Contrarians love a good scandal. When a stock drops hard for no other reason, it often presents the chance to play the rebound for a quick profit. That seems to be the case with banking giant Wells Fargo (NYSE: WFC). #-ad_banner-#On Sept. 9, news came to light that employees had been opening illegal accounts in an effort to meet sales targets and earn bonuses, and the stock got slammed. Of course, it didn’t help that the market tanked that day on rather hawkish comments by the Federal Reserve. Interestingly, though, while the stock was severely punished for its foibles, falling… Read More

Contrarians love a good scandal. When a stock drops hard for no other reason, it often presents the chance to play the rebound for a quick profit. That seems to be the case with banking giant Wells Fargo (NYSE: WFC). #-ad_banner-#On Sept. 9, news came to light that employees had been opening illegal accounts in an effort to meet sales targets and earn bonuses, and the stock got slammed. Of course, it didn’t help that the market tanked that day on rather hawkish comments by the Federal Reserve. Interestingly, though, while the stock was severely punished for its foibles, falling 9% in just over a week’s time, analysts have not lowered their ratings on the stock, with the majority still considering WFC a “buy.” And with interest rates likely to start moving higher, the entire banking sector stands to benefit from a friendlier lending environment. A look at the KBW Nasdaq Bank Index (BKX) shows the sector setting a new high for the year early this month and finally outperforming the broader market. Wells Fargo, on the other hand, stalled last month right at resistance from earlier peaks in 2016. This set up a sizeable trading range for the year. Read More

In the small town where I grew up, our veterinarian was something of a local hero.  He’d take late night calls for a sick pet or a colicked horse. And given that our nearest hospital was an hour’s drive away, he even x-rayed my broken elbow.  I even witnessed him miraculously revive my sister’s dog after it had been struck by a car.  Like I said, he’s a local hero in my small hometown.  #-ad_banner-#But I’d wager that many folks across the country think of their animal physician as a hero. Similar to how grateful we are after a doctor… Read More

In the small town where I grew up, our veterinarian was something of a local hero.  He’d take late night calls for a sick pet or a colicked horse. And given that our nearest hospital was an hour’s drive away, he even x-rayed my broken elbow.  I even witnessed him miraculously revive my sister’s dog after it had been struck by a car.  Like I said, he’s a local hero in my small hometown.  #-ad_banner-#But I’d wager that many folks across the country think of their animal physician as a hero. Similar to how grateful we are after a doctor helps us battle through an illness or mend a broken arm, we are forever thankful for the animal clinic that’s cured our sick puppy or kitten. Pets are a large part of our lives. Here in Austin, Texas, dogs are welcome in nearly every establishment. And new ones that cater to man’s best friend are opening up all the time. Take Yard Bar for example — a local business that features more than 20,000 square feet of playground for your dog. You can grab a burger and beer while your dog runs around and makes friends. The menu also features… Read More

The S&P 500 is quietly having a great year. Despite recent volatility, the index has delivered a total return of 6.6% in 2016 – putting it on pace for a 12% return this year. While that looks like great news on the surface, it’s actually creating a problem. The leading index is expensive. Its P/E ratio of 20 is the highest in five years. Take a look below. That higher valuation has a lot of investors searching for a bargain. I’ve got the answer to one of the best pharmaceutical stocks to buy.  Gilead Sciences, Inc. Read More

The S&P 500 is quietly having a great year. Despite recent volatility, the index has delivered a total return of 6.6% in 2016 – putting it on pace for a 12% return this year. While that looks like great news on the surface, it’s actually creating a problem. The leading index is expensive. Its P/E ratio of 20 is the highest in five years. Take a look below. That higher valuation has a lot of investors searching for a bargain. I’ve got the answer to one of the best pharmaceutical stocks to buy.  Gilead Sciences, Inc. (Nasdaq: GILD) is one of the largest and well-known pharmaceutical companies in the world. A few years back, Gilead was one of the hottest stocks in the S&P 500 and big pharma industry. Its share price was up more than 500% from 2012 to 2015. But for the last year Gilead’s share price has struggled, falling more than 25% and recently hitting a multi-year low. That decline has been driven by weakness in Gilead’s Hepatitis C drug sales. This suite of drugs is responsible for almost half company revenue. #-ad_banner-#That was great when sales were growing… Read More

Mark your calendars. Tomorrow, Sept. 21 at 2 p.m. Eastern, is when the Federal Open Market Committee will announce whether or not it will raise interest rates. This, as my colleague Jared Levy points out, is an event that could easily turn this market on its head.  If the Fed takes a dovish outlook and chooses to not raise rates, then it could fuel another short-term rally (at the expense of risking higher inflation down the road). Jared recently pointed out to his Profit Amplifier readers that this seems to be what the consensus is expecting;… Read More

Mark your calendars. Tomorrow, Sept. 21 at 2 p.m. Eastern, is when the Federal Open Market Committee will announce whether or not it will raise interest rates. This, as my colleague Jared Levy points out, is an event that could easily turn this market on its head.  If the Fed takes a dovish outlook and chooses to not raise rates, then it could fuel another short-term rally (at the expense of risking higher inflation down the road). Jared recently pointed out to his Profit Amplifier readers that this seems to be what the consensus is expecting; both Bloomberg and Goldman Sachs believe there’s only a 25% chance we’ll see a rate hike next week. (My money is still on a rate hike by the end of the year, though.) Still, even though the odds are low this time around, a rate hike is still very much on the table. As many as six members of the 10-member committee have issued generally hawkish comments on the public record. So it’s just a matter of “when,” not “if.” And when the Fed does raise rates, then expect the news to trigger massive selling and a general reversal in… Read More

Last week’s stock market rebound was driven by an 11.4% weekly jump in Apple (Nasdaq: AAPL), as iPhone 7 momentum picked up, lifting the tech-heavy Nasdaq 100 2.9% for the week. The other major indices made a modest recovery following the prior week’s sharp decline. At the sector level, last week’s advance was predictably led by technology (2.3%), but defensive utilities (1.7%) and health care (0.8%) also performed well.  Spooked Investors Warn Of A Deeper Decline Despite last week’s splashy tech rally, investors are still apprehensive, if not outright afraid. The Volatility S&P 500 Index (VIX) finished last week… Read More

Last week’s stock market rebound was driven by an 11.4% weekly jump in Apple (Nasdaq: AAPL), as iPhone 7 momentum picked up, lifting the tech-heavy Nasdaq 100 2.9% for the week. The other major indices made a modest recovery following the prior week’s sharp decline. At the sector level, last week’s advance was predictably led by technology (2.3%), but defensive utilities (1.7%) and health care (0.8%) also performed well.  Spooked Investors Warn Of A Deeper Decline Despite last week’s splashy tech rally, investors are still apprehensive, if not outright afraid. The Volatility S&P 500 Index (VIX) finished last week at 15.37, well above its 50-day moving average at 13.01. I use the 50-day as a baseline to distinguish between a confident and nervous market.   As long as the VIX remains above 13.01 this week, it will warn that the market is vulnerable to a deeper decline.   Seasonality Also Warns Of Near-Term Weakness Seasonality statistically defines the historical performance of an asset at various times during the calendar year. Based on data since 1957, the benchmark S&P 500 historically peaks for the month of September on the 11th trading day, which was Sept. 16. And it… Read More

As a former economist, I’ve always loved following the macro themes when looking for breakaway good buys in the stock market. Find the big picture forces like rates, currency impact and trade that are moving markets and you’ve got a huge head start on where an investment is going. Over the last several years, it’s these economic forces that have been leading the markets.  #-ad_banner-#Consumer staples and shares of utility companies have easily beaten the S&P 500 over the last year, jumping 12.6% and 17.2% as the Fed held off on raising rates. The flip side has been the weakness… Read More

As a former economist, I’ve always loved following the macro themes when looking for breakaway good buys in the stock market. Find the big picture forces like rates, currency impact and trade that are moving markets and you’ve got a huge head start on where an investment is going. Over the last several years, it’s these economic forces that have been leading the markets.  #-ad_banner-#Consumer staples and shares of utility companies have easily beaten the S&P 500 over the last year, jumping 12.6% and 17.2% as the Fed held off on raising rates. The flip side has been the weakness in financials as the net interest spread tightened, making it difficult for banks to make any money. As we come in to what could be the later innings of the business cycle, it won’t take much to tip the markets back into freefall.  The World Bank expects the global economy to grow just 2.4% this year, the same rate of growth booked last year, and next year is only expected to improve to 2.8% growth. Developed markets are expected to inch along at just 1.9% growth next year, less than half the 4.9% growth expected in emerging markets. On miserably… Read More

I recently found myself sitting in the warm Texas sun with a few beers, some of the best barbecue in Dallas and friends visiting from all over — Australia, Zimbabwe, South Africa and a few from the States. Two topics kept coming up in our conversation: travel and the global economy. All of these friends travel the world regularly, and nearly all happen to be in finance or the travel industry, so they’ve got a bird’s-eye view of the international tourism climate. #-ad_banner-# They’re also all Millennials. We all agreed that while much of the world’s economies are… Read More

I recently found myself sitting in the warm Texas sun with a few beers, some of the best barbecue in Dallas and friends visiting from all over — Australia, Zimbabwe, South Africa and a few from the States. Two topics kept coming up in our conversation: travel and the global economy. All of these friends travel the world regularly, and nearly all happen to be in finance or the travel industry, so they’ve got a bird’s-eye view of the international tourism climate. #-ad_banner-# They’re also all Millennials. We all agreed that while much of the world’s economies are just skirting along, with central banks leading the tortoise-style growth race, people still have the means (and desire) to travel. And now, more than ever, access to travel is easier and cheaper.  Socially, the under 35 crowd is less eager to work or settle down and more compelled to explore.  To verify our thesis, we started scrolling through our Facebook, Instagram and Twitter feeds. It looked like we were on the right track. The vast majority of posts had to do with travel. Most of our peers seemed to be more concerned with showing off their selfies taken in foreign… Read More

Emerging markets were a brutal place to invest in 2014 and 2015. #-ad_banner-#While the S&P 500 gained more than 12% in that time, iShares Emerging Markets (NYSE: EEM) fell into a bear market, declining 20%. That weakness was driven by a perfect storm of a strong dollar, falling commodity prices and slower than expected growth in China. Today, emerging markets are showing signs of a long-term reversal. And it is creating a great opportunity for investors who are frustrated with record low yields and dividends in the United States. In 2016, emerging markets have been among the best performing stock… Read More

Emerging markets were a brutal place to invest in 2014 and 2015. #-ad_banner-#While the S&P 500 gained more than 12% in that time, iShares Emerging Markets (NYSE: EEM) fell into a bear market, declining 20%. That weakness was driven by a perfect storm of a strong dollar, falling commodity prices and slower than expected growth in China. Today, emerging markets are showing signs of a long-term reversal. And it is creating a great opportunity for investors who are frustrated with record low yields and dividends in the United States. In 2016, emerging markets have been among the best performing stock markets in the world. In the first eight months of the year, the iShares Emerging Markets is up more than 14%, almost tripling the return of the S&P 500. Take a look at the outperformance below. Despite that impressive rebound, I see two reasons why it’s still a great time to invest in emerging markets — particularly investors looking to pad their dividends. Emerging Markets Are Undervalued After posting big gains over the last two years, the S&P 500 is overvalued compared to historical averages. Its current P/E ratio of 25 times is up from 21… Read More