|Dow||+26.32 to 18,298.88|
|S&P 500||+6.47 to 2,129.20|
|Nasdaq||+30.15 to 5,078.44|
|10-YR Yield||+0.087 to 2.228%|
|Gold||-$0.40 to $1,224.90|
|Crude Oil||-$0.04 to $59.65|
Stocks hit all-time highs today! So where’s the “Oomph?”
I’m talking about the momentum. The excitement. The broad participation. The euphoria that accompanied the day “Dow 10,000” hats rained down on the stock exchange floor.
Forget the bang. Today’s S&P 500 close of 2,129.20 and Dow Industrials close of nearly 18,300 – were both a fresh record highs for the broad averages – but they hardly elicited a whimper on Wall Street.
I’m not the only one noticing. Here’s one piece from TheStreet.com talking about “joyless rallies” and saying “the lack of excitement out there is reaching new depths.” Here’s another recent article on the topic from a college professor in Massachusetts.
For its part, the Financial Times also offered its take on the trend a couple months ago in this article. What did the FT blame for the lack of excitement:
1) The artificial nature of the rally. Investors have had a hard time embracing it because excessively easy central bank policy has helped fuel the gains.
2) The fact Wall Street bankers aren’t earning the huge paychecks they used to when markets surged. That sure dampens enthusiasm in New York, London, and other centers of the financial markets universe.
3) A lack of broad participation from Main Street investors. Unlike in the late 1990s, when average Americans were trading tech stocks like crazy, many of them are missing out on this rally. They’ve been so scarred by the dot-com crash, the housing crash, and the market meltdown that accompanied the financial crisis, that they’re just holding cash or ignoring the markets entirely.
Frankly, I can understand a degree of caution and skepticism. This economic recovery has left too many Americans behind. The wealth being generated by the markets isn’t touching as many of us as the rally in the 1990s did. We’ve seen the pain that bursting bubbles fueled by too-much easy money can inflict on individuals and the economy as a whole.
In the current rally, the broader Russell 2000 index hasn’t hit a new high. The Dow Transports and Dow Utilities are also lagging the Dow Industrials.
|Stocks hit a record high, but where’s the excitement?|
But is there a point where healthy skepticism turns into something worse? Where it becomes an unhealthy hindrance to building wealth – at least in reasonably priced, non-bubble-icious asset classes and investments that actually deserve your trust and hard-earned capital?
I’m not suggesting that just because the S&P 500 sets a marginal new high, you should plow every buck you have into the 2015 version of Pets.com. What I am suggesting is that you shouldn’t remain blind to opportunities, even as you continue to pay prudent attention to risks.
One of my favorite strategies has been to focus on anti-bubble sectors, like energy that have already had the heck beaten out of them.
That doesn’t completely insulate you from downside risk. But I believe it increases your chance of success. You’d be amazed at how many opportunities are out there.
(Note: That’s one reason I put together a time-sensitive, informative briefing for you. Click here to find out more.)
I’ve also been zeroing in on cheap foreign stocks and higher-yielding companies in sectors swept up in their own private bull markets. Plus, I’ve been using the 100 percent conflict-of-interest-free, time-tested Weiss Ratings to help steer investors like you away from the lousiest stocks and toward those with inherent, quantifiable fundamental and technical strength.
|“One of my favorite strategies has been to focus on anti-bubble sectors, like energy.”|
Lastly, you could even make an argument that a market without too much “Oomph” is actually a good thing. It’s precisely when everyone is lathered up with excitement — and dog-piling into an investment or stock market sector — that you probably want to start thinking about heading for the exits! That was certainly true for dot-coms in 1999, housing in 2005, and government bonds just a couple of months ago.
So what’s your take here? Did you take much note of the all-time closing high in the S&P 500? Or was it a non-event?
Why do you think so many investors seem apathetic toward stocks, or at least aren’t publicly professing enthusiasm about them like tech in the late 1990s? What would it take, in your view, to give this market more “Oomph?” Please do weigh in over at the Money and Markets website and let me know when you have a minute.
|Our Readers Speak|
In the meantime, and based on the comments I’ve seen, you’re clearly wondering if energy stocks are truly cheap — and whether that’s enough to make them attractive “Buys.”
Reader Chuck B. offered his take by saying: “Those charts from Friday are interesting, but it would have been more useful to have similar charts from several previous months or quarters to compare them with and look for trends.
“Energy, for example, trails the charts, but if it was higher in previous readings, it may still become weaker. If it was lower, then it may be showing strength. We would need more data to make informed decisions. Of course, one might take the pure contrarian route and jump on board without a care.”
Reader Jim added: “If we were chain-bound to the supply and demand fundamentals of oil, I would agree that caution was warranted now. However, past fluctuations in this market have been more political than economic and I suspect that is the case now.”
Finally, Reader Denis M. said: “I like well-managed energy stocks. Most of mine are Canadian. Recently, I’ve sold some of my physical gold, as I think it will remain in a bear situation for quite a while. I’m going to invest in more mid-tier oil/gas stocks and some select banks.”
Thanks for sharing. We’re at a very interesting level in the energy market, with oil prices consolidating their recent gains around $60 – and oil and gas stocks doing the same.
This looks like a normal pause that refreshes, and I continue to believe the path of least resistance is higher. Canadian producers, cheap, foreign oil and gas firms, and domestic takeover plays look particularly attractive to me.
Please do continue to add your thoughts to the mix, using this website link. I’ll respond to as many comments as I can to keep the discussion going.
|Other Developments of the Day|
ISIS overran Iraqi defenders in the critical regional capital city of Ramadi over the weekend. They managed to do so despite U.S.-led airstrikes and intelligence sharing that was designed to support Iraqi police and military units. Several hundred troops died in the fight, while tens of thousands of residents fled in advance of the ISIS attack.
So much for that ceasefire. Airstrikes resumed in Yemen after a five-day, humanitarian truce between Houthi rebels and Saudi-backed government forces expired. Peace talks on a more lasting solution have gone nowhere.
Is it possible a mystery object struck Amtrak Train 188, helping lead to the fatal derailment in Philadelphia? That’s one theory investigators are considering, given a mark on the windshield and the fact two other trains were struck by projectiles around the same time and in the same location.
Several biker gangs got into a massive shootout in Waco, Texas, on Sunday, leaving nine dead and 18 wounded. Rival gangs had decided to meet at the Twin Peaks restaurant for unspecified reasons, before words and blows were exchanged, followed by gunfire.
Any thoughts on the latest Middle East conflicts? The most recent theory about the Amtrak 188 derailment? Then use the website to share your thoughts on those stories, or any others I didn’t cover!
Until next time,