The S&P 500 traded in a 20-point range on Thursday, 12/27. And most of that activity was consistent with risk-off, “sell-it-all” fretfulness. What have investors been fretting? What else… the fiscal stand-off. Early on Thursday, Senate Majority Leader Harry Reid sent broader indexes 1% lower on statements suggesting that a budget deal could not be reached before year-end. Later [...] Continue Reading...
Since the summertime lows, a number of themes have gained enormous traction. U.S. real estate is benefiting from ultra-low mortgage rates, limited supply and remarkable demand from overseas buyers. Chinese leadership continues to provide just enough government support to maintain economic targets. And the European Central Bank (ECB) is having success at containing its sovereign [...] Continue Reading...
Why are investors still buying treasuries and short-term investment grade bonds? Many have grown accustomed to the exceptional total returns. As I look out across the 2013 landscape, however, I see less opportunity for investors to score big with a capital appreciation component on taxable U.S. debt or quality (e.g., AAA, AA, etc.) corporate debt. Depending on [...] 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...
Precious and industrial metal mining stocks were huge gainers during the bond-buying rumor rally. From Draghi’s “do-whatever-it-takes” hint on 7/26 through Bernanke’s QE3 announcement on 9/13, Mining ETFs rocketed more than nearly any other economic sub-segment. Rumor Rally: Metal Mining ETFs Skyrocket On Expectation Of Unconventional Easing % Run-Up (7/26-9/13) Global X Silver Miners [...] Continue Reading...
Timber has been weak since the Federal Reserve announced its enormous bond buying initiative. Agricultural grains have been even weaker since the peak of drought fears in mid-July. And crude oil? Instead of surging past $100 per barrel, it closed below $88 per barrel on 10/3/12. The question is simple: If gurus from Jim Rogers to [...] Continue Reading...
The Federal Reserve’s quantitative easing in 2010 (a.k.a. QE2) significantly boosted the share prices of resources-related ETFs. Some of the biggest winners from QE2 included iShares Oil Equipment (IEZ), SPDR Oil & Gas Exploration/Production (XOP), Market Vectors Russia (RSX), SPDR Metals & Mining (XME) and First Trust Natural Gas (FCG). Indeed, FCG went on a [...] Continue Reading...
Economic uncertainty has been monstrous, from the cloud hanging over end-of-the-year tax policy and budget negotiations to a down-to-the-wire national election. And that doesn’t even include ever-present eurozone squabbling over bailouts for austerity. In spite of the question marks, stock assets continue working their way to higher ground. Remarkably, they’ve done so with limited resistance and a relatively low [...] Continue Reading...
