That Was The Week That Was-1st Week September

 

Last Week Started With Uncertainty. The president seeing global support for punishing the government of Syria for using poison gas on its citizens evaporating decided to let Congress decide. And, this may take weeks before any firm decision, allowing Syria to move Command and other vital defense centers to schools and hospitals, as seems to be the defense du jour when threatened. Meantime global stock markets will meander until something is decided. A committee decision on possible retribution will keep markets in a ‘holding pattern.’ Gold, silver and bonds weakened over the Holiday weekend.

 This Week, Syria May Shake Markets. According to Monday’s, September 9th, MarketWatch, this month could be more sideways action before moving higher. Also on the plate this week is the new iPhone unveiling, Fed speculation on bond tapering and McDonald sales.

For the rest of the news…

The Commerce Department reported last month that consumer spending ticked up 0.1% and adjusted for inflation remained flat. Inflation is trailing Fed expectation and consumer spending is weak, reported Bloomberg, August 30th. The one-two weak combo is said not to influence the Fed in beginning their taper sometime this month in keeping interest rates low. There are a lot of whispers for 3% GDP in the coming 12 months but a wary consumer and modest inflation may short-cut this strongly anticipated recovery.

August also saw the biggest outflows from ETFs in 3 Years!  S&P 500 Index BlackRock saw outflows of $16 billion! Reported MarketWatch on August 31st.

Jimmy (The Mouth) Cramer talks about his ‘Buy’ signal and how anyone can use it.

• Any stock that is selling at a multiple which is twice the size of its growth rate is too expensive. If a stock is trading at 10 x’s earnings and has a growth rate of 20% it is cheap. If a stock is trading at 20 x’s earnings and has a growth rate of 10% will not attract investors.

Love it or Hate it- GM is on track to sell 5 million Chevrolets in 2013. The auto giant sells 1 car every 6 1/2 minutes globally, according to Sunday’s CNBC.com.

Car sales reach pre-Recession levels.

Microsoft Buys Nokia Mobile Biz for a total of $7 billion + announced Tuesday Morning. The deal hopes to play catch-up to Apple and Samsung in the mobile devise market. Nok shares were up 41% in the pre-market on the news September 3rd. It could have been worse and they could have bought Blackberry.

Gold making a comeback? According to INO.com the metal is coming back. Down 17% in 2013 INO.com gives the following reasons for the possible resurgence of gold in 2013:

• Insurance- according to INO.com one of the safest commodities that can be converted to cash.
• A Haven from storm currencies.

Robert C. Doll, CFA, Nuveen Asset Management, reported in his Weekly Investment Commentary, September 3rd, ‘The combination of overbought conditions, rising bond yields and an uncertainty about monetary policy has triggered a modest correction in developed and emerging market equities. We anticipate the current setback will give way to renewed gains once Fed tapering starts and the bond market calms, and revenue and earnings growth begin to accelerate.’

Dow Up Almost 100 points Wednesday!

Morgan Stanley’s Adam Parker Sees S&P 500 at 1840 in 12 Months. It was little over a year ago that investors wondered if the S&P could or would reach 1400!

 

The Zacks Update, for September. Mitch Zacks reminds us that September has a bad reputation because it has the worst historical record for the S&P 500 average. It is the only month to have a negative average return- ever!  Still Zacks reminds us that the market has no knowledge of a calendar and long-term investors do what long term investors always do.

The 10-Year Treasury Closed at 2.99% on Thursday.

Remember my client meeting beginning of the year. When yield rise principal falls.

Borrow! Borrow! Borrow! The low yield party won’t last forever. Remember re-fi at less than 4%? Oh, so long ago? March, 2013! Corporations, investors and individuals are piling on the ‘almost’ free money train. Friday’s WSJ reported that in 2009 bank’s were not willing to provide financing for a specific $35 million of oil and gas project. Today that same CEO borrowed $200 million to buy oil wells in Oklahoma. It would seem the idea of deleveraging is now coming apart as everyone is reaching for the cheap money before rates really pop.  The following chart seen in the same WSJ article illustrates the business of ‘risky’ business.

SYRIA MATTERS AS MARKETS CUT SHORT A RALLY AS PUTIN WARNED THE PRESIDENT THAT RELATIONS WITH THE U.S.A. AND HIS COUNTRY WERE NOT IN ‘COLD-WAR’ TERRITORY, BUT COULD GET THERE IF THE U.S. STRIKES SYRIA. THE PRESIDENT SAID, WHILE NEITHER HE NOR PUTIN AGREED WITH EACH OTHER, THEY WERE TALKING.

It Didn’t Help That a Bad…Dismal…Disappointing …Okay, Worse Than Expected Jobs Report Sullied A Sun Filled Trading Day. Jobs added 160,000 in the month of August, way under expectations. Not even a Goldie Locks Number as more people simple stopped looking for work and the percentage of unemployed dropped to 7.3%. Markets were primed and ready to rock Friday the 6th, and by 10 AM were down, then up at 11 AM and then down at the close. The Dow was off 14 points in a spectacularly abysmal day.

Sad. Sir David Frost Died Last Week Age 74. The writer reporter was the inspiration for this blog’s name, ‘That Was The Week That Was,’ from his weekly television comedic view of past events.

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

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