The Markets U.S. stock markets finished last week higher than they started it, but the five-day ride was awfully bumpy. Concerns about China’s slowing growth, shifting currency valuations, and falling stock markets, coupled with uncertainty about the Federal Reserve’s next monetary policy move, contributed to malaise in world markets early last week. After falling by about 6 percent the previous week, U.S. stocks spiraled even lower early last week. They flirted with correction status (a correction is a 10 percent drop from previous highs) before moving higher. By midweek, markets were on the rebound, bolstered in part by the comments
The Markets Correction! The Dow Jones Industrial Average lost about 6 percent last week. That puts the benchmark index about 10 percent below its record high on May 19, 2015, according to Barron’s. A drop of that magnitude from a new high may be a correction – a brief but jarring drop in value that often causes investors to reassess the state of the market and the health of the companies they hold. If investors judge markets and holdings to be sound, a correction may represent a buying opportunity. Of course, there is a chance markets could fall further. A
The Markets Stock markets in the United States got off to a good start last week, heading higher before stumbling over China’s currency news. China, which has one of the world’s largest and fastest growing economies, is experiencing a slowdown in economic growth. The Economist reported data released last week showed, “…an 8 percent fall in Chinese exports in July and a 5.4 percent drop in factory-gate prices. Output prices have fallen for 41 straight months, a symptom of overcapacity in much of China’s heavy industry.” MarketWatch suggested China may be in (or on the verge of) recession. In an
Most people consider a bull market to generally take place when the market goes up, and a bear market when the market goes down. Most people don’t know what constitutes a bull or a bear market. That should not be a surprise. The stuff they call financial news is mostly junk to be able to fill a 24 hour news cycle. I don’t remember having any courses in school to give some education on the matter. Shoot, if you go online you will see that my industry does not even agree on a single definition. But it is important for
When it rains it pours, as the saying goes. If you’ve been following the financial news this summer, it probably seems like a torrential storm has been churning all around the world. Every week, people ask me about the headlines they hear on TV. “What’s going on with China?” they want to know. “Is the Greece situation over?” “Why do I keep hearing more about Puerto Rico?” “What about Canada?” You may have already seen my thoughts on some of these issues, but for the sake of convenience, I thought you might enjoy a quick round-up about what’s happening in
The Markets Back to school…back to higher interest rates? After a solid July jobs report arrived on Friday – 215,000 new jobs were created and unemployment remained at 5.3 percent – analysts were pretty confident there would be ample support for a Federal Reserve rate increase (a.k.a. liftoff) in September. Bloomberg reported the odds of a September liftoff shot from 38 percent to 52 percent just last week. The pending rate increase was not a surprise, but investors were ruffled and U.S. stock markets moved lower. According to Barron’s, the Dow Jones Industrial Index has lost value for seven days
I find that many of those who I seen in my office for the first time have a great deal of concern about being invested in the equity markets. That stands to reason. Many of them experience seeing the equity portion of their account cut in half during the Great Recession and the subsequent collapse of all three major market indicators. Should these people worry? You bet if they don’t have a plan to deal with the next major downturn. In case you have forgotten, the market peaked on October 9, 2007 and declined for 17 months until the bleeding
The Markets The market is flat. That’s right. It’s a rare occurrence – something that has happened just 12 times since 1926, according to Fortune – but the Standard & Poor’s 500 Index (S&P 500) has remained in a narrow trading range for seven months. For every sector that has delivered performance gains (for instance, healthcare, software, and consumer discretionary), there has been one with losses that have offset those gains (for instance, energy, materials, and industrials). The S&P 500’s unremarkable gains year-to-date are owed to just a handful of stocks, which Barron’s said means the market has bad breadth.