Young Research & Publishing Inc.

Investment Research Since 1978

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The Raging Bull Market in Silver

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Silver hit a new all-time high this morning. Silver has risen over 144% since August 31. Why are we measuring from August 31? The end of August is when the esteemed Mr. Bernanke signaled that the Federal Reserve would print another $600 billion in Federal Reserve Notes. The money-printing campaign ignited a stampede into hard assets. Silver has been the big winner among the precious metals. Silver tends to be a more speculative metal than gold. The silver market is small and easily influenced by speculative capital. In 2010, total silver demand was 1.05 billion ounces or $21 billion dollars at … [Read more...]

Dollar Crashes to Record Low

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Scott Pelley: “You have what degree of confidence in your ability to control [inflation]?” Ben Bernanke: “100%” – 60 Minutes 12/5/2010 The U.S. dollar took another beating this week. The greenback fell 1% vis-à-vis the euro, 1.1% against the Swiss franc, and 1.7% against the Australian dollar. The Federal Reserve’s continued ultraloose monetary policy in the face of both emerging global inflation threats and a more hawkish tone from almost all of the world’s other major central banks has contributed to the slide.  On an inflation-adjusted basis, the broad trade-weighted dollar index is … [Read more...]

Still No Recovery in Housing

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March data for housing starts, building permits, and existing home sales came out this week. All three economic indicators continue to point to a housing market that has yet to enter a sustained recovery. New housing starts and building permits both ticked up in March, but failed to recover the ground given up in February. Existing home sales also ticked up in March, but remain subdued. Total existing home inventory at the end of March rose to 3.55 million homes—an 8.4 month supply at current sales rates. The median price of a single family was $160,500 in March—down 5.3% from March of last … [Read more...]

Bank Stocks Signal Trouble

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The KBW Bank stock index has a real troubling look. Bank stocks are rolling over. The bank index is down almost 10% from its February high. Bank of America, the fourth largest component in the index, is now trading below its pre-QE 2.0 price. Wasn’t the Fed’s money printing campaign supposed to inflate asset prices? Indeed it was ,and indeed it has, but if BofA’s price action is any indication of what is to come for the broader market, the Fed’s quantitative easing experiment has failed. And predictably so.  Temporary stimulus fueled stock market rallies don’t create sustainable economic … [Read more...]

Investors Flock to Consumer Staples

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Hitting new highs last week were a number of consumer non-cyclical (staples) stocks. Household names, including Kraft, Coca-Cola, JM Smucker, HJ Heinz, Unilever, and Hershey all made the new highs list. Meanwhile the major market averages have failed to regain their February peaks and show signs of breaking down. The quantitative easing trade appears to be waning. We are seeing early indicators of a flight to safety. The high beta cyclical stocks are underperforming the market.  Non-cyclical stocks are now in favor.  The S&P 500 Consumer Staples index has recently broken out of a … [Read more...]

Are Investors Expecting too Much From Earnings?

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Alcoa kicked off the first-quarter earnings season this week with a big thud. The aluminum producer reported strong earnings, but Alcoa shares dropped as much as 7% following the announcement. Earnings per share exceeded consensus estimates, but the top line came in below expectations. Has the two-year, 100% bull move in stocks raised investor expectations to unrealistic levels? I’m sure Jamie Dimon (the CEO of J.P. Morgan) thinks so. On Wednesday, J.P. Morgan reported first-quarter earnings of $1.28 per share compared to estimates of $1.15—that’s a huge earnings beat, but the stock is down … [Read more...]

S&P 500 Technical Analysis

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The S&P 500 is at a key technical level. The bounce-back rally from the March low has failed to surpass the February 18th high. The index is forming a double top, and looks poised to break below its 50-day moving average. A close decidedly below the 50-day average could result in a more extended correction. How big of a correction? On a technical basis, there is minor support for stocks at 1,250 and again around 1,200, but I don’t see meaningful support for stocks until the S&P approaches the 1,100 level—that’s a long ways down from today’s level of 1,312.  … [Read more...]

Chinese Fraud: Tip of the Iceberg?

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Welcome to the first post in our new Stock Market Movers column. This new area of the website will focus on explaining and analyzing some of the market’s best and worst performing stocks. The focus will be on stocks reaching 52 week highs and lows, and those with extreme short term price changes. Below you’ll find the first addition to this new column, a review of a much lauded Chinese water industry company. Hitting a new low last week, was China based Duoyuan Global Water. The one-time high flying Chinese water play, closed at $3.11 yesterday, 86% below its $22.65 June 2009 IPO … [Read more...]

Import Price Inflation Leaps

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Today, the Bureau of Labor Statistics released its latest import price index. Import prices spiked 2.7% in March, and they are up 9.7% over the last twelve months. Economists were anticipating a 2.1% monthly increase and an 8.6% year-over-year inflation rate. Much of the year-to-year gain in import prices is attributable to fuel. Excluding fuel, import price inflation was 4.2% for the twelve month period ending in March.  Though it isn’t 9.7%, an inflation rate of 4.2% is by no means benign. If broader measures of inflation rose to 4.2% on a sustained basis, interest rates would spike. You … [Read more...]