Inside The Stock Market ...trends, cross-currents, and outlook
The Fireworks in July: Some Shooting Stars and Some Duds
Well, I have to admit it, this writer counts himself as one of the befuddled. Based on the calls in late June, a number of clients are also in the peer group. So, in terms of the shorter-term market outlook, I’m afraid it is a case of the befuddled leading the befuddled...or not leading the befuddled?
“Remembrance of Things Past”
If you haven’t done so already, I highly recommend you spend some time with the June 1987 20th Anniversary issue of Institutional Investor. Here, we are reproducing one of those remembrances, as Don Weeden recalls his earlier battles with the New York Stock Exchange.
View from the North Country
Mid-course corrections to our annual economic and market projections for 1987. Also, some low down dirty pirates from “out east” made a pass at Minnesota’s beloved Dayton Hudson...our Legislature's response and the Greenmail Solution.
Major Trend Index Improves, But….
Our broad-based measure of the stock market’s wellbeing improved in June, gaining some 500+ points. However, this work still remains decidedly negative on balance.
Reviewing the Second Quarter
For most of us, essentially all of the positive 1987 performance has come in the first three months of the year, with most of that in January and February. Still, our equity model was up 5.2% in the second quarter.
View from the North Country
Doing the MTA and FAF conferences in May....The polite nods and smiles are waning as the Japanese come to increasingly believe they are scapegoats for America’s economic woes...Even though we think the currency play in the Australian dollar may be played out for a while, the high yields in themselves are very attractive. All in all, we find Aussie bonds to be a comfortable investment area these days.
Indicators Continue to Deteriorate
Our composite Major Trend Index has continued to deteriorate and is decidedly negative. It is no longer just the Intrinsic Value measures that are warning us of trouble ahead.
Client Questions
Most of last month’s questions have been addressed in other sections of this month’s publication, but here are some ‘‘leftovers”.
The Farm Belt: Dirt Cheap
For those who have survived, things are looking up down on the farm. Land prices are down through most of the Midwest, close to matching the previous great farmland bear market, 1920 to 1932. We think farmland is bottoming out. If you want to invest in farmland we give you some advice.
View from the North Country
Thoughts from the airplane…Two pictures of gold…Is finding values in this market “Mission Impossible?”
“April Must Have Been Dull”
When the closing bell sounded on April 30, the market averages were down very little from the month before. To the casual observer, it might appear to have been a dull quiet month. But to those on the floor, in front of a quotron, or even reading the daily financial pages, it was anything but.
The Stock Market in April
It was a wild and wooly, hairy and scary market in April, even though the popular averages ended the month only about 1% below where they began. However, the NASDAQ and Value Line measures each declined about 3% over the month.
Client Questions
Three questions that seem to be coming up quite frequently these days: Is it time to buy electric utilities? What do we think about the telephone utilities? Inflation sensitive stocks - what do we do now?
More Cautious
A month ago, this publication recommended clients start moving toward a defensive posture. Our cautious stance toward the stock market is essentially unchanged from last month. If anything, we have become more cautious.
Liquidity Considerations
The stock market might still go higher, but at least some elements of the liquidity thesis are no longer quite as valid as they were even a month or two ago. More and more, the liquidity driven case is narrowing down to the waves of cash rolling across the Pacific.
Japan Investors Are Not Forever
A number of factors have, in recent months, combined to create strong Japanese demand for U.S. equities, especially the known recognizable U.S. names. But keep in mind, attitudes and current conditions can change almost overnight.
Stocks…Where Else Can I Make Money?
Where else can all the world’s liquidity go, other than into the stock market? After all, bonds are not attractive. It has to flow into stocks, doesn’t it?
View from the North Country
A Giant Step Backward: Hoggish House’s Pork Barrel Propensity for Speedy Spending… Gold stocks are exploding, but gold itself is only edging higher. What is going on?
Getting Defensive……Right Now
Our Major Trend Index, after remaining neutral for all of February, shifted into negative territory with the March 2 calculation. Immediate defensive action is being taken in our two asset allocation models.
The Stock Market in February
The S&P 500 gained 3.7% in February, the DJIA 3.1%, but the majority of market sectors outperformed these benchmarks. Secondary stocks, especially technology issues, moved well ahead of the popular averages in the last half of the month.
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