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• Monday, 15 March 2010

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• Third Quarter Earnings Loom Ahead - 28 September 2009

Friday saw stocks on Wall Street falling for the third straight session, after having enjoyed a fairly consistent rally since the lows of March. It would appear that investors reacted negatively to the Federal Reserve's meeting on Wednesday, with Thursday's dismal existing home sales report, durable goods orders and oil slump, as well as a mix of disappointing economic news on Friday adding to the Wall Street gloom. While many in the know are disappointed at the retreat, few are surprised, anticipating that the road to recovery is going to be a lot rockier than has been indicated recently by stock market performance.

• Job Loss Slow Down Encourages Investors as They Look to the Week Ahead - 8 June 2009

Friday saw the Dow Jones industrial average edge higher, gaining 12.89 points (0.15 percent) to an unofficial close of 8,763.13, while the Standard & Poor’s 500 dropped 2.37 points (0.25 percent), ending the day at an unofficial 8,763.13, and the Nasdaq Composite closing virtually static. This is the eleventh out of thirteen weeks that the Dow has ended on a higher note and one of the reasons cited for this continued rally was the slowing pace of job losses as reported by the Labor Department on Friday. Employers cut 504,000 jobs in April and analysts were forecasting a job loss figure of 520,000 for May, so when the job loss figure was reported as 345,000 for the month of May, it came as a pleasant surprise to stock market traders. There is no denying that this is still a huge number of job losses and far from the desired scenario of flat job loss figures, it nevertheless indicates that, while things are still bad, they are "less worse" – a term commonly used in financial circles today.

• Manufacturing Data Boosts Markets Despite Impending GM Bankruptcy - 1 June 2009

All major stock market indexes gained more than 1 percent on Friday, ending the week, and the month, on a high and clinching a third month in a row rally on Wall Street. Ahead of markets opening on Monday the Dow Jones industrial average futures rose 1.4 percent, or 121 points, to 8,609, while the Standard & Poor’s 500 index futures rose 1.7 percent, or 15.30 points to 933.40, and Nasdaq 100 index futures climbed 1.4 percent, or 20 points, to 1,455.50. This surge of optimism appears to be as a result of encouraging survey data on manufacturing industries in Europe and Asia, fuelling hopes that the global economy may be turning around and heading toward recovery. Investors anticipate a similarly encouraging survey on the United States manufacturing industry to be released late Monday morning. Although analysts are forecasting the Institute for Supply Management's purchasing managers' index to rise to 42.0 from the 40.1 reported in April, which is still considered to be a contraction, the European and Asian reports have given investors hope that Monday’s report will be better than forecast.

• Markets Absorb “Stress Test” Results and Remain Optimistic - 11 may 2009

Despite the fact that the "stress test" results performed on nineteen U.S. banks revealed that ten of these will need substantial government assistance, Wall Street ended last week on a high, with Nasdaq advancing for nine weeks in a row, and the Dow and S&P 500 both rising for eight out of the past nine weeks. The government report that employers cut fewer jobs than was expected during the month of April also contributed to a glass-half-full mindset among investors and thereby boosting the market. Analysts agree that stock market traders are becoming so accustomed to bad news that when the bad news is not as bad as anticipated, it is perceived as "good" news, or at the very least "less worse" news. With U.S. markets showing a strong likelihood of advancing for a tenth week, it appears that nervous investors are overcoming their anxiety and are keen to get back into the market before they miss out.

• Wall Street Sees Burst of Investor Confidence Ahead of Stress Test Results - 7 may 2009

While the much-awaited bank "stress test" results are only due out after close of business on Thursday, investors have been responding with zeal to speculation, rumors and leaked information since markets opened on Monday morning. Despite the fact that most of the "information" doing the rounds indicates that anywhere between ten and fourteen of the banks being scrutinized are likely to be instructed by the government to raise capital, shares of all nineteen participants jumped on Monday. At least a dozen increased by more than 10 percent, with even the worst performer, Morgan Stanley, gaining 4.7 percent.

• First the Good News, Then the Bad News, Then the Good News … - 26 March 2009

Wednesday’s roller-coaster ride on Wall Street, which ended with a rally shortly before close of business, was fuelled by optimism that the draining effect of the recession may be abating. Better than expected data relating to housing and durable goods as well as the continued rally of the financial sector, offset to some extent the increasing concern by investors that U.S. authorities may not have what it takes to yank the economy out of recession, and may even be courting disaster by releasing large amounts of money into the economy which may trigger a rise in inflation.

• Will U.S. Investors Continue To Shrug Off Flow Of Bad News? - 8 December 2008

Friday’s U.S. stock market gains fueled hopes that the market may finally be bottoming out. While analysts are divided as to whether this is so, it certainly appears that investors are becoming somewhat accustomed to bad news and are trading anyway. At one point in Friday’s trading session the Dow was down 257 points, but rallied and ended the session with a gain of 3.1 percent, or 259 points to 8,635. The S&P 500 rose 3.7 percent, while the Nasdaq added 4.4 percent. The five-day decline for the Dow, S&P 500 and the Nasdaq was 2.2 percent, 2.2 percent and 1.8 percent respectively.

• Air of Pessimism Likely to Persist Despite Approval of Revised $700 Billion Bailout - 6 October 2008

Following almost two weeks of intense debate, the revised $700 billion financial sector bailout plan was passed by the U.S. House of Representatives, with President George W. Bush signing the bill into law on Friday. With unanswered questions regarding the implementation of the plan and many questioning its potential effectiveness, analysts are doubtful that the plan’s approval will lift the cloud of pessimism hanging over the stock markets, at least in the short term.

• Volatile Market Defies Old-Favorite Investment Strategies - 25 August 2008

The volatility of the market since October 2007, and more specifically during the past few weeks, has vividly illustrated that investor favorites of the past can no longer be relied upon and a varied investment portfolio is the wisest way to go. Many analysts have had to adjust their views as it has become apparent that the global market is not immune to the woes of the U.S. economy, oil prices can be dramatically influenced by changes in demand, and small-cap funds, which are generally avoided in tough times, are turning out to be a good investment choice.

• Analysts Fear That U.S. Market Has Not Yet Bottomed-Out - 19 August 2008

While the decrease in oil prices has to some extent soothed concerns about inflation, the U.S. market remains volatile and trading volumes continue to be disappointing. Investors and analysts who are searching for signs that the U.S. stock market has bottomed out are concerned that the significant changes in major indexes since the 2008 low on 15 July are an indication that the bottom has not yet been reached.

• The Value of Analysts in Stock Market Investing - 21 July 2008

Analysts perform a vital role in the time-strapped investor’s decision making process. Conducting in-depth research on a company’s financial status is time-consuming, and many investors just don’t have the time available to do the job well. Analysts provide investors with the information they need as a basis for decisions on whether they should buy or sell certain securities.

• Random Walk Hypothesis - 16 June 2008

The financial theory known as the "random walk hypothesis" proposes that stock market prices develop according to a random walk and, therefore, stock market prices are completely unpredictable. This hypothesis is widely accepted by economists, investors and other financial behaviorists, who continue to believe that stock prices are random making it impossible to consistently outperform market averages.