Market participants are beginning to plan for the end of Federal Reserve bond-buying program. It is a critical time to prepare for the next investment movement. The speculative trading portfolio will closely watch the activities of market participants and act accordingly to protect the portfolio from market turbulence.
Dividends come roaring back in 2011
The surge in dividends reflects a turning point in the long recovery from the financial meltdown in 2008. After the meltdown many companies slashed or eliminated their dividends and, like many Americans, put their cash in the bank and sat on it. As a result, U.S. companies have amassed a record $940 billion in cash.
But now the economy is recovering, profits are rising and investors are demanding something for their patience. An easy way to keep shareholders happy is to restore or raise dividends.
Robots Rattle Data Guru
New robotic-trading strategies are attempting to hack futures and equities markets — again. The suspicious activity appears unconnected to the October cyberattack on Nasdaq OMX Group now being investigated by the National Security Agency. But there seems to be a new team of trading 'bots abroad — and yes, they're distorting prices.
Automated systems are programmed by mathematicians whose ultra-short-term strategies have radically altered markets. And while there have been flash-crash fixes, they haven't stopped the new invaders, which are orders of magnitude faster.
Dos Hombres: Is the Party Over?
Nesto also observes how thin leadership has gotten in the rally, with materials and energy leaving other sectors well behind, another traditional sign that equities are nearer a short-term top than a breakout.
Why Real Estate Will Hold the Economy Back
Commercial real estate loans and residential housing will continue to be a significant drag on economic performance. Until the mass of overbuilt homes and commercial properties are liquidated, credit will remain tight and unemployment will remain high.
The unfortunate fact remains that credit for most of America is still tight, banks are still trying to repair their balance sheets, and the overlying problem is real estate, the detritus of the Fed’s reckless monetary policy.
The other side to this issue is that businesses, especially small businesses that employ about one-half of the workforce, are not borrowing, contrary to what some of the big banks are reporting.
One may ask why businesses aren’t expanding and borrowing. The obvious answer is that they don’t see sufficient demand to warrant expanding and borrowing. Another less obvious answer is that a lot of small-business owners were negatively impacted by the decline in real estate.
New Fee Shakes Up a Lending Market
The money market has been roiled by a sudden shortage of Treasury securities, another unintended consequence of government involvement in financial markets.
The disappearance of Treasurys in recent days has created a scramble among banks and investors, who depend on a fluid supply for short-term borrowing and lending. It is an unusual event, considering the market is generally awash in Treasurys, with about $9 trillion outstanding.
The lack of supply was so severe on Monday, and some investors so desperate for Treasurys, that they accepted negative yields—effectively paying to lend money to the banks. That is something that has rarely been seen since the financial crisis.
The Fed would likely rather deal with some short-term turmoil in the repo market than work against its own liquidity measures. And part of the Fed's intention with its liquidity pumping programs has been to make it more painful for investors to stay in cash, forcing them to buy riskier assets.
Why you can't get a mortgage
Yep, mortgage interest rates are low, but there's a catch: It doesn't matter how cheap rates are if you can't get a loan.
And these days, only highly qualified borrowers can get financing -- let alone the best rates.
Nearly a quarter of people who apply for loans are turned down, according to the Federal Reserve.
Industry insiders say all these factors have reduced the pool of buyers, lowering demand for homes and hurting prices.
Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, speculates the tougher credit standards may have stripped as much as 30% of the buyers off the market, compared with normal times.
Josh Brown: Don’t Be a Clown With This Market
Yet stocks continue to creep higher in the face of a classic wall of worry consisting of European unrest, Asian disasters and endless government tampering. If the media seem gloomy, it's most likely because the news has been fairly dire. But big picture concerns are not an investment thesis, as those who've remained on the sidelines for the last 24 months are learning the hard way.
So what's an investor to do if they've missed the rally? That's where discipline comes into play.
The Truth about Hedge Funds
The hedge-fund boys are back in the saddle.
According to Hedgefund.net, investors pumped another $22 billion into hedge funds of all description last month, the fastest rate in well over a year. The industry's back to managing a thumping $2.5 trillion — all but a sixth from the all-time peaks seen in 2008.
Investors clamor to get on board. They'll pay through the nose for the privilege: typically 2% of assets a year, plus 20% of the profits, if any. And they'll consider themselves lucky.
Fed official mulls early end to bond-buying plan
A Federal Reserve official on Friday called on the central bank to consider ending its $600 billion Treasury bond-purchase program, fearing it could lead to higher inflation.
Fed Chairman Ben Bernanke has said the program has helped the economy by lowering rates on loans and raising prices on stocks. The Fed at its March meeting voted unanimously to stick with the program, even after declaring that the recovery is on "firmer footing." Unemployment has fallen to 8.8 percent, a two-year low.
Fisher argued that the Fed did its job. Continuing to provide economic stimulus through the bond-buying program poses "significant risks" to the economy, he said.
The recent run-up in oil prices has sparked fresh disagreements within the Fed about when it should reverse course and start tightening credit.
No comments:
Post a Comment