It’s Friday in the Wall Street Daily nation. That means it’s time to embrace the adage that a picture is worth a thousand words.
For the newbies in the group, each week I select a graphic or two to convey an important economic or investment insight.
This week, I’m debunking a stubborn myth about stock markets that’s making the rounds.
Then it’s onto a dire warning we hope you heeded.
Last, but not least, I’m highlighting the hottest growth sector in the market — and the best way to profit from it.
So let’s get to it…
Stocks Destined to Tread Water?
If we’re supposed to believe Wall Street strategists, we should pack up for the year and quit investing.
Why? Because they’re saying that stock prices have peaked. Not kidding.
After an impressive 8.1% rally for the S&P 500 index in the first half of the year, a recent Bloomberg survey of 20 strategists suggests that it’s all over.
They’re convinced that stocks will trade sideways through yearend.
The only problem? Stock market history suggests strongly otherwise.
Take a look:
Since 1950, whenever the S&P 500 has risen by more than 8% in the first half of the year, the gains keep coming.
On average, stocks rally another impressive 7.2%.
Talk about sending mixed signals. My recommendation? Listen to analysts and ignore stock market history at your own peril!
Speaking of warnings…
I Hate to Say… We Told You So
But we told you so!
Earlier this week, shares of Wall Street’s latest social media darling, Snap Inc. (NYSE: SNAP), officially turned into Wall Street’s latest IPO bust.
Shares crashed below the IPO price of $17 to hit a new all-time low:
What caused the latest breakdown in prices? Turns out that another one of the underwriters that was so eager to earn an investment banking fee on the IPO changed their mind about the company’s prospects.
