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Showing posts from May, 2014

May 31, 2014 – Weekend Market Comment

May 31, 2014 -- Three days in a row the S&P 500 hit a new recorded intraday high this week. The quiet trading days of late May could fade fast as markets brace for two major events towering at the end of the week—a rate cut in Europe and the U.S. monthly jobs report.

The European Central Bank European is widely expected to cut its deposit rate, putting it into negative territory for the first time, and take actions to promote small business lending. The ECB has been signalling that it could take action, including in comments from Mario Draghi, ECB's president, who set the table for a move following the last rate meeting. There is a heavy calendar of economic reports in the U.S., the most important of which is Friday's May employment report. Economists expect job creation to have slowed from April's 288,000 nonfarm payrolls but still come in above 200,000. We are almost back to pre crash employment levels.

While there are few earnings reports, Apple promises to grab hea…

May 24, 2014 – Weekend Market Comment

May 24, 2014 - The S&P 500 is up 1.2 percent in the past two days. I know, big deal, but believe it or not it's the best two-day rally since April 15-16. Pretty meager, eh? That's why I called 2014 "the Mehh year" this morning. Up one day, down the next, and mostly in a very narrow trading range, even on an intraday basis. And in the last month, volume has been lighter than usual on most days.
So what's the rest of the summer going to look like? Remember what has been holding back markets this year: 1) choppy economic data, partly weather induced, 2) emerging market concerns, and 3) global tensions, largely Ukraine-Russia.  But there is some reason for optimism. Russia/Ukraine tensions have eased for the moment.

Friday, the iShares Emerging Market ETF (EEM) is closed at its highest level since October. It's up 3.1 percent this year, outperforming the S&P 500's 2.5 percent gain. That brings us back to the choppy economic data. Earnings were hardly…

May 17, 2014 – Weekend Market Comment

May 17, 2014 – The broader stock market sold off Thursday as a result of hedge fund manager David Tepper's comments during the SALT Conference in Las Vegas. He said Wednesday he was not bearish on stocks but was more cautious last year. He likes tech stocks such as Google and Priceline.com and has lowered his equities stake to 60% from 100% in 2013. David Tepper, who made the most money of any hedge fund manager in 2013 at $3.5 billion, believes investors better approach the market with more caution now. "I'm not saying go short, I'm just saying don't be too fricking long right now," the head of Appaloosa Management told a few thousand of his colleagues Wednesday at SkyBridge Capital's SALT 2014 conference in Las Vegas. Among his concerns are a deflationary environment, weaker-than-expected U.S. growth and a European Central Bank (ECB) that badly needs to ease monetary policy. The selloff was very broad on Thursday and hit pretty much every sector. But th…