When the Beatles sang, “Can’t Buy Me Love,” who would have thought that the chorus might some day apply to U.S. stimulus spending. Indeed, the $862 billion hasn’t purchased much in the way of love for new employees. And as it currently stands, longer-term economic growth hinges on love for human resources. Consider an example that involves actual dollars. As part [...] Continue Reading...
The American Association of Individual Investors (AAII) conducts a popular bull-bear survey. The most recent results? Only 1/5 of respondents expect stocks to rise over the next 6 months. When’s the last time that the AAII survey only found 20% bullishness among its participants? Just 4 days before the March 9, 2009 bottom for the U.S. market. It’s a [...] Continue Reading...
Permabears will probably point to Thursday’s volatile stock sell-off as proof of a double-dip recession. They’ll also suggest that the market’s action is indicative of a major decline ahead. The problem that I have with ”get-me-noticed” predictions of devastation is the permanency of the position. For instance, when stocks move higher, permabears explain that it is either a [...] Continue Reading...
What if determining stock market direction was as simple as wetting your finger in the outdoors and holding it up to the sky? A cool breeze telling you if the wind was coming out of the northwest? Not surprisingly, it has never been quite that easy. While we have trendlines that we base on moving averages — 50-day, 100-day, 200-day [...] 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...
There may be more than 1000 ETFs worth $850 billion in assets. However, when you remove leveraged “long”/”short” investments, and when you discard those with limited assets under management (i.e., less than $100 million), you pare that list down to 380 ETFs. Most of the themes for 2010 are readily recognizable in this ETF roll call. Current [...] Continue Reading...
The S&P 500 is more than 15% off its April peak. In fact, nearly all sector and industry investments have fallen more than a corrective 10% from the top. Yet there may be another approach for assessing the damage. For example, the S&P 500 index itself hasn’t been at this price level since October of 2009… more than eight months [...] Continue Reading...
Over the last 6 weeks, downward momentum has accelerated, volatility has increased and bullishness has disappeared. No doubt about it… this is a custom-made environment for extreme bearishness. However, doom-n-gloomers may want to tame their own irrational exuberance. The vast majority of stock markets around the world aren’t down 20% in their local currencies, meaning that most stock markets… so far… [...] Continue Reading...
Mr. Market is always looking ahead. He’s not particularly interested in Q1 GDP… the assumption is that the economy grew at 3% or better. He’s not even concerning himself with Q1 earnings results… the expectation is that most corporations will handily exceed top-line revenue and bottom-line profit projections. So what is Mr. Market wondering about these days? He’ll be looking for [...] Continue Reading...
The Senate recently voted in favor of a health reform bill. Is this good or bad for medical insurers? November new home sales were no better than they were in April. Does that spell doom for homebuilders or serve up new opportunity? Congress raised the deficit debt ceiling to $12.4 trillion. Can the U.S. dollar really handle [...] Continue Reading...
