Good morning. Happy Monday. Hope you had a good weekend. The Asian/Pacific markets closed down across-the-board. China dropped 5.3%, Hong Kong 2.8% and Singapore, Australia, Indonesia, Malaysia, South Korea and Taiwan fell more than 1%. Europe is currently mixed. Russia is down 3.5%, and Norway, Poland and Portugal are down more than 1%. Germany, France, […]
S&P Select – Week in Review
Per the nine S&P Select groups, this is how the market did last week.
Before the Open (Jan 8)
Good morning. Happy Friday. Happy Employment Numbers day. The Asian/Pacific markets closed with a lean to the upside. China rallied 2%; Hong Kong, Singapore and South Korea also did well. Europe is currently mixed. Austria is down 2%, and Belgium, Greece and Poland are down more than 1%. The Czech Republic, Finland and Hungary are […]
12 Reasons to Not Like This Market
Despite the rebound off the August low and the bounce attempts in November and December, I haven’t liked this market since last summer. These issues have been discussed at Leavitt Brothers for several months, so it’s time to summarize everything in one place.
The Market Has Bad Breadth (1/12)
The indexes are mostly dominated by large cap stocks that trade lots of volume, so it’s possible for a small number of big companies to paint the index charts different than what’s really going on beneath the surface. The internals, or market breadth, tell us what’s going on behind the scenes. The S&P 500 may […]
The Small Caps Have Been Lagging (2/12)
The flow of money tells us investor’s risk appetite. When more money flows into safe, large caps that have long track records, it’s a sign investors are looking for safety. They’re less concerned with making money and more concerned with not losing. When money flows into riskier small caps that have much higher upside, but […]
Higher Rates and the Absence of QE (3/12)
Rates are going up, perhaps slowly, but still going up. Lower rates didn’t help the general public, but they definitely helped corporate America.
Defensive Leadership (4/12)
Just as a healthy, “risk-on” market sees money flowing to small cap stocks, money also flows from safe-havens to less proven companies that have greater upside potential. A quick glance at the leader and loser board each week tells us where money is flowing.
High Stock Ownership Relative to Assets (5/12)
Most middle class people have the bulk of their net worth tied up in a house. It’s not a great investment – more like a forced savings program – but considering how bad people are at saving, home ownership carries more positives than negatives.
High Percentage of Unprofitable IPOs (6/12)
Reminiscent of the dot com bubble days, the percentage of IPOs that are currently unprofitable is at its highest level since 2007. During good times, this gets ignored, but if the market/economy weakens, flight to safety rotates money out of these stocks.