14 Jan 2016

Insight: More Bears are Growling

The widely followed Dow Jones Industrial Average (DJIA) fell -365 points, bringing it perilously close to correction territory, which is generally defined as a decline of -10 percent from the recent peak. The S&P 500 is already in correction territory having not fully recovered from the steep losses last August.  The rally in October offset most of the losses, but a new peak was not reached since last May. While… Read More

By Tags: ,
13 Jan 2016

Insight: David Bowie, Finance Wizard?

You may or may not be a David Bowie fan, but either way, you’ll probably be surprised by his contribution to finance. In 1997, David Bowie was a wealthy man, but didn’t have enough cash to buy out the other 50 percent co-owner of the songs that he had written. He was buddies with an investment banker who proposed a novel idea: sell bonds using his song library as collateral… Read More

By Tags:
12 Jan 2016

Earnings Season is Upon Us

The headlines have been filled with major macroeconomic news from China and elsewhere that have pushed stock prices lower. It’s perfectly legitimate to factor this news into stock prices because our collective fortunes are tied together whether we like it or not.  If Chinese gross domestic product falls substantially, you can be sure that ours will drop as well along with growth prospects for US companies. Last night, earnings season… Read More

By Tags: ,
8 Jan 2016

China Rocks Markets

Last April, I wrote that the Chinese stock market was red hot and that I didn’t watch China closely enough to say whether it was in a bubble, but it was an expensive market (click here for the article). By the end of summer, it was pretty clear that there was a bubble and that it was bursting (click here for the article), as we can see in the chart… Read More

By Tags:
5 Jan 2016

Oil Prices Drop on Middle East Tension?

One of the puzzling aspects of yesterday’s trading was that oil prices fell. When I read about the malaise between Saudi Arabia and Iran over the weekend, I assumed that oil prices would gap higher yesterday morning. Violence in the Middle East has always meant threats to output, which meant potentially lower supply or other disruptions that resulted in higher prices. In this case, though, the geopolitical tension between these… Read More

By Tags:
4 Jan 2016

Stocks End Year with a Whimper

For me, reading the Wall Street Journal is a bit like eating, drinking and sleeping – I can’t really go without any of these things for very long.  I think that their reporting is fair and accurate and definitely of interest to me. So, I was a bit annoyed when the Friday headlines read ‘US stocks Post Worst Annual Losses Since 2008.’ Now that headline is accurate – last year… Read More

By Tags:
29 Dec 2015

Market Forecasts Part 2

Yesterday I posted some of the questions and answers from the Barron’s annual ‘Test Your Wall Street Skills’ quiz. Here’s a link to my article from yesterday and here is the link to the article in Barron’s (a subscription may be required). Most of the ‘big’ questions have already been answered, but there are still some fun ones: 1. Which ‘FANG’ stocks will fare worst in 2016 – Facebook, Amazon,… Read More

By Tags:
28 Dec 2015

Market Forecasts Part 1

Over the weekend, Barron’s put out their annual quiz for readers to predict market related events in the coming year (you can find the quiz here, but a subscription may be required). I thought it would be fun to share some of my answers – but keep in mind the quote from Warren Buffet, who said that ‘the only value of stock forecasters is to make fortune-tellers look good.’ I… Read More

By Tags:
23 Dec 2015

Oil and Energy Stocks

One of my favorite long-timer readers asked me today to follow up on the chart from yesterday to include the performance of energy stocks (click here to see yesterday’s chart). The best quality sector data from S&P only dates back to 1989, so this data set isn’t quite as long as what I showed yesterday, but the story is basically the same and I have to admit that I was surprised… Read More

By Tags:
22 Dec 2015

Treasury Bills Beat Oil 30 Years On

Although oil ultimately finished higher yesterday, West Texas Intermediate (WTI) crude touched on a 2004 low during the day.  I know I am repeating myself, but I continue to be surprised by how far oil has dropped in the last 18 months. As you know, I think a chart is worth 1,000 words, so I’ve plotted the spot price for WTI as far back as my Bloomberg data would take… Read More

By Tags: