Vanguard S&P 500 ETF
You Can Own a Piece of the Entire Stock Market—Here’s How
What S&P 500 Index Moving Averages Could Indicate
The S&P 500 Index is trading 1.2% above its 20-day moving average and 6% above its 100-day moving average.
Rising Stocks: Why It May Not Be Time for the Jitters
Rising stocks have been buoyed by various factors, including the accommodative monetary policy of the Federal Reserve and robust US corporate earnings.
Why Did the US Federal Reserve Turn Hawkish at Its June Meeting?
As expected, the Federal Reserve increased the interest rate by 25 basis points after its June meeting, which concluded on June 13.
Will We See a Recession within the Next 2 Years?
In a recent interview, Jim Rogers said, “I’m on record as saying that we’re going to have a recession certainly within a year or two.”
Fed’s twin targets—are negative real interest rates needed?
The Federal budget deficit (the difference between budget collections and the government’s commitments) has also been a key source of uncertainty to both businesses and households.
Why Larry Fink Thinks Markets Could See Some Setbacks
In a recent interview with CNBC, Larry Fink, CEO of BlackRock (BLK), shared his views on market movement, the US economy, and the dangerous impact of the lower interest rates.
Important releases hone in on rates and consumer spending
The hottest topic for market players right now is the interest rate hike. Last week’s labor releases spurred the recovery. Many investors had thought the recovery was flagging.
Why Investors Are Optimistic about Tech Stocks
The tech sector’s competitive edge So far in this series, we’ve discussed the potential effects of Trump’s proposed tax reform on prominent tech stocks such as Apple (AAPL), Microsoft (MSFT), IBM (IBM), and Amazon (AMZN). Tech companies continue to be preferred by investors due to their proprietary technological expertise and large cash balances. Their technical […]
What Drove Microsoft Stock to Touch an All-Time High
On July 21, Microsoft (MSFT) stock crossed $74.3, its all-time high since the company became public in 1986.
Are Tougher Days ahead for Global Equities?
The IMF revealed that emerging Asia is expected to grow ~6.5% in 2018 and 2019.
Why Buffett Believes US Businesses Aren’t Really Hurting from the US Corporate Tax
The US economy has been improving gradually, but some businesses in the US have suffered a lot over the years.
Why Real US Rates Have Been Climbing
Real US rates have been climbing, while rates are falling in much of the rest of the world. As Russ explains, this divergence has a number of implications for investors.
Fed Rate Liftoff: Not Much Is Likely to Change
So now that the Fed rate liftoff has finally arrived, should you flee to market sidelines? If you can believe history, the answer is an emphatic no.
Why Israeli Stocks Look Attractive
Israeli stocks (ISL) are trading at attractive valuations. The Tel Aviv 25 Index is trading at 15.7 times its trailing-12-month earnings.
What Are Lowe’s Supply Chain and Inventory Management Policies?
Lowe’s inventory turnover came in at 4.1x in fiscal 2015 compared to 4.9x for Home Depot (HD).
Structural Considerations Could Mean Lower Yields in the Future
Many structural considerations are likely to keep yields low in the future. Demand for Treasuries and bonds is likely to be more than the supply in the next two years.
A guide to Yellen’s Delphic speech and the Odyssean FOMC guidance
In this article, we’ll discuss how the Fed’s Odyssean and Delphic guidance in March has impacted financial markets.
REITs 101: Understanding this Investment Vehicle
In this series, we’ll get down to the brass tacks of investing in the REIT sector, the market’s current landscape, and the benefits you can expect from this type of investment.
What Could Hamper the Momentum in US Steel Prices?
Due to a seasonal uptick in steel demand and better-than-expected demand from the construction sector, Chinese steel prices got a boost.
Will S&P 500 Rally Continue?
Major US indexes showed positive movement after the announcement of US election results, and this rally has continued throughout the last month.
When geopolitical risk takes precedence over interest rate risk
The total returns on municipal debt came in at 3.32% in the first quarter of 2014, as measured by the Barclays Municipal Bond Index.
Nike’s Profitability Improves But Still Trails the Competition
Despite Nike’s expanding margin and improved operating profitability, its margin and profitability still trail peers Under Armour and Lululemon Athletica.
Bill Gross Shuns the Taylor Rule and the Phillips Curve
The Taylor rule is a backward-looking model used to determine short-term interest rates in an economy. Bill Gross prefers a corollary to Gresham’s law.
Why Did the German 2s30s Spread Dip on Quantitative Easing?
The 2s30s spread is the difference between the yield on the 30-year bond (TLT) and the yield on the two-year bond (SHY).
Can Global Markets Continue to Surge?
Since the start of the year, global markets have recovered well. The S&P 500 has risen 15.5%, emerging markets have risen 17.2%, and developed markets have risen 13.2%.
How Bill Ackman Is Taking Shelter from a Potential Market Drop
Bill Ackman, an activist investor and the CEO of Pershing Square Capital Management, shared his views on how geopolitical risk could affect market movement (SPY) in a CNBC report.
Why are junk bond yields the lowest ever on record?
The BofA Merrill Lynch U.S. High Yield Master II Index increased by 0.34% over the week ending June 20, and is up by 5.64% so far this year (up to June 20).
A quick look into the most indebted country in Europe: Greece
On November 14, 2014, Greece’s economy finally registered some growth and emerged from recession. The economy expanded by 1.7% in Q314, compared to 3Q13.
Rich Valuations and Higher Rates Lead to Poor Stock Returns
Rich valuations and higher rates are a lethal combination for stocks. Over the longer term, multiple expansion and tightening lead to negative returns.
Why the Bottom for Gold Could Be Close
The SPDR Gold Trust ETF (GLD) has fallen ~8.4% year-to-date and ~11.5% from its April peak.
We’re in ‘an Environment of Abnormally Slow Growth,’ Says Dalio
This isn’t a normal business cycle Billionaire hedge fund manager Seth Klarman said, “the stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.” Ray Dalio believes that this isn’t a normal business cycle. In our April 2015 series Business Cycle Investing: What Should You Look […]
Declining US unemployment rate a boost to the economy
The US unemployment rate is now two times lower than it is in the Eurozone, where the jobless rate currently sits at 11.2%.
ISM shows the highest non-manufacturing growth since August 2013
The Institute for Supply Management (or ISM) released the services Purchasing Managers Index (or PMI) report for April on Monday, May 5.
Must-know: Charles Evans discusses monetary policy in Istanbul
The Fed’s main policy tool, the funds rate, has been at near zero levels since December, 2008.
Tech Sector’s Buybacks Fell despite Microsoft’s $40 Billion Plan
The IT (information technology) sector is still the biggest spending sector on share buybacks in 2Q16, the way it was in 1Q16.
REITs 101: Understanding this Vehicle
By Michael Orzano, Director, Global Equity Indices Publicly traded property stocks, including real estate investment trusts (or REITs) and real estate operating companies (or REOCs), allow investors to gain exposure to real estate, which is generally an illiquid asset class, without sacrificing the liquidity benefits of listed equities. They also typically offer higher yields than […]
Why the FOMC, BoJ, and EBA Will Drive Markets This Week
In terms of the major macro data release from the United States (VOO) (QQQ), it would be the FOMC monetary policy release on July 27. 2016.
Must-know: Unusual outcomes arising from low interest rates
When real interest rates decline, the prices of long-term bonds increase because bond yields and prices move in opposite directions.
Will the August Jobs Report Soften the Fed’s Rate Hike Urgency?
During the Jackson Hole Symposium, the Federal Reserve chair, Janet Yellen, already hinted that if the August jobs report provided a strong performance, there was a chance for a rate hike during its September 2016 meeting.
Wall Street Maintains ‘Strong Buy’ Recommendation for Stryker
Analysts’ recommendations Stryker (SYK) has registered strong results over the last few quarters and has been expanding at a fast pace through organic and inorganic growth. The company has made a number of acquisitions and expanded its market presence across product lines and regions. Its most recent earnings results were reported on October 26, 2017. For details, read […]
Which International Opportunities Is Lowe’s Betting On?
Lowe’s (LOW) operates stores in the select international markets of Canada and Mexico.
US Industrial Sector Hit Hard by Currency Wars
The industrial sector accounts for about 12.5% of total US GDP. It’s also a main source of demand for goods and services in other sectors of the economy.
Consider these must-know demand trends for ETFs like SPY
Exchange-traded funds (or ETFs) of companies based in the U.S. saw strong growth of 33% in 2013, with $1.6 trillion in total assets by year end.
What Bill Miller Thinks about Valeant Pharmaceuticals
According to Bill Miller, Valeant Pharmaceuticals (VRX) is correctly valued.
John Williams outlines the must-know signs pointing to a recovery
Dr. John Williams, president and CEO of the San Francisco Fed, spoke on the normalization of monetary policy and monetary tightening in a presentation to the Association of Trade & Forfaiting in the Americas in San Francisco on Thursday, May 22.
Outlook: The 2016 Dogs of the Dow
The 2016 Dogs of the Dow are based on dividend yields measured on December 31, 2015. KO, GE, and MCD have been replaced by Walmart (WMT), Cisco Systems (CSCO), and IBM (IBM).
How You Can Win More By Losing Less
Most investors focus much of their time on picking assets that have the potential to win. However, limiting downside risk is just as important.
The Implications of Depreciating Latin American Currencies
Latin American currencies have depreciated against the dollar since 2014. The Argentine peso is one of the most beaten up currencies in the region, having lost 27% in this period.
Is the simple life cycle model practical in the current scenario?
Being a large capitalist economy with relatively smoothly functioning markets, some degree of inequality is expected.
Why Higher Correlations Between Risky Assets Don’t Bode Well
Increasing correlations between risky assets could leave your portfolio vulnerable.
AbbVie’s Humira Continues to Generate High Revenues
In 2Q17, AbbVie’s (ABBV) Humira generated revenues of $4.7 billion, which was a 14.0% rise YoY (year-over-year) and a 15.0% rise QoQ (quarter-over-quarter).
Must-know: Fisher’s stance at future FOMC meetings this year
Fostering price stability is one of the Fed’s most important goals.
Factory orders race ahead, driving companies like Union Pacific
The US Census Bureau will release the factory orders report for March on Friday, May 2. The Bureau already released an advance report on factory orders and shipments for March last week.
US Producer Price Index Fell: Difficult Path ahead for the Fed
On April 13, the U.S. Department of Labor declared that its producer price index fell 0.1% in March—compared to a 0.2% drop in February.
How Pfizer’s Vaccine Franchise Is Positioned in 2017
In 2016, Pfizer’s (PFE) Prevnar 13 reported revenues of ~$5.7 billion, which reflected a ~8% decline on a YoY (year-over-year) basis.
Why Marc Faber Believes US Economic Growth Is Weakening
In 1Q17, the US economy saw a growth rate of 1.2%, according to the report provided by the US Bureau of Economic Analysis.
Did the January Jobs Report Improve Confidence in the US Economy?
The January jobs report indicated a strong improvement in the labor market.
FOMC’s June Meeting Moved Markets
In the June FOMC meeting, the weighted average forecast was much lower at ~70 basis points. Both stocks and bonds rallied after the meeting.
Why Have Treasury Yields Risen?
The US Treasury (TLT)(GOVT) yields have been driven mainly by the Greek debt fiasco and central bank actions. Yields started falling early this year.
The Dallas Fed’s Richard Fisher shares key forward guidance
The Fed’s tapering of monthly asset purchases is expected to end this fall. Markets are closely watching for developments on the Fed front as to when the base rate might rise.
Is qualitative forward guidance better than no guidance at all?
At the recently concluded Federal Open Market Committee (or FOMC) meeting of the U.S. Federal Reserve, the Fed said it would remove the quantitative thresholds from its policy statement.
This week’s releases are key to the Fed funds rate and yield curve
This week, Wednesday to Friday is crammed with economic releases, many of which will be key data points for the Fed’s April FOMC and have a significant impact on the Fed funds rate and the yield curve.
Why Fed policies influence inflation but not employment long-term
In this part of the series, we’ll discuss Mester’s views on how monetary policy decisions impact the Fed’s dual mandate of ensuring price stability.
Key drivers for Treasury yields after the June FOMC release
The Fed’s third Federal Open Market Committee (or FOMC) meeting of the year took place June 17–18. Always a market-moving event.
Overview: Chicago Fed’s National Activity Index report, May, 2014
Unlike the regional manufacturing surveys conducted by the Federal Reserve Banks of other districts, the CFNAI is a nation-wide measure.
Corporate debt trends—have high yield investors had enough?
However, corporate borrowers in the primary markets continued to take advantage of the low yields environment.
A key preview of retail indicators due for release this week
Last week, both the ICSC–Goldman Sachs Retail Chain Store Sales Index and the Johnson Redbook index recorded strong year-on-year gains.
Analyzing secondary trends in high yield debt securities
Investor flows into high yield (HYG) mutual funds reversed their trend in the week ended June 27. High yield (JNK) mutual funds recorded net inflows of $619 million in the week
Analyzing the Redbook and ICSC-Goldman retail sales indices
Retail sales, excluding food services, make up about 27% of the total U.S. GDP. They’re an important driver for economic growth. An uptick in retail sales usually means upside for broad-based equity markets like the S&P 500 Index.
Why external factors affect ISM’s purchasing managers’ index
The ISM will release the manufacturing PMI for August on September 2. The PMI is a composite measure of economic activity. It’s based on surveys of private-sector firms.
How daily re-balancing affects returns on leveraged ETFs
Leveraged ETFs seek to provide a certain multiple (generally 2x or 3x) of daily returns on the underlying index. The daily movements in the underlying index and subsequent changes in ETF exposure may mean the ETF manager needs to rebalance the portfolio daily.
Why high-grade and high-yield markets assess risks before FOMC
Generally, bond yields increase when the economy is expanding because the central bank will likely raise rates sooner rather than later—the demand for financing for funding new projects also increases which generally tends to increase rates.
Does Falling Corporate Profitability Signal a Recession?
Falling profitability of US companies has Joe LaVorgna, chief US economist for Deutsche Bank Securities, feeling a bit pessimistic about the economy.
Why 1 + 1 doesn’t equal 2 when it comes to leveraged ETFs like SSO
The reality seems to be different due to the phenomenon of compounding at play. Let’s look at the following three cases to understand how compounding works in leveraged ETFs.
4 must-know drawbacks to investing in leveraged ETFs like SSO
Leveraged ETFs are inherently riskier than traditional ETFs, as they use borrowings and complex derivatives to generate a return in multiples of an benchmark index.
Lowe’s $2.3 Billion Rona Acquisition: A Fair Price for Growth?
Lowe’s (LOW), announced that it had entered into a definitive agreement to acquire Canada’s largest home improvement retailer, Rona (RON.TO).
Is the Financialization of Education Leading to a US Bubble?
The financialization of education, especially in the United States (IWF) (IWD), has led to an important and emergent risk to the country’s economic future.
The $1.3 Trillion Student Debt Bubble
The rise in the balance of student debt has been driven by an increase in the number of borrowers and a rise in the average debt by each student.
Millennials or Baby Boomers: Who’s Affected Most by Student Debt?
The Baby Boomer generation has also been increasingly contributing to the student debt crisis.
US Nominal GDP Seems to Be Signaling a Recession
During his latest webcast, “Turning Points,” Jeffrey Gundlach presented a chart that seems to be signaling a recession in the making.
Do the Markets Support a Rate Hike?
Back in November 2015, Gundlach presented what he called “the most bearish chart of the US economy” during a webcast.
Gundlach Says This Chart Is ‘Early Warning Indicator’ of Recession
Jeffrey Gundlach seems quite bearish in his views about the US economy (IWM) (QQQ).
Ray Dalio: ‘Risks Are Asymmetric on the Downside’
“Risks are asymmetric on the downside” On the economy, Ray Dalio stated that “the risks are asymmetric on the downside, because asset prices are comparatively high at the same time there’s not an ability to ease.” Courtesy of the current global monetary policy’s low interest rates, asset prices are artificially inflated—so much so that they’ve […]
Where Are We in the Debt Cycle?
Ray Dalio doesn’t see abrupt crisis Back in 2007, Ray Dalio’s economic principles template “signaled that we were in a bubble and a debt crisis lay ahead.” However, Dalio doesn’t “see such an abrupt crisis in the immediate future.” He has provided two reasons he holds this belief. “Most economies are near the mid-points of the […]
Why Clinton and Trump Believe Their Plans Could Create Jobs
At the third presidential debate on October 19, 2016, Chris Wallace asked the two presidential candidates why they believe their plans could create jobs and growth.
Clinton or Trump: Who Would Add More to Debt Burden in 10 Years?
According to the CRFB, Hillary Clinton’s plan would increase public debt in the United States (IVV) (VOO) by about $200 billion over the next ten years
Bill Gross Says We Shouldn’t Expect a ‘New Trump Bull Market’
In his investment outlook for November 2016, Bill Gross advises investors to be prepared for lower stock earnings and PE (price-to-earnings) ratios in the future.
Why the high-yield debt issuance in 2014 overtook 2013 levels
A key factor influencing issuance this year may have been the lower average yields on high-yield debt in the first half of 2014, compared to 2013.
Assessing demand fundamentals for the latest T-bond auctions
The 30-year T-Bond auction was a reopening of May’s 30-year bond issue. The underlying 30-year T-Bond was auctioned on May 8 at a coupon of 3.375% to mature on May 15, 2044.
Issuers like Wells Fargo and Verizon take advantage of low yields
Major deals included debt issues by Wells Fargo (WFC), Baidu, AT&T, and Verizon (VZ).
Must-know: Lessons from the $2 billion issue at Target
Target (TGT) made a two-part $2 billion offering. The retailer issued $1 billion each in five-year and ten-year notes, in order to refinance about $1 billion in existing debt.
Why do key purchasing managers’ index readings move markets?
In this series, we’ll focus on the manufacturing PMI issued by three major institutions, measuring manufacturing activity in the U.S.
How daily compounding works in case of inverse and leveraged ETFs?
If SPY rises 5% each on two consecutive days, SSO will rise 10% each day due to the 2x leverage achieved using derivative products and external borrowings. While the compounding works even for SPY, it’s magnified in SSO due to the 2x multiplier effect.
Bond investing: Key risks and strategies to boost your portfolio
As with all investments, fixed income investments are subject to risks too. Bond prices increase when interest rates decline and decline when interest rates increase.
Why apparel sales may boost April earnings for retailers like Gap
Both the International Council of Shopping Centers (or ICSC) Goldman Sachs Store Sales report and the Johnson Redbook Index report for the week ended April 5 will be released on Tuesday, April 8.
How firms’ inflation expectations impact the Fed’s mandate
Other factors remaining constant, the higher the expected rate of inflation, the higher the required rates of return on both debt (AGG) and equity (VOO) investments, and vice versa.
VF Corporation Beats 2Q15 Estimates after Three Straight Misses
VF Corporation (VFC) released its 2Q15 earnings on July 24, coming in ahead of Wall Street estimates on both earnings and revenue after three quarters of misses.
Is the World’s Largest Hedge Fund Right about Equity Valuations?
In its research, Bridgewater Associates has argued that the current margins in the US corporate sector aren’t sustainable.
BAML Survey: How Are Global Fund Managers Positioned?
BAML conducted a survey that polled 187 global investors with $547 billion in total assets under management between April 5 and April 11.