Succinct Summation of Week’s Events 2.26.21 (plus the 5 Best Dividend Stocks)

Below is the usual weekly summary, the high point being COVID infection rate plummeting by 72%, the low note being higher yields on the 10-year Treasury note whacking the stock market and stoking inflation fears. The bonus this Sunday night is of interest to anyone watching the indexes sinking this week with bond yields rising to 1.5% and now being competitive with the S&P dividend index. 

BITCOIN AND OTHER BUBBLES - A message from Consuelo

If you're like me, whenever you hear the term "bitcoin," your eyes just glass over. This week's episode of the PBS Weathtrack program is really about bubbles, of which bitcoin is one, created by the low interest rate environment, but bitcoin has always been a total mystery to me so anything that can shed some light on it is welcome in this space. Enjoy this spring-like weekend.  

Nasdaq finishes higher, tech stocks retrace some losses

Oh, those pesky bond yields! Even though the 10-year Treasury note actually eased up a bit today, the market consensus is that rates will continue to go higher which caused yet another rout in stocks today, even though tech actually made up a little of its lost ground from this week.  Despite all this, as investors continue transferring their funds into cyclical companies, and despite this week’s losses, the Dow still ended the month up 4% and the S&P up 2.6 percent. But today’s econ data was good with consumer spending up the most in 7 months. Volume was right in line with the 4-week average at 15.5 billion. 

Wall Street ends sharply lower, tech selloff weighs as bond yields climb

Yesterday everyone was so jazzed over Powell’s statement committing to a longterm policy on low interest rates. Today things turned back to panic with bond yields continuing to rise and, in fact, now exceeding the S&P dividend yield thereby now competitive with stocks with one big exception – no risk of capital with 10-year notes. This brought everything tumbling down in an equity market where very high valuations relative to historic norms have become a major concern.  This was all despite continued optimism over stimulus, fewer unemployment claims, and quickening vaccinations which have all combined to give the Dow its best month since November. But as the experts have been regularly cautioning us, since the bull market has been going so strong, a pullback now and then is not only expected but very much needed. Volume was a tad above the 4-week average at 15.8 billion. 

Wall Street finishes up as Fed's Powell soothes inflation fears

The last several days of fence sitting ended today as Powell’s late session comments yesterday took firm root today and got everyone on a big buying spree again rotating into cyclicals and boosting the Dow a big 424 points. Powell added to his remarks today estimating inflation goals would take three years to achieve thus signaling that Fed policy on interest rates will remain for a long time.  Rising bond yields threaten growth stocks as do concerns over valuations. But all in all, Powell’s statements gave a big boost to confidence in a recovering economy. Volume again fell below the 4-week average at just under 13.7 billion shares traded. 

S&P 500, Dow close higher in late session turnaround

Crazy Day with the Dow down over 300 points early and in the red almost all day until just before close when it regained all its ground and closed even. It was again the tug of war between growth and value with value again winning the day as the stocks most favored to gain as economic restrictions are lifted. Another late day boost was Fed Chair Powell reiterating for the umpteenth time that accommodative policy will continue for some time and that statement was sufficient to bring investors back to their buy lists. For the first time in a number of days, volume finally exceeded the 4-week average at 16.5 billion. 

Nasdaq, S&P 500 end lower as U.S. yields rise; Disney lifts Dow

The rotation from growth to value continues in earnest with the tech indexes falling sharply and the cyclical stocks that will benefit from a recovering economy getting a buying spree.  There’s also the small factor that the bull market has been going great guns for a year and a small pullback is expected. Contributing to the sell off was a rise in Treasury yields, suggesting a shift from safety to risk but also stoking inflation fears.  But as today’s expert states, “That’s bullish for stocks.”  The Q4 earnings rally seems to be losing steam. Volume continues below the 4-week average at just under 14.4 billion. 

Succinct Summation of Week’s Events 2.19.21 (plus Which Funds Fit Your Needs? Here’s How to Decide)

Below is the usual Sunday night weekly summation, the main positive being more vaccines and fewer infections and hospitalizations. The main negative is the increasing speculation that may be fueling artificial market rallies. Plus there's another big negative that did not but should have made the list and that is the atrocious weather that has created massive disasters and slowed down all progress on other critical fronts down to a crawl.  The bonus is an AAII mini-course on the most important aspect of investing -- a methodology for selecting winning stocks.  (The text is provided below but click on the link for some informative charts and graphics.) It's finally starting to warm up a bit. Enjoy your week.  

9 Best Green Stocks to Buy

For your weekend reading, and for those among you who are environmentally minded, I submit below this week's edition of US News Invested with their recommendations of the best green energy companies in which to invest. Enjoy the weekend.  

Wall Street closes flat as cyclicals shine, big tech falls

Today saw a big rush to buy cyclical stocks which do well in a recovering economy and an equal rush to unload tech which fare better in a faltering economy. The big rally in cyclical was offset by the sell off in tech and all three indexes ended in a wash. Despite all this optimism, Bank of America is forecasting a 10% pullback in stocks due to the high valuations which currently are at 22 times earnings, the highest since the 1990s dot-com bubble. Of course the big difference is that the dot-com bubble was pure speculation vs lousy fundamentals whereas the current bull market is based almost entirely on solid fundamentals. So I’m not quite ready to buy into BofA’s gloom-and-doom scenario.  Volume came in at just under 13.5 billion, still considerably below the 4-week average.  

Wall St closes down on tech slide, rising jobless claims

The rotation away from tech continued today plus some sell off due to unemployment claims coming in 13,000 higher than expectations, bringing all the indexes down, the Dow by 119 points. There remain concerns not only regarding inflation but over the market being overvalued, the vaccine-induced recovered producing a lot of irrational exuberance. Will the fundamentals match price levels? That’s the question. Volume came in at 13.1 billion, considerably below the 4-week average of 16 billion. Yes, uncertainty is in the air. 

Nasdaq ends lower as tech slides; inflation concerns weigh

The day saw continuing rotation out of tech and into energy and consumer discretionary, triggered by the Fed’s statement supporting the maintenance of accommodative monetary policy pinning interest rates to near zero until inflation is at 2 percent. The Dow was also boosted a good 90 points by the recent Berkshire Hathaway major investments in Verizon and Chevron. There was also a strong rebound in retail sales though concerns remain about the Fed policy and stimulus package stoking inflation. Volume came in at 14.3 billion vs the 4-week average of nearly 16 billion. 

Stimulus hopes drive Dow to closing peak but interest rate worries loom

It was yet another record high for the Dow bumping up another 64 points on the same enthusiasm over the relief bill, the vaccine rollout, and a quicker economic recovery. Today also 10-year Treasury notes hit their highest in a year which, with its higher yields, brought down all the rate-sensitive sectors such as utilities, real estate and homebuilders. Tech slipped as well. A stronger than expected Q4 also boosted hopes for a quicker recovery. The cyclical stocks including energy and financials again had the strongest gains. Volume was a little below the 4-week average at just under 14.9 billion. 

Succinct Summation of Week’s Events 2.12.21 (plus Debate: Should Social Media Be Allowed to Ban Users?)

For the conclusion of the President's Day holiday weekend, I submit below the usual weekly summation, the top positive being the 48 million vaccinations that have so far been given in the U.S. (with many more on the way in the next weeks and months), the main negatives being the 2nd impeachment (which of course was wrapped up the day after this list was published) and unemployment claims rising more than expected by about 5 percent.  

Percentage who have gotten, or definitely will get, a vaccine

Happy Valentine's Day and Happy President's Day. Since the market is closed tomorrow, I'll wait until then to publish the weekly summation. But in the spirit of Valentine's Day, and since this pandemic, the quarantine, and the social distancing it has required has all put a strain on relationships (and for those who did not have a Significant Other at the start of this thing, how does one get a new relationship started under these conditions?), I thought I'd share a graphic from today's Big Picture blog site showing the percentage of Americans by state who either have or plan to get the vaccine. 

The GameStop lawsuits are missing the point

For your weekend reading, I submit from this week's Investment News still another perspective on the GameStop debacle that caused so much commotion in the markets a couple weeks ago and almost brought down the hedge funds. This article is a defense of what they did, though personally I still feel it had to be illegal. We'll see what comes from the SEC investigation.  Meanwhile, enjoy the weekend. 

S&P 500 hits record peak as stocks post weekly gain

The S&P and Nasdaq hit records again today as the optimism over stimulus and a quicker recovery continues to feed the bulls. The good news remains that it’s all just a big rotation into cyclicals speaking highly of an expectation for a brighter future. Better yet, the VIX closed below 20 for the first time in a year with a Reuters poll showing people believe the economy will be back to normal within a year. Over $23 billion has poured into stocks this week, the biggest weekly inflow in 13 years. Today’s volume came in at just under 13.3 billion. 

Nasdaq, S&P 500 gain on tech stocks, hopes for more stimulus

Down a hundred, up a hundred, that’s how the day went with the Dow. Today Joe Biden reminded the world that we still have a problem with China and, if we don’t up our game on infrastructure, we might be in for a real challenge. Thus, the case of nerves between East and West got a jolt today which accounted for much of the seesaw action. The stimulus and a $15 minimum wage are just the first steps. The good news is that unemployment applications were down and, at under 800K, way below the 6.8 million from last March. And Q4 earnings growth has been upped again, this time to +3%, and again a very stark contrast to the minus 10% predicted last month. The really good news is that as Q4 drones on, sentiment as today’s expert put it, is that “I don’t see the overall market as horribly overvalued,” as for the past month investors have been looking to Q4 to validate the high valuations.  At least one expert feels they have now been validated.  Volume was nearly 17.7 billion versus the 4-week average of nearly 16 billion. 

Wall Street rally pauses as big tech loses steam

Both the S&P and Nasdaq lost just a smidge of ground today but the Dow advanced 62 points on continued optimism of stimulus and a quicker recovery. The big positive, as was also true yesterday, is that investors are not moving to cash but rather just rotating to different sectors, sectors that will do well in a recovered economy which means hope springs eternal. As today’s expert put it, “You’re seeing a broadening of market leadership. 75% of the S&P are trading above its 200-day moving average. That’s remarkable breadth.” The big concern remains over-valuation, which is why eyes are still glued to Q4 which the markets are hoping will validate current price levels. The good news: consumer prices rose moderately but inflation remains benign and Q4 has so far exceeded expectations on volume of 18.3 billion. 

Nasdaq extends record run; oil prices rise

The S&P and Dow ended their 6-day winning streak with a day of very small losses with the Dow down a mere 10 points while investor sentiment remains focused on a strong Q4 and optimism over a quicker economic recovery. The good news, as today’s expert put it, “Investors are hard pressed to find significant negatives. You’re not seeing money going out of the market and into cash … but money coming out of one sector and being rotated into another,” reflecting faith that things are on the right track. The hopes of a quicker recovery has boosted oil prices on the expectation that as people return to work the demand for fuel will rise.  No volume data was report but per the CBOE, 16 billion shares changed hands. 

Wall Street sets record closing highs on stimulus hopes, vaccine deployment

Optimism over increased stimulus and a speedier vaccine rollout took the indexes to new highs, the Dow up 237 points and up for a 6^th straight session. As today’s expert summarized the optimism, “[Investors are thinking] maybe they can go to a baseball game this summer.”  But the concerns over significant overvaluation continues, concerns that have haunted investors for most of the past year.  The best news is Yellen’s prediction that we could see full employment again as early as next year. Q4 is now past the half mark with 83% of 294 companies beating estimates. Volume is right in line with the 4-week average at 15.3 billion.  

Succinct Summation of Week’s Events for 02.05.21 (plus Winning By Losing Less)

Sun 2-7-21

Below is the usual weekly summation, the big positive being the week's rally, the big negative being payrolls coming in below forecast. The big bonus this Sunday night is again this week's segment of the PBS program WealthTrack and its guest Charlie Dreifus talking at length about the pic that has dominated our conversations since Day One: increasing profits by cutting losses.  Please also make note of the P.S. at the end suggesting the required reading of Jason Zweig's Wall Street Journal column, "The Intelligent Investor" and its commendable analysis of the GameStop mania. Hope everyone had a great weekend.  

Investing in Uncertain Times: Four Ways to Move Forward.

For those unable to participate last month, below is a YouTube link to the January 25th AAII webinar "Investing In Uncertain Times: Four Ways to Move Forward" as presented by Morningstar guru Janet Brown. Enjoy and stay warm this weekend.  

S&P 500, Nasdaq post biggest weekly gains since early November

The Dow and S&P rose for the fifth straight session marking their longest streak since August bolstered by the expectation of a big stimulus package and a continued upbeat Q4. The VIX fell to its lowest point in three months and GameStop started gaining again after Robinhood removed all barriers to buying. The SEC continues its investigation into fraud. With the VIX down and Q4 humming along, volume finally fell below the 4-week average at 13.6 billion. 

S&P 500, Nasdaq hit record closing highs amid upbeat earnings, data

It was another record breaking day with both the S&P and Nasdaq reaching all-time highs and the Dow up for the fourth straight day on positive Q4 reports, strong enough that the S&P is now headed for positive Q4 earnings instead of the previously forecasted decline. We’re getting closer to a COVID relief bill, the payrolls report due tomorrow is expected to show a 50,000 job increase, and the VIX has fallen to its lowest level in two weeks.  The retail trading frenzy continues to fizzle, GameStop stock has fallen again, the SEC continues its investigation into fraud and Secretary of Treasury Yellen has stated that they will be studying the recent frenzy deeply before taking any action. All in all, the Dow gained 332 on volume of just under 14.1 billion. 

S&P 500, Dow end up for 3rd day as Alphabet jumps, volatility eases

Though the VIX was reported to be down today, it was nevertheless another wild ride with the Dow swinging from a -170 to a +110, finally settling at a +36 at close. The good news is that GameStop and the retail trading frenzy continues to fizzle  while the SEC reviews the whole situation for fraud. Amazon declined 2% on the news of Bezos’ surprise move which doesn’t really make a lot of sense since the overall sentiment on his successor is upbeat. Private hiring came in at 174,000 after a drop in December while the services industry hit a two year peak. Volume came in just under 14 billion. 

Wall Street jumps for second day; Amazon says Bezos to step down from CEO role

The GameStop sizzle is fizzling with the stock dropping 60% today alone and bringing relief to the short sellers. Robinhood is in trouble seeking a billion dollars in loans to cover its orders. Combine all that with the optimism over shrinking COVID cases for the first time since September and a generally bright Q4 with 80% of reporting companies surpassing expectations, and all the indexes were way up, the Dow 475 points.  Volume is finally back in line with the 4-week average at 14.7 billion. 

Wall Street ends up sharply, led by gains in tech shares

The profit-takers swooped in today to scoop up tech shares while the rebellion among the retail traders switched to the silver markets, which went crazy today. However, being a much smaller market, the impact was quite a bit less than it was last week which saw the steepest sell off since October. Silver though hit its highest in 8 years but the VIX eased off from last week’s 3 month highs.  And Robinhood, one of the key players in this uprising, had to go looking for a bank hoping to raise a billion dollars to fulfill their orders.  Not much econ news today except manufacturing slowing a bit but, after weeks of greatly elevated volume and especially last week when there were three days of over 20 billion shares traded, today volume was back to almost normal (normal for these excitable times anyway) coming in at 15.9 billion.