Tag Archives: stocks

POCKETBOOK: Week ending April 14, 2018

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  • Golden

Good news this week for gold investors. On Wednesday, gold futures traded at an intraday high of $1,369.30 an ounce, according to Gary Wagner’s Kitco Commentary on Friday, April 13, 2018.

The June Comex contract wasn’t quite that high at the close of business on Friday ($1,348.60), but even so, for the week gold had enjoyed an $11 an ounce  gain.

That’s a big deal because this precious metal has had a hard time making any kind of sustainable gains over the past few years. And, in a jumpy market like we’ve all been a part of, one might consider that a bit of an oddity.

That said, the big takeaway here is that you’ve got to go back to August 2016 to find gold trading at that high a level. “More importantly,” writes Wagner, “ the highs achieved during that rally were the first occurrence of a higher high since the multiyear correction (that) began in the middle of 2011.”

Perhaps it’s time to reconsider the value of this precious metal for ones investment portfolio other than see its worth only in golden bangles, earrings or as a cap to top off one of your back molars.

 

  • Market Quick Glance

A better performance week for stock index results than the week before with the downs not as down and the ups more up.

Look at the 1-year returns and one might even begin to wonder what all the bears on Wall Street are concerned about. Then again, the only time that 1-year returns that seem to matter to the average investor is when the end of the year 52-week results are in.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, April 13, 2018.

 

DJIA -1.45% YTD down but less than the previous week’s -3.18%

  • 1 yr Rtn 19.10% up from the previous week’s 15.82%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 -0.65% YTD down much less than last week’s -2.59%

  • 1 yr Rtn 14.06% up from last week’s 10.48%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 2.94% YTD way up from last week’s 0.17%

  • 1yr Rtn 22.42% way up from last week’s 17.62%

Nasdaq reached a brand new all-time high on March 13, 2018 of 7,637.27. The previous high was reached on March 9, 2018 of 7,560.81.

 

-Russell 2000 0.91% YTD up from than last week’s -1.45%

  • 1yr Rtn 15.18% way up from last week’s 10.91%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

Lipper’s weekly mutual fund performance figures not available yet. Will post them when received.

Till then, here’s a repeat look at last week’s report: At the close of business on Thursday, April 4, 2018 the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of +0.32%. That’s up—yes up—from the previous week’s average of -0.37%.

Large-Cap and Small-Cap Growth funds were up on average well over 3% last week. Science & Technology Funds and Global Science & Technology Funds both up at 4.92 and 5.08% respectively.

Latin American Funds, too, were up–averaging almost 6% y-t-d.

The biggest loser fund type of all were Energy MLP, down on average -10.02%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  •   Credit Risks

The ability to raise, borrow and repay money is great deal. And one individuals as well as businesses count on. But like everything else within the world of money, risks exist and timing is everything.

Last week, Jack Ablin,CFA and Chief Financial Officer at Cresset Wealth Advisors published a piece titled “Credit Conditions and Risk Taking”.

From the piece: “The easiest way to gauge real time credit conditions is by observing the yield differential between 10-year, BBB bonds and 10-year Treasury notes. Since the bond market is roughly seven times the size of the stock market, the yield premium lenders require to extend credit to lower-quality borrowers is a useful barometer.”

While currently credit conditions are “favorable”, Ablin thinks that rising credit spreads can be an early warning sign of troubles ahead.

The chart below  provides additional insight on the subject.

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POCKETBOOK:Week ending March 3, 2018

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  • Another bull’s birthday

The bull market is going to be 9 this week. In dog years that would be 63 in human years. Okay okay—I know there’s nothing that really connects bulls with dogs and humans but then again, from a human’s point of view, 63 represents an age of maturity. One, that some figure, is an age worthy of retirement.

A look back at the historic lengths of  bull markets between 1926 through 2017 represented by  S&P 500 Index total returns reveals that a bull market lasts on average  9 years, according to FirstTrust (FTPortfolios.com). That puts this market in  watch-for-bears territory.

The longest bull market ,relating to that same index, lasted 13.9 years (from the 1930s-early 1940s), with an average annualized rate of return of 17.2%.  The shortest, 2.5 years in the early 1970s in which the average annualized gain was 25.3%.

Clearly, this bull market has been running a long time but more importantly,  bulls don’t run forever.

Then again, this same source reveals that S&P500 Index  bear markets have a history of being much shorter in length averaging only 1.4 years.

 

  • Market Quick Glance

Back peddling and who knows for how long.

If, at the beginning of this year, you invested into an S&P 500 index fund or one that tracks the Russell 2000 you’ve lost money. Not so with the Nasdaq.

Who knows what the year-to-date returns will be by the end of this week but here’s a bet worth considering: If Trump continues to be hell-bent on imposing tariffs on the steel and aluminum that the US imports, the market might have a hell-bent time of moving upward.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, March 3, 2018.

 

DJIA -0.73% YTD down and back into minus land–the previous week +2.02%  

  • 1 yr Rtn 16.83% down from the previous week’s 22.31%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 +0.66% YTD significantly down from last week’s 2.76%

  • 1 yr Rtn +12.99% down from last week’s 16.40%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ +5.13 YTD down from last week’s 6.29%

  • 1yr Rtn +23.83% down from last week’s 27.74%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 -0.15%YTD down into minus land from last week’s 0.89%

  • 1yr Rtn +9.85% down from last week’s +11.08%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

Reflecting a not-so-hot week for stocks, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was -0.31% at the close of business on Thursday, March 2, 2018, according to Lipper.

Near the end of 2017, many talking heads were projecting that markets outside of the U.S. were going to be the ones likely to score well this year. That however, hasn’t necessarily been the case. For instance, the year-to-date return for the average World Equity Fund was 0.11% as of Thursday’s close. There are 4,453 funds that fall under that broad heading.

Areas doing well and not-so-well under that heading include: Latin American Funds and China Region Funds, up 6.28% and3.66% respectively, on average. And, on the other hand,  India Region Funds and Global Equity Income Funds were down on average -5.40% and -2.08% respectively.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Kohl’s and Aldi a match made in heaven?

There’s a maybe unlikely new couple coming to town: Kohl’s, the retailer that sends out so many discount coupons to their credit card holders that you wonder how in the world they make any money—-and Aldi, the German grocer that sells its food stuff and goodies at prices that don’t need any coupons to get shoppers into their stores.

The deal is, Kohl’s has too many stores with too much space in them and has plans to cut the size of its footprints, while Aldi is expected to open 900 new stores over the next five years, according to USA Today.

So,  the idea is to lob off some of existing Kolh’s stores space to make Aldi its next door neighbor.

If you’re a shopper of both, the idea makes sense. If you’re not, it might be time to try shopping at either.

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