May 24, 2013
Stocks Close in the Red For the Week on Fears of Fed Exit
 By Friday’s close, Wall Street showed itself unable to muster the enthusiasm necessary to recover from the Federal Reserve’s hints this week that Quantitative Easing may be pulled back sooner than expected. Stocks ended mostly on slight losses, making for the first losing week in over a month, even though Friday brought with it positive economic data in the form of an increase in durable goods orders in the month of April. The commerce department cited a 3.3 percent gain for last month, more than doubling on analysts’ expectations of a 1.4 percent increase. While orders increased more or less across all categories, the biggest jumps were taken by cars, airplanes, and military goods. While the Federal Reserve continues to maintain that any cut-backs in its fiscal stimulus program are dependent upon specific improvements in the economy, it seemed this (more)…
Is Stock Performance Always the Most Accurate Way to Judge a CEO’s Leadership?
 Income statements turn the focus almost entirely towards revenue and profit, and whether or not these have increased, even though on their own these metrics do not always provide the most accurate means of assessing a company’s performance. When a stock does not perform well, often the first person or persons to be blamed are a company’s CEO and its executive management. Each industry undergoes circumstances that will always be beyond the leadership of any single executive, or group or executives, however. Consider tech, and especially those companies involved with computer hardware, who have seen the very basis of their business undermined in a relatively short period of time with the exponentially increasing popularity of mobile devices and cloud computing. CEOs are often brought in to companies to turn around a bad situation, a process that can often take years. (more)…
As Sam Sees It: Investors Building Up an Appetite for Risk After Recent Run
 Each week, we tap the insight of Sam Stovall, Chief Equity Strategist for S&P Capital IQ, for his perspective on the current market. EQ: The market is currently experiencing a rotation as the appetite for risk is returning for investors. One of the ways we’re noticing that is the acceptance of more volatile stocks as evidenced by S&P’s High Beta and Low Volatility indices. What have you noticed there? Stovall: We know how well the Low Volatility group did in the first quarter. Including dividends, it was up 13.2 percent versus 9.2 percent for High Beta index. Yet, for the first 17 days of May, the High Beta group was up 9 percent while the Low Volatility group was up only 1.3 percent. So there was a definite rotation into the higher beta stocks, and I think that was primarily (more)…
May 23, 2013
Stocks Rally To Slight Losses After Rollercoaster Day
 Wall Street began Thursday at a deficit after the Japanese Nikkei Stock Average tanked more than 7 percent overnight, before rebounding off of positive housing data that was released later on in the morning. The Nikkei was hit with its worst loss in over two years as bond yields jumped and the yen was up, prompting a frantic sell-off on Japanese markets. The resulting unease was compounded by weaker than expected Chinese manufacturing data, as well as Wednesday’s release of the minutes of the latest FOMC meeting that contained the most substantial discussion to date regarding the timing of the inevitable drawdown of the Federal Reserve’s asset and bond purchases. The Commerce Department saved the day somewhat when it said that sales of new homes in the U.S. were up for the month of April, to a seasonally adjusted annual (more)…
May 22, 2013
Stocks Tumble After Bernanke’s Comments, FOMC Minutes Catch Wall Street Off-Guard
 After the Presidents of two regional Federal Reserve banks reassured markets on Tuesday that the Fed would hold steady to its massive bond and asset purchasing program pending substantial improvements to the economy, Federal Reserve Chairman Ben Bernanke on Wednesday cattle-prodded investors with an apparent about-face. Stocks were up on comments made yesterday by St. Louis and New York Fed Reserve Presidents James Bullard and William Dudley, who in separate public appearances maintained that the Fed’s current fiscal stimulus strategy would only be modified in accordance with improvements to specific areas of the economy such as jobs and inflation. Bernanke’s appearance before the Congressional Joint Economic Committee redirected all of that upward momentum almost instantaneously. The Chairman essentially reiterated what his colleagues had said the previous day, that too abrupt a drawdown to quantitative easing could singlehandedly put the brakes (more)…
May 21, 2013
Dow and S&P 500 Close On Record Highs as Federal Reserve Reiterates Monetary Policy
 Stocks rallied on Tuesday ahead of Ben Bernanke’s appearance before congress, along with the release of the minutes from the last FOMC meeting, as New York and St. Louis Federal Reserve presidents reassured markets about the Fed’s quantitative easing program. St. Louis Fed President James Bullard, who has been more openly skeptical than some of his colleagues regarding the Fed’s bond-buying program, spoke about monetary policy before an audience at the House of Finance at the Goethe University in Frankfurt, Germany, recommended that the central bank should stay on course with its purchases in accordance with the inflation and employment targets it has reiterated on numerous occasions. As Japan transitions wholeheartedly to a stimulus policy very similar to the one that has been adopted by the Fed, William Dudley, President of the Federal Reserve Bank of New York, appeared before (more)…
As Statute of Limitations Runs out, Pressure Mounts on Steve Cohen and the SAC
 The five-year old drama that has been unfurling between the Securities and Exchange Commission and US Attorney Preet Bharara on the one hand, and SAC Capital Advisors and its legendary founder Steve Cohen took a turn for the dramatic over the past week. Throughout 2013, the SAC story has become more or less of a major news item, at least in the investment and finance world, at a time that can otherwise be characterized as awash in excitement about the seemingly inexhaustible appetite of markets to climb higher and higher still. In March, the SEC managed to extract a $615 million penalty out of SAC Capital to settle claims of insider trading. For several years, the SEC has been picking away at the hedge fund, trying to peel off whoever it could with the help of whatever pressure it could bring (more)…
May 20, 2013
Wall Street Holds Taps the Breaks Ahead of Federal Reserve Activity
 Early on Monday, the Dow and S&P touched new intraday highs before paring back to slight losses ahead of Fed Chairman Ben Bernanke’s mid-week appearance before congress’s Joint Economic Committee, during which he will likely be asked some very direct questions regarding the status and the direction of the Fed’s current quantitative easing policy. Worries about what most see as the Fed’s inevitable drawdown of asset and bond purchases were rekindled last week, though investors were not worse off for it. Still, Wednesday will also see the release of the minutes of the latest Federal Open Market Committee meeting, and will be preceded by a number of talks given by voting members of the Fed’s board of directors. Over the last few weeks, statements emerging from the Fed have all seemed to more or less back the continuation of fiscal (more)…
May 17, 2013
Wall Street Ends Another Week On Big Gains
 On Friday, Wall Street awoke still smarting from the previous day’s losses, and promptly seized on the University of Michigan’s consumer confidence survey to send stocks straight back to their recent position at all-time highs. The University’s broadly recognized index was up to 83.7, from last month’s 76.4, the highest reading since July of 2007, and well ahead of Economists’ expectations of 77.9. The economic conditions sub-component increased from 89.9 to 97.5, and the economic outlook sub-component was up from 67.8 to 74.8. The news helped soften the blow of Thursday’s greater than expected increase in jobless claims, as well as renewed talk from the Federal Reserve that a pull-back in bond and asset purchases could be seen as early as this summer. JPMorgan Chase (JPM) added to the day’s momentum when it upped its full-year price target for the (more)…
May 16, 2013
Stocks Slip on Disappointing Economic Data
Jobless data from last week was released on Thursday indicating that unemployment claims jumped to 360,000, a significant increase on estimates of 330,000, while the prior week’s figure was revised upward to 328,000 from 323,000. The spike in jobless claims last week was also the biggest in six months. Meanwhile, the Philadelphia Federal Reserve Bank said that its manufacturing index for the Mid-Atlantic region had dropped to a -5.2 for the month of May, well below expectations of 2.4, and indicating a substantial slowdown in factory production across Pennsylvania, New Jersey and Delaware. The Commerce Department had its own unfortunate story to tell, with housing starts for the month of April down 16.5 percent to an annual rate of 853,000 units, far worse than the expected 6.4 percent drop. This data, however, was somewhat softened by an increase in building (more)…
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