That Was The Week That Was-2nd Week June

 

Sideways Action Marked The Beginning of The Trading Week. Robert C. Doll, CFA, of Nuveen Asset Management, reported:

• Non-farm payrolls rose slightly ahead of consensus with average earned wages flat.
• Manufacturing Purchasing Managers Index fell in May. Expect it to improve in the second half.
• 80% of the S&P 500 companies that provided guidance for the second quarter expected negative outlook.

CNBC Reports a Surge to Leveraged ETFs that are equity based. This is usually a negative contrarian signal.

Every Major Asset Class in the World is Overpriced, according to TrimTabs in its weekly analyst market letter. Reported at CNBC online last Monday this report suggested caution.

James Paulson at Wells Capital Management said, ‘I don’t see anything to end Bull stock market.’  Paulson went on to say that he thinks the 10-year Treasury will yield closer to 3% by the end of the year- a 33% move. Also he expect the S&P to touch 1700 this year. For those of us with poor memories it wasn’t that long ago that we wondered if the S&P would hit 1400.

Tuesday & Wednesday Global Market Action… it went something like this… More further on…

Thursday Markets Across Asia Fell! The Japanese stock market suffered the worst- falling 6%, and into official Bear territory. Chinese stocks were also battered. All this on worries over our Federal Reserve monetary policy and worries over cooling emerging markets. Europe was also down about 1%. The Dow fell over 120 points on Wednesday.

 

Golly! Thursday Dow Jumped on better than expected jobless and easing Fed worries. Dow up 181, S&P 500 up 23 Gold closed at 1382. Asia also saw a rebound on Friday morning.

My Inflation Meeting Early in The Year Reported on How to Take Advantage of Rising Rates. We have seen rates rise to 4.15% last week on the 30-year mortgage. This is a 14 month high. Experts contend this may stifle the bank refinancing business. It may slow it down for a bit but it won’t hurt the overall business.  

THIS COULD BE THE TIME TO STEP IN AND BUY THE ETF THAT SHORTS BONDS.  The Exchange Traded Funds that act as inverse to the bond market could see rewarding long-term returns if investors believe this is the beginning of a long-term trend of rising rates.  Call me for the list and options.

Friday saw a surprising sell-off.  Markets see-sawed and finally traders ran for the exit, unwilling to wait out the weekend. The Dow off 105 points, S&P –9 and gold up. Overall the Dow lost 1% for the week.

The news from Wallstreetdaily.com was that the short interest (betting markets will tank) is as low as it has been in a very long time.

The Intelligent Investor in WSJ blog on Saturday offered up the recent sell-off is good for investors. Stock prices have again gotten attractive in several sectors.

DETAILS ON THE WEEK AND EDUCATION NEWS FOLLOWS: 

 The Australian Retirement System has about half the assets of the U.S. 401(k) plans with 1/14 of the workers! It’s reported that 90% of the workers are enrolled in a mandatory retirement plan with an average contribution of 9% of earnings.  According to Dow Jones contributor Matthew Heimer the system works because it is mandatory, the contributions are after tax (15%), and all withdrawals are tax-free. Maybe someone should clue in lawmakers on what works?

Retirees Looking For Part-Time Work May Want to Explore:

• Patient Advocate
• Tax Prep
• Temp Help
• Mr or Mrs Fixit
• Tutor
• Non-Profit Consulting

E-Cigarettes the Next New Thing. Investors such as Fidelity and Founders Fund are climbing aboard the e-smoke train. Lorillard’s ‘blu’ currently has 34% of the e-smoke market. More brands coming on-board. A dozen states have banned sale of e-cigs to minors. Health issues remain and sales of the new fangled smokes are expected to reach $1 billion in 2013- double where they were in 2012.

 

 

New Apple Bling…or Bloop?

New features, cleaned up iPhone, iRadio,photo sharing ala Samsung, new iMac with Intel engine boost made in USA coming out now, and still boo-bears beat stock down almost $3.00 a share Monday as they were not impressed. Morningstar maintains shares to $600. Cody Willard wonders why the Market rewards McDonalds with a product anyone can replicate and ignores Apple that creates something only a handful of companies on the planet could possibly duplicate. Apple spoiled investors with their awe-some products and properties.

 

 

It’s always something!

US regulators are investigating the $32 billion in overdraft fees banks charged customers in 2012. In 2011 Bank of America was considering a $5 a month debit card fee for customers but decided against it. Fees are huge moneymakers for banks in a climate of low interest rates and consumer loans. Still some banks are considering hiking existing fees another dollar.

 

Bank of Japan Created Global Sell-Off Tuesday. Worries over Central Bank Commitment to Providing Continued Liquidity Had Global Stock Markets Shaken.  Investors were ‘disappointed’ that the Bank of Japan was simply ‘maintaining’ its stimulus. Investors were hoping the BOJ would ‘extend’ the asset purchases further.

The Federal Reserve Chairman Used the Word ‘Tapering’ to Describe The Process of Ending the Bond Buying Program aka QE3.

and that’s just this year!The definition of ‘tapering’ is not stopping….that’s what the confusion is all about.

Is This is The Start of The Summer Correction?

This is the S&P 500 Chart from Yahoo.com Finance page. Notice it was higher May 20th than it is June 11th?

The question the WSJ and others raised is the ‘tapering’ of the stimulus ending the equity recovery.

Love This Chart.

Makes Reagan look positively…conservative.

Summer Sell-Off? A Refresh? Markets can only fall so far. Unlimited upside. Mitch Zacks says an amateur investor’s worst enemy is ‘The News’.

Finally: FDIC closed 1 Bank in Tennessee making a total of 16 Year to Date.

Questions call Paul @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER SIPC/FINRA.