Commentary

George Chamberlin

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.

From the Executive Editor

A bullish trifecta. Stocks rose yesterday for the third consecutive session with the Dow industrials gaining 162 points and all the major indexes posting gains of more than 1.0 percent. So far this week, the Dow is up about 400 points and unless things really fall apart today, it will be the fourth time in the past five weeks the index has posted a weekly gain. That, of course, is a well-kept secret on Wall Street. The financial markets will be closed tomorrow for the traditional observance of Good Friday.

The tug of war between the bulls and bears continues. The last few days have seen a high degree of volatility as the markets seesaw trying to find a clear direction. Perhaps the end of tax selling leading up to April 15 has removed some pressure from stocks as the Dow industrials have put together two consecutive winning sessions, adding 235 points. The gains have not come easy, and extending the streak to three in a row could be tough but again today would confirm some upward momentum.

Stocks prices were higher again Wednesday after reports showed better-than-expected economic growth in China and a rebound in new-home construction.

Volatility is back. Stock prices, as measured by the Dow industrials, have posted triple-digit closes in the past five trading sessions, three times dropping more than 100 points and two times gaining more than 100 points. Yesterday was one of the upside moves, although it wasn't easy. Stocks were sharply higher in early trading after it was reported that retail sales rose by an impressive 1.1 percent in March. However, the rally faded in midsession only to spike at the close and finish up 146 points. The markets could get a boost from a couple of corporate earnings reports. Coca-Cola and Johnson & Johnson reported Q1 numbers above expectations. They are components of the Dow industrials.

The gradual improvement of weather across much of the United States has consumers taking their pocketbooks and wallets out of hibernation just in time for a traditional spring event.

The bears win one. After going up for three consecutive weeks, the Dow industrials trended down last week. The loss was a good one, with the Dow dropping 2.5 percent and the Nasdaq, which has been struggling for a while, dropping 3.1 percent. The impetus for the declines has been valuations. Some of the small-cap tech and biotech companies have reached points that seem hard to justify. That provided the opportunity to take profits and switch to more conservative, dividend-paying large cap shares. We are still a long way from "correction" territory. “Sooner or later, those calling for a steep decline will be right. Yet the interest rate yield curve gives me the comfort that the decline will be both swift and shallow, relatively speaking," said Sam Stovall of S&P Capital IQ.

Stock prices rose Monday after a report showing a strong rebound in retail sales in March.

Blood bath. That's the way Bloomberg reported the sell-off in stock prices yesterday. True, the Dow industrials were down 267 points and the Nasdaq fell 130 points, a loss of 3.1 percent and the second triple-digit loss for the index in the last three days of trading. But a blood bath? Turns out Bloomberg likes to use the word in describing economic events. I searched the website and found it used it as an adjective to dramatize losses in stocks, bonds, precious metals and other financial matters. They should be careful. A 3 percent decline is uncomfortable, annoying, nerve-racking, irritating, inconvenient and frustrating, but to call it a blood bath is inappropriate. The folks at Bloomberg obviously weren't around in 1987 when the markets fell 25 percent in one day, Oct. 19. That, my friends, is a blood bath.

Despite ongoing efforts to warn investors about scams promoted through social media, government regulators continue to bust bogus operations promising big returns.

Well, what do you know. Just when the permabears were so sure the Great Correction was underway -- the markets had been down four days in a row -- the stock market decided to jump up and laugh in their face. The Dow industrials surged 181 points yesterday and the Nasdaq added 71 points, making back a big chunk of the losses in the mini-correction. The rally followed the release of the minutes from the last meeting of the Fed's Open Market Committee, which emphasized their commitment to keep interest rates low for an extended period of time.

Concerns about the valuation of some high-momentum stocks led the major market indexes sharply lower Thursday.

Sellers took a break yesterday. After three sessions in a row where stock prices traded lower -- yes, three sessions in a row -- the markets eked out small gains yesterday. The Dow industrials were up 10 points but the Nasdaq, which had dropped nearly 5 percent during the decline -- was up 33 points. And stocks are moving higher again this morning with a bit more momentum ahead of the release of the minutes from the last meeting of the Fed's Open Market Committee. The mid-March meeting was notable not for any change in policy but, rather, the comments made by Janet Yellen afterward. That was when she casually suggested the Fed may begin raising interest rates in the middle of 2015, the first time an official had pinpointed a possible time for the policy change.

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