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After last week's mayhem, investors breathed a sigh of relief. The past five days saw some swings but not too much trouble. Markets gained about 1%, most of it on Tuesday, when overseas bourses rallied strongly and U.S. indices followed suit.
By the numbers, the
was up 1.3% on the week, off just 4% from the all-time closing high set last month (although quite a few traders were heard to complain it didn't feel that way). The
saw a 1.1% rebound from the previous week, while the
gained 0.8%, lagging its brethren. The Russell 2000, a big loser the prior week, added a little less than 1.3%.
points out that "small-caps outperformed large, especially on Friday,suggesting that investors' risk appetite hasn't disappeared. Still, market sentiment remains skittish, following late February's huge selloff."
Economic data for the week was mostly soft: The Bureau of Labor Statistics said the U.S. economy added only 97,000 jobs in February, the ISM's non-manufacturing index fell to 54.3 from 59, wholesale inventories rose and retail sales in February came in below expectations.
No worries, mate -- we got your back. It's Linkfest time:
INVESTING & TRADING¿ 7th anniversary of the beginning of a painful lesson: "It was on March 10, 2000, that the Nasdaq Composite index closed at its all-time high of 5,048.62. By the time all the air in the Internet bubble had been let out, some 2-1/2 years later on Oct.9, 2002, that benchmark stood at 1,114.11 some 78% lower than where it stood at the top." ( MarketWatch) ¿ Last week, a Barron's article by Bill Alpert (that was buried on page 39) discussed what may be the next great Wall Street scandal: Analyst Recommendation Back Dating. (If no Barron's, go here). Following is a bonus two-fer on the issue: ¿ Paul Kasriel of Northern Trust asks What Does Shrinking Equity Supply Mean? So far, it's been a huge boon to prices. ¿ Barron's online: Fasten Your Seatbelts, It's Going to Be a Bumpy Ride. (If no Barron's, go here.) ¿ Bogle Sees Tough Times Ahead: "Vanguard Group founder John Bogle doesn't believe you can forecast the stock market's short-term direction. But he's done a pretty good job of proving himself wrong. He was bearish at the market peak in 2000 and bullish at the 2002 market low. Unnerved by the recent stock-market turmoil? Here comes Mr. Bogle, warning investors that modest returns may lie ahead." (free in The Wall Street Journal) ¿ "Is emerging market contagion back? Yes and no." Contagion? No, Wake-Up Call. ( BusinessWeek) ¿ Fascinating trivia about the S&P 500 on its 50th Anniversary. ¿ Sentiment Watch: As Doubts on Economy Grow, Stock Investors Stay Upbeat. (free WSJ) Also, Advisers' hasty retreat may be a good sign. ( MarketWatch) ¿ George Soros interview. The legendary investor discusses the yen carry trade, the housingsituation, China, Iraq, and the role hedge funds and private equity funds play today. ( The Financial Times) ¿ What do large 5-day declines mean for subsequent market performance? ( Answer: It depends on proximity to highs and market internals.) ¿ 'Broken Deals' Become Rockets. (free WSJ) ¿ It doesn't take much selling to bring the bear-market funds Out of hibernation, but I was surprised to learn that there is close to $8 billion invested in bear funds. ( MarketWatch) ¿ "Whenever I think I'm being too biased about something, especially in my own technical analysis, I perform a simple, but effective trick: I just flip the chart and see if my analysis would be the exact opposite. In other words, if I'm bullish on a chart and I flip it, frankly I should be bearish about it and vice versa." See what you think of this example, in The Kirk Report. ¿ SEC suspends trading of 35 firms tied to 'pump-and-dump' spam. ( Computerworld) ¿ Cody Willard gets Wallstripped!ECONOMYThe Wall of Worry continues to build:¿ All is fine! According to the Goldilocks crowd, the economy is just fine. The only problem is that they have been wrong about corporate profits, GDP, job creation, and tax receipts... ¿ How Alan Helped Ben: "What does Federal Reserve Board Chairman Ben S. Bernanke think of his illustrious predecessor now? For weeks, Bernanke has been reassuring Washington and Wall Street that the economy is healthy and inflation pressures are diminishing. Yet Alan Greenspan comes along and helps ignite a global market firestorm by talking about the risks of recession in America. Is Bernanke feeling dissed by a living legend?" ( BusinessWeek) ¿ Bull/Bear Video Debate ( Bloomberg): ¿ NFP Day (plus, ADP update) Soft job creation was not a big surprise -- but improvements to ADP's forecasting were. Can private data gatherers best government and academic sources?¿ Ten Observations on the Coming Financial and Economic Hard Landing. Nouriel Roubini makes me look (heh, heh) downright cheery! (RGE) ¿ I offer you only one post on retail sales this week -- but it's the only one you must read: Through The Retail Looking Glass. HOUSING¿ One word: Suck. ¿ Realtors Are Sick of NAR "Spin". A newsletter quoted by the Palm Beach Post has this to say: "A growing number of Realtors in Florida are frustrated with the state and national Realtors groups' efforts to 'spin' the market as one that is strengthening and where home prices are stabilizing." ¿ Subprime Wreckage Entices Bargain Hunters: "As fallout spreads from soaring defaults on riskier home-mortgage loans, some big investors see a recovery coming and are preparing to increase their bets on the so-called subprime market. Others already have reaped big gains wagering against it." (free WSJ) ¿ Subprime Defaults Prompt Calls For Rules to Protect Borrowers: "As more homeowners fall behind on their mortgage payments, the debate is heating up over whether lenders should be required to ensure that the loans they issue are suitable for their customers." (free WSJ) But Bloomberg's Caroline Baum is skeptical: As Housing Goes Bust, Lenders Become Predators?¿ Markit is a good source of subprime mortgage trading data: Markit ABX. For a non-FOMC week, the Fed was sure front and center: ¿ Fed Warned on Foreclosures as Mortgage Growth Cools. ( Bloomberg) ¿ In case you forgot why some people hold Alan Greenspan responsible for the housing mess, the wayback machine reminds us why: Quote of the Day - Alan Greenspan on subprime, I/O and other exotic mortgages (Doh!) ¿ Bernanke Says Fannie, Freddie Need to Reduce Assets:"Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, should sell most of their $1.4 trillion in assets to refocus on homeownership among low-income Americans, Federal Reserve Chairman Ben S. Bernanke said. The companies could destabilize financial markets should they fail to hedge their assets against risks like shifts in interest rates." ( Bloomberg) ¿ Niall Ferguson's Wake-Up Call: "Ferguson is fascinated by what he calls the 'paradox of diminishing risk in an apparently dangerous world.' By that, he means ebullient global stock markets and record-tight yield spreads between risk-free U.S. Treasuries and junk bonds and emerging-market debt. He also cites declining volatility in stock, bond and foreign-exchange markets, and an abiding faith in the ability of the Federal Reserve and other central banks to rescue the investment community from any potential financial crisis." ( Barron's) Meanwhile, Syria deploys thousands of rockets on Israel border. ( AFP) ¿ Unlearn:Trial's Lesson: Just Take the Fifth. (free WSJ) I guess that's one lesson you could have learned, especially if you are suffering from blunt head trauma or have some form of diminshed mental capacity. The rest of us with fully functioning brains might have learned a different lesson: Don't ever BS the FBI, and never lie under oath to federal prosecutors.¿ Gonzales Defends Move to Fire Attorneys, Denies Political Role. (free WSJ) The Justice Department claimed that the firings of seven U.S. attorneys were performance-related -- but a Wall Street Journal review of internal Justice Department documents reveals this to be false. This is a scandal with legs, and before it's over, someone will be disbarred. TECHNOLOGY & SCIENCE¿ You knew this was coming: YouPorn! The latest imitator of YouTube is precisely what it sounds like: a triple-X version of YouTube. It caters to all those people who have been getting busy videotaping themselves, well, getting busy. ¿ Music's New Gatekeeper: Apple -- now one of the largest sellers of music in the U.S. -- offers home-page placement in exchange for things such as exclusive access to new songs, special discount pricing or additional material such as interviews with stars. Most other big retailers, digital and physical, also seek exclusive offerings, but Apple is especially aggressive and has outsize clout when it comes to the slightly out-of-mainstream music it often emphasizes. (free WSJ) ¿ The 50 Most Important People on the Web. ( PC World) ¿ Weighing the Results of Popular Diets: A government-funded study determines which popular diet is most effective -- the results will surprise you. ( WSJ) Click here for free video. ¿ If you travel a lot, this is for you: The definitive guide to US airport wireless connections and free airport wifi. ¿ The annoying tech/retail CEO that won't go away: Revisiting Overstock.com and Utah. ( The New York Times) ¿ Don't Get Caught In a Losing Battle Over DVD Technology. (free WSJ) ¿ How To Avoid A Heart Attack. ( Forbes) ¿ Apartment Transformed into Star Trek Shrine. Need I even say it? Owner's sex life transformed into a distant memory. ¿ Bioluminescent squid. ¿ The Lord's Encyclopedia: Christian fundamentalists in the U.S. have launched two onlineencyclopedias modeled on the Wikipedia format. Conservapedia and CreationWiki aim to explain the world from a creationist perspective. They make entertaining reading. ¿ Weekend Jazz with Thelonious Monk: Monk was a genius three times over: As a composer, as a jazz pianist, and as an improviser, he was without peer, and shaped the future of jazz. ¿ Vanguard founder and tireless index promoter John C. Bogle pens The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. Bogle also has an opinion piece in the WSJ this week that touts indexing over even 'Value' Strategies. ¿ The Best Burger in America: You can quibble with the list, but it's a worthwhile discussion. When in NYC, check out this list: Best Burgers in NYC. ¿ Fun! Fish body/face-art. ¿ Astonishing use of data: A gorgeous depiction of all the flights over the U.S. in a 24-hour period. Stunning.
MUSIC BOOKS MOVIES TV FUN!
That's all from the Northeast, where we may possibly have put winter behind us. With the cold snap gone, the crocus shoots are coming up, and a 50-degree week awaits. Good riddance!
At the time of publication, Ritholtz was short Thomson (TOC), although holdings can change at any time. Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback;
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