SPY

A Meaningful Rate Hike? No Way

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Inflation? What inflation? Crude oil prices have been cut in half, iron ore prices have absolutely been pummeled, copper has seen better days, and the last time I checked the value of my house, it is still not up to the price I bought at. What inflation, I say? For those that may not be familiar with the so-called dual mandate of the Fed, here it is: “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” … Read more

Wealth or Income? You Decide.

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I know better than to jump up and down in sheer bliss with the S&P 500 (SPY) basing at 2,000. Frankly, the chart looks toppy and “tired,” and with the ongoing series of lower tops, I wouldn’t be surprised that we break down in the coming weeks. Earnings disappointments have been rampant, and following one of the strongest periods of economic expansion in some time during the third quarter (+5%), the pace of US GDP growth in the fourth quarter barely edged out half of the preceding period’s rate of expansion (+2.6%). But that’s yesterday’s news (well, last year’s really), and what concerns me most is that first-quarter GDP will be quite disappointing, even with the stimulus brought about by … Read more

Stocks Catapult Back To Near All-Time Highs

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It appears that we may get a Santa Claus rally after all. Call it window dressing. Call it drinking at the Fed’s punch bowl. Call it what you will. But the Dow Jones Industrial Average (DIA) polished off its biggest two-day gain in six years to propel itself back to near all-time highs again. The S&P 500 (SPY), shown above, is now within throwing distance of setting new record ground, and spirits remain high as we approach the Christmas holiday and New Year. Collapsing prices at the gas pump, though highlighting risks to global economic growth, may be helping to spread the holiday cheer. For clarification, we continue to be optimistic about the future returns in the newsletter portfolios, but … Read more

Yikes! Investor Expectations

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A few days ago, I received an email from a valued member of ours. He said that our call on Ford (F) was wrong because we removed shares from the Best Ideas portfolio too early. Another member mentioned a couple months ago that we removed Baidu (BIDU) from the Best Ideas portfolio too early, and he was extremely disappointed for this reason. One of our most valued financial advisor clients, whom said that our call on a certain industry had saved him millions in client assets, decided to cancel his subscription due to a structural shift in his business to ETFs. The puzzling part of all of this, however, is that our call on Ford reaped a ~35% gain, the … Read more

Look Out Below: Crude Oil Prices Continue to Tumble

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West Texas Intermediate crude oil (Dec’14) fell under $75 per barrel today, now almost $30 lower than its 52-week high, reaching the lowest level since September 2010. Brent crude also fell to a four-year low. We view the move in crude as a net-negative for the economy and S&P 500 earnings, even though many from transportation to retail will benefit from lower energy costs. The energy sector accounts for roughly 10% of the S&P 500 (SPY), and ExxonMobil (XOM) and Chevron (CVX) top the index’s top 10 holdings.  We think falling crude oil prices are more a reflection of expectations for declining global economic activity, which in itself, signals that trouble is on the horizon. North American shale production continues … Read more

A Sneak Peek at Valuentum’s Slides for the AAII Presentation in Chicago This Saturday!

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Let’s take a sneak peek at President Brian Nelson’s slides for this weekend’s presentation in Chicago! Firms mentioned: MSFT, GOOG, AIR, BRCM, CSCO, SPY, AAPL, QCOM, MA, DPZ, SVU, RNDY, DDE, STRA, EXC, CLF, PBI, CTL, JCP and others. <select image to download the slide deck>

The Correction: Surveying the Marketplace in 3 Charts

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For those just joining us, we’ve been profiling the market’s recent slide under the article series titled, The Correction. This article is the latest installment of the series. SPDR Select S&P 500 (SPY) Breaks Below 200-day Moving Average You can say what you want about technical analysis, but times have changed since strict fundamentalists started publishing that chart reading is taboo. There are industry veterans who grew up with the markets decades ago that still don’t buy into the discipline, but technical analysis has become a much-needed skill at any level. Why? Well, the more technicians and chart-followers there are, the more the markets behave according to that particular discipline. Remember: stock prices are driven by buying and selling of … Read more

The Correction: No Panic Selling on Columbus Day

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The past three years have been an anomaly, in our view, with the broader equity markets practically going straight up. For those new to the markets and stock investing, in general, this simply is not how the equity markets behave. Many stock pickers have even become frustrated as a result of the market’s steady-eddy advance with negligible meaningful swings during most of the past 36 months. The market, as measured by the SPDR S&P 500 (SPY), hasn’t had a 10% drop in nearly 1,100 days. As of last Friday’s close, we’re a mere 5.6% from the intra-day high on September 19. During the past three years, the market has made everyone look like a genius, and frankly it has been … Read more