Showing posts with label bull market. Show all posts
Showing posts with label bull market. Show all posts

Thursday, May 16, 2013

S&P vs GDP

An analyst pointed out that -
At the risk of provoking a spat - 
There's a gap in demand
Between equities and
The economy, which is still flat. 

Monday, August 6, 2012

Proceed Cautiously

The economy, generally dreary,
Brings occasional news that is cheery,
But consider all facets
Before moving assets
Because of a bull market theory.

Marketwatch reports that "Asian stock markets were bolstered [today] after the U.S. economy added more jobs than expected in July." According to Paul Ashworth of Capital Economics, “The bigger-than-expected 163,000 increase in U.S. non-farm payrolls in July, alongside the small rise in the ISM non-manufacturing index, should ease fears that the U.S. economy is following Europe into recession.” However, there are three good reasons to proceed cautiously in reacting to a single, positive datapoint:

  1. The July number does not confirm a positive trend; the average NFP increase over the last three months is only 105,000, at the lower end of the 100,000-120,000 monthly increase considered necessary to accommodate new jobseekers. 
  2. The unemployment rate went up; unemployment is calculated based on a household survey "of people who are without jobs, who are available to work and who have actively sought work in the prior four weeks, and that number rose in July—by 45,000 to 12.8 million," says the Wall Street Journal's Phil Izzo. NFP is calculated from the number of jobs reported in a survey of businesses, so workers can be counted twice. 
  3. A single datapoint may be influenced by one-time factors; in this case, auto manufacturing layoffs that normally occur in July did not happen, raising the possibility that they may do so in August, depressing that month's jobs data.

Thursday, March 15, 2012

St. Patrick's Day on Wall Street

There's a Blarney old stock market theory
That prices are frothy and cheery
On the eve of St. Pat,
But decline after that,
When Hibernian eyes are still bleary.

St. Patrick's Day is upon us, and all the sons and daughters of the Emerald Isle are thinking the same thing: what does this mean for my portfolio? With this question in mind, I went to seek answers in the Seeking Alpha blog. There, a laddy by the name o' Timothy Wood posted a wee guide to How St. Patrick's Day Can Make You Money in the Stock Market. Evidently, the market rises by an average of 0.34% in the two days before St. Paddy's. Indeed, in the years between 2006 and 2010, stocks rose during each four-day period from March 15 to 18. As if to confirm Mr. Wood's hypothesis, the S&P 500 rose by 0.6% on Thursday to close above 1400 for the first time in four years. Says Mr. Wood: "This peculiar occurrence is attributed to a rise in mood levels as people await the celebratory day, which encourages investment." In that case - Sláinte!

Dr. Goose reminds you to celebrate St. Patrick's Day responsibly... by listening to Marketplace Money this weekend! Your faithful limericker and host Tess Vigeland will recite tax-time limericks for your pleasure and edification. Check your local public radio listings for the time and station, or download the podcast!

Tuesday, February 28, 2012

Dow 13,000

Whenever an index is bound
For a number exceedingly round,
The luster of Midas
Convinces insiders
It's time that their longs were unwound.

Ah, the enthralling power of round numbers; by itself, the Dow Jones Industrial Index hitting 13,000 for the first time since 2008 means nothing. It is neither fundamental - i.e., indicative of the economic prospects of companies, markets and industries - nor truly technical - i.e., indicative of the patterns of buying and selling behavior in stocks. But it does provide a convenient marker of how far the US stock market has come since its bottom (roughly double), as well as how far it has to go to reach the previous high of 14,164.53, set on Oct. 9, 2007. Still, most of those who make their living in the markets seemed to betray a certain exasperation with the whole hoopla, such as the market strategist who said: "No doubt (the market) has been overbought since the beginning of February, but in a powerful uptrend, price will continue higher for some time amid overbought conditions." Bloomberg's Margaret Brennan may have tweeted it best: "Dow closes above 13,000 for the 1st time since 2008. Can we stop talking about it now?" Now that the limerick is out, sure.

Thursday, February 9, 2012

Time To Invest?

Said a broker, in recommendation,
At a client's undue hesitation:
"Throughout time, we deduct,
Sh^t has always been f#cked;
Pray be bold in your risk allocation."

In times like these, after a prolonged economic slump, isolated indicators may offer glimmers of hope; an improving jobs number here, more manufacturing there. And yet, the economy as a whole is not clearly improving. At such times, investors may become paralyzed by the conflicting data, waiting for all the stars to align and thereby missing a rocket launch to the moon. Investors may need the equivalent of a "snap out of it!" delivered with a bracing slap. Here to meet this pressing need is Joshua Brown, the investment advisor and blogger known as the "Reformed Broker". Urging investors to "Get Your Shit Together," Mr. Brown says:

I have no idea when this secular bear market and the attendant economic malaise will truly be over - but I know for a fact that if you're not planning for its end you're going to miss your chance.

Thursday, August 11, 2011

Check Your Emotions

Investors, with faces quite ashen,
Their holdings may clamor to cash in,
But advisors persuade
That it's best not to trade
In a greedy or panicky passion.

Down 600 points, up 400 points, down 400 points again - the volatility of the stock market this week may induce emotional volatility on the part of those whose retirement savings are tied up in it. However, at such times it is best to remember that the investor's two worst enemies are their own fear and greed, which may prompt rash decisions with adverse long-term consequences. As the legendary early 20th century trader Jesse Livermore once said: "The successful trader has to fight these two deep-seated instincts. Instead of hoping he must fear; instead of fearing he must hope." For more on this topic, listen to this weekend's Marketplace Money on public radio, where an expert panel will answer listeners' questions about how to respond to the market upheaval.

Disclaimer: nothing in this post should be considered as investment advice, for which the reader should turn instead to a qualified investment advisor.

Monday, August 8, 2011

Weekend Worriers

Whenever a bombshell discloses
After Wall Street on Friday night closes,
The market is fraught
All weekend with what
The chance of new highs or new lows is.

Listening to the weekend's feverish speculation as to the market effect of the S&P downgrade of US sovereign debt, one could not help but hark back to the Lehman failure in 2008, when the world waited breathlessly for the Asian markets to open and point to our global economic fate. Early results this time around indicate a sharp sell-off of anything risky, though not necessarily US Treasury bonds themselves, the risk perception of which has not really changed.

Friday, May 20, 2011

Don't Buy Retail

Wall Street sees contrary sentiment
In retail investors' presentiment,
So, when Mom or Pop's right,
One asks if it might
Be the good call that coincident'ly went?

The Wall Street Journal's Kelly Evans writes in her Ahead of the Tape column that the American Association of Individual Investors' sentiment survey has been showing more predictive power than usual in the first half of this year.   Market professionals often see retail investors as a contrary indicator; small investors typically react in a herd to broad market moves, such that, as Stifel Nicolaus strategist David Lutz puts it: "If everyone's on one side of the boat, I like being on the other one."  The fact that the S+P 500 index climbed 6.6% after a bullish reading of the AAII December survey is an interesting departure, but how soon before Mom and Pop revert to type?

Tuesday, December 14, 2010

Fed-Up Stock Market

Sinking rates was the Fed's one desire
In becoming a big T-note buyer;
Though for naught they did meddle
In bonds, they can settle
For driving stock indices higher.   

The Wall Street Journal's Ahead of the Tape columnist, Kelly Evans, notes that "QE2" (the second round of quantitative easing) failed in its goal of lowering long-term interest rates, but has been correlated with a 19% increase in the S&P 500 index since August.  Should we take stimulus any way we can get it?

Thursday, October 28, 2010

Please Cry for Me, Argentina

Buenos Aires said tearful goodbyes
At Kirchner's  surprising demise,
Though some, less well bred,
Spoke ill of the dead,
In the form of new bull market highs.

The sudden death by heart attack of Argentina's ex-President Néstor Kirchner ignited a rally in Argentine stock and bond markets. Along with his now-widow, current President Cristina Fernández de Kirchner, the deceased had mapped out a political dynasty marked by heavy state intervention in the economy. His passing during an election season improves the chances of the market-friendlier opposition against Mrs. Kirchner.

Tuesday, March 9, 2010

Happy Birthday

On this day, when the century was new,
The internet stock bubble blew;
And just one year ago
The Dow Jones hit a low,
So happy birthday, Bull Market - who knew?

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