Posts filed under “Markets”

Understanding Broad Trends Driving Stock Markets

Good to be back in the saddle after of a week of traveling in Silicon Valley, Napa and San Francisco. And I thought New York real estate prices were crazy.

Whenever I am away, I like to ease back into the groove by reviewing some broad market and economic metrics. It isn’t that a lot changes in the day-to-day or even week-to-week numbers — short-term measures are terribly noisy — but rather it’s a good exercise to return to form.

Let’s jump right in:

Breadth: I have discussed the importance of the advance-decline linemany times before (see thisthis and this). The simple fact is breadth remains positive. Lowry Research Corp., a technical market-research service, observed that several of its advance-decline indicators “are all confirming the April market highs.”

From my perspective, I find it extremely helpful to be able to put this into context for those who have a low tolerance for volatility. It also is nice to know where we might be from a cyclical perspective. If you are a long-term asset allocator, willing to ride the ups and downs of volatility, this probably doesn’t mean very much to you. But if you are a trader, this may well mean that there more gains to be had.

Employment: Regular readers know of my disdain for the obsession with this number. It is very noisy and subject to significant revisions. The broad trend is what matters much more than any single month’s data.

Was the weak showing for March a one-off, or was it the beginning of a new, deteriorating trend? We won’t be certain for a while, but Friday’s numbers didn’t suggest a weakening employment pattern. Unemployment fell 0.1 percent to 5.4 percent and wages rose slightly (0.1 percent). The data also show that long-term unemployment – those people who are unemployed for more than 27 weeks — continues to head lower. It is now 29 percent of total unemployment, down from 45.5 percent in April 2010. This, along with little increase in wages, has been the most stubborn negative about nonfarm payrolls.

 
Continues here What Drives the Stock Market

 

 

Category: Markets

Tren Griffin runs 25IQ, a blog about business models, investing, technology, and other aspects of life that he find interesting. He works for Microsoft; Previously he was a partner at Eagle River, a private equity firm established by Craig McCaw. ~~~ A Dozen Things I have Learned from Barry Ritholtz about Investing As part of my “A Dozen Things…Read More

Category: Apprenticed Investor, Investing, Markets

Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania David Card, Alan B. Krueger NBER Working Paper No. 4509 Issued in October 1993 NBER Program(s):   LS On April 1, 1992 New Jersey’s minimum wage increased from $4.25 to $5.05 per hour. To evaluate the impact of the law we…Read More

Category: Markets

Flash Crash a Perfect Storm for Markets

Great couple of graphics from the WSJ this AM. This is the simple version, a short explanatory overlaid on a graph:   Perfect Storm click for ginormous graphic Source: WSJ   The interactive version is far richer and more details as tot he minute by minute set up: Flash Crash’ a Perfect Storm for Markets click…Read More

Category: Markets, Really, really bad calls, Trading

Create Your Own Stock Market Narrative!

What makes this so good is how dead on accurate this collection of cliches have become:     Click to create your own personal narrative. You may even get your own punditry spot. Source: Stockcats     How awesome is this?!

Category: Cognitive Foibles, Financial Press, Markets, Psychology, Really, really bad calls

EPA Rule Is Redrawing the U.S. Coal Map

Click for an interactive graphic. ~~~ Source: Bloomberg

Category: Markets

The QE Era

I am on the road this week in San Francisco, but I wanted to share this wonderful collection of charts from Jim Bianco of Bianco research:

 

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There’s much more after the jump

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Category: Bailouts, Federal Reserve, Markets

Wild Wild East

Source: Barron’s

Category: Markets

Succinct Summation of Week’s Events 5.1.15

Succinct Summations week ending May 1st Positives: 1. Initial jobless claims plunged to 262k vs the 290k expected, the lowest reading in 15 years. 2. Pending home sales rose 13.4% y/o/y vs expectations for a 5.1% rise. 3. Consumer spending rose 1.9% in the first quarter, better than expected. 4. The S&P/Case-Shiller index increased 5%…Read More

Category: Markets

Forewarned: Traveling This Week

As previously mentioned, we are going West this week, to meet up with friends and clients as well as meet with prospective clients. I am looking forward to speaking with some interesting folks at David Rosenberg’s intimate event in Napa this weekend. Then for the rest of the week of May 4-8th, we will be in San Francisco…Read More

Category: Markets