Published July 29, 2022
In a bull market, investors buy the rumor and sell the news, with the selling being typically light. In a bear market like we are in now, this week showed us it is the opposite. Investors fear the news, sell stocks down on the fear, buying them back when the news, though bad, is not quite as terrible as it could be. So it was with the Federal Reserve announcement this week. (more…)
Published January 21, 2022
Markets have struggled mightily so far in 2022 as looming Fed policy changes merge with Omicron-fueled slowdowns and Russia-Ukraine tensions to put investors on edge. Growth stocks, presumably more sensitive to rising interest rates, have stumbled the most. (more…)
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…)
Published August 27, 2021
We have written often in recent weeks about how extended the market seems to be. Some of this content has come from Schwab. Back in the late 1990s, Schwab notified clients more than once that the market’s valuation was excessive and to be careful. Similarly, they have been proactively warning this summer of higher-than-normal market valuations and a market ripe for some downside action. There are notable differences between now and the late 1990s. (more…)
Published July 16, 2021
The stock market is in the midst of a correction, a pullback in price. With broad market indexes hitting new highs, this assertion sounds clearly wrong. However, look under the surface of those indexes and most stocks are going nowhere, with a sizeable chunk of them declining. (more…)
Published May 14, 2021
The stock market continues to hold on through intermittent bouts of selling. Corporate earnings have been record-setting in their growth from year-ago levels, severely depressed though they were. Despite outrageously good earnings for the top growth stocks in the Nasdaq, investors continue to shift money to cyclical value sectors like energy, finance, materials. The lackluster response to the hotshot earnings has led to some heavy down days in the market recently. (more…)
Published March 5, 2021
The market’s preferred narrative has changed over the past month leading to a selloff in the tech & consumer-heavy Nasdaq. When the current market rally started way back in April 2020, the argument was that the stable earnings growth and global presence of the mega-cap tech and consumer stocks like Amazon, Facebook, Nike, et al. would be the best place for stock investors to park their money. These brands are substantially online or ‘digital’ in their business operations, and less likely to be impacted by the new stay-at-home lifestyle. (more…)
Published October 23, 2020
With the Nasdaq 100 (QQQ) index as the focus of our models, we spend a lot of time talking about that index and its major components – e.g. Amazon, Apple, Microsoft, et al. Another trend in the market, and one that might be poised to outperform the Nasdaq, is the old line industrials. (more…)
Published July 24, 2020
We have mentioned recently the need for the stock market to expand its participation if the rally was to continue. Over the past couple of weeks this appears to be happening. See below a variety of sectors outside the usual FANGMA* tech/consumer complex that have been showing strength. This rotation is what fuels longer-term stock market rallies.
Published June 5, 2020
Stocks have just unleashed their all-time best 50-day performance in history. Some think it might be due for a break. The support for that argument comes as the Nasdaq 100 (QQQ) has run right up to its prior high point – e.g. it’s on the verge of an all-time high price. Usually, there is some resistance to buying at an all-time high price (who wants to pay the highest price ever for something?). That resistance eventually gives way as new information supports paying more. But initially, there is some balking. We find ourselves at that point this week. (more…)