Four years ago this week, the Dow Jones Industrial Average hit an important milestone: 12,000. A year later, in October 2007, the venerable index moved past 14,000. But by October 2008, headlines blared “Dow 8,000” before eventually bottoming at 7,200 in March of 2009. A furious rebound has the Dow back on the rise, surging +54% in the past 19 months to a recent 11,100. A continued march back to 12,000 is no sure thing, as serious headwinds remain, leading some to expect we’ll see “Dow 10,000” before “Dow 12,000.”… Read More

Four years ago this week, the Dow Jones Industrial Average hit an important milestone: 12,000. A year later, in October 2007, the venerable index moved past 14,000. But by October 2008, headlines blared “Dow 8,000” before eventually bottoming at 7,200 in March of 2009. A furious rebound has the Dow back on the rise, surging +54% in the past 19 months to a recent 11,100. A continued march back to 12,000 is no sure thing, as serious headwinds remain, leading some to expect we’ll see “Dow 10,000” before “Dow 12,000.” One thing’s for sure: recent history tells us that the Dow is unlikely to stay put where it is right now. Volatility is the name of the game these days, so let’s look at three positive and three negative catalysts that could push or pull the Dow to the next milestone. Any of these factors may play out over the next six months. The positive catalysts: 1. Sustained profit growth. Earnings season is off to a robust start. Thus far, more than 80%… Read More

Deflation has become a central  concern these days. The Federal Reserve sweats the notion of falling prices across the economy, as it tends shrink asset values even as debts against those assets remain constant. And companies hate deflation, because it usually… Read More

There are a lot of folks that visit Washington, D.C. in April to see the famous cherry blossoms. The same goes for touring New England when the leaves start to change in the fall. But one season that seems ignored despite being every bit as beautiful —… Read More

You’ve likely been wondering what’s going on with the market. The S&P 500 is up about +12% since the start of September, yet unemployment is still high, the U.S. deficit is still enormous and the overall economic picture is still hazy. What’s behind it all? I think most of the answer lies in QE2. No, not the Queen Elizabeth 2 ocean liner. QE2 is what the business media is calling the pending second wave of quantitative easing by the U.S. Federal Reserve. To stimulate the… Read More

You’ve likely been wondering what’s going on with the market. The S&P 500 is up about +12% since the start of September, yet unemployment is still high, the U.S. deficit is still enormous and the overall economic picture is still hazy. What’s behind it all? I think most of the answer lies in QE2. No, not the Queen Elizabeth 2 ocean liner. QE2 is what the business media is calling the pending second wave of quantitative easing by the U.S. Federal Reserve. To stimulate the economy, the U.S. Federal Reserve has set short-term interest rates at all-time lows. But the economy is still sluggish and unemployment remains stubbornly high. To further stimulate the economy, the Fed has stated that it is likely to try a little-used tool called quantitative easing. Quantitative easing is used to hold or push down long-term interest rates. To do this, the central bank buys long-term Treasury bonds, keeping their prices higher — and yields lower. The hope is that by… Read More

No matter how you slice it, $3 trillion is a lot of money. That’s the amount of money states will need to come up with to pay for the health care and retirement benefits of all of their employees if stock markets fail to rise in coming… Read More

Value stocks have long been regarded as safer investments than growth stocks. They tend to sport lower valuations and are often dogged by low expectations. So any stumbles can be taken in stride. But investors need to do their homework before pouncing on a value stock too quickly. A little… Read More

“Strike while the iron is hot,” is the new catchphrase in Private Equity (PE) circles. Conditions are perfectly in place to do deals, and you can expect to hear of many more this winter. Just this week, Yahoo! (Nasdaq: YHOO), Wendy’s/Arby’s (NYSE: WEN) and Seagate (NYSE: STX) are surging on… Read More

As we headed into Labor Day, stocks could muster little enthusiasm. A creeping sense that the economy was slowing led to fresh concerns of the dreaded “double-dip” recession. The Federal Reserve was also seeing signs of a slowdown. As a remedy, The Fed began to speak of a tool in its arsenal to help jolt the economy to life. That tool, known as Quantitative Easing (QE), changed the entire perception of the stock market. Investors came to see that… Read More

As we headed into Labor Day, stocks could muster little enthusiasm. A creeping sense that the economy was slowing led to fresh concerns of the dreaded “double-dip” recession. The Federal Reserve was also seeing signs of a slowdown. As a remedy, The Fed began to speak of a tool in its arsenal to help jolt the economy to life. That tool, known as Quantitative Easing (QE), changed the entire perception of the stock market. Investors came to see that the Fed’s move had a real chance of getting the economic ball rolling, which was enough to fuel a heady rally in September that has continued into October. The Dow Jones Industrial Average now sits near its 52-week high. But it’s fair to wonder if this steady gain has already accounted for benefits that may be derived from the Fed’s much-discussed QE plans. And it’s also fair to mistrust these kinds of rallies. The Dow surged more than +10% last February and March only to give back all those gains… Read More

Before the economic crisis took hold, the U.S. dollar began a steady downward drift as global investors started to realize that economic growth would be more robust elsewhere in the world. The dollar’s slump was also due to never-ending trade deficits, which had long been expected to weaken the greenback, and finally did so beginning in late 2004. During the next 30 months, the U.S. dollar, compared to the euro, fell from 0.86 euros to 0.63 — a -25% drop. With concerns about the global economic crisis receding, the dollar is… Read More

Before the economic crisis took hold, the U.S. dollar began a steady downward drift as global investors started to realize that economic growth would be more robust elsewhere in the world. The dollar’s slump was also due to never-ending trade deficits, which had long been expected to weaken the greenback, and finally did so beginning in late 2004. During the next 30 months, the U.S. dollar, compared to the euro, fell from 0.86 euros to 0.63 — a -25% drop. With concerns about the global economic crisis receding, the dollar is back on a downward path. As I noted recently, the dollar “now stands at all-time lows against the Australian dollar and the Swiss franc, a 15-year low against the Japanese yen, and more recent lows against the euro.” [What the Global Currency Wars Mean for Your Portfolio] That recent downward move should have an almost immediate impact: export-related profits are bound to come in higher than forecasts in the fourth quarter of 2010 and the first quarter of 2011 as those earnings get repatriated back into dollars. Yet it’s the long-term… Read More

I’ve always been a sucker for the home improvement shows on HGTV. That’s why I planned to sit in front of the TV for just a few minutes while folding laundry over the weekend, but it wasn’t until an hour later that I got moving again. One… Read More