In 2013, Mondays have been noticeably superb for U.S. stock investors. Tuesdays have been even more spectacular; in fact, until a few weeks ago, the Dow closed higher on 20 consecutive occasions. However, what began as a siren song of riskless gains back in November could be shifting in pitch and tempo. The Dow has risen [...] Continue Reading...
The possibility of the Federal Reserve slowing its bond purchasing program sent interest rates rocketing in May. Rate-sensitive assets — dividend stocks, REITs, MLPs, preferreds, muni bonds — all began to depreciate in value. By the end of the month, even common stocks began to stammer. Here on the first trading day of June, however, the [...] Continue Reading...
There are moments when the media will grab hold of a terrific sound byte and refuse to let go. For example, some blame the recent weakness on yield-oriented assets — investment grade bonds, high yield bonds, convertibles, preferreds, REITs, defensive dividend stocks — on a mythical “Great Rotation.” The popular catchphrase describes a circumstance whereby [...] Continue Reading...
Extraordinary rallies off bear market bottoms are typical. Bullish run-ups in March of 2003 as well as March of 2009 registered enviable unrealized gains of 35% and 65% respectively; each advance experienced little resistance for roughly 9-10 months. Powerful moves off minor corrections are less typical, if not downright suspicious. Investors in the S&P 500 SPDR [...] Continue Reading...
Is the American consumer genuinely spending? While the combination of rising home prices and higher 401k values may contribute to a temporary wealth effect, higher payroll taxes may begin to exact a toll. Consider the curious case of SPDR Retail (XRT). Its year-to-date 16.2% haul is better than most large and mid-cap benchmarks. Equally impressive, XRT [...] Continue Reading...
When you think about it, ultra-low interest rates can be credited with a wide variety of recent occurrences. Real estate became more accessible. Vehicles became more affordable. And higher-yielding stocks and bonds became unavoidable for those who required a return on their life’s savings; that is, CDs and treasuries were not able to provide retirees [...] Continue Reading...
For the first time in 2013, investors do not appear to be tripping over themselves to buy every fractional percentage dip. Here on 4/15, the media have blamed the accelerated selling on commodity price depreciation and a disappointing GDP reading (7.7%) out of China. So we’re supposed to believe that a manic Monday where the domestic [...] Continue Reading...
Flare-ups in the euro-zone refuse to disappear entirely. On the heels of a disastrous Italian election and a full-fledged banking crisis in Cyprus, a Portuguese court has ruled that some of the austerity requirements for bailout dollars are discriminatory. Prime Minister Coelho hopes to find a workaround, but alas… securing bailout money in the near [...] Continue Reading...
Over the course of the 4-year bull market, I’ve kept an eye on the percentage of S&P 100 stocks that reside above a long-term 200-day trendline. Market pressures always seemed to develop when the level approached 86%-90%. Similarly, when the 50-day moving average for the S&P 100 reached 85%, you could pretty much count on [...] Continue Reading...
Investors may be heartened to discover that the Cyprus bailout is back on track. I am not sure how that will prevent Europeans in Italy and Spain from slowly moving their money out of beleaguered banks, but that is an issue for another day. Right now, broad-based U.S. large cap stocks are trading at record levels [...] Continue Reading...
