In the last few days, investors have been willing to take on a bit more cyclical growth risk. Specifically, they’ve pushed up the prices on technology and materials stocks, and pushed down the prices of dividend stalwarts from Verizon (VZ) to Altria (MO). Even so, you would be hard pressed to find many who are ready to give [...] Continue Reading...
It doesn’t take much for stock markets to rev up their “risk-on” engines. For instance, European leaders have offered little more than verbal promises in their desire to push equity prices higher. Meanwhile, market-watchers celebrated the Bureau of Labor Statistics (BLS) Employment Report (163,000 net jobs gain), even though a variety of unemployment/underemployment measures degenerated in July. In truth, European leaders have [...] Continue Reading...
European headlines are getting the lion’s share of the blame for across-the-board stock weakness. And, in fact, every investor worry pales in comparison to Eurozone debt concerns. On the other hand, weak corporate forecasts and earnings misses are also making the rounds. Most troubling? The world’s largest package delivery company, United Parcels Service (UPS), missed quarterly expectations [...] Continue Reading...
In a recent screen of stock ETF performers since the October 2011 bottom, I came across PowerShares Small Cap Financials Portfolio (PSCF). The fund has catapulted 45% off the 52-week low through 7/16/12 versus 30% for its large-cap brother, SPDR Select Financials (XLF). The PSCF:XLF price ratio demonstrates that the relative outperformance has… for the most part… stayed intact over 18 months. PowerShares [...] Continue Reading...
A seemingly endless string of interest rate hikes (unlucky 13) and bank reserve increases killed India ETFs in 2011. In fact, investors may not have feared inflation as much as they feared that the Reserve Bank of India would go too far. Yet a shift in central bank policy bias towards easing has given emerging market watchers reason to [...] Continue Reading...
Month-over-month, most sector investments have provided investors with ample capital appreciation. Country ETFs with ties to technology, energy and infrastructure have all performed admirably. Yet there are a variety of areas of weakness that cannot be disregarded as inconsequential. For instance, in my February commentary on underachievement in the transportation arena, I highlighted the concerns with the Dow Industrials Average [...] Continue Reading...
How do “value” gurus determine worth? Bill Miller spent 30 years at the helm of Legg Mason Value (LMVTX), buying companies that he believed were deeply discounted. This often meant that he would purchase shares of a company where the market had priced the shares less than what was on the accounting books; sometimes, he might acquire shares for less [...] Continue Reading...
In my 10/27/11 commentary, “3 Reasons Stock ETF Investors Should Continue To Tread Lightly,” I pointed to the fact that the month-long stock surge had not come from the spectacular earnings season; in fact, the average return for individual securities on the session following a Q3 earnings report was -0.21%, suggesting that the entire October run-up emanated from enthusiasm for pan-European cooperation. It follows that articles [...] Continue Reading...
The bear has been ruthless to investors in Chinese companies. For example, from an early November 2010 multi-year peak to an October 2011 valley, the iShares FTSE China 25 Fund (FXI) plummeted -36.6%. Since those October 3 lows, however, several facets of the Chinese “story” have become more favorable. First, analysts worldwide began upgrading China stocks [...] Continue Reading...
Since 7/25/2011, market participants have been dealing with extraordinary volatility. In fact, for the past 11 weeks, the CBOE Volatility Index (VIX) hadn’t closed below a 50-day moving average. Until now, that is. On 10/10/2011, the current price of the VIX closed below a key trendline.  In a similar vein, the S&P 500 hadn’t closed above a 50-day MA since 7/27/2011. [...] Continue Reading...
