Category

Commodity ETFs

Why Should Stock Investors Pay 2016 Prices For 2012 Profits?

By | Bond ETFs, Commodity ETFs, Currency ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Since the S&P 500 logged an all-time record (2130.82) 11 months ago, there have been two violent price sell-offs of more than 10%. On both occasions, the popular index rallied back to recapture the 2100 mark. Yet the unknowable question still remains; that is, will the bull market demonstrate its durability by notching a new closing high, or did U.S. stocks hit a plateau in May of 2015? My contention is that U.S. stocks topped out last May. Primarily, the downward sloping…

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Lack of Earnings Quality and Debt Downgrades Limit S&P 500’s Upside

By | Bond ETFs, Commodity ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Four in a row. That’s how many consecutive 3-point baskets Andre Iguodala scored against the Houston Rockets in last night’s playoff game. There has also been a “4 for 4” in the financial markets. One after another, major banks have lowered their year-end targets for the S&P 500. Most recently, the global equity team at HSBC shaved its year-end target to 2,050 from 2,100. On the surface, HSBC’s cut is less severe than other bank revisions to S&P 500 estimates. That…

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Should Investors Take Notice When Reward Prospects Diminish?

By | Asia ETFs, Bond ETFs, Commodity ETFs, Consumer ETFs, Current Affairs and ETFs, Dividend ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

The world’s central banks devise conventional and unconventional ways to depress interest rates. The impact? Consumers purchase goods and services on credit with favorable financing terms. Corporations issue low-yielding debt in order to buy back shares of their own stock. And governments issue low-yielding treasuries to continue spending far more than they generate in tax revenue. For some investors, then, the only thing that matters in the determination of whether to acquire assets like stock and real estate is ultra-low interest…

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No Bull. Economic Weakness Continues To Pressure Corporate Profitability

By | Bond ETFs, Commodity ETFs, Consumer ETFs, Currency ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Is the U.S. economy really in great shape? The U.S. Federal Reserve does not seem to think so. They started the year with an intention of raising the overnight lending rate four times – from 0.25% to 1.25%. In March, they announced that it would more likely be a mere two. And today, the Atlanta Fed downgraded its Q1 estimate for gross domestic product (GDP) to a new low for the year (0.4%). Granted, GDP for the fourth quarter of…

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No Sales, No Profits, No Bull: What Happens When Valuations And Central Banks Collide

By | Asia ETFs, Bond ETFs, Commodity ETFs, Consumer ETFs, Currency ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Large Cap ETFs, Latin America ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Total business sales – sales by wholesalers, manufacturers and retailers – have fallen 5% from their July 2014 peak of $1.365 trillion. At $1.296 trillion for January 2016, total business sales have dropped back to where they were in January of 2013 ($1.293 trillion). In fact, the erosion of total sales by American businesses are even uglier when one takes inflation into account. Over the last 20 years, whenever total business sales continued on an upward trajectory, the U.S. economy steered clear…

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Are Stocks Cheap Now? Get GAAP If You Want To Get Real

By | Bond ETFs, Commodity ETFs, Currency ETFs, Current Affairs and ETFs, Energy ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

The times they are a changin’. In the ’80s as well as the ’90s, corporations reported quarterly results that corresponded to generally accepted accounting principles (GAAP). These days, the vast majority of companies report “pro-forma” earnings that adjust for unusual, special or one-time circumstances. Take a look at the dramatic rise in the percentage of companies serving up adjusted profits per share rather than GAAP-based results. In June of 2010, 70% provided adjusted earnings. However, as the pressure to engineer…

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5 Huge Misunderstandings About The Current Investing Environment

By | Biotechnology ETFs, Commodity ETFs, ETF Philosophy, ETF Strategy, Health ETFs, US Markets and ETFs | No Comments

Over the weekend, the Denver Broncos beat the New England Patriots in the AFC Championship. Popular football analysts had – across the board, it seemed – believed the Patriots were a “shoe-in.” They were wrong. Peyton Manning could still throw deep passes to score touchdowns. And Denver’s defense rattled Tom Brady on nearly every Patriot possession. In a similar vein, an overwhelming majority of analysts believed that the ending of QE3 in December of 2014 and the 0.25% rate hike in…

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ETF Relationships That May Tell You When The Worst Is Over

By | Bond ETFs, Commodity ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Natural Resources ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Businesses, consumers and the federal government have taken on enormous amounts of debt since the Great Recession. Optimists argue that total debt is irrelevant; that is, they believe the only thing that matters is the cost of servicing those debts. Fair enough. Then what happens when interest expense does rise? Assuming total debt remains the same, higher rates would increase the percentage of household income or the percentage of corporate/government revenue that must be allocated to debt servicing. In earlier…

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Why Good News And Bad News Are Not Helping Stocks Anymore

By | Bond ETFs, Commodity ETFs, Currency ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Short ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Since the Great Recession’s inception, whenever the stock market dropped like a steel anvil or the U.S. economy showed signs of weakness, the Federal Reserve acted to inspire investor confidence. For example, in November of 2008, when the Fed announced its first quantitative easing (QE1) program to buy mortgage-backed securities (MBS), stocks rocketed 10% in two weeks. The enthusiasm wore off quickly. In March of 2009, the central bank of the United States “doubled down” on the MBS dollar amount…

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1704 on the S&P 500 in 2016? Less Far-Fetched Than Investors Want To Believe

By | Asia ETFs, Bond ETFs, China ETFs, Commodity ETFs, Consumer ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

How does a favorable bullish uptrend become an unfavorable bearish downtrend? Does the transition happen overnight? Do commentators, analysts, money managers and market participants simultaneously concur that the environment for risk-taking is exceptionally poor? The transition from “good times” to “bad times” is far more gradual than many realize. Granted, prices on the Dow or the S&P 500 may fall apart in a matter of days, changing the narrative from “no reason to worry” to “don’t panic.” That said, there…

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