Stock Market Today, Jan. 22: U.S. stocks today are mixed and trading in a fairly narrow range as corporate earnings season continues - with lackluster results. Investors are cautious ahead of economic data tomorrow that includes jobless claims and existing home sales reports.
- Stock Market Today: This Stock Wins With or Without QE3
- Stock Market Today: U.S. Credit Rating At Risk Again
- A Flash Crash, Fat Fingers, and Positioning for a Correction
Stock Market News Today, Jan. 17: The Dow is up but the S&P 500 and Nasdaq down in afternoon trading, and here's why...
Housing market data today revealed that new home construction fell 9.8% in December to a seasonally adjusted rate of 999,000. The numbers were weighed by starts for single-family homes and apartments, the U.S. Commerce Department reported.
Stock Market Today, Jan. 6, 2014: U.S. stocks, including all three major indices, closed in the red today as growth in the service industries was weaker than expected, adding to the heavy start to 2014 trading.
U.S. services sector shrank last month, with an index of 53.0, down from 53.9 in November and below expectations for 54.8. But, in a more positive economic indicator, factory orders rose 1.8% in November from a year prior, the U.S. Commerce Department reported.
In response, the Dow Jones Industrial Average today closed down 0.27% at 16,425, while the Standard & Poor's 500 was down 0.24% at 1,827 and the Nasdaq Composite Index is off 0.36% at 4,118.
In addition to today's economics reports, retail stocks are likely also weighed by the headline-grabbing cold weather, which investors expect to hurt January's retail sales.
Stock Market News Today, Jan. 2, 2014: U.S. stocks are kicking off the New Year on a heavy note in today's trading, with the Dow shedding more than 100 points as investors absorb fairly positive reports on jobless claims and U.S. manufacturing.
Initial jobless claims fell 2,000 to 339,000 last week, which is close to analyst expectations of a small increase for that week.
Stock Market News Today, Dec. 12: U.S. stocks are weighed today after having started the day higher on upbeat retail sales data. They retreated on more concerns that the U.S. Federal Reserve will scale back its $85-billion-per-month bond-buying stimulus program.
The S&P 500 today fell 0.38%, or 6.72 points, at 1,775.50, and the Dow Jones Industrial Average lost 0.66%, or 104.03 points, at 15,739.50 points. The Nasdaq Composite Index fell 0.14%, or 5.41 points, at 3,998.40.
The housing market is bracing for another shock. Thousands of borrowers who took out home equity loans during the bubble years are now getting alarming news - their monthly payment will soon triple. And as more bubble-era home equity loans reach their 10th birthday, more homeowners will be affected.
No bull market goes on forever. And with the stock markets hitting record highs recently, the possibility of some kind of correction grows larger every day. But we've found seven charts that show why the next big move down could be more than just a run-of-the-mill correction. By the time you see the last chart, you'll realize why you should start mapping out a defensive strategy now...
Stock Market News Today, Nov. 21: U.S. stocks are continuing to rally today as the 30-year fixed mortgage rate dropped to 4.22% this week from 4.35% last week, and despite the fact that data showed manufacturing activity slowed this month.
The Philadelphia Fed's manufacturing index for October was 6.5 last month, down from 19.8 in October and below economists' expectations for 14.5. That data indicates slowing, but still positive general manufacturing activity.
Stock market news today, Nov. 18: The Dow ended up today but fell short of 16,000 after bearish comments from Carl Icahn.
The Dow Jones Industrial Average closed up 0.1% to 15,976 points, hitting a high of 16,030 earlier in the day. The S&P 500 closed down about 0.4% at 1,791 points, and the Nasdaq Composite Index closed down 1% at 3,949.
It was the first back-to-back bruising since June 18th and 19th, when Fed “comments” drove the Dow 560 points into the ground. But you can’t blame the Fed for the latest pair of triple-digit routs. Not directly, anyway. Here’s what triggered all the action…
A recent article by Paul B. Farrell of MarketWatch said that there is a 98% risk of a stock market crash before the end of 2014.
He said in the article "bubbles are everywhere. . .ready to blow."
That's quite a statement. One key reason Farrell expects a crash? Federal Reserve policies.
He believes that the three major bubbles that have blown up in the past two decades were caused in large part by the Fed's loose monetary policies.
The three bubbles are: the Asian financial bubble that resulted in the Asian Financial Crisis of 1997, the Dot-Com bubble of the late '90s and early '00s, and the credit/housing bubble that resulted in the 2008 financial crisis.
For readers unfamiliar with the term bubble, it simply means a financial asset whose price has been driven far beyond any rational analysis of its true worth. And although they look like they will rise forever, since there is little substantial basis for the valuation, these asset prices will eventually pop just like a soap bubble.
The pop results in a substantial drop in price - in other words, a crash.
Farrell quotes SocGen's global strategist Kit Juckes as saying all these bubbles were "fueled by the Fed keeping policy rates below the nominal growth rate of the economy far too long." Juckes went on to call current conditions the "bubble with no name."
He may be on to something. Even members of the Federal Reserve are worried.
In the mid-May meeting of the Fed's Advisory Council, some members expressed "strong concerns" over the Fed's low interest rate policies and its bond purchase program, which some members said could result in an "unsustainable bubble" in the stock and bond markets.
Thus, we've had the talk in recent weeks about 'tapering' the Fed's purchases of bonds.
Here are just a few of the headlines from the past week:
- "Hindenburg Omen is Just Hot Air"
- "Why 'Hindenburg Omen' Is Just a Superstition"
- "Hindenburg Omen is idiotic, and if you believe in it, you should lose your right to own stocks-or anything"
"Let's not mince words on this subject: This is an example of the worst kind of 'technical analysis' - a market signal essentially designated for media sound bites," Adam Grimes, chief investment officer at Waverly Advisors., told The Wall Street Journal. "The markets may well decline from this point, but they will not do so because of some cleverly named signal. The Hindenburg Omen, we have to say, is mostly hot air."
Nonbelievers in the Hindenburg Omen say it correctly predicts a stock market crash only 25% of the time, and point out the last time it appeared, in 2010, the markets just kept on rising.
"In 2010 the accuracy of the 'Hindenburg Omen' indicator went up in flames and the current situation suggests the same result in 2013," huffed Daryl Guppy on the CNBC Web site.
Yet an appearance by the Hindenburg Omen has preceded every stock market crash but one since 1985, and if you look closely at the numbers this indicator's track record is remarkably accurate.
Maybe the doubters don't know as much as they think they do.
"They call it bogus because they don't understand it," said Money Morning Chief Investment Strategist Keith Fitz-Gerald, who called the Hindenburg Omen one of his favorite indicators.
It's called buying on margin, and it's soaring as the market continues its tear and speculative investors seek a piece of the action. As your stocks appreciate you can borrow even more. A market rally lets you expand your portfolio by piling on more debt.
But it's potentially dangerous and could portend a stock market crash.
As the accompanying chart shows, historically there has been a direct link between a surge in margin loans and corresponding stock market peaks - followed by sharp declines in the markets.
So it's no small matter of concern that the Financial Industry Regulatory Authority reports the amount owed on loans secured by investments climbed to a record high $384 billion at the end of April.
That topped the previous high - $381 billion in 2007, not coincidentally, just before the financial meltdown and the Great Recession.
As a percentage of the economy, the latest margin borrowing totaled 2.71% of gross domestic product.
By comparison, margin borrowing hit 2.73% of GDP in July 2007, during the housing bubble, and 2.81% in March 2000 during the tech bubble, which was followed by a stock market crash.
We buy insurance on our houses, our cars and even on our artwork and jewelry.
But that's not the case with our retirement savings - the money we spend our working lifetimes to amass - the money that will be our sole means of support once we stop working.
With our 401(k)s, IRAs and other socked-away savings, we're content to "let it ride."
That's a reckless and ulcer-inducing investing strategy.
And, as we'll show you in a minute, it's even riskier than most of us realize.
The thing is, it doesn't have to be that way.
- QE3 a 99% certainty?... Not quite- When the Federal Open Market Committee makes its statement at 12:30 p.m. EDT every investor will be waiting to hear if QE3 has finally arrived. After what seems like two years of speculation since QE2 was announced will we finally get QE3? According to Citigroup Inc. (NYSE: C) a gauge of indicators of market expectations for additional central bank stimulus rose to a record 99% in August. Yet many economists do not expect QE3 to be announced today for many reasons. If the Fed takes action it will be viewed as highly political coming just months before Election 2012. Even if the Fed announces QE3 but says it will delay QE3 purchases until after the election as it did with QE2, the political implications will still be there. Other reasons are the lack of progress the previous rounds of QE have had in turning around the economy - and not just the stock market. "The Fed continues to want the economy to grow faster and specifically, to grow more jobs, but the ability of QE to do that is extraordinarily limited," Catherine Mann, a finance professor at Brandeis and former Federal Reserve economist told CNN. "We know that QE reduced interest rates, but we also know that has not led to more construction, more mortgages, more business investment, or more lending. Since it hasn't done any of that, it probably hasn't created jobs either."
- Producer prices rise most in three years- Wholesale prices, measured by the producer price index, climbed 1.7% in August - the most since June 2009 - due to higher gasoline and natural gas prices. This was a faster increase than the 0.3% reported in July and ahead of the median forecast for a gain of 1.3%. Food prices rose 0.9% due to a rise in dairy and egg prices. The core producer price index which excludes food and energy rose 0.2%, which was in line with expectations. Tomorrow's consumer price index will be a good indicator if higher wholesale prices have translated into increased consumer prices.