Succinct Summation of Week’s Events for 3.29.19 (plus humorous California vanity plates)

The weekly summation is once again provided below.  The positive about the Mueller Report failing to cause a rift in the space-time continuum, though a humorous observation, is quite premature since no one has yet seen it (or maybe that was the point.)  And the one thing that has been dominating the news all week but ended up in neither the positive nor negative columns was the yield curve inversion.  That may be because, after driving the price of stocks down the past ten days, the inversion ended on Friday but, like the Mueller Report, tomorrow may bring an entirely different set of news.  And while we are entertaining humorous sidebars about Mueller, the bonus this Sunday is a humorous article from Los Angeles Magazine about some of the more hilarious vanity license plates that have attempted to pass snuff with the California DMV.  I've included a jpeg of four of them but go ahead and click on the link provided to see a great many more and the (legit?) reasons the applicant gave for why they wanted it and the (mostly) perverse readings the DMV had on each as the basis for their denial.  Enjoy April Fools!

AAII Investor Update Yield Curve Inversion

Two days ago the article I've posted below was a lot more newsworthy but given the fact that the yield curve turned slightly positive on Friday, it may be old news already.  But probably not.  That's why when I saw it on Thursday, I bookmarked it since (a) it provides a pretty good explanation as to the history behind this inversion and (b) offers their own optimistic conclusion that we are not heading for recession.  It's well worth the read and there's a pretty good graph that goes with it.  We're having another chilly weekend.  March is supposed to go out like a lamb?  Says who?  The inversion curve is supposed to be a harbinger of recession?  Says who?

Trade hopes lift Wall Street; S&P 500 notches best quarter since 2009

There was another big rally today with the Dow getting a 212 point boost based on two principal developments: (1) After months of trade war, there is a new optimism that it will soon end based on talks currently being held in Beijing and continuing next week in Washington, and (2) that pesky yield curve between the 3-month and 10-year bond, after being inverted for five consecutive sessions, turned positive again on Friday, if only slightly.  And even though through most of this week we’ve had nothing but doom-and-gloom reports about the future of 2019, Q1 has in fact turned in its best performance since 1998 and, for this week alone, all major indexes are up 1 percent or more.  Yet Q1 reporting, which begins next week, may still be registering the first profit decline in 3 years with earnings expected to fall almost 2 percent from last year.  But let’s be mindful of the fact that these forecasts almost always lean toward the negative … and then pleasantly surprise us when the actuals come.  Volume was close to average at 7.4 billion. 

Wall Street ends up as yields, trade optimism rise

Except for a brief downturn around noon, the entire day was in the black with the session starting about 90 points up and closing about 90 points up.  Concerns about Q4 GDP falling below 3 percent and corporate earnings not rising for the first time in two years sparked the downturn along with the inversion curve which has now persisted for five days.  Yet it continues to reverse and though it may not be indicating the end of the cycle, some feel there’s not much room left in this cycle.  The afternoon optimism was triggered by renewed China talk hopes as a fresh round began in Beijing and will continue next week in Washington.  Volume remains below average at 6.2 billion. 

Wall Street ends down as Treasury yields fall on slowdown worries

It doesn’t take much to spook the markets.  Yesterday the index rallied because the 3-month went down and the 10-year went up, not enough to completely reverse the inversion, but pretty close.  Today, both of the bond yields rose again and, even though the 3 month rose only 1/10^th of 1% more than the 10-year, the Dow spent the entire morning over 230 points down before rallying all afternoon being at break-even just a few minutes before close but then falling another 32 by close.  The good news for the day is that housing stocks got a boost when the No. 2 home builder said it expected the market to improve. Mortgage applications were also up 9 percent last week.  Volume remains below average at 6.9 billion. 

Wall Street climbs as financials snap five days of losses

The rally we thought would happen yesterday instead happened today with the Dow aggressively in the straight up black all day closing up 140 points.  The primary trigger was the 10 year T-Bill rate rising while the 3-month fell, thereby narrowing the inversion yield curve considerably.  With the bond market stabilizing, investors became more confident that we were getting back to normal, though that inversion curve will still be watched like a hawk.  Other positives included a boost in the energy index as OPEC cut supplies. Negatives included Apple down 1 percent, weak consumer confidence numbers and home building falling more than expected.  (Funny, just last week it was reported that home sales were up 12 percent; who are we supposed to believe?)  Volume was below average at 6.5 billion. 

S&P 500 slips with Apple, lingering fears on global growth

After yesterday’s panicked sell off, the market went schizophrenic today bouncing back and forth between elation and depression as the Dow was at various times a hundreds points down and a hundreds points up, but finally settling at near break-even 14 up.  The 10-year T-bill was once again inverted against the 3-month which, if it persists, will be taken by investors as a signal of impending recession.  Adding to the bad news was Apple taking a hit for introducing its new streaming service, seen as a bad move into a crowded market.  But this was offset by the good news of new talks with China scheduled for March 28^th and gains for Home Depot and Amazon.  Volume was below average at 6.9 billion. 

Succinct Summation of Week’s Events 3.22.19

Sun 3-24-19

Tonight it's going to be short and sweet as I just got back from throwing a small private birthday party for my feisty next door neighbor who has done me a lot of favors (of course, I've done her a lot of courtesies too) and who turned 78 today.  So since I haven't had time to do anything I'm keeping this short and sweet tonight with just the usual summation and no bonus, as I've had no time to look for one.  The summation is below with the main positive being home sales rising nearly 12 percent, and the main negative being that pesky yield curve inversion.  The Mueller report has been listed as both a positive and a negative but until we have many more details, it's still far too early to know with any certainty which side of the ledger it's going to fall on.  All we know so far is that the report says something like there's no evidence to support a charge of collusion, but the President is not exonerated -- whatever the hell that means!  As I said, too early.

Financial literacy: An epic fail in America

For your weekend reading, this is a favorite topic of mine - financial illiteracy, which I happen to have always thought is abysmal in America and just keeps getting worse.  This article takes the same perspective and I am also currently reading a classic investments text, "Rich Dad, Poor Dad," for which this also serves as the central thesis.  This is a problem so serious and so critical that I believe solving it would go a long ways towards solving many other problems too.  Anyway, this 9 page article from the March 2nd issue of Investment News, does an excellent of summing up the issue and offering solutions.  Enjoy the rest of your weekend. 

Wall Street tumbles on global economic slowdown fears

Yesterday the Dow rebounded over 200 points on reports of a sharp rebound in mid-Atlantic factory activity. Evidently, this good news was not typical of the rest of the country as today’s report showed weak U.S. factory activity overall for this month, with similar news coming from Japan and Europe. And once again that pesky inversion yield curve on Treasury yields popped up again where the 3-month T-bill was paying more than the 10-year.  This has been taken in the past as a sign of impending recession which sent the markets spinning downward.  The one voice of reason came from today’s expert at Princeton, “I would not leap to the conclusion that a recession is imminent” and “the yield curve has been exaggerated.”  This happened not too long ago and quickly reversed itself.  So the index dropped 460 points today and the VIX jumped to its highest in two months.  Once again, when calmer minds prevail, will we be seeing another big rally come Monday?  Volume was above average at 8.6 billion. 

Wall Street rises as Apple, tech shares climb

The sentiment expressed after yesterday’s 141 point drop was “The first reaction to a Fed statement is always the wrong reaction,” so did this mean we were to expect a rally when the market wised up?  That’s exactly what happened today.  With the release of reports showing falling jobless claims and sharply increased factory activity, the Dow zoomed 216 points, practically in a straight up line.  Apple, with its highly anticipated streaming service to debut next week, led the pack with a 3.7 percent bump, raising the entire semiconductor sector 3.5 percent.  At 7.6 billion, volume was right in line with the 4-week average. 

Banks stifle Wall Street rally following dovish Fed statement

The Dow spent most of the day in the red closing 141 down.  The best explanation can be summed up in a single sentence from today’s expert, “The first reaction to a Fed statement is always the wrong reaction.”  Indeed the Fed today did exactly what everyone expected – reaffirmed the continuing “patient” approach to rate hikes and even affirming that there will likely be no more rate hikes this year.  This is exactly what the market wanted, yet with but one sector that does not benefit from this policy – the banks – investors went crazy and sold off so many financial stocks as to bring the whole index down.  But as has usually been the case, soon the market will realize that this is after all good for most equities and will start buying again.  So look for another rally soon.  Volume was a tad above average at 7.7 billion. 

Wall Street gives up gains on news of troubled trade talks

I learned today why it doesn’t pay to check the market before closing time since as late as 3 p.m. it was in the black as it had been all day, up as much as 200 points at noon.  But it took a big dive after 3 (or rather after noon, but more after 3) and closed down 26.  Today China came back as the main trigger when reports surfaced that the Asian power was not really as happy with the Trump negotiations as we’d been lead to believe.  The pushback raised the ugly trade war fears again and that, added to another underwhelming economic report after a string of same lately, left investors skittish.  Ironically, Nvidia, a major chipmaker which should have been adversely impacted by the news, did well getting a boost of 4 percent.  Despite the trade war, the Philadelphia Semiconductor Index is up almost 22 percent this year.  At 7.3 billion shares traded, today’s volume remains a little below average. 

Wall St. advances ahead of Fed policy meeting

After spending the morning 65 points in the hole, the Dow rose gradually all afternoon to finally close 65 in the black.  Boeing once again was the main drag falling almost 2 percent adding to its more than 10 percent decline from last week.  Tuesday begins the Fed’s monthly two-day policy meeting and it is expected that their dovish approach to rate hikes will continue.  Also the prospect of more OPEC supply cuts sent crude to a four-month high boosting energy companies and the banks benefited by news of an uptick coming in IPOs.  Facebook, Amazon, Goldman Sachs and Citigroup were all up though volume was below the 4-week average at 6.8 billion. 

Succinct Summations of Week’s Events 3.15.19 (plus Flawed Retirement)

It's that time of the week again for the summation, this time on the positive side job openings up 1.4 percent and business inventories, new home sales, and the Consumer Price Index all meeting expectations.  On the negative side the increase in e-commerce sales toppled about 1/3 and durable goods orders about 2/3 while jobless claims rose about 2 percent.  The bonus this Sunday is a feature from Consuelo Mack's "WealthTrack" series on PBS that should be near and dear to all of our hearts -- avoiding the pitfalls of the retirement crisis - or - how to have a better retirement.  Hope everyone had a great weekend and a great St. Patrick's Day.

To Beat the Market, Invest Differently Than the Market

For your weekend reading this Saturday I submit this recent article from the AAII that suggests that an effective strategy for beating the market is to take a different approach than the market.  This has of course been the subject of numerous articles but this one is the latest and greatest.  For those of you who are AAII members, you should have no problem using the link below.  For those who are not, you may be allowed a free read.  Good luck and good weekend. 

Wall Street gains with tech; S&P 500 posts best week since November

Yesterday, the report of continuing talks with China scheduled for next month did little to move the markets.  Today it shot the Dow up 138 points and the S&P to its best week since November.  Even though an agreement is no longer expected by the end of this month, investors do expect a deal eventually and that was enough to lift everyone’s spirits today.  Boeing continued its comeback though it still lost over 10 percent for the week and a number of tech companies jumped after good reports.  Volume was quite vigorous and, at 10.8 billion, considerably above the 4-week average of 7.5 billion shares. 

S&P 500 slips amid U.S.-China trade uncertainty

Today’s trading was basically a wash as the competing interests of the months-long trade war and the subsequent hit to chipmakers, the sales of new homes falling, and the “rumblings” of new China talks late next month sort of canceled each other out.  The market has now decided that the key S&P resistance level of 2,800 will probably not be breached until we have good news on China and the Brexit.  And there was a touch of good Brexit news today as Britain voted by a large majority to delay the Brexit, though nobody, including them, seem to have a very clear idea at all about exactly what that means.  As investors await better news, volume is below average at just under 6.7 billion. 

Wall Street rises; Boeing up despite U.S. grounding of 737 MAX jets

On Wednesday the U.S. finally announced the grounding of all the Boeing MAX jets following in the wake of heavy global criticism of so many other countries doing it.  Nonetheless, it was taken as a positive for Boeing whose stock started going up again and, boosted by fresh new economic data endorsing the view of benign inflation, the Dow closed the session up 148 points.  For a while late afternoon, the index tumbled again when Trump said he was in no rush to do a deal with China, but then was bolstered by the British parliament voting, at least for now, against leaving the EU.  The 7.3 billion share volume was in line with the recent average. 

S&P 500, Nasdaq rise after inflation data, Boeing weighs on Dow

It was another down day with the Dow falling 150 points in the morning but then recovering to close down 96, all on a slew of bad news and this time the market was not immune to the problems from Boeing. The gains that were seen in the afternoon session were quickly tamped down with the overwhelming defeat of Theresa May’s Brexit deal by the British Parliament, leaving the future of America’s greatest ally in a state of marked uncertainty.  Volume was below the 4-week average at 6.7 billion.  

Wall Street snaps five-day losing streak despite Boeing's drop

Part of my commentary on Friday was, “Does this mean there’s going to be more buying on Monday?”  As it turned out, yes it did as the Dow shot straight up all day long to close up 200 points.  The tech sector, which today had been judged as oversold last week, bounced back in a big way, despite the crisis with the latest Boeing air disaster, which brought them down 5.3 percent.  Today’s rally was seen as yet another sign of continuing enthusiasm for equities and Trump’s new proposed budget boosting military spending drove up the defense companies, though this will undoubtedly be temporary as the budget has already been declared DOA in the Congress.  But overall, today’s performance, despite some bad news, is bolstering the belief that the bull market remains alive and well and this was reflected in the 7.1 billion share volume, just a tad below the average. 

Succinct Summation of Week’s Events 3.8.19 (plus The Bulls Are In Charge, But...)

Below is the usual weekly summary, this time on the plus side hourly earnings growing the highest in ten years and unemployment falling to 3.8 percent.  On the minus side payrolls rose less than expected and layoffs are at a 3 year high, which is probably part of why payrolls are down. Once again, the negatives seem to be a mirror of the positives.  The bonus this Sunday is a nice concise analysis from Heritage Capital Research showing all the technical models that support the point of view that on this tenth anniversary of this longest running bull market, the bulls remains alive and well, but ...  Hope everyone enjoyed their weekend. 

Wall Street's oldest-ever bull market turns 10 years old | Reuters

Today March 9th is officially the 10th anniversary of the longest running bull market in history.  So for your weekend reading I offer this salute to the bull market as published by Reuters a couple days ago.  There's one little glitch that I've never seen happen on Reuter's before.  For whatever reason, at least on my computer, the link only shows the article to a fraction of a second before flashing to a more or less blank screen. 

Wall Street extends losing streak after weak U.S. jobs data

The Dow dove over 220 points at open this morning on news that only 20,000 new jobs had been created in February.  This is in sharp contrast to the six-figure new jobs each month that has been the trend for some time now.  Did the economy completely stall last month?  Is this a portent of things to come?  These are the questions that haunted investors this morning until they reassessed the report and concluded that the weak numbers were justified as temporary flukes based on the very bad winter combined with the government shutdown.  Reassured by this conclusion, the buying started again and the day ended as a wash with the index down a trifling 22 points.  Does this mean there’s going to be more buying on Monday?  As is usually the case, the sell off was balanced by a spree of buying in the so-called defensive stocks – those stocks which investors always flee to as safe havens when other sectors are hurting – utilities, consumer staples, and real estate.  Volume was 7.1 billion, very much in line with the 4-week average. 

Wall Street drops for fourth day as ECB stokes growth worries

The Dow started out over 300 points down this morning and stayed down most of the day rallying modestly at the end to close 200 points down.  As has been the trend the past several days, the sell off is attributed to continuing concerns over weakening global growth and that the market, after a very strong rally to open the year, is due for a breather and for profit-taking.  There also continues the concern over the S&P and the breaching of the 200-day MA, which today was lost, and the impending breach of the magic 2,800 level, which today is further away than ever.  But the day’s biggest news was the ECB deciding to hold off on rate hikes and offer banks a new round of cheap loans.  Is this good news for the EU, or does it suggest that things really are slowing down over there?  From my own perspective, we’ve seen this happen so many times in the past ten years that doom-saying is entirely premature.  Volume was a little above the 4-week average at 7.8 billion shares traded. 

Wall Street sinks for third day as healthcare, energy slump

The Dow was just a straight shot down today, though at its low point it was nearly 200 points down but closed at a minus 133, and we are once again being counseled that, in the absence of positive news to serve as a market catalyst, everyone’s taking a breather and taking profits.  In other words, the consensus seems to be that the the market is now priced correctly so stocks are no longer bargains.  That pesky S&P resistance level of 2,800 is also being closely watched by investors as, though the 200-day MA has been breached, the 2,800 level has not.  The Fed’s “Beige” report came out today but only said what we already knew: slowing global growth and the 35-day government shutdown have adversely impacted the economy.  GE also continues to have bad news.  At 7.3 billion shares traded, volume was in line with the 4-week average. 

Wall Street slips as GE swoons, key market level looms

A very choppy day swinging back and forth through a 175 point range but finally closing just about even, today’s drama is blamed on GE which took a nosedive of 4.7 percent upon reporting net cash outflows countering positive retailer earnings.  Investors are also waiting to see if the S&P can breach the critical 2,800 level of which it’s been skirting for several sessions.  Contrasting with GE’s bad news, Kohl’s and Target both issued good reports.  The one piece of very positive news is that single home sales rose to a 7-month high.  As the market lurks in this wait-and-see mode, volume was a little below average at 6.9 billion. 

Wall Street drops after weak data, healthcare slump

The market opened on great optimism jumping 130 points right out the gate, but then going into an immediate dive falling 450 points over the next few hours but then recovering more than half of that to close 206 down.  All last week I noted that investors were selling because “trade optimism” had already been priced in.  Then on Friday that seemed to reverse with yet another rally based on trade optimism.  But today we were right back to selling based on the optimism already being priced in.  Is it priced in or not?  Does it matter?  The market runs on perception and perceptions change hour by hour and day by day.  There was some weak data today but today’s expert says that the real reason for the sell off was the S&P reaching the key technical level of 2,800 in intraday trading today.  Volume was above average at 7.9 billion. 

Succinct Summation of Week’s Events 3.1.19 (plus Celebrating Fed Independence Day)

Below please find the usual weekly summation with the credit side registering a 2.6 rise in Q4 GDP and home sales up 4.6% m/o/m, way above the 1% forecast.  The debit side is the Korean talks ending in a bust and factory orders up only 0.1%, way below 0.6% forecast.  The bonus this Sunday night is a 16 minute NPR recording detailing how the Fed obtained its independence from the White House on March 4, 1951 and why that has been a very good thing as we celebrate the 68th anniversary.  Hope everyone had a great weekend.  One more frigid ahead, then maybe spring?

O'Neil's CAN SLIM Revised 3rd Edition Approach

As we enter a new month and with spring and an end to this long difficult winter right around the corner, I thought it fitting to share the most recent update to the IBD CAN SLIM investment strategy as outlined by AAII a couple weeks ago.  As IBD has been the subject of much discussion in the past, this article presents a very good summary of the method. Since O'Neil's classic book on the subject is a considerable read, it might be better to start here.  Enjoy the rest of this nice if frigid weekend.  Spring in just 18 days! 

Wall Street rises as trade optimism counters weak data

I noted yesterday that the trend this week has been retrenchment over trade optimism as the sentiment had become that it was already priced into the market.  Today that was already reversed as trade optimism has once again taken center stage and boosted the Dow over 230 points, though slowing factory activity in both the U.S. and China softened the session though it still closed over 110 up.  Of further note is that today the S&P closed above the benchmark 2,800 for the first time since November 8^th and the index has now closed just 4.2 percent under the September record high and is up 11.8 percent for the year.  So there was more good news than bad but enough bad to cut the early gains in half.  Volume was quite strong and quite a bit above average at over 7.9 billion.