S&P closes lower after last week's rally with inflation in focus

The Dow was down nearly 450 points in the morning session with the other indexes following a similar red pattern, but recovering throughout the day, even breaking even around 2 pm, then falling again to close 222 down.  What initially triggered today’s chaos was a statement from Fed Governor Waller yesterday that there should be a rate hike every month for the foreseeable future, thereby once again inflating the whole “uncertainty” balloon that everyone thought was under control last week. So once again “the market’s trying to figure out the endgame for the Fed.” Also rising energy prices have really impacted consumer spending, particularly with the higher grocery prices. With the holiday over, volume has now risen above recent averages at 15.5 billion. 

AAII recording of "Buyable Gap-Ups" webinar

To close out the holiday weekend, I'd just like to note that I made an earnest effort to get a link from the AAII to the recording of what I considered to be the excellent webinar on April 26th on the subject of buyable gap-ups.  Unfortunately, I found out that one of the conditions the speaker had for presenting the webinar is that no recording be made.  I was very disappointed to hear that since he laid out a very doable process for identifying and investing in these gap-ups.  If I had known that there would be no record kept, I would have recorded it myself off the screen.  

8 Safe Stocks to Buy in a Volatile Market

Given the volatility that has been plaguing the markets for what now seems like forever, I thought this week's edition of U.S. News Invested was particularly relevant.  Enjoy and enjoy the holiday.  

New Investment Opportunities

From this week's episode of the PBS financial program WealthTrack, this one features a panel discussion hosted by both UCLA and Berkeley business schools in which the top of new investment opportunities amidst the market meltdown of the past few months is explored. This is such a fast moving market that this discussion may already be obsolete given the rallies of this past week that suggest things may be starting to turn around. In any event, finding opportunities amidst crisis is always a topic worth considering. Hope everyone is enjoying the holiday weekend.  

Wall Street rallies, snaps longest weekly losing streak in decades

It was another day of no volatility, just a straight up shot as the market enjoyed a second day riding the wave of exuberance that came with a second report now of increased consumer spending and the new found optimism that not only has inflation peaked but that the Fed action to tame inflation will not throw the economy into a recession.  All three indexes reacted even stronger than Thursday with the 2-day total being over 1,000 points on the Dow, nearly 700 on the Nasdaq and nearly 200 with the S&P, the latter enjoying its biggest week in over 18 months. The Dow has now snapped an eight week losing streak, the S&P and Nasdaq a seven week, in all 3 cases the longest streaks in decades. As for Q1, all but 12 of the S&P have now reported with an astounding 77% beating estimates. Given the holiday weekend, volume was light at 10.9 billion. 

Wall Street jumps on retailer outlook hikes, ebbing Fed fears

During the past week or two there has been nothing but dire news from the retailers which in turn has sent the market into a panic with the inference that inflation is hurting buying power. Today that got completely reversed with very good news from retailers hiking their annual profit forecast and very much suggesting that consumer buying power is not in quite the peril the market thought. Further optimism came from the Fed’s suggestion that front-loading rate tightening will be especially good if it means backing off in the fall.  As yesterday’s expert said, “Inflation is doing the Fed’s work for them.” With inflation peaking, it may not be necessary to do as many hikes as the market feared. Today they are saying that the economy is just soft enough to perhaps pivot the Fed into a more dovish turn come autumn.  All this was taken as very good news which prompted a very handsome and consistent rally pushing the Dow up 516, the Nasdaq 305.  Volume remains below average at 11.4 billion. 

Wall Street rallies as Fed minutes meet expectations

 There was a lot of up and down again today with the Dow up over 200 in the morning, then down again before soaring again right around 3pm before falling yet again to ultimately close up nearly 200 again.  But the real trigger was the minutes of the FOMC confirming a unanimous consensus of rate hikes coming June and July. All the fears surrounding these possible hikes suddenly evaporated when, as today’s expert put it, “There’s a lack of uncertainty of what needs to be done in the near-term.” So as is so often the case, there is a confirmation of bad news but the market is actually glad about the bad news. On Thursday we get a better look at Q1 GDP and on Friday more clarity on consumer spending. But today’s rally is really about the “credence to the idea that inflation is doing the Fed’s job for them. There’s already a cooling occurring.” So maybe that means that rate hikes won’t be so aggressive after all.  Volume was considerably below average at 11.2 billion. 

S&P 500, Nasdaq slide as weak economic data, dire outlooks stoke recession fears

 All three indexes started the day deeply in the red, the Dow over 500 points in the red, before all gradually recovered closing closer to break-even, except the Nasdaq with a loss of 270 and the Dow which even squeaked out  a modest of gain 48.  The 43% collapse of Snap was credited with much of the sell-off which then spread like contagion through the entire social media sector. There is no rationale stated below for the market afternoon comeback, just that the sell off was further encouraged by continuing fears of rate hikes and recession plus today’s reports of waning momentum, plunging home sales and decelerating business.  

Wall Street rallies on back of big tech, banks

The Dow was up 700 by 11:30, then stayed there the rest of the day, dropping to a still impressive gain of 618 points by close. After last week’s truly dismal selloff, today is being called a relief rally though today’s cautious expert says, “Investors as a whole feel like there’s another shoe to drop and they’re probably right in the short term.”  Another expert opined, “Today it would appear the market is less fearful but the bias is still to the downside.”  Wednesday we get more info from the Fed to confirm or deny that inflation has peaked and whether it’s hurt spending. But based on the last couple of weeks, even a good report is likely to be met with fear. Volume was below average at 10.9 billion. 

Competitive Edge Investing

From this week's edition of PBS's WealthTrack comes some prudent advice on how to manage investments in this turbulent market that started in January and just doesn't want to go away. $100B has left mutual funds and $200B has migrated to index funds. In this program, Harbor Capital Advisors President Kristof Gleich discusses how to use actively managed ETFs to gain an edge.  Hope everyone had a great weekend.  

10 Stocks Warren Buffett Just Bought and Sold

From this week's U.S. News Invested and for those of you who follow Warren Buffett, here are his latest purchases and, by extension, recommendations for the rest of us.  

Wall Street ends mixed after punishing week

All three indexes opened on the upside, the Dow up over 250 points before almost immediately starting a steady decline falling nearly 900 points by 1:30 before rising again through the remainder of the session to close almost flat. All three indexes were into heavy losses until about 1:30.  All three indexes closed almost flat.  So volatility remains the dominant force. It’s the seventh straight week of losses for the S&P and Nasdaq, the eighth for the Dow. Ross Stores today added to the gloomy retail forecast and the consensus of waning consumer purchasing power and subsequently got beaten down over 22 percent. Traders are now pricing in a ½ point rate increase for not just June but also now July.  Volume was close to recent averages at 13 billion. 

Wall Street ends lower as Cisco and Apple sink

Another day of rampant volatility with the Dow opening near 500 points down and then swinging wildly back and forth all day long between near break-even and some 400 down (and even briefly being near 100 up right around 2 pm) before closing down 236, a loss of over 300 in just the final hour.  It was the same rerun – fear of inflation and rising interest rates – but also today a big slump in Cisco as well as continued declines in Apple that contributed to the chaos. The volatility is expected to continue until inflation starts to slow and that is not expected to happen until at least late summer.  

Wall Street ends sharply lower as Target and growth stocks sink

Wow, after so much optimism yesterday everything just fell through the floor today. Even after yesterday’s very positive retail sales report everything went just so sour after Target collapsed losing an earth-shattering 25% of its capitalization in a single day. But there were clues yesterday with retail giants from Costco to Dollar Tree (including Target) falling between 1 and 3% and Walgreens a precipitous 11%.  The devastation continued today throughout the retail sector which dropped over 8% in a single day as investors panicked over the prospect of eroding consumer purchasing power. The market in trying to assess how bad it’s going to get just fled to the exits, the Dow down nearly 1200 points, the Nasdaq down 566, even the S&P with rare triple-digit losses.  

Wall Street ends sharply higher, fueled by Apple

The retail sales report showed that April was strong so it was a straight shot up today as all the popular stocks that had been fueling the market rallies for months and had recently been beaten down were today taken as opportunities to buy the dip.  And no whipsaws today, just straight up – 431 on the Dow, 321 on the Nasdaq. The big mega-tech stocks all gained between 2 and 5 percent and news of industrial production being up lent more credence to the belief that Q2 will see more growth and a recession will be avoided. Traders still widely expect another ½ point hike in June. Today the S&P is now down only 14% for the year vs yesterday’s 16% and the Nasdaq is off 23%.  Volume again was below average at 12 billion. 

S&P 500 ends lower as Tesla falls, while energy rallies

The Dow started down almost 300 points before steadily rising all day to a point nearly 600 points above its low before falling again around 2:30 pm and losing all the gains save 26 points before close.  If that wasn’t bad enough, the Nasdaq got whipsawed like crazy 4 times swinging back and forth between near breakeven and a near 200 point loss, being for a fourth time near breakeven as late as 2:30 pm before plummeting again to close down 142.  It seems investors were testing the waters all day to see whether Friday’s big rally ws sustainable or if there was more capitulation to be worked out.  

How to Pick Stocks: 7 Things All Beginner Investors Should Know

This week's U.S. News Invested provided an excellent "back to basics" review of investing fundamentals, offering guidance on the most important issue all investors must conquer:  How To Pick Stocks.  Enjoy the read and don't forget Monday afternoon's AAII webinar on combining growth and value strategies for maximum portfolio performance.  Hope everyone had a great weekend.  

The Wisdom of Wall Streeters

For those who are interested, the AAII will be hosting a Zoom webinar on value and growth strategies on Monday afternoon at 2 p.m.  Since the value and growth sectors have been playing tug of war for quite some time now, this should be an excellent lesson on how to combine the two for maximum portfolio profit potential.  As always, preregistration is required and a link for doing so is provided below.  Hope everyone is enjoying this very summery weekend.  

Wall Street rallies, weekly losing streak continues

It was another whipsaw day with the indexes reaching a peak around noon, the Dow up almost 500 points, then sinking in the afternoon and dropping almost 400 points by 2 pm only to have another surge to gain the 400 back and close 466 up.  What lies beneath this very up day?  As today’s expert put it, “a recognition by investors that the sell off is overdone. Some of the beaten-up quality names are really rebounding sharply.”  As the experts have been saying all week, this has all been an emotional rollercoaster since the fundamentals remain strong and it took a week like this one with four consecutive reports saying inflation has peaked that finally got a rational reaction today. 

Wall Street whipsaws, S&P closes lower on worries of prolonged inflation

All three indexes were going down, down, down most of the session.  The Dow dropped nearly 700 points from its 11 a.m. high to the 3 pm low, then rocketed up 500 points in the final hour to close down 103 points. Speak of whipsaws!  Today’s expert summed it up, “These wild swings of upwards of 2% up or down are extremely rare, and showcase a very fragile investor psyche.”  The problem is they haven’t been rare in the last couple of months. 

Nasdaq falls more than 3% as U.S. inflation data gives little relief to investors

The CPI inflation data came in just 0.1% higher than expected and the smallest gain since August suggesting, as investors had hoped, that inflation may have peaked.  But it was still not enough to calm nerves, not enough to placate concerns that inflation will remain a long-term issue, so the panic selling continued with another sharply down day, the Dow down 326, the Nasdaq 373.  As today’s expert put it, “The market is trying to make sense of whether we’re also going to see growth pullback more than expected as the Fed raises rates.”  The Dow’s decline is in its fifth day, the longest streak in three months and the S&P is down 18% from the January high. The good news is that value is still strongly outperforming growth, growth down 2.8% today, value down only 0.5%.  Thursday there will be more inflation data via the Producer Price Index.  Volume was again huge at nearly 15.4 billion. 

S&P 500, Nasdaq end higher in choppy session as inflation data looms

Extreme volatility was once again the order of the day with the Dow swinging back and forth several times between a 350 or so point loss and a 500 gain before diving into negative territory again to close down 84 points. The Nasdaq’s ride was even more dramatic enjoying 300+ point gains twice and twice also near or just below zero before closing up 114.  Once again the up and down was triggered by a variety of factors including the Fed, Ukraine, the supply chain and China. As today’s expert once again reiterated, “It’s just fear-based selling.”  All eyes are on Wednesday’s CPI report on inflation with the hopes it will show that inflation has peaked. Volume was again way above average at nearly 15.5 billion.  

S&P 500 ends below 4,000 for 1st time since March 2021; growth shares lead decline

It was a third day of irrational selling as investors continue to doubt the Fed’s ability to tame inflation and the fears of future rate hikes stoking even more inflation and even recession.  And of course there is also Ukraine, the latest increases in COVID, the supply chain, and now China’s slowdown. It was another massive drop from opening bell on, 653 points on the Dow and 521 on the Nasdaq.  The S&P fell below 4,000 for the first time in 14 months and is now down over 16% for the year. The sell off has been most concentrated in tech and growth, the stocks expected to be most seriously impacted by rising rates. Volume was enormous at just under 15.3 billion. 

New Bond Era

This WealthTrack program from March 24th fell through the cracks while I was doing just weekly updates but given the events of the past week, it's more relevant than ever here in mid-May.  It's all about how the rising interest rate environment has reinvented the bond market and how we can still find a suitable place for bonds in our portfolios.  Enjoy, and hope everyone enjoyed this beautiful weekend.  

Buffett's advice for beating inflation: 'Be exceptionally good at something' [Video]

For Mother's Day weekend it seemed appropriate to conjure the spirit of the Oracle of Omaha for advice on beating inflation, advice a mother would be likely to give.  Truly, these are not just words of wisdom for beating inflation but for successful investing and, for that matter, success in general.  Enjoy -- and enjoy this beautiful weekend.  

Wall Street ends down on fears inflation will force tougher Fed tightening

Volatility was the order of the day as the Dow kept swinging back and forth between near 500 point losses and then touching near break-even three times during the session to finally close 98 points down.  Yesterday’s huge rout did not encourage bargain hunters just yet but, just like yesterday, fears of a ¾% June rate hike to calm inflation spurred on the sellers and, like yesterday, this was all despite Powell insisting that would not happen.  So it was a second day of emotions and fear ruling the market despite strong fundamentals and a glowing jobs report that saw nearly 40,000 additional jobs than expected.  Next week we get the CPI inflation report.  Perhaps that will calm things down.  Volume remains above average at nearly 13.5 billion. 

Wall Street tumbles as investors fret over bigger Fed rate hikes

Will this market ever behave rationally again? Yesterday’s huge rally was a clear indication that investors were excited about the ½ point rate hike in the battle against inflation.  Today we find out that may have been an impulse buy and that when they took overnight to think about it, the thought that dominated was – will it really work?  And it was doubts about that which triggered today’s massive sell off with investors now convinced that June will bring another hike, this time .75%.  This was despite the fact that Powell was both specific and emphatic yesterday in stressing this would not happen. As today’s expert put it, “Investors aren’t looking at fundamentals. This is more of a sentiment issue.”  In other words, the sell off is rooted in fear rather than reason.  Which brings us back to the original question – will this market ever behave rationally again?  Perhaps as has happened many times before, cooler heads will prevail tomorrow, conclude everyone dramatically overreacted today, and there’ll be another big rally.  Volume was quite high at over 13.4 billion. 

Wall Street closes with sharp gains after Fed's interest rate hike

All three indexes were straddling pretty close to break-even all day long until about 2:30 p.m. when suddenly everything went crazy and the market zoomed way up in the final hour.  After having its worst days in two years in recent sessions, today it was the best day in two years with all the indexes up triple digits, the Dow over 932 points. It was likely around 2:30 that the Fed made the announcement making the ½ point rate hike official and validating there would likely be more coming before year end.  And I guess investors decided they really wanted that hike to tame inflation as that last hour saw the biggest spree in a long time, volume considerably above average at just under 13.5 billion.  This was despite less hiring and a loss of momentum in the services sector. As always, the hike benefited bank stocks which jumped 3.5% and 2 year Treasuries soared to their highest yields in 3-1/2 years. 

Wall Street ends higher after choppy session ahead of Fed

Dow down as much as 150 in early session and then up as much as 300 points later before dropping into the red again in late afternoon and then recovering to a 67 point gain at close and near break-even for the other indexes.  It’s a virtual certainty that the Fed will announce a ½% rate hike on Wednesday. Yesterday the experts were saying that the Fed actions have already been priced into the market.  Today they are saying, “The number one driver of all volatility has been the Fed hawkish rhetoric” so Wednesday’s update “is a major catalyst.” Doesn’t sound like they really think it’s priced in.  Tuesday we saw extreme volatility ahead of the announcement. Who now knows what Wednesday’s announcement will bring even though it’s been widely expected for some time. Volume was very close to average at 11.3 billion.  

Wall Street up before Fed meet as tech buying punctuates volatile trade

All the indexes down, way down, as late as 3 pm, the Dow down more than 500 points. Then in the final hour everything rebounded for all three indexes to close in the black. Or as today’s expert put it, “Someone who likes to look for long-term opportunities, this is the land of opportunity right now” as the megacap tech names “which stand to remain key parts of the economy for years to come, as being ‘on sale.’”  Many of the names that got beaten down last week – Facebook, Nvidia, Microsoft, Amazon, Apple – all climbed on Monday between 2 and 5%.  The even better news is that all the fears over the Fed’s upcoming rate hikes are by consensus all priced into the market already. So declines are being used as buying opportunities.  Volume was considerably above average at 13.2 billion. 

4 Growth Stocks, 4 Value Stocks to Buy

As the battle between growth and value rages on, here are the latest and greatest picks from both sectors from this week's U.S. News Invested.  As always, there is a great deal more detail on each stock that can be had by clicking on the link below.  Hope everyone had a great weekend.