@theMarket: Wall Street Sees Another Positive Year AheadBy Bill Schmick,
04:11PM / Friday, December 27, 2024 | |
It is a time when financial strategists and economic experts forecast what will happen in the coming year. Since most of Wall Street is trying to sell you something, prepare for a positive outlook from most firms.
On practically the same date last year, I wrote that strategists were predicting the 2024 S&P 500 Index targets ranged from 4,200 to 5,500. Given that over a long period, the S&P 500 has delivered around 10.13 percent yearly returns since 1957, and 9.19 percent over the last 150 years, forecasts that mimic those returns should be ignored.
Those forecasts told me the authors had no idea where the market was going. As such, they just 0 Comments
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@theMarket: Fed Backs Away from More Interest Rate CutsBy Bill Schmick,
10:45AM / Saturday, December 21, 2024 | |
The Federal Open Market Committee cut interest rates again on Wednesday and reduced the number of interest rate cuts next year. That decision dismayed investors and triggered a run for the exits in the stock market. Will this government Grinch decision ruin the chances of a Santa Claus rally?
Wall Street labeled the central bank move a "hawkish cut." Prior to the meeting, most investors were expecting that the Fed would pause after this month's rate cut of 25 basis points. Given that events unfolded as expected, why did the Dow lose over 1,000 points in two hours?
Inflation is the short answer. You may recall in last week's column I 0 Comments
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@theMarket: Stocks Shrug Off Rising InflationBy Bill Schmick,
11:40AM / Saturday, December 14, 2024 | |
New highs continue as equities ignore the inflation data and focus instead on the prospects of the next administration. Wall Street consensus is that the upside in stocks should continue at least until the new year.
As a contrarian investor, I often disagree with the consensus view but not this time. Last week I explained how global money flows usually support the markets and create the Santa Claus rally. This period of good cheer and higher prices should extend into mid-January.
This week, the most recent data on inflation confirmed my fears that we have not seen a bottom in inflation. Back in September, I predicted that inflation would begin to rise again, 0 Comments
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@theMarket: The Santa Claus Rally and Money FlowsBy Bill Schmick,
03:49PM / Friday, December 06, 2024 | |
Each year from roughly the end of the second week of December through the second week in January the stock market rises most of the time. This year, expect a similar occurrence.
There are plenty of explanations for why this occurs. Many believe it is simply the good cheer the holidays bring to the markets. Others point to the additional spending triggered by holiday shopping, while some argue it is because institutional investors buy stocks before going on their Christmas break.
For me, it comes down to the flow of funds in and out of financial markets. Every year, for many reasons the flow of funds into the financial markets increases at the end and 0 Comments
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@theMarket: Holiday Cheer Lead Stocks HigherBy Bill Schmick,
03:49PM / Friday, November 29, 2024 | |
Scott Bessant at Treasury, threats of day-one tariffs on trading partners, and calls for another end-of-year rally buoyed markets. It is a seasonally bullish time for the equity markets with Christmas around the corner.
By now, you have probably heard that hedge fund manager Bessant will take the reins at the U.S. Treasury in January. Markets cheered that news. Most market participants believe Bessant is the man best suited for that post. Investors hope he will be market-friendly and a voice of moderation in the new Trump administration.
But before Bessant or anyone else gets carried away with the idea that Trump has lost that loving feeling he has for 0 Comments
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