On Hold Chicken Little flew the coop as investors concluded that the sky was not actually falling following the passage of a debt ceiling bill that averted a U.S. default combined with the mounting evidence that future interest rate hikes are on hold. The next critical economic data will not come until mid-June on the 13th, when the Fed starts its June 2-day meeting. The stock market closed out the holiday-shortened [...]
Closing In Artificial intelligence and questionable intelligence dictated the action in the financial markets. Early in the week stocks drifted lower as debt ceiling talks progressed without resolution and the Fed minutes showed uncertainty about future monetary policy actions (both qualifying as questionable intelligence). Nvidia’s fantastic earnings Wednesday evening lifted everything AI related on Thursday, while most equities continued to languish outside of the tech sector. Back to questionable intelligence, stocks [...]
No Fresh Drama The equity markets moved higher, with the usual suspects (Apple and its fellow tech giants) continuing to lead the charge, but with the rally broadening out as other stocks joined the party. The Nasdaq Composite gained 3%, the S&P 500 rose 1.6%, and the Russell 2000 jumped 1.9%, while advancing issues outnumbered declining ones by a 3-2 margin. For most of the week the constructive tone of the [...]
Last Week: Negative Spin Don't worry, be happy In every life we have some trouble But when you worry, you make it double Don't worry, be happy Don't worry, be happy now Bobby McFerrin penned those lyrics back in 1988. Today’s grandstanding politicians and attention seeking media outlets have apparently rewritten the lyrics: Don’t be happy, worry There is going to be trouble which we will double When you are happy, [...]
Another Rate Hike Uncertainty remained in fashion on Wall Street, with a mixture of comforting and disquieting headlines. On the one hand corporate earnings reports and the economic data releases were encouraging; on the other hand, there were fear mongering short sellers assaulting the banking system and yet another interest rate hike accompanied with the usual dose of negative jawboning from our friends at the Fed. The market suffered hefty losses [...]
Aftershock The market suffered from an SVB aftershock early in the week, as banking concerns resurfaced after First Republic Bank (FRC) revealed a continued deposit outflow. First Republic, the 14th largest bank in the U.S., relied on wealthy customers with large balances among its depositors. Those customers were tremendously profitable for the bank, which posted record earnings of $1.7 billion in calendar 2022. Those same customers were quick to withdraw their [...]
Watch the replay of Eric’s April 20th small cap segment on TD Ameritrade Network here. Stalemate April trading remained somewhat calm and quiet, with the S&P 500 slipping 0.1%, the Nasdaq sliding 0.4%, and the Russell 2000 gaining 0.6%. It has been one of the least volatile months in the last five years, suggesting a stalemate between the bulls and the bears in the face of the myriad of uncertainties that [...]
A Case for the Consumer Last week, the equity markets rose supported by mounting evidence of disinflation and solid results from JPMorgan Chase & Co (JPM) and other large banks. The gains were muted by the release of the Fed’s March FOMC minutes on Wednesday and an unexpectedly weak retail sales report on Friday. Small caps fared the best, with the Russell 2000 gaining 1.5%, followed by the DJIA up 1.2%, [...]
Modest Rebound Trading got off to a crude start Monday as oil prices surged following news of a production cut led by Saudi Arabia. Regional banks got hit on Tuesday as analysts cut price targets on the group, in an excellent example of closing the barn door after the horse has bolted. The SPDR Regional Bank ETF (KRE) for example has declined approximately 25% in the wake of the SVB failure, [...]
Volte Face It was all good news for the equity markets starting with the FDIC backed acquisition of SVB by First Citizens Bancshares on Monday and ending with a tame inflation report on Friday. Every sector of the market rallied with advancing issues outnumbering declining issues by nearly seven to one. It was green across the screen with the S&P gaining 3.5%, the Nasdaq Composite adding 3.4%, and the Russell 2000 [...]