Tag Archives: investments

NASDAQ in the Spotlight

Have you wondered why the NASDAQ has become so popular? It is now the driving force leading markets higher. Here are some highlights from the pages of the NASDAQ:Continue Reading

The Two Faces of Oil

Oil is a mysterious commodity. It trades with supply and demand numbers, yet it also trades with geopolitical events. It is an international commodity with each country buying or selling depending on their needs and domestic supply.Continue Reading

How Producers and Suppliers are Coping with the Oil Crash

We all knew that there was an oil glut several months ago. US oil production is the highest in three decades. US crude stockpiles climbed 7.27 million barrels in the week ending December 19. This brought the gain to 387.2 million barrels. But the wild card was Saudi Arabia and OPEC. In previous periods of oversupply, OPEC has cut production. This time they dropped a bombshell and said NO to cutting production, that they would pump 30 million barrels per day. OPEC supplies 40% of the world’s oil. This caught the energy market by surprise. Where Brent crude was trading at $111.05 per barrel in June, it plunged more than 50% to $59.45 per barrel in the February futures contract. WTI crude closed at $54.73. The impact on producers and suppliers is creating a crisis of monumental proportions. Producers, oil- rig operators and manufacturers, refineries, and natural gas producers are all getting hit. The US dollar has been trending higher with a close on Friday December 26, of 90.31 for the March futures contract. Commodities usually take a beating with a stronger dollar. Let’s examine the impact of the oil crash on key oil exporting and importing countries.Continue Reading

Investors Seek the Fed’s Guidance on the Economy

What do the latest Fed minutes tell us? Since the recession began, the Fed has set two goals for the economy. Perhaps the foremost objective is to maintain inflation at or near the 2% level. The one crisis point would be a drop in inflation below the flat line. This would indicate that the economy is teetering on the brink of recession. The entire quantitative easing program is aimed at keeping the economy growing. We are seeing the effects of stagnation in Europe with the introduction of negative interest rates to stimulate the economy. So far, the US economy has been expanding, albeit very slowly. The latest 2nd quarter GDP numbers came in better than expected at 4.6%. The media has jumped on this number and is prodding the Fed to raise interest rates. However, all is not that great. The 1st quarter GDP actually fell 2.1% after a brutally cold winter in the Northeast. When taken together these numbers indicate a moderate expansion in the economy. According the Fed’s statistics, inflation in August was at 1.7%. However, this number does not include food, energy and shelter.Continue Reading

Investing in Small Cap Stocks

We have a group of stocks that we refer to as “Small Cap.” They are defined as having a Market Cap of between $250,000 and $2 billion. Many are start ups trying to bring a new product or service to market. For example we are seeing many of the biotech stocks in this category. Many of them have a promising new drug but it first must go through rigorous testing by the FDA. This is a lengthy process involving several stages of testing, often lasting up to three years. Only a small group make it through. These become he new “stars” of the investing world and their stocks rise, often very quickly.Continue Reading

Where is the Price of Gold Headed?

The markets have turned in a strange performance over the past several weeks. The numbers on the economy came in weaker than expected with GDP down -.1% in April. Unlike other recoveries, spending growth has decelerated. Each year it takes a step down. This is not the way it should be. In all past recoveries, spending growth increased as the economy grew. Discretionary spending was up but 90% of that was due to inflation, especially in food and energy. Consumers are being forced to spend more. Our US deficit is running at about $17.3 trillion. The US Federal Reserve’s Balance Sheet has grown to $4.9 trillion. Surprisingly, the US stock market made a new all time high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks.Continue Reading

How to Protect Your Portfolio

With the stock market averages making new highs every few weeks, investors are becoming increasingly edgy about what will happen next. These are unsettling times. We have a high US national debt running about $17 trillion. Added to this the US Federal Reserve has bought $4 trillion of bonds and mortgage backed securities from the big banks. They are now in the process of reducing their purchases, but they still must sell these securities back to balance their books. In addition they must continually issue new bonds to finance our debt.Continue Reading

Creating Wealth with DRIPs

Since January 1, 2014, the markets have turned topsy turvy, up and down with sometimes violent, unexpected moves. When the good news about job creation was recently released, the market sold off instead of rallying. Or the US Federal Reserve says that they will be accommodative to the markets and the market rallies, only to have a vicious sell off the next day. Investors are on edge, wondering if the bull market will continue or if this the top of the move? Is there an investment program that will provide some security against these events?Continue Reading

High Speed Trading

In the early days of stock trading prices came across a ticker tape. It posted the stock symbol and the volume. The tape ran at one speed and traders would follow the buying and selling by analyzing the tape. The great traders were able to mentally track price action and make instant trading decisions, almost like a card counter does in Blackjack. One popular past time was for investors to gather in a large sitting room and watch the ticker tape during trading hours.Continue Reading

2014 First Quarter-A Mood Shift

The year 2013 ended on a high note with the S & P up a whopping 29.6% for the year. The first quarter 2013 saw the S & P up 10%. The Russell that includes small and mid cap securities rocketed up 37%. With that stellar performance investors looked to 2014 with rare optimism. Only 16% of investors were bearish. However, starting on day one of 2014 the markets and the world turned turbulent. The major averages sold off sharply, then recovered to end the quarter barely nudging from their 2013 levels. The Russell did not fare as well. It was down 4.7% for the quarter, pointing to an exodus from small and mid cap stocks. The average investor pulled $4 billion out of mutual funds.Continue Reading