That Was The Week That Was-3rd Week November

 

If You’re An Investor In The Camp of Sophisticated  Confusion…and Rationally Know Interest Rates Have to Rise & The Markets Collapse You May Have a Long Time to Wait. Outgoing Fed Chief Ben The Bernanke said on the 19th in prepared remarks at the National Economist Club annual dinner in Washington  said even if the jobless rate fell below 6.5% the fed fund rate would be kept at a very low rate for quite some time after.  Incoming Fed Chief Janet Yellen is certainly on board with this philosophy. Before raising rates the Fed policy will be to get the broader economy percolating and strengthened. It could be years before the Fed ‘begins’ to raise rates. And even then rate will move up slowly, steadily and controlled. I would expect that taxes and inflation would erode most value from early increased fixed income interest rates.

 

 

Here’s some news from our friends at Talmer Financial in their Monitor Newsletter of the 15th…

‘Stocks today are still not overvalued on a historical basis…we continue to see earnings beat stocks strongly outperforming earnings miss stocks.’ And for those still on the sidelines or trying to time the markets: ‘Missing the strong days in recent markets, and not participating during the downward trend, would have a strong magnifying effect on long term returns.’ What is scary is that there seems to be a logic disconnect with investors who experienced the 2008 Depression and refuse to believe that another market meltdown is not just right around the corner. A lack of confidence with Washington, DC and the present administration frightens a certain percentage of Mom and Pop investors who still shy away from something they know little about. Chuck Jaffe at MarketWatch.com wrote on November 15th that ‘Fear is Killing Certain People’s Savings. These investors shy away from risk. What they seem to be looking for is market returns without the market risk. It just doesn’t exist.’ Still with interest rates at fairly low rates and inflation muted investors don’t think they’re hurting themselves too much until they start withdrawing money from their portfolios. Then they see how fast their savings evaporate. I talked to people just like that who lived through the first Great Depression. There was nothing that anyone could say to convince them to put money back into the stock market. The 2008 Second Depression simply created more of the same.

 

Robert C. Doll, CFA, Chief Equity Strategist with Nuveen Asset Management: ‘We anticipate a relentless grind higher equity-market, as well as strong equity performance versus bonds in light of equity valuations, monetary policy, economic prospects and investor positioning.’ Doll has been a frequent guest on CNBC Squawk Box. Here’s another pro that the average investor should be listening to. 

My Internet was down due to the storms earlier last week. And when I called to inquire when it would be back on-line the recording informed me to go to www.comcast.com…….?!&*

Maria Bartiroma, CNBC anchor, and trademarked ‘Money Honey’, is leaving her afternoon program after a two decade run to anchor at Fox Business News. Becky Quick is said to fill in until a replacement is appointed. Bartiroma was tagged with ‘Money Honey’ back in the day and she quickly and shrewdly trademarked the appellation.  

Another Expert The Average Investor Should Follow- Mitch Zacks. In his Zacks Update 11-20 : ‘While its possible equities could be reaching a peak, I don’t believe odds are very good. Most likely we are in the middle of an economic expansion that could go on for years.’ Others have also expressed in previous blogs the same sentiment suggesting another 4-5 years of growth.

OMG…Beetlejuice2 in the works!? Keaton & Ryder supposedly on board and now if they can get Mr. Crusty (Alex Baldwin)…

Monday DJIA up all other indices down. Gold up $3.00. Tuesday everything down.

FDA wants meatpackers to provide greater transparency where livestock was born, raised and slaughtered. WSJ report 11/19/13. Tyson and Cargill, Inc. are lobbying Congress saying it is an unnecessary cost. China just bought the world’s biggest pork producer Smithfield and got a sweet contract to dissect U.S. chicken parts for soups, nuggets and stuff. Yes, I want to know where my Spam fixens come from, don’t you? 

Concerns Over Fed Tapering Are On The Table This Week as Market Indices Down Going Into Thursday. Traders get ready for the Thanksgiving Holiday.

There is goes….DJIA closed over 16000 on 11/22. Remember 18 months ago the question was if the Dow could or would ever close in on 14000. Reported on ‘The Tell’ the next Buy cycle for the S&P is for cyclicals.

The above chart was published in MarketWatch 11/21/2013. Source S&P Capital IQ. Cyclical stocks are made up of those products the consumer does not need but will buy during a boom economy. Example of industries are cars, hotels, furniture.

The Week Ended With S&P 500 Up For 7th Weekly Gain. While there are doomsters on the fringes most managers are optimistic. Karyn Cavanaugh, VP at ING US Investment Management said in Bloomberg interview Friday last, ‘I don’t see any reason why the markets shouldn’t go up.’ Whispers that once the Fed begins to taper the markets pull back 5%-10% seems reasonable considering how quickly the markets have moved in 2013. There have been no significant pullback so far. Health care stocks were the prime mover Friday. Job openings climbed in September. The Labor Department showed more hires in September since August, 2008. Happy Thanksgiving to All!

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

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