Is This Just Another Bear Market Rally?
March 31, 2009
The equity market has taken a turn for the better in the past couple of weeks, reversing losses for many investors who have ridden this market down. It has been a welcome change for investors as we bounce off lows and are beginning to put some faith behind equities again. The million dollar question: is this the turn around we have all been looking for, or is this just another bear market rally? In my opinion, this is just another bear market rally. Rallies of 5%+ in one day do not occur during bull markets, but they are very typical of bear markets and normally occur during bear market rallies. What has really changed fundamentally over the past few weeks in the macro-economy? To tell you the truth, not much. It is my opinion that three things need to get better before we can consider ourselves to be out of this crisis: an improvement in the employment picture, more stable credit markets, and a somewhat stable housing market. Let’s look at how these criteria have changed over the past few weeks. Read more
Monday’s Market Recap (03/30/09)
March 30, 2009
The markets started the week down, with the Dow closing -3.27% lower. The NASDAQ and the S&P 500 were both down on the day closing at 1501.80 and 787.53 respectively. The 10-year price was up today with yields closing at 2.712%. Both oil and gold contracts were down today with oil settling at $48.41 and gold at $917.70.
How to Play the Healthcare Sector
March 30, 2009
The recent volatility from the Healthcare sector has left many investors weary about where to place their money. General market swings aside, M&A activity and legislative developments have intensified the uncertainty in the sector, but have also lead to many investment opportunities. Read more
Credit Where It’s Due
March 29, 2009
Despite all of the problems surrounding consumer credit, the credit card industry is in a position to benefit over the long run, as the public continues to make the transition from paper to plastic. Additionally, consumer spending, although it has hit a speed bump, will rise over time. Indeed, late payments on credit cards hit a record high in January and defaults are likely to worsen until the economy makes a turn around. Although the commercial banks, such as J.P Morgan [JPM: 43.79, +0.55 (+1.27%)] and Bank of America [BAC: 17.27, +0.24 (+1.41%)], saw net losses in their credit card divisions last quarter, credit card companies like MasterCard and Visa fared better. Visa and MasterCard are unique in that they operate the electronic payments networks the cards are processed on but do not have direct credit risk due to lending. The following is a run down of companies that are part of the credit card industry and how consumer spending is going to affect the industry in the future. Read more
Just How Much Does Size Matter?
March 28, 2009
Amidst this economic downturn, investors are consistently looking to invest in companies with the ability to “weather” the storm. A frequently mentioned characteristic of the companies deemed qualified to handle the current recession are size, in particular market cap. But how has size held up thus far in this market? The following is a snapshot of the largest stocks, by market cap, in each sector of the S&P 500. Included in this synopsis is their performance since the beginning of 2008, and the current state of each company’s operations. As a note, performance figures were calculated as of the market close on Monday March 23. Furthermore, for a relative perspective, the S&P 500 returned -39.58% in 2008. Read more
Friday’s Market Recap (03/27/09)
March 27, 2009
The market had a down day as investors sold out of equities to lock in the weeks gains, the Dow Jones closed down -1.87%. The NASDAQ was down -2.63%, while the S&P was down -2.03% to close at 815.94. Yields of the 10-year rose to 2.761% as prices fell. Both oil and gold contracts were down, settling at $52.38 and $925.30 respectively.
Early-Cycle Industrial Plays for a Turnaround
March 27, 2009
After a recent market rally to new short-term highs in the Dow Jones Industrial Average, investors should start shifting their strategy to position for future growth in the international economy. Clearly, if the recent rally has shown us anything, it is that investors still believe that there is a fundamental reason to hold equities despite horrendous conditions. As bad news continues to pour in, we should concentrate on re-positioning for an eventual global recovery. To do this, I turn your focus to some historically strong global conglomerates that are at attractive levels in a suppressed market. Read more
Thursday’s Market Recap (03/26/09)
March 26, 2009
The markets rallied today with the Dow up over 2% to close at 7924.56. The NASDAQ was up 58.06 to close at 1587.00 while the S&P was up 18.98 to close at 832.86. The price of the 10-year rose with yields ending the day at 2.746%. Oil contracts were up settling at $54.34 while gold contracts fell to settle at $942.20. Read more
Messing with the Markets
March 26, 2009
Jean-Claude Trichet, President of the European Central Bank, announced Monday that Europe does not intend to further spending in an effort to offset Europe’s continued fiscal deterioration. Instead, he proposed that governments will work on implementing the plans already announced. This comment stemmed from European concern following the U.S. announcement Sunday evening of further stimulus measures. Trichet’s comments seem enlightened, looking at the U.K.’s first failed auction in seven years as an example. A clear sign has been sent by the investment community that they understand the risks associated with leveraging up the central bank’s balance sheet. Read more
Wednesday’s Market Recap (03/25/09)
March 25, 2009
A turbulent day for the markets ended with a slight gain. The markets started out strong due to the release of strong economic data on housing and durable goods. The Dow and NASDAQ closed at 7749.81 and 1528.95 respectively. The S&P was up 0.96% to close at 813.88. Oil was down as news was released that US inventories were at a 16-year high. Oil settled at $52.77. Gold was up today settling at $938 as the dollar weakened. The 10-year price was down and yields settled at 2.786%
