I would be surprised if the average investor understands how major securities indices are composed. Take the S&P 500, for example. It’s a market cap weighted index. What’s a market cap, and how is it calculated? It’s surprising to me how little attention this gets. Market capitalization is the value of all the shares of a company added together. The market cap of the S&P 500 is the value of all the shares of all five hundred companies added together. The companies with the biggest market caps themselves, therefore, make up a bigger part of the index’s market cap. So, when you … [Read more...]
Archives for January 2024
Durable-Goods Unchanged in December
Economists expected a slight rise in durable goods orders, but they were dragged down by the transportation sector and by capital goods in the defense sector, reports Joshua Kirby of The Wall Street Journal. He writes: Orders for longer-lasting goods in the U.S. were unchanged in December, pointing to little movement in manufacturing as the year ended. New orders for products meant to last at three years, such as appliances, computers, cars and other manufactured goods, were stable on month, adjusted seasonally, according to Commerce Department figures set out Thursday. [...] Orders … [Read more...]
Warm Temps Pushing Down Natural Gas Prices
Ryan Dezember of The Wall Street Journal tells his readers that warmer temperatures in December have pushed down prices for natural gas despite the frigid temps at the start of 2024, causing a surplus in U.S. natural gas. Dezember writes: U.S. natural-gas production notched new highs in December, pushing down prices for the heating fuel despite the frigid start to 2024. The flood of gas, along with forecasts for unusually warm weather in the coming weeks, has knocked natural-gas prices down by more than 30% since the start of heating season at the end of October. Natural-gas futures for … [Read more...]
Dow 38,000 and Beyond
Let’s not get too excited about Dow 38,000. Your Survival Guy remembers when we hit Dow 10,000 in 1999. As you can see, we crossed that bridge again and again. What’s always amazing to me is how short the average investor’s memory is (you’re not average, dear reader). Look how long it took for Dow 10,000 to gain some terra firma. Then, look at how long it took for NASDAQ. Not pretty, as an entire generation was lost to price wars—prices were stagnant. With the so-called Magnificent Seven running a third of the show for the S&P 500, let’s not forget that … [Read more...]
Is Inflation Improving? It Depends on Who You Ask
Americans have suffered through three years of Bidenflation, and by all accounts, the rate of inflation is improving. But some people, mostly those affiliated with the current administration, are taking a victory lap based mostly on the PCE price index, while other inflation measurements are still coming in at distressingly high levels. Gwynn Guilford reports for The Wall Street Journal: The core index of the Federal Reserve’s preferred inflation metric, the personal consumption expenditures price index, increased 2% from the prior quarter, the same as in the third quarter and in line with … [Read more...]
Houthis Aided by Iranian Military Advisers and Technology
Benoit Faucon and Warren P. Strobel of The Wall Street Journal tell their readers how Iranian military technology and advisers have aided Houthi attacks in the Red Sea. They write: Iran is sending increasingly sophisticated weapons to its Houthi allies in Yemen, Western officials and advisers say, enhancing their ability to attack merchant vessels and disrupt international commerce despite weeks of U.S-led airstrikes. The Houthis, once derided as a ragtag militia operating in Yemen’s arid backcountry, have emerged as one of Iran’s most capable proxies, these officials and analysts say, due … [Read more...]
Surveys Show Economic Growth and Waning Inflation
Jeffry Bartash of MarketWatch tells his readers that recent S&P surveys ‘send a clear and welcome message of resilient economic growth and sharply waning inflation’. Bartash writes: The U.S. economy got off to a good start as growth sped up in January a pair of S&P business surveys showed, indicating a recession still appears far off. The S&P flash U.S. services PMI climbed to a seven-month high of 52.9 in January from 51.4 in the prior month, S&P said Wednesday. The flash U.S. manufacturing PMI, meanwhile, jumped to a 15-month high of 50.3 this month from 48.2 in … [Read more...]
“Inflation Dodger”
You want a history lesson? In 1987, I was interviewed by The Kiplinger Magazine - Changing Times (which is known today as Kiplinger’s Personal Finance). This wasn’t long after I had written Financial Armadillo Strategy with the late David Franke. At the time, America was coming off some of its heaviest inflation ever, and investors wanted a solution to the problem. Despite those high rates of inflation in the 80s, I warned that even somewhat more moderate rates of inflation—like those Americans have seen over the last two years—do real harm to investors. “I don’t mean 10% or 15% inflation; … [Read more...]
Your Own Margaritaville Is Here
A Jimmy Buffett-inspired community near Panama City Beach has been named among the nation’s best. Warren Kulo reports for AL.com: Latitude Margaritaville Watersound may have the laid-back vibe inspired by late music legend Jimmy Buffett, but the national praise the community is getting is anything but laid-back. For the second consecutive year, Latitude Margaritaville Watersound has been named one of the top 50 master-planned communities in the country by John Burns Real Estate Consulting and RCLCO Real Estate Consulting, according to the Panama City News Herald. “It certainly is … [Read more...]
China Moves to Curb Stock Selloff
Jason Douglas of The Wall Street Journal tells his readers that the central bank of China is sending a signal that officials are eager to curb a stock selloff and support the economy. Douglas writes: China’s central bank announced new steps to boost bank lending to households and businesses, an early move in what is expected to be a broad but restrained campaign by authorities to prop up growth this year after a lackluster 2023. It comes on the heels of signs of gathering government support for China’s swooning stock market, with investors detecting a rash of share buying by pension … [Read more...]
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