A lot of smaller companies and micro-cap stocks are now reporting their quarterly earnings, and a lot of the numbers are pretty good. I’ve noticed particular financial strength in a number of micro-cap technology companies, along with good trading action among biotech companies.There’s no real trend among micro-cap stocks, aside from the Russell 2000 Index, which is about five percent below its recent high set in March of this. Read More
It continues to be uncertain times for the stock market. You get good news, the stock market goes down; you get bad news, the stock market goes up. With no definable trend, you could say we’re in a market where anything could happen. This is why investment risk is so high.I’m hopeful about this upcoming earnings season and it’s exactly what the stock market needs—to see some results from. Read More
I think investors really want to be buyers of stock at this time, but there isn’t much of a catalyst to do so. Institutional investors are buying, but they’re also playing on the market’s volatility, accentuating the results. Reality is beginning to set in now and there’s a realization that corporate earnings are actually going to be strong in the bottom half of the year. The employment situation isn’t great and neither is the real estate market, but the corporate economy is well-positioned to deliver solid earnings growth and this makes the current stock market look very reasonably priced.
In a much-anticipated initial public offering (IPO), Dunkin’ Brands (NYSE/DNKN) was set to debut on the New York Stock Exchange yesterday. The company owns two big-name franchises — Dunkin’ Donuts and Baskin Robbins — and could be much sought after.
The stock market is facing some strong headwinds over the short term and all the wrangling is a real shame considering that we’re still getting great earnings results from large-caps. It’s no wonder the spot price of gold keeps ticking higher; there’s nothing else for investors to rally around.
The second-quarter earnings season has started strong. As of July 20, 88 of the S&P 500 companies have reported, with 78% beating estimates and 10% falling short, according to Thomson Reuters.Strong earnings from technology have provided the catalyst for the buying, helping to offset the significant debt issues in Europe and the U.S.
During the technology euphoria in late 1999 and early 2000, I recall that a friend of mine had taken out a massive loan against the value of his home and bet on several high-risk micro-cap stocks. I remember his position surging from $100,000 to nearly two million dollars in less than two months. He asked me my investment advice on what to do. I said take profits. He did not listen and sat on the two stocks all the way back to well below his initial investment!
One of the things happening in this market is that trading action is occurring as a slow deterioration, rather than an outright correction. You can see this in the technology sector in particular. This kind of market is really hard on sentiment, because investors can’t see an endgame. In a bull market, investors can quite easily get their head around a major correction in share prices, and even expect it as part of the long-term trend. In a bear market, however, there is no defined outlook—only uncertainty about where things are headed.