That Was The Week That Was – 2nd Week July

•  The Big News was Huge Hefner announcing the possibility of buying back Playboy and taking it private- again. The pajama clad publisher caused shares in PLA to soar to their highest value in 2 years to $5.55 a share. Rival Penthouse hearing the news suggested that it may join the bidding for the publication.
• Markets see-sawed all day Monday waiting for guidance. After hours Alcoa showed great earnings and predicted 12% growth for the remainder of the year. Investors said AA report hit all the right notes. Shares fell after hours on the news but popped up the next day.
• Hedge Funds had their worst …excuse me, their 4th worst half since industry performance tracking began.
• Comex gold for August delivery lost $10.
• As I predicted earlier this year and now confirmed in a July 12th WSJ report, the small investor is fleeing the market. Just as the small investor fled the market in 1929 today’s do it yourself investor has packed up and left the building. Reasons cited were growing disillusionment and lack of confidence. Other reasons for running were moving in and out of the market at the worst times and owning concentrated blocks of tainted, and designed to fail, stocks and bonds.
• Tuesday markets moved higher based on growing sentiment the worst may be over.
• Intel showed strong earnings and Mark Hulbert wrote in MarketWatch that the markets may continue their run for several weeks based on better then expected earnings and guidance.
• History shows that whenever the Dow is up for six straight days the Dow gains an additional .4% over the subsequent five days. (I love history.)
• Not so fast, say skeptics. Volume has been thin and this rally may be born of a reaction to an oversold market then an improving economic situation.
• Stocks took a breather Wednesday as the Dow squeaked ahead less than 4 points while the rest of indices were down. Mortgage application were at worst levels in 13 1/2 years.
• Who’s your financial planner, baby? Seems like one of the Russian spies sent back to Moscow Tuesday was a financial planner in the New York area while living with her husband in Montclair, NJ. By all accounts she was a good planner but there is no verification if her recommendations included invisible ink manufacturers, itsy bitsy camera companies or really cool fast cars that shoot rockets and such.
• According to MarketWatch curmudgeon Paul ‘The Sky Is Falling’ Farrell, who has never seen a market he likes, a politician outside of Lenin he respects, and thinks the entire world is going to you-know-where in a hand basket, reports that ‘lazy’ simple investment portfolios worked best. Best 10-year is the 6 fund Yale U Unconventional with a 4.45% average annual rate of return.
• Sob. So close. The markets were heading for a double digit loss when the late afternoon surge started and the Dow on Thursday posted its first loss in 8 sessions, down  7.41.
• Liar, liar, pants on fire. Citi now admits it  hid risk from regulators. Apple said of their iPhone they knew of antenna risks. Goldman settles with the SEC for 550 million dollars for duping customers. The small print in today’s WSJ reads that ‘other’ banks may pay because of similar wrong doing. Oh, who can we now trust if not American’s leading financial and corporate leaders?  
• Banks reported less than stellar earnings Friday and traders punished stocks. Dow closed off 261 points.  GE, Google, Citi and Bank of America all were the culprits as the selloff started early and held throughout the day. Gold was off huge during trading hours but recovered in after hours trading. Some analysts based sell off also on consumer confidence but CNBC talking heads agreed that if profits were reported with strong guidance confidence would have been a non-issue.
• This is a traders markets, you bet.
• Inflation, nyet. Deflation, da. Consumer prices fell 0.1% in June from May.(Just trying to brush up on the socialist lingo. You too, comrade?)
• Small cap stocks fell 3% for the week. Huge drop as the overall markets were slightly up.
• Wal-Mart signals the recovery won’t stall, according to Bloomberg Businessweek’s Feld and Willis. Wal-Mart historically tends to outperform in slumps and lag when the economy rebounds. The stock has underperformed this year.
• Finally, 6 more banks were shuttered with 1 in Michigan Friday.

If you have questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.