During bull markets, Wall Street traders like to “buy the dips.” This mantra was the order of the day, literally, when I was a hedge fund trader during the tech bull of the 1990s. Over the past year, the buy-the-dip philosophy has served traders well, as stocks have largely rebounded from every minor incursion into the red.#-ad_banner-#​ Now, however, the market is experiencing much more than mere dips. Today, we are getting something akin to “air pockets,” meaning we are seeing some very sharp sell-offs in stocks in reaction to the news. The latest of these… Read More

During bull markets, Wall Street traders like to “buy the dips.” This mantra was the order of the day, literally, when I was a hedge fund trader during the tech bull of the 1990s. Over the past year, the buy-the-dip philosophy has served traders well, as stocks have largely rebounded from every minor incursion into the red.#-ad_banner-#​ Now, however, the market is experiencing much more than mere dips. Today, we are getting something akin to “air pockets,” meaning we are seeing some very sharp sell-offs in stocks in reaction to the news. The latest of these air pockets came during Wednesday’s trading, as the market dropped sharply on the Federal Open Market Committee’s release of its October policy statement before rebounding off the session lows. The culprit here was fear that the Federal Reserve still hadn’t ruled out the possibility of a December tapering of its current $85 billion-a-month bond-buying program. Basically, I think traders got a little too complacent over the prospect of the Fed holding off tapering until 2014. The possibility, however remote, of a taper in December caused some skittish money to cash in. Still, there are a lot of underinvested money managers… Read More

When you think of stalwart mega-cap industrial stocks, Caterpillar (NYSE: CAT) certainly is one that comes to mind. The earth-moving equipment blue chip, Dow component, and long-time bellwether for the global economy, has been a big winner for investors and traders over the years, and for good reason. During the past decade, there’s been a huge infrastructure buildup in the emerging markets of Asia, especially China, and Russia, India and Brazil. The massive demand for heavy-duty construction equipment has made the iconic brand a mainstay on big building projects in nearly every corner of the… Read More

When you think of stalwart mega-cap industrial stocks, Caterpillar (NYSE: CAT) certainly is one that comes to mind. The earth-moving equipment blue chip, Dow component, and long-time bellwether for the global economy, has been a big winner for investors and traders over the years, and for good reason. During the past decade, there’s been a huge infrastructure buildup in the emerging markets of Asia, especially China, and Russia, India and Brazil. The massive demand for heavy-duty construction equipment has made the iconic brand a mainstay on big building projects in nearly every corner of the globe. Recently, however, demand for Caterpillar’s products has waned, and that’s caused a marked slowdown in the company’s earnings growth, as well as a significant decline in CAT shares. On the earnings front, the company recently released results for the third quarter, and they were anything but impressive. Third-quarter earnings sank 44% year over year, missing consensus estimates by a wide margin. The company reported earnings per share (EPS) of $1.45, down from $2.54 in the same quarter last year. Revenue disappointed as well, coming in at $13.4 billion, down from $16.5 billion in the same quarter a year ago. Read More

September is nearly in the record books, and as it turned out, a month that began replete with potential headwinds for equities turned out to be a very good one so far for the bulls. The S&P 500 index is up 3.8% month to date, a move that I doubt… Read More

By now we all know that the Federal Reserve’s suggestion of “tapering” its massive bond-buying program, aka quantitative easing (QE), has caused the return of volatility in both the equity and bond markets. Since Fed Chairman Ben Bernanke implanted the tapering bomb into the market‘s cortex on May 22, the markets have gyrated wildly, not just here at home, but also in Japan and… Read More

By now we all know that the Federal Reserve’s suggestion of “tapering” its massive bond-buying program, aka quantitative easing (QE), has caused the return of volatility in both the equity and bond markets. Since Fed Chairman Ben Bernanke implanted the tapering bomb into the market‘s cortex on May 22, the markets have gyrated wildly, not just here at home, but also in Japan and emerging markets around the world. #-ad_banner-# The hint that QE could soon be DOA also has caused a massive decline in one market segment that’s thought of largely as a slow, safe asset. That market segment is Treasury Inflation-Protected Securities, or TIPS. TIPS are basically just government bonds with a built in mechanism that allows them to rise along with the most widely followed inflation metric, the Consumer Price… Read More

While the overwhelming narrative of late in the global markets has been the Federal Reserve’s “taper” talk, not every central bank around the world is following the Ben Bernanke playbook. Last week, there was a meeting of the Bank of England (BOE) that proved that not all minds think alike when it comes to monetary policy and a continued commitment to easy-money stimulus. In his first meeting as governor of the Bank of England, former… Read More

While the overwhelming narrative of late in the global markets has been the Federal Reserve’s “taper” talk, not every central bank around the world is following the Ben Bernanke playbook. Last week, there was a meeting of the Bank of England (BOE) that proved that not all minds think alike when it comes to monetary policy and a continued commitment to easy-money stimulus. In his first meeting as governor of the Bank of England, former Bank of Canada Gov. Mark Carney stirred the pot with a much more detailed statement of the normally terse BOE decision by the Monetary Policy Committee. (To show what I mean by “terse,” the BOE’s June press release was basically two sentences long.)#-ad_banner-# The new Carney-led BOE came with a more detailed statement for July. It essentially signaled that the Bank of England will begin using forward guidance as another tool to keep… Read More

While the overwhelming narrative of late in the global markets has been the Federal Reserve’s “taper” talk, not every central bank around the world is following the Ben Bernanke playbook. Last week, there was a meeting of the Bank of England (BOE) that proved that not all minds think alike when it comes to monetary policy and a continued commitment to easy-money stimulus. In his first meeting as governor of the Bank of England, former… Read More

While the overwhelming narrative of late in the global markets has been the Federal Reserve’s “taper” talk, not every central bank around the world is following the Ben Bernanke playbook. Last week, there was a meeting of the Bank of England (BOE) that proved that not all minds think alike when it comes to monetary policy and a continued commitment to easy-money stimulus. In his first meeting as governor of the Bank of England, former Bank of Canada Gov. Mark Carney stirred the pot with a much more detailed statement of the normally terse BOE decision by the Monetary Policy Committee. (To show what I mean by “terse,” the BOE’s June press release was basically two sentences long.)#-ad_banner-# The new Carney-led BOE came with a more detailed statement for July. It essentially signaled that the Bank of England will begin using forward guidance as another tool to keep… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s run by university endowments. These often multibillion-dollar endowment fund portfolios tend to be managed in a cautious way and rarely make drastic moves. When you see much of this segment of the smart money make a big move away from a certain asset class, you had better take notice.#-ad_banner-# So, when I read an article in the Financial Times that detailed the recent flight out of U.S. government debt by university endowments, it grabbed… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s run by university endowments. These often multibillion-dollar endowment fund portfolios tend to be managed in a cautious way and rarely make drastic moves. When you see much of this segment of the smart money make a big move away from a certain asset class, you had better take notice.#-ad_banner-# So, when I read an article in the Financial Times that detailed the recent flight out of U.S. government debt by university endowments, it grabbed… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s run by university endowments. These often multibillion-dollar endowment fund portfolios tend to be managed in a cautious way and rarely make drastic moves. When you see much of this segment of the smart money make a big move away from a certain asset class, you had better take notice.#-ad_banner-# So, when I read an article in the Financial Times that detailed the recent flight out of U.S. government debt by university endowments, it grabbed… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s… Read More

When you’re trading stocks, options, bonds, commodities and other financial instruments, it’s important to get a handle on what the so-called smart money is doing. The giant footprint that professional money managers leave when they move en masse into or out of a particular asset class is quite often the precursor to bigger price movements in that sector. Now, there is perhaps no smarter money out there than the money that’s run by university endowments. These often multibillion-dollar endowment fund portfolios tend to be managed in a cautious way and rarely make drastic moves. When you see much of this segment of the smart money make a big move away from a certain asset class, you had better take notice.#-ad_banner-# So, when I read an article in the Financial Times that detailed the recent flight out of U.S. government debt by university endowments, it grabbed… Read More