Succinct Summation of Week’s Events for 4.5.19 (plus INVESTMENT SUCCESS SECRETS)

Below is the customary weekly summation, the positives being that the market seems to be once again stabilizing and the fears of recession that were raised a couple weeks ago have now abated.  The negative is that, even though the positive column revealed higher than expected payrolls, the negative column shows lower than expected new jobs? Can they both be right?  The bonus this Sunday is the latest edition from WealthTrack on PBS, this week's program revealing "Investment Success Secrets" from Gotham Asset Management.  The 30 minute program is available on the WealthTrack/PBS website.  As an additional note, I would also like to comment that tonight's episode of 60 Minutes had a very informative interview with investment genius Ray Dalio of Bridgewater Associates, who has also been interviewed a number of times on WealthTrack.  The CBS/60 Minutes web site will likely have the program available for streaming in a week or so.  Hope everyone enjoyed their weekend.

Will Stocks Always Outperform Bonds?

For your weekend reading, I submit below one of this week's articles from the AAII evaluating the long-term performance of stocks vs bonds.  Since so much of our emphasis has always been on the FastTrack strategy of short-term trading of bond funds, I thought this would be particularly relevant.  It is a particularly good technical analysis of the superior yields that stocks deliver in the long run over bonds. 

S&P posts seven-day winning streak as jobs data allay economic fears

It was a fairly steady day on The Street today as the Dow rose 40 on news that payrolls had risen by 196,000 new jobs in March vs a forecast of 180,000, now putting the S&P just 1.3% from its October record high (vs 1.75% yesterday vs 2% the day before!)  That pesky yield curve that had everyone panicky about recession has reversed itself and continues to steadily widen with the 10-year at 2.51% and the 3-mo 2.42%.  With today’s job numbers, the recession question has been taken off the table and investors feel more confident and still optimistic about a trade deal with China.  Q1 reporting kicks into higher gear next week with the major banks reporting in and volume remains below average at 6.2 billion. 

S&P 500, Dow advance with trade talks in focus

Today the S&P came near a six-month high (also the record high, now only 1.75% short vs yesterday’s 2% short) and the Dow was on an uptrend all day with continued optimism over China, Boeing getting a lift from Ethiopian investigators, and Facebook recovering from yesterday’s latest scandal. Also lifting the index was a good labor report showing jobless claims at a 49-year low (wasn’t it just yesterday that the market got hit by fewer new jobs in March than forecast?) But the real deal comes tomorrow with the non-farm payrolls report.  All in all, the Dow closed 166 points up and volume remains below average at 6.3 billion. 

U.S. chip stocks surge on trade deal hopes, Wall Street edges up

It was another wild ride today with the Dow crashing in the morning only to be up over a hundred at noon and then crashing again all afternoon but rallying at the very end to close up 39 points.  The rising and falling tides were attributed to an influx of both good and bad news, good news on China and the chip index, bad on economic data with optimism over trade just barely winning out.  Among the bad news was the services sector coming in at its lowest since 2017 and new jobs in March also below estimates.  Facebook also took a hit with the report that millions of users private records were inadvertently made visible to the public.  But the S&P gained more traction, now just 2 percent below its record high.  Though volume remains below average, today it was just a little below at just over 7.2 billion. 

Wall Street treads water after rally, Walgreens slumps on profit warning

After yesterday’s stellar rally, the market took a breather today spending most of the session down around 130 but came back to close down 79.  Just as yesterday’s impetus was good news from China and re U.S. manufacturing, today it was bad news about U.S. manufacturing leading today’s expert to categorize today’s trading as “mixed signals.”  Also the first Q1 report came from Walgreen’s with a disappointing slump and though this was balanced by good reports from the airlines, it didn’t make the difference.  Investors are still looking to Q1 for the first decline in earnings since 2016, expecting a 2% fall.  Volume was below average again at just under 6.5 billion. 

Wall Street rallies on upbeat China, U.S. manufacturing data

For April Fools Day the market got a big surprise that was anything but foolish. It seems all the gloom and doom about China’s slowing economy was a bit overblown as today Q2 got started with positive numbers from China, easing global growth concerns. That combined with the S&P closing just 2 percent below the record high from September sent the Dow up a big 329 points.  And it turns out that U.S. manufacturing numbers were also looking better than expected. Additionally the yield curve inversion which ended on Friday reversed even more so today hitting a one-week high and now starting to unwind the gloomy outlook.  But investors are still bracing for Q1 earnings to be down 2 percent from last year.  We’ll see.  The pattern has been for gloomy earnings forecasts and then the reporting pleasantly surprises.  Volume remains below average at 7.1 billion.