FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Despite the rally in stocks John Praveen, chief investment strategist at Prudential International Investments Advisers, thinks stocks are due for a “healthy” correction. There are four triggers for such a correction. 1. A slowdown in Q2 U.S. GDP growth, after a strong first quarter. A slowdown in China, and the ongoing eurozone recession. 2. Uncertainty in Europe surrounding the Italian election, and Cyprus. 3. Earnings disappointment in Q1. 4. Uncertainty about when the Fed will wind down QE.
Raymond James’ Jeff Saut is out with his call for the week:
“The ‘buying stampede’ is at a legendary 70 sessions and quite frankly I have never seen anything like this in 42 years in this business and more than 50 years of watching the markets. As they say, ‘Markets can do anything,’ and this one certainly is! Indeed, it has now been more than 100 sessions without so much as a pullback of 5% or more, the third longest stint since 2002. This morning, however, China’s growth risks are in focus as Q1 economic data falls short, leaving the preopening SPX futures down about 8 points. So maybe we will finally see a pullback, but it should not be all that much.”
People Shouldn’t Take Financial Advisor Credentials At Face Value (Consumer Financial Protection Bureau)
The Consumer Financial Protection Bureau is out with a new report that warns people to be cautious while trusting advisors with financial decisions. This they say is because many consumers “don’t understand basic differences between brokers, investment advisers, insurance agents, and financial planners—let alone the 50 plus senior designations that many of those financial advisers add to their titles.”
Here are some senior designations and the coursework required for them:
Advisor Settles Charges That He Defrauded CalPERS (Thomson Reuters News & Insight)
Mesh Tandon, head of Simran Capital Management, has settled charges brought against him by the SEC. The regulator alleged that Tandon defrauded the California Public Employers’ Retirement System (CalPERS). Tandon will pay “$121,698 in penalties, interest and disgorgement of ill-gotten gains,” according to Thomson Reuters News & Insight. The agreement also sees Tandon barred from the securities industry.
The S&P Falls Beneath A Horizontal Line And A Diagonal Line (Business Insider)
Technical analysts are worried because the S&P 500 just fell below two important price levels. The S&P 500 fell below the 50-day moving average, which is at 1543, and below its resistance level of 1530.
Miller Tabak Chief Technical Market Analyst Jonathan Krinsky said, “If 1539 does prove to be support yet again, we could be in the process of forming the neckline of a head and shoulders top. That would suggest a bounce somewhere back to the 1560-1570 area. We view that as the least likely scenario given the breakdown in many marquee stocks, but as always want to keep an open mind.”