9 Red Flags Investors Should Know About the Robinhood IPO

Once again, for your weekend reading pleasure and to show that I can be balanced I submit yesterday's edition of U.S. News Invested giving the other side (the side I happen to agree with) of the meme/retail/Robinhood trading craze that has seized the market in the last few months.  

Wall Street falls with Amazon; S&P 500 posts sixth straight month of gains

We all know that the success of the tech stocks has been mostly driven by the “stay at home” environment created by the pandemic so it’s only natural that tech companies would now be forecasting an ease in growth. When Amazon did that today, it sent everyone running away from tech and, along with tech, the rest of the market as today’s expert put it, “This market is being driven by big tech so when the market doesn’t go along with it, it falls.”  So with consumer spending on the rise, which is good for the recovery, the market didn’t go along with tech.  Today anyway, and that’s the key. Almost every day investor sentiment changes from risk-on to risk-off, thereby creating a lot of volatility. Today it was risk-off even though the S&P did well with its sixth consecutive month of gains. 300 companies have now reported with 89% beating estimates and the earnings forecast once again jacked up, today to nearly 90%, quite a jump from the forecast of 65% a month ago, which may be unprecedented. Volume was nearly 8.9 billion, below the 4-week average. 

Wall St gains with upbeat earnings and forecasts

With Q2 coming along so nicely and GDP now above its pre-pandemic highs, (plus the good news from the Fed) investors jumped back in to the economically sensitive financials, materials and energy boosting the Dow 153 points and both the Dow and S&P to intraday records. Q2 reporting is now half over with an astounding 91% beating already exaggerated estimates and the earnings forecast has once again been catapulted, today to 87.2 percent. On Friday everyone will be looking at the consumer spending report. Volume was a little below average at 9.1 billion. 

S&P 500 ends off day's lows; Powell says Fed still a ways away from rate hikes

Even though the tech Q2 reports were quite nice and the Fed told the markets exactly what they wanted to hear, the Dow nonetheless took a dive, most of it in the last half hour of trading. But the dive in the Dow was compensated by a boost in the Nasdaq, undoubtedly triggered by Google hitting an all-time high. And though the S&P suffered earlier in the session, it rallied and broke even after the Fed announcement. As today’s expert put it, “The most important thing is they (the Fed) are predictable and are remaining predictable.” Volume was right in line with the 4-week average at 9.8 billion. 

Wall St snaps five-day up streak as caution rises before tech earnings, Fed

After five consecutive days of gains, the market stepped back a bit today, especially on the eve of tech giants like Apple, Microsoft, Google and Amazon reporting. The fear today was that tech expectations are so high that even very good reports are liable to disappoint. Nothing short of spectacular was going to satisfy investors so, bracing for a letdown, there was a flight out of tech today. And as the July Fed meeting wraps up tomorrow, there is also anxiety about trimming the stimulus. So the market went into “risk-off” mode today as demonstrated by defensive sectors outperforming. Volume was a little above average at just under 10.4 billion. 

Indexes notch closing record highs as key earnings, Fed meet eyed

The market continued its upward trajectory with all three major indexes reaching new records for a second consecutive session. Even though Q2 earnings projections are in the stratosphere, companies continue to beat them so everyday brings new surprises and more optimism. At the Fed meeting Tuesday and Wednesday everyone will be looking to see if the position of rate hikes as early as 2023 is still on the table and whether the Fed still sees inflation as temporary. Volume was a tad below average at 9.7 billion. 

How to Analyze a Fund Using AAII Tools

Wow, so many tornadoes last night.  Hope everyone is ok. It was pretty scary here in Bloomfield between 7 and 9 pm.  For your Sunday night consideration, I have a notice below from the AAII of a rebroadcast of their popular webinar on analyzing funds using AAII tools.  It should be very informative.  Please note that it's coming this Wednesday and that you must register. Hoping everyone is well and have a good week. 

10 worst percentage losses ever for the Dow

I like the weekends because it gives me time to share interesting articles like the one I found this week below from Investor News Daily. I also like these kinds of articles because they put things in perspective. What follows is a list of the worst daily losses in the history of the Dow (just in case anyone thinks last Monday was actually bad) and though several of them were from the Great 1929 Crash, most of them were not. Some were even from quite recent history.  Enjoy the trip down memory lane.  It was quite a fierce storm tonight and we're in for a few very steamy days ahead. Hope everyone is surviving. 

Wall Street surges to all-time closing high on earnings, economic revival

It was another ground breaking day with the Dow closing above 35,000 for an all new record as the market continued its trend of the last four days with “risk-on” back with a vengeance.  There is still a fair amount of ambivalence as to whether the future holds more brightness or more clouds and, though the Fed has remained consistent in its stand to support the recovery, investors will still be looking for any hint that this may not be the case. 120 S&P companies have now submitted Q2 reports with 88% beating estimates and the Q2 earnings forecast has again been upped, this time to 78.1 percent, quite the change from the earlier forecast of 54% which, I may remind you, was considered wildly optimistic at the time.  Volume remains just a little below average at 9.7 billion shares traded. 

Wall Street inches higher in pivot back to growth stocks

The Dow was down about a hundred in the morning, then up about a hundred in the afternoon to settle at close with a modest gain as did the S&P and Nasdaq. With unemployment benefits suddenly spiking and the day bringing mixed reports on earnings, investors backed away from the value stocks and back to growth with the big tech leaders pulling out front but, overall, it was close to a wash. Fortunately investors are now looking more at earnings than at macro data but as today’s expert states, “Earnings so far are better than expected. It’s a market that’s priced to its heights and there’s no room for mistakes.” 104 S&P companies have now reported with 88% beating estimates and the earnings forecast has been raised once again, today to an exorbitant 76.5%. Volume was below average at 8.2 billion. 

Wall Street ends higher, powered by robust earnings, economic cheer

It was another big rally today as the markets decided that the robust Q2 and solid economic reports instilled more optimism about the continuing recovery and that the Delta variant could be managed. It was especially encouraging that the cyclical stocks expected to do well in a recovery are the ones that were in most demand. 73 S&P companies have now reported with 88% beating estimates. Volume was a little below average at 9.1 billion. 

Wall Street bounces back on renewed economic optimism

All of the panic of the last two days suddenly evaporated today as the market went into “buy the dip” mode and charged the Dow a good way towards recouping yesterday’s losses and the S&P with its strongest one-day gain since March. All the recovery stocks did well which sent the message that, unlike yesterday, the economy was not going over the cliff after all. Q2 is going well with 91% of reports beating estimates and the earnings forecast has been raised once again, this time to an astonishing 72.9%. The best news is that volume is still above average at 10.6 billion, meaning the market consensus favors the optimism.  

Wall Street ends sharply lower as Delta COVID variant sparks new lockdown fears

What a rout!  The surge in the Delta variant finally came home to roost today and completely spooked the markets leaving some fresh doubts that the recovery is not going to be quick. It was the biggest sell off on the Dow in nine months and the biggest one day percentage drop in the S&P and Nasdaq in two months.  The surge is being caused almost entirely by the unvaccinated and there remains little hope of changing their minds. This was despite the greater news of 90% of Q2 reports beating estimates and Q2 profits now projected to grow 72%, quite a change from the original forecast of 54 percent. Volume for once was considerably above average at 12 billion. 

8 Robinhood Stocks Investors Are Buying in Q3

Again, to show that I can be fair even if I do have suspicions about the legitimacy of the Robinhood strategy, I submit below the Friday edition of US News Invested in which they list their picks of the best Robinhood stocks to own for Q3. These are all good companies. Use your own judgement. Once again, there is no summation. I suspect they're done for good.  Hope everyone had a great weekend. 

Bank of America's 8 Best Stocks to Buy in Q3

For your weekend reading, I again submit this week's issue of US News Invested with Bank of America's (that owns Merrill Lynch) recommendations of the best stocks to buy in Q3. For Sunday there will be one more little surprise coming from US News.  Stay tuned. 

Wall Street ends down as Delta variant drives fears

The markets turned sharply down today as COVID once again became the headline with the uptick over the Delta variant having investors worried about another wave and how that might impact the recovery. Once again there was a rush from tech with Amazon and Apple particularly hard hit and cyclicals like utilities and real estate getting a boost, real estate reaching a new record. Q2 projections have now been raised to 72% profit growth but as today’s expert said, “It’s been hard for the market to gain from these already elevated prices.” So Q2, in addition to showing healthy profits, must also show valuations continuing to remain high.  Q2 reporting next week will be coming from such stalwarts as Netflix, J&J, Verizon and Intel. Meanwhile, volume remains below average at 9.3 billion. 

Nasdaq ends lower as investors sell Big Tech stocks

As investors continue to sit on the fence, there was another mild exodus today away from tech and growth and back to industrials and cyclicals as unemployment claims sank to a 16 month low and people remain nervous about inflation and tax rates.  And it now appears that a great Q2 will not be good enough. The markets are also looking for evidence that the good times will extend into 2022 before they get comfortable with the high valuations. Volume remains below average at 9.6 billion. 

S&P 500 ends higher after Fed Chair Powell lulls market

After Fed Chair Powell once again reassured the markets that the recent bout of inflation was temporary and that no hawkish policy shifts were on the agenda, the indexes all took a day to take a breath with just modest gains and losses across the board as investors await more data and more Q2.  Though a strong Q2 is expected, there is going to be a certain amount of fence sitting. This was demonstrated today with Citigroup’s stock dropping slightly even though they handily beat their profit estimates. Volume remains below average at 9.8 billion. 

S&P 500 and Nasdaq end down after hitting record highs

After two record setting days in a row, the market pulled back a bit today even though JPMorgan and Goldman Sachs turned in stellar profit reports.  In fact, despite the good news, both companies’ stocks fell. Data showed that consumer prices are at their highest in 13 years and this might have contributed to the slide even though economists and the Fed widely view the price surge as temporary. The good news is that with growth outperforming value again, inflation appears not to be a real threat. Tomorrow and Thursday everyone will be paying close attention to Fed Chair Powell’s testimony before the Congress.  Volume remains below average at 9.5 billion. 

Wall Street closes at record highs, lifted by Tesla

It was another record breaking day clear across the board with Q2 earnings now expected to jump 66% and the markets generally optimistic about the banking reports coming this week.  The S&P is up 17% in the first half of the year and Q2 reports will be watched closely for clues about how long the recovery will last and whether inflation will be an issue.  But while awaiting reports and data on inflation and retail sales, volume remains below average at 8.3 billion. 

Rethinking Demographics

I guess it's pretty much an unavoidable conclusion now that Barry Ritholtz is no longer doing his succinct weekly summation. But on Friday I summed up three days worth of market action so let that suffice. There is so much interesting stuff on his daily blog that I'll just continue doing what I've been doing and provide an interesting selection from the many he posts each day, over each weekend, and particularly on Sundays. Today there was a great article about demographics which is posted below along with a graphic that sums up a huge amount of information about past, current, and changing trends in one visual.  

Check a Firm’s Health in Its Annual Report

For this weekend's reading, I found it might be a good idea to get back to basics when I found this article in last month's AAII.  Since so much good investment information can be culled from an annual report, this essay on how to properly read an annual report in order to evaluate a company as a good buy I thought was worth a look-see.  

Wall Street posts record closing highs as financials lead rebound

This is my attempt to succinctly sum up three days of market activity. Wednesday the Dow rallied about a hundred points and then took a big dive of 259 points Thursday mostly on worries about the pace of the recovery. As yesterday’s expert said, “We’re still effectively at all-time highs so I wouldn’t read much into today’s actions.” And what a wise comment that indeed was as the market snapped back huge today with a 448 point rally on the Dow and 142 on the Nasdaq sending all three indexes to new record closings. It was a complete reversal from yesterday’s doom and gloom. Today everybody did well – cyclical, growth and bonds. As today’s expert put it, “The U.S. is in a bubble compared to the rest of the world with a lot of free money and low interest rates.” The Q2 earnings forecast is for 65.8% growth vs the prior forecast of 54 percent. Volume was below average at 8.5 billion. 

Massive power outage until 10 pm tonight

Readers, there was no Marias posting last night and there will not be one tonight because at 3 pm Wednesday Bloomfield Township experienced a massive power outage from the violent afternoon storms. Power was restored at 10 pm Thursday night  31 hours without power. Thankfully, the heat let up somewhat so it wasn't as miserable as it might have been. No access to news so don't know what went on with the markets the last two days but will endeavor to catch up tomorrow and put out the next posting. 

Dow, S&P 500 fall as financials drag; Nasdaq at record

It was yet another day of investors running away from cyclical stocks and towards the safe haven of tech as the Dow plunged 208 points and the Nasdaq a modest bump of 24.  Or as more likely the case, a day of profit-taking after the enormously successful close of Q2 last week. A third option is that investors may be concerned that the overall economy may not be in quite as good shape as the stock market suggests.  Whatever it was, the value index fell by 1% while growth spurted up ½%.  Volume on this first day after the holiday was still below average at 10.1 billion. 

What makes a good citizen? Voting, paying taxes, following the law top list

To close out this 4th of July weekend, I thought the following article published by the Pew Research Center was quite appropriate. As we celebrate the privilege of being a citizen of the greatest country in the world on the country's birthday, there is no more appropriate topic than what does and does not make a good citizen.  There are some very good thoughts in here. Enjoy, and enjoy your week.  

Epic Bubble

For this 245th  Independence Day celebration I submit this week's edition of PBS' WealthTrack which very appropriately tackles the subject of this very long bull market, or what they call the big market "melt up," what lies behind it and where it's going.  Hope everyone has enjoyed the holiday so far. Looking for another hot one tomorrow.  Have fun with it.  

Your Favorite Money Rules

For your weekend reading pleasure, Barry Ritholtz has conducted a great survey of his readers soliciting opinion on his Big Picture blog of what their favorite money rules are. There's a lot of wisdom contained here and, if you have the nerve, there is a link to the Twitter feed that has hundreds of more pearls. 

Wall Street hits record on robust June jobs data

The employment report, which the forecast had at a plus 700,000 jobs, actually came in at a plus 850,000 jobs for a total of 6.8 million which just thrilled investors today.  It was enough to instill even more confidence in the recovery but, with the jobs picture still not ideal, not enough to prompt fears of the Fed changing inflation policy. All three indexes rose, the Dow another 152, the Nasdaq 116 and, with a +32 the S&P reached its seventh consecutive record high. Headwinds weighing on the market are considered to diminish as we head into fall and more jobs are added. The next big event, as always, will be the June Fed minutes which will be published next week and give investors more clues on inflation and bond tapering. Due to the holiday, trading is light at 7.9 billion vs the 10.8 billion average. 

S&P 500 winning streak extends to sixth straight record close

For the first day of Q3 the S&P with an increase of 22 points once again hit another record, this time the sixth straight record close. Great economic data has given the markets plenty of confidence so once again investors are pulling out of tech and back to the Dow cyclicals with a zoom up of 131 points. But the best news per today’s expert, “Historical data shows if you have a strong first half, the second half will be even stronger.”  Jobless claims continued downward as the worker shortage continues. All eyes as always will be on Friday’s employment report but all employment and manufacturing data supports the idea of continued growth. If Friday’s report is also on target, we’ll see another up day, though there is the possibility that strong employment will stoke more inflation fears and bring the markets down. Friday’s payroll data is expected to be a plus 700K.  Volume is again a little below average at 9.5 billion.