A correction is usually defined as a peak-to-trough decline of 10- percent using closing prices. Under that definition, we’re not quite at a correction, since the S&P 500 is ‘only’ down -9.28 percent since the recent high on September 20th. I think that such a strict definition is a little bit silly, so I’m calling it a correction since we’re very close using closing prices, and we crossed the 10-percent… Read More
Somewhat like Hurricane Michael, the stock market selloff last week seemed to come out of nowhere quickly, and it hit hard. The question on everyone’s mind is what caused the sharp move? In truth, nobody really knows the answer, but that also means that my guess can’t be wrong. There are several broad themes that could explain the selloff, including further weakening of US relations with China expressed in the… Read More
Five years ago, at the five-year anniversary weekend remembering the collapse of Lehman Brothers, I wasn’t ready to deal with the bad memories of that terrible time. Granted, what happened 10-years ago in financial markets was not like being in a war, a natural disaster, sick with a terrible disease or the victim of a terrible crime, but it was still upsetting to me (no doubt because I live in… Read More
When I graduated from college and started working for Mark Twain Bank’s brokerage unit, there was an older gentleman who occupied one of the offices in the branch. I’m not sure he was actually employed by the bank at that point, but I was told that he had been an important executive at one time. He came in around nine, read the newspaper (we all did in those days), made… Read More
As we approach the halfway point of 2018, some things are looking very different from last year. Although it has been a bumpier ride compared to last year, US stocks are on track to have another good year as the S&P 500 is up more than 4.5 percent and the Russell 2000 Index is up more than 10 percent. But unlike last year, international stocks have effectively been flat, flipping… Read More
At this point, 93 percent of S&P 500 stocks have announced their first quarter results, which means that earnings season is almost over. The expectations for earnings were relatively high at the beginning of the season, as Wall Street analysts expected that earning would grow by 11.3 percent. In fact, it was a blow out earnings season, with FactSet reporting that the blended average earnings grown at 24.5 percent –… Read More
Market participants and the news media alike are focused on round numbers, whether it’s the hopefully forthcoming Dow 25,000 or the 10-year Treasury crossing three percent last week. Amidst all of the news last week, one round number caught my eye: the unemployment rate crossing below four percent for the first time in nearly 20 years. The chart above shows the unemployment rate, or, more officially U3, for the past… Read More
If you’re writing a check to the government tomorrow for tax day, you’re probably not too happy about it. At least you’re not suffering like John Paulson, the hedge fund manager, who is writing checks to the Fed and state for over $1 billion – on top of the $500 million that he paid in estimates last year. I know, I know: it’s a high class problem that we would… Read More
This past Thursday, President Trump announced tariffs on Chinese imports citing security concerns and a significant trade deficit and estimated approximately $50-$60 billion in new tariffs. This was a follow up to his previous announcement of a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Following both announcements, stocks proceeded to sell-off on fears of a trade-war. Since the simple act of increasing tariffs… Read More
Last week’s Daily Insight was a little long and a little technical, so today I am going to keep it short and sweet. The market appears to have shifted back into rally mode with concerns about inflation, rising bonds yields or volatility, seemingly falling by the wayside. At this point, this correction seems a lot like the last two, although as I said last week, it’s a little too early… Read More
