“Novice Traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.” – Bruce Kovner.

1. Warren Buffett’s Stake in Wells Fargo (NYSE:WFC) Increased to 9.9% as of Dec. 31 2015 — Warren Buffett’s stake in Wells Fargo (NYSE:WFC) hit 9.9% as of Dec. 31,most of which is held by Berkshire Hathaway (BRK.A, BRK.B). At 10%, Buffett would have to pass a review by the Federal Reserve in order to keep accumulating shares. While the central bank typically tries to limit the ties between non-financial companies and lenders, it has at times accepted a pledge by investors that they don’t plan to influence a bank; this happened in the ’90s when Buffett’s stake in AmEx (NYSE:AXP) rose above 10%.
2. Wages Fall and Spending Slow — the core PCE deflator, the Fed’s favorite inflation gauge, rose 1.7% vs. last year, matching Jan’s recent high but below views and policymakers 2% target. Actual wages and salaries fell 0.1%. Consumer spending rose 0.1% with Jan’s big initial gain revised down to 0.1%.
3. Google Announces Fiber Phone Service Starting At $10 A Month — Google ‘s product Manager John Shriver-Blake announced that Google (NASDAQ:GOOG)(NASDAQ:GOOGL) is introducing Fiber Phone, confirming rumors that it would be offering a home phone service in addition to its existing Fiber high-speed internet and cable TV offerings (and potentially a triple play package). The service is set to provide unlimited local and nationwide calls for $10 per month, while adopting the same international calls rates as Google Voice (GOOG, GOOGL). According to the company, a user’s Fiber number “lives in the cloud,” allowing them to use it on any phone, tablet, or laptop.
4. Fed Chair Woman Backs Dovish Stance — the Fed chair said global uncertainty has left policymakers making a coutious approach to rate hikes, adding that the US economy has been mixed. Manufacturers and exporters have suffered, but the job market is robust with housing and consumption adding a lift.
5. China Rating Outlook Cut to Negative From Stable by S&P — Standard & Poor’s has cut the outlook for China’s credit rating to negative from stable, saying the nation’s economic rebalancing is likely to proceed more slowly than the ratings firm had expected. The nation’s credit rating is AA- with a negative outlook, S&P said in a statement, which also affirmed the long-term and A-1+ short-term sovereign credit ratings. “We revised the outlook to reflect our expectation that the economic and financial risks to the Chinese government’s creditworthiness are gradually increasing,” S&P said.
6. Key ETFs Asset Class Performance Matrix — Q1 2016 — courtesy of BIG, below is the asset class performance matrix for Q1 2016 using key ETFs traded on U.S. exchanges. A strong March propelled US stocks just barely into the green for the quarter. As shown, the S&P 500 SPY ETF finished Q1 up 0.81% year-to-date. The Dow 30 (DIA) more than doubled that at +1.96%, while the Tech and Biotech heavy Nasdaq 100 (QQQ) finished down 2.4%. Eight of ten sectors were up in Q1, led by Consumer Staples (XLP), Utilities (XLU), Telecom (IYZ), and Industrials (XLI). The two sectors in the red for the quarter were Financials (XLF) and Health Care (XLV) — both falling nearly 6%.

The week ahead — Economic data from Econoday.com: