David's Feed
Dec 10, 2014
via Morning Bid with David Gaffen

Oil, toil and trouble

A bit of tumult has entered global markets as the year comes to a close, with various reasons proposed for the gyrations that we’ve seen in Greece, Japan and China in recent days. Some are linked to fundamentals in those specific nations. The rest are due to reduced liquidity. Speculation has heated up over whether the Fed is going to remove the “considerable time” language that has been in its statements for, well, considerable time, as it relates to monetary accommodation.

Reuters recently reported that new Cleveland Fed President Loretta Mester believes that the Fed’s “communications need to be adjusted based on what we’ve seen in the economy.” But then again, she says she’s more optimistic than most of her colleagues – Dennis Lockhart of Atlanta says he’s not in a rush to change things.

Dec 9, 2014
via Morning Bid with David Gaffen

Sapping Energy

Don’t expect the selling in the energy sector to end anytime soon. With tax loss selling dominating the rest of the month, the energy stocks, which have been the worst performer this year in the Standard & Poor’s 500, are slated to perhaps lose even more ground. That’s particularly true as the price of oil continues to decline. (We are right now eagerly awaiting the moment when the Russian rouble crosses the price of oil, an occurrence that would’ve seemed unfathomable even just two months ago.)

Nicolas Colas of BNYConvergex points out that 8 of the worst 12 stocks in the index this year are energy companies. With capital expenditure plans unclear, and with earnings outlook severely damaged by the drop in the commodity, short interest has gone through the roof in these names.

Dec 8, 2014
via Morning Bid with David Gaffen

The Energy-Industrial Complex

The next few weeks will bring a few analyst meetings out of some of the bigger industrial companies, including Dover Corp. The company is expected to hold a confab Monday to discuss where things stand this year, particularly as it has a 36 percent exposure to the energy industry through businesses that produce equipment for the gas and oil extraction industries – pumps and other such equipment.

Dover has been pretty optimistic for some time on this front, with its annual report last year boasting of global expansion and expectations that North America would bring new opportunities as well.

Dec 4, 2014
via Morning Bid with David Gaffen

The Market’s Silly Season

The meaningful part of the year is drawing to a close (near as I can see it, there’s tomorrow’s jobs report, the Fed meeting in two weeks, and, yep, that’s about it), and as we head into the silly season for happenings in our markets, here’s a laundry list of oddball things to consider:

This is not going to materially affect the Fed in one direction or the other. The recent inflation data and the plunge in oil prices has some smart people (and some overconfident ones) thinking the Fed is in no way going to raise rates in 2015, but three consecutive quarters of above-trend growth, which is where we’re headed, won’t continue to justify a zero-bound interest rate. It just won’t.

Dec 3, 2014
via Morning Bid with David Gaffen

Microsoft’s 15-Year Itch

New Microsoft CEO Satya Nadella will come to his first annual shareholder meeting having boosted the company’s market value by about $90 billion in less than a year’s time (that the stock market is running wild, and Microsoft with it, well, that’s not the only thing that’s important, one supposes) as Nadella has pushed ahead with various efforts to make Microsoft something closer to the powerhouse that it had been some years back.

The move in shares – tapping $50 for the first time since god-knows-when (ok, it was nearly 15 years ago, at the end of the tech bubble) comes as the company remains a steady source of demand for its own stock, having bought back more than $3 billion in shares in its most recent fiscal year.

Dec 2, 2014
via Morning Bid with David Gaffen

The ‘Worst’ Central Bank, Like, Ever

One day ahead of Friday’s key U.S. jobs report, markets will turn their attention to the European Central Bank, which is currently engaging in what strategist Rich Bernstein of Richard Bernstein Advisors calls a quest to become “the worst central bank in all of history.”

As the ECB once again meets to either do what ECB chief Mario Draghi says it will do “whatever it takes,” (which apparently involves a lot of jawboning while contracting, not expanding, its balance sheet), or what the Germans want (pretty much what it’s doing now), we look again to see that the ECB in recent days has not done all that much to move the needle when it comes to getting more aggressive.

Dec 1, 2014
via Morning Bid with David Gaffen

The Oil Conundrum

There’s a real question right now about whether the sharp decline in oil prices will continue to have a ‘rising tide’ effect on the rest of the economy, thanks to the help it gives to consumer spending, or whether that marginal benefit is offset by a drop in oil production and mining jobs.

The fixed income market is certainly reacting as if it’s the latter, although this could also be the result of more weak data out of Asia and Germany that suggests those economies are nowhere near getting off the mat any time soon.

Nov 24, 2014

Strategist Bernstein sees more equity gains, likes high-yield munis

NEW YORK (Reuters) – Longtime Wall Street strategist Richard Bernstein hasn’t quite gotten used to investors’ reactions when he tells them his favorite asset class for 2015 is the same as in 2014 – high- yield municipal bonds.

“A lot of times when people ask me that question, they’re physically disappointed when I tell them,” said Bernstein, chief investment officer at Richard Bernstein Advisors LLC, which he founded in 2009. “‘That’s the best you can come up with?’ That’s the response.”

Nov 20, 2014
via Morning Bid with David Gaffen

The Hunger Games

The IPO train keeps on running, and on Thursday, it’s being fueled with hamburgers.

One of the new companies set to begin trade is Habit Restaurants, a chain offering “char-grilled burgers and sandwiches” that operates in California, Utah, Arizona, and strangely, New Jersey.

Nov 19, 2014
via Morning Bid with David Gaffen

As shaky as a fiddler on the roof

It’s nice to look back every month or so and see just how far the market has come, and, well, it’s come a long way. And it’s worth noting yet again that investors are starting to talk about corrections.

Even the most bullish – the ones who have been positive for quite some time – are starting to again shake their heads in the knowledge that this market is up more than 50 percent in just a bit under two years at a time when U.S. economic growth, while still at a level that would make Europe envious, isn’t exactly amazing (It’s nice. Not thrilling. But nice).

    • About David

      "David Gaffen oversees the U.S. markets team, having joined Reuters in May 2009. He spent four years at the Wall Street Journal, where he was the original writer of the web site's MarketBeat blog. He is a frequent guest on Reuters TV, and has appeared on CNN International, Fox Business, NPR, and assorted other media and is the author of the book "Never Buy Another Stock Again.""
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