Trouble Brewing Beneath the Surface
The more I analyze, the more I don’t like. The number of stocks participating in this rally has not been encouraging, but Friday’s action along with today so far is becoming eerily similar to that of 1999. Notice I said 1999 and not 2000. Valuations are nowhere near as egregious nor is sentiment showing much greed, not mention frothy. And monetary conditions are certainly not restrictive. On Friday, on the New York Stock Exchange, there were almost 1000 more stocks […]
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Date: July 20, 2015
Chinese Market Collapse Not Over
I remember the outrage when the government sought to pull off TARP in 2008, first buying troubled, illiquid assets from the big banks which then morphed into outright capital injections into the banks. When QE was announced, the calls were equally as emotional, not to mention the myriad of special Fed programs designed to provide liquidity in the financial system when there was little. I can only imagine what those naysayers believe now regarding China. This is not a new […]
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Date: July 15, 2015
Another Bad Deal… Iran
We woke up this morning to learn that the big western nations struck a deal with Iran to lift the economic embargo in return for nuclear concessions. In life, I have always tried to avoid rewarding bad behavior. Once you start down that path, it never ends. Just look what happened in this country with the S&L crisis, Orange County, Long-Term Capital and Bear Stearns. Talk about moral hazard! While Lehman Brothers put an end to that, look at how […]
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Date: July 14, 2015
Reboot Greece
Since the latest “crisis” in Greece unfolded in the markets almost two weeks ago, I continued to offer that China was the real problem, but Greece was dominating the headlines. Greece doesn’t really matter in the grand scheme of things, economically or market-wise. And even though they struck an absolutely horrific deal for their country, stocks will rally in the short-term because the uncertainty is lifted. Who in their right mind would agree to more tax hikes, more austerity and […]
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Date: July 13, 2015
Q3 Stock Market Scenarios Unfolding Nicely
Last week after the Dow plunged 350 points and began to bounce, I offered the two most probable scenarios for stocks, both of which included new multi-month lows before any real rally would begin. Stock Market Scenarios for Q3 My conclusion was, “just because we saw extreme readings on Monday doesn’t mean that the ultimate low was seen. I would argue against that. Monday’s snowball day was an important piece, but far from the final piece. Wash out readings like […]
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Date: July 10, 2015
Rip Off the Band-Aid Greece
As the early tally in Greece showed overwhelming support for the NO camp, meaning they wanted to reject more austerity, markets around the globe braced for another round of strong selling. As usual, the pundits got it wrong. Almost every single interview I watched or read had the vote almost a dead heat. “Famed” investor Wilbur Ross laid a huge egg in not only predicting a YES vote, but also positioning his portfolios for it and then trying to rationalize […]
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Date: July 8, 2015
Greece Occupying Headlines But China is Key
Last Monday, as the stock market was in the process of falling 350 points on news out of Greece, I offered that the much more important news was coming from China where the Bank of China cut interest rates in an attempt to spur on the economy and support the stock market. That was barely a footnote in the media. After an extremely volatile week, reminiscent of 2008, and with the Shanghai Index down almost 25% from its peak, the […]
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Date: July 7, 2015
Greece = Opportunity. Stock Market Scenarios for Q3
With Monday’s blog and Street$marts being on the long side, I decided to wait a day to offer commentary on how the markets’ reaction to the impending default by Greece, bank closure, referendum, etc. would impact the new month and quarter. To reiterate an important market tenet of mine which has been around for decades, it’s not what the news is, but how the markets react. We are constantly reminded of that with economic news. Is good news bad news […]
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Date: July 1, 2015
Birds, Salmon and Russell 2000
As the birds fly south for the winter and salmon spawn each fall, it’s time for the annual reconstitution and rebalancing for the Russell 2000 index of small cap companies. The Russell 2000 represents the smallest 2000 companies in the Russell 3000 index. The companies which no longer rank in the 2000 are jettisoned and the new ones are officially added on June 26th. This is all based on the rankings as of May 31st. As this happens only once […]
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Date: June 30, 2015
Grexhaustion… Leave the Euro Already
If you weren’t already exhausted by the constant stream of headlines regarding Greece’s inability to meet their financial obligations, you should be now! After more than five years of negotiations, deals, posturing and extensions, the situation in Greece seems to be coming to a head. I hesitate to use the word “crisis” because unless you’re living there and feeling the depressionary pain, this is really a fringe story. What I find interesting is that we are finally seeing all parties […]
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Date: June 29, 2015
