It has been a bumpy week for stocks, and it could get worse if you believe the headlines of the financial press. The issue I see is that just about everyone is expecting a nasty period ahead for equities. That makes me somewhat bullish. Calling short-term market moves in this environment is akin to fortune-telling. It is short on analysis, and long on my gut feelings. Granted, I too, have been warning folks that the September-October 2021 time period has been a seasonally difficult time for equities. My column last week addressed the possibility of a 5-10% correction, and what…
Insights & Advice
Tag: Coronavirus Delta variant
Disappointing job gains in leisure and hospitality sectors
The most recent jobs report was disappointing. Only 235,000 jobs were created in August 2021, versus an expectation of 720,000. Leisure and hospitality jobs had led the way this year — until August. For the six months before August 2021, those industries had averaged 350,000 new jobs per month. Last month there were no job gains in the sectors. The drop-off in leisure and hospitality resulted in August’s jobs gains being the weakest monthly gain since January 2021. The weakness was attributed to rising COVID-19 cases. Consumer demand ticked down as the uncertainty regarding new infections went up. U.S. infection…
Japan is worth a look
It has been 30 years since the Nikkei 225 last touched the 30,000 level. However, many investors look beyond this island nation and focus instead on its Chinese neighbor. That may prove to be a mistake. To some investors, it is the epitome of value investing. Warren Buffet’s Berkshire Hathaway made some sizable bets on several Japanese trading companies last year. Japan’s stock market is cheap compared to many other markets. But deservedly so, say the bears, since investors have had to put up with years of sluggish growth and perennial deflation. Japan is home to many well-known companies (think…
Investors are chasing stocks higher
The proverbial Wall of Worry provided plenty of foot holds for investors this week. The major averages continued to make new highs (or hovered just below them) despite bad news and focused instead on anything that could justified higher prices. The belief that the Delta variant of the coronavirus may be peaking in the worst-hit states was enough to cheer investors. Not that the extremely contagious infection ever had much of an impact on the markets anyway. Still, the hope that Delta has peaked gave added umph to large cap growth stocks. Helping this summer’s move higher was almost $30…
Corporate activism comes of age
For decades, corporations stuck to their knitting, while letting Washington and American voters decide how to deal with social and political issues. But times are changing as companies become bigger and more powerful. Corporations are speaking out on issues from LGBTQ+ rights to gun control. To some politicians, managements and their boards are throwing their weight around in ways that make elected officials uncomfortable. At first, I dismissed much of their actions as simply rhetoric, or just good public relations, but more companies are speaking out—frequently—on many issues. Take the gun control issue. U.S. politicians on both sides of the…
Stocks grind higher
The major indices have been working higher over the last few weeks, while rotation among sectors continues unabated. The higher markets climb, the more investors begin to question how long the bull market can sustain its upward trajectory. “Thin” would be the way I would describe the movement upward in the S&P 500 Index. The same term could be used for the slight downward drift in the NASDAQ and technology stocks in general this week. It is August, after all, and volumes dry up as many on Wall Street take vacations. Technically, we are trading in the middle of a…
Wild week for stocks
In just one week, the major averages have had a 3% swing from lows to highs. These gyrations go hand in hand with the high level of indecision investors are feeling right now. Can you blame them? Last week, and into the end of the day on Monday, the S&P 500 Index registered a 3% decline. In the next few days, all of those losses were recouped and then some. While investors breathed a sigh of relief, I don’t think we are out of the woods just yet. Most strategists blame the decline in stocks on the free fall in…