Last Week: Ouch. The previous week’s sideways bottoming action gave way to a nasty sell-off, with the S&P 500 surrendering its remaining gains for 2018 after declining 3.9%. The Pendulum has quickly swung from greed to fear as the Volatility Index spiked to its highest level since early February. It wasn’t the actual earnings reports that fostered the selling wave, instead it was the more cautionary tone within the reports, particularly [...]
The U.S. economy continued to show momentum during the Third Quarter of 2018. Corporate earnings were strong, unemployment declined, inflation remains tame and most indicators show improving financial conditions. The stock market had a good quarter, as measured by the S&P 500, with a 7.2% return. Small stocks, as measured by the Russell 2000, returned 3.13% during the last three months. Growth stocks continued to outpace Value stocks – the Russell 2000 [...]
Last Week: Earnings season got back on track, and the market responded with a nice rebound early in the week, only to have the gains dissipate with the market finishing flat to slightly lower by the close on Friday. So far, major bank earnings in particular are looking very good, both the level of earnings and the quality of the earnings. I believe that as interest rates rise, the large, multi-regional [...]
Last Week: It was the worst week for the equity market since early February, with the S&P 500 declining 4.1%, erasing over half the gains for the year. Only a relief rally of over 1% in the last hour of trading Friday allowed the index to break a six-day losing streak. The twin headwinds of rising rates and trade tensions uprooted the pillar of strong corporate earnings, as cautionary language from [...]
Last Week: Despite enthusiasm on Monday morning over the new U.S.-Mexico-Canada Agreement (take note that the word “Trade” disappeared from the agreement formally known as NAFTA), as the week progressed the trade and interest rate headwinds once again intensified. On the trade front, U.S. Commerce Secretary Wilbur Ross told Reuters on Friday that the US and China probably won’t resume trade negotiations until after the November mid-term elections. It is becoming [...]
Last Week: The two major near-term headwinds were lightly blowing in the face of investors, with the implementation of tariffs on Monday by the U.S. and China, followed by the Federal Reserve rate hike on Wednesday. Both events were widely expected, and the damage was minimal, with the S&P 500 retreating 0.54% and the Russell 2000 0.92%. Also, as expected, the Fed removed the word “accommodative” from its policy statement. The [...]