A Divided Market
There are clearly opposite views on the market right now. After a fabulous day for all three indexes yesterday, not to mention the performance of many leading stocks, some commentators remain committed to the idea we are headed for a recession. A week ago, recession fears were plastered on the front pages of all the […]
Q1 2019 Market & Economic Review
U.S. stocks experienced a strong rally in the first quarter of 2019. The biggest performance driver came from the Federal Reserve pausing their interest hikes. Between 2017 and 2018 the Fed raised the Fed Funds rate approximately 8 times and until recently expected to continue raising rates into 2019. The sell-off in Q4 was largely […]
Should Investors Prepare For More Market Declines?
The stock market experienced swift and deep downward action last week. Part of the market selloff points to typical action by institutional investors and looks very similar to the February decline. This type of trade action includes Option Gamma Hedging strategies, where traders profit from increased sensitivity to an option’s price change measured by gamma. Much of this […]
Will Higher Interest Rates Derail Stocks?
Continued economic growth has led the Federal Reserve to raise the Fed Funds rate to 2.25%. This is the biggest issue facing asset markets right now even though the rate remains well below levels that led to recessions twice during the last 18 years. For that reason, I believe the Fed is going to be cautious […]
Are Tech Stocks Going On Sale?
The U.S. stock market has come under pressure despite good Q2 earnings and the continuation of strong economic numbers. The price declines are especially prevalent in tech industries while other sectors of the stock market have held up over the last week. What is the market telling us? In simple terms, technology stocks may be […]
Stocks Finally Correct, What’s Next?
After an outstanding 15-month stock market advance, last week stocks experienced a significant pullback. The S&P 500 declined 3.9% but all three major U.S. stock indexes remain in positive territory so far in 2018. After outstanding performance in 2017, U.S. stocks started 2018 on an even more accelerated run with the Dow Jones Industrial Average […]
The Stock Market Prepares for Higher Interest Rates
U.S. stocks have been stuck in a trading range since the middle of July. Q3 earnings and central bank policy are likely to be the factors driving near-term market direction but any number of wildcard events could derail a rally attempt. The market is currently priced for perfection but that does not mean it can’t […]
BREXIT UPDATE – Q&A
Is BREXIT Europe’s “Lehman” event? Britain’s vote to leave the European Union is nowhere near the impact of the Lehman Brothers bankruptcy back in 2008. The BREXIT situation at this point is not a financial disaster. How market respond going to forward will tell us more about the impact this development is going to have […]
To Raise Or Not To Raise, That Is The Question
The on again of again posture of The Federal Reserve is apparently back “on” again regarding an interest rate hike in June. At least that is what they are signaling this week. Apparently they are seeing enough strength in the U.S. economy to feel confident another small increase from already very low rates should not […]
Pro Forma & Reported Earnings Spread
The Wall Street Journal recently published an article suggesting earnings are far worse than reported based on a widening gap between Pro Forma and Reported (GAAP) earnings. Pro Forma earnings exclude certain items like restructuring charges and stock based compensation and shows U.S. companies earning 0.4% more in 2015 then 2014 – the weakest growth […]
