The late speechwriter and New York Times columnist William Safire coined a phrase notoriously uttered by Vice President Spiro Agnew: "Nattering nabobs of negativism."
Agnew was a highly dubious politician, but those catchy words come to mind when we hear the naysayers these days in the financial media. You should ignore them. Their agenda is to boost ratings and to separate you from your money; they don't have your best interests at heart. If you had listened to these self-appointed gurus seven years ago, you would have missed the third-longest bull market in history.
The investment road from here requires vigilance, not undue fear. As long as the global economy continues to exhibit momentum, you can still find reasonably valued stocks with plenty of upside left. In the meantime, you need to brace yourself for any bumps along the way.
As this battle-scarred bull market wheezes into its seventh year, risk mitigation is more imperative than ever. Below, we preview the major events of the coming week that you should keep a close eye on.
The beaten-down technology sector rallied last Friday, helping to push the broader indexes back into the black for the year. Despite these gains, though, the overall market has hardly budged year-to-date.
This bull market is long in the tooth and increasingly vulnerable. To prevent getting blindsided, you should emphasize intrinsic value more than ever. Warren Buffett's Berkshire Hathaway (BRK.A - Get Report) last week reiterated that approach, by acquiring a $1 billion stake in Apple (AAPL - Get Report) .
APPLE is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells AAPL? Learn more now.
Four years ago, Buffett famously stated that he avoided investing in technology companies because he wasn't sure how to value them. The surprising decision last week to take a big bite out of Apple came not from the 85-year-old Oracle of Omaha but from his putative successors, Todd Combs and Ted Weschler.
The upshot is that some of the smartest investing minds on the planet now see Apple not as a growth stock but as a value play. And in this volatile and risky market, you should follow Berkshire's lead and make value your watchword.
Do bull markets die ... or are they killed?
A major source of investor anxiety right now is the Federal Reserve, which has indicated that it might raise rates when it next meets, in June. When the Fed increases interest rates and squeezes credit, it causes money supply growth to nosedive, an unmistakable warning that a bull market will soon die.
Historically, money supply growth has exhibited a close correlation with stock price movements. An increasing money supply boosts stocks; decreasing money supply puts the brakes on stocks.
Closely watched barometers of economic health that will guide the Fed in its fateful decision are on the docket this week:
Monday: PMI Manufacturing Index Flash
Tuesday: New Home Sales
Wednesday: MBA Mortgage Applications, FHFA House Price Index, PMI Services Flash, EIA Petroleum Status Report
Thursday: Durable Goods Orders, Jobless Claims, Bloomberg Consumer Comfort Index, Pending Home Sales Index, EIA Natural Gas Report
Friday: U.S. Gross Domestic Product, Corporate Profits, Consumer Sentiment, Baker-Hughes Rig Count, and last, but certainly not least, a speech from Fed Chair Janet Yellen.
Meanwhile, it's been a disappointing earnings season so far. With 95% of companies in the S&P 500 reporting earnings to date for the first quarter of 2016, the blended year-over-year earnings decline is -6.8%. The first quarter marked the first time the index has recorded four consecutive quarters of year-over-year declines in earnings since Q4 2008 through Q3 2009.
Here are the major corporate operating results to watch this week, including the consensus estimates for earnings per share and how that stacks up to the same quarter a year ago. Except for the deep discount chains, you can expect continued earnings pressure (and stock price declines) among the traditional retailers:
Bank of Montreal (BMO - Get Report) ($1.75 vs. $1.71); Best Buy (BBY - Get Report) (35 cents vs. 37 cents); Royal Bank of Canada (RY - Get Report) ($1.64 vs. $1.61); Tiffany & Co. (TIF - Get Report) (68 cents vs. 81 cents); Valeant Pharmaceuticals (VRX) ($1.38 vs. $2.36); Guess? (GES - Get Report) (-18 cents vs. 4 cents); Abercrombie & Fitch (ANF - Get Report) (-51 cents vs. -53 cents); Dollar General (DG - Get Report) (95 cents vs. 84 cents); Dollar Tree (DLTR - Get Report) (82 cents vs. 71 cents); Seadrill (SDRL) (39 cents vs. 86 cents); and Sears Holdings (SHLD) (-$3.20 vs. -$2.00).
As we've just explained, this market is risky but still offers growth opportunities if you know where to look. Here's one opportunity you shouldn't miss: an 85% Accurate Trader who gives his Personal Guarantee: "Give Me 9 Minutes a Week and I Guarantee You $67,548 a Year." He turned $50,000 into $5 million trading this way and for a limited time, he's guaranteeing you at least $67,548 per year in profitable trades if you follow this simple step-by-step process. Click here now for details.