Weekly Update

Weekly Update

The Fuel for Stocks


Published October 22, 2021

The stock market is driven by earnings + liquidity + sentiment. With the Federal Reserve providing money at near-zero interest rates, the liquidity piece of the formula has been overflowing. Sentiment, or how optimistic/pessimistic investors are regarding the economy and markets, has generally been favorable. Corporate earnings have been stellar, rebounding strongly from the Covid-induced weakness. (more…)

Weekly Update

How Do We Value the Stock Market?


Published October 15, 2021

There is always plenty of talk about whether the stock market is ‘fairly’ valued, expensive, or cheap. It is a question without an answer; there are only opinions. Because in the marketplace, the price is determined solely by what investors are willing to pay. (more…)

Weekly Update

The Storm Below the Market’s Surface


Published October 8, 2021

Markets have clearly been gripped by uncertainty over the past month as interest rates have risen while concerns about government funding and China have called into question the trajectory of the economic recovery. Below is a portion of an excellent overview from Schwab’s Liz Ann Sonders on the noisy information facing investors these days. (more…)

Weekly Update

Market Finally Pulls Back


Published October 1, 2021

For the first time in a year, the stock market delivered a negative monthly return. We have written about the negative seasonality of September, which has proved out once again. October can be a dicey month as well, with wide swings in performance. (more…)

Weekly Update

Seasonally Weak September Challenges the Bulls


Published September 24, 2021

 

Monday’s gap down to begin the week was notable for the current stock market rally. It was the first time in almost a year that the S&P 500 broke the intermediate term trendline (in blue on the chart below). It has been an exceptionally long period of calm. (more…)

Uncategorized, Weekly Update

Are Market Fears Overblown?


Published September 17, 2021

September is the worst month of the year for the stock market historically. As such, investors who are predisposed to worry unearth plenty of things to be concerned with. The pair of articles below discuss some of the current worries of investors. (more…)

Weekly Update

Reviewing the market’s seasonal patterns


Published September 3, 2021

Below is an overview of the seasonal patterns of the stock market.  This review from VantagePoint overlays 15 and 37-year charts to identify periods of strength and weakness. Every year is unique, of course, but there are general tendencies as the oft-noted “sell in May” reflects. Seasonality does not play a role in our models.  But, as students of market data and history, we do find it interesting to be aware of.
(more…)

Weekly Update

And Again … the Stock Market Finds Buyers


Published September 3, 2021

The S&P 500 has spent ten straight months above its 50-day moving average, one of history’s longest stretches of calm. Ultra-low interest rates from an extremely cautious and accommodative Federal Reserve have supported risk-taking investors by keeping the cost of money near zero. Very strong corporate earnings have rewarded investors by expanding the ‘E’ in the P/E ratio, justifying the market’s run upward. (more…)

Weekly Update

A Surge in Companies Going Public Reverses Years of Decline


Published July 30, 2021

 

One of the interesting features of the stock market over the past year has been the tremendous rise in companies going public. This is coming after a long period where companies seemed very much to prefer staying in private hands. That sentiment has changed dramatically and pretty quickly, giving investors a plethora of new companies to consider. (more…)

Weekly Update

Different Types of Market Corrections


Published July 23, 2021

 

We thought a recent article by David Keller on the various types of market corrections might be of interest. Here it is with some recast charts we provide to assist:

“As the S&P 500 and Nasdaq 100 indexes have pounded away at new all-time highs basically every month in 2021, investors are left to wonder when a correction may actually be coming. We were taught that markets do not just go straight up, but instead they move in a series of impulse moves and corrective reactions as the overall trend continues. But 2021 has very much been the exception to that rule of market trends! (more…)