Let’s talk about the week that was, as the S&P 500 fell -7.03 percent, on top of the losses of 5.71 percent over the previous two weeks. All told, the loss for the S&P 500 is now -17.54 percent from the all-time high set on September 20th. Although I don’t follow the Dow Jones Industrial Average (DJIA) closely, I know that many of you do, in part because that’s what’s… Read More
Stocks are suffering for two basic reasons: slowing global growth and tightening central bank policy. While both of these rationales are true, they’re also very generic. Therefore, I thought it would be interesting to look at the big sectors driving the market performance and try to describe what’s happening in each one for a little more granularity. There are 11 sectors, and I won’t be discussing all of them, because… Read More
Last week, I said that the stock market had three big questions for the Federal Reserve and its chair Jay Powell. You can read the full article here, but the questions were as follows: What is the course of interest rates? What will happen with the Fed’s balance sheet? Will the Fed support the stock market, as it has in the recent past? This past week saw a major market… Read More
Stocks have been rocky since the start of the fourth quarter, and while investors are worried about a few things from tech stocks to crude oil to junk bonds, but I think the primary concerns are interest rates and the Federal Reserve. There are three huge questions on the table. First, how high will the Fed raise short term interest rates? Second, what is the Fed going to do with… Read More
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
