Preparing for a Default, and Possible Investment Opportunities – Published in Noozhawk on Monday, October 14, 2013

With only four days remaining before the United States — for the first time in its history — will default on its debt unless Congress and President Barack Obama take action, investors should be prepared for what could be the best opportunity to invest for the foreseeable future. The recent 4 percent pull-back for stocks will pale in comparison to what the stock market will do if the government defaults. Investors with available cash…

3rd-Quarter Earnings Look to Disappoint — Again – Published in Noozhawk on Monday, October 7, 2013

As we get set to enter the third-quarter earnings season, most are still focusing on the government shutdown and the threat of Federal Reserve tapering, with little interest in corporate revenue or earnings growth. However, the importance of this data will have a lasting impact on the financial markets and the economy, far beyond that of the partial government shutdown. According to FactSet Research, Standard & Poor’s 500 earnings are expected to grow 3 percent…

Dow Cracks 15,000 as U.S. Default Fears Mount – 10-3-13

The Dow is trading down more than 1%, off 150+ points so far today as fears about the U.S. government defaulting if the Congress does not act push investors to sell.  The 1-month U.S. treasury has also spiked in yield, as investors exit bonds as well.  All three major stock indexes are down more than 1% at-present.  If the Congress doesn’t act, we will run out of ways to borrow…

Nasdaq Assumes Leadership Role – October 1, 2013

Recently the NASDAQ has assumed a leadership role, outperforming the S&P 500 over the past month or so.  The NASDAQ is tech-heavy, meaning it has a significant weighting in technology stocks – as goes tech, so goes the NASDAQ Composite index.  This means that in the past month or so, technology stocks have begun to outperform.  This is a healthy sign for the stock market, as one would expect to…

Renewed Fears over Debt Ceiling Trump Fed Tapering Concerns – Published in Noozhawk on Monday, September 30, 2013

Over the last several months, discussions about stock market performance have centered on the debate over when and by how much the Federal Reserve will taper off its bond-buying program —quantitative easing round 3, or QE3. With our attention focused on the possible impact of tapering, we have lost interest in the looming threat of running up against the debt ceiling once again, a threat that is all too real, and all…

All Rally Attempts Failing – 9-25-13

Stocks have attempted to mount rallies each day since the all-time highs were set last Wednesday, but each rally has met with resistance and ultimately with failure, so far.  Once again, stocks opened down this morning, attempted to rally and went positive for a while, but then faded.  We are now down 76 points on the Dow today, and 417 points, or 2.6% from the all-time high.  The S&P 500…

No-taper Euphoria Short-lived – 9-24-13

The euphoria surrounding the unexpected decision by the Fed not to taper-off their bond buying program sent stocks rallying to new, all-time highs on Wednesday last week, with the S&P 500 reaching 1,725.  Since then, however, stocks have faded, losing more than 1.5% in the past two trading sessions.  We reached an intraday low of 1,695 this morning, before stocks mounted a rebound, and we are currently at 1,705, which…

Fed Stimulus Just Isn’t Working – Published in Noozhawk Monday, September 23, 2013

For months and months, many of us have been discussing and evaluating the costs and benefits of the Federal Reserve’s stimulus — the third round of the Fed’s quantitative easing, or QE3— through which it is buying $85 billion each month in bonds to stimulate economic growth. Twelve months into QE3, the Fed is facing a difficult choice: Does it remove stimulus and risk stifling the economy, or does it continue pumping cash into…

Fed Completely Ignoring the Economic Influence of the Stock Market – Wednesday, September 18, 2013

The Fed, by maintaining their bond purchasing program, is completely ignoring the the possible negative impact on the economy that a sizable stock market correction will have.  By continuing to buy bonds through their QE3 program, they are driving stocks to all-time highs, and to unsustainable valuations.  In essence, they are creating a bubble in stocks that inevitably will burst, resulting in a massive shock to the economy.  The longer…