foxex: Have a Good Friday

The Market Sum | Insight after the bell

By Caleb Silver, Editor in Chief

Friday's Headlines

1. U.S. Markets are Closed for Good Friday, but we are Still Sharing

Year-to-Date

Dow
26,559.54 +13.85%

S&P
2,905.03 +15.88%

Nasdaq
7,998.06 +20.05%

Russell 2000
1,565.75 +16.10%

Crude Oil
64.00 +35.53%

US 10-Yr Yield
2.56 -4.69%

U.S. markets are closed today for Good Friday and New York City is as peaceful as it gets on this lovely Spring day. We'll keep today's note short and sweet.

Before we do, we just want to truly thank our daily readers for taking a few minutes to read our newsletter and for giving us thoughtful and honest feedback. Good or bad, we appreciate it all, and it makes us try harder to make this worth your time every day.

Best Performing Asset Classes this Year

Wait! What?

That's not a typo. Bitcoin is up 39% year-to-date, while Gold is down 1%. Bitcoin, we can't explain, other than the fact that someone or some group of people have been buying it aggressively this year. Gold's performance makes a lot of sense given the strong returns for global stock markets and low interest rates. Gold is often considered a safe haven when markets are volatile and rates are rising. Those things are not happening right now. Oil's 38% return is all about supply and demand. OPEC and other oil producing countries, especially the U.S., have been cutting production given both slowing demand due to a weakening global economy, and to boost prices which have been relatively low for the past several years. The stock market, as seen through the S&P 500 and SPY, the ETF proxy for the broader market, has been very strong this year given the Fed's about face on raising interest rates.

In Fact...

The S&P500 hit an all-time-high on a total return basis this week.

What does that mean?

The total return index is a type of equity index that tracks both the capital gains of a group of stocks over time, and assumes that any cash distributions, such as dividends, are reinvested back into the index. Looking at an index's total return displays a more accurate representation of the index's performance. By assuming dividends are reinvested, you effectively account for stocks in an index that do not issue dividends and instead, reinvest their earnings within the underlying company.

So, while the S&P500 itself has not eclipsed its all-time-high just yet, if you add back in all the dividends and all the cash reinvestments, it has.

Pretty Impressive.

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How to Master the Art of Negotiation

And then, there's Apple

Remember back in December and January when Apple warned that sales of its new iPhones were struggling, especially in China? Shares nosedived, bringing the broader market with it. Well, Apple has its swagger back, and is on track to hit the vaunted $1 Trillion market cap. It launched its new media and streaming platform, a new credit card with Mastercard and Goldman Sachs, and a new iPad in the past couple of months, and it settled its long dispute with Qualcomm in a favorable way.

Michael Batnick, the blogger behind 'The Irrelevant Investor', co-host of the Animal Spirits podcast, and head of research at Ritholtz Wealth Management, dropped these stats this week:

Apple has added $286 billion in market capitalization over the past 73 trading sessions. That's $10 million every minute!
There are only 11 companies in the United States with a higher valuation than what Apple managed to tack on since January 3rd.
The biggest stock in the world gained 43% in under four months

You know who is really happy about that?

Apple's third largest institutional shareholder... that's who!

Gratuitous pic of the legendary Warren and Buffett and me from another lifetime.

Photo of a Provincial Promissory note from the Pennsylvania Colony, May 1, 1760 issue, £5 , courtesy of numismatics.org

Today in History

On April 19, 1764, the English Parliament bans the American colonies from printing paper money. The Currency Act, as it was called, was actually a re-do of a similar Act passed in 1751 that prohibited the American colonies from using their own legal tender. The British loosened that Act three years later so the Americans could pay for supplies and soldiers to help them fight the French-Indian War. But, as 1764 rolled around, British merchants were tiring of not being paid by the Americans in a currency that had any real value to them. They couldn't take those bills back to their banks in London and redeem any value for them. When you look at those bills, it's hard to argue with them.

Excerpt of The Currency Act , courtesy of the Lillian Goldman Yale Library at the Yale School of Law

WHEREAS great quantities of paper bills of credit have been created and issued in his Majesty's colonies or plantations in America, by virtue of acts, orders, resolutions, or votes of assembly, making and declaring such bills of credit to be legal tender in payment of money: and whereas such bills of credit have greatly depreciated in their value, by means whereof debts have been discharged with a much less value than was contracted for, to the great discouragement and prejudice of the trade and commerce of his Majesty's subjects, by occasioning confusion in dealings, and lessening credit in the said colonies or plantations: for remedy whereof, may it please your most excellent Majesty, that it may be enacted; and be it enacted by the King's most excellent majesty, by and with the advice and consent of the lords spiritual and temporal, and commons, in this present parliament assembled, and by the authority of the same, That from and after the first day of September, one thousand seven hundred and sixty four, no act, order, resolution, or vote of assembly, in any of his Majesty's colonies or plantations in America, shall be made, for creating or issuing any paper bills, or bills of credit of any kind or denomination whatsoever, declaring such paper bills, or bills of credit, to be legal tender in payment of any bargains, contracts, debts, dues, or demands whatsoever; and every clause or provision which shall hereafter be inserted in any act, order, resolution, or vote of assembly, contrary to this act, shall be null and void.

Have a great holiday weekend, Easter and Passover to all who celebrate.