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Apr 26

Further Volatility to cause Emotional Overreactions

Market Recap:

Stocks sold off and then rebounded to close the trading day near the flat line on Monday. While oil, which had been a key driver for stock market direction, was sharply down for the day, stocks in general fared better. The ‘new’ correlation seems to be with bonds, which sold off in the early part of the day before rebounding. Earnings season kicked into high gear as some 100 companies reported on Monday alone.

 

Looking Ahead:

Investors should expect further volatility as earnings and economic news releases are sure to cause emotional overreactions. Tomorrow’s FOMC announcement will likely contain language that indicates that the U.S. economy can sustain 2 or more interest rate hikes, however that the Fed has chosen to hold off due to international concerns. The Fed is in quite a bind, as it absolutely wants to raise rates, but is (rightfully) fearful that such a move will further strengthen the dollar, thereby weakening the Chinese Yuan, which could cause a significant banking crisis in the worlds’ second largest economy. Moreover, given the challenges that Europe and Japan are facing, the negative impact on these economies is also undesirable. As such, we continue to believe that commodity prices will remain somewhat depressed, that the U.S. dollar will remain in its current trading range, and that if the Fed doesn’t raise in June, no hike in 2016 is a significant possibility. From an investors perspective this will mean that interest rates will remain suppressed, making high-quality dividend paying stocks attractive alternatives for those seeking income in a low-yield environment. Don’t miss this week’s Money Matters with Gary Goldberg; for stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 25

This Week’s Market Moving Events

Market Recap:

While it may have been an uneventful week for markets, it was an important one. On the heels of a slew of (decent) earnings reports, major stock indexes stabilized and ended within arms-reach of their all-time highs. Speculation that the U.S. Federal Reserve would hold interest rates steady at this week’s meeting became almost unanimous. And while we agree that the Fed is unlikely to raise rates this go around, we believe that the risks are in what Chairwoman Yellen says, not what the committee does. So far, Dr. Yellen has been on the Dovish side, a trend that is sure to end at some point.

 

Looking Forward:

Index futures as well as major international bourses are down slightly on Monday morning, as investors digest recent political events relating to President Obama’s European tour, the failed Doha accord and threats by Saudi Arabia relating American’s ability to sue foreign governments for damages due to terrorist related damages. More significantly, there are a slew of earnings reports and economic data on tap for the week, not least of which is the long-awaited April Fed meetings scheduled for Tuesday and Wednesday of this week. Markets are likely to remain range bound until the Fed’s press conference on Wednesday afternoon or Thursday’s release of revised Q1 GDP data.

 

This Week’s Market Moving Events:

Monday: New Home Sales, Dallas Fed Manufacturing Index

Tuesday: Durable Goods Orders, Case Shiller Home Price Index, Richmond Fed Manufacturing Index

Wednesday: International Trade data, FOMC Meeting Minutes and Press Conference

Thursday: GDP, Jobless Claims, Kansas City Manufacturing Index

Friday: Employment Cost Index, Chicago PMI, Consumer Confidence

Apr 18

Wall St falls after oil meeting fails to result in production freeze

Market Recap 4/15/16:

U.S. stocks fell on Friday, pressured by energy shares as investors bet that a meeting of major oil-producing nations would do little to clear up the commodity’s oversupply glut. Though the correlation has somewhat faded of late, Wall Street remains closely tied to crude oil prices. Investors are worried that persistently weak prices could presage a broader economic slowdown, or that financial companies could be vulnerable to energy companies defaulting on loans if prices do not pick back up. Also weight on the markets on Friday was Apple (AAPL), following reports the tech giant was continuing its reduced production of iPhones in response to light demand. Despite the decline on the day, major indexes were positive for the week.

Looking ahead:

U.S. stock index futures fell on Monday after a weekend meeting of major oil nation failed to result in a freeze to their production targets. The news means that energy prices could stay low for a while, until global demand picks up in a big way – a uncertain prospect given slowing growth in China and increased use of alternative energy sources. Investors were also cautious as they awaited the latest corporate earnings, with Morgan Stanley (MS) scheduled to report before the market opens and both IBM (IBM) and Netflix (NFLX) coming out after the close. While earnings are seen falling this quarter, expectations may be so low as to make it easier for names to come in ahead of expectations. Don’t miss this week’s Money Matters with Gary Goldberg; for stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 15

Wall St flat with Citigroup results on tap

Market Recap 4/14/16:
 
U.S. stocks closed flat on Thursday, with investors finding few reasons to keep pushing shares higher following two strong days of gains, especially with questions remaining over the upcoming earnings season. While there have been some positive results thus far in the season – most notably JPMorgan (JPM) – investors continue to expect a sharp drop in overall earnings. The low expectations could give companies an easier bar to top, allowing for upside surprises; nonetheless, this is expected to be the third straight month where earnings have dropped. So-called “earnings recessions,” defined as at least two consecutive drops in profits, are often seen as a presage to broader economic weakness. Despite the overall flatness on the day, financial shares rallied following results from Bank of America (BAC) and Wells Fargo (WFC).  
 
Looking ahead:
 
U.S. stock index futures were little changed on Friday, though market direction could turn decisively when Citigroup (C) reports its quarterly results. Financial stocks have performed well this week, boosted by some better-than-expected results, but skepticism remains over whether this earnings season will show corporate America holding up in an uncertain economic environment, or whether financials have deteriorated in the manner than many investors fear. Market participants are also looking ahead to data on consumer confidence and industrial production. Don’t miss this week’s Money Matters With Gary Goldberg, where the guest will be Ari Benmosche, author of the book Good For the Money, about how his father led AIG back to profitability and repay its TARP bailout money with interest. For stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

 

Apr 14

Wall St flat, investors await more earnings

Market Recap 4/13/16:
 
U.S. stocks rallied on Wednesday, with major indexes gaining more than 1 percent and the S&P 500 ending at a four-month high. The gains followed better-than-expected results from JPMorgan & Co (JPM). The bank was the first Dow component to report this season, as well as the first major financial, a sector that many have worried would struggle this season. Investors have been concerned that the sector’s loan growth has been negatively impacted by slowing growth in China, as well as a weak commodities market. JPMorgan’s results sparked a massive rally in the sector, and helped to offset a weak read on March retail sales. 
 
Looking ahead:
 
U.S. stock index futures were flat on Thursday, as investors awaited further earnings for confirmation of the market’s valuation. While JPMorgan topped expectations on Wednesday, Bank of America (BAC) and Citigroup (C) are scheduled to report this week, and the results could indicate whether JPMorgan’s results were uniquely strong, or if the overall banking industry performed better than anticipated in the quarter. With major indexes near record levels and the market coming off two strong days of gains, earnings will need to top expectations in order to validate current levels. Don’t miss this week’s Money Matters With Gary Goldberg, where the guest will be Ari Benmosche, author of the book Good For the Money, about how his father led AIG back to profitability and repay its TARP bailout money with interest. For stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 13

Wall St rallies on oil gain, JPMorgan results

Market Recap 4/12/16:
 
U.S. stocks rallied on Tuesday, boosted by energy shares as crude oil jumped more than 4 percent, ending at its high of the year. The surge came following a report that Russia and Saudi Arabia – two major oil producers – had agreed to freeze their output. The measure is seen as addressing the commodity’s oversupply problems, which have been a major drag on both energy shares and the overall market in recent months. The gains came as investors look ahead to a first-quarter earnings season that is expected to be weak. Earnings for S&P 500 companies overall are seen down more than 7 percent, in what would be the index’s third consecutive quarterly decline for profits. While the low expectations could make it easier for companies to top consensus forecasts, Alcoa (AA), the first major company to report, late Monday posted weaker-than-expected revenue. 
 
Looking ahead:
 
U.S. stock index futures rallied on Wednesday, following better-than-expected results from JPMorgan & Co (JPM). The bank was the first Dow component to report this season, as well as the first major financial, a sector that many have worried would struggle this season. Investors have been concerned that the sector’s loan growth has been negatively impacted by slowing growth in China, as well as a weak commodities market. Market participants are also looking ahead to a read on March retail sales, which could provide insight into the state of the consumer. Don’t miss this week’s Money Matters With Gary Goldberg; for stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 12

Wall St mixed as earnings season begins

Market Recap 4/11/16:
 
U.S. stocks closed lower on Monday, with caution edging up ahead of the first-quarter earnings season. Profits are seen falling sharply this quarter, in what could be the S&P 500’s third consecutive quarterly earnings pullback. The economy is already in an earnings recession – defined as two straight quarters of negative growth – and major indexes could be vulnerable to a pullback if results fail to meet expectations. With indexes not far from record levels, market participants need validation of current valuations, especially amid concerns over China’s growth and the oil market.
 
Looking ahead:
 
U.S. stock index futures were mixed on Tuesday, following a disappointing quarterly report from Alcoa (AA). The aluminum company, a former Dow component, is seen as the unofficial start to the earnings season, and its results are said to “set the tone” for the season overall. Alcoa reported weaker revenue than had been expected, sending shares lower in premarket. On the upside, crude oil rose on hopes that an upcoming meeting of major producers would lead to production targets, a move that is seen as reducing the commodity’s oversupply problems. Don’t miss this week’s Money Matters With Gary Goldberg; for stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 11

U.S. stocks edge up ahead of earnings season

Market Recap 4/8/16:

U.S. stocks ended higher on Friday, following data that showed a drop in crude oil stockpiles. The report was a positive sign for demand and helped lift crude oil prices by more than 6 percent, a rally that sharply boosted energy shares. The energy sector has been a concern for investors of late, with persistently low prices leading to massive drops in both share price and profits; any indication that either the supply or demand picture is improving could help support the industry. Sentiment was also lifted after Fed Chair Janet Yellen said the U.S. economy was on “a solid course,” while other Fed officials indicated that a less-aggressive interest rate policy would be appropriate.

Looking ahead:

U.S. stock index futures edged higher on Monday, though trading could be light going into the start of the first-quarter earnings season. Alcoa (AA) reports after the market closes, unofficially kicking off a season that is expected to show a pronounced decline in profits. While investors are anticipating a third consecutive quarter of earnings falling, extending the market’s “profit recession,” all of the expected decline is due to the weakness in the energy sector, which could leave the market open to upside surprises. Don’t miss this week’s Money Matters with Gary Goldberg; for stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 08

Wall St rises following positive Yellen comments

Market Recap 4/7/16:
 
U.S. stocks fell sharply on Thursday, with major indexes sinking more than 1 percent in a broad decline. Investors fled risky assets like stocks in favor of ones that are seen as safe-havens, like gold. The decline followed a rally in Wednesday’s session, when minutes from the Federal Reserve’s most recent meeting indicated that the central bank was unlikely to raise interest rates prior to June, owing to global economic concerns. Those minutes also fueled Thursday’s decline, with investors concerned that the Fed would be unable to offset the impact of a broad-based slowdown. Crude oil fell sharply on the day, with investors betting that the commodity would continue to see weak demand and suffer from oversupply, while financial stocks – another sector tied to the pace of economic growth – also fell sharply.
 
Looking ahead:
 
U.S. stock index futures rose on Friday, indicating a partial rebound from the previous day’s selloff. Recent trading has been driven by the Federal Reserve. On Wednesday, minutes from the Fed’s latest meeting lifted markets as investors took the commentary as a sign that the central bank was unlikely to raise rates before June. On Thursday, however, investors began to fret that the Fed may have limited ability to deal with a global slowdown. Also on Thursday, Fed Chair Janet Yellen said that the U.S. wasn’t a “bubble economy,” and touted the strength of the labor market. While concerns over global growth remain, Yellen’s comments were a reminder to investors that U.S. fundamentals largely remain strong. Don’t miss this week’s Money Matters, where the guest will be Ron Wallace, the former president UPS and author of the book Leadership Lessons from a UPS Driver. For stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

Apr 07

Wall St edges lower as investors digest recent Fed minutes

Market Recap 4/6/16:
 
U.S. stocks rose on Wednesday, boosted by comments from the Federal Reserve that indicated the central bank was unlikely to raise interest rates before June. Investors have been cautious about Fed policy of late, given uncertainty over when and how frequently rate hikes could be expected. An aggressive Fed is considered a headwind for stocks, especially given persistently weak conditions from abroad. Market sentiment was also lifted on Wednesday by an unexpected drop in crude oil stockpiles, a positive datapoint for demand. Crude oil rose, lifting energy shares, though the commodity remains well off its highs given concerns over both oversupply and limited global demand.
 
Looking ahead:
 
U.S. stock index futures fell on Thursday, retreating after the previous session’s sharp rally as investors continued to digest the minutes from the Fed’s latest meeting. Fed Chair Janet Yellen is scheduled to speak Thursday afternoon alongside former Fed chairmen Ben Bernanke, Alan Greenspan and Paul Volker; the talk will be closely scrutinized for any further insight into Yellen’s rate timing. In addition, market participants are also looking ahead to weekly jobless claims data, the latest sign of how the labor market is faring. Don’t miss this week’s Money Matters, where the guest will be Ron Wallace, the former president UPS and author of the book Leadership Lessons from a UPS DriverFor stations and air times, please click here. Visit our website at www.ggfs.com for more details, including for a free, no-obligation portfolio evaluation.

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