Are interest rate hawks pushing policy at the Federal Reserve?
Thursday’s Federal Reserve decision to raise the discount rate, the interest rate banks pay to borrow from the Fed, may not be the “no big thing” that chairman Ben Bernanke and the financial markets (so far) say it is. The minutes of the January 14 meeting of the...Is today's good news on home prices only a false dawn?
So how stable is this stability in home prices? That’s the question raised by the good news on home prices from today’s (February 23) release of the most recent S&P/Case-Shiller index of home prices. On a seasonally adjusted basis the index climbed 0.3% in...Is it a bull? Is it a bear? A strategy for making the best of a market that's both
So this is a cyclical bull market rally of potentially up to three to four years’ duration inside a secular bear market steady decline of potentially 10 to 20 years? That’s what I argued in my post of February 19...Was Lowe's earnings report good or bad news for the economy?
So when does beating low expectations stop counting as good news? It’s an important question for the stock market and for the economy as a whole. After easy to beat earnings comparisons in the first and second quarters, stocks face a bigger challenge in the third and...Markets decide Fed's discount rate increase is no big thing
The financial markets have bought it. The Federal Reserve’s move to increase the discount rate, the interest rate it charges banks to borrow money overnight, by 0.25 percentage points to 0.75% is part of “normalization” after the financial crisis and not a sign that...Wal-Mart's U.S. sales drop another sign that the economy is turning–and a signal to put Wal-Mart on my watch list
Sun fails to come up. Water no longer wet. Wal-Mart (WMT) sales dropped at its U.S. stores for the quarter ended on January 31 2010. Wal-Mart comparable sales dropped? That’s the first time ever. Ever. Time to add this company to my watch list for a buy sometime...Why even after a 70% gain this is still a secular bear market
This is still a bear market Even though stocks, measured by the Standard & Poor’s 500 Stock Index, were up 70% from their March 9, 2009 low to their recent high on January 19, 2010. Yep. Yes indeed. Absolutely. If by bear market you’re talking about what’s called...The Fed expects strong economic growth too
I guess that counts as a fat reed. Yesterday at 4:30 p.m. ET—just a minute after I posted my piece on thin reeds that argued that the U.S. economy was growing more strongly than many investors expected...My thin reeds say the first half of 2010 will be surprisingly strong in the U.S.
Thin reeds. You wouldn’t want to count on a single one to support much weight but bind enough of them together and you can sail across the Atlantic—or find a profitable investing trend before it’s visible in the official numbers. Sometimes the reeds all point in...Europe's politicians fiddle while the Euro burns
So much for the Euro rally. After rallying against the U.S. dollar on February 16, today (February 18) the Euro is back to its old ways. As of noon in London the dollar had gained 0.4% against the Euro, sending that currency to its lowest level since May 2009....So is the correction over already?
So that’s all ya got? If the much feared correction is over, then investors are still waiting for the kind of 10% correction that normally punctuates a rally. From the January 19 peak close at 1150.23 to what is so far the bottom at 1056.74 at the close on February 8,...China sells short-term Treasuries but buys long-term U.S. bonds
China sold U.S. Treasuries in December. At a record pace. (Well, records for this do only go back to 2000 but still…) The country sold a net $34.2 billion in Treasuries in the month. That brought China’s holdings of Treasuries to a mere $755.4 billion. That’s down...Euro rally a one day wonder? (Maybe three?)
Today’s rally in oil and other commodities that pushed the entire stock market higher was built on a weak dollar and a stronger Euro. Right now this looks like just a euro bounce. A one (or at most a few days) wonder. The Euro is still well below its 200-day moving...How to worry–and when–in 2010
This is my fourth take on how to worry in less than six months. I wrote the first one in October when the Dow Jones Industrial Average had poked its head above 10,000 for the first time in a year (and the Standard & Poor’s 500 Stock Index was just about to kiss...The bet is that the Euro is headed even lower
Nobody is taking off their bets against the Euro quite yet. Short positions against the Euro on the Chicago Mercantile Exchange, which had set a record in January, set a new record in the three weeks that ended on February 9. And judging from the continued pressure on...Jubak's Picks up 3.9% for Q4 and 21.3% for 2009
The Jubak’s Picks, my 12-18 month portfolio, returned 3.9% in the fourth quarter of 2009. That trailed the major indexes. For the quarter the Dow Jones Industrial average climbed 7.4%, the Standard & Poor’s 500 was up 5.5%, and the NASDAQ Composite was up 6.9%....Insure your neighbor's house and then burn it down–derivatives played a role in creating the Greek crisis
Credit default swaps are not insurance. The most common way to describe these derivatives is to say that they’re a way to insure bonds and other financial instruments against default. I’ve used that explanation myself over and over again. But as James Rickards...When elephants fly–dividends from emerging market stocks
When emerging stock markets hand you lemons, make lemonade. Specifically dividend-paying lemonade. So far 2010 hasn’t exactly been kind to emerging market stocks. The ETF (exchange traded fund) that tracks the iShares MSCI Emerging Markets Index (EEM) was down 6.4%...Lower than expected inflation in China puts off currency, interest rate changes
Consumer prices in China rose for the third month in a row in January. But the 1.5% year-over-year increase was less than the 2.1% increase economists had expected. That has led stocks in China to rally for a third day on speculation that lower-than-expected...Never mind: actually unemployment wasn't on the rise last week
Remember last week when everybody was in a dither about an unexpected increase in the number of workers filing an initial claim for unemployment? Suddenly the economic recovery in the United States looked in doubt. Well, never mind. Today’s initial claims number, for...China's imports surge 86% in January
No signs that China’s economy is slowing down in these numbers. China’s imports jumped a record 86% in January from the same month in 2009. This increase, the third straight monthly climb, far outstripped a 21% increase in exports. The growth in exports, however, was...And now for something NOT about the euro: Good news for U.S. growth in today's inventory numbers
And now for a break from the euro and today’s “They will bail out Greece/They won’t bail out Greece” rumor fest. Real news on the U.S. economy and it’s very good news indeed. Inventories at U.S. wholesalers dropped in December, according to data released this morning...Just a euro bounce on rumors?
Why are European (and global) stock markets and the euro rallying today on vague rumors that there’s a plan to bailout Greece when yesterday similarly vague official statements couldn’t stem the tide? Could it be because today the markets believe what they discounted...Honey, we bankrupted the kids!
Worried that the global financial crisis combined with the Great Recession in the United States has bankrupted not just ourselves but our kids and their kids? Good. You should be worried. Maybe then we’ll do something about the problem before it’s too late. First,...Forget the January effect–this year watch the Lunar New Year effect
When thinking about when to buy Chinese stocks, don’t forget the Lunar New Year effect. China’s New Year holiday stretches from February 13 to February 21 this year. And Shanghai and other Chinese stock markets will be closed for five days from Monday February 15...The euro crisis isn't a global crisis–yet
One crisis or two? How you answer that question goes a long way to determining your investment strategy right now. If the euro crisis and the bank lending crisis in China are all part of the same crisis, you should stay out of all equity markets until the world works...Reassuring talk isn't ending the euro crisis
Talk is cheap. And not terribly effective, even when it’s coming out of the mouths of Europe’s financial leaders, in ending a financial crisis like the one that continues to engulf Europe this morning (February 8). The current phase of the crisis started in Greece,...How to build a global portfolio: What countries do you want to own?
If you were building a global stock portfolio for the long run—let’s say 2020 and beyond—how would you weight the world’s stock markets? Personally, over that time period I’d pick India over China, Poland over India, and Brazil over them all. And I’d give U.S. stocks...The economic recovery is on track in spite of today's disappointing initial claims number
Take a deep breath, guys. With all the hyperventilating about today’s (February 4) disappointing initial claims for unemployment numbers you’d think that everyone has forgotten that unemployment is a lagging indicator. Unemployment numbers will be one of the last...Jim’s Daily Email Alerts:
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