Published October 18, 219
Recent breakouts in key stocks and sectors have some investors feeling that a bullish breakout is coming, after months of sideways trading. (more…)
A Weak Economic Report Unsettles Investors
Published October 11, 2019
The stock market has been going nowhere for four straight months as investors have hoped for a breakthrough in U.S. trade negotiations with China. Most days, stocks are reacting to rumors or vague official announcements regarding the outlook for those trade talks. However, there was one recent hard economic datapoint that caught investor attention. (more…)
Small-Cap Stocks Continue to Struggle, Thanks to the Banks
Published October 4, 2019
The stock market has begun the month of October with small-cap stocks trading back down to the bottom of their months-long trading range (green box below). The inability of small-cap stocks to find strength continues to hold back a stock market longing for a spark to drive a new uptrend. (more…)
Contrasting Views Lead to Range-Bound Trading
Published September 27, 2019
Bond manager PIMCO recently offered their mid-year outlook for the global economy and markets. Their conclusions are:
“In a nutshell, we see a global economy about to enter a low-growth “window of weakness,” which we expect to persist going into 2020 with heightened uncertainty about whether it is a window to recovery or recession. (more…)
How Emotion Drives the Economy
Published September 20, 2019
Finance, and investing even more so, are resting on the foundation of human emotion. How much a stock is worth certainly has some underpinning in the company’s earnings. But perhaps more important is the price-earnings or P/E ratio, which is how much investors are willing to PAY for those earnings. (more…)
The Stock Market’s Unspent Fuel
Published September 13, 2019
Stocks in the U.S. have come roaring back from the weakness of one month ago, returning to the doorstep of new high ground. Lost in the enthusiasm about new highs, however, is the fact that fully half of the stock market has been treading water for almost two years now. If that lagging half of the market were to break through, stocks would be in a position to substantially rally. (more…)
The Safety Trade Unwinds – for One Day at Least
Published September 6, 2019
For the past month stocks have chopped within a fairly wide range as the circled area on the chart below shows. Hemmed in by on-again, off-again trade tariff talks, stocks have made no progress over the past year. (more…)
A Mixed Bag Economy
Published August 30, 2019
Liz Ann Sonders at Charles Schwab recently wrote a thorough overview of the current economic state. Given the latest increase in economic uncertainty courtesy of the ramping of the trade war—but also last week’s release of the Leading Economic Index (LEI), her report is worth posting here for our subscribers who are interested in tracking the economy and musing about where that might be headed. (more…)
Business Cycle/Sector Investing Takes a Curve Ball This Cycle
Published August 23, 2019
Business cycle/sector investing is a seemingly easy way to apply a layer of insight to traditional buy-and-hold investing. By focusing our investment funds on sectors that typically show improved performance during certain phases of the business cycle, a sector investor can presume to outperform the broad market. However, it is never quite that easy. (more…)
The Dreaded Yield Curve Inversion
Published August 16, 2019
Like a surfer bounced by wave upon wave, investors were hit this week by a second wave. After a one day burst of market joy as the Trump Administration dialed back the September 1st imposition of trade tariffs, the U.S. Treasury bond market was rocked by a deeper reduction in yields. (more…)
