Huawei CEO Ren Zhengfei said in an interview with CNBC the company's business is still strong in China.Technologyread more
The Fed is not likely to make a move on interest rates when it meets this week, but it should clear the way for a rate cut later in the summer.Market Insiderread more
U.S. President Donald Trump officially kicked off his reelection campaign Tuesday at a Florida rally where he exhorted thousands of rollicking supporters to keep advancing his...Politicsread more
BlackRock's global fixed income chief says the European Central Bank just turned up the pressure on the Federal Reserve to more toward easier policy.Market Insiderread more
Global watchdogs and top U.S. Congress members are calling for oversight of a digital asset being launched by Facebook and roughly two dozen other stakeholders.Marketsread more
Facebook's new cryptocurrency project, titled Libra and backed by the likes of Visa and Booking Holdings, is being widely embraced by market watchers.Trading Nationread more
Mortgage applications were down 3.4% from the previous week, but still up 31.6% from a year earlier, according to the Mortgage Bankers Association.Real Estateread more
Trump's remarks came a day before the Fed was set to announce its next decision on interest rates.Politicsread more
Sen. Josh Hawley, a well-known tech critic, introduced legislation on Wednesday that would remove the immunity big technology companies receive for user-posted content under...Technologyread more
Zuckerberg fell out of Glassdoor's top 20 CEO ranking for the first time, although his employee approval rate remains high.Technologyread more
Ford announced that the 2020 Mustang Shelby GT500 has 760 horsepower and 625 lb.-ft of torque, which it says makes this the most powerful street-legal Ford. The car is not yet...Autosread more
As we close in on the end of the summer, one of Wall Street's longest-running and widely followed prognosticators says the U.S. market is "overdue" for a 5 or more percent drop.
But CFRA's chief investment strategist, Sam Stovall, does not believe stocks are about to enter any sort of bear market.
Stovall blames "geopolitical tensions" for keeping the below 2,500, the next key level that the bull run was set to send it above. Instead the S&P hit a new high of 2,490 last week before dropping back to 2,441— that's still well above the key 100- and 200-day moving averages of 2,411 and 2,338, respectively. The index was up 1 percent to 2,466.02 late morning Monday.
In a note to clients Monday morning, Stovall notes since World War II the market has had 56 pullbacks ranging between 5 percent and 9 percent, 21 corrections involving a market drop of between 10 percent to 19.9 percent and 12 bear markets (drops of 20 percent or more). "On average" says Stovall, "only six months have separated the end of one decline of 5 percent or more until the start of the next."
The S&P hasn't had a 10 percent or more slide since late 2015, ending in February 2016.
However, Stovall warns against investor panic. His research shows that 85 percent of the time after 5 percent declines, stocks returned to rally mode. According to Stovall, "recommending that investors lighten up their exposure to equities may end up doing more harm than good to their portfolios and psyche."
The CBOE Volatility Index, often cited as a key metric of investor nervousness, jumped last week but remains near historical lows.
Like just about every other market watcher, Stovall concedes it is nearly impossible to forecast when a small drop will turn into a big one.
But he does say there are three things he's watching especially closely. First on the list, the 10-year Treasury, which is now yielding just 2.25 percent, "well below the average rate of 6.1% at market tops."
The second watch factor is valuations and that's drawing more of Stovall's attention. The average price-earnings ratio for the S&P 500 is 18.1 at market tops, it's currently at 23.5 times earnings.
Another of Stovall's warning factors is the unemployment rate which has historically dipped below 5 percent before the market hits a top, we're now at 4.3 percent.