Downside Protection

Here is some more useful information for dealing with a falling market via this week's WealthTrack program on PBS hosted by Consuelo Mack. In this episode she interviews Charlie Dreifus of Royce Investment Partners on the whole topic protecting your downside. Hope everyone enjoyed the beautiful weekend. We're heading for major heat again this week.  

12 Terms Every Investor Needs to Know

For this last weekend in July I thought it would be nice for some light summer reading to get back to basics.  This week's U.S. News Invested not only reintroduces us to the meanings of 12 essential terms of investing but also provides an investing dictionary, something that along with Investopedia should prove to be an invaluable resource in anyone's financial library.  Hope everyone is enjoying the wonderful weekend.  The big heat is coming back.  

S&P 500, Nasdaq register biggest monthly gains since 2020

We just closed out the biggest month in two years with a third consecutive day of big rallies.  Apple and Amazon’s strong numbers bolstered confidence that the megacaps are able to navigate through these tough times and for a second day the contracting GDP was taken as good news supporting speculation that the Fed will slow down. All three indexes gained for both the month and the week with the S&P up 9.1% for July, the Nasdaq up 12.3 percent. 279 S&P companies have reported, 77.8% beating estimates and earnings growth now forecast at 7.1%, way up from the 5.1 just two weeks ago and even surpassing the much more optimistic 6.8 from four months ago.  Volume was again above the 4-week average at 11.3 billion. 

Wall St ends up sharply for 2nd day; Amazon.com, Apple jump after hours

The Dow was down over 200 points by 10 a.m. but quickly reversed course to begin a continuous climb for the remainder of the day to close up 332.  It must have been about that time that the GDP report was issued showing another contraction in Q2 indicating the possibility of recession. They called it “unexpected” but it wasn’t really. The financial media has noted for some time now that a Q2 contraction was expected. But the contraction is also an indication that the Fed could slow down a little and evidently that was more important than the prospect of recession because it triggered an immediate buying spree almost as energetic as yesterday’s.  Adding to the excitement were megacaps Ford, Amazon and Apple shooting up due to beating Q2 estimates. For once volume was above the 4-week average at 11.2 billion. 

Nasdaq has biggest one-day jump since 2020 after Fed rate hike

All the indexes were up nominally all day until about 2 pm.  Then the Dow shot up almost 600 points after 2 pm, then came down a bit in the last half hour to close up 436.  The Nasdaq did even better. So it must have been right around 2 pm that the Fed made the announcement of the ¾ point rate hike. Powell’s comments were taken by investors as hope for a slower pace of hikes and was considered calming. That taken in combo with more better than expected Q2 and everyone went on a buying spree.  Megacaps Microsoft and Alphabet also zoomed further adding to hopes that the recent rally might continue.  Volume was much closer to the 4-week average at just under 10.6 billion. 

Indexes drop as Walmart profit warning spooks investors

On the day before the expected rate hike, all three indexes went way south with the nation’s biggest retailer sinking 7.6% on the announcement that it was cutting its full-year profit forecast, news that also sent several other heavy hitters plunging as well as the entire S&P retail index.  Adding to the gloom was a report showing consumer confidence had dropped to a 1-1/2 year low.  This was despite the fact that the majority of Q2 reporting thus far has beaten estimates but Amazon created the biggest drag in announcing it would raise Amazon Prime fees by a whopping 43 percent. 

S&P 500 ends choppy session nearly flat; investors eye Fed, earnings

It was a choppy session to say the least with the Dow bouncing back and forth between about 100 up and break-even 5 times during the day to finally close up 90.  This is the week of the next expected Fed rate hike to be announced on Wednesday and also a big week for Q2 with 170 new reports due.  The Q2 earnings growth forecast has grown again now at 6.1% vs 5.1% two weeks ago and edging nearer again to the 6.8% estimated at the beginning of Q2.  Housing data due Tuesday is expected to confirm that inflation continues to cool. Volume continues below average at just under 9.4 billion. 

7 Best REITs to Buy for a Recession

Continuing on this weekend's theme of investing in a difficult market, here are more hot tips from U.S. News Invested, this time for beating recession by buying real estate investment trusts.  The searing hot weekend is over, nicer temps coming.  

7 Best Monthly Dividend Stocks to Buy

For those of you interested in investing for income, here are the latest and greatest dividend picks from U.S. News Invested.  

Wall Street closes lower as ad tech, social media stocks drop

The Dow opened almost 200 points up but then immediately started a precipitous decline diving some 500 points by 2 pm, then another brief rally to close down 137 points. The trigger today was the almost total implosion of Snapchat which fell 39% on its weakest-ever sales growth for Q2, news that sent other major online companies plunging as well.  One-fifth of the S&P has now reported with 75% beating estimates compared to the 81% beat rate of the past year. Business activity is down for the first time in two years and other weak data is confirming the likelihood of recession. (How can business activity be down when there is still so much empty space on store shelves, clearing demonstrating that companies still cannot keep up with demand?) Volume is again below average at 10.4 billion. 

Wall Street closes higher boosted by strong Tesla earnings

Tech did better than value today with the value-heavy Dow dipping more than 300 points by 10 a.m. but recovering to break-even by noon and continuing to rise and close up 162.  The tech-heavy Nasdaq was on an upward trajectory all day climbing to a gain of 162 at close.  This was triggered by a good Q2 report from Tesla and an overall continuing Q2 faring better than feared. Not to be overly optimistic though, the consensus is that tech is rising because it is so far down that bargain-hunters are sweeping in. 

Wall Street closes higher boosted by tech stocks gains on upbeat earnings

All the indexes seesawed today with the Dow down 180 in the morning and afternoon and up 120 around noon and just before close before falling in the final half hour to close up 47 points. The Nasdaq fared better with a gain of 184 points indicating the market was more risk-on today with the tech stocks. But the rollercoaster is expected to continue for at least two more quarters until the market is satisfied that inflation is indeed under control. S&P profits are now expected to grow 5.9% vs 5.8% yesterday vs 5.1% last week so confidence seems to be building and we’re gradually getting back to the 6.8% projected at the beginning of Q2.  At 11.5 billion shares traded, volume is now back on par with the 4-week average which also indicates added confidence, not to mention the VIX falling to 23.8, its lowest reading in 3 months. 

Wall Street closes sharply higher on strong corporate earnings

In a mirror-image of yesterday when the indexes started way up and then quickly sank, today the indexes started up and then went way up the rest of the day.  The Dow opened about 100 points up and then climbed another 650 points to close up 754.  The Nasdaq had its biggest day since June 24^th, the S&P since June 9^th.  More and more banking stocks beating forecasts was the trigger with investors now placing heavy bets that the long awaited bottom has been reached. Still, today’s expert cautions, “The macro picture hasn’t changed. I don’t think this type of rally has staying power.”  At 10.95 billion, volume remains below the four-week average but with each day inches closer and closer to it. 

Wall Street closes down on slide in Apple shares, bank stocks

It’s a short story today with good Q2 coming from BofA and Goldman Sachs shooting the Dow up some 350 points. Then disappointing reports from the rest of the financial sector and especially from Apple sent all indexes into a steady decline ending with the Dow closing down 215, nearly a 600 point drop from its morning high.  With most investors still on the sidelines awaiting more Q2 reporting, volume remains below average at 10.6 billion. 

7 of the Best Ways to Invest $5,000

And for still more wisdom from a recent edition of U.S. News Invested, here are some very useful tips for even modest investors with only small sums to commit, all of these pretty much as close to risk-free as you can get.  As always, you can click on the link to get more details.  Hope everyone is enjoying this warm weekend.  

4 Growth Stocks, 4 Value Stocks to Buy Now

For your continued consideration, 8 more stock recommendations from the latest issue of U.S. News Invested, four for growth, four for value.  Enjoy the weekend.  

Wall St ends tumultuous week with strong rally as rate hike fears wane

It’s amazing how just one bit of good news can send the market on a wild buying spree and that’s exactly what happened today with Citigroup bucking the bad news banking reports by turning in a Q2 that beat estimates, not only sending all the indexes surging all day long but boosting the banking index 5.8% along with Citi stock 13.2%.  More importantly, this single piece of good news changed the entire Q2 profits growth forecast from yesterday’s 5.1% to today’s 5.6%.  A slew of good economic reports also helped the spree along with the fact that 80% of the 35 S&P companies that have now reported have beaten estimates. 

S&P 500, Dow close lower after bank earnings, inflation data

It was a repeat of yesterday with the market panicking right out the gate and driving the indexes way down, the Dow more than 600 points, all on the disappointing Q2 news from JP Morgan and Morgan Stanley and both major firms warning of uncertainty. But again, just like yesterday, there were almost immediate second thoughts as investors realized that they didn’t really expect the two big banks to do well and certainly the announcement of uncertainty was no real news.  As today’s expert put it, “If you’re alive and breathing you know there’s uncertainty in the market.”  

Wall St ends down as hot inflation data raises odds of steep Fed rate hike

It was the worst case scenario for today’s CPI report showing inflation running hot at 9%, stoking fears that the Fed may actually raise rates a full 1% next week and thus plunging the Dow down some 500 points by 10 a.m.  Then it was almost like immediate second thoughts.  Why are we panicked?  We knew this was likely going to happen.  And we’re no longer debating the inflation vs recession question. Now a recession is assumed and the question is now going to be how bad.  All this seemed to be the trigger that spurred a buying spree that by 3 pm had the indexes near break-even only to lose again in the final hour to close down 208.  The good news is that the high CPI is almost entirely due to gas prices which have already started coming down so core CPI continues to show cooling inflation with the real rate at 5.9% rather than 9.1.  Volume continues below average at just under 10.7 billion, likely because investors are awaiting Q2 which begins in earnest on Thursday. 

Wall Street tumbles at close as worries mount ahead of CPI report

The market was sort of skirting its way all day between modest gains and losses until about 3 p.m. when suddenly there was a massive selloff as investors got nervous about Wednesday’s CPI report. It is expected to show that inflation continued to rise in June but that the core CPI confirms inflation has peaked. So will this be enough to make the Fed ease up?  Investors doubt it and today’s expert opined that topline CPI will be in the 8 or even 9 percent range and, if that high, the Fed will certainly continue its aggressive moves.  

Wall Street ends lower ahead of economic data, earnings

So Macau is dealing with another surge in COVID and today the island just off the coast of China shuttered its casinos to curb the spread. To illustrate how delicate and nervous the markets are, that minor action that took place on the other side of the world sent the markets spiraling down.  (There was a momentary rally at 2 pm that sent the Dow to break-even but no explanation below as to why.)  Q2 begins later this week with the banks reporting and expecting steep drops in profits, plus Pepsi and Delta due Tuesday and Wednesday. Earnings growth is expected to drop to 5.7% vs 6.8% three months ago.  

Bear Market Opportunities

To continue on this weekend's theme, below is this week's WealthTrack program on PBS hosted by Consuelo Mack, this time on the topic of Bear Market Opportunities as she interviews Sarah Ketterer of Causeway Capital Management.  Hope everyone enjoyed the weekend.  The heat returns on Monday.  

10 Inverse ETFs That Gain in a Bear Market

For those of you who favor contrarian approaches to investing, here's an interesting suggestion from this week's U.S. News Invested for profiting in this bear market -- Inverse ETFs.  Enjoy and enjoy this beautiful weekend.  

Wall Street gyrates to muted close as investors weigh jobs data in rate debate

It was a seesaw day with the employment report coming in at 372,000 new jobs vs the forecast of 268,000 and with a jobless rate near pre-pandemic lows at just 3.6%. More employment could mean more inflation as demand for goods continues to rise and that could mean more aggressive action from the Fed. So the Dow was first down about 200 in the morning, then broke even and reached a high of about +130 by 11 a.m, only to sink into the red again and rise again and then finally fall one more time for a modest loss at close.  So volatility remains the tone of the market which have all started July on a solid footing partially prompted by the Fed hinting at more tempered rate hikes. 

S&P, Nasdaq end higher as July hot streak continues

It was a shot straight up today with the Dow up about 250 points right out the gate and just continued climbing to close up 346 points, as with all the other indexes.  This was the second day of euphoric buying on the speculation that the July rate hike due in a couple weeks will only be ½ point instead of ¾. This was further validated today, which explains the buying spree, by Fed Governor Christopher Waller who took a less hawkish tone in calling fears of a recession overblown and advocating for a ½ point hike in September, taken as a cue by some to add to positions.  The risk to the downside is now considered minimal compared to the potential to the upside, today anyway. All eyes are on tomorrow’s employment report, expected to add 268,000 jobs in June. Volume was again considerably below average at just under 10.5 billion. 

Wall Street ends up as investors absorb Fed minutes

Like Tuesday, all the indexes were deeply down in the morning session, the Dow down some 170 points by noon.  Then at 2 pm, the report parsing the June Fed meeting was published shedding some hope that a ½ pt rate increase was still on the table rather than a ¾ point. The market pulse says that a ½ point increase will avoid recession but that a ¾ point will make recession a 50/50 crap shoot.  Indulging in the wishful thinking regarding the ½ point, the market zoomed up, the Dow gaining some 335 points by 3:30 (or some 250 past break-even) only to dive again, along with the rest of the indexes to close a modest 69 up.  No explanation is given below for the last minute dive. In three weeks we’ll know what the Fed verdict is.  Volume was considerably below average at 11.3 billion. 

S&P 500, Nasdaq end higher as investors eye economic path

It wasn’t a bad day but it started out really bad with the Dow down some 750 points around 11 a.m. and then slowly but steadily coming back to close down 129.  At least the Nasdaq and S&P though they also started heavily in the red not only recovered to break-even but even had some gains. But today’s reports showed that new orders had increased more than expected and that demand remains strong.  And the outlook for recession is not quite so bleak, now being called “non-zero” instead of "likely" but could still emerge in late year or early next.  The markets will be looking at Friday’s payroll report for clues on peaking inflation and cooling growth.  Volume was a little below average at 12.4 billion. 

Four Ways to Identify Companies at Risk of Going Bankrupt

To close out this holiday weekend and in consideration of all the tumult the market has been going through of late, this week's AAII Investor Update seemed particularly timely.  Hope everyone had a wonderful 4th today!  

Bear Market Recession

Are we or are we not headed for recession?  Are we or are we not already in recession?  These are the questions that are addressed in this week's edition of the PBS program WealthTrack as Consuelo Mack interviews Wall Street guru David Rosenberg.  Happy 4th of July!  

10 of the Best Bank Stocks to Buy for 2022

Given that financial stocks are going to benefit the most from the Fed rate hikes, this week's edition of U.S. News Invested featuring the industry's top 10 bank stocks seemed particularly appropriate this weekend, especially considering the horrors of the month we just left.  Hope there's something useful here.  

Wall Street ends first day of third quarter with solid rebound

All three indexes were heavily in the red right out the gate this morning, the Dow down some 250 points until about 10:30, then started a slow recovery breaking even around 1:30 to finally close up 321 points. So the first day of Q3 got started with a bang but still with a ton of volatility and leaving all three indexes in the red for the week.  Today’s data was a double-edged sword validating a deceleration in new orders but also confirming that the economy is cooling and inflation has passed its peak.