I think everyone can agree that stocks and bonds sold off last year because interest rates rose. You might get some argument about why rates rose but the fact they did is sufficient to explain the drop in stocks and bonds. It doesn't matter if you think rates went up because the Fed raised their target rate on Fed funds [...]
Stocks had a rip snorter of a rally last week and a lot of people are pondering the question in the title over this long weekend. The S&P 500 was down 20.9% from intraday high (4818.62, January 4th) to intraday low (3810.32, May 20th). From that intraday low the market has risen 9.1% in just six trading days. That still [...]
There's an old Wall Street maxim that the cure for high commodity prices is high commodity prices. As prices rise, two things will generally limit the scope of the increase. Demand will wane as consumers just use less or find substitutes. Supply will also increase as the companies that extract these raw materials open new mines, grow more crops, or [...]
I'll just get this out of the way right at the beginning. The question in the title of this post refers to the end of the ongoing stock market correction and the answer is likely no. There are no sure things in this business so it isn't an unequivocal no, but based on history, the odds favor more weakness. I [...]
Fear tends to manifest itself much more quickly than greed, so volatile markets tend to be on the downside. In up markets, volatility tends to gradually decline. - Philip Roth Be fearful when others are greedy and be greedy when others are fearful. - Warren Buffett The new year hasn't gotten off to a great start for growth stocks or [...]
What we know about what’s going on in Hong Kong is limited. That’s a real shame because I have no doubt what has been transpiring is important for a lot more than Hong Kong and the short run. The connections are too obvious for it to run any other way. I’ve been asked several times to diagram or further explain [...]
Market risk in whatever asset class is usually estimated by volatility, and conceptually thought out in that way. Higher volatility is typically associated with “riskier” markets, particularly stocks. Let’s assume that you have two market choices for investment. The first features a standard deviation (1-year period of weekly market returns) of 1.48% where the VIX is 12.83. The second market [...]
As we've been reporting, the economic data has been showing weak performance. But, the market hasn't seemed to mind. QE is in high gear. It is supporting asset prices as the over-leveraged sectors of the economy heal themselves. The banking and household sector received bailouts and a slow healing process puts them in a better place today. The government sector [...]
Joseph Gomez, Sr. Investment Advisor and Portfolio Manager Apple was, once again, the star performer in client accounts last week, rising 7.41% and hitting another milestone - $600 per share. The rapid increase in AAPL’s share price has also caused a bit of a problem for analysts, as the stock keeps catching up with their price targets. Right now, the lowest price [...]
The markets were once again higher this week, as the Dow Industrials hit the 13,000 level and the Nasdaq Composite hit 3000, levels not seen in years. The S&P 500 also hit multi-year highs, on its way to the best 2-month start to any year. This might all change soon with Bernanke's announcement on inflation and monetary easing. The VIX [...]
Stay In Touch