Jason Geopfert of SentimenTrader.com recently explained that a three-month view of the S&P 500’s upside persistence (closing near a daily high) has reached an extreme seen in 4 other instances over the last decade. On each of those occasions, the market hammered risk assets with a significant pullback. In the last 30 years, the only [...] Continue Reading...
In 1986, I visited the Philippine Stock Exchange. There were few, if any, computers on the floor. Black markers registered trading activity on a giant whiteboard. And the feeling that I came away with was that I had caught a glimpse of an incomplete science experiment. Today, however, a number of frontier economies have upped their [...] Continue Reading...
“I’ve never seen THIS in 34 years of investing,” quipped media personality Jim Cramer on Monday. What was Mr. Cramer referring to? For the most part, he expressed excitement over the stock market’s ability to reward stocks of companies that missed earnings expectations as well as to reward those that beat expectations by not taking [...] Continue Reading...
Sometimes, when the chairman of the U.S. Federal Reserve speaks, my diaphragm pushes on my lungs hard enough to inhibit breathing. It’s not that I don’t admire Ben Bernanke on a variety of levels. It’s just hard to believe that a man of remarkable intelligence is serious when he says, “In light of the current [...] Continue Reading...
When you think about it, ultra-low interest rates can be credited with a wide variety of recent occurrences. Real estate became more accessible. Vehicles became more affordable. And higher-yielding stocks and bonds became unavoidable for those who required a return on their life’s savings; that is, CDs and treasuries were not able to provide retirees [...] Continue Reading...
Treasury bonds are rocketing, commodities are reeling and the euro-zone’s economy is contracting. That is hardly the backdrop for continued equity price appreciation. Yet the U.S. stock market has had little resistance in capturing all-time records. Regardless of region, asset classes typically move in the same direction. It follows that one would not expect unabashed buying [...] Continue Reading...
Here in the first week of April of 2013, an overwhelming number of folks believe one truth to be unassailable. For worse or for better, the U.S. Federal Reserve’s unconventional interest rate easing has pushed dollars into riskier assets, including higher-yielding debt, equities and real estate. Beyond crediting the Fed with a modern-day “wealth effect,” however, [...] Continue Reading...
People are feeling better about spending money. Similarly, investors are feeling better about risking it. The problem is, whenever people begin to feel wealthy due to a faulty premise (i.e., the U.S. Federal Reserve can keep buying bonds to depress interest rates without longer-term implications), they may spend more than they have. Others may blindly [...] Continue Reading...
Non-cyclical stock sectors (e.g., consumer staples, health care, utilities, etc.) often do well when there are concerns about economic growth. Indeed, exchange-traded funds representing one or more components of the non-cyclical arena have been the key drivers in the broader U.S. market’s run toward all-time records. Nevertheless, it is still a bit surprising that the potential [...] Continue Reading...
In previous years, consumers spent more money when the value of their 401ks and the value of their homes were rising. That goes a long way toward explaining the performance of the third best sub-sector ETF on a rolling 5-year basis. Specifically, SPDR S&P Retail (XRT) annualized at 16.1% over the past 5 years while [...] Continue Reading...
