Financial stocks rocketed ahead in the first quarter and Bank of America (BAC) recently received a high-profile upgrade. So why is the SPDR Select Sector Financials Fund (XLF) one of the worst performers over the last 5 days? Aluminum giant, Alcoa, surprised Wall Street with its stronger-than anticipated earnings report. So why is the SPDR Select Sector [...] Continue Reading...
In 2011, S&P 500 profits expanded 15%. And yet, the benchmark’s price finished in the very same place that it started the year. In essence, since prices flat-lined and earnings experienced double-digit growth, a fundamentally inexpensive stock market via the price-to-earnings ratio (P/E) became even cheaper. The most common reason cited for P/E contraction in 2011? The Euro Zone debt crisis. Obviously, sovereign [...] Continue Reading...
Is it possible that commentators have underestimated Warren Buffett’s flexibility? Indeed, the Oracle of Omaha is best known for buying the cheapest names on “boring” brand name institutions, like Coca-Cola (KO), American Express (AXP) and Procter & Gamble (PG). He rarely showed interest in anything remotely “tech.” Yet during the summer of our discontent — when technology shares plummeted alongside double-dip recession fears [...] Continue Reading...
Many folks are “banking” on a year-end rally. The catalyst? The European Union (EU) will come up with a massive recapitalization (a.k.a. bailout) of their financial institutions. In theory, if we no longer need to fret the collapse of the EU — the solvency of member nations, the functionality of its banks, etc. – investors should be able to return to corporate earnings. And most should like [...] Continue Reading...
Scores of investment gurus live on momentum and relative strength. They may advocate investing solely in those assets that have put together streaks over 4, 8 and 12 weeks (3 months). Other media darlings don’t care what happens in a shorter period. They may run with a particular theme for decades. For instance, Jim Rogers likes commodities and the China [...] Continue Reading...
In the 7/12/11 feature, Bond ETFs Predict The Debt Celing Will Be Raised, I demonstrated why there has been little reason to fret financial calamity. In essence, bond yields have neither surged nor “sold off” during the debt debate timeline. That fact alone has been supporting the notion that a deal would get done. Although many still ponder the possibility [...] Continue Reading...
There are plenty of analysts who have questioned whether or not Google (GOOG) could sustain a double-digit growth rate going forward. Yet the tech giant’s 32% revenue burst in the current quarter not only quieted the naysayers, it sent share prices up 13% in a single trading session. Not sure about those annoying click-through links? The average [...] Continue Reading...
How many times have you heard some variation on the following words: The most critical driver of underlying stock prices are corporate earnings growth prospects. Would you say you’ve read a similar sentence 10 times? 100 times? 1000 times? While I don’t disagree in principle, I do disagree in principal. (Note: Fundamental valuation fanatics need to look back [...] Continue Reading...
In truth, I originally anticipated that we’d see some “sell-the-news” profit-taking in late January… somewhere in the midst of the corporate earnings barrage. I did not think that I’d be cautioning on the bull market’s near-term viability here in late December. Why am I concerned about stock assets in the immediate-term? Did the recent rate hike by China give me pause to reflect, [...] Continue Reading...
The Dow, S&P 500 and Nasdaq offer 3 different ways to look at the U.S. market’s health. Even with the monumental start to December trading, however, none of the broad market indexes are hitting new 52-week peaks. (Not yet, anyway.) It’s not like certain sectors haven’t been pulling their weight. SPDR Select Energy (XLE) and SPDR Select Consumer Discretionary (XLY) have [...] Continue Reading...
