All major U.S. stock indices finished in the red last week, led lower by the small-cap Russell 2000, which lost 2.4% and is the only major U.S. index in negative territory for the year. #-ad_banner-#The key takeaway heading into this week is that the U.S. stock market is at another near-term decision point: Assuming the market’s larger 2014 advance is still healthy and intact, we should see its September pullback end. Put another way, if U.S. stocks can’t get any traction from their current level, a deeper correction could potentially extend well into October. Watch Key… Read More

All major U.S. stock indices finished in the red last week, led lower by the small-cap Russell 2000, which lost 2.4% and is the only major U.S. index in negative territory for the year. #-ad_banner-#The key takeaway heading into this week is that the U.S. stock market is at another near-term decision point: Assuming the market’s larger 2014 advance is still healthy and intact, we should see its September pullback end. Put another way, if U.S. stocks can’t get any traction from their current level, a deeper correction could potentially extend well into October. Watch Key Support Levels This Week The first chart displays what is probably the most influential index and price level to watch this week. In the Aug. 25 Market Outlook, I pointed out major overhead resistance in the market-leading Nasdaq 100 (NDX) at the 4,147 September 2000 high, which the index has been testing and holding ever since. Last week’s decline from 4147 has positioned NDX right on top of underlying support at 4,007 to 3,998, which represents its July 24 high and 50-day moving average. Read More

They’re popping the champagne corks in Denver, Colorado, where fund management firm Janus Capital Group, Inc. resides. Shares of Janus surged more than 43% on today, inflating the company’s market value by nearly $1 billion. Investors figure the sudden and unexpected hiring of legendary bond fund manager Bill Gross will generate massive amounts of new business for Janus. Yet, it may be time to put the cork into the champagne bottle. The road ahead for Bill Gross — and the bond market — is likely to be much more challenging. #-ad_banner-#Make no mistake, Bill Gross is one of the brightest… Read More

They’re popping the champagne corks in Denver, Colorado, where fund management firm Janus Capital Group, Inc. resides. Shares of Janus surged more than 43% on today, inflating the company’s market value by nearly $1 billion. Investors figure the sudden and unexpected hiring of legendary bond fund manager Bill Gross will generate massive amounts of new business for Janus. Yet, it may be time to put the cork into the champagne bottle. The road ahead for Bill Gross — and the bond market — is likely to be much more challenging. #-ad_banner-#Make no mistake, Bill Gross is one of the brightest minds in the bond business. His wise prognostications helped draw $270 billion into his firm’s Pimco Total Return Fund (Nasdaq: PTTRX). And Janus executives hope he will have a similar magic touch at his new firm.  Even before his arrival, Janus rebounded from its tarnished dot-com legacy and now manages more than $30 billion in bond assets.  According to various media reports, Gross will oversee Janus’ Global Unconstrained Bond Fund (Nasdaq: JUCAX) — which was launched in May 2014 — and he will also help further develop the firm’s fixed-income investment strategies. An unexpectedly long rally When I started… Read More

On March 11, 2011, a massive 9.0-magnitude earthquake erupted about 45 miles east of the Japanese coast. The earthquake let loose a huge tsunami that struck the Fukushima Daiichi nuclear power plant and caused a reactor meltdown. This was the worst nuclear disaster since the 1986 Chernobyl incident and caused bitter backlash against the nuclear power industry around the world. Japan immediately shut down its remaining nuclear plants and Germany followed suit. Both countries vowed to be nuclear free by 2030 and 2022, respectively. Was this the end to atomic energy?… Read More

On March 11, 2011, a massive 9.0-magnitude earthquake erupted about 45 miles east of the Japanese coast. The earthquake let loose a huge tsunami that struck the Fukushima Daiichi nuclear power plant and caused a reactor meltdown. This was the worst nuclear disaster since the 1986 Chernobyl incident and caused bitter backlash against the nuclear power industry around the world. Japan immediately shut down its remaining nuclear plants and Germany followed suit. Both countries vowed to be nuclear free by 2030 and 2022, respectively. Was this the end to atomic energy? As you can see from the chart below, major uranium producer Cameco (NYSE: CCJ) plummeted on the news:   But here’s where the story gets interesting… The Fukushima nuclear incident in Japan — an event that singlehandedly sparked a 50% plunge in uranium prices and raised speculation about the “end of atomic energy” — has actually had no impact whatsoever on global uranium demand. You see, most of Japan’s nuclear fuel is purchased under long-term supply agreements. Uranium fuel is thus delivered regularly to utilities there. Here’s… Read More

If you’ve been watching the market action in recent days, you’ll notice a growing sense of unease. The S&P 500 has repeatedly scaled past 2,000, only to be rebuffed. Is it simply buyers’ fatigue or instead the result of growing concerns about the economies in China and Europe and military action in the Middle East? Frankly, the news outside our borders has been mostly negative, and we may be hearing about the rising set of challenges being faced by export-focused U.S. multinationals as earnings season gets underway in a few weeks. To be sure, the stocks that comprise the S&P… Read More

If you’ve been watching the market action in recent days, you’ll notice a growing sense of unease. The S&P 500 has repeatedly scaled past 2,000, only to be rebuffed. Is it simply buyers’ fatigue or instead the result of growing concerns about the economies in China and Europe and military action in the Middle East? Frankly, the news outside our borders has been mostly negative, and we may be hearing about the rising set of challenges being faced by export-focused U.S. multinationals as earnings season gets underway in a few weeks. To be sure, the stocks that comprise the S&P 500 aren’t in crisis mode — most of them trade near their all-time highs. Yet further down the food chain, small caps and micro caps are quickly breaking down. The Russell 2000 index has begun to drift steadily lower, and many of the underlying components in that index are now 30%, 40% or more from their 52-week highs.  In fact, more than 140 stocks hit 52-week lows on Monday, September 22, on each the Nasdaq and the New York Stock Exchange. That’s the largest number we’ve seen all year. The divergence between small cap stocks and their larger peers… Read More

As investors scan the business news each morning, they often gloss past major acquisition announcements. Most deals don’t involve and don’t have much impact on stocks in your portfolio. But such news can be a fertile source of investment ideas. You can look at these deals, including the valuations, and start to gain an idea of what it means for rival stocks. Sometimes, you’ll find a sharply undervalued rival, simply by connecting the dots. Let me give you an example. Two years ago, I noted that ad agency MDC Partners, Inc. (Nasdaq: MDCA) may soon rally because French advertising and… Read More

As investors scan the business news each morning, they often gloss past major acquisition announcements. Most deals don’t involve and don’t have much impact on stocks in your portfolio. But such news can be a fertile source of investment ideas. You can look at these deals, including the valuations, and start to gain an idea of what it means for rival stocks. Sometimes, you’ll find a sharply undervalued rival, simply by connecting the dots. Let me give you an example. Two years ago, I noted that ad agency MDC Partners, Inc. (Nasdaq: MDCA) may soon rally because French advertising and marketing agency, WPP Plc (Nasdaq: WPPGY), spent $540 million to acquire a rival digital-focused ad firm. On an apples-to-apples basis, MDCA, which became a key player in digital marketing strategies, would be worth more than $30 a share. At the time, shares traded for just $11. I thought the $30 price target seemed too rich: “Frankly, I don’t see this stock going much past $20,” I concluded.  Shares eventually surged to $26 before a recent pullback to $20. In this very same industry (digital advertising), the connect-the-dots trade has just happened again. And it all starts with the September 12,… Read More

Despite ongoing worry about the risk of a big correction, the market is having quite a good year. The S&P 500 is up about 10%, and the financial media is packed with reports about high-profile takeovers, major initial public offerings and soaring tech and biotech stocks. So investors may be shocked to hear which sector is leading the pack in 2014 — and by a sizeable margin. In fact, the sector is up around 15% year-to-date, placing it more than 4% ahead of the highly-publicized tech sector and even a tad out in front of the red-hot biotech… Read More

Despite ongoing worry about the risk of a big correction, the market is having quite a good year. The S&P 500 is up about 10%, and the financial media is packed with reports about high-profile takeovers, major initial public offerings and soaring tech and biotech stocks. So investors may be shocked to hear which sector is leading the pack in 2014 — and by a sizeable margin. In fact, the sector is up around 15% year-to-date, placing it more than 4% ahead of the highly-publicized tech sector and even a tad out in front of the red-hot biotech industry. Some other sectors aren’t even in the same ballpark as utilities. This outperformance is a surprise, considering the negative sentiment toward utilities at the start of the year. At that point, many analysts expected the sector to underperform because of a greater risk appetite among equity investors and gradually rising interest rates, which analysts surmised might begin pushing more conservative income-oriented investors back toward bonds. However, utilities have retained their appeal in 2014 because in many cases their yields still well-exceeded those of government bonds and high-quality corporate debt. What’s more, many equity investors sought refuge… Read More

Every quarter, I sift through a list of thirty billionaire asset managers and their holdings, uncovering the biggest similarities and differences that might be ripe for in-depth study. All the favorites are on my list: Warren Buffett, George Soros and Carl Icahn are some of the more notable names.  Big earners like David Einhorn, Stanley Druckenmiller and Donald Yacktman add extra weight to the group, joining twenty-four others who have amassed a ten-figure (or higher) bank balance through market speculating.   One of my favorite studies is to see which stocks appear most often in the portfolios of these gurus. … Read More

Every quarter, I sift through a list of thirty billionaire asset managers and their holdings, uncovering the biggest similarities and differences that might be ripe for in-depth study. All the favorites are on my list: Warren Buffett, George Soros and Carl Icahn are some of the more notable names.  Big earners like David Einhorn, Stanley Druckenmiller and Donald Yacktman add extra weight to the group, joining twenty-four others who have amassed a ten-figure (or higher) bank balance through market speculating.   One of my favorite studies is to see which stocks appear most often in the portfolios of these gurus.  They must have a broad following from billionaires for a reason, so let’s make it a point to find out why.  See below for a list of six stocks that at least half of the thirty managers I follow own. Stock Symbol No. of Funds That Own (out of 30) Apple, Inc. AAPL 18 Anadarko Petroleum Corp. APC 18 Facebook, Inc. FB 17 Liberty Global PLC LBTYK 16 Micron Technology, Inc. MU 15 Actavis PLC ACT 15 You’d be hard-pressed to visit any stock research website and not see tons of commentary about Facebook and Apple.  In the interest of… Read More

Around the office, we call them “secret wealth investments.” That’s because they’ve been almost exclusively used by the wealthiest investors and institutions for decades now. #-ad_banner-#Yale has used them to generate average returns of 30% every year for their endowment funds since 1973. High net-worth individuals have used them to beat S&P 500 investor returns by an average of 7 percentage points every year for the past decade. And because federal law has stipulated that only millionaires with annual incomes above $200,000 per year can invest in them,… Read More

Around the office, we call them “secret wealth investments.” That’s because they’ve been almost exclusively used by the wealthiest investors and institutions for decades now. #-ad_banner-#Yale has used them to generate average returns of 30% every year for their endowment funds since 1973. High net-worth individuals have used them to beat S&P 500 investor returns by an average of 7 percentage points every year for the past decade. And because federal law has stipulated that only millionaires with annual incomes above $200,000 per year can invest in them, about 94% of investors have been blocked out of this private-market investment. That is, until we found a backdoor way for all investors to invest in them… If you’ve been reading StreetAuthority for the past couple of weeks, you know some my colleagues and I are big fans of these ultra high-yield investments. Some of these “secret wealth investments” I’m referring to are known as private equity firms. And over the last decade, they’ve slowly become open to individual investors. Today, roughly a dozen of these firms sell shares on the… Read More

All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in… Read More

All major U.S. stock indices posted gains last week except for the Russell 2000, which lost 1.2% and is also the only major index in negative territory for 2014. Despite the weakness in small caps, the broader market, as measured by the S&P 500, has managed to rack up a decent 8.9% gain this year, largely on the back of technology issues. #-ad_banner-#The Nasdaq 100 is up 14.2% year to date. However, as I have been stating in this space for some time, if and when technology stocks stop leading, the broader market may be in for some significant problems over the near term. Dow Makes New High, but Problems Persist In last week’s Market Outlook, I warned that the early September new closing high in the Dow Jones Transportation Average had not yet been corroborated by a new closing high in the Dow Jones Industrial Average, which, according to Dow Theory, was a red flag for the overall market. That situation was averted last week by a new high in the industrials, clearing the way for more near-term strength in both indices. Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the… Read More

All major U.S. stock indices lost ground last week, led by the broad market S&P 500, which was down 1.1%. #-ad_banner-#​Halfway through the month, the market leading Nasdaq 100 (NDX) continues to stall just below formidable overhead resistance at 4,147, which I first discussed in the Aug. 25 Market Outlook. With the small-cap Russell 2000 the only major index in negative territory for the year, technology stocks have been responsible for market leadership. Without a significant and sustained rise above 4,147, or a strong surge higher by the Russell 2000 to pick up the slack, a broad market pullback is likely coming soon. All 10 sectors of the S&P 500 finished in negative territory for the week, led by energy, which was down 3.6%. My own metric based on ETF asset flows shows that the greatest outflow of sector-related assets over the past one-week, one-month and three-month periods was from the energy sector, which explains why it has been the weakest sector for each of these periods. Although my longer-term metrics suggest there will be an opportunity to buy energy-related assets in… Read More