Friends

With the S&P 500 getting very close to the 4000 level, I saw a note today that remembered that the first time the S&P closed above 400 was in December of 1991. That’s a 10 bagger as we say in the biz, over a 30 year period. It’s another great illustration as to how wealth is created in the stock market. If an investor simply would have bought “the market” 30 years ago, she would be up 10 fold today. That is how wealth is created. Not jumping in and out and buying Gamestop after it’s gone up 1000%. Ok, I sound like the “get off my lawn” guy now, don’t I?

Let’s briefly review the last 30 years. We’ve had 2 evil Democrat Presidents (Clinton and Obama if you’re a Republican) and 2 evil Republican Presidents (Bush and Trump if you’re a Democrat). Of course, now we have a 3^rd evil Democrat President in Mr. Biden. In the late 90’s we saw the collapse of Long Term Capital Management and the Asian currency crisis in subsequent years. Then in early 2000 we saw the bursting of the dot-com bubble and Nasdaq drop 80%, followed by the horrific 9/11 attacks. Of course we saw fraud rear its ugly head with the collapse of Enron, Stanford Financial and of course good ole Bernie Madoff.  Just about when we had recovered from that we saw the housing crisis and the near collapse of the developed world financial system. In recent years we’ve seen budget battles, Brexits, Flash Crashes and heightened trading volatility fueled by easy money, technology and leverage. But, when all is said and done, the S&P 500 is up 10 fold. $50,000 invested in the S&P 500 30 years ago would now be worth approximately $500,000. Your honor, I rest my case.

As for today’s action, by the close the Dow Jones Industrial Average was down 85 points to finish the day at 32,981. The S&P 500 was up 14 points to close at 3,972. The Nasdaq Composite Index was up 201 points to close at 13,246. Gold was up $23 to trade at $1,709 per ounce, while oil was down $1.35 to trade at $59.20 per barrel WTI.

The bulls were able to deliver another good quarter for stocks. Not all stocks were created equal though this quarter. Value soared while growth lingered. Nevertheless we enter the second quarter of 2021 with the bulls holding the high ground.

Have a nice evening everyone.

Jim

Friends

If you want to understand why the financial markets are difficult to oversee and why Congress has such a difficult time designing legislation to do so, today’s Committee on Financial Services zoom testimony with the GameStop situation players was essential to that education. Simply put, very few of the folks asking questions have a clue as to the workings, much less the purposes of financial markets. But I digress.

Stocks slumped mightily in early trading but did recover some of those losses as the trading session wore on. By the close, the Dow Jones Industrial Average was down 119 points to finish the day at 31,493. The S&P 500 was down 17 points to close at 3,913. The Nasdaq Composite Index was down 100 points to close at 13,865. Gold was up $1 to trade at $1,773 per ounce, while oil was down $1.15 to trade at $59.99 per barrel WTI.

I know it’s been a difficult week for us here in Houston and in Texas in general. Hopefully you have your power back by now and your water is running. We have all been in this together and after tonight it looks like we will start to thaw out. Stay strong, the week is almost over.

Have a nice evening everyone.

Jim

Friends

Despite some good earnings reports, such as the one delivered by Microsoft after the close yesterday, stocks just could not overcome the wave of disturbing news concerning the coronavirus continuing to blow up in the U.S. and Europe. Add to that, that this week saw the possibility of a stimulus deal before the election go out the window, and of course concerns over the election and possible political instability and stocks are really facing some headwinds.

For the day the Dow Jones Industrial Average was down 943 points to close at 26,519. The S&P 500 was down 119 points to finish the day at 3,271. The Nasdaq Composite Index was down 426 points to close at 11,004. Gold was down $33 to trade at $1,878 per ounce, while oil was down $2.28 to trade at $37.29 per barrel WTI.

Tomorrow, before the open we’ll get a look at 3^rd quarter GDP and it’s expected to be a big number (30% plus). Then after the close we get earnings from the likes of Apple and Amazon. We are in a volatile moment for the markets, but it comes as no surprise. It’s part of process and we are prepared. Stay tuned.

Have a nice evening everyone.

Jim

Friends

Despite more encouraging news on the vaccine front, stocks were struggling through the early part of the trading session. But, as the day wore on, the bulls got a little more interested and by the close stocks had posted decent gains. The big move was in the big growth names which had been left behind last week. Back on top, were the usual suspects, Microsoft, Apple, Google, Tesla and Amazon, as they pushed the Nasdaq up nearly 3% at one point.

By the close, the Dow Jones Industrial Average was up 8 points to finish the day at 26,680. The S&P 500 was up 27 points to close at 3,251. Gold was up $8 to trade at $1,818 per ounce, while oil was up $.16 to trade at $40.75 per barrel WTI.

Earnings season swings into full gear this week and next, so we’ll be keeping an eye on what companies have to say about the coming months. This week we’ll hear from IBM, Coca-Cola, AT&T, Verizon, Intel, Union Pacific, Amazon, Microsoft, Tesla, Lockheed Martin, and the beleaguered Schlumberger- just to mention a few.  Stay tuned for a busy week. We’ll keep you up to date of all proceedings.

Have a nice evening everyone.

Jim

Friends

Well, it appears that the old worrier indeed had something to worry about. Stocks collapsed today, perhaps on fears that the Covid-19 pandemic still is anything but in the past, or as a continuation of yesterday’s concerns over Fed Chair Powell’s less than encouraging outlook of the economy. Now, remember, we have seen a two month advance in stocks that was reaching historic proportions, so to give some back is certainly not something that we normally would be concerned about. What does get our attention these days is the speed at which things happen. You know the old adage that the stock market takes the escalator up and then takes the elevator down. Many of the moves we’ve seen in 2020 have been breathtaking. Today’s was no exception.

By the close, the Dow Jones Industrial Average was down 1,861 points to finish the day at 25,128. The S&P 500 was down 188 points to close at 3,002. Gold was up $13 to trade at $1,734 per ounce, while oil was down $3.92 to trade at $35.68 per barrel WTI.

We had been chalking up one great week after another for stocks, but this week has certainly been a different story. Whether a little bit of economic reality has been introduced into the discussion or just a cooling off period, the pullback is not really unexpected. We had risen nearly 45% off the lows of March 23^rd. Even the bulls would agree that would call for a little digestion before strapping on the feed bag again. Let’s catch our breath and see how the week finishes up tomorrow.

Have a nice evening everyone.

Jim

Friends

Stocks finally took a little breather today, and that is probably a good thing. The market averages have gotten very extended on a technical basis, so before we set ourselves up for another more drastic downturn, it would be nice if we just cooled down a bit. The Fed is meeting today and tomorrow, but it is not expected that anything particularly new will come out of it, but we’ll let you know what the statement and Mr. Powell have to say.

As for today, by the close the Dow Jones Industrial Average was down 300 points to finish the day at 27,272. The S&P 500 was down 25 points to close at 3,207. Gold was up $15 to trade at $1,720 per ounce, while oil was up $.49 to trade at $38.68 per barrel WTI.

Though Covid-19 cases seem to be on the rise in states like Texas, California, Arizona and Florida, the markets for the time being aren’t taking any notice. It was expected that case counts would rise as states opened up, so for the time being we’ll count it as an expected occurrence, but we will keep an eye on hospitalizations which have risen here in Texas. As mentioned, today’s pause is one that was welcome. It would be good to see the economic data catch up just a little with stock prices. Oh, I’m just on old worrier, aren’t I?

Have a nice evening everyone.

Jim

Jim

Friends

You may have noticed over the past few weeks that we try to temper our enthusiasm on up days, and try not to get too disturbed by down days. The up days are great, and mostly they have been fueled by Fed liquidity, then down days happen and we focus back on how difficult this all is to predict and quantify. It’s a battle between the Fed’s liquidity and the reality that the economy is almost totally shut down at the moment. Today, worries about the economy had the upper hand.

For the day, the Dow Jones Industrial Average was down 445 points to close at 23,504. The S&P 500 was down 62 points to finish the day at 2,783. Gold was down $22 to trade at $1,746 per ounce, while oil was up $.33 to trade at $20.42 per barrel WTI.

We continue to get decent news on the flattening of the virus curve, but we are getting mixed signals about when we will be able to reopen the economy. Today it seemed like the angst over opening the economy too soon and perhaps seeing a resurgence of the virus overshadowed the benefits of getting the economy back open. This is going to be a rocky road ahead, and markets will likely see good days and bad, so we won’t get too encouraged or discouraged on a daily basis. Corporate earnings are rolling out now, and, not surprisingly, they are going to be a mess.

We sent out a video today. If you missed it, we linked it again below. We’re hoping these will be helpful.

Have a nice evening everyone.

[youtube https://www.youtube.com/watch?v=nViUyh4WsdM?feature=oembed&wmode=opaque&showinfo=0&w=1200&h=900]

Jim

Friends

We got another horrific weekly jobless claims number, but that was certainly expected. What was not expected was that the Federal Reserve found another kitchen sink to throw at the situation. Previously, the Fed committed billions, if not trillions of dollars to support government bonds, mortgage bonds, investment grade corporate bonds and money market funds. Today, they stepped up by pledging another $2.3 Trillion dollars to support the junk bond market and the municipal bond market. Basically, the Fed has stepped in to support everything but the stock market, and I wouldn’t be surprised if we head back down to new lows at some point that they would step in to buy stocks. Simply put, the Fed is really ALL IN.

Since the weekly jobless claims number wasn’t a surprise, and the Fed action was, it was the bullishness of the Fed action that helped move stocks higher. By the close, the Dow Jones Industrial Average was up 285 points to finish the day at 23,719. The S&P 500 was up 39 points to close at 2,789. Gold was up $45 to trade at $1,730 per ounce, while oil was down $1.63 to trade at$23.46 per barrel WTI.

It was a very good week for stocks. We still remain cautious because there is still so much that is unknown, but the good news is that the forced selling that we saw in March is likely behind us, and the Fed is a force to be reckoned with. Stocks have been able to recover about half of the first quarter losses and that, at least, has calmed things for the moment. Remember, the markets are closed for Good Friday tomorrow, so we’ll be back at it on Monday.

Happy Passover and Happy Easter to everyone. Have a great weekend.

Jim

Friends

Now that we all know that we’ll all be in our homes for a least another month, I guess we’re going to have to come up with new ways to entertain ourselves. I went out at lunchtime and started my car (hadn’t in 15 days). It still works. Let me know if you have any fun ideas.

As for the markets, the news that the doctors and scientists are dictating policy actually seemed to come as a bit of relief to investors. Also, we continue to get encouraging news about vaccines and therapeutics, and that is certainly a positive for the market psyche. But, the damage to the economy is still going to an unknown that investors are going to have to deal with as the weeks and months go by.

As for today, stocks spent the day in positive territory and volatility actually wasn’t that bad. By the close, the Dow Jones Industrial Average was up 690 points to finish the day at 22,327. The S&P 500 was up 85 points to close at 2,626. Gold was down $19 to trade at $1,635 per ounce, while oil was down $1.41 to trade at $20.10 per barrel WTI.

The quarter ends tomorrow, so there is hope that portfolio rebalancing might add a little more fuel to today’s rally. But, as we move into the second quarter, the unknowns greatly outweigh the knowns. We need to prepare ourselves for more volatility going forward, as headlines from day to day are sure to be challenging. First, let’s see how the quarter finishes out tomorrow.

Have a nice evening everyone.

Jim