Posts by Jeff Macke
- Jeff Macke at Yahoo Finance7 hrs ago
Someday there will be a correction. Even if the squall of selling on Wall Street over the past few days proves to be fleeting, I can tell you with absolute certainty that stock prices will at some point move dramatically lower and your shares will do the same.
The question to be asking isn’t if a sell-off will happen but: Are you financially and emotionally prepared? In the attached clip, Jeff Kilburg of KKM Financial offers his 2 cents on how investors can stress-proof their portfolios for the coming draw down (whenever it may arrive).
“It’s been 35 months since we’ve had a 10% correction,” Kilburg tells me from the floor of the CME. “Are we overdue? I would say so. In the pits behind me, where they trade 10 year notes (^TNX), they’re buying safe-haven trades.”
- Jeff Macke at Yahoo Finance18 hrs ago
Stocks are getting smacked around this morning on weak economic news out of Europe and Asia. Combined with earnings fear and the general consensus that investors are too complacent and you've got a stock market down 1% early and still way above support.
At 1960 the S&P 500 (^GSPC) is still less than 2% off record highs made just last week but it probably feels worse than that to casual investors. That's because the S&P hasn't had a 1% loss on a closing basis in almost 3 full months. When everyone leans to the same side of the row boat it gets pretty unstable. Forget the volatility index (^VIX) or "fear gauge," which is still near all time lows. The way I like to measure mood is by watching shifts in the American Association of Individual Investor's sentiment survey.
Earnings season is here and not a moment too soon for those suffering from the summer time "blahs." Over the next few weeks corporate America will gussy up its numbers and put its best foot forward for Wall Street. The question is whether or not analysts and investors will like what they see enough to justify a stock market that’s already gone ahead and built in some solid earnings news.
In the attached clip John Butters of FactSet says expectations have come down some from where they were at the end of Q1 but there’s still plenty of optimism out there. “The earnings growth rate estimate right now stands at 4.9%. That is down from 6.8% at the start of the quarter but that’s one of the lowest declines in the growth rate we’ve seen in the last couple years.”
There is no free lunch, even if you’re eating nothing but Candy Crush. As the industry for mobile apps grows, the business model that seems to work best are the so-called “freemium” games that give users a taste of the action for nothing but force them to pay up if they want to advance further, faster.
Sure, you can wait for lives to restore on Candy Crush by King (KING) and continue to play for free but for a trifling 99-cents you can get another shot now.
Given the self-selecting nature of grown ups and kids who chose to download apps in the first place (hyper, short-attention spans, disposable income) it’s not surprising these in-app purchases have become big business.
If gold and gold miners were celebrities it would be time for them to look for a new PR team. Despite outperforming stocks in 2014 the group still carries the taint of the bubble that burst in 2012. With the popular SPDR Gold ETF (GLD) showing strong volume and the Market Vectors Gold Miners ETF (GDX) moving higher on Tuesday despite a brutal market for stocks it may be time for some traders to reconsider the barbaric metal as an alternative to suddenly suspect equities. Jonathan Krinsky, the chief technician of MKM Partners says gold and the miners are just getting going to the upside despite a slight pullback in the early stages of July.
After more than five years of reckless stimulus, endless rate manipulation and generally artificial life support the bull market faces a new challenge from the most unlikely place. It's not the Fed but the consumer that could derail the recovery, at least according to a what we heard from a couple of retail execs on Tuesday.
In a conference call last night. The Container Store (TCS) CEO Kip Tindell said America is facing a "retail funk." Not funky, with connotations of heavy bass and jewelry purchases, but funk as in gloominess and general lassitude. Tindell took the unprecedented step of retroactively un-blaming the weather for weakness in The Container Stores first quarter results. "It's more than just weather" said Tindell, "With so many of our fellow retailers we're experiencing a retail funk."
- Jeff Macke at Yahoo Finance2 days ago
Welcome to the dog days of summer. It's hot. Trading is beyond quiet. In fact, the S&P 500 (^GSPC) hasn't moved more than 1% since the middle of April. That's the longest stretch of nothingness since 1995.
Well, it's time to snap out of it. Right about the time the Boys from Brazil take the field against their distant relatives from Germany on Tuesday, the corporate reporting season begins in America. This matters because it's the first time we've heard from corporate America since the disastrous deep freeze of Q1. Stocks are up 8% for the year. We're eventually going to need to see some earnings growth in the next couple weeks or those gains are going to disappear faster than World Cup mania.
Most outlets are going to want to tell you about Alcoa (AA). I'm not most outlets. There are only three companies that matter this week — and none of them smelt. Here are the three best story stocks for this week.
Summertime and the livin’ is easy, at least if you’ve been long an index fund for the last five years. Those lucky few are sitting at all-time highs on the Dow ( ) and S&P 500 ( ) with the Nasdaq ( ) lurking within striking distance of it’s 5,000 mark from way back in the dot.com bubble days.
Though most investors have lagged the market as whole Americans are still spending at a decent clip. According to a the average American self-reported spending $91 a day in June. That’s down from May post-recession highs but $1 more than the same poll last year and more than 50% higher than June of 2009.
With spending strong but most investors lagging, chief market technician Jonathan Krinsky says investors should be looking to raise their spending power by getting long some of the lagging names in the consumer space.
“Most people wouldn’t actually think of the retail sector as hot in the summer,” says Krinsky who notes that merchants have lost an average of 3% in 2014 despite the rally. “Seasonally July, August and September is one of the best stretches to be in retail. All three of those months have 1% or more average gains over the last 10 years.”
Not even rainy weather on the east coast could save Hollywood from itself last weekend. July 4th weekend box office fell a stunning 44% compared to 2013. The studios are blaming the World Cup and lack of big releases over the holiday weekend but there's something bigger at work.
For June, U.S. box office dropped 16% and for 2014 year to date receipts are at 2011 levels. The key phrase here is "U.S." The reason Hollywood isn't panicking over weak results locally is that international sales are strong, particularly in China where box office is soaring over 20%.
The new Transformers flick for instance may be lagging here but it's set to become the biggest box office hit in Chinese history sometime this week. In fact, Transformers is huge everywhere except the U.S., taking in nearly $600 million dollars world wide and $200 million in China alone.
Even our grandest, most jingoistic super heroes are being groomed for foreign appeal. The years' biggest movie to date is Captain America: The Winter Soldier. The frozen World War II GI's second feature has raked in $250 million here but that's only about a third of its total box office.
Dow (^DJI) 17,000 is upon us, like it or not. Despite the big round number, with a 3.25% gain for the year the Dow Jones Industrial Average is still lagging the S&P 500 (^GSPC) and Nasdaq (^IXIC). Regardless, it remains America’s go-to measure of markets. As surely as you're still nursing a hot dog and beer induced hangover this morning, so to will the Dow’s official surmounting of 17k be followed by extended, often heated conversations about whether or not stocks “should” be in year six of the financial meltdown rather than at record highs.
You’d think 108 years of history would have taught investors that words like “should” have nothing to do with investing, but we simply can’t help ourselves. Something about the stock market being at record highs just rubs Americans the wrong way.