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How Long Before Powell Throws In The Rest Of The Towel?

By | Bond ETFs, China ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, Real Estate ETFs, Semiconductor ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

It was only a few days ago when the stock market celebrated a Trump-Xi tariff delay. And it was only a few days before that when Federal Reserve Chairman Powell flip-flopped on the extent of rate hiking yet to come. Both of the above-mentioned actualities sent stocks and risk assets soaring higher. And both were expected to serve as tailwinds for a phenomenal December rally. So how did the Dow lose nearly 1600 points in two days, then recover roughly…

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Should You Buy the S&P 500 Dip Or Sell the S&P 500 Rips?

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

Until recently, the U.S. stock market had been taking Federal Reserve rate hikes and quantitative tightening (QT) in stride. The investment community had come to believe that corporate tax reform would compensate for the gradual removal of ultra-easy interest rate stimulus. Indeed, up through October, rising interest rates had been hurting bonds far more stocks. Corporate credit assets of all sizes and shapes have logged total return losses year-to-date. The last time this happened? 2008. Lately, however, sellers have been overwhelming…

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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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Higher Rates Will Hurt Stocks Far More Than You Think

By | Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, International ETFs, Popular Posts, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

Federal Reserve Chair Jerome Powell thinks the economy is awesome. And he has no problem telling us so. What Powell will never discuss, however, is the “way-too-low-for-way-too-long” stimulus that the central bank engaged in to get here. In particular, the Fed has kept the neutral rate of interest far beneath the rate of inflation (CPI) for an entire decade. Consumers, corporations and Uncle Sam predictably borrowed as if there’d never be consequences. What consequences? Asset bubbles. Stocks, bonds, real estate, collectibles,…

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Stocks? Throw The Book At Them!

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

Net worth used to be a simple concept. Add up assets. Subtract liabilities. And celebrate (or mourn) the tangible book value of the company. It is not so simple anymore. In a service-oriented economy, the value of a corporation partially depends on several intangibles. How influential is the company’s brand? What about the impact of the personality of one or two key individuals? Nevertheless, the increasing importance of intangibles should not diminish the relevance of tangible net worth. Tangible book…

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Are Investors In U.S. Stocks Turning A Blind Eye To Contagion Risks Abroad?

By | Asia ETFs, China ETFs, Consumer ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Frontier Market ETFs, Global ETFs, Popular Posts, Special Sectors ETFs, US Markets and ETFs | No Comments

Things look pretty darn good for the U.S. economy. Unemployment rates are low, inflation-adjusted borrowing costs are practically zero, and corporate profit margins sit at record highs. U.S. consumers have taken notice. The recently released Conference Board reading for consumer confidence reached 133.4. We have not seen a data point like that since the year 2000. Ironically enough, an exceptionally happy consumer is rarely beneficial for the investment markets. Take a look at the forward returns for the S&P 500…

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Should You Celebrate or ‘Fade’ The Longest Bull Market In History?

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

The mainstream financial media love to tell you, “Bull markets don’t die of old age.” True enough. Indeed, the current uptrend remains a shining example of cyclical durability and persistence. For many, then, the fact that the stock bull has set an all-time record in length is cause for celebration. 3,453 days and counting. If you choose to listen, Kool & The Gang will even let you know where the party is at. It is worth noting that the S&P 500 needs to…

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Corporations Set Records For Buybacks As Their Insiders Sell

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

Tax-cut infused earnings have been solid. The rapid-fire rise of longer-term borrowing costs has slowed considerably. And corporate share buybacks have dwarfed earlier records. In Q2 alone, corporations purchased a staggering $436.6 billion in stock buybacks. That brings the year-to-date total to $670 billion. Similarly, announced S&P 500 buybacks are practically leaping off of the chart. More than most factors influencing market direction, buybacks have kept large-cap stocks from succumbing to legitimate concerns about Federal Reserve policy error, China trade…

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The Yield Curve and Stocks: Much Ado About Everything

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

There has been a great deal of chatter about the strength of the American job market. And with good reason. Most measures of employment health – U-2 unemployment rate, jobless claims, wage increases, year-over-year job growth, etc. – support the notion that U.S. workers are “winning.” On the other hand, very few folks have addressed the possibility that the data are more likely to weaken than strengthen. On the contrary. So much faith is being placed on tax cut stimulus…

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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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