The S&P 500 has not seen a 10-percent correction since mid-2012. Valuation remains a concern.
The S&P 500 (.SPX) has a price-to-earnings of 17.4, above its historical average of 14.8. On a forward P/E basis, most of the S&P's sectors also look expensive, with financials the only sector with a P/E below the benchmark's historical average.
"I'd have to go outside the stock market to find areas of value," said McDonald, who oversees $932 billion. "There just aren't individual pockets of the market that you would describe as cheap."
Over the past five sessions, an average of about 6.26 billion shares traded on all U.S. platforms, according to BATS exchange data, nearly 8 percent below the month-to-date average of 6.8 billion. The S&P moved in its narrowest range since Christmas Eve on Friday; it is also closing out its narrowest weekly range since Thanksgiving this week.
Despite the thin trading, the Dow (.DJI), S&P and Russell 2000 (.RUT) all hit record levels this week. The CBOE Volatility index (.VIX), a measure of investor anxiety, on Friday fell 2 percent to 13.61, well under its historical average of 20. The volatility index for the Russell (.RVX) is also well below its historical average, falling 1.2 percent to 16.06 on Friday.
"The billion-dollar question is, has everyone gotten so complacent that we could see things roll over?" said Michael Matousek, head trader at U.S. Global Investors in San Antonio. "If nothing changes, investors may just keep following things higher, but the high in the Russell and the low in Russell volatility suggest things could really take a hit if anything bad happens."
Some of the market's biggest recent gainers could be the most vulnerable to a pullback. The Nasdaq biotech index (.NBI) has rallied for three straight weeks, up nearly 7 percent over that period. Small-caps could also be ripe for profit-taking, with the S&P 600 small-cap index (.SPCY) up for four straight weeks, gaining 6.4 percent over that period.
Nick Sargen, chief economist at Fort Washington Investment Advisors in Cincinnati, said these sectors were "difficult calls since they've had phenomenal advancements," though alternatives were hard to come by given the headwind large-cap stocks face from a stronger U.S. dollar.
"The market is no longer cheap," he said. "I'm not worried about a selloff of 20 percent, but I keep waiting for a clear signal that the economy is really accelerating. Until I get that, I have to temper my enthusiasm."
(Editing by Nick Zieminski)
Sentiment: Strong Buy
Fri, Feb 27, 2015, 9:26pm EST - US Markets are closed
By Ryan Vlastelica
U.S. Stocks Rise to Records in Week on Greek Deal, Fed Rate Bets Bloomberg
Small caps outperfroming large caps so far in 2015 MarketWatch
After tight trading, volatility set to return to stocks Reuters
Wall St Week Ahead: After tight trading, volatility set to return to stocks Reuters
Bumpy stock market leads to surprise drop in hedging with VIX options Reuters
NEW YORK (Reuters) - The U.S. stock market has been quiet this week - too quiet.
Wall Street has traded in a tight range of late, with both volatility and trading volumes drying up as the earnings season winds down and Federal Reserve Chair Janet Yellen's recent Congressional testimony delivered no surprises.
While markets have held near record levels, there are signs equities have gotten stretched and could be vulnerable next week, when a number of key economic indicators come out.
If any of those, including the February payroll report, extends a recent trend of disappointing data, that could shock indexes out of their ranges and send them lower.
About 238,000 jobs are expected to have been added in February, according to the non-farm payroll report that will be released on Friday, down from the 257,000 added in January. Separately, readings on both the manufacturing and services sectors are on tap, as is a report on factory orders.
"Economic data will be the biggest driver of market moves over the next month, and the key one is the jobs report," said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Asset Management. "Right now, there continues to be a reasonable amount of skepticism regarding the market outlook."
Recent data has pointed to weakening conditions. Growth slowed more sharply than initially thought in the fourth quarter, while the Institute for Supply Management-Chicago Business Barometer's fell to its lowest since July 2009.
Sentiment: Strong Buy
Mon, Feb 16, 2015, 3:23pm EST
BRUSSELS (Reuters) - Talks between Greece and euro zone finance ministers over the country's debt broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout and stick to the conditions.
The unexpectedly rapid collapse raised doubts about Greece's future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro bailout, reverse austerity policies and end cooperation with EU/IMF inspectors.
Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month.
How long Greece can keep itself afloat without international support is uncertain. The European Central Bank will decide on Wednesday whether to maintain emergency lending to Greek banks that are bleeding deposits at an estimated 2 billion euros a week.
"The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the programme," Dijsselbloem told a news conference.
A Greek official said Finance Minister Yanis Varoufakis had rebuffed a draft statement put to him at the meeting.
"Some people's insistence on the Greek government implementing the bailout is unreasonable and cannot be accepted," the official said. "Those who keep returning to this issue are wasting their time. Under such circumstances, there cannot be a deal today."
The talks, which had been expected to last late into the night, collapsed in less than four hours.
Sentiment: Strong Buy
Mon Feb 16, 2015 2:01pm EST
By Ahmed Tolba and Yara Bayoumy
CAIRO (Reuters) - Egyptian jets bombed Islamic State targets in Libya on Monday, a day after the group there released a video showing the beheading of 21 Egyptian Christians, drawing Cairo directly into the conflict across its border.
Egypt said the pre-dawn strike hit militant camps, training sites and weapons storage areas in the neighbouring oil-producing country, where factional fighting has unleashed virtual anarchy and created havens for jihadi Islamists.
While Cairo is believed to have provided clandestine support to a Libyan general fighting a rogue government in Tripoli, the 21 decapitations pushed President Abdel Fattah al-Sisi into open action, expanding his battle against Islamist militancy.
"And let those near and far know that the Egyptians have a shield that protects and preserves the security of the country, and a sword that eradicates terrorism," the Egyptian military said in a statement.
Egyptian state television aired footage of fighter planes leaving a hangar with "Long live Egypt" emblazoned on their tails, followed by night-vision aerial footage showing bomb explosions and the aircraft returning in early daylight.
Libya's air force also participated in Monday's attack, which targeted Derna, an eastern coastal city regarded as a base for fighters of the ultra-radical Islamic State.
"There are losses among individuals, ammunition and the (Islamic State) communication centres," Libyan air force commander Saqer al-Joroushi told Egyptian state television, adding that dozens had been killed.
Joroushi, who is loyal to Libya's internationally recognised government, which set up camp in the city of Tobruk after losing control of the capital Tripoli, said there would be more strikes on Tuesday.
The rival Tripoli-based parliament, which is supported by some Islamist groups, said the air raids were an assault on Libya's sovereignty. Omar al-Hassi, premier of the self-appointed Tripoli government, said three children, two elderly men and a 21-year-old woman were killed in the attack.
It was not possible to confirm either faction's accounts of the number or nature of the casualties.
Cairo called on the U.S.-led coalition fighting Islamic State in Iraq and Syria to broaden the scope of their operations to include Libya, highlighting how the insurgent group has expanded its reach around the Arab world.
Since the fall of strongman Muammar Gaddafi in 2011, a number of Islamist movements have taken hold in Libya. Recently, some have declared ties to Islamic State and claimed high-profile attacks in what appears to be an intensifying campaign.
The U.S. military estimated in December that only around 200 Islamic State fighters were operating in the country.
Egypt is not the only Arab nation sucked into confrontation with the group by the gruesome killings of its citizens.
Jordan has taken a leading role in conducting air strikes against the group in Syria and Iraq this month after the militants released a video showing a captured Jordanian pilot being burned alive in a cage.
The 21 Egyptian Coptic Christians were marched to a beach, forced to kneel and then beheaded on video, which was broadcast via a website that supports Islamic State.
The victims were among thousands of unemployed Egyptians desperately seeking work in Libya, despite the risks. Egypt's foreign ministry said it was banning travel to Libya and had set up a crisis centre to bring home Egyptians.
Thousands of traumatized mourners gathered at the Coptic church in al-Our village, where 13 of the 21 victims came from, struggling to come to terms with the fate of compatriots who paid a gruesome price for simply seeking work.
Before the videoed killings, one of the militants stood with a knife in his hand and said: "Safety for you crusaders is something you can only wish for." Afterwards, he says: "And we will conquer Rome, by the will of Allah."
The head of the Roman Catholic Church, Pope Francis, condemned the beheadings. "They were killed simply for the fact that they were Christians," he said at the Vatican.
Egypt's Coptic Christian pope was one of the public figures who backed Sisi when he, as army chief, ousted Islamist president Mohamed Mursi in 2013 after mass protests against him.
The killings put pressure on Sisi to show he is in control of national security, even as he makes progress against Islamist militant insurgents in the Sinai, some of whom have recently pledged allegiance to Islamic State.
"It's swift and decisive, it's not about strategy, it's about containing anger within Egypt," said Hassan Hassan, co-author of a book on Islamic State.
"Just like in Jordan, it's more about saving face, saying: 'You can't mess with us'. .... It's likely to evolve into a sustained strategy of helping in the fight against ISIS (Islamic State) in neighbouring countries."
Fears the crisis in Libya could spill across the border had already prompted Egypt, the Arab world's most populous nation, to upgrade its military hardware.
Sentiment: Strong Buy
Friday, 13 Feb 2015 10:04 PM
It is only a matter of time before the stock market plunges by 50% or more, according to several reputable experts.
“We have no right to be surprised by a severe and imminent stock market crash,” explains Mark Spitznagel, a hedge fund manager who is notorious for his hugely profitable billion-dollar bet on the 2008 crisis. “In fact, we must absolutely expect it."
Unfortunately Spitznagel isn’t alone.
“We are in a gigantic financial asset bubble,” warns Swiss adviser and fund manager Marc Faber. “It could burst any day.”
Faber doesn’t hesitate to put the blame squarely on President Obama’s big-government policies and the Federal Reserve’s risky low-rate policies, which, he says, “penalize the income earners, the savers who save, your parents — why should your parents be forced to speculate in stocks and in real estate and everything under the sun?”
Billion-dollar investor Warren Buffett is rumored to be preparing for a crash as well. The “Warren Buffett Indicator,” also known as the “Total Market Cap to GDP Ratio,” is breaching sell-alert status and a collapse may happen at any moment.
So with an inevitable crash looming, what are Main Street investors to do? One option is to sell all your stocks and stuff your money under the mattress, and another option is to risk everything and ride out the storm.
But according to Sean Hyman, founder of Absolute Profits, there is a third option.
“There are specific sectors of the market that are all but guaranteed to perform well during the next few months,” Hyman explains. “Getting out of stocks now could be costly.”
How can Hyman be so sure?
He has access to a secret Wall Street calendar that has beaten the overall market by 250% since 1968. This calendar simply lists 19 investments (based on sectors of the market) and 38 dates to buy and sell them, and by doing so, one could turn $1,000 into as much as $178,000 in a 20-year time frame.
Sentiment: Strong Buy
crabshack777, this company is starting to get the attention it deserves. I've been a share holder for quite some time and I average down every-time it takes those drastic drops for no apparent reason..
Sentiment: Strong Buy
Penny Stock Newsletters emailed a profile on the company this evening. I am thinking two other emailers will follow tomorrow.
PMCB Readies Diabetes Preclinical Study
Type one (1) and two (2) diabetes is wreaking havoc across the world and in the US alone more than 29.1 million people are affected.
It is estimated that by 2017 the drugs treatment market for diabetes will be worth $55.3 billion. All this makes me very bullish about my latest short term pick, PMCB.
The company recently announced a preclinical study, one of the most important steps in bringing its drug to market.
The news has created a huge buzz around the play and right now its 14 cent price tag looks very attractive. Daily volatility levels are good so entry/exit opportunities abound.
Start your research ASAP.
PMCB’s Must-See Technicals
PMCB is trading 3 cents below its 50 DMA of 17 cents. This presents upside of more than 21% in the short term
PMCB has a RSI of 48 which positions the play for a potential bounce from current levels.
PMCB and its proprietary cell-in-a-box technology is well positioned to capitalize on the exploding diabetes treatment market, projected at $55 billion+ in two (2) years.
PMCB is trading with very strong daily volatility levels, giving traders some fluidity in terms of entry and exit
PMCB is still in a position to test its 4-week high of .19, presenting potential accumulation of 36%
PMCB (PharmaCyte Biotech, Inc.) is a clinical stage biotechnology company, focuses on developing and commercializing treatments for cancer and diabetes based upon a proprietary cellulose-based live cell encapsulation technology, known as Cell-in-a-Box.
PMCB’s patented Cell-in-a-Box technology would be used as a platform to build treatments for various types of cancer, including advanced, inoperable pancreatic cancer and diabetes.
How Big Can The Diabetes Treatment Market Get?
Sentiment: Strong Buy
Scottrade told me if I receive three Reg T's that I will not ever be able to trade with unsettled funds anymore.
pissytheant , let me explain. I have had two Reg T's, free rides and I only have one more left.
You have up to three Free Rides in your lifetime in all stock trading accounts. This is an SEC rule.
Free Ride's one and two you get warning emails and maybe a call from your broker and a 90-day restriction will be placed on your account, I could still trade with unsettled funds, but if you get three Free Rides you will only be able to trade with settled funds only in your lifetime on all trading accounts. NO MORE TRADING WITH UNSETTLED FUNDS EVER. You would then be able to buy stocks forever with ONLY settled funds.
I have had two Free Rides and only have one more left, so I have to really be careful when trading with unsettled funds.
Refer below from the Scottrade account.
What happens if I violate Reg T?
Each time you violate Reg T, a 90-day restriction will be placed on your account. If a trading restriction is placed on your account, you will only be able to place buy transactions using settled funds. In addition, your local Scottrade team will reach out to you to make sure you understand exactly what happened and how to prevent it in the future.
If I have a Reg T violation on my record, will it be there permanently?
Yes. The record of your violation will stay on your account, but you could potentially receive a warning at Scottrade's discretion.
I do what is stated below all the time. I sell my higher priced settled shares first and sell my lower cost shares after they settle if I have settled and unsettled shares in the same account.
What if I already own shares of the stock and I buy and sell additional shares?
If you already own settled shares of a particular stock and you buy additional shares with unsettled funds, you can sell up to the amount of settled shares without incurring a free riding violation. You may still see a warning in your account, however, because new and old shares are indistinguishable.
aeinstein, thanks for sharing. It is greatly appreciated.
Thanks, here is more info. Yahoo keeps deleting my posts.
5. The same designation criteria are used for US and EU applications
There are a number of differences between the US and EU applications. For example, in the EU:
Prevalence is defined as less than 5 out of 10,000 people
The disease must be life threatening or chronically debilitating
No treatment can exist or if there is an existing treatment, the new must show significant benefit over the old.
6. Scrutiny of orphan designations has not changed over time
The orphan field is becoming crowded. Since the beginning of the program in 1984, there have been more than 3,000 orphan designations with nearly 500 approvals. As more companies pursue rare diseases there is a tendency to slice disease states into sub-indications in an attempt to gain orphan status. While some of these sub-indications might be considered improper and therefore will receive increased scrutiny, improved diagnostic techniques have enabled sponsors to match treatments with specific therapies. For example, there is an orphan designation for skin testing of victims of fire ant stings to confirm fire ant sensitivity, and if positive, for use as immunotherapy for the prevention of IgE-mediated anaphylactic reactions.
7. Seven-year exclusivity is the sole benefit of the orphan approval
Although post-approval benefits are significant, many early-stage companies apply for orphan designation when approvals are in the distant future. The successful application becomes public when the designation occurs, thereby broadcasting the young company’s intention and opening the category to anyone. Therefore, there must be another reason for these early filings. There is. Orphan designations are newsworthy and small companies often use the designation to put themselves on the map and to gain the interest of the investment community. Other benefits of orphan designation include:
Protocol assistance offered by FDA
Tax credits of 50% of the clinical drug testing cost awarded upon approval
Research grants—FDA awarded approximately 75 grants in 2013
Waiver of NDA/BLA application fee—this is a $2.2 million value
Sentiment: Strong Buy
Common misconceptions about the orphan drug designation
Jeff Antos, Weinberg Group | March 03, 2014
Things to know about the increasingly popular--and competitive--orphan drug space
Small biopharma companies are often interested in obtaining the advantages of an orphan designation and subsequent approval. This can lower the cost of approval and potentially reduce development costs. While most understand the major benefits of orphan approval, such as seven-year market exclusivity, there are a number of misconceptions about orphans. The following is a list of the most common.
1. The orphan designation is part of the approval process
Submitting an orphan designation request is unrelated to the drug approval process. In fact, the orphan application can be filed anytime in the drug development process before NDA/BLA submission, even prior to IND filing.
2. There can be only one orphan designation per indication
Not only can there be multiple orphan designations per indication; more than one sponsor can receive an orphan designation for the same drug/indication. However, only the first drug to be approved for a given indication will enjoy the benefits of orphan approval. A product with a different active moiety can also receive orphan approval for an already approved orphan indication. Additionally, a second sponsor may gain orphan approval for a previously approved orphan drug/indication if the second sponsor’s product demonstrates increased clinical benefit, e.g. oral administration instead of intravenous.
3. A drug must be proven safe and effective in order to get orphan designation
The safety and efficacy bar is fairly low for an orphan designation. The applicant is asked to provide a “scientific rationale” for the use of the drug. The applicant may provide clinical data, animal studies or in vitro data to make the case. If sufficient information exists in published literature, that may suffice.
4. The orphan application process is arduous
Actually, the orphan application process is quite simple. In the US, the argument hinges on disease prevalence of under 200,000. If the number can be established and there is a “scientific rationale” for the use of the drug, it will most likely achieve orphan status. Unlike most other FDA submissions, we often urge our clients to file rather than continuing a lengthy internal debate. If FDA rejects the submission, FDA will explain why and the submission may be reworked and refiled as many times as necessary. Additionally, there is no FDA fee for the orphan designation request.
Sentiment: Strong Buy