US stock indexes made marginal gains Thursday in volatile trading, with the Dow Jones Industrial Average swinging 550 points during the day. Possibly easing tension between the US and China is thought to have aided the market, but one trader says, "Sometimes there's an obvious answer for why the market is doing what it is, and other times you really have to scratch your head."
Deepening uncertainty in Brexit negotiations caused the pound to lose 1.6% against the US dollar Thursday, and technical analyst Fawad Razaqzada expects the slide to continue, especially if a no-deal Brexit becomes likelier. Razaqzada expects the pound to fall to $1.266, and a long-term chart reading suggests a retest of an October 2016 low of $1.184.
Cisco Systems jumped almost 5% after an earnings report surpassed expectations, but technical analyst Bruce Kamich, CMT, notes chart indicators that suggest caution is advisable. The stock has an upside target of $57, but Kamich contends volatile conditions could send it below support at $44 to $42.
CME Group plans to expand total-return index futures Dec. 3, citing increased demand driven by implementation of uncleared margin rules. Total-return futures help "with uncleared margin, and we are continuing to look to expand that complex," says Tim McCourt of CME.
Technical analyst Todd Gordon says prospects are improving for NVIDIA, which has taken a sharp downturn since an October peak. The semiconductor sector is showing signs of improvement, with relative strength increasing and higher lows being achieved, Gordon says.
The rise of exchange-traded funds could pose risk to investors because of the false impression that liquidity is created, Payden & Rygel Chief Economist Jeffrey Cleveland says. ETFs do not pose systemic risk, Cleveland says, but "liquidity in the ETF market is untested, and investors do not fully understand the risk they are exposed to in stressed market conditions."
The Securities and Exchange Commission's Office of the Whistleblower received 5,282 reports in fiscal 2018, an 18% increase compared with fiscal 2017, according to an SEC report to Congress. The agency paid $168 million to 13 whistleblowers in fiscal 2018, up from almost $50 million to 12 individuals in fiscal 2017.
Libor is likely to be discontinued, and other benchmarks are available, but Libor alternatives aren't being written into financial contracts. Banks say there is too much uncertainty to reference alternative benchmarks, despite regulators' frustration the process is moving slowly.
In this article, authors Ned Davis and Steve Lackey discuss some of the steps involved in building a stock market model. Although they do not resort to arcane mathematical language, they nonetheless conclusively demonstrate that standards of proof and empirical testing are necessary in the building of such a model.
This paper is about financial manias -- economic events rather than market events. From reading financial market history as a technician, I noticed certain economic patterns seemed to precede financial manias. While financial manias were relatively infrequent and the preceding patterns not absolutely precise, as are most technical patterns, the recurrence of economic and political events was so consistent that it formed the basis for a technical theory of financial manias.