Archive for category Fund Markets
Bounce Or New Beginning?
Posted by Tetyana Matychak in Fund Markets on August 31st, 2010
Although it was one of the last summer Friday’s, trading was surprisingly volatile. Despite the fact that most traders were likely working on their short game or vacationing with the family, there was a serious dose of data input to the game on Friday ranging from economic results, corporate guidance, and of course, some very important Fedspeak. The end result was an impressive move up in the indices, which may or may not represent a new beginning for the bull camp.
While the bears could be heard making remarks about short-covering and discussing the height to which a dead cat could actually bounce, the bulls talked about a second successful test of 1040 and a move “into the gap” that was created by Tuesday’s opening dive lower. And while no one knows for sure how much farther the bulls can run, it does appear that our heroes in horns were able to wrestle the ball away from their opponents on Friday.
There were three key inputs to the session. First, we had the first revision to the second quarter GDP in the U.S. While down significantly from the initial estimate made earlier in the month (remember, the government’s first estimate didn’t even include all the data from the final month of the quarter), the growth rate of 1.6% was actually better than the consensus for a rate of 1.3% and the whisper numbers containing a zero-handle. The takeaway from the report was that although the growth has indeed slowed, the economy does continue to grow. And in short, this is what “slowdowns” look and feel like.
The next bit of data was less upbeat as Intel (INTC) revised its revenue guidance for the third quarter – and not in a good way. Although analysts following the chipmaker suggested that the move wasn’t exactly a surprise, the computers that look for key words were able to put “Intel” and “reduced guidance” together in order to create a swift downdraft. It is also interesting to note that the Intel news was released within a couple minutes of the University of Michigan’s Confidence index, which, while not a bad report by any stretch, also came in “below consensus.” As such, the computers clearly got busy for a period of about 10 minutes Friday morning. Read the rest of this entry »
U.S. stock futures rise ahead of Bernanke testimony
Posted by Tetyana Matychak in Fund Markets on July 21st, 2010
U.S. stock futures rose on Wednesday, buoyed by Apple’s stronger-than-expected results, as investors braced for testimony by Federal Reserve Chairman Ben Bernanke and another barrage of earnings reports.
Nasdaq 100 futures gained 11.75 points to 1,851.50 and S&P 500 futures added 4.40 points to 1,084.50. Futures on the Dow Jones Industrial Average rose 31 points to 10,210. The Dow (DJIA 10,230, +75.53, +0.74%) ended up 0.7% on Tuesday, reversing intraday triple-digit
losses.
Sentiment was buoyed after Apple (AAPL 251.89, +6.31, +2.57%) reported last night a surge in earnings due to booming demand for its iPhone and iPad devices.
Strategists at Deutsche Bank said the spotlight Wednesday will be on Bernanke’s monetary policy report to the U.S. Senate Banking Committee.
“Expectations that Bernanke may announce policy accommodation measures seemed to help risk assets recover from the softer housing-starts data and Goldman Sachs’ earnings and revenue miss,” they wrote in a note. Markets will “likely listen carefully to decipher any hints about the possibility of a U.S. double-dip [recession].”
Bernanke will start speaking at 2 p.m. Eastern time, but before that investors will get a number of earnings reports from companies, including Morgan Stanley (MS 25.22, +0.44, +1.78%) , Wells Fargo & Co. (WFC 25.91, -0.11, -0.42%) and Freeport McMoRan Copper & Gold Inc. (FCX 64.32, +3.46, +5.69%) . Read the rest of this entry »
Stocks May Surprise By Year-End
Posted by Tetyana Matychak in Favourites, Fund Markets on July 5th, 2010
Economic news has been weak lately. Financial markets have performed poorly for over two months. Dow Theory “sell signals” have been issued. You may have heard a “death cross” is on the way. It is nearly impossible to find a bull among the growing sloth of bears. We are concerned about both the fundamentals and the technicals. However, in the context of history the current situation is not all that unusual.
On the economic front, the Wall Street Journal helps put recent weak economic numbers in some perspective. Stocks did quite well from late 2002 to late 2007. They also did well from 1992 to 1994.
Pauses aren’t uncommon early in a recovery. After rebounding from recession in late 2001 and early 2002, the economy had a 12-month stretch in which it grew at a paltry 1.5% annual rate, sparking fears of a double-dip recession. In late 1991, growth waned after a recovery had started. In the past 12 months, the economy has gotten off to a faster start than in 2002.
From CNBC: Former Federal Reserve Chairman Alan Greenspan said that the recent stock market decline is “typical” of a recovery, and that international instability has more to do with the recent decline than problems in the United States. “What we’re looking at is an invisible wall, which we’ve run into here. Which, essentially, as far as I can see, is a typical pause that occurs in an economic recovery,” Greenspan said in an interview with CNBC. “Ordinarily we’re saying that the stock market is driven by economic events, I think it’s more in the reverse.” Read the rest of this entry »
Stock futures fall after euro hits new 4-year low
Posted by Tetyana Matychak in Fund Markets on June 1st, 2010
Stock futures tumbled Tuesday after the euro fell to a new four-year low. Major U.S. indexes are set to resume their slide due to fresh concerns about the health of Europe’s economic recovery. Stocks fell late Friday ahead of the long holiday weekend after Fitch Ratings cut its view on Spain’s debt.
A slowdown in manufacturing in China also worried investors. U.S. traders will get a reading on the domestic manufacturing sector after the market opens.
The Dow Jones industrial average fell 122 points Friday. Dow futures are down another 120 points early Monday.
The euro fell as low as $1.2112 before easing off that low to $1.2155. Markets worldwide have been tracking the euro, the currency used by 16 countries in Europe. The euro has been seen as an indication for confidence in whether countries like Greece, Spain and Portugal will be able to cut spending to contain mounting debt without stalling a recovery.
Investors in recent weeks have used any signs of weakening around the world to sell stocks and move into safe-haven investments like the dollar and U.S. Treasurys. Read the rest of this entry »
Whistle-Blowers Become Investment Option for Hedge Funds
Posted by Tetyana Matychak in Fund Markets on May 21st, 2010
Hedge funds have found a new market to invest in: whistle-blowers.
Informants who turn in tax cheats have to wait years to get their share of any reward from the I.R.S.’s recently expanded whistle-blower program. So hedge funds, private equity groups and other big investors are offering an alternative. They are essentially agreeing to buy a percentage of those future payouts in exchange for a smaller amount upfront to the whistle-blowers.
The surging size of the potential awards is driving all the interest. Three years ago, the I.R.S. began offering bigger rewards — 15 percent to 30 percent of whatever money the government recovered — in a move that has turbocharged the agency’s whistle-blower program.
Where it once handled only a trickle of tips, often involving relatively small amounts of unpaid taxes, I.R.S. offices now receive a torrent of big money claims. Accountants and company employees have taken to trooping in bearing computer records and boxes of documents to back up their claims of underpayment by big companies.
In what is believed to be the first of these structured tax payouts, an I.R.S. informant who reported that an overseas multinational corporation had underpaid its taxes by billions of dollars received $4 million last month from a private equity firm. In exchange, the firm will receive a portion of the award the informant expects to collect eventually. Read the rest of this entry »
Euro-zone troubles may keep stocks on edge
Posted by Tetyana Matychak in Fund Markets on May 17th, 2010
Stocks could face more volatility this week as growing doubts about whether Europe can solve its deepening debt crisis are likely to take center stage again.
A $1 trillion rescue package unveiled at the week’s start gave only temporary relief to investors, who are increasingly worried about the impact of the crisis on the global recovery and the euro.
Wall Street also will be anxious to see the results from retailers next week, and will pay special attention to their forecasts for the rest of the year. Wal-Mart Stores (WMT.N) and Lowe’s Co (LOW.N) are among companies expected to report.
Below-par results on Friday from retailers, including Nordstrom (JWN.N) and J.C. Penney Co Inc (JCP.N), cast some doubt on the consumer’s health.
The week also brings government data on inflation, which is expected to remain tame, and on housing, a sector still struggling to recover from the country’s worst economic downturn since the 1930s.
The three major U.S. stock indexes ended Friday’s session with losses ranging from 1.5 percent to 2 percent amid worries over Europe’s debt problems. The CBOE Volatility Index .VIX or VIX, which is Wall Street’s fear gauge, jumped 17.1 percent. Commodity prices also dropped sharply, with oil sliding to a three-month low below $72 per barrel. The euro fell to an 18-month low against the dollar. Read the rest of this entry »
Mutual Funds: 10 questions to test your IQ
Posted by Tetyana Matychak in Favourites, Fund Markets, Investing on May 14th, 2010
Mutual funds are a cornerstone of retirement planning. Yet they’re widely misunderstood and investing ignorance can really cost you. Do you know the difference between an expense ratio and a turnover ratio? What about an open-end fund versus a closed-end? Try this quiz, and check out the answers at bottom:
1. What percentage of households own mutual funds?
(a) 10 percent; (b) 27 percent; (c) 43 percent
2. When was the key law governing mutual fund operations adopted?
(a) 1929; (b) 1933; (c) 1934; (d) 1940
3. How many mutual funds are there in the U.S.?
(a) Nearly 1,000; (b) Nearly 4,000; (c) Nearly 8,000 Read the rest of this entry »
GLOBAL MARKETS: European Stocks Edge Higher
Posted by Tetyana Matychak in Fund Markets on April 29th, 2010
European stocks edged higher early Thursday, with investors finding some comfort in the U.S. Federal Reserve’s easy-money stance amid better-than-expected corporate earnings. However, overall sentiment remains one of caution given the euro-zone’s ongoing sovereign debt crisis saga.
The two-way pull between still decent macro and corporate news flow and the apparently deepening black hole of debt dug by the peripheral euro-zone economies will continue a while longer, said Ian Williams, strategist at Altium Securities.
By 0735 GMT, the Stoxx Europe 600 index was 0.3% lower at 259.94. London’s FTSE 100 index was up 0.2% at 5598.99, Frankfurt’s DAX. Read the rest of this entry »
Stocks pull back on Europe’s deepening debt woes
Posted by Tetyana Matychak in Fund Markets on April 28th, 2010
U.S. stocks followed European markets sharply lower Tuesday after Standard & Poor’s downgraded the debt of Portugal and Greece. The rating agency’s move intensified investors’ fears that Europe’s debt problems are spreading.
The Dow Jones industrial average fell nearly 130 points. All the major market indexes were down more than 1 percent.
The ratings downgrades sent the dollar up more than 1.1 percent against the euro, hitting its highest level in about a year. At the same time, gold and U.S. Treasury bond prices also rose as investors sought perceived safe-haven investments. The three often do not trade in the same direction.
“It was a knee-jerk reaction,” said Brian Peardon, a wealth adviser at Harrison Financial Group in Citrus Heights, Calif. Peardon said the small size of Greece and Portugal’s economies mean their debt struggles are not yet a major problem. But if they were to default on their debt, other countries that hold their bonds would also suffer.
Debt-strapped countries might also find it harder to spend more to stimulate their economies and help feed the global economic recovery. Read the rest of this entry »
European Stocks Gain Ground
Posted by Tetyana Matychak in Fund Markets on April 20th, 2010
European stocks traded higher Tuesday, following Monday’s rally on Wall Street, helped by upbeat earnings from Citigroup and news that the Securities and Exchange Commission voted 3-2 in favor of filing civil fraud charges against Goldman Sachs.
The U.K. FTSE 100 index was 0.6% higher at 5760.41, Germany’s DAX rose 0.7% to 6202.92 and France’s CAC-40 index gained 0.6% to 3992.72.
“Last week’s SEC ruling against Goldman Sachs had certainly been weighing on the banks and, in turn, pressuring the major indices, but traders are now looking forward to Goldman’s earnings, which are due for release later today, and some solid numbers here have the potential to help extend the rally once again,” said Ben Potter, research analyst at IG Markets.
On Monday, U.S. stocks edged higher, recovering some of the Friday decline caused partly by the SEC’s civil fraud charges against Goldman Sachs, as strong earnings from Citigroup and analysts’ positive comments on DuPont and McDonald’s encouraged investors.
News that the U.S. Conference Board’s index of leading economic indicators posted a large gain in March also helped, and the Dow Jones Industrial Average rose 0.7% to 11,092.1. The Nasdaq Composite slipped 0.1% to 2480.1, but the Standard & Poor’s 500 index climbed 0.5% to 1197.6. Read the rest of this entry »
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Consumer Spending in U.S. Rises More Than Forecast
30 August 2010
Monetary Policy Gets No Respect
19 July 2010Stocks May Surprise By Year-End
5 July 2010
Is A Global Reserve Currency A Necessity?
28 June 2010
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