U.S. stocks edge downward as Wall Street takes a pause

There’s been a consistent theme in this week’s trading – retrenchment.  Investors have concluded that the market has handled all the trade optimism it can and, with new concerns about a pullback for Q1, there’s been a slow retreat while the market awaits better news.  Thus the Dow today spent the entire session in the red again with statements from Larry Kudlow leaving everyone flat whereas, a couple weeks, such a statement would have triggered a rally.  And though the good news that Q4 pushed GDP up 2.9 percent (just barely missing the 3 percent target) helped some, it wasn’t enough to close the index up.  Volume was above average at 8.2 billion. 

Wall Street steadies after Lighthizer, Powell, Cohen testimonies

The entire day was in the red starting right out the gate down almost 200 points before the market decided that Michael Cohen’s testimony was not producing any major bombshells.  I guess the market really is about perception since, depending on which side of the aisle you’re on, the day’s hearing was either the first step towards impeachment – or a complete Trump victory!  But the sentiment continues that all the good news regarding trade and rate hikes is already priced in so investors are now waiting for better news before taking more action.  But after the morning crunch, the Dow rose steadily to close 72 down and, at 7.3 billion shares traded, just about even with the 4-week average. 

Wall St. edges lower in choppy session

The Dow was in the red all day until the last hour or so when it briefly gained about 60 points but then just as quickly lost it all in the final minutes to close down 33 points.  Just as happened yesterday, investors were leery of continuing to chase trade optimism so took a pause in lieu of better news, which was not forthcoming today.  This was despite the fact the Powell declared a continuation of the “patience” policy but weak housing data plus some nerves over Cohen’s impending testimony overshadowed the good news, even the good news that consumer confidence was up.  Volume again dipped just a little below the 4-week average at 7 billion. 

Wall Street rises after Trump stirs China trade hopes again

It was almost another 3-digit day with the Dow up over 200 points before noon on continued trade optimism but then the market reversed course on the premise that the rally had topped out and that good trade news had already been priced in.  So it was steady decline all afternoon to end 60 points up.  But another rally may be coming tomorrow if Fed Chair Powell continues to endorse the “patience” policy on rate hikes, something of which investors are currently not sure.  The forecast for Q1 earnings also took another dip today down now to a 0.9 percent decline vs 0.6 last week.  This forecast contrasts with the one from early January where Q1 growth was expected to increase by 5.3 percent.  After a number of days of below-average volumes, Monday’s trades were very close to the 4-week average at just under 7.4 billion. 

Succinct Summation of Week’s Events. 2.22.18 (plus The Bulls vs The Bears)

Below is the usual weekly summation with all the indexes up and the S&P just 5% off its all-time high.  The big negatives continue to be all the political dysfunction for which there does not appear to be any end in sight.  The bonus this Sunday is an article from our friends at Heritage Capital Research published a couple weeks ago that does a pretty good job delineating the whole debate of whether it's the bulls or the bears who are winning (or may ultimately win) in this rather chaotic environment.  As always, the link provided will give access to some useful graphics that support the story.  Hope everyone survived the high winds today and that none of you are currently in the dark without power. 

Wall Street Journal: History Bodes Well For Stocks the Remainder of the Year

For your weekend reading, I submit the following commentary from Friday's Wall Street Journal showing how historical trends since 1931 demonstrate that the stock market will continue to do well for the rest of this year.  With 50 mph winds in the forecast for tomorrow, let's hope we don't lose power.  If we do, there won't be any postings.  So if you miss this tomorrow or Monday, you'll know why. 

S&P 500 posts highest close since November 8 on trade optimism

The 3-digit loss from yesterday’s session was more than made up for by a bigger 3-digit gain in today’s.  Continuing to cling to hope on the China question, investors shot the Dow up a rather respectable 181 points.  But March 1^st, whether it be a real deadline or a loose one per Trump, it is the date that the market will expect some tangible progress and if it isn’t forthcoming there will be a reaction to the downside.  So the end of next week will be more telling.  The S&P is now up 19 percent from the December low.  It’s been a good week with all three indexes gaining and nine weeks of gains for both the Dow and Nasdaq.  The sticking point right now is that, despite all the optimism on ending the trade war, the concern is that, with Trump, things have a tendency to suddenly change at the last minute.  So ending the trade war and stabilizing the Chinese economy is now seen as key to future market results.  At 6.9 billion, volume remains below the 4-week average. 

Wall St. breaks run of gains as economic data disappoints

There was no point during today’s session that the Dow was in the black and was in fact down almost 200 points as late as 3:30 p.m., though in the final half hour the index recovered to close down 103.  The sell off was due to a flurry of down data - from orders for capital goods falling, to existing home sales dropping to its lowest since 2015.  Whether it’s being driven by the harsh winter or the trade war is a question that’s hard to handle.  But it continues on the plus side that hopes for an end to the trade war and a dovish Fed contribute to the upside whilst a general slowdown in global growth sends it all down.  But the Atlanta Fed now says that the economy grew 1.4% annualized in Q4.  Volume remains below average at 6.9 billion. 

Wall Street ends up slightly as Fed minutes support cautious stance

It was another day of wild swings in a 140 point range and once again ending on the positive side and this time a bit more positive with the Dow up another 63.  Once again the trigger was the Fed reaffirming its policy of “patience” on future rate hikes but not giving any sense of how long that patience would last.  In fact, it seemed the Fed deliberately avoided saying that there would no rate hike later in the year.  Meanwhile, continued optimism over China helped the S&P boost to 18 percent from its December low and is now trading just 5 percent below its record close from September.  Weighing on the market was potential new tariffs on European car imports.  No volume data in today’s Reuter’s report but, per BATS, 7.5 billion shares were traded on all U.S. exchanges. 

Wall Street rises modestly on Walmart bump

It was another wild ride with the Dow swinging back and forth in a 140 point range but ultimately closing just about even.  After a 60 point dip in the morning, the rally thereafter was sparked by a good report from Walmart as well as good news from Amazon and Freeport McMoRan.  The continuing optimism that there will be a deal with China also helped in view of new talks that began today in Washington.  But after rising more than 140 points all afternoon, the gains were lost when the New York Fed issued a statement casting a pall on the current economic outlook, saying it would have to change before rate hikes resumed.  Ordinarily a statement of a delay in future hikes would be welcome news but today the market took it as a sign of impending trouble.  The forecast for Q1 earnings growth got gloomier too as it now stands at a 0.6 percent loss over last year, down from 0.5 on Friday.  Volume remains below average at just under 6.9 billion. 

The Third Monday In February

When I wrote my post last night, I did not think that President's Day was one of the federal holidays observed by Wall Street but, lo and behold, today I discovered otherwise.  Hence with the markets being closed, I will use this space today to do a little editorial on this President's Day holiday that is held every year since 1971 on this third Monday in February. 

Succinct Summations for the week ending February 15th, 2019 (plus Hedge Fund Titans)

Below please find the usual weekly summation with the big plus this week of market gains due to the new budget deal, the big minus that retail sales came in way below forecast - a minus 1.2 percent vs an expected plus of 0.1 percent.  Another minus that really should be a plus are jobless claims being up about 2 percent, but these were mostly residual claims from the shutdown which don't really count since they were both temporary and artificial. 

UNUSUAL INCOME OPPORTUNITIES

This week's episode of PBS's WealthTrack with Consuelo Mack may well be worth checking out as it explores the unusual income opportunities that have now presented themselves in the bond market via its interview with Kathleen Gaffney, portfolio manager of the Eaton Vance Core Plus Bond Fund, which carries a 5-star rating.  It should be 30 minutes well spent.  The link below should take you to the web site where you can watch the program.  Or just google WealthTrack.  Enjoy what's left of this cold but dry weekend. 

Wall Street rallies on trade optimism

Continued optimism over speculation of a positive resolution to the trade war kicked the Dow into high gear with a big boost of 443 points.  However, today’s expert cautions against “false hope” as there are still many “thorny details” to be worked out.  This was reflected in Deere’s poor Q4 report coming in below projections and specifically blamed on the slowing of global trade.  Put succinctly, “absent a tariff solution, growth will continue to slow.”  80 percent of Q4 reporting is now in with an earnings increase of 16.2 percent.  But today Q1 projections fell once again, estimates now at a 0.5 percent decline from last year, down from 0.3 yesterday and 0.2 Wednesday.  Amazon scrapping its New York plans hit both it and all the the FAANG stocks, all in the red for this session.  Volume continues below the 4-week average at 7 billion. 

S&P 500 slips as grim retail sales data overshadows trade hopes

After three up days, the Dow lost a little ground today when December retail sales were reported to have suffered their biggest drop in  nine years, dragging the index down 103 points.  This would make sense in view of yesterday’s report that consumer prices had not risen.  So the flip side about good news on inflation is that prices did not go up because of weakened demand.  Today’s weaker economic data has now lowered Q4 earnings growth to 16.2 percent from 16.6 just yesterday.  Q1 outlook remains unchanged at 0.3 percent year-on-year decline.  Volume was again below recent averages at just under 6.2 billion. 

Wall Street advances on trade hopes, tame inflation data

It was another 3-digit increase in the Dow today as market optimism over both China and a sign off on the border agreement boosted the index 117 points.  There was also encouragement from a report showing benign inflation indicating the Fed may hold rates steady for a while.  With two-thirds of the S&P reporting the Q4 earnings growth estimate has now been increased from 16.5 percent a few days ago to 16.6 percent today.  Q1 estimates remain at a 0.3 percent decrease from last year.  Volume remains below average at 6.9 billion. 

Wall Street advances on trade hopes, deal to avert government shutdown

It was just straight up today – a full 372 points on the Dow – with the market being uber-optimistic about a positive resolution to the trade war AND a sign off on border security to avoid the 2/15 government shutdown.  The main trigger today was Trump’s remarks that he was willing to let the March 1 tariff deadline with China slide with or without a new deal, which great allayed fears of the previously promised dramatic increase in tariffs.  Q4 remains on track with 71 percent of S&P companies beating estimates and Q1 got slightly more dour with the earnings growth projections now sliding from a 0.2 percent loss from last year to now a 0.3 percent loss.  Volume remains a little below average at just over 7 billion shares traded. 

Wall Street wavers as investors eye trade talks, growth fears

It was yet another very choppy day but at least the Dow stayed pretty close to even all session to finally close 53 down.  Optimism about negotiations with China plus a tentative deal on the border to avert another shutdown was still overshadowed by the lurking concerns of a global slowdown.  Still, Q4 continues to go well with 2/3 of the S&P reporting and 71 percent of those beating estimates.  Today’s estimate on Q4 earnings growth jumped to 16.5 percent from 15.8 percent, and growth for Q1 shrank from losing 0.1 percent over last year to now losing 0.2 percent.  This seems like such a miniscule thing to get into a snit over but there are always those in the market who need something to worry about.  Volume was quite a bit lower than the 4-week average at 6.2 billion, which sort of indicates that investors are waiting to see what happens with both China and the shutdown. 

Succinct Summation of Week’s Events 2.8.19 (plus A few Tips on Business Cycle Forecasting)

Below is the customary weekly summation, Jeff Bezos standing up to the notorious National Enquirer being the big winner in the credit column and the predicted decline of Q1 being #1 in the debit column.  The bonus this Sunday is a column from Friday's Big Picture blog about how business cycle forecasting is done, something that will help us all make better investment decisions.  It's going to be a messy snow and ice week so stay safe. 

Confessions of a Content Marketer

Your reading material this weekend is an article from Institutional Investor posted on The Big Picture blog giving some rather detailed insight into an area in which we all have an interest -- financial writing.  The author presents a rather thorough breakdown as to how all those white papers, prospectuses annual reports, fund brochures, newsletters and everything else financial designed to persuade us to invest get produced.  Knowing their tricks is a valuable tool to help avoiding their traps.  Enjoy the pleasant weekend.

S&P, Nasdaq edge higher as earnings offset trade fears

Though the S&P and Nasdaq just barely broke a two day losing streak, the Dow took another bath today losing nearly 300 points by noon before gradually edging up to close just 63 down.  More positive Q4 reporting accounted for much of the comeback as well as yet another announcement from the White House that Mnuchin will go to Beijing next week for another round of talks after yesterday’s letdown that Trump would not be meeting with China before the March 1^st deadline.  But the morning crash revolved yet again around market anxieties over the trade war and eroding confidence that it will be resolved satisfactorily.  

Wall Street slides on renewed U.S.-China trade fears

After over 350 points in gains over the last five sessions, the Dow took a 220 point plunge today after the White House threw cold water on the high hopes for a China trade agreement, after sending positive signals all week.  (Early in the session, it was even worse, the Dow being down nearly 400 points at noon before starting a long afternoon recovery.)  Also dampening market enthusiasm was the EU slashing growth forecasts for both 2019 and 2020 in its largest countries, resparking global growth fears.  All the stocks dependent on China took a big hit, especially semiconductors, and as is usually the case on troubling days, everyone took refuge in the defensive sectors, namely utilities and real estate.  Q4 reporting today was also disappointing, especially from Twitter.  So far, more than half of the S&P has reported with 71 percent beating estimates.  So Q4 continues to go well but Q1 is suddenly looming as barely break-even, the new forecast now shrunk to 0.1% earnings growth compared to a 5.3 percent projection last month.  For the first time in a while, volume was above the 4-week average at 7.89 billion.  At least today, investors are off the fence and a little more nervous. 

Wall Street rally pauses after underwhelming revenue forecasts

As today’s expert states, today there was “a void of catalysts for market gains.” So after two days of 3-digit gains, today investors took a breath with the Dow dipping a hundred points early on but then regaining all but 21, triggered mainly by videogame makers turning in poor Q4 reports.  The indexes remain near two-month highs but with trade talks still being very much in the lurch, many prefer the sidelines evidenced by the lower than usual volume of 6.7 billion.  The one bright spot was the semiconductor index which advanced 2.6 percent with residual optimism about China, now the main intrigue for the market.  The Fed chair was due to speak at 7 p.m. Wednesday so Thursday’s opening will undoubtedly reflect the reaction to that though, in all likelihood, Powell will simply have said, “stay the course.” 

Earnings send Wall St higher as investors eye State of the Union speech

Yesterday the market was up 175 and continuing on the same good feelings, today it was another 172.  More upbeat Q4 remains the primary driver with Estee Lauder and Ralph Lauren being the big winners.  Alphabet didn’t do too badly either.  There is optimism about reaching a deal with China and “the wall” issue, about which Wall Street could care less, will not cause another shutdown.  But mostly, after a terrible end to ’18, investors are thrilled that so far ’19 has gotten off to such a great start, the S&P and Dow both up 9 percent, the Nasdaq 11 percent.  Volume remains a little below average at 6.9 billion. 

Boost in tech shares sends Wall Street higher

There was no volatility in the market today. Indeed it was a straight up trajectory of 175 points triggered by sustained optimism over China that boosted the entire tech sector, with Apple and Microsoft rising 2.7 percent and the whole of the S&P tech gaining 1.6 percent.  Having dropped last year 20 percent from its September high, the S&P has now rebounded all but 8 percent.  Q4 continues going well with 71 percent of reporting companies beating estimates.  The projection for Q4 earnings growth has now risen to 15.4 percent and the forecast for Q1 is now just 0.5 percent.  Volume was below average at just over 6.5 billion. 

Succinct Summation of Week’s Events 1.1.19 (plus The Greatest Retirement Fear)

Below is the weekly summation, the positive being the Fed doing exactly what the market wants it to be doing and payrolls rising dramatically. The negative is that unemployment has risen .1% to 4.0%, but this isn't really a negative since it mainly means that workers who have long since dropped out are seeing enough optimism in the job market to get back in the swim.  And the big negative -- the next shutdown is in just two weeks.  The bonus this Sunday night is a link to the most recent episode of the PBS series WealthTrack, this week focused on the topic of The Greatest Retirement Fear. If you guess that the greatest retirement fear is running out of money, you would be correct.  Consuelo Mack's guests discuss this fear across all age categories.  Hope everyone enjoyed this nice warm weekend after that historically cold week we just had. 

AAII Different Than a Mutual Fund

Your weekend reading selection this evening is an article from Thursday's edition of the AAII newsletter suggesting a different way to invest in value stocks.  The link has the graphics.  Enjoy the wildly different weekend we're having versus last week. 

Amazon jitters offset upbeat jobs data on Wall Street

304,000 new jobs, nearly double what was expected, were created in January and thus pushed the Dow up nearly 200 points in the a.m. session.  Unemployment also rose to 4 percent but this was mainly due to the job market improving so much that those who had long since dropped out were now back in wanting to go back to work.  This 6-digit job increase went along with a report of increased manufacturing activity pointing to continued underlying strength in the economy.  But then things started going south when Amazon disappointed and this sent the heavyweight down and the entire retail sector with it.  At close, the Dow had lost all but 64 points of the gains.  China also reported that its manufacturing shrank for the second consecutive month.  Volume continued heavy at 7.5 billion.