Posts by Aaron Task
- Aaron Task at Yahoo Finance3 days ago
Being bullish on Europe stocks was a fashionable trade at the beginning of 2014. But as often happens when "everyone" on Wall Street bets in one direction, the market goes in the other.
Led by a 4.8% year-to-date decline in Germany's DAX, major European markets have badly lagged their U.S. counterparts in 2014; heading into Monday's session, the S&P 500 was up 5.8% this year vs. just 0.9% for the MSCI Europe Index.
"Major indexes have slumped after modest gains earlier in the year, as uneven news turned decidedly downbeat," The WSJ reports. "Italy slipped back into recession, Germany slowed down and a Russian-backed incursion gripped Ukraine. Investors have been disappointed that the ECB has held off from the kinds of aggressive easing efforts employed by the Federal Reserve and Bank of Japan."
- Aaron Task at Yahoo Finance6 days ago
Stocks were rallying Friday morning, then came reports of Ukrainian forces attacking an armed Russian convoy. The news breaks a string of positive developments on the geopolitical front -- including a temporary (at least) lull in tensions on the Russia-Ukraine border and Iraq Prime Minster Nouri al-Maliki stepping down -- that helped put the S&P 500 on track for its best week in four months and the Nasdaq's best in six months.
After trading as high as 1964, the S&P quickly fell to as low as 1946 before rebounding to near breakeven in recent trading. Regardless of the Friday morning squall, it has been a remarkable turnaround from the lows of last Friday morning, when S&P futures fell to as low as 1890, roughly 3% below current levels.
"Just when you think they're pulling the rug out, nothing seems to happen," says Howard Lindzon, chairman of StockTwits, who calls the "general rotation" from big caps to Chinese ADRs back to biotech a sign of a "healthy" market.
- Aaron Task at Yahoo Finance7 days ago
Updated from 11 a.m. ET with response from Walmart spokesman
Walmart (WMT) managed to meet expectations with its second-quarter earnings and its revenue slightly exceeded consensus. But the world's largest retailer still managed to disappoint investors by cutting its full-year earnings forecast and failing to produce same-store sales growth for the seventh-consecutive quarter.
Walmart needs to improve "in all key categories," Davidowitz says, citing intense competiion from Costco and Kroger's as primary threats. "Food and consumables are half of [Walmart's] sales," he notes. "This is something they've got to work on because Kroger's is gaining share on them. They're the largest traditonal grocer and doing a much better job."
- Aaron Task at Yahoo Finance8 days ago
With the Middle East in turmoil (and Iraq on the verge of imploding) and tensions high on the Russia-Ukraine border, you'd think oil prices would be shooting up; instead, they're falling, with Brent crude at a 13-month low and West Texas Intermediate below $100 for 10-straight days. Retail gasoline prices, meanwhile, have fallen 22 cents from April's peak of $3.70.
America's fracking revolution is a major reason why geopolitical unrest hasn't resulted in a surge in crude prices, which remain far below the $147 peak hit in 2008.
At around 7.2 million barrels per day, U.S. energy imports are down 26% since May 2008, Bloomberg reports; since that time, U.S. energy output has increased by over 3 million barrels per day.
- Aaron Task at Yahoo Finance10 days ago
Arguments the stock market is "overvalued" are pretty common these days. But MarketWatch columnist Brett Arends raised eyebrows in a recent column in which he argues "valuations are higher today than they were at the peak in 1999-2000."
The dot.com era was notable for its excesses, he says, but the heady valuations of the tech bubble were driven by a handful of uber-high flying stocks, including Microsoft, Cisco, Intel and our corporate parent Yahoo.
"But that overvaluation was quite concentrated in a relatively small number of large-cap growth stocks," Arends recalls. "When you look beyond that small segment of the market, the rest of the market wasn't so bad. That is not the case right now."
Indeed, the median valuation for the top 1500 stocks by market cap today is higher than it was in 1999, Arends reports, citing the following:
- Aaron Task at Yahoo Finance13 days ago
It's not the news that matters, it's how the market reacts to the news that matters.
That old Wall Street saw comes to mind Friday morning after U.S. stock futures produced a stunning turnaround from overnight losses tied to geopolitical news that roiled global markets.
After S&P 500 futures traded as low as 1890 in pre-open trading, the index was recently up 0.4% at 1916 despite reports that U.S. Navy jets bombed ISIS artillery in Northern Iraq. Rumors of such strikes were attributed with prompting Thursday's selloff and President Obama's formal authorization announcement was cited in causing the overnight selloff in futures and global markets.
As my colleuage Michael Santoil notes, traders view the U.S. bombing of ISIS as marginally bullish for stocks because it's net bearish for oil, which jumped overnight after Obama authorized the strikes. By attacking ISIS now, the hope is the jihadist group can be stopped before it threatens Iraq's oilfields in the south -- or so the thinking goes.
- Aaron Task at Yahoo Finance15 days ago
Income inequality is the "defining issue of our time", according to President Obama. It's also become one of the most heavily discussed and debated issues of our time, often devolving into partisan bickering.
A new report from Standard & Poor's seeks to go beyond the right-left debate and address a more fundamental issue: Income inequality is hurting U.S. economic growth. In part because of income equality, S&P has reduced its 2014 forecast for U.S. GDP to 2% vs. 3% at the beginning of the year and forecasts the 10-year annual average growth will be 2.5% vs. a prior forecast of 2.8%.
The most recent data out of China, including PMI and industrial profits, were consistent with the broader truth: The world's second-largest economy has clearly downshifted but isn't heading for a 'hard landing' -- at least not anytime soon.
Dan Gross, editor and columnist at The Daily Beast, recently returned from a trip to China and joined me in the accompanying video to explain why hardcore China bears are likely to remain frustrated.
"They have a lot of problems," he says, citing suffocating air pollution, a burgeoning credit bubble and "bubblicious activity" in cities like Wuhan, where Gross describes seeing "row upon row of apartment buildings and office buildings you could see through."
But "the idea of collapse is far-fetched," he continues, citing several macro trends.
If it feels like the rich are getting richer and the majority of Americans are falling behind, well...that's because it's true! A new study published by the Russell Sage foundation found that wealth inequality in America roughly doubled between 2003 and 2013. In 2003, the top 20% Americans had 13 times more wealth than the median household. By 2013, this gap nearly doubled to 24 times. Yes, that's right, the inequality gap doubled in 10 years! Double the pleasure! Double the fun...especially for the wealthy!