Did a customer poll revive a rock phenom?

Stocks edged slightly lower as investors eyed data on jobs, pending home sales, and ongoing negotiations over Greece’s debt repayments. The Dow fell 36 points, with 15 of its 30 components advancing, the S&P 500 Index declined by 2 points, and the Nasdaq lost 8. Decliners led advancers by about four to three on the NYSE and by almost nine to eight on the Nasdaq. The price of the 10-year Treasury strengthened, and price of the 30-year Treasury weakened. Gold futures rose $2.30 to close at $1,188.80 an ounce. The price of crude oil rose 17 cents, settling at $57.68 a barrel.

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Evolving money market fund products (excerpt)

Evolution of the light bulbAs the investment universe expands and evolves, investors rely on companies like ours to provide products that keep pace with change. Aldo Ceccarelli takes you behind the scenes in this excerpt of On the Trading DeskSM from Tuesday, May 26, 2015.

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Aldo: On the 12th floor of a building on Market Street in the heart of San Francisco’s financial district sits money market product analyst, Jerry Johnson. Jerry’s been a busy guy, tracking and monitoring new rules and regulations that the Securities and Exchange Commission (SEC) enacted across the money market industry. Jerry, thanks for joining.
Jerry: Thanks for having me.

The SEC and its money market regulations decided to treat retail and institutional investors differently. Why?
During the financial crisis, retail and institutional money market investors in general behaved differently. As retail investors pose less run risk, the SEC will allow these investors to continue to invest in prime and municipal money markets with a stable one dollar net asset value (NAV), as they do today. Institutional prime and municipal money markets will be required to have a floating NAV using daily market prices instead of amortized cost, though any investor, including institutions, seeking a one dollar NAV can also invest in government money markets.

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Goodbye, Millennials: Meet the Centennials

On a slow news day in the U.S., stocks reversed course after yesterday’s losses to post solid gains, with the Nasdaq closing at a record high. European stocks also jumped on reports that a deal between Greece and its creditors was in the works.

The Dow gained 121 points, with 25 of its 30 components advancing; the S&P 500 Index climbed 19; and the Nasdaq jumped 73, the percentage leader for the session. Advancers led decliners by 11 to 4 on the NYSE and 9 to 4 on the Nasdaq. The prices of Treasuries strengthened. Gold futures fell $1.30 to close at $1,185.60 an ounce, and the price of crude oil dropped 52 cents to settle at $57.51 a barrel, a low for the month.

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A long winding road ahead for the Fed: Part 1 of 2

Long and winding country roadRegardless of which way interest rates head, are you and your clients prepared for the long haul? Brian Jacobsen, Ph.D., CFA, CFP®; Wayne Badorf, CFP®, CFS®; and Jon Lagerstedt begin the conversation in the first of a two-part series.

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Wayne Badorf: This week we’re going to talk about the Federal Reserve and a potential rise in interest rates. Next week, we’re going to talk about whether or not America is ready for it. I’m Wayne Badorf.

Jon Lagerstedt: And I’m Jon Lagerstedt.

Wayne: And welcome to The Essential Practice. For those of you tuned into this program, we would encourage you to listen to program 117, When rates rise: The advisor’s role, in addition to our program today.

Today we’re joined by Brian Jacobsen, Chief Portfolio Strategist. Brian, welcome to the program.

Brian Jacobsen: Thanks for having me back. It’s an honor.

Wayne: Brian, we want to talk about the Federal Reserve and interest rates. I know the next time the Federal Reserve is meeting is mid-June, I want to say it’s June 16 and 17. Let’s just cut right to the chase. When do you think the Fed’s going to increase interest rates?

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Why workplace go-getters don’t want extra work

Stocks posted sharp losses as the market reacted to economic data that painted a mixed growth picture for durable goods, the housing market, and underlying consumer confidence. The Dow fell 190 points, with all 30 of its components retreating; the S&P 500 Index dropped 21 points; and the Nasdaq lost 56. Decliners led advancers by 11 to 3 on the NYSE and by 3 to 1 on the Nasdaq. The prices of Treasuries strengthened. Gold futures declined by $17.10 to close at $1,186.90 an ounce. The price of crude oil fell $1.69, settling at $58.03 a barrel.

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Millennial investors value tech and trust

Millennials have a difFinancial app on tabletferent relationship with money than their generational predecessors, a dynamic that focuses more on data-driven insights than dollar bills. For example, a Millennial who buys a $4 breakfast sandwich every day by tapping a smartphone against a sensor might never experience the shock of seeing an empty wallet. But that doesn’t mean there’s no lesson to be learned. Instead, a Millennial’s aha moment might arrive after viewing an app-delivered chart displaying the budgetary benefits of eating a low-cost bowl of cereal before work.

The same dynamic applies to investing. More than other generations, Millennials are turning to on-the-go technology to help them plan for retirement. Generation Y represents 43% of all personal finance activity (pdf) conducted on mobile devices,1 and 69% have used their mobile devices (pdf) to log on to financial accounts.2 This includes apps that let users research stocks, track portfolio performance, chat with fellow investors, and even access basic tips from automated learning tools—all with just the click of a button.

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Say cheese! Your hamburger is ready for its close-up

Stocks traded in a narrow range and closed lower after core CPI rose more than expected and Federal Reserve Chairwoman Janet Yellen said the Fed would likely begin raising rates later this year if the economy continued to strengthen.

The Dow lost 53 points, with 24 of its 30 components declining; the S&P 500 Index fell 4; and the Nasdaq dropped 1. Decliners led advancers by five to three on the NYSE and by three to two on the Nasdaq. Treasury prices weakened. Gold futures slipped $0.10 to close at $1,204.00 an ounce. Crude oil lost $1.00 to settle at $59.72 a barrel.

For the week, the Dow was down 0.21%, the S&P 500 Index added 0.17%, and the Nasdaq rose 0.83%.

In earnings news:

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How 3-D movies boost our cognitive abilities

Stocks posted gains today as earnings season begins to wrap up and investors continue monitoring economic data—and signals from the Fed—to gauge when rates will rise. The Dow closed ahead by less than 1 point, with its 30 components split evenly between gainers and decliners; the S&P 500 Index added almost 5 points; and the Nasdaq rose 19 points. Advancers led decliners by five to four on the NYSE, while advancers and decliners were almost even on the Nasdaq. The prices of Treasuries strengthened. Gold futures declined by $4.60 to close at $1,204.10 an ounce. The price of crude oil rose $1.74, settling at $60.72 a barrel.

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Golden opportunities in large-cap core

Jeff Moser

Jeff Moser

Undiscovered opportunity in the large-cap core space can be found with science and art. Jeff Moser, COO and portfolio manager with Golden Capital Management, LLC, explains in this excerpt of the On the Trading DeskSM from Tuesday, May 19, 2015.

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Your team focuses heavily on understanding earnings. Why?
The reason we put a lot of weight in earnings and earnings surprise at a good valuation is we believe that, in the long run, it drives the price of a stock.

Jeff, can you describe your process? I know it’s both quantitative and qualitative.
Our process is active quant, and just as you mentioned, it’s quantitative and qualitative—in that sequence. We describe it as the science and the art of investing. The first step is the quantitative process, the science, because when you’re managing large-cap core, the investment universe starts off fairly large: 1,200 companies. There’s no way to qualitatively review 1,200 companies. Our process is to objectively narrow that universe down to a small subset of companies that have just the right type of qualities—companies with a high probability of reporting a positive earnings surprise and good valuation or undervalued. Then comes the qualitative part, the art, where we look inside the company, at the management team, the products of the company, any new products, whether these new products are working or not, and if there needs to be an expansion of the sales team to take advantage of that. The qualitative things assess the investment merit, the fundamentals of the company, and the ability of that company to deliver on future earnings at a good valuation.

Are there undiscovered values yet to be found in large-cap core?
First off, when you think of undiscovered names, you think a stock that maybe no one’s heard about before. But it can be a stock that is very common yet has underperformed over a long time period. For example, a very large, big-box home-improvement store is a holding of ours. When we purchased it, it had been out of favor. It lost ground to its competitor, its profit margins suffered, and it was dealing with customer service complaints. But it began to address those issues. Our quantitative model selected the stock, and it rose to the top. I looked at that stock as a buy candidate. The metrics looked better. So you can look under the numbers and see if there’s something that’s causing a temporary blip in a particular company. Comparing a company’s fundamentals, investment merit, and earnings opportunities to the other 1,200 companies in our investment universe has been the best way for us to determine whether it is a buy, hold, or sell candidate.

Jeff, that’s all we have time for today. Thanks for joining us.
Thank you, Amy.

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Leftovers go high-tech

Anticipation over what the Federal Open Market Committee minutes might hint about upcoming rate increases made for a choppy day of trading. Stocks initially rallied after it appeared from the minutes that a June rate increase was unlikely, but the major indexes lost steam and ended mixed.

The Dow fell 26 points, with 17 of its 30 components retreating; the S&P 500 Index dropped almost 2 after first setting a new intraday high; and the Nasdaq managed a 1-point gain. Advancers narrowly led decliners on the NYSE and vice versa on the Nasdaq. The prices of Treasuries were mixed, with the 30-year weakening and the 10-year strengthening. Gold futures were up $2.00 to close at $1,208.70 an ounce, and the price of crude oil rose 99 cents to settle at $58.98 a barrel after a report showed falling crude inventories.

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