caution following the downfall in tech.  All of this signals a 2019 which may be shrinking so the sell off is anticipating this.  And after allegedly good news from OPEC last week, oil got hit too on reports of rising global supplies.  The one sign of good news:  “high volume on a bad day usually means an initial sign of capitulation and that the sell-off may be near an end.”  One thing is for sure – this is not the usual holiday week when things typically slow down.  Quite the contrary, volume was furious at 9 billion. 

Wall Street tumbles as Apple, internet stocks swoon

It was another major rout today on all three indexes when Apple announced a cut in production of all the new iPhones due to lack of demand.  Apple’s stock today is now down nearly 20 percent from its October high and S&P tech today alone lost nearly 4 percent.  All the FAANG stocks dropped sharply and collectively they have underperformed the S&P by more than 16 percent since September.  The Dow slid nearly 400 and part of that was today’s takeback from the Fed contradicting Friday’s statement that there might be a pause in the hikes.  Not so they say today.  And the trade war stress that was momentarily relieved last week on word that tariffs too might be put on hold was knocked down this weekend with the double whammy of Asia-Pacific talks failing and VP Pence doubling down on tough talk.  All in all, not much went on today to encourage buying but, at least with it being a holiday week, trading was light at just 7.7 billion. 

Succinct Summation of Weeks Events 11.16.18 (plus corporate bonds)

The usual weekly summation is posted below, the biggest positive that the Fed may be getting ready to announce a pause in rate increases, something I'm not at all sure is wise but will certainly be most welcome by the market.  The biggest negative might also be taken as a positive, that is the Brexit chaos.  It's a negative because it is chaotic, but a positive from the point of view that all this mayhem may just lead to Britain having a change of heart, which would be good for them, the EU, and the rest of us.  This Sunday's "a picture is worth a thousand words" graphic shows in one eye-shot the state of corporate bonds and the unfortunate fact that more than half have now been downgraded to BBB.  But though they represent only about 1/2 trillion dollars, there are still a fair amount of AA and AAA issues out there to consider.  Looking forward to the short week ahead. 

A Closer Look at the Level3 Passive Portfolio's ETFs

For our weekend reading I have once again stumbled onto an article from the November issue of AAII magazine exploring the ever popular Level 3 investing strategy, this time with the emphasis on passive portfolio ETF's.  I'm assuming most or all of you are AAII members with access to the rest of this article.  Have a good read and have a good weekend. 

S&P, Dow advance on trade optimism; Nvidia sinks Nasdaq

So the market enjoyed another 3-digit rally today with the Dow up over 120 points as yesterday’s news of Trump putting a hold on further Chinese tariffs continues to sink in and give investors hope of containing this trade war.  A statement from the Fed Vice Chair that interest rates may be nearing their “neutral” rate also lent support.  Energy also got a lift from reports that OPEC may be cutting output next month.  But the biggest winner was the beleaguered PG&E with the California commission issuing a statement that the giant utility might still be spared bankruptcy even if found culpable for the fires.  Their stock came back a whopping 37 percent today.  Volume continues very brisk at over 8 billion. 

Wall Street climbs on hopes of easing trade tensions

Today the Dow recouped all of yesterday’s losses when a report surfaced that the next round of Chinese tariffs were on hold.  Though the report was quickly denied by the U.S. trade rep who allegedly made it, investors nonetheless remained positive and continued the buying spree.  The message: “the market is absolutely primed for any piece of good news it can get a hold of.”  Yes, facts be damned; let’s go with the rumor instead.  The buying spree was also helped by the tech index which came back 2.5 percent, which in turn was helped by Apple which also coincidentally came back 2.5 percent.  The one company that remains in big trouble is PG&E after yesterday’s statement that if their faulty equipment is found to be the cause of the California fires their insurance won’t cover the losses.  For the second day, the company stock suffered a huge loss of nearly 31 percent bringing their two-day loss to a catastrophic 52 percent.  Volume was again very high at nearly 8.7 billion. 

S&P 500 falls for fifth day as financials drag

The market keeps going down and down this time with another 3-digit loss on the Dow as a preemptive strike against feared Democratic regulations against the banking industry come January.  And what are the Democrats threatening: higher capital and liquidity requirements for the banks to avoid another meltdown.  In another era, this would have been the Republican playbook so it’s always strange how one party’s policies become another party’s when the power paradigm shifts.  And then the party of the first part changes its mind! 

S&P, Dow lose ground as crude plunge punishes energy stocks

It was quite the rout yesterday and straight down.  Today volatility was back with the Dow swinging back and forth in a 270 point range but settling at close 100 points down.  The problem once again was the global exposure of U.S. companies, today Boeing being the victim going down over 2 percent and providing the biggest drag on the Dow.  Aside from that, an over 7 percent decline in crude proved the heaviest weight on the S&P.  The overall sentiment is that, despite some occasional signs of hope, the tensions with China “reflects an unsuredness and lack of direction” in the market.  But GE had a bit of a comeback unveiling plans to raise $4 billion dollars to start paying off its debt, boosting the share price almost 8 percent.  As Q3 approaches closure, 77 percent of the 91 percent of companies that have reported have beaten estimates.  Volume was 8.2 billion, after the holiday back very close to the 4-week average. 

Apple, Goldman Sachs send Wall Street tumbling

Well, the late session recovery that started on Friday most certainly did not extend into the new week with panicked investors going on a major sell off dropping the Dow 602 points.  Once again, Apple’s exposure to global markets is what triggered it all, Apple dropping 5 percent and taking the whole semiconductor index with it.  Goldman Sachs also got pushback from its global commitments, particularly Malaysia, which dropped the bank 7.5 percent, making it the biggest drag on the Dow.  The holiday muted trading somewhat but it was still pretty vigorous at 7.3 billion, though below the 4-week average of 8.4 billion.  The beleaguered GE was also back in the red today, falling nearly 7 percent on news of its increasing debt. 

Succinct Summation of Week’s Events 11.9.18 (plus safe, respectful workplaces)

The time has again come for the weekly summation, the biggest positive being -- Hurray!  The Midterms are over!!  Divided government is good.  And, best of all, no more robocalls!  Other good news included stocks bouncing half way back from the October lows and 7 million new job openings.  The negatives are pretty much same old, same old.  Yes, rates are likely to go up again next month and, of course, the flip side of all those new job openings is that there are not enough qualified workers to fill them. 

Principles for Navigating Big Debt Crises

The Marias submission for this weekend is a 55 minute audio interview with Ray Dalio of Bridgewater Associates as interviewed by Barry Ritholtz discussing the entire U.S. history of debt crises and, more importantly, his new book published November 1st outlining his strategy for how to not just recognize the next debt crisis but to protect yourself from it.  The big bonus is that this book that is available for $30 on Amazon can be had here as a free download.  And if you don't have time to listen to this recording or read this book, you can go to the Amazon listing and for $7 purchase a published summary of this book.  Anyway you do it, the information sounds valuable.  Enjoy your weekend.

Oil slide, China worries send Wall Street tumbling

With a new report today showing the Chinese economy continuing to slow, the global markets were sent into a tailspin and Wall Street went along for the ride, the Dow falling 202 points.  But as late in the session as 2 p.m. it had been down some 300 points so maybe the late session recovery will continue next week.  Oil continues to fall so with election worries behind us we’re now back to the conventional wisdom that oil runs the market, which has sent the energy index down more than 2.5 percent in the last two sessions and spooked investors on any risk taking, sending tech and particularly Apple down almost 2 percent.  Volume remains high at 7.9 billion though still below the fevered pitch averages of 8.4 billion that have dominated the pre-election averages of the past four weeks. 

Wall Street falls after Fed statement, energy shares tumble

The 10 point gain made in the Dow today may suggest that investors are taking a breath after such a strong run-up yesterday.  But it’s not at all what happened.  The chart clearly shows that we were back to volatility as usual with the index up and down all day in a 200 point range and, though it was in the red in the beginning and end of the session, at least it closed near break-even.  Everyone was looking at the Fed today and nothing unexpected happened; they said what we knew they would say – they’re keeping an eye on drags on growth but are still looking at another rate increase next month.  Is that really a hawkish position?  Some investors think so.  Bank stocks were up in anticipation of the December hike.  But mostly everyone is now back to wait-and-see mode on the trade war and volume, though by any other standard would be called high at 7.2 billion, is anemic by the standards of recent weeks. 

Wall Street rallies on U.S. elections; tech, health stocks lead

Just about everybody found some justification for declaring victory in the midterms so investors on both sides of the aisle enthusiastically pushed the Dow up 545 points with almost no arguments.  The curve was quite unusual today – straight up!  The wisdom now – and history does back this up – is that a divided Congress may actually prove better for business now that checks and balances are back in place and everyone will be forced to negotiate.  And there were things to like for both sides – voters approving Medicaid expansion was a boost for health insurers and a rejection of tougher rules for oil and gas boosted energy.  Volume was again very robust at 8 billion but a little below the elevated averages that have been dominating the market in the past few frenetic weeks.  There has been a sigh of relief that the election is over – the VIX went down to its lowest in a month. 

Wall Street gains as investors look to U.S. elections

Election Day and it appears that both sides feel optimistic that things are going to go their way as investors on both sides of the aisle went on a buying spree pushing the Dow up another 173 points.  So, as I mentioned yesterday, tomorrow will be the real test.  But at least today everyone was seeing green, already pricing in the likelihood that the Dems will take the House and the Reps will keep the Senate.  But volume was relatively muted at 6.8 billion so trading was light pending tomorrow’s news. 

Wall Street boosted by financials, energy, defensive sectors

Today’s rally (all day in the black and straight up) brought the Dow back up 190 so yesterday’s losses were recouped on a scale of nearly 2:1.  On the eve of election, investors retreated to the safer stocks like real estate, utilities and consumer staples.  And though volume was still quite healthy at 7 billion, it was lower than the recent elevated averages which points to caution before the election.  Apple was once again the biggest drag having its biggest two-day loss in nearly six years.  Caution is also advised ahead of the Fed meeting later this week.  But Wednesday’s going to be the really big day. On Wednesday, we’ll know how the vote went. 

Succinct Summation of Week’s Events 11.2.18 (plus Trump the Revealer)

The usual weekly summation is below, the positives being payrolls and hourly earnings up with the inevitable flip side being that p+e = likely continued rate hikes.  With what is likely the most important election in many years coming up on Tuesday, this Sunday's bonus is today's very good non-partisan analysis of Trump courtesy of Barry Ritholtz.  As noted, he did the same thing with both Bush and Obama so now it's Trump's turn but he does so with surprising objectivity and perspective.  It's an ideal commentary for election week. And anyone who dares not vote because of the rain that's due on Tuesday will deserve what they get.  Historically voters do tend to stay home when there is inclement weather but I have a feeling that Tuesday will make history for both the weather and other things. 

Never Send a Hawk to do a Dove’s Job

After an October that was basically ripe enough for the record books, for this first weekend in October I submit still another perspective on the Fed and interest rates courtesy of our guru Barry Ritholtz of The Big Picture blog, this one reprinted on Friday's blog and originally published on Bloomberg October 26th.  It's a short read and quite informative.  Enjoy this rare dry weekend we're having. 

Wall Street snaps three-day rally as Apple falls, trade optimism fades

It was mentioned in yesterday’s post that Apple turned in a disappointing Q3 report after the market closed so there might be a dip today.  That is just what happened with the Dow initially up some 60 points but then diving 500 by 2 pm and then recovering to a 109 point deficit by close.  As you might guess, this was attributed almost exclusively to Apple’s report that sales were expected to drop in Q4.  The FAANG giant tumbled 6.6 percent bringing the company down below its landmark $1 trillion dollar value.  Also contributing to the day’s malaise was Larry Kudlow throwing cold water on the hopes of making a deal with China, citing that Trump had not yet even asked his advisers for a plan for a proposed trade deal.  Other data was very positive with job growth up sharply in October, Chevron and Starbucks turning in great Q3 reports, and 78 percent of S&P Q3 reporting beating estimates.  As has been the case lately, volume was very high at 8.9 billion. 

Wall Street climbs for third day, trade optimism helps

Now for a third consecutive session we’ve had triple-digit gains, today even a little bit better than yesterday with the Dow climbing another 264.  A few days ago, we had a very serious rout when the White House put out the statement that we might be having trouble with China.  Today the statement was that things with China were “moving along nicely” and that’s all it took to start another furious round of buying.  Q3 still solidly in command helped too with 77 percent of 348 of the S&P companies beating estimates.  After taking a substantial beating, the Nasdaq has had a 5.4 percent lift in the last three sessions, its biggest 3-day gain in 2-1/2 years, but not to be too rosy about things since the S&P has had its worst month in seven years.  (In other news Apple is reported to have turned in a bad Q3 after today’s closing bell, so we might see a dip tomorrow.)  Volume remains very high at 9.1 billion.