“When the facts change, I change my mind. What do you do, sir?” —John Maynard Keynes

While looking at the earnings reports that have come out recently, I couldn’t help but think of the quote above. Indeed, I have written quite a few times over the last year that I felt the market was becoming fairly valued and that earnings reports would have to impress to make valuations look attractive. Each quarter, earnings have impressed, valuations have come down and the market has again started to look cheap—even after the fabulous advances we’ve seen since March 2009. (more…)

The Securities and Exchange Commission (SEC) fired a shot across Wall Street’s bow on Friday when it filed suit against Goldman Sachs (GS), charging the firm and one of its traders with fraud. While Goldman has had its fair share of bad press since the financial crisis, this is the first real legal action against it. We now wonder, “Will this be the last?” (more…)

The old saying that “bull markets climb a wall of worry” held true last week. At a time when fears of a Greek default were on the rise, when disgraced bankers testified in front of Congress, and when numerous other geopolitical tensions (China, Poland, Kyrgyzstan and Thailand, among others) were percolating, the major domestic stock indices managed to rally to new highs. The Dow Jones Industrial Average almost closed above the well-hyped value of 11,000, while the technology-heavy NASDAQ composite also showed strength for the week. (more…)

While the Employment Situation Report that was published on Friday came in under expectations, the numbers did not disappoint. For almost nine months we have watched with cautious optimism as the job market continued to shed jobs, but at a slower pace almost every month. March 2010 finally bucked the jobs loss trend, posting the strongest jobs growth in three years. In the report, January was adjusted from a net negative to a net positive, which helps support the trend. (more…)

The first quarter will end on Wednesday, and unless the major domestic stock indices move drastically over the next few days, it looks like we’ll be able to chalk up another quarter of strong gains. The gains have been driven by many of the things we discuss regularly in this weekly piece (rebounding corporate profits, supportive government policies and improving psychology among others). (more…)