Succinct Summation of Week’s Events 5.29.15 (& bonus)

This is probably the longest weekly summation I've ever seen - 10 positive items, 8 negatives.  But I think everyone should find the bonus this weekend rather entertaining -- a graphic displays pearls of wisdom dispensed by Apple CEOs from their best commencement speeches.

Dynastic Billionaire Wealth Under Siege!

I'm not sure if the intention here was for humor or not, but I thought it was pretty comical.  What do you think?  I mean ... poor babies!

Wall St. ends down after weak economic data but gains in May

The Dow is down 115 today due to a so-called report showing GDP contracted 0.7% annualized as opposed to a previous estimate of 0.2% growth.  The only problem with this report is that it's wrong!  It was actually reported at the beginning of April that the forecast of a +0.1% increase in Q1 GDP was in fact a minus 0.6% so investors rightfully should have already had that factored in, thus making today's big sell off somewhat inexplicable.  Adding to the confusion was our own Treasury Secretary issuing dire warnings that Greece may very well pull out of the EU, even though all prior reporting has been quite emphatic that this almost certainly will not happen.  Greece's own polling data about a month ago showed an overwhelming 80% approval rating for staying in the EU.  The only real challenge with Greece is for the ECB to find a way to get Athens' new leftist government to go back on a few campaign promises without losing face.  And that is what they have been and will continue to do.  We've heard much talk lately about "irrational exuberance" but the real problem is that the market has actually been freely swinging back and forth between irrational exuberance and irrational panic, today being an example of the latter.  Today's sell off was on quite brisk trading of 7 billion shares.

Wall St. inches down on Greece, China worries

Today everyone took a little hit and this is why.  Tuesday it was all jitters about Greece missing their debt payment.  And the Dow plummeted.  Yesterday Greece said a deal was imminent and everyone listened to that story even though the EU denied it.  And the Dow shot way up.  Today everyone is listening to the EU belying Greece's claim that there would be a deal by week's end.  But at least the two stories are getting a little closer together -- Greece says a deal by Sunday, the EU says it must be Friday or it's off.  The EU has tried posturing like this before and then blinked.  This is likely the reason the Dow only got hit by 36 points.  Volume was again very light - 5.7 billion - probably because everyone's waiting for tomorrow's GDP report.  This will be the first since the weak Q1 data so it will be important.  Stay tuned.

Tech, healthcare lead Wall St. higher; Nasdaq hits record

What a difference a day makes!  The Dow was way down yesterday because of good news taken as bad and continued worries over Greece.  Magically today, good news is taken as good news and Greece is no longer the albatross it was yesterday so the Dow shot back way up another 121 points.  Once again, the rising dollar made oil take a hit but why today's good news of a rebound in the tech and healthcare sectors was met with enthusiasm whereas yesterday's good news about business investment and housing prices were met with anxiety can only be explained as "voodoo economics."  Even the turnaround on Greece is a mystery.  The financial media is reporting that Greece is near a deal with the EU despite explicit statements from the EU that this is not true.  Yesterday investors believed the EU; today they choose to believe the media.  But once again none of this hodgepodge really matters much as volume remained below average at 5.8 billion.

Wall St. drops on rate concerns, Greece

History has certainly been repeating itself a lot lately.  Today was another major bath with the Dow sinking 191 points due to too much good news combined with apprehension about possible upcoming bad news.  Among the good news was a string of buoyant data showing business investment and house prices solidly increasing and consumer confidence perking up.  This of course just added more fuel to the continuing seesawing fears that good news may lead to an earlier interest rate hike.  The dollar was also up, which meant that oil was also down and Greece ... well, Greece is Greece.  They are now cautioning about possibly missing their June debt payment.  Such jitters will continue to upset investors until Greece has settled down, which might not be for years.  But at least volume wasn't drastically different, at 6.3 billion quite in line with recent averages.

Apple Is King

For Memorial Day,  a chart that says a lot about where we are and where we are heading.  In B-school they preached the gospel of "Cash Is King."  It didn't matter how wonderful your products, how much market share you commanded, or how popular you were with Wall Street.  The only thing that really counted was that your bills were paid with cash and no company could survive that could not pay its bills.  No amount of great product, no percentage of market dominance, no mountain of good reviews could keep you alive.  Only cash!  So as an MBA student, and later as a financial analyst and manager, it was drilled into me the critical importance of appropriate cash management.  Companies run only on cash.  The world runs on cash.  So for this Memorial Day, Barry Ritholtz has chosen his column as a tribute to the vast cash holdings of the 25 largest companies in the U.S., and the enormous cash holdings of our #1 company, Apple!  There may be a reason besides its popular products that Apple is #1.