In the best of times, stock prices of different economic segments behave differently. So it isn’t surprising to find Sector ETFs travelling unique paths in ”challenging times.” For instance, if we are heading for the dreaded “double dip,” one might expect relative strength in consumer staples and health care. Staples (XLP) is currently showing relative strength, yet [...] Continue Reading...
The financial media continue to perpetuate a “risk trade on, risk trade off” myth. Yet a better representation of what’s taking place in market-based securities is “developed market risk off, emerging market risk on.” Is it true that nearly every U.S. Treasury Bond ETF has been hitting 52-week highs on a daily basis? Absolutely. Yet you shouldn’t [...] Continue Reading...
Is it the never-ending, “New Normal” correction? Or is it the beginning of the bear’s salmon dinner? Ironically, the financial media have decided that there are only two choices — a “new normal” or a bear market. There’s no room for bullishness in the hot August heat. Trailing P/E ratios, forward P/E ratios… does it even matter how [...] Continue Reading...
There’s a lot being made about crude oil settling below $75 per barrel again. On Wednesday, 8/18/2010, the commodity fell to a 3-week low. Yet there’s a larger trend that may be developing and that the mainstream media may be missing. Emerging market growth throughout Asia means an uptick in the demand for commodities… particularly, oil and agricultural products. [...] Continue Reading...
One may not need much more than the CBOE Volatility Index (VIX) and the S&P 500 SPDR Trust (SPY) to forecast near-term weakness in U.S. stocks. The current price on the VIX has been flirting with a closing value above its 50-day moving average, while the price on SPY has already slipped beneath a long-term 200-day trendline. Fundamental analysts [...] Continue Reading...
Drought and fire have severely damaged crops in Russia this week. Moreover, the country has responded by issuing a temporary, two-week ban on the export of grains like barley, wheat and rye. (Obligatory beer joke… insert here.) In spite of the fact that scores of analysts are warning about a glut of wheat from harvests in 2008 and 2009, wheat prices [...] Continue Reading...
It smells a bit like 2009 to me. Specifically, emerging markets are outperforming foreign markets… and foreign markets are outperforming U.S. markets. The driving forces? One, investors perceive that China demands materials and energy vis-a-vis a “reflation trade.” Two, currency traders are “short” the U.S. dollar once more vis-a-vis a “carry trade.” Reflation may not be occurring by direct [...] Continue Reading...
Even a devout follower of financial news may have missed it; that is, the real engine behind renewed bullishness is the continuation of the China growth story. Granted, there’s been a variety of exceptional earnings reports, including UPS, 3M, Apple, Qualcomm and Pepsico. However, plenty of others expressed ”unusual uncertainty,” such as Amazon, Google, Starbucks and Bank of [...] Continue Reading...
There are times when the talking heads in the financial media are myopic. Naturally, everyone wants to know if tech bellwethers like IBM, Yahoo, TI and Apple will beat top-line revenue estimates. Undoubtedly, Goldman Sachs and BP are headline-grabbers due to the recent SEC settlement and the never-ending “spill.” Yet, I’m startled by the fact that you couldn’t find a decent feature on Halliburton’s earnings triumph. [...] Continue Reading...
The University of Michigan’s Consumer Sentiment Report could not have been more dismal. The gauge fell to its lowest level of confidence since the 2009 start of the Obama Administration. The news weighed heavily on stocks, pushing the S&P 500 back into solid correction territory… roughly 12.5% off its April high. And yet, consumers and investors are as frightened [...] Continue Reading...
