On a quarterly basis, 61% of companies tend to beat top-line revenue numbers. However, corporations are only beating expectations by a paltry 39% for Q1. The revenue shortfall is not hard to explain. Multinational corporations are struggling to generate sales due to a slowdown in global growth, particularly in Europe and China. The modest achievement in [...] Continue Reading...
Is the American consumer genuinely spending? While the combination of rising home prices and higher 401k values may contribute to a temporary wealth effect, higher payroll taxes may begin to exact a toll. Consider the curious case of SPDR Retail (XRT). Its year-to-date 16.2% haul is better than most large and mid-cap benchmarks. Equally impressive, XRT [...] Continue Reading...
Half of the largest U.S. corporations are missing revenue targets this earnings season. Non-cyclical sectors from health care to consumer staples are beating the pants of economic growth standouts like technology and energy. Trading volume is noticeably larger on down days than on up days. Treasury bonds are notching new 2013 peaks on safe-haven purchasing. [...] Continue Reading...
After the market closes on Tuesday, April 23, the world will turn its attention to the previously untarnished Apple (APPL). Its epic downward spiral from $700 per share to a sub-$400 price is largely responsible for the relative under-performance of Technology ETFs. Below, the Vanguard Information Technology (VGT):S&P 500 price ratio demonstrates the trend. Over the [...] Continue Reading...
There are moments in time when I get tired of hammering on a theme. For example, on April 1, I penned the article, Selecting Safer Growth and Income ETFs for the 2nd Quarter Pullback. The commentary made the simple case for shifting to sectors that do not exhibit a great deal of economic cyclicality. After [...] Continue Reading...
The relative strength of the primary U.S. benchmarks — the Dow Industrials and the S&P 500 — distorts the true picture for risk assets today. In fact, we do not even need to look closely to see the cracks all along the wall. For example, the most important metal to the world’s economy appears destined for [...] 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...
For the first time in 2013, investors do not appear to be tripping over themselves to buy every fractional percentage dip. Here on 4/15, the media have blamed the accelerated selling on commodity price depreciation and a disappointing GDP reading (7.7%) out of China. So we’re supposed to believe that a manic Monday where the domestic [...] Continue Reading...
U.S. stocks have been resilient in their response to bad news throughout the year. They may sink at the start of a trading day, but they’ve been able to recover quickly and finish strong. Consider the most important headlines on Friday, April 12. Consumer confidence unexpectedly dropped to its lowest level in 9 months. Retail sales [...] 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...
