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@theMarket: Higher Interest Rates Clobber StocksBy Bill Schmick,
11:42AM / Saturday, February 27, 2021 | |
In the grand scheme of things, a small, upward blip in the yield of the U.S. 10-year Treasury bond should be of little concern to equity investors. But sometimes, when the conditions are ripe, even the tiniest spark can cause a conflagration within a speculative stock market.
As readers are aware, interest rates have been trading at historically low levels for some time. The onset of the coronavirus forced our Federal Reserve Bank to pin them even lower. Essentially, it is why the stock market has been having such a great run. Investors have been conditioned to just assume that, if anything, interest rates might trend even lower but not higher. However, during the last few 0 Comments
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@theMarket: Stocks Versus BitcoinBy Bill Schmick,
04:48PM / Friday, February 19, 2021 | |
There was no contest this week. Cryptocurrencies took center stage as the stock market churned, chopped and gave investors a little indigestion. Welcome to the market's brave new world.
It appeared that Bitcoin was the answer to whatever ails you. Higher interest rates, the threat of higher inflation, weaker (or stronger) dollar, no problem just buy Bitcoin. By the end of this week, the crypto coin had chalked up a 15 percent gain and was trading above $52,000. Ethereum, Bitcoin's younger cousin, was also up 10 percent.
None of the financial market's usual suspects — stocks, bonds, or commodities — could come close to those kinds of 0 Comments
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@theMarket: Financial Froth Infects MarketsBy Bill Schmick,
06:24PM / Friday, February 12, 2021 | |
One sure sign that stocks are getting overdone, is the actions of overconfident investors that bid up stocks in a euphoric frenzy, only to dump them at the first sign of trouble. These behavior patterns normally usher in a corrective stage in the stock market, but exactly when that will occur is anyone's guess.
Investopia's definition of froth "refers to a market condition where an asset's price begins to increase beyond its intrinsic value." Wall Street's "Reefer Madness" event this week is just such an example. Certain stocks in the Cannabis sector saw their share prices double and then triple in a matter of days. Penny pot stocks with 0 Comments
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@theMarket: Stocks Regain MomentumBy Bill Schmick,
04:16PM / Friday, February 05, 2021 | |
What a difference one week makes! Stocks recouped all their losses this week, and then went on to make new highs. The outcome of President Biden's proposed stimulus bill will determine the market's next move.
Let me set the record straight. Last week, I wrote that I expected stocks to stumble, and hopefully preparing readers for a possible decline of 10-15 percent. That was a mistake. Instead, traders bought last week's 3 percent dip and, at this point, we are now back to square one. Well, not quite.
The U.S. dollar, the 10-Year U.S. Treasury Bond, and the price of gold have all moved substantially since last Friday. The greenback, as 0 Comments
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@theMarket: A Roller Coaster MarketBy Bill Schmick,
04:59PM / Friday, January 29, 2021 | |
Investors learned a number of lessons this week. First among them was that stocks, on occasion, can go down as suddenly as they can go up. They also began to realize that it may take longer than expected before this pandemic is put to rest.
Over the last two weeks, I have been warning investors to shuck those rose-tinted glasses and take a more realistic view of exactly where we are in this pandemic relief world. That advise is starting to sink in. This week, the Biden administration, Senate Majority Leader Chuck Schumer and even Dr. Anthony Fauci, the nation's top infectious-disease expert, gave investors a more sobering look at the future.
The 0 Comments
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