Corporations continue to post phenomenal earnings. And yet, macro-economic reports continue to register weaker-than-expected numbers. It’s a battle for the soul of the investing public. Do you believe that strength at classic cyclical organizations (e.g., Intel, Alcoa, etc.) will lead to improvement in hiring, consumption and overall GDP? This would likely be bullish for stock assets. Or do you anticipate [...] Continue Reading...
Hedge funds aren’t done buying or selling. And they aren’t particularly interested in making huge bets in this environment… on the long or the short side. So what are hedge funds looking to do if they aren’t trying to make money? Right now, they are far more interested in keeping their powder puffs dry. And that means… they’re still [...] Continue Reading...
Perhaps the most common question that I receive from financial journalists at popular publications (e.g., Investor’s Business Daily, Smart Money, Business Week, etc.) regards ETF risk. For example, with U.S. stock assets eclipsing their January highs, and coming off a 9.2% correction, writers are asking, ”What do you see as the next big hurdle?” In truth, it would be [...] Continue Reading...
In January, ETF fund flows depicted a number of seemingly incongruous events. Investors liked foreign stocks, but hated U.S. stocks. They distanced themselves from the risks of the financial sector, while they embraced the risks of energy and natural resources industries. Meanwhile, foreign currencies became outcasts, yet most forms of U.S. bonds received billions of new assets. Perhaps [...] Continue Reading...
The Economist polls a wide variety of economic forecasters to come up with consensus readings on inflation (consumer prices) and GDP growth. Similarly, Bloomberg has sought median forecasts on year-end changes on world currencies. Here’s a quick summation on what the business journalists found: 1. Nearly all consumers in the developed world will see rising prices (a.k.a. inflation), though [...] Continue Reading...
Legitimate criticism of leveraged ETFs is rapidly fading from the blogosphere. In fact, a number of my peers serve up “champagne-and-caviar-like” praise for Leveraged ETFs. There may be a reason for that… and that reason may be a direct or indirect advertising/financial arrangement. In fact, one wonders why there isn’t a warning label with, “Caution: Commentators receive compensation from Leveraged ETF provider.” There’s nothing [...] 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...
At the end of September, the U.S. economy (GDP) grew at an unexpectedly fast clip of 3.5%. Yet this did little to push U.S. treasury yields higher. At the end of October, the Fed unceremoniously completed its $300 billion purchase of U.S. treasury bonds. In spite of the cessation in buying U.S. government debt, treasury yields remained flat. They [...] Continue Reading...
Remember the day when an exchange-traded fund was as easy to grasp as the sunshine is bright? No longer! On Monday, 11/16/09, iShares launched the Diversified Alternatives Trust (ALT). Its stated objective? Well… that’s too long for a gifted speaker to say aloud on a single breath of air. (Go ahead… try it for yourself!) “The objective of the Trust is to maximize absolute [...] Continue Reading...
The worldwide solution to fight deflation is/was government stimulus spending and coordinated rate decreases. Some world powers spent more than others and some spent less intelligently than others. In addition, different central banks cut rates more drastically than their counterparts. Regardless of political camp or economic orientation, there’s near unanimity that the dramatic efforts by the U.S. government are responsible for significant deterioration in the value [...] Continue Reading...
