We are still about three weeks away from First Quarter Earnings announcements. In absence of any real fundamental data the market will trade from day to day on current headlines. Over the last few years, the market has shrugged off the headlines knowing the economy was still growing and the Fed would protect that growth. As we get further through the business cycle, the markets are paying closer attention to news headlines and as of late, there has been plenty of news to make the markets… View More
March 2018
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The major indices fell by the largest percentages in two years last week as investors feared a trade war between the U.S. and China. The Nasdaq was the worst performer among the major indices, declining 6.5%. Facebook fell 13.8% (roughly $75 billion in market value) following revelations that the political data analytics firm Cambridge Analytica, which had been given access to profiles of over 50 million users, had used the data, without permission, for political advertising campaigns. An… View More
The revelation that Facebook and other high flying Tech companies may face regulation like the mere mortal companies has shaken the Tech sector this week. Facebook is down more than 35% from its high a few months ago and its poor performance is dragging down the FANG Stocks. Remember the F in FANG is Facebook. Add to that new Tariff announcements on China and you come up with headline risk which is what is affecting the markets as of late. Many investors have a phobia when it comes to volatil… View More
In the history of the NCAA Basketball Tournament, a 16th seed has never, ever, beaten a one seed...until this year. But, on Friday, the University of Maryland, Baltimore County (UMBC) beat the University of Virginia – not just a number one seed, but the top ranked team in the USA. We don't expect the unexpected, however, when the Federal Reserve finishes its regularly scheduled meeting on Wednesday.Based on the federal funds futures market, there is a 100% chance that the Fed will boost the f… View More
Trade concerns and political developments dominated headlines last week. On Wednesday, reports surfaced that the White House plans to announce new tariffs aimed at up to $60 billion in annual Chinese imports (e.g., electronics, telecommunications equipment, furniture, and toys) in retaliation for intellectual property theft. The news followed the administration’s order to block Singapore-based Broadcom’s efforts to acquire Qualcomm, citing national security concerns following a review b… View More
Nine years ago, on March 9, 2009, the stock market bottomed as plans to end overly strict mark-to-market accounting rules took shape. Banks were no longer forced to write-down assets to illiquid, un-traded market prices. Since then, profits have soared as entrepreneurs and innovators have overcome the headwinds of two tax hikes and a rise in regulations. Starting last year, these government-created headwinds began to shift, as deregulation and tax cuts became tailwinds for the economy and the ma… View More
February has kept investors on their toes. Just before the month began, Amazon, Berkshire Hathaway, and JP Morgan Chase announced their entrance into the Healthcare Market. The S&P 500 Healthcare Sector traded down 12% after the news broke. In February, the VIX (volatility measurement) climbed 176% and then fell off sharply to end the month at a more normal level. The S&P 500, Dow Jones, and Nasdaq were all down more than 8% for the month by February 8th, but ended the month down… View More
For the last few years we have been lulled into a false sense of security that no matter what happened in the world, the Market would continue to go straight up. All you needed to do is look at the VIX Index over the last few years to confirm my comments. VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options… View More