Succinct Summations of Week’s Events 5.28.21 (plus Investor Amnesia)

To close out the 2021 Memorial Day weekend, below is the weekly summation, the main positive that more than half of all U.S. adults are now fully vaccinated and jobless claims fell over 10 percent. All the negatives being that new home sales, personal income, durable goods orders, pending home sales, and retail inventories all came in below expectations. 

Separating Winners From Losers

For this holiday weekend, I submit still another valuable article, this one from this week's AAII newsletter with another mini-course on how to separate winning from losing stocks. It's very basic stuff but it is the very root of what we do.  Enjoy.  

8 Things to Know Before You Invest in Gold

From this week's edition of U.S. News Invested, I submit the following article which serves as a very succinct little min-course on investing in gold.  Gold is one of my favorite topics, hope you find this equally informative.  Have a great holiday.  

Wall Street shakes off inflation rise and closes higher

All week long, the market has been waiting with baited breath for today’s personal consumption report as a gauge whether inflation really is a danger. If it’s as bad as we feared, more selling; if not more buying. Instead, even though the report came in worse than feared (an increase of 0.7 vs the estimate of 0.6), investors decided inflation didn’t matter after all and went on a modest buying spree boosting all three indexes, the Dow 64 points. What was even more contrarian was that bond yields, which are supposed to rise with inflation, instead fell and even lifted tech stocks which are also supposed to fall as inflation goes up.  Nothing about the day was logical, not even volume which is supposed to be light going into a major holiday weekend but instead was quite vigorous and right in line with the 4-week average at 10.3 billion. (Do again check out today’s graphic for a quick eye-shot 31 year history of inflation.)  

Wall Street ekes out gain as weekly jobless claims fall

On news of a fall in jobless claims, in fact a 14 month low, and the 10-year note remaining in a range to keep inflation in check, the Dow advanced 141 points with the Nasdaq and S&P staying even, as the good news beckoning a recovery moved more cash away from tech and towards value. But everyone’s been waiting all week for Friday’s consumption report which is anticipated to be the best indicator yet of where inflation is heading. For a change, volume was ahead of the 4-week average at just under 12.5 billion.  (Please check out the graphic below for an eye-popping view of the trend in jobless claims since before the pandemic.) 

Wall Street edges up as U.S. bond yields stay tame

A modest gain in all the indexes as the Fed helped temper inflation worries and as the 10-year note stayed below 1.6% further tempering inflation worries. The Fed’s message remains that recent inflation is transitory and that things are gradually improving. Volume remains below average at 9.3 billion and, with the holiday weekend coming up, should stay on the thin side as the week progresses. 

Wall Street ends slightly lower as investors eye inflation clues

The markets were up in the morning, then down in the afternoon to close modestly lower at 81 points on the Dow, a mere 4 on the Nasdaq.  Again it was the tug of war between rising prices continuing to fan the fears of inflation and speculation of whether the Fed would combat it by paring back its bond buying, something some investors find comforting and others fear. The good news is that the S&P is now just 1% below its all-time high from early May.  Volume was again below average at just under 9.5 billion. 

Wall Street climbs on tech gains as U.S. Treasury yields dip

It was a third day straight up, 186 for the Dow, 190 for the Nasdaq as the whole tech sector advanced 2 percent cooling inflation concerns. Once again it’s ironic that bad news is taken as good news what with the Biden infrastructure bill being pared way down to the point that it may not provide the desired boost but that also translates to lower price increases. Investors are now looking toward consumer consumption data which will be out on Thursday. At just 8.3 billion, volume was considerably below the 4-week average. 

Succinct Summation of Week’s Events 5.21.21 (plus Financial Risk Vs Opportunity)

Below is the weekly summation, the main positive being normalization and economic reopening appearing and growing all over the country, the main negative being congressional partisanship over the January 6th insurrection. The bonus this Sunday night is a very instructive graphic that I think we've seen before but it's been a while so, since it was posted this weekend on The Big Picture blog, I thought it deserved a new look, a graphical representation of the wisdom and follies of how investment decisions are made.  Enjoy!  And hope everyone had a good weekend.  It won't be nearly so hot this coming week.  

Three Issues Markets Are Working Through

For your weekend reading I submit this week's edition of "Daily State of the Markets" from our friends at Heritage Capital Research as they try to explain what's going on with the current market in their article "Three Issues Markets Are Working Through."  The issues should be familiar from the tapering of the bull market due to concerns over valuations to whether the whole inflation question is transitory or the new normal.  Enjoy the read and enjoy the weekend.  

U.S. stocks close mostly lower with tech; dollar up after factory data

It was another day straight up for the Dow but down for the other two as inflation fears continued to migrate money out of tech. Bitcoin continued to slide and now the Treasury is flagging the risks that cryptocurrency poses to stability by considering clamping down on crypto transfer reporting. Volume was 9 billion shares.  

Wall Street ends to snap 3-day losing streak as technology stocks rise higher

After three days of panic selling, the bargain hunters swooped in today bringing all three indexes up after the good news of three straight weeks of falling unemployment claims. But the Fed’s intentions of whether to continue or parse back quantitative easing remains a major concern and market driver. Since the Fed has been pretty consistent in its statements about continuing QE, this would suggest that the cycle here is “buy the dip, and keep buying the dip, ‘cause there’s going to be a lot of dips.”  Volume was a little below average at 9.3 billion. 

Wall Street closes lower after Fed minutes, crypto fall

Twas the third day of panic selling over inflation jitters as investors scrutinized the April Fed minutes to discover that some of the commissioners were leaving open the possibility of reducing the monthy bond purchases “at some point.”  The Dow crashed almost 600 points before recovering later in the session to close down 164.  This was despite the fact that the Fed’s position has remained relatively consistent that the current spikes in inflation are short-term and will likely recede into 2022.  There was also some risk-off movement in crypto when China banned crypto services, a policy change that particularly hit Tesla. Volume was a tad above the 4-week average at 10.7 billion. 

Wall Street closes lower on weak telecom stocks despite strong retail earnings

Inflation fears triggered still another day of panic selling as stalwarts Walmart and Home Depot both lost share value despite beating Q1 estimates. But both seen as icons of both the corporate and consumer sectors, the weakening housing starts data due to spiraling lumber and materials costs sent every one once again to the exits. There is also some “risk-off” going on with anticipation of unpleasant news from the Fed when April minutes are published Wednesday. Volume was just a tad below the 4-week average at still a very brisk 10 billion shares. 

Wall St ends lower, pulled down by tech stocks

It was another day of panic selling over inflation fears with the Dow down about 200 points much of the session but then recovering at the end to close down just 54.  Inflation fears, as has been the case, hit the tech sector particularly hard as higher prices are seen as having a more serious impact on demand for tech products. Despite all this, Q1 is nearing its end with earnings forecasted to climb 50.6 percent, quite the change from the 25% forecasted in early April and the strongest increase in 11 years. Volume was below average at 9.8 billion. 

Succinct Summation of Week’s Events for 5.14.21 (plus 7 High Return, Low Risk Investments for Retirees)

The weekly summation is below, the main positive being the lifting of many restrictions for the fully vaccinated, though many people (myself included) will continue to exercise precautions. The main negative is the 4.6% increase in the CPI, though most economists think (and I agree) that this is strictly temporary and due only to a momentary supply chain breakdown in the face of a huge demand surge as people get back to work and have more money to spend. The bonus this weekend is the latest edition of U.S. News Invested and its article on the best low risk high return investments for retirees.  Hope everyone had a great weekend. 

Congress, stop the madness and eliminate RMDs

For your weekend reading pleasure, I submit an article published this week in Investment News on the topic of RMDs. I admit I've never understood why they even have RMDs, seems like a pointless form of taxation. Why can't a retiree just leave an IRA be and let it continue growing until it's needed rather than being forced to spend it down. And with people living longer, possibly even spending it down faster than life expectancy, thereby defeating the whole purpose of the IRA.  Anyway, this article does a good job of covering the whole question -- why RMDs? Have a good weekend. 

Wall Street closes sharply higher, but posts weekly loss

For the second day there was a huge buying spree with the Dow gaining 360 points and now recovering 2/3 of its losses from earlier in the week. Inflation continues to haunt but continuing optimism over the rebounding economy took center stage again. Q1 is in its final stretch with 87% of companies beating estimates. Volume was a little below average at 9.5 billion. 

U.S. stocks end higher in 'buy the dip' session

My comment last night was that investors who are smart and not panicky should buy the dip and that’s exactly what happened today with the Dow gaining back about one-third of the losses from the last three sessions.  Today we got a little more sensible looking at all the recent positive data, that the recovery remains strong, giving the Fed a lot more credit that they know what they’re doing, and generally acknowledging that rising prices were widely expected. Jobless claims fell to a 14 month low and the sensitive cyclical stocks once again outperformed tech and growth.  Volume remains vigorous at 11.5 billion. 

Wall Street closes sharply lower as inflation fears heat up

For a second day we had panic selling, but about twice as worse than yesterday with the Dow plummeting 681 points, the Nasdaq 357.  Today’s trigger was a CPI report that prices had gone up 3% vs a target of 2%, 50% higher than expected. This is despite the fact that we know the problem is a temporary one caused by a supply chain breakdown due to suppliers being caught with their pants down. It’s Econ 101: as the recovery continues, there is more employment and stimulus; with the added cash in the economy, there is more spending. With more spending prices go up, thus inflation. But inflation has been at rock bottom for so long that any stimulus at all was bound to cause a spike; but even this spike is nothing compared to historical inflationary trends. Much ado about nothing. Investors should be buying the dip. Today’s expert opinion, “The big question is just how long can the Fed maintain its dovish stance in opposition to the markets?” Isn’t this a tad presumptuous? I think the Fed knows more about inflation than investors do.  Investors panic at the slightest sign of bad news. 87% of the S&P have beaten Q1 estimates. Volume continues to be very brisk at 11.8 billion. 

Wall St closes lower as inflation jitters spark broad sell-off

Labor and supply shortages triggering fears of inflation sent the markets into a tailspin with the recent exodus from tech now spilling over into the broader indexes. And though the Dow and S&P went deeply into the red, the Nasdaq largely recovered late in session to close almost even. Job openings are at a record high but labor is not keeping up with surging demand as the recovery continues and the consumer is anxious to spend. There is the additional anxiety that investors just don’t believe the Fed won’t raise rates.  All in all, it was a day of panic selling with the VIX at 21 being at its highest since March 11^th.  (Let’s keep in mind however that any VIX reading under 30 is generally considered good.)  Volume was again very brisk at nearly 11.8 billion. 

Wall Street closes lower as inflation fears prompt tech sell-off

Both the Nasdaq and the S&P took big dives today as once again there was a mass migration from tech to value with the Dow being up almost 300 much of the day only to dive to zero and beyond late in the session and close down 34.  And once again, the concerns revolved around fears of inflation or, as today’s expert put it, “A demand resurgence is colliding with strained supply of basics materials, helping to fuel inflation worries. Once the supply lines are rebuilt this will go away. But it’s going to take some time.”  And time, of course, is the big question. Will this be transitory or stick around? Q1 continues to go marvelously with 439 of the 500 reporting and 87% beating estimates. The Q1 earnings forecast remains at 50.4%, more than twice what it was in early April and more than thrice what it was on January 1. Volume is again a tad above average at just under a pretty vigorous 11 billion. 

Succinct Summation of Week’s Events for 5.7.21 (plus High Dividend Yield Value Stocks to Buy)

Below is the weekly summation, the bad news of weak jobs data taken as a positive as supportive of more stimulus, the corresponding negative that payrolls came in below expectations and April unemployment came in at 6.1%, 0.1% higher than March. The bonus to conclude this weekend is a list of value stocks from this week's U.S. News Invested that pay high dividends, particularly useful during this recent trend of the market moving away from tech and towards value as the economy continues to improve. This is useful as the dividends give these value stocks the same advantage as growth.  Hope everyone enjoyed the weekend, wet and cold as it was. 

HIGH OCTANE INVESTING

It's time for another segment of the PBS program "WealthTrack" hosted by Consuelo Mack and any program that dons the moniker "High Octane Investing" in this market that is already on super steroids is worth a look.  This is an interview with the head of technology research at Baron Capital which for years now has beaten the "reversion to the mean" odds by outperforming an already outperformed market. Enjoy the weekend.  

S&P 500, Dow hit record highs as weak jobs data eases rate worries

Today was another example of Wall Street illogic as bad news got taken as good news and all three indexes soared, the Dow and S&P to new records.  The bad news is that the April payrolls report came in unexpectedly weak, likely due to worker shortages. The good news is that the market is cheering this as a virtual guarantee of no rate hikes, this despite the fact that Yellen gave all but such a guarantee the other day. Growth names are coming back but value also had a very good day as an upbeat Q1 continued fueling gains. The Q1 forecast has been raised again, today to 50.4%, the highest growth rate in 11 years. Volume is right in line with the 4-week average at 10.2 billion. 

Dow ends at record high after upbeat jobless claims report

It was another big rally taking the Dow to still another record as financials and other value stocks got a boost from news that unemployment claims had fallen 92,000 from the prior week.  Though the real proof of the pudding will be Friday’s payrolls report, investors continue to show nothing but optimism in economic recovery.  Pharmaceuticals took a bit of a hit from Biden’s proposal to waive vaccine property rights but it didn’t seem to be that big a deal with even Moderna saying it wouldn’t hurt future sales. Volume had still another day a little above average and quite brisk at 11 billion. 

Dow ends at record high as tech slides

More volatility as has been the trend for some time now with the Dow down about 200, then back to even, then up around 200 then down again to close up 97. It was another day of running from tech and towards the value and defensive stocks that benefit from an expanding economy. There have been wobbles over mostly unfounded inflation concerns but private payrolls increased in April and jitters continue to be reflected as volume is again below average at 8.3 billion. 

Nasdaq ends sharply lower in tech stock sell-off

It was another day of panic selling after Janet Yellen made some rather benign comments about inflation that got interpreted that interest rate hikes might be in our future.  This was despite her saying, “It may be that interest rates will have to rise somewhat to make sure our economy doesn’t overheat, even though the additional spending is rather small relative to the size of the economy.” So even though she said quite directly that this will be a minor problem if indeed it turns out to be any problem at all, it sent everyone screaming towards the gates.  The good news is that there was yet another migration away from tech and towards value which further validates the market’s optimism over recovery. The Q1 profit forecast has now been raised to 47.7% which is quite remarkable seeing that it was just 24% in early April and even at 24% investors thought it was wildly optimistic. It seems just in the last couple days that skepticism has finally been diminishing as reflected in today’s volume of 12.2 billion, the highest in a month. 

S&P 500, Dow start month on strong footing, growth stocks lag

It was another terrific day with stocks flowing out of tech and into value once again as earnings season continues to outpace estimates and optimism grows over the economic reopening. Q1 is more than half over now and 87% of companies have beaten estimates leading to the Q1 profits forecast being raised once again, today to 46% growth vs Thursday’s 45% vs the 25% they started with weeks ago. As today’s expert put it, “There continues to be an underestimation of how strong this rally and how strong the economy is rebounding.”  The skepticism over Q1 seems to be waning as today’s volume was actually a tad greater than the 4-week average at 10.3 billion.  

Succinct Summation of Week’s Events for 4.30.21 (plus AAII Upcoming Webinars)

Below is the weekly summation, the main positives being 1.1 billion vax doses globally and GDP rising 6.4% in Q1, about 50% higher than the previous increase, personal income rising 21% vs the previous 7% decline and consumer confidence rising.  The big negative remains the continuing rise of vaccine hesitancy, giving rise to fears that herd immunity may not be possible. The bonus this Sunday night is a convenient AAII email outlining the upcoming webinars for May 12, 19, and 26.  Hope everyone had a great weekend.  

The Ultimate Buy and Hold on Steroids

For those of you who may have missed Monday's Zoom webinar by Paul Merriman "The Ultimate Buy and Hold On Steroids," Cookie has provided links below to both the pdf presentation and the YouTube webinar. Paul presented a compelling case showing scenarios for 2, 4, and up to 10 ETF portfolios, all of which way outperformed the S&P and even aggressive short-term trading, simply by making an initial investment and then leaving it alone for 20 or 30 years. It was quite an eye-opener (and of course, there were also strategies for those of us in the retiree bracket who don't have 30 years.)  The pdf alone is worth a good study.  Hope everyone is enjoying the weekend.