Wall Street retreats from record on trade cloudiness

It was such a great Q3 day with Apple and Facebook both turning in stellar reports.  But the most spectacular development has been that in three short days the earnings forecast for Q3 has gone from a -2.0% (vs a -3.2% in early October) to an astounding -0.8% today.  (What are the bets that it’s going to be in positive numbers this time next week?)  But despite all this good news, the Dow still tanked 140 points and the culprit was good old trade war angst again.  Encouraging news yesterday and the index was up 115.  Today there’s a report that Chinese officials have doubts about ever being able to make a deal with Trump and the market sinks again.  As today’s expert comments that the rallies have been triggered by so much anticipation on the trade deal and that “this market would come in (sink) very quickly if in fact word got out the Chinese are completely walking away.”  So it’s all pins and needles until further notice.  Volume was quite brisk at 7.9 billion. 

S&P closes at record on Fed bump

The Fed did exactly what the market was expecting – another rate cut AND a lower target – which boosted the Dow another 115 and put the S&P at another all-time high for the second time in three sessions (as stated in the article, or put another way, the third time in four sessions). What further boosted confidence was the Fed statement that “monetary policy is in a good place” remaining open to what data shows them.  As today’s expert summed it up, “Flexibility is what the market wants to see.”  Q3 continues going well with 74% of the S&P beating estimates. So growth slowed less than expected in Q3 but, better yet, resilient consumer spending has allayed recession fears.  Volume was just under 7 billion. 

Wall St. dips after S&P notches record, Fed on deck

It was a day of well-deserved fence sitting as investors took a breather from yesterday’s rally and continued to observe the unfolding of Q3 which continues to go remarkably well with 77% of nearly half of the S&P reporting and beating expectations.  And there is still Apple, Facebook, Exxon and Chevron coming later this week.  As today’s expert pointed out, “The encouraging thing is that we are trading more on earnings and less on rumor, which is a nice change of pace and how the market should work.”  Now all eyes are on the Fed meeting being held Wednesday and Thursday and the almost unanimous consensus that another rate cut will come from it.  Volume was around 6.5 billion. 

Trade optimism, Fed rate-cut expectation sends S&P 500 to record

There was increased optimism today regarding trade negotiations with China and that combined with even more increased optimism over another Fed rate cut later this week pushed the Dow up 132 points.  The Dow is now less than 1% below its all-time high, the S&P achieved a new record for the second straight day and the Nasdaq closed just 5 points below its all-time high.  The oddsmakers have increased the likelihood of a Fed rate hike from last month’s 49% to 94% today and 78% of the 204 S&P 500 companies that have thus far reported have beaten estimates.  The Q3 outlook remains at a minus 2% but that’s a big improvement on the minus 3.2% that was in the forecast just two weeks ago.  Today’s Reuter’s report did not contain volume data but, per the Chicago Board Options Exchange (CBOE), volume was 6.6 billion, a tad above the 4-week average. 

Succinct Summation of Week’s Events 10.25.19 (plus The White Cliffs of Brexit)

As always Sunday nights bring the weekly summation, this time the positives being that the markets are within a hair's breadth of all time highs again --  and the negatives being the usual.  In fact, depending on your point of view, the negatives concerning impeachment and the trade war might also be in the positives column.  The bonus this time is a lengthy (3300 words) article from this week's The New Republic that explains in detail everything you do and don't want to know about Brexit, raising the question that has been puzzling the world since the beginning: with all the chaos and detriments that Brexit will surely be raining down on the British, why are so many of them so anxious for it to happen?  Maybe after 3300 words, we'll have a better understanding.  Hope everyone had a great if soggy weekend.  More big rains due for Halloween. 

Use Fractional Shares for Retirement Investments

We've all heard about fractional share investing and some of us may have even used it.  So when this article popped up on last week's edition of U.S. News Invested, it looked like a really good mini-course on this very topic and so I offer it for your weekend reading.  Besides which, it looks like a great way in conjunction with the Acorn Advisers program that was discussed a short time ago, to begin to continue building the old retirement nest egg on literally a daily basis. Enjoy the rest of the weekend and try to dry out from the deluge we're having. 

S&P 500 nears record high on trade progress, upbeat Intel earnings

Week #2 of Q3 ended on a very positive note with reports that the trade negotiations are going well and the S&P hitting a new record high after its last closing record July 26^th.  The S&P had its biggest gain in seven weeks, the Nasdaq in eight weeks.  Intel had the best report shooting its stock up over 8% and the overall chip index to its own new record high.  All in all, the Dow closed up 152.  And next week will be even bigger with giants Apple, Alphabet, Pfizer and Merck reporting.  Volume was a tad below the 4-week average with just under 6.3 billion shares traded. 

Strong tech results propel S&P 500, Nasdaq

It was another day of fence sitting with the Dow up a hundred at open, then down 200 by noon to recover to a 28 point loss by close.  Q3 continues to go well with more than 80% of companies beating forecasts.  Today Microsoft and PayPal turned in stellar reports, but 3M not so much. In fact, it seemed for the day that for every company doing great there was another doing not so.  The bottom line as noted by today’s expert is that Q3 earnings “have supported a view of the economy as slowing.”  And contrary to yesterday’s good news that the tariffs were having a less than disastrous impact, today that view took a 180 with the market back to worrying about trade.  With all the lighter than usual trading days lately, today’s also light volume of just under 6.5 billion is now in line with the 4-week average. 

Wall Street ticks higher, but chip stocks tumble

The Dow was up a hundred points in the morning only to dive over 150 points by 3 pm and then recover to close up 45.  In other words, it was close to yesterday’s pattern of investors reacting to Q3 only to be put in a 180 turnaround when other news comes out.  In this case, the Q3 reporting was not as positive as in past days with giants Boeing and Caterpillar both going lackluster.  But then came the announcement that the tariffs from the trade war were having a smaller impact than expected and that caused the rally in the final hour.  But investors continue to be on the fence with volume still below average at 6.1 billion. 

Wall Street slips after rejection of Brexit timetable

The Dow was up nearly 120 points as late as 2 pm, mostly on positive Q3 reporting.  Then came the announcement that the British parliament had voted down Johnson’s Brexit plan and that sent the markets spiraling downward to close down 39.  But as today’s expert has noted, the Brexit is just one of many factors contributing to the uncertainty that plagues the market.  In fact, his statement nicely summarizes the whole global picture.  “The global economy is effectively suffering from 1,000 paper cuts.  None of them are deadly, but in agreement, they’re certainly painful.”  As investors await more Q3, volume remains below average at just under 6.4 billion. 

Trade hopes move S&P 500 close to new record high

Not a whole lot of action today as the market continues to digest Q3 and this week should tell a lot. But already only 12 percent of reporting companies have come up short. There also remains considerable optimism about trade as investors continue holding out hope that there will be some type of truce with China.  Overall sentiment is very much on the plus side.  As today’s expert put it, “We’re watching for a breakout to the upside; the early signs we’re seeing are favorable.”  Despite all this, there is still a good deal of fence-sitting.  The Dow swung back and forth in a very modest 30 or 40 point range all day but closed up 57, which isn’t much considering the news.  As the week progresses and the news remains positive, that should change.  Volume remains on the light side at under 6 billion.

Succinct Summation of Week’s Events 10.18.19 (plus Reconsidering the Advice in 3 Popular Personal Finance Books)

The usual weekly summation is presented below, the big positive that jobless claims remain at very low levels, the big negative (and the negative that brought the market crashing down on Wednesday) was the sudden contraction of retail sales at a -0.3% when they expected a +0.3%, thereby revealing for the first time that the consumer may be under stress.  The bonus this Sunday evening is another consumer reports type article, this time from The New York Times, which, unlike yesterday's post which reviewed top notch films and TV programs for your leisure time, now it's back to business with hindsight reviews of three of the most popular personal finance books that have been on the market for many years.  Consequently, this article sort of serves as an encapsulated course on investing in itself.

Top Movies and Television Series on Netflix 2019

On this autumnish weekend we shall take a break from finance and instead take the shortcut to leisure and entertainment.  What follows are all the most viewed films and television programs on Netflix during the past year.  It's sort of an one eye-shot consumer's guide to the best of the best in films and TV programs.  There should be something on this list that appeals to everyone.  Enjoy!  And enjoy the rest of the weekend. 

Boeing, J&J, dismal China data drag Wall Street lower

Today it was a triple whammy.  First, a blitzkrieg of negative headlines from such giants as J&J and Boeing; then another report that China’s GDP growth had slowed to its weakest in 30 years; and the IMF lowering its forecast for global growth to 3 percent.  The combo brought the Dow steadily down throughout the session to close 255 in the red.  But market sentiment remains positive on Q3 with nearly 84% of 73 companies beating estimates.  Still, the day’s news brought the overall Q3 forecast back above 3% as a y/o/y decline and, if it happens, it’ll be the first contraction in earnings in 3 years.  But there are some very high profile companies reporting next week so many market watchers remain on the sidelines which is reflected in the continuing below average volume which today was just over 6.2 billion. 

U.S. stocks gain on upbeat earnings, geopolitical news

The Dow was up 110 points in the morning, then dropped 130 points by noon, then came back, then fell again to close a modest 23 points up.  This was pretty much the same trend as yesterday except that today everyone is singing the praises of the day’s developments just because we closed a tiny bit in the black instead of crying gloom and doom from yesterday’s tiny bit in the red.  Well, yesterday’s tiny bit in the red was no indication of a downward trend and today’s is none so for an upward.  And those who are singing the praises just because of a few tentative pluses are being way premature.  It’s especially premature to assume that the expansion is losing steam just because of one day of underwhelming data.  We’re only 3 days into Q3 reporting and the weak volume suggests a lot of fence sitting.  The one good thing is that 82% of the 62 companies reporting to date have beaten estimates and that has already brought the S&P earnings estimate from last week’s 3.2% decline to 2.9% today.  It has been the trend in past quarters that the more companies that report the better the earnings forecast becomes. So let’s wait for all the chicks to hatch. 

Wall Street slips as weak economic data offsets earnings strength

Day #2 of Q3 reporting continues to go very well but that was not enough to overcome the anxiety produced by the first retail sales report in seven months to show a contraction, being called the first indication that consumers are stressing.  As today’s expert states, “The consumer has been looked at as the savior of this economy and this data comes out and it’s rather shocking.”  There was also more stress put on the trade war when the Congress voted to support the protesters in Hong Kong, something that certainly is consistent with our principles but will not please the Chinese at all.  Consequently the Dow was in the red all day and closed 22 down.  Of course that isn't much and one month of contraction does not make a trend so no need to panic just yet.  43 companies have now reported with 86% beating estimates.  Volume was down to just over 6 billion. 

Wall Street gains as earnings season begins in earnest

Q3 started today with a bang as all the major financial firms posted results, most of them handily beating estimates. In fact, 88% of the 34 companies that reported today beat estimates.  So the Dow jumped a big 237 points on newly found optimism as investors have ample justification now to get back into equities after an extended time of fence-sitting.  In one day now, the forecast for Q3 earnings has been upwardly revised from yesterday’s 3.2% contraction to now 3.0 percent.  If past quarters are any indication, that number will just keep improving.  Volume was a little below average at just under 6.3 billion.  But it’s only the first day of Q3 reporting. 

Stocks pause on unsettled trade deal; earnings eyed

On a holiday, everyone’s sitting on the sidelines waiting for Tuesday when Q3 reporting starts.  The uncertainties that continue surrounding the trade war brought the Dow down a modest 29 points (though for much of the session the index was up as much as 50 points.)  The Q3 forecast continues to be down 3.2% from last year’s Q3 12.1%  gain. But since it was a holiday, trading was exceedingly light at 4.7 billion.  The games begin in earnest on Tuesday when the major banks report. 

Succinct Summation of Week’s Events 10.11.19 (plus Acorns Advisors)

Below is the Sunday night weekly summation, the positives being a partial trade war agreement and a drop in jobless claims, the negatives being a deepening of the Ukraine scandal and fewer new job openings than last month (though only by a trifling 120,000 over 7 million openings.)  The bonus this Sunday evening is a very informative article from last week's U.S. News Invested about a number of ways to invest without much money.  Pay particular attention to item #7 about Acorn Advisors. Sign up at Acorn and they automatically take every credit card purchase and round it up to the nearest dollar, transferring the difference to a basket of ETFs.  It sounds like a fantastic way to grow a fund without any effort at all and without any pain at all. Hope everyone had a great weekend.

AAII Weekly Digest: How to Become a Better Stock Picker

There is no one approach to selecting stocks that works for all investors.  But there are some general guidelines that can help anyone make better decisions when analyzing stocks.  With that in mind, I submit for your weekend reading the following article from this week's AAII Digest positing four tests that every investor can use to do a better job selecting stocks.  Enjoy what's left of this very coolish weekend. 

Wall Street jumps but ends off highs after partial trade deal

So the president announced today that there was a deal in principle with China, what he called a substantial “phase-1” trade deal.  And the Dow zoomed up over 500 points for most of the session.  Then, in the last 20 minutes, investors gave themselves a reality check which was expressed very succinctly by today’s expert from Jones Trading, “It looks like while there is an agreement, this is still going to … drag out and be an issue.”  And in the last 20 minutes, the Dow fell almost 200 points.  So there remains a good deal of skepticism that this trade war will end any time soon.  Today also the forecast for Q3 got a little worse from a 3.1% decline in earnings to a 3.2% decline.  Next week, the reporting begins. Good data showing a rise in consumer sentiment was countered by fears that this positive news might counter a rate hike.  Volume was a little above average at just under 7.6 billion shares traded. 

Indexes climb on fresh hopes for U.S.-China trade deal

The Dow jumped 250 points this morning on news that China had indicated more willingness to negotiate while a senior U.S. official said negotiators were working toward an “early harvest” of confidence-building agreements.  But the initial elation quickly got tempered by the reality of past history dragging the index steadily down throughout the remainder of the session closing up 150.  The consensus seems to be that there is hope that something positive comes out of this, but also tempered by the practical side that “this thing may not be finished.”  The forecast for Q3 remains at a -3.1% but this could change quickly when the first reports come flowing in next week.  Today’s data was another positive with consumer prices unchanged and inflation retreating.  Volume remains below average at just under 6.2 billion. 

Wall Street gains on trade optimism, but Beijing tempers hopes

The Dow shot up 181 points on the positive news that Beijing offered to purchase more U.S. agricultural products.  It would have been 250 except that it got shot down 70 points in the last half hour when the same Beijing expressed doubts about this week’s negotiations.  Stocks closed up but lost ground after close when Chinese officials made clear again that goodwill was damaged by the blacklisting of the 28 companies.  So there may be more selling tomorrow.  The forecast for Q3 is now increased downwards to a 3.1% drop in earnings.  But keep in mind that Q2 started with an even bleaker forecast and ended in the black.  Volume was light at 5.3 billion. 

Indexes tumble as visa restrictions fuel U.S.-China worries

It was another bath today with the Dow going way bearish with tensions added to trade talks when the U.S. imposed visa restrictions on Chinese officials.  Even Powell’s remarks, which strongly hinted at more rate cuts, were not enough to overcome the negative headlines over trade which sent the index plummeting 313 points.  Nevertheless, Powell’s comments were taken as a positive sign that the Fed was showing more concern so perhaps, once this sinks in, there’ll be a rally tomorrow.  Volume was a little below average at 6.7 billion. 

Wall Street falls amid caution on U.S.-China trade dispute

Once again, conflicting trade war rhetoric got in the way of healthy trading with the Dow spending most of the day in the red, only briefly going about 80 points in the black mid-afternoon until it turned south again ending 95 points down.  The trigger today was Beijing reporting a reluctance for an agreement, placated late in the session by Kudlow issuing a statement that progress was expected once the meeting actually gets underway later.  Then Fox reported that a deal was actually imminent, which sent stocks higher in late trading, but that report was later denied by the White House so look for more selling tomorrow.  Very shortly, though, anxieties will switch from trade to Q3, which begins next week, and is expected to fall 3% which, if true, would be the lowest profit performance since 2016.  Volume was on the light side at 5.7 billion. 

Succinct Summation of Week’s Events 10.4.19 (plus AAII Audio Subscription)

It's Sunday night and the usual weekly summation is below.  The positives are that unemployment has reached another historic low and non-farm payrolls rose per expectations thereby alleviating some of the panic from earlier in the week.  Layoffs also fell about 20% to their lowest since April.  The most significant negatives are the decline in factory orders and construction spending rising less than expected.  The bonus this Sunday is a great little deal being offered by AAII that audio recordings of all 50+ talks at the national annual seminar to be held in Florida later this month can be had for just $89, reduced from $139, if they are pre-ordered.  This sounds like a wonderful opportunity to get a lot of great information without the expense of going to Florida.  Hope everyone had a great weekend.

AAII Weekly Digest: Mutual Fund and ETF Critical Questions to Ask

It's time to talk about ETFs again as this week I received this very timely notice from the AAII about their latest guide to mutual funds and ETFs and, in particular, the most important questions to ask when evaluating them.  Have a good read and have a good weekend.  Tomorrow, more good news from the AAII. 

'Goldilocks' jobs data propels Wall St. to best day since August

Generally speaking, if the monthly Labor Department jobs report is at all contrary to a poor payrolls report that is always issued a couple days beforehand, it triggers a considerable rally.  That’s what happened today with the nonfarm payrolls report showing an increase of 136,000 new jobs last month and unemployment at a 50-year low.  The Dow shot up immediately upon open and continued rising all day to close 372 points up.  It’s been called a “Goldilocks” report, not strong enough to prevent a rate cut, not weak enough to create concern, the best of both worlds.  The S&P, which lost 3% earlier this week, is now just about even and, better still, for the last 12 months is up 2% and just 2% off its record high in July.  The real excitement is that there remains a wide expectation of more rate cuts, the odds having changed from 40% on Monday to 77% today.  But volume was light at 5.9 billion shares traded. 

Wall Street gains as weak services data raises rate-cut expectations

Some days we get bad economic data and the market plummets for fear of recession and other days bad reports cause a rally because of hopes of rate cuts.  For a long time now, investors have not been able to decide whether they want a healthy economy or not.  That’s what happened when the Dow plunged some 330 points at 10 a.m. when a report surfaced that services activity was at a 3-year low.  Then the market readjusted its thinking and decided to take this as a sign that the Fed would have to have more rate cuts now – and the Dow soared the rest of the day some 450 points to close 122 up.  But the real tune will be sung on Friday with the jobs report.  Volume was close to average at 7.1 billion. 

Wall Street tumbles as trade war threatens U.S. economy

For the second day in a row the Dow tumbled big time, this session to the tune of 494 points, 150 more down than yesterday, triggered by the private payrolls report showing that businesses have cut down on hiring.  This is just another confirmation of the toll the trade war is taking on U.S. businesses and the economy, showing we are not immune to this trade dispute.  That combined with yesterday’s report showing factory activity at its lowest level in a decade is just stoking investor expectations of a recession.  Now all eyes will be on Friday’s jobs report which, if it shows a different picture, will probably bring the buyers back but, if it agrees, will just spark more selling.  The S&P and Dow have now momentarily slipped below their 100-day moving averages but, to keep perspective, the S&P is still just 5% below its all-time high and has lost only 1% in 12 months.  Volume was large at 8 billion and the VIX rose almost 2 points to just over 20.  Just bear in mind that anything under 30 is still considered optimistic. 

Wall Street tumbles as factory activity hits 10-year low

Today was the first day that a much more concrete report came our way supporting possible recession with the ISM manufacturing data showing factory activity contracting for the first time.  It was significant since it follows in the same trendline as Europe, Japan, the UK and China.  It was more than enough to send the Dow tumbling 343 points, its biggest drawdown since August 23^rd when Trump demanded that U.S. companies stop investing in China.  And though the ISM was a bad number, the good news is that as expressed by today’s expert, “Manufacturing itself is in a recession, but it does not mean that the overall economy is in a recession.”  Indeed, the general consensus seems to be that it is not.  But Friday’s jobs report will shed more light on this and investors eagerly await it.  Other good news is that, despite the yearlong hammering of global growth, confidence in the U.S. economy remains high and has helped bolster the S&P 17% this year.  Other big news is that Schwab has started a brokerage price war by eliminating online transaction fees sending the industry into a panic. E*Trade tumbled 16.4%.  Oddly, Schwab tumbled 9.7 percent.  Volume was right in line with the 4-week average at 7.3 billion.