The First and Last Hour of Each Trading Session Matter Most

Yesterday stocks attempted to rebound from Monday’s rout, only to fail in the last 15 minutes of the session, falling more than 300 points to close down 204 for the session (Dow Jones Industrial Index). Today we have witnessed another attempt to rally stocks, with the Dow entering the last hour of trading up 408 points. It will be interesting and instructive to see how stocks react during this final…

stocks continue yesterday’s losses

Stocks continue to slide, with the Dow losing 250 points, and the Nasdaq Composite off more than 100 points (more than 2%) so far today. I think there has been too much emphasis on the first rate hike (I am guilty of this also). If we look at the multi-year trend for rates, the U.S. has been in low interest rate mode for 7 years. If we look globally, other…

Fed Window for Rate Hikes is Now, Officially Open!

The long awaiting Fed rate raising cycle is now, officially upon us. The question of whether or not the Fed will raise rates has long been answered in the affirmative, and so, it is not a question of if, but when will the Fed tighten. June was almost universally forecast to be the first Fed meeting at which Fed governors would possibly vote to raise rates. The June meeting occurs…

U.S. Stocks Rally to New Highs on Empty Greek Promises

Stocks rallied today to close at all-time highs (again) after a deal was announced that basically delays Greece’s responsibilities to repay loans and follow required austerity measures as part of their bailout.  The reality is that this changes nothing; it simply puts-off the pending implosion of the Greek economy and the probable end to the EU resulting from a Greek exit from the euro.  Nothing has changed – the risks…

Germany swiftly rejects loan extension request by Greece

Just hours after Greece submitted a proposal to extend their bailout loans, Germany rejected the request citing Greece’s failure to include an agreement to also extend the austerity measures that are a requirement of the original bailout.  Greece is clearly trying to avoid continuing the austerity measures, and obviously cannot afford to service their debt.  It is amazing to me that financial markets around the globe, and especially those of…

Sinking Gasoline Prices May Be Too Late to Rescue Holiday Retail Sales – Published in Noozhawk on Monday, December 8, 2014

Last week’s jobs report was amazing, plain and simple. The U.S. economy added 321,000 jobs, far exceeding consensus analyst estimates of 235,000 jobs. The unemployment rate fell slightly to 5.8 percent, from a high just above 10 percent at the trough of the Great Recession. The stock market continues to set new, all-time highs. So why isn’t the economy growing at a robust pace? The answer is simple, although the…

Has Black Friday Lost Its Significance? – Published in Noozhawk on Monday, December 1, 2014

Black Friday — the first official shopping day of the holiday season — has historically been the most important shopping day of the year for retailers. But with the emergence of Cyber Monday, and the loss of pricing pressure that has resulted, particularly since the Great Recession of 2008-2009, is Black Friday no longer relevant to retailers or to the economy and financial markets? Black Friday, so-called because in the past the…

Economic Growth Is All About Wages – Published in Noozhawk on Monday, November 3, 2014

Although we witnessed the first glimpse of wage improvement last week, American workers are not seeing consistent pay increases. Until this changes, economic growth will remain lackluster, and as a result, earnings for U.S. companies will lag current stock valuations. The United States is adding jobs at the fastest pace since the end of the Great Recession, with the economy adding 248,000 jobs in September, and another strong month of…

Healthy GDP Report Could Put Nail in Economic Coffin for the Fed – Published in Noozhawk on Monday, October 27, 2014

The Commerce Department will release the first report for third-quarter gross-domestic product this week. Real GDP growth is expected to be 3 percent annualized, following the dramatic jump to 4.6 percent growth for the second quarter. A healthy GDP report on Wednesday could give consumers — who have been reluctant to spend — more confidence in the economy, but may also push the Fed to begin raising interest rates sooner rather than later. We began 2014…

Head fake: Probably the last chance to sell before more downside

Today’s stock market bounce is likely the last chance investors will have to sell, if they haven’t already, before we see stocks make new lows.  My short-term target for the S&P 500 is around 1,700.  Today’s close will be very interesting – if we close higher, and if decent earnings and economic data support it, we could see further upside next week as the market tries to shake-off all of…