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Wall Street posts worst day since November 7

April 15, 2013 by F. Peter Brown Leave a Comment

NEW YORK (Reuters) – Stocks posted their worst day since November 7 on Monday as big declines in the price of gold, oil and other commodities fed a broad selloff in equities.

Weaker-than-expected data from China sparked the initial decline, but selling accelerated late in the session as reports of two explosions in Boston near the finish line of the Boston Marathon unnerved investors.

Commodity-related shares led stocks’ losses, with gold suffering its worst two-day sell-off in 30 years as the China data fueled worries about the strength of the global economy. The SPDR Gold Shares ETF lost 8.8 percent to $131.31 on record volume.

Total trading volume was the second highest of the year, with about 8.5 billion shares changing hands on U.S. exchanges.

Analysts said the stock market had been vulnerable to a pullback, given the sharp gains since the start of the year as well as the Dow’s and the S&P 500′s recent record highs. The S&P 500 is still up 8.8 percent for the year.

Read More at finance.yahoo.com . By Caronline Valetkevitch.

Filed Under: News Tagged With: Stocks, Wall Street

2010′s coming stock market crash: 1987 all over again

May 18, 2010 by F. Peter Brown Leave a Comment

In two tumultuous weeks in October 1987, the stock market shed nearly one-third of its value in perhaps the second most notorious crash in U.S. history. It could happen again. Don’t be deceived by the rebounding economy, any more than the bulls should have been misled by the balmy climate during the late Reagan years. Right now, stocks are extremely vulnerable to the same scenario. The reason: The market is even more overpriced than when thunder struck on that distant Black Monday.

That doesn’t mean that a giant correction is inevitable; far from it. But the quasi-bubble that followed the big selloff in late 2008 and early 2009 makes the probability of sudden downward swing far more likely. And today’s high prices make it practically certain that investors can, at best, expect extremely low returns in the years ahead.

Let’s gauge where the market stood just before the shock of October ’87. For this analysis, we’ll use the price-to-earnings multiples developed by Yale economist Robert Shiller, who smoothes the erratic swings in profits by calculating PEs based on a 10-year average S&P earnings, adjusted for inflation.

Strategist: Portugal May Spark Global Market Crisis

April 28, 2010 by F. Peter Brown Leave a Comment

Greece was pushed to the brink of a financial abyss and started dragging another euro zone country — Portugal — down with it Tuesday, fueling fears of a continent-wide debt meltdown.

Stocks around the world tanked when ratings agency Standard & Poor’s downgraded Greek bonds to junk status and downgraded Portuguese bonds two notches, showing investors that Greece’s financial contagion is spreading.

Major European exchanges fell more than 2.5 percent, and on Wall Street, the Dow Jones industrial average finished down more than 200 points. The euro slid more than 1 percent to nearly an eight-month low.

“We have the makings of a market crisis here,” said Neil Mackinnon, global macro strategist at VTB Capital.

Greece is struggling with massive debt, and with prospects for economic growth weak it could end up in default. Its 15 euro zone partners and the International Monetary Fund have tried to calm the markets with a 45 billion euro ($59.51 billion) rescue package, but it hasn’t worked.

Survey: Investor Expectations for Stocks Turn Cautious

April 23, 2010 by F. Peter Brown Leave a Comment

Investor expectations about stock prices have eased since the start of the year, despite gains in the market, a private survey released on Friday showed.

The probability of an increase in the price of a diversified stock portfolio during the year ahead was judged in April at 52 percent by investors with portfolios valued at more than $25,000, down from 54.1 percent in January, according to Thomson Reuters/University of Michigan‘s Surveys of Consumers.

Those percentages are still up from ones recorded since 2008, including 37 percent recorded at the start of 2009.

Morgan Stanley: Rally Over, Stocks Headed Down 11 Percent

April 12, 2010 by F. Peter Brown Leave a Comment

Morgan Stanley analyst Teun Draaisma recommends that investors use “tactical caution” for the next three to six months.

The European equity analyst called for investors to sell stocks in June 2007 when the markets were flashing a “full house sell” signal. He then flipped bullish in November of 2008 as the markets were pricing in a much more severe situation than Draaisma saw unfolding.

“We recommend selling into strength, and we think MSCI Europe will reach 1,030 at some point later in 2010, down 11 percent from here,” Draaisma writes in a note to investors.

“The last 12 months have been characterized by record stimulus and rising economic leading indicators,” Draaisma says, adding that Morgan Stanley reduced its equity exposure two months ago.

Read More: – By Julie Crawshaw, Moneynews

Filed Under: News Tagged With: Europe, Investors, Morgan Stanley, Stocks, Teun Draaisma

Investor ‘Does Not Have Faith’ In the Stock Market: Siebert

April 9, 2010 by F. Peter Brown Leave a Comment

Wall Street veteran Muriel Siebert has seen her share of downturns, yet none has been quite like this.

“It has a different feel to it,” she said in an interview with CNBC.com. “We want a marketplace where people are going to take their retirement money and build up stocks for their retirement. They’re not doing it to the same degree anymore. I have customers who are sitting on cash in their accounts because they don’t have the same confidence. Cash has lost its value in terms of creating income for them.”

Born during the Great Depression, Siebert has witnessed economic cycles as a Wall Street trader and a bank regulator. She started her career as a $65/week trainee in research to become the first woman to hold a seat on the New York Stock Exchange in 1967. Today, Siebert heads Muriel Siebert & Co., her discount brokerage firm.

Stocks, Commodities Drop on China Economy Concern; Dollar Gains

March 15, 2010 by F. Peter Brown Leave a Comment

Stocks retreated, led by emerging markets, and commodities declined on concern that China and India will seek to restrict economic growth to curb inflation. The pound and the euro weakened against the dollar.

The Standard & Poor’s 500 Index, which closed at a 17-month high on March 11, lost 0.7 percent to 1,142.16 at 11:27 a.m. in New York. The MSCI Emerging Markets Index slipped 1 percent as the Shanghai Composite Index plunged 1.2 percent. The pound weakened against all 16 of its most-traded counterparts and the euro snapped three days of gains versus the dollar. Oil, copper, lead and nickel lost at least 1 percent. Treasury 10-year notes fell on speculation the Federal Reserve will say the U.S. economy is showing signs of recovery.

Premier Wen Jiabao may take steps to cool China’s expansion and economists predict India will raise interest rates after inflation in both nations accelerated to a 16-month high. European finance ministers meet in Brussels today to discuss how to help Greece overcome its debt crisis. The U.S. Federal Reserve will detail its outlook for interest rates tomorrow.

“China is between a rock and a hard place” because of the need to control inflation without hurting the recovery, Mikio Kumada, a senior market analyst at LGT Capital Management in Singapore, said in an interview on Bloomberg Television.

Read More: – By Stuart Wallace, Bloomberg

Filed Under: News Tagged With: Bloomberg Television, China, Commodities, India, Stocks, the S&P 500 Index, the U.S. dollar, the U.S. Federal Reserve

Faber: Sell Stocks Now Since Market to Only Keep Sliding

February 26, 2010 by F. Peter Brown Leave a Comment

Stock prices will finish 2010 somewhat lower than where they began this year, says investment guru Marc Faber.

Faber told investors to buy stocks in March of last year, right when the Standard & Poor’s 500 Index reached its lowest level since 1996.

Since then, the S&P 500 rallied more than 60 percent and the Dow Jones Industrial Average gained 59 percent thanks to government stimulus programs.

Now it’s time to sell, Faber says.

“I would look at the market to close probably a bit lower than it started the year in 2010,” says Faber, according to Bloomberg.

“Equally, I don’t think we have a huge downside risk. If the Dow and the S&P dropped, say 15 to 20 percent, in other words the S&P towards 900, I think there would be more stimulus and more quantitative easing.”

Read More: – By Forrest Jones, Moneynews

Filed Under: News Tagged With: Dow Jones Industrial Average, Marc Faber, Standard & Poor's 500 Index, Stimulus, Stocks

IG Markets Analyst: Stocks Could Fall to 8,800

February 3, 2010 by F. Peter Brown Leave a Comment

The market could see a huge correction in a few months, says Dan Cook, senior market analyst at IG Markets.

Investors are not buoyed by positive earnings reports, he says.

“There’s still a lot of confusion in the market. We’re looking at a pretty positive earnings season overall, but as we saw (recently) it was basically ignored due to political conflicts and we’re likely to see more of that,” Cook said.

Cook predicts there to be a 20 percent to 25 percent correction in the markets by April or May.

“It wouldn’t surprise me to see a range of 8,800 to 9,000 on the Dow. There are a few individual stocks I like, but sector-by-sector, I’m definitely more bearish than what I am bullish,” he told CNBC.

Beware the 4 new asset bubbles

January 25, 2010 by F. Peter Brown Leave a Comment

Less than two years after the housing market collapsed, the U.S. economy is threatened by a new bubble in asset prices. This time, four billowing balloons are hovering: two commodities — gold and oil — stocks, and government bonds.

Don’t be fooled into thinking that last week’s 5% drop in the S&P, and the recent sell-off in oil, remotely makes them fairly valued, let alone bargains. Equities and commodities, as well as Treasuries, which actually rallied as stocks dropped, still have a long way to fall. The reason: They’ve already seen huge run-ups that put their prices far above their historic averages, and far above the levels justified by fundamentals.

Two examples: Most companies can’t possibly grow earnings fast enough to support their lofty valuations, and oil and gold are so expensive that we’ll see what high prices always bring, a surge in new supply. That makes a price-pounding glut inevitable.

Read More: -By Shawn Tully, senior editor at large, Fortune

Filed Under: News Tagged With: 4 new asset bubbles, Gold, government bonds, oil, Stocks, the United States economy

Wall Street posts worst day since November 7

2010′s coming stock market crash: 1987 all over again

Strategist: Portugal May Spark Global Market Crisis

Survey: Investor Expectations for Stocks Turn Cautious

Morgan Stanley: Rally Over, Stocks Headed Down 11 Percent

Investor ‘Does Not Have Faith’ In the Stock Market: Siebert

Stocks, Commodities Drop on China Economy Concern; Dollar Gains

Faber: Sell Stocks Now Since Market to Only Keep Sliding

IG Markets Analyst: Stocks Could Fall to 8,800

Beware the 4 new asset bubbles

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