Market Wrap-Up for July 30 (AAPL, LLY, CL, JPM, BEN, more)

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As we continue to watch the Fed and ECB commentary, wondering where the next big move will come from, the only other thing that should actually matter from an investment standpoint is company earnings.

In some cases, investors are putting any company cautions from the likes of Apple ( AAPL ) and Amazon ( AMZN ) aside, as the chase for performance overtakes the need to see stellar earnings results. In what was a light earnings day today, shares of Franklin Resources ( BEN ) ended higher following their earnings commentary . Meanwhile, positive Wall Street commentary helped push stocks like Colgate-Palmolive ( CL ) and Phillips 66 ( PSX ) higher, while cautious analyst commentary moved stocks like Abercrombie & Fitch ( ANF ), J.P. Morgan ( JPM ), PetSmart ( PETM ), and Eli Lilly ( LLY ) lower.

Hold Your Applause

As I spent part of my weekend going over market data, I couldn't help but wonder what the common mindset is for investors today.

I can tell you that Wall Street analysts do a good job pretending to know every turn the market is about to take. Predictions don't cost much, and we all know accountability is essentially non-existent when a particular analyst re-issues the same call over and over again until it finally works. For example, I'm seeing the same old analysts calling for higher interest rates. This prediction is nothing new, of course, and is an easy call to make when rates are basically at 0%.

Here's the thing though. Many of the well-known market prognosticators had been calling for higher rates when rates broke below 4% on the 10-year Treasury Notes, then again when the 3% mark was eclipsed, and certainly even more so at 2%, now most recently 1.5%. At some point these analysts will finally "nail" this call and be applauded mightily for it. The same concept holds true for calling market tops or bottoms, and so on.

Such is the unfortunate reality of mainstream business media coverage. We can't do anything to change it, but from time to time we'll remind our readers as to how the game is played.

Why Investors Are Losing Interest in The Stock Market

Another quandary regarding the markets recently involves the declining trading volume we've seen over the past few years. Every so often, the business media will float the question out there, wondering why investor interest in the markets is at such low levels - as if they don't already know the answer.

Well, here's my take on the slowing market interest. It all centers around how the markets are covered. The business media focuses almost entirely on traders, and as I've said many times, that the track record of people making a long careers as traders is poor. Still, the TV segments tend to center on what is moving at this very moment, and how traders should maneuver their way through every hour of the day. The script every day is simple: cover anything that is "actionable" as breaking news, find two analysts that may disagree on a particular topic and keep the risk tolerance high. After all, the markets need new players to come in for the easy pickings when someone's trade discipline eventually wipes them away.

Look at all the shilling that took place for the whole social media space as companies like Groupon ( GRPN ), Zynga ( ZNGA ), and Facebook ( FB ) were set to IPO. That's not to say we'll never see any success stories result from social media, but again the retail investor that got sucked in has seen nothing but losses in this arena so far.

So here I sit, worrying that some of the quality companies we follow in the dividend space - companies that actually make money - could be getting too frothy from a risk/reward standpoint. If I was willing to just follow the script and tell readers there is no risk, I could join the business media party that goes on with every sound rally (like when an ECB or Fed official says they will do whatever it takes to keep the economy/markets afloat). But I'm not willing to do that. I will continue to focus my research on fundamentals, and listen closely to what companies are saying in their conference calls.

One thing I learned in my many years in the markets is to never fight the tape. As a trade, this concept is even more important. However, when it comes to building wealth for the long term, the focus has to be on more than just the next 24 hours, week, or even several months. Our purpose continues to center on providing investors the best possible long-term dividend investment ideas. That's all we do, and I think we do it better than anyone else out there.

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I hope everyone had a chance to check out our Dividend.com Premium members-only weekend articles , including new features that highlight some of the biggest winners and losers from the week that was, such as analyst upgrades/downgrades and earnings/story stocks. These articles are a great way to catch up on the week that was in the markets. We also have a rundown of how various Dividend ETFs performed on the week.

Thanks for reading everybody. I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: AAPL , AMZN , FB , GRPN , ZNGA

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