The mostly tech oriented stocks of the NASDAQ Composite Index have not been faring well. Nearly 40% are down 50% from their 52-week highs. Vildana Hajric reports on the carnage for Bloomberg, writing: Roughly four in every 10 companies on the Nasdaq Composite Index have seen their market values cut in half from their 52-week highs, while the majority of gauge members are mired in bear markets, according to Jason Goepfert, chief research officer at Sundial Capital Research. “Whatever the fundamental and macro considerations, there is no doubt that investors have been selling first and … [Read more...]

People often look back at the end of a year and evaluate what happened. The year 2021 was strange in many ways, and markets were no different. In the Financial Times, Katie Martin remembers the year's biggest moments, writing: This has felt like a long year in financial markets, studded with events that offered insight in to the rapidly changing nature of trading and investment. From across the Financial Times’ markets team, here is our pick of the standout moments of 2021. GameStop: revenge of the nerds In January, US stock markets were transfixed by the outsized trading volumes and … [Read more...]

Companies bought back a record-breaking $850 billion worth of shares in 2021, and are planning even more buybacks in 2022. Mark Maurer reports in The Wall Street Journal: Sitting atop a haul of strong earnings, companies are planning to spend even more in 2022 on share buybacks and dividends, a trend finance executives don’t expect to slow despite a proposed 1% excise tax on repurchases. Many companies have bounced back from the blow dealt by the coronavirus pandemic and are in a period of hale growth, giving them ample leeway to reward their shareholders, said Howard Silverblatt, a senior … [Read more...]

If you're only looking at the movement of the major stock market indexes, you're missing out on what's going on under the surface. A divergence in the performance of the biggest stocks by market cap, which have more influence over the index's movements, and that of smaller stocks is a signal that trouble may be ahead. Eric Platt reports in the Financial Times: On the tech-heavy Nasdaq Composite the figures are even more striking, with more than 1,300 stocks down 50 per cent or more from their highest level of the past year. And roughly 80 per cent of the more than 3,000 stocks on the exchange … [Read more...]

Reddit's army of meme-stock traders can now move the values of the biggest companies in the world because hedge funds are chasing them into options trading strategies. Look what happened to Apple this week. Eric Platt and Madison Darbyshire report in The Financial Times: Investors pointed to several reasons for its strength, including the fact the company is a defensive play as uncertainty abounds over the coronavirus and as monetary policy shifts at the US Federal Reserve. Trading volumes in Apple have been impressive as mentions of the company have climbed up the ranks on Reddit message … [Read more...]

UPDATE November 30, 2021: Since we first posted this in March, stocks have continued their upward climb rising another 18%. Investors who bailed out at the March 2020 bottom and still haven’t gotten the courage to invest back in the market have forgone a 113% return. Ouch! And that doesn’t even count the capital gains taxes that were likely due when long-held positions were sold. Trying to rush for the exits when everyone else in the building is doing the same and then piling back in when the all-clear signal is given is a good way to get banged up. A long-term balanced approach that properly … [Read more...]

Just how fragile are markets? Wellington has done a report, and the results aren't promising. The supply and demand of liquidity are mismatched, and chaos could be right around the corner. Robin Wigglesworth explores the market's fragility in the Financial Times, writing: Investors have been blithely skating into the Christmas period, basking in another remarkable rally across financial markets. But the ice underneath may be thinner and brittler than many realise, as Friday’s violent sell-off showed. The past decade has been characterised by unusually calm, strong and long stock market … [Read more...]

Bloomberg's Lu Wang reports on options activity that boosted shares of Tesla in recent trading, writing: There were plenty of reasons for Tesla Inc. to rally Monday. Everything from Hertz Global Holdings Inc.’s blockbuster order to buying by passive funds and a squeeze on short sellers. But other forces were at play in goosing the gain: options traders who piled on bullish bets, and market makers who were forced to purchase shares to hedge their positions as the stock surged. In other words, the tail wagging the dog. It’s a narrative that’s come up repeatedly in … [Read more...]