That Was The Week That Was-3rd Week August

 

CNBC CALLED IT THE WORST DAY OF THE YEAR. For the S&P and DJIA. If you’re sitting on the sidelines looking for a massive slide to dip a toe back in you may want to wait for confirmation. The S&P 500 erased all gains for the year and is now in negative territory. All sectors finished Thursday negative. The cumulative volume was 7.9 billion shares, the most since August 12th. CNBC 8/20/2015

Tug of War Between the Bulls & Bears.

Jonathan Krinsky, on CNBC 8/18, said, ‘There hasn’t been a 5 percent pullback in the S&P 500 since last December.’ The last time this happened, a full year without a 5% decline, was 20-years ago in 1995, and there were only four times before that. In each of those years, the markets posted an average return of 30 percent. But Krinsky doesn’t see that happening this year. He said it would be extremely rare to get through the last four months of the year without a correction of at least 5 percent. He finished by saying he thought the S&P 500 end the year 2% higher than current levels. Source CNBC 8/18

 

The Petro War Continues. Oil Rises From 6-Year Lows, But Fall Expected to Resume. Data Showed Surprise Increase in U.S. Stockpiles. OPEC’s Production Has Climbed to a Multi-Year High in July. WSJ 8/20/2015

In previous blog: The Saudi’s are unrelenting in pumping oil to destroy the U.S. fracking industry. When prices fall U.S. producers cap the well and when prices rise begin pumping. The process continues.

Federal Reserve Minutes Offered No Clear Signal That it is getting ready to raise interest rates next month.  This dovish Fed minutes did little to calm investor nerves and a major selloff commenced on Thursday. The DJIA closed off 350 points.

 

 

JP Morgan’s Weekly Recap August 17: With full year 2015 EPS growth projected to be a meager 1%, we anticipate single digit returns for the S&P 500 this year, but anticipate a rebound in 2016 EPS growth as many of the macro headwinds have been dampening corporate profitability subside. A nice way of saying get used to a lousy year this but a better year next.

 

Robert C. Doll, CFA, Senior Portfolio Manager, Nuveen Asset Management: August 17, Investment Commentary:

• The devaluation of the Yuan roiled financial markets, but we do not believe it will trigger a currency war or widespread deflation.
• Global growth continues to decouple, with the U.S. economy looking healthier than other regions.
• We think investors should hold overweight positions in equities, with an emphasis on domestically-oriented companies.  

 

  DOLLAR VALUE VERSUS OTHER CURRENCIES The Chinese Yuan fell 4% versus the dollar a week past and pundits proclaimed the economic world ending. The fact that has been ignored by the press is that for the last year or so the dollar has been strong against the Euro, Yen, Australian dollar, Canadian dollar, Peso and other currencies only seemed to be a ‘ho-hum’ fact of life, and not the crisis that the Yuan plunge created. Multi-national domestic corporations have struggled during earning season with a strong domestic dollar and doing business in other parts of the world. So why the big deal with China? CNN provided a few ideas on the subject:

• Size Matters. China is big.It is the second largest economy and when something happens people and industry listen.
• Big domestic companies with big China exposure are worrisome.Once considered a positive big business doing business in China may spell trouble.
• China slowdown? No one really knows. ‘Smoke and Mirrors?’ Some even wonder if Chinese officials and regulators actually know what they’re doing.
• Trust is not something accepted by U.S. investors about China and Chinese companies.

Source CNN.com 8/14/2015 WHY CHINA SCARE INVESTORS.

 

Housing Stocks Recovery. Not just the housing stocks but allied stocks in construction materials, appliances and real estate brokers are being buoyed from a deep slumber. IBD reported that some investors are looking at home builders in the entry level home business as they expect millennial home buying to rise. Investors can also look to ancillary plays in wallboard, cement, insulation, and other home building materials. SOURCE IBD 8/20/2015

 

made me smile…

 

 

The Daily Signal, ‘Four Reasons Obama’s New Methane Emission Regulations Don’t Make Sense:

• Methane emissions are not harmful.
• Regulations target energy sector, which impacts all American families and businesses.
• The market is already driving emission reductions. ( The reason for the decline is that producers have an incentive to capture and sell methane.)
• It’s another component to a costly, ineffective climate agenda.

‘The U.S. could grind the economy to a halt and cut all emissions, and the averted global warming would still be less than two-tenths of a degree Celsius over the next 85 years.’ source Dailysignal.com 8/18

‘It’s years like this that dividends matter.’

WHISPERS SOROS BUYING COAL COMPANIES IN DIRECT CONFLICT WITH LIBERAL SOCIAL BELIEFS. FOX NEWS 8/19

 

 

 DOW WAS DOWN OVER 200 POINTS WEDNESDAY BEFORE RECOVEING OFF ITS LOWS AND CLOSING OFF 162 AND THE NAZ WAS DOWN 40. GOOGLE FINANCE.COM 8/19

WHY ? REPEAT AFTER ME:

CHINA, DOLLAR, OIL, CHINA, DOLLAR, OIL, CHINA, DOLLAR, OIL…. AND THE FED…and the Fed and the Fed…Tra…la..la.. 

• The Global Market Tug of War Means More Volatility for Investors.
• Deflationary worries from slowing emerging markets economies, and dropping commodity prices.
• The decent growth in developed countries like the U.S. & the U.K. are leaning toward increasing rates for the first time since the Great Recession.
• Investment grade bonds are suffering because of a trend toward corporate releveraging. 
• High yield bonds have fallen sharply, but much of that is in the energy, metals and mining sectors.
• Investors are demanding a higher premium for uncertainty and the result will be greater volatility.  SOURCE WSJ. MARKETS/HEARD ON THE STREET/ WSJ PRO/8/20/2015

 

 

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