Scandals Still Moving Markets

This week’s Market Update is posted at Alpha Baskets and includes the following; Yields backed up around the globe including a ten basis point gain up to 1.84% for the US Ten Year Treasury Note yield. The trend of rising rates has been in place for several weeks and in that time the larger intermediate and longer dated treasury ETFs have seen declines of 6% to as much as 9% in that time. While we won’t guess whether this is the turn in rates or not, the last month provides an example of how quickly interest rates can change direction and how quickly and how far certain funds can decline. Please click through to read the entire update. This sign for Arches is at the visitor center, the one at the entrance is actually on Highway 191 and isn’t as neat as this one, IMO. This is Delicate Arch in Arches National Park. As we were starting our drive home I saw this truck from the highway. The crew was very patient while I took a couple of pictures but the lighting was pretty rough for looking right into the sun. That is obviously Monument Valley in the...

Governments Are People Too

My latest post for Alpha Baskets looks at the government of Norway going through the same sort of cognitive dissonance that individuals go through. From the post; It turns out the relationship between the Norwegian government and the Government Pension Fund of Norway (that country’s sovereign wealth fund) is a lot like an emotional client and his advisor. The government commissioned a report that is trying to pressure the fund to increase its equity allocation to 70% from 60%. Please click through to read the entire post. The first picture is from Dead Horse Point State Park looking at Canyonlands National Park using a fisheye app. Coming into Capitol Reef National Park from the Torrey, UT side. Driving into Arches National Park at first...

Big Merger Monday

Domestic equity markets mostly stayed between the lines last week in terms of very little index-level price movement. The market was willing to reward strong earnings including mega cap software, financials and video streaming and punish the weak like in the car parts business. There also large price swings Friday triggered by media industry merger talk. But through all that the Dow Jones Industrial Average gained just four basis points for the week, the S&P 500 did slightly better, adding 0.38%, the Russell 2000 gained 0.47% and the NASDAQ was the big winner thanks to the above mentioned earnings with a 0.81% rally. The new week is starting with a big merger bang including a mega cap merger in the communications industry, a deal involving discount brokerage Scottrade being bought by a larger rival as well as another financial merger and a proposed tie up in the industrial sector. Mergers of course go on the positive side of the ledger for market sentiment as they represent optimism about future prospects. While signs abound that the stock market cycle is long in the tooth, heavy merger activity provides ammunition for the bulls. We found a little bit of humor in last week’s CPI data as the headline rose 0.3% which might be a sign that Fed policy could finally be starting to help but the core CPI, which excludes food and energy was only up 0.1% which extinguishes, for now, that glimmer of hope. The humor, if there really was any, was that the report captures the struggle of this entire cycle where the FOMC, Fed and even the treasury...

Utah National Park Panoramic Pictures

Last week we traveled through Southern Utah hitting Bryce, Capitol Reef, Canyonlands and Arches National Park and Monument Valley Navajo Tribal Park. It was a Saturday to Saturday trip. We did a lot of hiking and I took about 600 pictures. These are my favorite panoramic pictures. Sunrise in Bryce Canyon Hiking down into the Hoo Doos on the Mojave Trail in Bryce Canyon The next two are from Capitol Reef National Park. It is a smaller park but stunning nonetheless. One nice feature is there isn’t a parade of tour buses pulling up and emptying out all throughout the day. The next three were taken at Dead Horse Point State Park and looks out over Canyonlands National Park The next three were taken in Canyonlands National Park, the scale of this park is massive Windows at Arches National Park close to sunrise Windows, shortly after sunrise Landscape Arch in Arches National Park Approaching Monument Valley Monument Valley Monument Valley at first light Monument Valley at sunrise On the self-guided driving tour inside Monument Valley You can follow me on Instragram @rogernusbaum or on Facebook...

Hang In There, The Election Will Be Over Soon

Earnings season is now well under way with the big US banks generally delivering strong results. The financial sector has been the center of attention lately for scandals, potentially large fines to be paid, a spinning out of REITs into its own sector and the promise of higher rates from the Federal Reserve which is generally accepted as a catalyst for better profitability. Hated though the banks may be, they still are essential to the economy’s ability to function. Markets seem to be paying more attention now to the election with it just a few weeks away. We will keep this report politically neutral but note that the popularity of both major party candidates is quite low with distasteful stories about both coming on an almost daily basis. In terms of market implications, In a conference call last week, Chris Kelleher, a portfolio manager at Newfleet suggest that while markets are pricing in a Fed rate hike in December, a GOP win could reduce that likelihood. Whether it was election fatigue or something else, domestic equities rolled over into another week of modest declines. The Dow Jones Industrial Average fell 0.55%, the S&P 500 was down 0.95% the NASDAQ dropped 1.46% and the Russell 2000 slid 1.94%. During the month of September, the NASDAQ and Russell 2000 led the Dow and SPX which can be taken as a sign of confidence or that risk is on. October thus far has reversed that trend indicating risk, for the time being, is off.   Foreign markets were a mixed bag last week. On the positive side, the DAX was up 0.85%,...