It was the toughest week in the markets in recent memory, as the Dow Jones tumbled 3.52% and the S&P 500 fell 2.63%. The MCSI Emerging Markets Index was hit particularly hard and tumbled 3.90%.
Apple Inc. (AAPL) was the sole exception in your Bull Market Alert portfolio, bucking the trend and eking out a 1.00% gain.
Asian stock markets continued to tumble overnight, with the MSCI’s broadest index of Asia-Pacific shares outside Japan falling 1.5% to a four-and-a-half month low, after losing more than 1% on Friday. Japan’s Nikkei index surrendered the 15,000-level and ended down 2.5% at a two-month low.
You no longer have exposure to this troubled region, since Trina Solar (TSL), your only investment there, stopped out this morning.
In many ways, the current pullback is as well telegraphed as any I can remember. I’ve been writing about the dangers of positive market sentiment heading into the new year for the past few weeks.
The market’s current bogeyman is weak emerging market countries like Argentina and Turkey. With the focus of Europe’s “PIIGS” countries (Portugal, Italy, Ireland, Greece and Spain) out of fashion, the bears needed a new crisis to focus on. And a rerun of the 1997 emerging markets currency crisis is the latest candidate for crisis of the day. Expect to see the media roll out permabears like Nouriel Roubini and Marc Faber this week — both of whom, incidentally, turned bullish over the past few months. If the sell-off continues, also prepare for an appearance by Robert Prechter, who will predict a re-test of the S&P 500’s low of 666 in March 2009.
Let me end with some good news: the extreme of bullishness in the market has abated rapidly. Here’s a graphical representation of market sentiment indicators from Friday’s sentimentrader.com.
Unfortunately, it also shows that the sell-off probably has another week or so to go. That’s why this week, the global bull is pulling in his horns and waiting for the manic-depressive Mr. Market to get off his couch.
Finally, I look forward to seeing many of you at the Money Show in Orlando this week. You can see a schedule of my presentations, which start on Thursday, Jan. 30. In addition, I will be hosting a private meeting exclusively for subscribers at 1:00 p.m. on Friday, Jan. 31. I encourage you to sign up for my subscribers-only private meeting now. Finally, I have single slot left open for a private meeting with potential money management clients on Friday. If you want to swoop down on it, please email firstname.lastname@example.org. NOTE: My Securities and Exchange Commission-registered money management firm, Global Guru Capital, is not affiliated with my publisher.
Bank of Ireland (IRE) lost 8.06% over the holiday-shortened week. No corner of the market was left untouched last week as the broad market sell-off touched nearly every sector — and Bull Market Alert position. However, IRE’s 28% jump earlier this month is a good cushion against last week’s negative move. IRE is expected to report earnings on March 3, before markets open. IRE is a BUY.
Google Inc. (GOOG) escaped last week nearly unscathed, pulling back just 2.32%. I recently highlighted Google’s acquisition of robotics company Boston Dynamics, a company that produces advanced robotic technology. News emerged yesterday that Google recently acquired artificial intelligence company DeepMind Technologies. This all adds up to one of the richest and most innovative companies on the planet, bringing together artificial intelligence, robotics and billions of dollars. Let’s hope Google’s “Don’t Be Evil” motto is more than just a catchy marketing slogan. GOOG is a BUY.
iShares MSCI Spain Capped Index (EWP) lost 5.00% last week. Although a tough week for this Spanish exchange-traded fund, Europe may finally be turning a corner. Reuters reported that government debt in Europe declined for the first time since 2008. This is yet another positive sign, signaling a lasting economic recovery in the euro zone. EWP is a BUY.
Apple Inc. (AAPL) bucked the formidable negative trend last week to gain 1.00%, as activist investor Carl Icahn announced that he purchased another $3 billion of Apple’s stock. All eyes will be focused on Apple today, as the company reports earnings after markets close. Last week’s strength could be a sign of good news to come. AAPL is just below the 50-day MA and remains a HOLD.
Apollo Global Management, LLC (APO) fell 8.16% last week. APO suffered a one-two punch last week as news of an investigation into its recent CEC Entertainment acquisition, coupled with the market turndown, took its toll. APO is scheduled to report earnings on Feb. 6, before markets open. APO remains a BUY.
AbbVie (ABBV) gave back 4.53% last week. Touting a strong new-drug pipeline for 2014, AbbVie currently stands in the top three of Zack’s ranked biotech sector stocks. ABBV will report earnings on Jan. 31, before markets open. ABBV is a HOLD.
Latest Special Report
As a courtesy, I want to bring to your attention my latest special report, the newly updated version of The Top 12 Stocks You Should Buy Right Now, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle.
- Be sure to sign up for my private, subscribers-only meeting if you plan to attend The World MoneyShow Orlando. The room for my private meeting is St. George 108, and my gathering is scheduled for Friday, Jan. 31, beginning at 1 p.m. I encourage you to sign up for my private meeting today. To attend The World MoneyShow Orlando, Jan. 31-Feb. 1, register today and attend free as my guest.
- I will be meeting with current and prospective Global Guru Capital clients at the World Money Show in Orlando on Friday, Jan. 31 and Saturday, Feb. 1. If you would like to set up a meeting with me personally, please drop my assistant a note at email@example.com to set up a time. NOTE: Global Guru Capital is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Publishing.