Research & Market Insights

09.02 2009

Gold Soars As Stocks Tread Water

The price of gold and gold mining stocks soared today as stocks continued this week’s selloff. Our preferred investment vehicle for gold, the SPDR Gold Trust (symbol GLD), which holds gold bullion, rose 2.4% today as spot gold closed at $980 per ounce. We also hold shares in gold mining companies through the Market Vectors…

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08.28 2009

Markets Shrug Off Good News

When it comes to the financial markets, often the reaction to news is more important than the news itself.  This week, I’d have to admit that much of the news was quite positive, including: July Existing Home Sales rose 7.2%, well above expectations of a 2.1% increase; The Case/Shiller Home Price Index showed a month-over-month…

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08.15 2009

Tough Week for U.S. Consumers

Markets received a little dose of reality last week, declining for the first time in five weeks due to disappointing news on the health of over two-thirds of the U.S. economy. Amid all of the recent talk of the imminent end to the recession, several data points released last week show the U.S. consumer is…

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08.05 2009

All Eyes on July Employment Report

The S&P 500 closed at 1,005.65 on Tuesday, just one-tenth of a point shy of the high on November 4th of last year, the day Barack Obama was elected President. Of course, we all know too well what happened over the four months following the election as stocks plummeted over 30%. So today, the S&P…

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07.07 2009

Equity Markets Begin Correction

Today, equity markets continued to show signs that at least a mild correction is underway as the S&P 500 Index closed at its lowest level since May 1st. After reaching an intra-day high of 956 on June 11, the S&P 500 has declined nearly 8% through the close of today’s trading at 881. From a…

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06.16 2009

Stock Market Correction Ahead?

In my May 22nd post, I talked about the S&P 500 Index approaching its 200-day moving average, an important level that would inspire confidence if the index could close above it on strong trading volume.  Well, the S&P 500 did close above the 200-day moving average on June 1st, but volume was lackluster, and has…

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05.22 2009

Is The Rally Over?

Is the monster rally that took the S&P 500 up 39% from the March 9th low to its 2009 high of 929 on May 8th over?  Recent market action is clearly warning that a near-term top may be at hand.  Look at the chart of the S&P 500 below.  The red circles indicate a “double-top”…

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05.15 2009

Free Market Capitalism?

Last week, I mentioned that a fair market value for the S&P 500 was around the 900 level, based on $60 of earnings in 2010 and a price-to-earnings multiple of 15 times.  However, I suggested that the multiple of 15 times earnings might be too high, meaning that earnings need to surprise to the upside…

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05.10 2009

All Clear Signal?

Stock markets worldwide extended the monster bear market rally last week amid a favorable response to the bank stress tests and better than expected employment numbers.  After a 40% rise in equities since March 9th, many believe the bear market is over.  So has the market issued the all clear signal? While huge government stimulus,…

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04.20 2009

Stocks Get a Dose of Reality

After a six week rally that took the S&P 500 up 28.5% from the March 9 bear market low, stocks endured a 4% selloff on Monday.  Financial stocks led the decline, as Bank of America’s earnings report and concerns over upcoming results of the bank stress tests sparked an 11% loss in the S&P Financials…

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