GEORGE CHAMBERLIN has been associated with The Daily Transcript at SDDT.com since 1998 and became Executive Editor in 2006. He is responsible for the development of editorial strategies for the newspaper and website. He has introduced video and audio into the editorial products and is the public face of the company at many community events. George regularly chairs industry roundtables and conducts video interviews of participants for use on the San Diego Source. He writes two daily columns, "Money in the Morning" and a daily stock market wrap-up.
George, a long time resident of North County, lives in Vista with his wife Terry.
The stealth rally continues on Wall Street. After a blow-off decline in January and early February, the stock market has resumed its upward momentum over the past five weeks, taking the S&P 500 stock index to record highs and pulling other indexes higher. The Dow industrials gained 62 points yesterday and began today less than 1 percent away from a record high. By the way, it was five years ago this Sunday that the bull market began. On March 9, 2009, the Dow industrials closed at 6,547 after dropping more than 50 percent during the Great Recession. Since then, the blue chip index has gained more 151 percent and helped restore value to retirement accounts and other investments.
Investors had every reason to be afraid. The Great Recession zapped the U.S. economy and there were ample reasons to believe the worst was not over.
Maybe it was a Mardi Gras hangover. Stocks were very quiet yesterday after two days of hyperactive trading. The Dow industrials were down just 35 points while the Nasdaq added 6 points. A bit of a breather was welcomed following Monday's decline in the Dow of 154 points followed by a 228-point gain on Tuesday. The weather is becoming less of a factor as far as the economy is concerned. To be sure, the big freeze of December and February has had an impact on retail sales of all sorts and other economic issues. However, this just sets things up for a big rebound once spring arrives and all of the pent-up spending is released. Watch for economic reports in May, June and July to be way above expectations.
Stock prices were mostly higher Thursday despite weak sales reports from retailers such as Costco and Staples.
The power of yesterday’s rally was, in a word, impressive. The Dow industrials posted the biggest gain of the year, up 228 points, or 1.4 percent. However, percentage-wise, the biggest gain came from the Nasdaq composite, up 1.75 percent. The S&P 500 rose 1.53 percent, closing at the record high for the 49th time in the past 12 months. Of course, the traders featured on CNBC and Bloomberg -- who probably were on the sidelines yesterday while the rally was roaring -- immediately noted that the gains were accomplished on light volume, which I guess means they don't count. What the rally really shows is that there is so much cash on the sidelines waiting to be invested and stocks continue to be the investment of choice.
Wall Street took a breather Wednesday after two days of volatile trading.
March greeted investors with a sharp drop in stocks -- not because of economic news or corporate earnings, but because of rising tensions in the Ukraine. Yes, the world seems to have a Putin problem, and that seems to be a good enough reason to sell stocks. Well, this morning the problem doesn't seem so bleak and the Dow industrials, which dropped 154 points yesterday, have opened with a gain of nearly 180 points. This, of course, drives some investors crazy. It's one thing if a stock drops -- or rises -- for legitimate reasons, but to see the markets influenced by turmoil in a region most people could not find on a map is frustrating.
Few things in the investment world arrive with as much anticipation as Warren Buffett's annual letter to shareholders of Berkshire Hathaway (NYSE: BRK), his publicly traded company.
Stock prices surged Tuesday as tension between Russia and the Ukraine eased.
February goes into the record books as a good month for investors. I mention this because most of the other financial media seemed completely uninterested in the fact the S&P 500 and the Nasdaq composite completely recovered their January losses and are in positive territory for 2014. And the Dow industrials, down about 5.5 percent in January, rebounded 4 percent last month. Yet, CNBC reporters on Friday repeatedly said the Dow was "still well below its record high."
We'll put the wraps on February today and celebrate a very good month for patient, long-term investors. Of course, most of the business media is ignoring the news, but the Dow industrials will close out the month with a gain of nearly 4 percent, recovering about two-thirds of the declines in January, the worst month to start a year in decades. Lots of headlines for that, of course, but little attention to the rebound. By the way, March and April are traditionally the best months of the year for investors, so hang in there.
Conventional wisdom seems to suggest the housing market may have gotten a bit ahead of itself. After powerful price and sales increases in 2013 gobbled up much of the supply of new and existing homes, the markets are a pause some believe could extend for a while.