Category

Financial ETFs

Marching Orders: Key Indicator Issues Signal To Reduce Stock Risk

By | Asia ETFs, China ETFs, Commodity ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Health ETFs, Large Cap ETFs, Special Sectors ETFs, Technology ETFs, Transportation ETFs, US Markets and ETFs | No Comments

Financial stocks should benefit from phenomenal employment trends as well as rising rates. Yet the Financial Select Sector SPDR (XLF) is down roughly 12% from a 2018 high and down nearly 5% year-to-date. Cyclical stocks should excel in a strong economic environment. Nevertheless, the iShares Transportation Average ETF (IYT) is down approximately 11% from its 2018 peak and down 3.5% this year. Facebook, Amazon, Netflix and Google? Market-driving FANG stocks? Tech leadership is off anywhere from 16%-30% from record-breaking tops….

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Conspicuous Weakness In Market Internals A Bad Omen For Stocks?

By | Asia ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Financial ETFs, Global ETFs, International ETFs, Large Cap ETFs, Popular Posts, Real Estate ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

One week ago, FactSet revealed that 250 of the stocks in the S&P 500 had dropped more than 20% from all-time peaks. The index itself, however, had only declined a modest 5% from its record top. Today, there are more indications of market distress. The Russell 2000, a popular small cap barometer, has dropped 13% from its high. The Dow Jones Transportation Average has fallen 13% as well. And the Financial Select Sector SPDR (XLF) is sitting at a 52-week…

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Can A Stock Bull Prevail Without the Financial Sector?

By | Consumer ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, International ETFs, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

“The most important item over time in valuation is obviously interest rates,” Warren Buffett explained in 2017. Never mind that this appears to contradict his beliefs back in 2001. Sixteen years earlier, Mr. Buffett stated that stock market-capitalization-to-GDP was “the best single measure of where valuations stand at any given moment.” On this indicator, then, stocks have rarely been as over-priced as they are right now. It is certainly possible that the financial crisis of 2008 fundamentally altered the investment…

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Non-Diversification: Free Stock Risk Without The Reward

By | Bond ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, Europe ETFs, Financial ETFs, International ETFs, Large Cap ETFs, Popular Posts, Small Cap ETFs, Technology ETFs, US Markets and ETFs | No Comments

Let me be quick to acknowledge that yield curve inversion can have considerable lag time before a recession. And for that matter, the U.S. Treasury bond curve can invert long before a stock market bear. For instance, 10-year yields fell below two-year yields in February of 2006. That was approximately 22 months before the recession officially hit in December of 2007. What’s more, between 2/2006-10/2007, the S&P 500 managed to climb more than 20%. There’s more. The 1990s Treasury bond…

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The Fed Is About to Kill The Credit Boom

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

Did seven years of zero percent rate policy, three rounds of quantitative easing (QE) and “Operation Twist” provide a consequence-free credit boom? Or will “too-low-for-too-long” monetary manipulation eventually lead to a credit bust – one with adverse effects for asset prices as well as economic growth? It is not particularly difficult to understand that the mid-2000s credit expansion became an unsustainable bubble for households. At the pre-crisis peak in the fourth quarter of 2007, household financial obligations as a percent…

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The Big Bad Bull Gets Meeker And Weaker

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

Can the U.S. economy grow without the federal government overspending? Apparently not. Since the financial crisis in 2008, GDP has only grown alongside massive Treasury debt issuance. Some might argue that it does not matter how the economy expands as long as it is expanding. After all, the U.S. is still capable of paying the interest on its mushrooming obligations. On the flip side, the bond market does not believe that the near-term economic picture will be quite so rosy. The paltry 0.18%…

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State of the Stock Market (#SOTSM)

By | Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Large Cap ETFs, Popular Posts, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

The U.S. stock market has rarely notched 150 trading days without back-to-back 0.5%-plus declines. It happened on one occasion prior to the financial crisis in 2007. It also occurred once in the mid-1990s and twice in the 1960s. More recently, the S&P 500 logged an additional streak for consecutive trading sessions. This time, however, 150 days did not serve as the high-water mark. Nor was it 200 or 250 days. The new record streak that culminated on January 30, 2018? Try…

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The Euphoria Debate: U.S. Stocks Versus U.S. Real Estate

By | Bond ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Large Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

When an asset class (e.g., stocks, bonds, commodities, real estate, collectibles, etc.) skyrockets in price – when it surges higher without sufficient economic reason – a bubble develops. Technology stocks in the late 1990s. Housing in the mid-2000s. When the asset class inevitably nose-dives? The balloon implodes. Speculative silliness has not been difficult for me to spot. As a national talk radio personality in the late 1990s, I warned stock investors not to get carried away by dot-com madness. A “New…

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Should Stock And Bond Investors Continue Their ‘Hop of Hope?’

By | Bond ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Large Cap ETFs, Popular Posts, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

Stock investors have made a “hop of hope” since the election of Donald J. Trump. Specifically, the new administration’s dedication to the repatriation of foreign profits, the lowering of corporate tax rates and the reduction of onerous regulations may create impressive wage growth as well as momentous economic growth. Keep in mind, year-over-year wage growth and annual GDP growth during the nearly eight years of recovery fell way short of pre-Great Recession growth rates. Wages have grown at a sub-par…

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How Should You Address The Existing Risk Of Disastrous Loss In The Market?

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Financial ETFs, Large Cap ETFs, Popular Posts, Special Sectors ETFs, US Markets and ETFs | No Comments

The previous decade’s financial crisis did not begin in earnest until 2008. Bear Stearns. Lehman Brothers. AIG. And yet, the warning signs had appeared long beforehand. Real estate sales had turned negative on a year-over-year basis in 2006, even as prices kept climbing. Meanwhile, SPDR Select Sector Financials (XLF) logged -21% in 2007, even as the broader S&P 500 had notched a record high as late as October. In mid-2015, European financial stocks peaked. And in much the same way…

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