For as long as I can remember, presidential candidates, their surrogates and the news media have always proclaimed every election as “the most crucial in our nation’s history”. Incidentally, my presidential campaign cycle awareness dates back to 1972.  #-ad_banner-#While I agree that presidential elections are an important exercise, I’m hesitant to label every one of them “crucial”. Case in point: George H.W. Bush versus Michael Dukakis in 1988. I mean…seriously? 2016’s contest has been anything but ordinary and, no surprise, I’m starting to field phone calls from nervous clients about what course of action they should take as the general… Read More

For as long as I can remember, presidential candidates, their surrogates and the news media have always proclaimed every election as “the most crucial in our nation’s history”. Incidentally, my presidential campaign cycle awareness dates back to 1972.  #-ad_banner-#While I agree that presidential elections are an important exercise, I’m hesitant to label every one of them “crucial”. Case in point: George H.W. Bush versus Michael Dukakis in 1988. I mean…seriously? 2016’s contest has been anything but ordinary and, no surprise, I’m starting to field phone calls from nervous clients about what course of action they should take as the general election cycle picks up engine pressure.  So I decided to go back and look at the performance of the S&P 500 during the general election cycles going back to the 1992 race. I did not include the 2000 and 2008 race, as both were extraordinary in circumstance. In 2000 there was the Gore v. Bush controversy that dragged out the final outcome to December of that year, and in 2008 the Obama vs. McCain contest occured during the depths of the financial crisis. I hope you like charts. … Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that… Read More

It’s been a good couple of weeks for stock market bulls, at least if you follow economic indicators. First, we saw a marked uptick in consumer spending. Next, July business spending remained in expansion territory, despite dipping somewhat from its 16-month high in June. Although the headlines were gloomy — focusing on the low GDP number for the second quarter — there’s just as much reason to expect an increase in business spending as a decline in the coming months. #-ad_banner-#That said, with stock prices near all-time highs, investors need to exercise some caution lest they buy overvalued stocks that do nothing despite decent economic performance over the next 12 months. Fortunately, there remain plenty of companies to choose from with solid prospects in the near term and excellent long-term opportunities. One of these is General Electric (NYSE: GE).  GE is an iconic company with roots in classic American themes: innovation, ingenuity and industry. Its history is storied, and blue chips don’t come any bluer. But as I’ve said before, what’s most attractive about the stock is not its past, but its future. GE has restructured its business through spinoffs and acquisitions to again focus on innovation — and it… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift… Read More

Everywhere you look there seems to be malaise about global economic growth and the outlook for markets. Forecasts for economic growth are continuously downgraded, and more than a third of global bonds carry a negative yield as investors rush to safety. However, digging deeper in the data uncovers a market disconnect between this wall of worry and a booming global payments processing industry.  #-ad_banner-#Visa Inc. (NYSE: V) beat expectations to report a 10% increase in global payment volume and a “remarkably steadfast consumer in the face of significant global instability.”  Here in my office in Colombia, I’m watching the shift to a cashless society happen first hand as people get tired of carrying large stacks of bills and instead opt for credit and debit cards. This shift in emerging markets could carry global payment growth, with Boston Consulting Group (BCG) forecasting as much as $900 billion in transaction-based revenue growth up for grabs through 2024. One market leader is taking advantage of the Brexit shakeup to snap up a competitor at a 12% discount, expanding its global footprint. Even better, its board just authorized a massive share buyback, and earnings this year could be well over expectations. Consumers Seem Unaffected… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When… Read More

With the market hitting new highs recently, investors should be weary of small-cap stocks. That’s because when the market inevitably turns, it’s usually smaller stocks that lead the charge in either direction. #-ad_banner-#But while investors should be cautious about small-cap stocks in general, my colleague Andy Obermueller has identified one that could be an exception. Back in August of last year, Andy highlighted a little-known company called Amplify (NYSE: BETR), an Austin, Texas-based snack food company. Amplify’s best-selling product is Skinny Pop, a healthy form of popcorn. But it also makes a host of other health-conscious foods for consumers. When Andy originally wrote about Amplify, he issued an immediate “buy” recommendation on the stock, which had recently gone public. Andy recently confessed to his Game-Changing Stocks readers that his timing was perhaps a little bit off, but anyone who followed his recommendation is still sitting on a nice gain:       “Looking back, I can see — and feel obligated to confess — that I made an error in my timing. As with many IPOs, the market created future entry points far more attractive than the pricing available at the time of my recommendation. I erred further in failing… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well…… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well… Here’s what Jared told readers of his premium newsletter, Pro Trader, about the report:       “The Morgan Stanley report forecast 2017 U.S. GDP growth at only 1.5%, which is 35% lower than the consensus of 2.3%. The report detailed just how bad things are for American consumers and how many were skimping on expenditures and saving in record numbers. Morgan Stanley explained that the Fed would be working overtime just to… Read More

It seems like it should be a fairly straightforward concept. You invest your money in a company for a share of future earnings. Most of the companies in which I invest have been around for longer than I have, so those earnings should be fairly stable, if not following a gradual path higher. Of course, investing can be anything but simple as the market charts its course through the new normal and you are trying to avoid the next historic crash in prices. #-ad_banner-#So when someone starts talking about ‘simple’ math that makes an investment a no-brainer, I start to… Read More

It seems like it should be a fairly straightforward concept. You invest your money in a company for a share of future earnings. Most of the companies in which I invest have been around for longer than I have, so those earnings should be fairly stable, if not following a gradual path higher. Of course, investing can be anything but simple as the market charts its course through the new normal and you are trying to avoid the next historic crash in prices. #-ad_banner-#So when someone starts talking about ‘simple’ math that makes an investment a no-brainer, I start to wonder how simple it can really be. Especially when that someone is the CEO of the company. That was the case recently during an earnings release by one of the world’s largest asset managers. Not only is the lecturing mathematician the CEO, he’s also the co-founder of the company. I admire this CEO greatly and he’s a guru in the world of private equity, but when I looked further into the details I found a few holes in his ‘simple’ math.  While I don’t agree with the CEO’s math, I did find evidence that the stock could be one of… Read More

When it comes to what people say versus what the market says, I think it is wisest to listen to the market. Just look at mining machinery maker Caterpillar (NYSE: CAT), which fell almost 1% in premarket trading on Tuesday after the company beat second-quarter earnings estimates but reported declines in profit and revenue. To top things off, the company offered one of the gloomiest year-end outlooks of the earnings season. Tell that to the market, though. That very day, after a weak premarket, the stock closed higher to the tune of 5%. Not only that, it scored a technical… Read More

When it comes to what people say versus what the market says, I think it is wisest to listen to the market. Just look at mining machinery maker Caterpillar (NYSE: CAT), which fell almost 1% in premarket trading on Tuesday after the company beat second-quarter earnings estimates but reported declines in profit and revenue. To top things off, the company offered one of the gloomiest year-end outlooks of the earnings season. Tell that to the market, though. That very day, after a weak premarket, the stock closed higher to the tune of 5%. Not only that, it scored a technical breakout, which we will get to momentarily. The company stated that global uncertainty, including the Brexit and the turmoil in Turkey, have increased risks. I’m not a fundamental analyst, but it seems to me that sort of news would boost the mining of precious metals, and indirectly, the use of Caterpillar’s equipment. Indeed, the gold market has been on the rise all year. But let’s stick to the charts. As we can see, Caterpillar broke out last week to the upside. Volume was rather heavy, too, validating the change in tone for the stock. And it is likely no coincidence… Read More

Times are good for America’s retailers. Retail sales hit a new record of $457 billion in June and are up 2.7% for the past 12 months, up from 2.2% year over year in May. The National Retail Federation recently increased its estimate for 2016 full-year retail sales growth to 3.4% from 3.1%. That’s healthy growth, especially given that inflation is practically zero. These numbers mean two things: one, U.S. employment growth is translating into greater spending power for U.S. consumers — and they are indeed spending rather than mostly saving, and two, companies that depend on U.S. consumer spending might… Read More

Times are good for America’s retailers. Retail sales hit a new record of $457 billion in June and are up 2.7% for the past 12 months, up from 2.2% year over year in May. The National Retail Federation recently increased its estimate for 2016 full-year retail sales growth to 3.4% from 3.1%. That’s healthy growth, especially given that inflation is practically zero. These numbers mean two things: one, U.S. employment growth is translating into greater spending power for U.S. consumers — and they are indeed spending rather than mostly saving, and two, companies that depend on U.S. consumer spending might perform better than recently expected in the coming quarters. #-ad_banner-#Note that I’m referring here to U.S. spending and U.S. retailers. That’s because in other parts of the world, retail sales aren’t rising quite as much if at all. Indeed, in the UK sales suffered their biggest decline in four years in the wake of the Brexit vote to leave the European Union. So while many U.S. retailers have some foreign exposure, and that doesn’t disqualify them as a potential investment, it makes sense to favor those more heavily exposed to the United States. These stocks appear attractive now and could… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility and the market insanity. In particular, I highlighted a strategy that not only reduces your risk, but also increases your chances of success to as high as 90% per trade. That is because you can profit whether a stock — or index — goes up, down or sideways. It’s called a bear put spread, and while it takes a bit more work on your part, I can guarantee it will be well worth the effort. Last week, I explained the ins and outs of the strategy. If you missed that article, I suggest you read it now to familiarize yourself… Read More