There wasn’t a whole lot of change in markets with the Russell 2000 edging back to support. Small Caps remains the most vulnerable to an increase in profit taking with the 50-day MA playing as the last line of support. If there is a loss in such support watch for it to spread to other indices which are holding up better. The Nasdaq finished with a narrow range doji just above the 20-day MA. Volume was down, while the MACD and On-Balance-Volume remain in ‘sell’ mode. The S&P was another narrow range doji, except without the technical weakness in the Nasdaq. The Semiconductor Index remains outside of the rising chann...
Stocks were off a bit for most of the day as traders continued to ‘digest’ the recent run up in equity prices that culminated in the SNAP IPO. As a reminder, there will be a Non-Farm Payrolls report this Friday for the month of February. The next week the markets fully expect the FOMC to raise interest rates 25 bp. All things considered, we are now in the eighth year of this very labored ‘market recovery.’ As you may recall, we had asset bubbles in stocks and housing that burst in 2000 and 2008 respectively. So we are probably within a year or two at most from a stiff correction in financial asset prices. My estim...
Among economics data watchers, a country’s exports enjoy a hallowed status. The ability of producers in country A to sell goods and services to people in other countries is taken as a sign of A’s economic strength, although the underlying metric for economic strength goes unmentioned. In addition, job counters across the spectrum constantly count the number of jobs associated with exports. The more export-related jobs, the better. In a nutshell, exports are intrinsically beneficial—no questions asked. The problem is that virtually no one, except perhaps for a workaholic, runs their personal economic affairs like this. Let’s consid...
November 2008 was an extremely busy month for authorities in the US. The financial markets had just undergone panic the month before, but rather than dissipate there were lingering indications that all was not yet over. On November 23, 2008, the Treasury Department, the FDIC, and the Federal Reserve issued a joint statement on Citigroup. The first two had agreed to issue protection against losses on $306 billion of various MBS and mortgage loans structures, with the Fed agreeing to a liquidity backstop of “residual risk”, all in exchange for an “investment” in the struggling bank. Just eleven days before that bailout, Treasury Secreta...
Judging by today’s VIX crush and USD/JPY ramp, this was the sound coming from The Eccles Building… 8 years ago today, the S&P 500 bottomed at 666…S&P earnings are up 78% since then.. and the S&P is up 247% The Dow bottomed on 03/09/09 at 6547 – 30Y yields were at 3.57%; The Dow is now at 21,000 and 30Y yields at 3.10%… (and the 2s30s yield curve has collapsed from 260bps to 175bps) Something very different today: Bonds and stocks were sold together (same as happened on Thursday but much more pronounced) And Risk Parity funds had their worst 2-day drop since mid-December… On the day, Trannies an...
It only took three days as a public company to do so, but 100% of the public buyers of SNAP have now lost money. (And if you mention the $17 offer price, you have no clue what you’re talking about). The stock’sprice and the company’s user base will have something in common soon – – both predominantly in the teens....
Urban Outfitters (URBN): About a month ago, Urban Outfitters reported preliminary sales results for the fourth quarter and full year fiscal 2017. In the three months ending January 31, net sales increased 2% from a year earlier to $1.03 billion. Comparable retail sales, including booming direct to consumer channels, came in flat largely on lower retailer comparable sales. Wholesale segments decreased 1% during the period but ended the year 1% higher than fiscal 2016. Nonetheless, analyst at Estimize expect profitability to drop by 6% with estimate activity steadily declining over the past 3 months. Dick’s Sporting Goods (DKS): Shares t...
Whenever we see trends in the market we immediately look for confirming data points. With the impressive rise in equity markets since the election, we look at the bond market to see if there is agreement on all this bullishness. There isn’t. “The bond market is taking a totally different view from the equity market. Blowing raspberries is a good way to put it,” says Jim McCaughan, chief executive of Principal Global Investors. “There’s no belief that the growth agenda will be dramatic.” After having thrown everything possible at the bond market, from a hawkish Fed to pro-growth promises from President Trump to ebullient sentiment ...
The stock market was down Monday. The S&P 500 is down about 1% from its all-time high. Anytime the stock market has been down since the election, it’s bigger news than it normally would be because it’s been in almost a straight line higher. It is difficult to remember what a normal market is like because we’ve been in an abnormal market for quite some time. The earnings metric I will mention later which uses 5 and 10 year averages is now distorted because the market has gone awry due to central banks’ accommodative policies. The distortion can be described by the combination of expanding market multiples and expanding debt levels....
Any number of financial analysts, experts and asset managers would be eager to guide you about how to go about investing the Warren Buffett way. Yet, few have managed to match the success of this plain talking veteran who has consistently outperformed most other investors over an extended period. Buffett is always market-relevant, but there has been some additional focus on him over the last month following the release of the details of his annual portfolio holdings. Additionally, his sage investor advice, in the form of his annual letter to shareholders of Berkshire Hathaway Inc. (BRK-B – Free Report) , grabbed headlines last week. B...