Last week’s stock market rebound was driven by an 11.4% weekly jump in Apple (Nasdaq: AAPL), as iPhone 7 momentum picked up, lifting the tech-heavy Nasdaq 100 2.9% for the week. The other major indices made a modest recovery following the prior week’s sharp decline. At the sector level, last week’s advance was predictably led by technology (2.3%), but defensive utilities (1.7%) and health care (0.8%) also performed well.  Spooked Investors Warn Of A Deeper Decline Despite last week’s splashy tech rally, investors are still apprehensive, if not outright afraid. The Volatility S&P 500 Index (VIX) finished last week… Read More

Last week’s stock market rebound was driven by an 11.4% weekly jump in Apple (Nasdaq: AAPL), as iPhone 7 momentum picked up, lifting the tech-heavy Nasdaq 100 2.9% for the week. The other major indices made a modest recovery following the prior week’s sharp decline. At the sector level, last week’s advance was predictably led by technology (2.3%), but defensive utilities (1.7%) and health care (0.8%) also performed well.  Spooked Investors Warn Of A Deeper Decline Despite last week’s splashy tech rally, investors are still apprehensive, if not outright afraid. The Volatility S&P 500 Index (VIX) finished last week at 15.37, well above its 50-day moving average at 13.01. I use the 50-day as a baseline to distinguish between a confident and nervous market.   As long as the VIX remains above 13.01 this week, it will warn that the market is vulnerable to a deeper decline.   Seasonality Also Warns Of Near-Term Weakness Seasonality statistically defines the historical performance of an asset at various times during the calendar year. Based on data since 1957, the benchmark S&P 500 historically peaks for the month of September on the 11th trading day, which was Sept. 16. And it… Read More

As a former economist, I’ve always loved following the macro themes when looking for breakaway good buys in the stock market. Find the big picture forces like rates, currency impact and trade that are moving markets and you’ve got a huge head start on where an investment is going. Over the last several years, it’s these economic forces that have been leading the markets.  #-ad_banner-#Consumer staples and shares of utility companies have easily beaten the S&P 500 over the last year, jumping 12.6% and 17.2% as the Fed held off on raising rates. The flip side has been the weakness… Read More

As a former economist, I’ve always loved following the macro themes when looking for breakaway good buys in the stock market. Find the big picture forces like rates, currency impact and trade that are moving markets and you’ve got a huge head start on where an investment is going. Over the last several years, it’s these economic forces that have been leading the markets.  #-ad_banner-#Consumer staples and shares of utility companies have easily beaten the S&P 500 over the last year, jumping 12.6% and 17.2% as the Fed held off on raising rates. The flip side has been the weakness in financials as the net interest spread tightened, making it difficult for banks to make any money. As we come in to what could be the later innings of the business cycle, it won’t take much to tip the markets back into freefall.  The World Bank expects the global economy to grow just 2.4% this year, the same rate of growth booked last year, and next year is only expected to improve to 2.8% growth. Developed markets are expected to inch along at just 1.9% growth next year, less than half the 4.9% growth expected in emerging markets. On miserably… Read More

I recently found myself sitting in the warm Texas sun with a few beers, some of the best barbecue in Dallas and friends visiting from all over — Australia, Zimbabwe, South Africa and a few from the States. Two topics kept coming up in our conversation: travel and the global economy. All of these friends travel the world regularly, and nearly all happen to be in finance or the travel industry, so they’ve got a bird’s-eye view of the international tourism climate. #-ad_banner-# They’re also all Millennials. We all agreed that while much of the world’s economies are… Read More

I recently found myself sitting in the warm Texas sun with a few beers, some of the best barbecue in Dallas and friends visiting from all over — Australia, Zimbabwe, South Africa and a few from the States. Two topics kept coming up in our conversation: travel and the global economy. All of these friends travel the world regularly, and nearly all happen to be in finance or the travel industry, so they’ve got a bird’s-eye view of the international tourism climate. #-ad_banner-# They’re also all Millennials. We all agreed that while much of the world’s economies are just skirting along, with central banks leading the tortoise-style growth race, people still have the means (and desire) to travel. And now, more than ever, access to travel is easier and cheaper.  Socially, the under 35 crowd is less eager to work or settle down and more compelled to explore.  To verify our thesis, we started scrolling through our Facebook, Instagram and Twitter feeds. It looked like we were on the right track. The vast majority of posts had to do with travel. Most of our peers seemed to be more concerned with showing off their selfies taken in foreign… Read More

Emerging markets were a brutal place to invest in 2014 and 2015. #-ad_banner-#While the S&P 500 gained more than 12% in that time, iShares Emerging Markets (NYSE: EEM) fell into a bear market, declining 20%. That weakness was driven by a perfect storm of a strong dollar, falling commodity prices and slower than expected growth in China. Today, emerging markets are showing signs of a long-term reversal. And it is creating a great opportunity for investors who are frustrated with record low yields and dividends in the United States. In 2016, emerging markets have been among the best performing stock… Read More

Emerging markets were a brutal place to invest in 2014 and 2015. #-ad_banner-#While the S&P 500 gained more than 12% in that time, iShares Emerging Markets (NYSE: EEM) fell into a bear market, declining 20%. That weakness was driven by a perfect storm of a strong dollar, falling commodity prices and slower than expected growth in China. Today, emerging markets are showing signs of a long-term reversal. And it is creating a great opportunity for investors who are frustrated with record low yields and dividends in the United States. In 2016, emerging markets have been among the best performing stock markets in the world. In the first eight months of the year, the iShares Emerging Markets is up more than 14%, almost tripling the return of the S&P 500. Take a look at the outperformance below. Despite that impressive rebound, I see two reasons why it’s still a great time to invest in emerging markets — particularly investors looking to pad their dividends. Emerging Markets Are Undervalued After posting big gains over the last two years, the S&P 500 is overvalued compared to historical averages. Its current P/E ratio of 25 times is up from 21… Read More

Most investors have been trained to think that earning 6% or 8% a year on their trades is admirable. And the old saying is true: No one ever went broke taking a profit. But that doesn’t mean they got rich that way. You can bet Wall Street traders don’t settle for such meager returns, and your average trader doesn’t have to either. The same methods used by Wall Street’s elite are available to average traders. It’s just that they often don’t know about them or are too scared to try them. #-ad_banner-# For instance, there is a way to potentially… Read More

Most investors have been trained to think that earning 6% or 8% a year on their trades is admirable. And the old saying is true: No one ever went broke taking a profit. But that doesn’t mean they got rich that way. You can bet Wall Street traders don’t settle for such meager returns, and your average trader doesn’t have to either. The same methods used by Wall Street’s elite are available to average traders. It’s just that they often don’t know about them or are too scared to try them. #-ad_banner-# For instance, there is a way to potentially amplify those 6% to 8% gains into 30%, 50%, even 65% windfalls or more in a matter of months, weeks or even days. And I’m not talking about buying micro-cap stocks that no one has ever heard of. You can make these returns from some of America’s biggest and most well-known companies.  Wall Street’s ‘Backdoor’ Trading Method Some of the most famous and richest investors in history (including Warren Buffett) use a backdoor trading method to amass much of their wealth. I say “backdoor” because, while it’s certainly not a secret, you won’t hear it talked about by 99% of… Read More

Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day… Read More

Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day in August, versus 12.2 million produced in the United States. The International Energy Agency (IEA) reported that Saudi Arabia added 400,000 barrels a day of production last month. At the same time, the United States took 460,000 barrels a day out of its production. This shift is exactly what Saudi Arabia and OPEC were hoping for. It’s been keeping the taps on its competitors and driving down oil prices in order to price out high-cost shale oil production in the United States. It worked. Investment in shale oil has fallen 66% since 2014, according to Rystad Energy and Bloomberg. And… Read More

Last week’s hawkish chatter from the Federal Reserve put the kibosh on the market’s advance. And although more soothing rhetoric doled out Monday sparked a rebound, the market could not sustain it, and stocks fell on Tuesday. What was once a calm, serene market has turned stormy, and one of the hardest hit sectors, at least from a technical perspective, is the homebuilders. #-ad_banner-# It’s easy for bears to look at the year’s biggest winners and think that’s where the easy money is in a market correction. However,… Read More

Last week’s hawkish chatter from the Federal Reserve put the kibosh on the market’s advance. And although more soothing rhetoric doled out Monday sparked a rebound, the market could not sustain it, and stocks fell on Tuesday. What was once a calm, serene market has turned stormy, and one of the hardest hit sectors, at least from a technical perspective, is the homebuilders. #-ad_banner-# It’s easy for bears to look at the year’s biggest winners and think that’s where the easy money is in a market correction. However, it’s rarely a good idea to bet against winning stocks such as Facebook (NASDAQ: FB), as they tend to remain in strong rising trends. It’s far better to look for sectors and individual stocks that have not fared as well. Within the homebuilding group, I like Lennar (NYSE: LEN) for a bearish play, as the charts show the stock is poised for a double-digit drop. Lennar has been floundering since March, and unlike the broader market S&P 500, it never eclipsed its 2015 highs. As you can see in the chart below, the trading range formed over the past few… Read More

The beaches were closed here in the New York City area this past Labor Day weekend as the slow-moving and dangerous tropical storm Hermine approached the area. People were told to expect stormy conditions, strong winds and rain, and to prepare for flash floods.  After the devastation of Superstorm Sandy nearly four years ago, nobody wanted to take any chances. Fortunately, this time, the storm took a slightly different path than was predicted, and its effects on the city were more or less contained to the beaches.  So even though the sun was shining and the winds were calm, there… Read More

The beaches were closed here in the New York City area this past Labor Day weekend as the slow-moving and dangerous tropical storm Hermine approached the area. People were told to expect stormy conditions, strong winds and rain, and to prepare for flash floods.  After the devastation of Superstorm Sandy nearly four years ago, nobody wanted to take any chances. Fortunately, this time, the storm took a slightly different path than was predicted, and its effects on the city were more or less contained to the beaches.  So even though the sun was shining and the winds were calm, there weren’t many complaints about the extra steps that officials took in response to the National Weather Service’s (NWC) warnings. It’s still prudent to be prepared for all eventualities rather than ignore the clear signs of an impending danger — even if it might not materialize.  These days, it feels like it’s the Federal Reserve that serves as some kind of National Weather Service for the stock market. The Fed does not know if there will be a storm — but what Fed governors do know is that the market conditions might be changing, and they keep telling us as much. … Read More