Succinct Summation of Week’s Events for 5.29.20 (plus The Future of ETFs)

Below is the usual weekly summation, the main positives being the markets stabilizing on hopes of vaccines/treatments and a rise in consumer confidence for May.  The main negatives being jobless claims falling less than expected, GDP falling more than expected, etc. etc.  And, of course, the whopper.  All the rioting and protests that have spread like wildfire this week just highlight the overall problem of the country's lack of leadership. 

Investing Mistakes to Avoid in the Next 6-12 Months: Wednesday's AAII webinar

For your weekend viewing pleasure, below is the YouTube link to Wednesday night’s AAII virtual webinar on mistakes to avoid in investing during this pandemic.  And for those of you who are subscribed to the email distribution of this blog, I will also supply the pdf handouts for this one hour presentation as attachments to the email.  Hope everyone is enjoying this very pleasantly cool weekend after the ungodly heat of the holiday.  I know I am. 

Wall Street ends mostly higher as U.S.-China spat simmers

Due to increasing tensions between Trump and China in regards to Hong Kong, the Dow took a beating most the day, down about 400 points as late as 3 pm.  Then Trump released another statement about Hong Kong that set investors’ minds considerably at ease as it came across quite a bit less dramatic than feared, especially in terms of the Phase One trade deal.  So the market immediately rebounded and closed almost even.  Despite the China fears that have haunted the markets of late, all three indexes enjoyed substantial gains for May.  Volume was brisk at 13.6 billion. 

Wall Street ends down in late selloff; Facebook and China weigh

The Dow was 200 points up most of the day until the final hour when Trump issued his executive order against the social media companies (which legal experts say is unlawful and is not supported even by the conservatives in Congress) but caused the index to dive and close 147 down.  The continuing ruckus with China also contributed to the late sell off.  Volume remains steady, today at 11.2 billion. 

Wall Street rises with economic hopes; bank stocks jump

A good day today for investors, the Dow up, straight up 553 points on continued optimism for an economic recovery following the further easing of lockdowns.  JP Morgan Chase is in particularly good shape reporting after the bell that their Q2 revenues are expected to be 50% higher than last year, quite a statement and speaking highly of their liquidity, the crucial factor in keeping the economy going, especially amid the Fed’s Beige Book report today of U.S. businesses continuing to be hammered.  The big damper continues to be the increasing tensions between the Trump White House and China.  Volume remains relatively steady, today closing at 12.8 billion shares traded. 

S&P 500 rises on economic recovery and vaccine hopes, pulls back from highs

A big 3-digit gain on the Dow today as optimism once again ruled the day with good news about vaccines and business activity restarting, weighed down only be a late session dive after a report that the Trump White House was considering more sanctions against China and, as Larry Kudlow commented, Trump is “so miffed with China on virus and other matters that the trade deal is not as important to him as it once was.”  Not exactly what investors wanted to hear.  But it was nearly a 530 point gain today leaving the S&P up only about 12% shy of the February record high.  Novavax announced it was testing a new vaccine and Merck is developing two new vaccines.  At 12.1 billion, volume was just a tad above recent averages. 

Succinct Summation of Week’s Events 5.22.20 (plus Investing Mistakes To Avoid -- free AAII webinar)

Okay, hope everyone had a great Memorial Day and below is the weekly summation, the biggest positive being that the markets seems to be stabilizing a bit with improving news on developing treatments and vaccines, the biggest negative the spike in infection rates in the areas that have reopened too hastily, bringing much warranted fears of the dreaded second wave. The bonus this Memorial Day weekend is a heads-up on a free webinar the AAII will be offering Wednesday night on the mistakes to avoid in the markets in the coming year.  It can be watched live at 6:30 p.m., but you do have to register for it. 

The Race for a Vaccine

The reality is everything depends on finding a vaccine. The economy will continue to founder, Wall Street will continue to sink, and people will continue to get sick and die until this happens. So for this Sunday evening on this holiday weekend, I thought the most appropriate reading to provide everyone with was the latest and greatest on the hunt for a vaccine, as so expertly articulated in this recent article from Slate, posted today on Barry Ritholtz's Big Picture blog.  Enjoy the holiday tomorrow.

CONTRARIAN INVESTOR

For your holiday weekend viewing pleasure I submit the most recent edition of the PBS program Wealthtrack.  This week Consuelo Mack interviews Robert Arnott, chair of Research Associates with $145 billion under management.  She titles the program "Contrarian Investor" with the theme being that successful investing comes from going against the crowd.  But it would be more appropriately titled "Investing In Times of COVID-19" as much of the advice is in regards to going against the crowd in this time of crisis by sticking with tried and true convention.  It's well worth the 24 minutes of your time.  Enjoy the holiday. This official opening of summer is really going to feel like summer. 

Wall Street ends mixed as China-U.S. tensions weigh

The Dow was down again about 150 points most of the day, again on reaction on Trump’s renewed threats against China and whether that might result in reneging on the trade deal.  As the session progressed buying increased for the index to close almost even for a mixed end to a good week that saw the markets reach multi-month highs.  The Nasdaq is now down just 5% from its February record high as we head into a holiday weekend with a considerably lighter volume of 8.7 billion. 

Wall Street finishes down as U.S.-China tensions heighten trade deal worries

There was a modest 101 point downturn in the Dow today triggered mostly by Trump’s renewed threats against China but notwithstanding the very good news from Oxford that there may be a feasible vaccine coming from Astra Zeneca.  That makes three major pharmaceuticals each announcing promising new vaccines in as many days.  The S&P has now recovered all but 13% from its all time February high and the Nasdaq all but 5 percent.  Volume today came in at 10.1 billion. 

Wall Street climbs on stimulus hopes, as S&P, Nasdaq hit multi-month highs

I mentioned yesterday that there might be a rally today due to Pfizer’s progress on their vaccine and, yes there was a rally but Pfizer didn’t get any of the credit.  Instead, it was just continued optimism for a faster than expected recovery and the Congress moving towards a vote for more relief for small businesses.  Overall, there was no new news but at least the lack of continued bad news was enough to spark a buying spree. (On the flip side was the cautionary note that stocks may be getting ahead of themselves.) Volume remains steady but today a little below recent averages at just under 10.7 billion. 

S&P stumbles as Moderna sinks on report questioning trial results

Everything was on an even keel today until about 3 pm.  Then the validity of yesterday’s Moderna announcement was called into question and the whole thing went to hell quickly, the Dow dropping 390 points in the final hour.  As today’s expert put it, “what will drive markets will be incrementally good news on the healthcare front.”  It also helped that Fed Chair Powell told the Senate Banking Committee today that Congress should consider anything that will keep people out of insolvency. The good news is that, after market close, Pfizer announced they were having quite promising test results from their vaccine so all bets are not necessarily solely on Moderna anymore.  We may very well have another rally tomorrow.  Volume was a little bit lower than usual today at just under 10.7 billion. 

S&P 500 closes at 10-week high on vaccine hopes, stimulus pledge

After an initial successful trial of Moderna’s experimental vaccine the market went wild with its first sign in a long time that this crisis might actually have a definable end date and the Dow soared 911 points.  As today’s expert points out, “if there is a vaccine, then all this uncertainty about the economy and the virus goes away.”  Suddenly all the stocks that have been so severely impacted by the lockdowns started coming back big time.  And Fed Powell added to reassurances by stating that more stimulus would be on the way if needed.  Volume remains steady, today at about 12.6 billion shares. 

Succinct Summation of Week’s Events 5.15.20 (plus Coronavirus Polling)

Below please find the usual Sunday night weekly summation, the main positive this week being the progress that has been made in potential COVID-19 treatments and that consumer sentiment is on the rise. The big negative of course is the disproportionately large number of infections and deaths in the U.S. compared to the rest of the world.  The  bonus this Sunday night is a very encouraging graphic that in a single eye-shot give us a very concise view of where the public stands on various coronavirus related matters.  It is very encouraging that such a large percentage of the public not only agree with the precautionary measures but taking them very seriously.  It may even mean we'll avoid a second wave.  Stay dry and stay safe. 

"REALLY BAD" TO "BETTER" - A message from Consuelo - May 14, 2020

For your viewing pleasure this weekend I submit the latest edition of Consuelo Mack's PBS "Wealthtrack" program, in which investment guru Ed Hyman presents his perspective (and a rather decent summary of the crisis) on how, despite the terrible data and highly uncertain future, we are still going from "really bad" to "better." He lays out the whole case, well worth the 22 minutes. Keep enjoying the beautiful weekend and stay safe.

Wall Street ends up after swings on reopening hopes, weak data, trade woes

The optimists once again won the day against the bad news of renewed trade tensions with China and grim economic data with retail and manufacturing in record declines.  And in early session the naysayers were winning hands down with the Dow plunging nearly 300 points but in the afternoon the focus turned to renewed hopes on re-openings and the glass half-full view that we may right now be in the worst of the economic numbers and there is no where to go but up.  This triggered a rally that brought the Dow to a plus 60 close or nearly 400 points up from the day’s bottom.  As today’s expert said, it was “the battle of conflicting factors.”  Volume remains steady at around 11.4 billion. 

Wall Street closes with strong gains as recovery hopes offset pandemic fears

It was a continuing upward slope for the Dow to close 377 in the black as investors tried to balance recovery hopes with new dire warnings about the future of the pandemic along with Trump’s remarks about China.  Today anyway the hopefuls won the day. Even the Wisconsin court voiding the lockdown orders was taken as a positive that maybe recovery will come sooner rather than later, balanced of course against the concerns about a pandemic spike. 451 S&P companies have now reported with 2/3 beating consensus and the Q1 earnings forecast is now for a minus 12.1%, quite a difference from the pre-pandemic forecast of a plus 6.3% but a significant improvement over the more dire forecast of a minus 15+% a few weeks ago.  Volume is remaining steady, today at 11.8 billion. 

Wall Street ends down on Powell's sober outlook, call to Congress for help

The market was almost an exact repeat of yesterday with this time Fed Chair Powell confirming Fauci’s grim warnings from yesterday that recovery may be a longer time coming unless the Congress intervenes with more fiscal support … and there isn’t much faith that the Congress will be able to come to an agreement on this critical matter.  Putting the responsibility on government is something investors don’t have a lot of confidence in, but that’s where our experts say we have to be.  The relaxation of restrictions very much continue to haunt with the very real fear that a second wave may well hit and, if so, will vastly diminish hopes for a recovery.  Volume was a little elevated at about 12.4 billion. 

S&P 500 tumbles on fears of virus resurgence in economic reopening

Worries about a resurgence of COVID-19 due to premature relaxation of restrictions have investors spooked enough to drive the Dow down 457 points. Anthony Fauci’s warnings about the significant danger in which the country remains helped trigger the sell off, plus his dire predictions that not only are treatments and vaccines further off than is being reported but the death rate is being under-counted. Today’s expert summed it up, “People are very nervous about how the reopening is going to go.”  And more bad news with consumer prices dropping the most since the Great Recession, but worse news in that the prices for essential goods is going up threatening stagflation if the consumer can’t keep up.  Volume is holding steady at about 11.3 billion. 

S&P 500 closes barely higher as investors balance pandemic with recovery

After diving over 200 points right out the gate, the Dow vacillated throughout the day to close down 109.  As has been the trend, investors are looking past the horrible economic data and looking towards recovery.  The concern today is that data from Germany and South Korea suggests that easing restrictions may be premature and that, though optimism remains fair, this could be quashed if infections re-emerge.  Q1 is almost over and 67% of S&P companies have beaten estimates.  The Q1 earnings forecast has once again been upgraded, this time to a 12.1% drop, quite a difference from the 15+% drop estimated a couple weeks ago.  Volume remains steady, today at about 10.1 billion shares. 

Succinct Summation of Week’s Events 5.8.20 (plus What the New Tax Rules Mean for You)

The weekly summation is below, the main positive being that both unemployment and jobless claims, as bad as they are, came in lower than expected, the main negative is that we are now losing more Americans every day to COVID-19 than in all of 9/11.  The bonus this Sunday evening is a heads-up on a virtual live taxes webinar via the AAII that's coming this Wednesday evening. Enjoy and keep staying safe this week. 

Profound Pandemic Shifts

For your weekend reading pleasure and ripped from this week's headlines, I submit the May 7th edition of PBS' Wealthtrack program, this one focused on the significant shifts facing the nation as we wind through the pandemic and open up the economy. As the title of the episode suggests, the changes that lie ahead could be quite profound. Indeed, in light of recent events I could not find anything more topical than this to share this weekend.  Stay safe.

Wall Street jumps as historic job losses fewer than feared

Another big rally upping the Dow 455 points, based not on good news but on the fact that the expected terrible news was not quite as terrible as feared.  That said, the unemployment numbers which were feared to be as high as 22 million actually came in at 20.5, not a huge variance but enough to infuse optimism into a very discouraged market.  As today’s expert points out, “Relative to expectations, you can see some silver linings in there.”  Still, removing the rose-colored glasses, it is the steepest decline since the Great Depression with the placation that, except for the initial panic in March, the markets are largely ignoring the hideous economic data and looking instead at COVID-19 data and any signs of the pandemic coming under control.  In other words, the dismal economy is widely seen as being temporary and this was further reflected in the lowest VIX number since the end of February, the first close below 30.  Volume continues to reflect a calming mood, today closing at 10.1 billion shares traded. 

Wall Street gets PayPal lift as Nasdaq wipes out 2020 declines

Today the Dow gained almost exactly the amount that was lost yesterday but the companies that have benefited from online shopping due to the pandemic are the ones that propped things up today.  But the real deal is watching the easing of restrictions and seeing what happens.  Will there be a spike in infections and deaths or will things normalize given a continuation of reasonable social distancing precautions?  But as today’s expert says, “The market is looking at this and saying, so far so good.”  If that changes for the better, things will improve quickly.  If it changes for the worse, we may very well find ourselves back at square one.  Friday’s employment report will provide much more clarity, especially on where we may be heading two months from now.  This is the main issue investors are focused on right now.  Volume continues to be relatively relaxed with 10.4 billion shares traded today. 

S&P 500, Dow drop as financial sector declines counter tech gains

The market had a modest sell off today, the Dow being almost even until the final hour, then diving over 200 points; and with tech going up but defensive sectors going down more. Jobs data shows 20 million unemployed in April and Trump issuing threatening statements against our current trade deal with China didn’t help matters at all.  But the real problem as today’s expert points out is this:  “States can declare themselves open all they want.  If people aren’t comfortable going out of their houses, then they’re not going to do anything.  Activity resuming is as important as states declaring themselves open.”  As for the rest of it, the jobs reports that everybody says actually counts is due Friday. Volume continues to relax, today at 9.7 billion. 

Wall Street rises as lockdowns ease, healthcare shares jump

The Dow spent most of the day up over 300 points as healthcare and oil surged with encouraging news on both vaccine and treatment fronts and the hopes that the easing of restrictions would once again boost demand for oil, then dove suddenly in the final hour when the Fed threw a wet blanket on the pandemic outlook.  It really wasn’t unexpected news, just that Q2 was likely to be bad but that a recovery could come as soon as Q3 and Q4.  There was also a report that the services sector had contracted for the first time in over ten years.  Thus the last minute sell off but the good news, as today’s expert put it, “We have certainly gotten some negative data, but for the most part the market has learned to look through that.”  Volume continues to calm down, today at 10.6 billion shares traded. 

Wall Street snaps two-day slump as tech titans give lift

Though the Dow opened over 300 points down this morning, throughout the day it steadily climbed as the oil markets rebounded and gains came from Microsoft, Apple, and Amazon ultimately leading to a very modest 26 point gain, but at least it was the first gain in three sessions.  But the abiding question remains: can we ease restrictions and restart the economy without also blowing up the pandemic?  It is this question on which investors are focused.  But optimism seems to be on the rise as the Q1 earnings forecast has once again been upgraded, this time to be down 12.5% vs last week’s 15.1 percent. Volume also continues to decline, today at 9.5 billion.  Of course in any other environment that would be considered huge but in this panicked environment where volume has been between 15 and 20 billion, it is a sign that the market is continuing to calm down. 

Succinct Summation of Events for Week Ending 5.1.20 (plus Go Big)

Once again, submitted below for your approval is the usual Sunday night weekly summation, the big positive being Andrew Cuomo's outstanding leadership in navigating New York through this pandemic, the main negatives being the lockdown protests and Q1 GDP falling 4.8 percent.  The bonus this week is an abridged version of Barry Ritholtz's 2500 word Business Week essay offering his solution to our economic crisis, a very readable 500 words articulating a concise analysis of past crises and how this one compares.  Hope everyone enjoyed this summery weekend.  And the best news:  Zero deaths in Detroit today! 

Dividend income is a new minefield for financial advisers

With the panic selling that went on yesterday with the threat of a new trade war now adding to the economy's woes, I thought it appropriate to get back to basics and share an article from Monday's Investment News Daily.  I've recently shared two good pieces about dividend stocks.  Is three times the charm?  This one takes the other side of the debate, pointing out potential flaws in the dividend strategy, particularly in the current environment.  Hope everyone's enjoying this very balmy weekend. 

Wall Street tumbles as renewed tariff threat adds to uncertainties

As if we did not already have enough tumult out there, today the ugly head of trade war reared up again when Trump resurrected the notion of new tariffs against China as punishment for what he sees as their culpability in the pandemic, a theory virtually no one else shares.  The market reacted accordingly diving over 2% with the Dow down 622 points and ruining a week that might have otherwise ended in the black.  As today’s expert says, “Trump poking China was the last thing markets needed given so much present economic and financial uncertainty,” especially in view of how the pre-pandemic tariff wars had so brutally roiled the markets during the last couple of years.  The good news is that 275 S&P companies have now reported with 68% beating estimates.  And even though they’re calling today a mixed bag of Q1 reports, today the S&P earnings forecast was once again upgraded, this time to 12.7%  down vs yesterday’s 14.4% and Wednesday’s 15.1 percent.  Volume continued again to fall, today at just under 10.2 billion.