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Tue, 25th April 2017

Anirudh Sethi Report

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Archives of “stock market index” Tag

Overnight US Market :Dow closed +174 points ,S&P 500 closed up 18 points

Nasdaq up 0.92%. S&P up 0.76%.  Dow up 0.86%

The US major indices are ending the day with solid gains.
The Nasdaq index is leading the way, closing at record highs today.  
More specifically, 
  • The Nasdaq is up 53.74 points or 0.92% to 5916.77
  • The S&P is also up strongly. The index is up 17.67 points or 0.76%. The index, however, could not close above its 50 day MA at 2356.38. The index is closing just below the MA at 2355.84
  • The Dow industrial average is also closing higher by 174.22 points to 20578.71. The high reached 20629.78.

Overnight US Market : Down day for the major US stock indices. S&P closes below the 50 day MA

S&P, Nasdaq and Dow.

The major US stock indices are all closing lower. Moreover the S&P index is closing below it’s 50 day MA for the first time since the 8th of November. The 50 day MA comes in at 2350.92. Yesterday, the price fell below that MA line (it also fell below on March 27th) but recovered by the close.   Today, was not so lucky as the price is not only closing below the MA line, but also closing nearer the low.
  • The Nasdaq is closing down -30.612 points or -0.52%
  • The Dow industrial average is closing down -59.44 points or -0.29%
For your guide the 50 day MA comes in 5828.43. The index settled at 5826.16 today.

China’s A-shares have better shot at MSCI index

Shanghai and Shenzhen shares have a greater chance at joining a major emerging-market stock index after recent market reforms, though a smaller pool of issues under consideration means entrance will do less than investors and China’s government would like.

MSCI of the U.S. is soliciting institutional investors’ input on whether to include A-shares, or yuan-denominated shares listed on the Chinese mainland, in its Emerging Markets Index. Citigroup gives China’s bid a 51% chance of success, in light of recent reforms.

 These odds are a good deal better than when the question was first considered in 2014. A-shares have been kept out of the mix three years running amid concerns that China’s capital markets are insufficiently open.

The so-called Qualified Foreign Institutional Investor, or QFII, scheme was one key factor. This scheme was long foreign institutions’ only option for buying A-shares. Each entity’s dealings were subject to strict quotas, and the value of remittances was capped at 20% of net assets each month. MSCI naturally refused to include shares in its index that could not be freely bought and sold, and Beijing was slow to change the system to address those concerns.

The index operator has also looked askance at Chinese listed companies’ ability to halt trading of their shares at will — an option that, at one point, roughly 50% of companies had taken. A need for prior approval to create products incorporating A-shares also left MSCI leery.

Overnight US Market :Dow closed -7 points.

Wall Street failed to hang on to its modest gains on Friday as escalating tensions between the US and Russia over President Donald Trump’s surprise airstrike on Syria weighed on investor sentiment.

The S&P 500 gave up gains of as much as 0.3 per cent to end the day 0.1 per cent lower at 2,355.54. For the week, the index is down 0.3 per cent.

It’s a similar story for the Dow Jones Industrial Average, which closed largely unchanged for the day, as well as for the week at 20.656.10, after having advanced as much as 0.3 per cent earlier on Friday.

Stocks had a choppy Friday, with the major indices swinging between minor losses and gains as the markets weighed a weaker-than-expected March jobs report against Mr Trump’s latest foreign-policy shift and a terror attack in Stockholm.

Overnight US Market :Dow closed -238 points.(YTD is up 4.58% )

It has been 109 days since the market moved 1% either way.  All indices down over 1% today.

The US stock market hit the skids today on concerns about the Trump agenda for healthcare, taxes, regulation…you name it.
In the major indices:
  • The Nasdaq traded to new all time highs at the start of the day but ended the day down -1.83%. Ouch.
  • The S&P index fell by -1.24%. The high reached 2381.93. The low extended to 2341.90. The all time high for the S&P reached 2400.
  • The Dow fell by -1.14 points to 20667. It peaked above 21000.
All three indices are now down on the month with the :
  • S&P now down -0.83%,
  • The Dow down -0.69% and
  • The Nasdaq down -0.54%.
For the year, the indices are still higher so all is not lost.  Looking at the major indices, the:
  • Nasdaq up 7.63%
  • S&P up 4.70%
  • The Dow up 4.58%

Overnight US Market :Dow closed + 44 points .S&P 500 up 8 points

The Standard & Poor’s 500 index rose 7.73 points, or 0.3 percent, to 2,372.60. The Dow Jones industrial average gained 44.79 points, or 0.2 percent, to 20,902.98. The Nasdaq composite added 22.92 points, or 0.4 percent, to 5,861.73.

Stocks had mostly fallen since March 1, the day indexes soared to their most recent record highs.

Overall it was a slow week for stocks. The current bull market had its eighth anniversary, but six-week winning streaks for the S&P 500 and Nasdaq ended, and the Russell 2000 index of small-company stocks took its biggest loss in three months.

U.S. employers added 235,000 jobs in February, according to the Department of Labor. The gains in hiring and pay, along with higher consumer and business confidence since the November election, could lift spending and investment in coming months and accelerate economic growth.

A poor jobs report was probably the last thing that could have stopped the Federal Reserve from raising interest rates next week.

Overnight US Market :Dow closed 51 point down ,S&P down -0.33%, Nasdaq down -0.37%

S&P down -0.33%, Nasdaq down -0.37%

The US major stock indices are ending the day in the red but off low levels
  • S&P was down -7.81 points or -0.33%. The low reached about -16 points
  • Nasdaq was down -21.577 points or -0.37%. The low for it extended to around -43 points
  • The Dow ended down -51.37 points or -0.24%. The low water mark was down about -93 points.
In the US debt market today, yield were up with the longer end rising the most.
  • 2 year 1.301%, unchanged for the day
  • 5 year 2.017%, up about 1 bp
  • 10 year 2.4925%, up 1.4 bp
  • 30 year 3.098%, up 2.6 bp
Spot gold was down -$8.60 or down -0.71%
Spot silver is down -$0.20 or -1.14%

Overnight US Market :Dow Closed +303 points.S&P 500 Up 32 points

The Trump Rally is back on again.

Wall Street didn’t get the nitty gritty details it wanted on policies such as tax reform and trade from President Trump Tuesday night in his speech to Congress, but the commander-in-chief’s “presidential” tone set investors at ease and they pushed the Dow up more than 300 points to a record-setting close above 21,000.

Investors are taking Trump’s measured and positive demeanor as a sign that he will have a better chance of getting his economic agenda through Congress.

In his address to a joint session of lawmakers, Trump reiterated his push for “historic tax reform” that will put American businesses on a level playing field with foreign competitors, repeated his calls for a $1 trillion infrastructure spending plan and noted that his administration has “undertaken a historic effort to massively reduce job‑crushing regulations.” The president also repeated his promise to repeal and replace Obamacare.

Wall Street was also listening for the things Trump didn’t say. He didn’t echo recent attacks on the media, complain about fake news or mention spats with celebrities and other topics considered “off message.”

Index Investing Unmasked: 96% Of Stocks Are Garbage

Warren Buffett released his annual letter over the weekend, in which he praised Jack Bogle as his “hero” for promoting index investing. The irony is that investors would have been better off buying Berkshire shares. Over the last 10 years, Berkshire stock is up 139% while the S&P 500 is up 71%. The real question is why Buffett just doesn’t tout his own stock rather than promote index investing. He tries to explain himself:

 “Charlie and I prefer to see Berkshire shares sell in a fairly narrow range around intrinsic value, neither wishing them to sell at an unwarranted high price – it’s no fun having owners who are disappointed with their purchases – nor one too low.”

Buffett is doing something every skilled salesman does: managing expectations. Buffett’s own performance is compared against the S&P 500, and what better way to win that game than by putting a floor under the Berkshire price with the promise of share buybacks and then putting a ceiling on the stock by promoting index investing? The real secret is Buffett is talking his book by not talking it: Rather than tell investors to buy Berkshire at any price, he tells people to invest passively through an index, which leads to the very market inefficiencies that he profits from.

The great appeal of index investing is its low fees, but like buying a cheap pair of shoes that falls apart after 6 months, investors will find that index investing is the most expensive thing they ever did. Vanguard promotes its rock bottom expense ratios, but what is not published is market impact costs that are incurred when the fund rebalances. Since these rebalances are often announced ahead of time, they are extremely vulnerable to front running. Christophe Bernard, PhD Senior Scientist at Winton Capital Management, estimates that front running costs index investors 0.20% per year. That’s 4 times the official expense ratio of Vanguard’s S&P 500 ETF.

In his latest research, finance professor Hendrik Bessembinder discovered that 58% of stocks don’t even outperform a Treasury bill. This study was based on 26,000 stocks from 1926 to 2015. Just 4% of stocks accounted for all of the $31.8 trillion in gains during this period. That means 96% of stocks were complete garbage. Even worse, shares of unprofitable companies outperform their profitable counterparts, which is why you have a marketplace that is dominated by Twitters and Teslas.

Index investing means buying a box of garbage stocks sprinkled with a few hope and glamour stocks whose price gains are solely a result of underperforming fund managers grasping for quarterly bonuses and retail investors juicing up their portfolios in a doomed attempt to catch up on their retirement targets.

While mom and pop buy a Vanguard index with their $500,000 and get front run all day by proprietary traders, the capitalist televangelist Warren Buffett will continue to actively trade billions while preaching the miracle of buy and hold investing.

As Le Pen Odds Surge; French Stock Market Risk Hits 5-Year High, Credit Risk Spikes

Marine Le Pen’s French election victory odds reached their highest level of the campaign overnight and it appears global investors are starting to panic-bid protection against the consequences for French stocks…

Oddschecker indicates Le Pen’s incessant rise in popularity…