The S&P 500 has not merely been resilient in its six consecutive weeks of gains. The celebrated U.S. stock benchmark has been unstoppable in its 8.3% unrealized run-up. Granted, nearly everyone expects a period of mild selling activity (a.k.a. “a breather”). Indeed, history certainly suggests that unbridled enthusiasm usually gets a reality check or three. The [...] Continue Reading...
For the last week, market participants have been adding to their stock risk. The activity seems to fly in the face of how markets tend to react to significant uncertainties like the fiscal cliff. While many expect a financial deal to get done, the market’s collective calm is reminiscent of the debt ceiling stalemate of 2011. [...] Continue Reading...
In 2001, an economist coined an acronym that typified investing in the initial decade of this century. Indeed, “BRIC” became part and parcel of our vocabulary. BRIC regards four of the largest economic powerhouses in the emerging world — Brazil, Russia, India and China. And for investors, it became a must-know concept for success in the 2002-2007 [...] Continue Reading...
Many of us in the financial services industry expected the outcome of the election to be determined by Ohio alone. Perhaps surprisingly, while Ohio was close throughout the evening, there was never a need for recounting the “Buckeye State” ballots; President Obama had won the electoral votes needed without a single-state showdown. While a protracted battle [...] Continue Reading...
Shortly after U.S. stock markets hit multi-year highs on September 14, Pacific Investment Management Co. (PIMCO) declared that the probability of widespread recessions in developed countries is rising. In early October, the International Monetary Fund (IMF) warned that the chances of economic contraction in the U.S. and Japan are 15% and 25% respectively, while essentially confirming [...] Continue Reading...
It may not take much to send the markets down these days. A profit miss by Google. A weak revenue showing by McDonalds. Or perhaps the most detrimental data point of the week: Existing home sales fell 1.7% on a year-over-year basis. With interest rates this low, properties have become increasingly affordable. Yet existing homeowners who [...] Continue Reading...
Mom-n-pop investors may not be taking on more risk, but institutional investors are. Perhaps the best example came in a Wall Street Journal article today by Kirsten Grind. Specifically, fund managers are investing in riskier high yield bonds, yet those funds still compare their “benchmark-beating” returns against benchmarks with safer assets (e.g., investment grade bonds). The [...] Continue Reading...
On Thursday, 6/28/2012, Germany’s Angela Merkel seemed to be singing Tom Petty’s iconic tune, “I Won’t Back Down.” By Friday 6/29/2012, many would say that Europe’s most visible leader blinked. In brief, heads of the 17 euro sovereignties agreed to drop requirements related to aiding Spain’s hapless banks. What’s more, there appears to be agreement with respect to recapitalizing European banks [...] Continue Reading...
Virtually all stock ETFs had been taking it on the chin prior to the Supreme Court’s decision on the “Affordable Health Care Act.” Yet some sub-segments fared better than others once the law had been upheld. For example, iShares Healthcare Providers Fund (IHF) might have been a big-time loser with its exposure to big insurance corporations like Cigna [...] Continue Reading...
Most Americans believe that the economy is on the wrong track. For that matter, Bill Clinton believes the country is in a recession. Polls don’t typically delve into why people believe the economy is in bad shape. However, it’s a pretty safe guess that citizens see declining home values and poor job prospects when making their assessments. Not surprisingly, [...] Continue Reading...
