The major U.S. stock market indices limped to the 2015 finish line with weekly losses, leaving all but the Nasdaq indices in negative territory for the year. The Nasdaq 100 added 8.4% in 2015 while the broader Composite index gained 5.7%.  The broader market S&P 500 was down 0.7% for the year and the Dow Jones Industrial Average fell 2.2%. It was the small-cap Russell 2000 that led the way lower, though, losing 5.7% in 2015.   From a sector standpoint, consumer discretionary was the year’s best performer, gaining 8.3%, followed by health care, which added 5.3%. At the other… Read More

The major U.S. stock market indices limped to the 2015 finish line with weekly losses, leaving all but the Nasdaq indices in negative territory for the year. The Nasdaq 100 added 8.4% in 2015 while the broader Composite index gained 5.7%.  The broader market S&P 500 was down 0.7% for the year and the Dow Jones Industrial Average fell 2.2%. It was the small-cap Russell 2000 that led the way lower, though, losing 5.7% in 2015.   From a sector standpoint, consumer discretionary was the year’s best performer, gaining 8.3%, followed by health care, which added 5.3%. At the other end of the spectrum, energy was by far the weakest sector, declining 23.8%, followed by materials and utilities, which lost 10.6% and 8.3%, respectively. Editor’s note: Despite the poor performance of most financial assets, one indicator pegged stocks that delivered gains of 55%, 60% and 88% in 2015. It also uncovered many of the best-performing stocks of 2014. And now it has found the Top 10 Trades for 2016. If you want the names and tickers, follow this link. #-ad_banner-# All things considered, 2015 was a tough year for investors… Read More

The past year was an eventful one for U.S. stocks, with volatility picking up considerably in August, China’s economic slowdown casting a long shadow and the Fed finally pulling the trigger on a long-telegraphed interest-rate hike. #-ad_banner-#What will 2016 bring? Here are six trends to watch: Interest rates. No one was surprised when the Fed increased the Fed Funds rate by 25 basis points (0.25 percentage points) in mid-December. Fed Chair Janet Yellen carefully telegraphed the increase for months, and better-than-expected jobs reports in the fall made it a near-certainty. What comes next is harder to predict, though an educated… Read More

The past year was an eventful one for U.S. stocks, with volatility picking up considerably in August, China’s economic slowdown casting a long shadow and the Fed finally pulling the trigger on a long-telegraphed interest-rate hike. #-ad_banner-#What will 2016 bring? Here are six trends to watch: Interest rates. No one was surprised when the Fed increased the Fed Funds rate by 25 basis points (0.25 percentage points) in mid-December. Fed Chair Janet Yellen carefully telegraphed the increase for months, and better-than-expected jobs reports in the fall made it a near-certainty. What comes next is harder to predict, though an educated guess isn’t too difficult: slow, gradual upticks in rates are the most likely course. My prediction is that Yellen & Company ease rates higher only once or twice in 2016, several months apart each time. Why? Despite low unemployment, the labor market clearly retains some slack, with historically high rates of non-participation and wages not keeping pace with productivity. And with energy prices still low (more on that later) and tepidly growing China unlikely to fuel an unexpected increase in global demand for commodities, inflation remains well under control. Some analysts are even calling for a recession to begin in… Read More

The world is on high alert for terror after the savage attacks in Paris that left 130 people dead and many others injured. This terrible act reminds us that there are more important things than money. Yet, I fear that terrorism itself is becoming a wild-card factor that all investors must weigh and consider. #-ad_banner-#Before Paris, ISIS claimed responsibility for taking down a Russian passenger jet returning from Egypt. Investigators combing through the wreckage discovered evidence of a bomb. And there has since been another attack within the past few days by al-Qaeda that left dozens dead at a Radisson… Read More

The world is on high alert for terror after the savage attacks in Paris that left 130 people dead and many others injured. This terrible act reminds us that there are more important things than money. Yet, I fear that terrorism itself is becoming a wild-card factor that all investors must weigh and consider. #-ad_banner-#Before Paris, ISIS claimed responsibility for taking down a Russian passenger jet returning from Egypt. Investigators combing through the wreckage discovered evidence of a bomb. And there has since been another attack within the past few days by al-Qaeda that left dozens dead at a Radisson Hotel in Mali. There have been other recent attacks in Nigeria, Denmark, Lebanon and Turkey. I don’t know what will happen in the days and weeks ahead. I would like to think that the worst is over. We all would. But common sense says otherwise. By all accounts this jihadi cancer is spreading, and it’s far more likely that the United States and other western nations will be drawn into further conflict. Normally, I would be talking to you about economic or financial matters today. To be sure, I’d much rather be discussing employment reports or factory orders. But my… Read More

Directionless volatility in the U.S. stock market continued during the holiday-shortened trading week, as all major indices closed sharply higher on the heels of two straight weeks of losses.  Last week ‘s surge higher was led by the downtrodden energy and materials sectors — the two worst performers of 2015. A rebound in oil prices and industrial and precious metals apparently provided hope that some economically influential commodities may have at least temporarily found a bottom. #-ad_banner-# Bigger picture, however, 2015 has been a lackluster to disappointing year for most individual sectors of the S&P 500. And when all was… Read More

Directionless volatility in the U.S. stock market continued during the holiday-shortened trading week, as all major indices closed sharply higher on the heels of two straight weeks of losses.  Last week ‘s surge higher was led by the downtrodden energy and materials sectors — the two worst performers of 2015. A rebound in oil prices and industrial and precious metals apparently provided hope that some economically influential commodities may have at least temporarily found a bottom. #-ad_banner-# Bigger picture, however, 2015 has been a lackluster to disappointing year for most individual sectors of the S&P 500. And when all was said and done, the broader market index ended last week right where it began its most recent bout of sideways, choppy behavior in late October. This indicates temporary investor indecision, which typically becomes the springboard for the next directional move.  In this week’s report, I will cover three charts that should help us determine whether that move will be up or down. Investor Fear Remains Key In last week’s Market Outlook, I pointed out that the Volatility S&P 500 index — better known as the VIX or fear gauge — had been above its 50-day moving average since Dec 10. Read More

If you regularly follow the advice of StreetAuthority experts, you probably sold some winning investments in 2015. That’s great news — but of course, there’s a downside: the capital gains tax you’ll owe on those profits. So as we wind down to the final days of the year, it’s worth considering an investment maneuver that can lower those taxes, or even eliminate them. Smart investors use capital losses to offset gains in years when they’ve sold a lot of winners. By selling losing investments before December 31, you can lower your net gain and significantly reduce the tax bill you’ll… Read More

If you regularly follow the advice of StreetAuthority experts, you probably sold some winning investments in 2015. That’s great news — but of course, there’s a downside: the capital gains tax you’ll owe on those profits. So as we wind down to the final days of the year, it’s worth considering an investment maneuver that can lower those taxes, or even eliminate them. Smart investors use capital losses to offset gains in years when they’ve sold a lot of winners. By selling losing investments before December 31, you can lower your net gain and significantly reduce the tax bill you’ll pay for 2015. But as with anything involving the IRS, you’ll need to do it the right way: in this case, without running afoul of the “wash sale rule.” #-ad_banner-#The IRS wash sale rule prohibits investors from claiming a capital loss on a sale if they buy back the same security within 30 calendar days. The rule applies to all of your accounts as well as your spouse’s. Furthermore, you can’t buy a “substantially identical” security as a replacement — e.g., selling an S&P 500 index fund and buying another one. And don’t try to get clever with options, convertible… Read More

The U.S. stock market posted its second consecutive weekly loss, led lower by the blue-chip Dow Jones Industrial Average, which shed 0.8%. The roller coaster week saw the broader market S&P 500 spike 3% by Wednesday’s close only to give up all of those gains and more by the close on Friday. With less than two weeks left in 2015, all major indices are in negative territory for the year except the Nasdaq. As I said last week, it’s time for investors to be on the defensive. #-ad_banner-# The two best-performing sectors last week — of… Read More

The U.S. stock market posted its second consecutive weekly loss, led lower by the blue-chip Dow Jones Industrial Average, which shed 0.8%. The roller coaster week saw the broader market S&P 500 spike 3% by Wednesday’s close only to give up all of those gains and more by the close on Friday. With less than two weeks left in 2015, all major indices are in negative territory for the year except the Nasdaq. As I said last week, it’s time for investors to be on the defensive. #-ad_banner-# The two best-performing sectors last week — of only four that posted a weekly gain — were utilities and real estate. Both sectors benefitted from the decline in long-term interest rates as investors made a defensive move back into the relative safety of U.S. government bonds. When interest rates decline, higher-yielding utilities become more attractive to investors while helping to spur real estate purchases. Apple: A Canary In The Coal Mine? In last week’s Market Outlook, I said recent price activity in market bellwether Apple (Nasdaq: AAPL) indicated a near-term top was in place at the early November high and that we could see a retest of the… Read More

Editor’s note: On Friday, Dec. 18, trading prodigy Jared Levy is going on camera to reveal his most lucrative secret. It’s a little-known Wall Street “insider” trade that he’s used to make millions. But here’s the best part: At the end of the event, you’ll have the chance to stake your claim in the up to $1 million we’re giving out. Click here to register and immediately get a sneak peek of how the strategy works.  The choppiness that has characterized the U.S. stock market since November continued last week, but this time with… Read More

Editor’s note: On Friday, Dec. 18, trading prodigy Jared Levy is going on camera to reveal his most lucrative secret. It’s a little-known Wall Street “insider” trade that he’s used to make millions. But here’s the best part: At the end of the event, you’ll have the chance to stake your claim in the up to $1 million we’re giving out. Click here to register and immediately get a sneak peek of how the strategy works.  The choppiness that has characterized the U.S. stock market since November continued last week, but this time with what appears to be some near-term directional implications. All major indices closed well in the red for the week, led by the small-cap Russell 2000, which lost 5.1%, bringing its year-to-date loss to 6.7%. Just two weeks ago, I pointed out that the index was on the verge of a bullish breakout that could set it up for a retest of the June highs. #-ad_banner-# Since then, however, the Russell 2000 has failed miserably, and the weakness in small-cap stocks is now spreading to the other market-leading sector, technology. This suggests that if Santa… Read More

The U.S. stock market featured a lot of fireworks last week but very little in the way of directional movement. All major indices closed less than 1% higher, and the beleaguered small-cap Russell 2000 lost 1.6%.  #-ad_banner-#The good news is that all of this directionless volatility has potentially set the stage for a Santa Claus rally between now and year end. I’ll discuss this in more detail later in the report. Last week’s strongest sectors were technology, which gained 1.5%, and financial services, which rose 1%. Energy was by far the weakest sector, losing 4.5%, triggered by a… Read More

The U.S. stock market featured a lot of fireworks last week but very little in the way of directional movement. All major indices closed less than 1% higher, and the beleaguered small-cap Russell 2000 lost 1.6%.  #-ad_banner-#The good news is that all of this directionless volatility has potentially set the stage for a Santa Claus rally between now and year end. I’ll discuss this in more detail later in the report. Last week’s strongest sectors were technology, which gained 1.5%, and financial services, which rose 1%. Energy was by far the weakest sector, losing 4.5%, triggered by a drop in West Texas Intermediate (WTI) crude oil prices below $40 a barrel to their lowest level since late August.  Not surprisingly, Asbury Research’s metric shows the biggest inflows of sector bet-related assets over the past one-week and one-month periods went into financials, and the biggest outflows came from energy. S&P 500 Coiling For A Santa Claus Rally? The benchmark S&P 500 has traded in a choppy, sideways manner since early November, developing a triangle pattern that represents near-term investor indecision on the heels of the index’s strong rise from the late-September lows. A sustained rise above the upper… Read More

On Tuesday, I argued in this article that banks have officially lost it again.  They’re lending people money that they never expect will be able to pay them back… all for a few percentage points of short-term returns.  This chart wraps up this thesis perfectly: As you can see, there is a significant rise in the number of new auto loans for the groups with poor credit. “Near prime” (in yellow) are borrowers who have credit scores of less than 660. “Subprime” (in red) have scores below 600. Yet these two groups have received more new money to… Read More

On Tuesday, I argued in this article that banks have officially lost it again.  They’re lending people money that they never expect will be able to pay them back… all for a few percentage points of short-term returns.  This chart wraps up this thesis perfectly: As you can see, there is a significant rise in the number of new auto loans for the groups with poor credit. “Near prime” (in yellow) are borrowers who have credit scores of less than 660. “Subprime” (in red) have scores below 600. Yet these two groups have received more new money to buy cars than any other. Why would banks do this? Because these groups have to take whatever interest rates they can get. And banks are desperate.  Specifically, there are two lenders doing this more than anyone else. And if you know what’s good for you, you’ll steer clear of them. The first is probably not a huge surprise, if you think about it. Over the last decade, American carmakers have struggled. They have not been able to compete as well with the likes of Toyota and Honda. Resale values for cars made by General Motors, Ford and Chrysler have dramatically… Read More

Mistakes of the past mean little to anyone in the modern banking industry. And now an unforgivable trend may have just hit its tipping point. I want to say upfront that this problem alone won’t be as devastating to the global economy as the housing bubble and burst was. But it could end our nice little — albeit slow — recovery for a while… and it certainly could affect the rate at which the Fed tightens its monetary policy. And if any other major economic disaster accompanies this problem — like, say, a few countries exiting the euro or a… Read More

Mistakes of the past mean little to anyone in the modern banking industry. And now an unforgivable trend may have just hit its tipping point. I want to say upfront that this problem alone won’t be as devastating to the global economy as the housing bubble and burst was. But it could end our nice little — albeit slow — recovery for a while… and it certainly could affect the rate at which the Fed tightens its monetary policy. And if any other major economic disaster accompanies this problem — like, say, a few countries exiting the euro or a full-blown Japanese depression — this could be the trigger to send the U.S. economy over the cliff.  U.S. Banks Are Going To Extremes To Increase Profits Many banking institutions have struggled these past several years. I know, it sounds absurd that after all that government money through TARP and other giveaway programs, banks could still be in trouble. But it’s precisely because of all this so-called “free money” that they are struggling. You see, the bottom line for a typical bank is comprised of the margin between how much they spend on short-term financing of their own and how… Read More