Wall St. eases as oil prices, General Electric fall

The market’s been on fire lately so a little water was thrown on the flames today as investors took a breather with market anxiety over valuations rising to a one-month high and GE causing concerns after announcing an $11 billion write-off.  So the Dow, after briefly tackling the 26,000 mark, reversed course and ended the session with a very minor 10 point deficit, as did the other indexes.  This was all counter-intuitive since the day’s Q4 news was downright jubilant, United Health beating estimates and Merck announcing its drug Keytruda has been proven an effective cancer treatment.  The bottom line remains that Q4 is going well and as long as that remains the case there will continue to be a general move into equities and the indexes will continue moving up.  Finally volume is reflecting the enthusiasm with a considerably above average 8.3 billion shares traded. 

A Game-Theory Solution for a Fractured America - Bloomberg

In honor of MLK Day and being that we are all entranced by the notion of finding technical-mathematical solution to complex problems, in other words gaming theory, I offer below this fascinating article posted today on The Big Picture website about using gaming theory to fix the country's divisions.  Since one of the major objectives of MLK was to address divisions in this country, particularly racial divisions, I could not think of anything more appropriate.  Of course, as always, also included is the usual weekly summation with once again the good news being yet another week of all-time highs for all three major indexes, and the bad news being an ever so slight increase in unemployment claims over the forecast.

Stocks AAII Members Follow ...

For this holiday weekend (at least for banks, government, and the stock market), I offer today's email from the AAII regarding the favorite stock picks of the organization's membership.  The essay also serves as a pretty good primer on investing including how to use value and momentum to achieve maximum gain.  For those of you who work in finance or government, enjoy your holiday.  For those who don't, enjoy your week and, as always, stay warm.

Good News / Bad News for Hedge-Fund Investors

On this very cold weekend, I offer the Saturday edition of Barry Ritholtz's Big Picture blog, one of the many articles featured today is on one of our favorite topics -- hedge funds.  Enjoy and stay warm! 

Wall St. hits new highs on earnings optimism, data

Yesterday the Dow shot up a big 205 on expectations of a terrific Q4, reporting of which started today.  Today it kicked off with a bang which sent the index flying up another 228 points with the S&P and Nasdaq correspondingly registering both their 8^th consecutive highs.  Q4 forecast has now been raised from an 11.8% increase two days ago to 12.1% today, 13.2% for the financial sector.  Again, at 6.8 billion, volume was a little higher than the recent average, but you’d think that with all this wild optimism it’d be going much higher.  There obviously remain concerns that valuations are way too high and a correction is in our future. 

Wall St. rises with oil prices, earnings optimism

The market is betting big on Q4 reporting, which begins tomorrow, and that shot the Dow up another big 205 points today.  Another contributing factor was oil benefiting from a surprise drop in production and lower inventories, something that has been a continuing issue for a few years now as the decline in oil prices has been the primary factor in deflation.  There remains some small concern that equities are priced too high but that always seems to be belied by almost daily reports of positive economic progress.  The week’s trend continues with volume being a little higher than recent averages with 6.7 billion shares traded today. 

Wall Street falls on China, NAFTA concerns

This is the way the market works when the bulls are running – that is the slightest negative headline has investors running to the sidelines.  So today China announced it would start buying fewer U.S. bonds and then Canada announced that they believe Trump will soon be exiting NAFTA.  After six straight days of new records, it was enough to cause a pullback, but just a minor one with the Dow dropping a mere 16 points.  Another likely cause is that Q4 reporting starts in two days so everyone’s in wait-and-see mode until Friday.  And as one expert pointed out today, “It’s a reflection of investor weariness and awareness that the market has risen for four straight months without seeing a major pullback.”  The forecast for Q4 is for an 11.8% increase in earnings.  Once again, volume was a little above average at 6.9 billion.