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Author: mandmweb

Are There Any Sleepers You Should Invest In?

The stock market just keeps going up. In the depths of the Great Recession you could have bought Amazon.com for $37 a share and now it trades close to $1,000. Amazon.com also has a P/E ratio of 250. In fact the tech darlings that are still driving the rally are all overpriced by historic standards. Are there any bargains left? Are there any sleepers you should invest in? CNBC writes about 5 stocks that have gone nowhere in 2017 but are stocks that may be worth buying. In the midst of a raging bull market, some stocks in the S&P 500 have seen virtually no gains or losses this year. But some of them could be worth buying for a breakout, according to some market participants. Goldman Sachs, Quest Diagnostics, Mylan, Concho Resources and Fastenal have all been trading within 0.2 percent of where they began the year. Max Wolff, chief economist at Disruptive Technology Advisers, says two of them stick out to him the most. The first of these is big bank Goldman Sachs, which actually fell following its earnings report on Tuesday. The underlying theme for each of these stocks is the reemergence of inflation as an economic factor and revival of the global economy. Where Should You Invest? If you think that the US stock rally has nearly run its course you can search for overlooked...

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How Long Will the Economic Sweet Spot Last?

The stock market seems to be overpriced but every times earnings come in they are positive and stocks keep going up. So long as the economy keeps chugging along it supports earnings but how long will the economic sweet spot last? CNBC writes that the economy may soon lose its power to boost stocks. Then what? Closely followed strategist Jim Paulsen told CNBC on Monday he’s worried that economic data could stop supporting the stock market’s bull run. “The economy has been doing so good for so long now that even if it continues to do well, it won’t any longer be a surprise,” said Paulsen, chief investment strategist at Leuthold Group. “Economic surprises I think are going to get as high as they’re going to get,” Paulsen told “Squawk Box.” “We may see toward year end and the first quarter next year a pause in this market.” Paulson says there is a wall of worry about the market being overpriced. The economy does not really need to falter to take stocks down. It could simply stop providing surprises. And if something in the economy happens to concern investors there are probably a lot of them ready to pull the plug on their portfolios after making nice profits on the years-long run up. Where Is the Economy Going? How long will the current level of economic growth last? Is...

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Should You Be Investing in Defense Contractors?

Every day seems to bring more bad news about possible conflict on the Korean Peninsula. As the dictator of North Korea and the American President trade insults and threats should you be investing in defense contractors? CNBC writes that the specter of war has driven defense stocks up. On Oct. 1, President Donald Trump once again took to Twitter to attack Kim Jong-un, saying that negotiating with the North Korean chairman is a waste of time. While social media mudslinging may not be the best way to deal with a hostile leader, there’s at least one group who may not mind Trump’s Twitter threats: defense industry investors. Year-to-date, the S&P 500 Aerospace and Defense Industry subsector index is up 30 percent, compared to 12.9 percent for the S&P 500. Since July 3, when North Korea fired its first intercontinental ballistic missile and Trump said in a tweet, “Does this guy have anything better to do with his life?” the index has climbed by 14.3 percent. While most people likely don’t want to go to war with North Korea, the increasingly heated rhetoric is helping many defense-industry stocks reach record highs. In order for defense stocks to go up and stay up there needs to be an increase in defense spending, not just rocket launches, nuclear bomb testing and twitter threats. Should you be investing in defense contractors or has...

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Is Pension Money Keeping the Rally Alive?

Everyone says that the stock market is overpriced but it keeps going up. One reason is that earnings are pretty strong for the market leaders and nothing seems to scare investors when earnings are good. But there is more to the story. When there is a lot of money to invest it tends to go into the market. Market Watch makes the point that money managers are being forced to buy stocks as pension contributions pour in. Their point is that while many factors drive the market, forced buying is a real driver when huge pension fund contributions roll in, usually on a quarterly basis. Downside Risk in Offshore Tech Reuters writes about a similar problem in tech companies in emerging markets. The boom in emerging market technology stocks is becoming a problem for fund managers of all stripes. The soaring market capitalization of a handful of companies such as China’s Alibaba (BABA.N) and Tencent (0700.HK) is steadily lifting their weighting in the MSCI emerging equities index .MSCIEF. This means investors in funds that track indexes (exchange traded funds or ETFs) Рwho want exposure to a range of companies for a lower fund management fee Рare finding themselves increasingly exposed to a single sector. Meanwhile, active fund managers, who justify charging higher fees for their individual stock-picking expertise, are under pressure to buy those tech stocks to...

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How a Stronger Dollar Creates Winners and Losers

A strengthening US economy and the prospect of more interest rate hikes by the Federal Reserve have helped the US dollar stop its recent slide. But how does a stronger dollar affect the economy and the stock market? Today we look at how a stronger dollar creates winners and losers. CNBC writes that stocks could take a hit as the dollar strengthens. The U.S. dollar is beginning to enjoy a bullish turnaround after declining for much of this year, and some strategists are watching for how its recent gains will impact equity markets domestically and abroad. Should this bounce continue, domestic markets with large multinational companies such as the S&P 500 would likely take a hit, as the negative impact of a stronger dollar on foreign earnings begins to be felt. Commodity markets such as crude oil and metals, priced in U.S. dollars, could also feel pressure from a stronger greenback, as could emerging markets, Maley wrote. The inverse moves in the large emerging markets exchange-traded fund, the EEM, were “incredibly exact” the last two times the dollar reversed, he wrote. Specifically, he pointed to the period between September and December of last year, as well as the period between this January and late September. Since oil is priced in US dollars the cost of oil goes up in foreign markets when the dollar strengthens. This creates losers, especially...

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