Market Update – Feb. 29, 2016

The broader stock market averages closed the week ended February 26 with gains of 1.5%-1.8%. Small caps rose 2.8%, a positive sign. This was the second consecutive week of gains, coming off of the Feb. 11 market low; but this week’s advance was not quite as robust and came on lower volume. Continue reading

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Market Outlook Teleconference – Feb. 24

On Wednesday, February 24, I will host another Market Outlook teleconference, which will provide a review of recent trends in the economy and financial markets and offer my assessment of the performance outlook for equity and fixed income markets.  I also plan to discuss one or more investment ideas or themes.  This teleconference is available at no charge.  Details are provided below: Continue reading

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Is A Market Bottom At Hand?

Ignoring, for the moment, the last three days of trading action, the stock market appears to be in the early stages of a correction. Last week, the S&P 500 broke below 1820, its October 2014 low, setting the next downside marker in the pattern of lower highs and lower lows that is characteristic of a downtrend. Continue reading

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Weak Economic Growth Does Not Necessarily Point to Recession

So far, the stock market appears to be anticipating a slowdown in economic activity, but not necessarily a recession. Some think that the decline in stocks might actually cause an economic pullback (consistent with George Soros’s concept of reflexivity). Certainly, a big drop in the stock market would hurt the economy, amplifying weakness; but it is highly unlikely that it would be the sole cause of a recession. Continue reading

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Sentiment on Homebuilding Stocks Turns Negative Suddenly

Homebuilding stocks have been crushed since the beginning of the year and especially over the past few weeks. The Lark Research Homebuilder Stock Price Index, (an equal-weighted price-only weekly index of the share prices of 12 publicly-traded homebuilders, rebalanced at the start of each year), is down 18.8% year-to-date (as of Feb. 5), much worse than the 8.0% decline in the S&P 500 and 13.2% drop in the Russell 2000. Continue reading

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Stock Market Update – Jan. 25, 2016

After a disastrous start to the new year, the stock market finally seems to be getting its footing.  The S&P 500 gained 1.4% in the week ended January 22.  That follows a 2.2% drop in the previous week and a 6.0% plunge in the first week of the year.  While the tone is better, however, in my mind the burden of proof for the future direction of the market is now on the bulls. Continue reading

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Notes from the Aqua America Analyst Meeting

Aqua America (WTR) is the nation’s second largest publicly-traded water utility, serving three million people in eight states. It held an analyst meeting at the NYSE on Jan. 14, its first under new CEO Christopher Franklin.  He is a 20+ year veteran of the company who served most recently as President and COO of WTR’s Regulated Operations. Continue reading

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Is the Federal Reserve Adding to Market Confusion?

The Federal Reserve Open Market Committee has taken the relative small (and symbolically huge) step of raising the target Fed Funds rate by one-quarter point. But its decision-making process and communications to financial markets both before and after the move have been somewhat puzzling. Continue reading

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Stocks Take A Tumble Again

Stocks got off to a terrible start in its first week of 2016 – the worst start to a year ever, according to Barron’s.  The S&P 500 closed the week down 6%.  Most major averages posted similar declines.  The S&P 400 Mid-Cap Index fell 6.4%.  The S&P 600 Small Cap Index fell 7.2%. Continue reading

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Notes from General Electric’s Annual Outlook Meeting

This has been an eventful year for General Electric (GE), one that brought about the most significant changes that the company has seen in its 127 year history.  The company has repositioned its business mix, drastically reducing its profile in financial services and emphasizing its industrial core.  It has also stepped up its drive to infuse its products with sophisticated technology (e.g. internet of things (IoT), additive manufacturing and advanced software) that can help its products run harder and longer and give customers greater insight into their utilization efficiency. Continue reading

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