U.S. Indexes Mark 25-Year Milestone

Please note that U.S. markets will be closed on Monday, February 20, in observance of Washington’s Birthday (President’s Day). AAII offices will also be closed. This week saw several market indexes notch multiple all-time highs. The Dow Jones industrial average recorded its fifth consecutive record close on Wednesday, the second such streak in roughly two…

 

AAII Sentiment Survey: Bull-Bear Spread Tightest Since August 2016

The percentage of individual investors describing their short-term market outlook as “bearish” rose over last week, while optimism pulled back, according to the latest AAII Sentiment Survey. This change has now pushed the bull-bear spread (bullish sentiment minus bearish sentiment) to 0.7%, its tightest range since August 24, 2016. Bullish sentiment, expectations that stock prices…

 

Fed Raises Rates While Dashboard Indicators Stand Pat

Weekly Market Summary After going a year since its last rate increase, the Federal Reserve announced this week that it was raising the benchmark federal funds rate by a quarter percentage point—to between 0.50% and 0.75%—and that officials now expect to raise short-term rates more often in 2017. This is only the second rate increase…

 

Fed Raises Short-Term Rates for First Time in a Year as Dow Flirts with 20,000

After going a year since its last rate increase, the Federal Reserve surprised almost no one by announcing this week that it was raising the benchmark federal funds rate by a quarter percentage point—to between 0.50% and 0.75%—and that officials now expect to raise short-term rates more often in 2017. That it has been a…

 

Those 2017 Fed Forecasts May Prove to Be Wrong

There are two questions investors may have following yesterday’s rate hike. The first is: What happens next? The second is: What do I do now? The short answers are: Don’t put too much faith into the forecasts and enjoy the marginally higher level of interest income, but don’t make big changes. I will expound on…

 

AAII Sentiment Survey: Lowest Neutral Sentiment Since November 2014

The percentage of individual investors describing their market outlook as “neutral” is now at its lowest level in more than two years, according to the latest AAII Sentiment Survey. Pessimism extended its rebound, and optimism is higher as well. Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.5 percentage points…

 

CI Market Dashboard: Bulls Tighten Grip in Post-Election Rally

Weekly Market Summary This week saw U.S. stocks, for the most part, continue their upward march in the wake of Donald Trump’s presidential election victory. Major indexes hit record highs and the U.S. dollar, as measured by the U.S. Dollar Index, climbed to a 13-year high. It also seems a near certainty that the Federal…

 

Putting the Rise in Bond Yields Into Perspective

Bond yields have suddenly found themselves in the financial headlines. Since Donald Trump became president-elect, the yield on the 10-year Treasury has risen from 1.86% on Election Day to a near-term closing high of 2.22% on Tuesday. That is nearly a half-percentage point jump in just seven days. (The closing yield was slightly higher today,…

 

Over 1 in 4 Surveyed Investors Neutral to Uncertain on Trump’s Impact

This week’s Sentiment Survey special question asked AAII members what factors are most influencing their six-month outlook for stocks now that the elections are over. Not surprisingly, many said president-elect Donald Trump. Slightly more than one out of every four respondents described themselves as being uncertain about the impact his presidency will have or did…

 

How to Keep Headlines From Driving Your Portfolio Decisions

On behalf of everyone at AAII, I want to say thank you to all of you who have served or are currently serving in the military. The stock market will be open Friday, Veterans Day, but banks and government offices will be closed. Big, unexpected events commonly trigger strong emotional reactions. The wiring in our…