nasdaq - What We're Reading - StockBuz2024-03-29T00:51:35Zhttp://stockbuz.ning.com/articles/feed/tag/nasdaqDoubts Begin Chipping Away At The Stock Markethttp://stockbuz.ning.com/articles/doubts-begin-chipping-away-at-the-stock-market2015-08-16T18:08:48.000Z2015-08-16T18:08:48.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p class="story-body-text story-content" data-para-count="71" data-total-count="71" itemprop="articleBody" id="story-continues-1"><a target="_blank" href="http://static01.nyt.com/images/2015/08/15/business/GRET-web/GRET-web-master675.jpg"><img class="align-left" src="http://static01.nyt.com/images/2015/08/15/business/GRET-web/GRET-web-master675.jpg?width=300" width="300" /></a>In the stock market, until recently, just about any news was good news.</p>
<p class="story-body-text story-content" data-para-count="122" data-total-count="193" itemprop="articleBody">Company earnings stumbled? Investors shrugged them off, sending shares higher. Economic growth was disappointing? So what.</p>
<p class="story-body-text story-content" data-para-count="25" data-total-count="218" itemprop="articleBody">But now that is changing.</p>
<p class="story-body-text story-content" data-para-count="337" data-total-count="555" itemprop="articleBody">Consider the recent trading in Apple, the world’s most valuable public company and a certifiable stock market darling. Apple announced <a title="Apple's report." href="http://www.apple.com/pr/library/2015/07/21Apple-Reports-Record-Third-Quarter-Results.html">third-quarter results</a> on July 21 that were “amazing,” according to Tim Cook, its chief executive. Revenue rose 33 percent over the same period last year, and earnings per share were up 45 percent.</p>
<p class="story-body-text story-content" data-para-count="174" data-total-count="729" itemprop="articleBody">But investors seized on the fact that demand for the iPhone and the company’s new smartwatch didn’t meet expectations. Apple’s shares have lost 11.3 percent since then.</p>
<p class="story-body-text story-content" data-para-count="267" data-total-count="996" itemprop="articleBody">“I thought the break in Apple was a pretty big deal,” said Bill Fleckenstein, a veteran money manager at <a title="The site." href="https://www.fleckensteincapital.com/">Fleckenstein Capital</a> in Seattle. “They made all the numbers, but units were light. Maybe that is a precursor to what the entire tape is going to show us.”</p>
<p></p>
<p class="story-body-text story-content" data-para-count="375" data-total-count="1371" itemprop="articleBody">The reaction to China’s devaluation was even more telling. Instead of viewing it as a competitive tool to lift exports and stimulate growth — as was the case when Japan took steps to devalue the yen — global investors were rattled, fearing that it meant the Chinese government was convinced that its economy was in much worse shape than conveyed by official statistics.</p>
<p class="story-body-text story-content" data-para-count="217" data-total-count="1588" itemprop="articleBody">As investors absorb the meaning of these moves, they also seem to be opening their eyes to other market wonders that may prove ephemeral. The question is, Are we seeing signs of a sea change in investors’ attitudes?</p>
<p class="story-body-text story-content" data-para-count="378" data-total-count="1966" itemprop="articleBody">Another example is the recent rout in shares of Keurig Green Mountain, the maker of specialty coffee and single-cup brewing systems. A former highflier that traded as high as $137 in January, the stock collapsed after the company warned on Aug. 5 that sales and earnings would decline this year. The shares lost 30 percent the following day and are down 62 percent year-to-date.</p>
<p class="story-body-text story-content" data-para-count="243" data-total-count="2209" itemprop="articleBody">Trying to plumb the mind-set of investors is always a tricky exercise, of course. But when one investment assumption is questioned — a perpetually strong Chinese economy, say — other bits of conventional wisdom go under the microscope too.</p>
<p class="story-body-text story-content" data-para-count="229" data-total-count="2438" itemprop="articleBody">Doubts may be creeping into the notion that companies with no earnings should trade at sky-high valuations. Some are starting to wonder whether corporate profits are being artificially elevated by share buybacks or other tactics.</p>
<p class="story-body-text story-content" data-para-count="116" data-total-count="2554" itemprop="articleBody">Then there’s the biggest assumption of them all — that the Federal Reserve will always be there to save the day.</p>
<p class="story-body-text story-content" data-para-count="120" data-total-count="2674" itemprop="articleBody" id="story-continues-2">An aging bull market often coincides with investors’ starting to question these kinds of assumptions, strategists say.</p>
<p class="story-body-text story-content" data-para-count="156" data-total-count="2830" itemprop="articleBody">That’s the view of James Stack, president of <a title="The site." href="http://www.investech.com/index.php">InvesTech Research</a>, a money manager in Whitefish, Mont., who publishes a highly ranked investment newsletter.</p>
<p class="story-body-text story-content" data-para-count="257" data-total-count="3087" itemprop="articleBody">“This is the third-longest bull market in 80 years, and we are starting to see some deterioration develop,” Mr. Stack said in a telephone interview on Wednesday. “If you look at market breadth, the number of stocks participating has been narrowing.”</p>
<p class="story-body-text story-content" data-para-count="247" data-total-count="3334" itemprop="articleBody" id="story-continues-3">Even as the Nasdaq was reaching new highs this year, for example, other indexes, including those made up of transportation stocks or utilities, were trading well off their highs. This divergence is not the sign of a healthy market, Mr. Stack said.</p>
<p class="story-body-text story-content" data-para-count="306" data-total-count="3640" itemprop="articleBody"><a title="About Mr. Gannon." href="https://www.roycefunds.com/people/francis-gannon">Francis Gannon</a>, co-chief investment officer at Royce Funds, which specializes in small-cap stocks, also thinks we are at an inflection point. The upside-down market — where untested companies’ shares vastly outperform those of more solid companies — may be in the process of righting itself, he said.</p>
<p class="story-body-text story-content" data-para-count="351" data-total-count="3991" itemprop="articleBody" id="story-continues-4">Mr. Gannon noted that fully one-third of the companies in the Russell 2000 stock index do not earn any profits, the highest percentage in a nonrecessionary period. And through the second quarter, a majority of the performance in the Russell 2000 index came from companies that lost money before interest, taxes, depreciation and amortization, he said.</p>
<p class="story-body-text story-content" data-para-count="176" data-total-count="4167" itemprop="articleBody" id="story-continues-5">“The laws of finance have been suspended for quite some time,” Mr. Gannon told me last week. “Now this is starting to crack. I think we are on a road to normalization.”</p>
<p class="story-body-text story-content" data-para-count="360" data-total-count="4527" itemprop="articleBody">If market sentiment is indeed changing, Mr. Stack is concerned that many investors may be quick to sell their shares in a swoon, amplifying a downturn. He’s especially worried about two groups: investors who have bought shares on margin, using borrowed money, and those who have been pushed into the market in search of returns because of low interest rates.</p>
<p class="story-body-text story-content" data-para-count="296" data-total-count="4823" itemprop="articleBody">Certainly the use of leverage to buy stocks is very near its peak. According to the New York Stock Exchange, <a title="Tables." href="http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=3153&category=8">margin debt</a> stood at $505 billion in June, the most recent figure available. That’s down just a bit from the April peak of $507 billion, but up 9 percent from the same period last year.</p>
<p class="story-body-text story-content" data-para-count="77" data-total-count="4900" itemprop="articleBody">“Money borrowed to buy stocks tends to be nervous money,” Mr. Stack said.</p>
<p class="story-body-text story-content" data-para-count="357" data-total-count="5257" itemprop="articleBody">Equally nervous may be the legions of traditional savers who felt compelled to buy equities to generate a viable yield on their investments. “The multigenerational low in interest rates has driven a lot of people into stocks who would not normally be there,” Mr. Stack said. “That money could exit the markets quickly once rates start to normalize.”</p>
<p class="story-body-text story-content" data-para-count="188" data-total-count="5445" itemprop="articleBody">As an active fund manager who buys shares of companies with established operations and genuine earnings, Mr. Gannon says he is eager for a market in which investors behave more rationally.</p>
<p class="story-body-text story-content" data-para-count="219" data-total-count="5664" itemprop="articleBody">“This particular cycle has been affected by the actions of the Fed and the many unintended consequences of what the Fed has done,” Mr. Gannon said. “We think we are at a point where that is beginning to change.”</p>
<p data-node-uid="1" class="story-body-text story-content" data-para-count="181" data-total-count="5845" itemprop="articleBody">Distinct market shifts are visible only in hindsight, of course. Still, it’s probably not a bad idea to be watchful for them and for the profits — and losses — they may bring.</p>
<p data-node-uid="1" class="story-body-text story-content" data-para-count="181" data-total-count="5845" itemprop="articleBody">Courtesy of <a href="http://www.nytimes.com/2015/08/16/business/doubt-starts-chipping-away-at-the-markets-mind-set.html?_r=0" target="_blank">NYTimes</a></p>
</div>This Day In 1999http://stockbuz.ning.com/articles/this-day-in-19992014-04-30T12:11:03.000Z2014-04-30T12:11:03.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><blockquote>
<p><b>1999</b>: Priceline.com, ($PCLN) which had gone public at $16 a share exactly one month earlier, closes the day at $162.375 -- giving the tiny Internet <a target="_blank" href="https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcSrYCyjGknSHKYE7WcTMxtO96ddK9OXWQdxonaCyea5d3pGQR3KAQ"><img class="align-right" src="https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcSrYCyjGknSHKYE7WcTMxtO96ddK9OXWQdxonaCyea5d3pGQR3KAQ" /></a>company a one-month return of 914.8% and a total market value of $23 billion. It's probably the fastest and stupidest stock run-up yet recorded. But it's all downhill from here, as Priceline.com ends up losing 99% of its value by the end of 2000.</p>
</blockquote>
<p>Fast forward 15 years and everyone books airfares and hotels online.  Everyone.  PCLN closing price yesterday was $1154.84 after reaching an all time high of $1378.96.  Oh to have bought that dip!</p>
<p>Was TWTR the tech top in the recent bull market?  Will we reach a new high and wait for Alibaba?  Are we in a Fed-induced bubble or as Einhorn states, only in select areas?  What are your thoughts?</p>
<p>Data courtesy of <a href="http://www.jasonzweig.com/thisday.php" target="_blank">JasonZweig</a></p>
<p></p>
</div>The Nasdaq Bouncehttp://stockbuz.ning.com/articles/the-nasdaq-bounce2014-04-15T02:30:55.000Z2014-04-15T02:30:55.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Art Cashin called it. Wasn't difficult to spot. Possible bounce off of the February low. Now what? Next stop.........right shoulder? Short trading weeks tend to be bullish. We shall see. I know I'm eager to re-short names at their <strong>falling</strong> 20d or 50d. At least there, risk would be defined. How about you?</p>
<p><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290525?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290525?profile=RESIZE_1024x1024" width="750"></a></p>
<p></p></div>