That Was The Week That Was-2nd Week December

Investors who were in the market in 2008 and now sitting on the sidelines have this fear that as soon as they invest the markets will crash.Unreasonable as that may seem they have missed what may have been the best part of the stock market recovery but there is plenty left according to James Dlugosch on December 5th published MSN.com. Here are a few reasons why Dlugosch believes 2014 will continue to be a good year for stocks:

• Doom and Fear. Bubbles and crashes need massive euphoria not doom every time the market sighs or gives up a 100 points.
• The Federal Reserve. It’s on Wall Street’s side.
• Compelling valuations. Stocks for the most part still look attractive and not over the top.

Fixed Investors Waiting for Bank Saving Alternatives to Perk Up Will Find Little For Several Years as Interest Rates Will Remain Painfully Low.

Wednesday News Broke That The House & Senate Negotiators Came Up With a Budget Agreement That Would Avoid A January Government Shutdown. Sen. Patty Murphy and Representative Ryan announced the deal that compromised on sequestered items and deficit reductions spread out over the next 10-years. The WSJ, Bloomberg and others announced the rare feat of bi-partisanship only to have certain conservative groups in the House express their dissatisfaction with any kind of loosening of the purse strings. The deal is supposed to ease spending limits on both domestic and defense spending. Certain cuts in federal pensions and military retiree pensions have also been implemented. Let’s see what the ‘other party’ does to ruin a ‘possible good thing’. Speaker Boehner showed some gumption and stood up to ultra-conservative groups who poo-pooed the compromise before it was even published. The House did pass the budget pact by a WIDE margin on Thursday!  We can make all sorts of assumptions but the one we think makes the most sense is that political gridlock is off the table for at least the next 24 months. From an investor viewpoint this can only be a good things as we move forward. Markets still have had a rough week on ‘tapering’ concerns but could be more so as investors take profits before the year ends.

Investor’s Business Daily Called The Budget Compromise A Waste of a Good Crisis. 12/16

Fed Up! That’s what large institutional investors are with the way the markets are hurting their ability to get best price. Because of the rapid trading caused by computers and the proliferation of other structural issues large institutional managers are changing the way they buy equities.

Because of the size of their trades it may take days or weeks to fulfill a particular order. Often it may take a manager using ten or more brokerage firms to buy his shares. Along the way prices may go up, word may leak of the buys and the process, according to December 9th WSJ get riskier as prices change. Now more firms are off-exchange trading is getting more popular. It is cheaper and carries more confidentiality than buying in the marketplace.

U.S. Sold G.M. Remaining Stake Recouped $39 Billion of the $49.5 Bail Out. Overall U.S.A. will lose about $15 Billion In Auto Related Loans. The Company also announced Tuesday a new CEO would lead the company. WSJ 12/10/13. The President called the bailout a success saying it created over 375,000 jobs. Lets not mention the tens of millions lost by bondholders when the administration changed the rules and many small investors lost their savings.

MarketWatch.com December 10th Reports on What China Really Needs From the U.S.A.

• Airplanes- 5600 over 20-Years from Boeing.
• Soybeans- 20% of all Agricultural Products Imported.
• Aluminum Scrap-Tons shipped to China 2013.
• Cars- Ford and GM sales Up 51% 2013 and growing.
• Computer Chips.

Now that you know the sectors you can do the company investment search.

Markets Fell Tuesday. Markets Fell Wednesday. Ditto Thursday!

Hey, has anyone noticed the price of gas? Merry Holidays, for sure!

 

FACEBOOK ADDED TO S&P 500. Social media giant will be added after December 20th. This just 19 months after its IPO. Investments that specialize in Index investing will have to add the stock to its portfolio.There was roughly $1.6 trillion linked to the S&P 500 portfolio reported WSJ on December 12th.

WSJ REPORTED 12/13/2013 US RETAIL SALES ROSE O.7% IN NOVEMBER. Whispers of a bad holiday season are nothing more than rumor as shoppers have opened purses both in brick and mortar stores and on-line.

Mexican Congress Passes Historic Energy Bill! Warren Buffett added to his Exxon Mobil stake by 8.8 million shares in November and we wondered why when energy has had a rough year. Now with the Mexican state owned energy firm Permex and the government opening the door to foreign companies within the country’s borders, we have to wonder how did Buffett know, when did he know and how is Exxon going to benefit? In Friday’s WSJ it was reported that proponents of this revolution to allow foreign companies to drill and explore for new energy within the country will bring tens of billions of dollars into Mexico’s sluggish economy. Exxon stated that they think that this new attitude would be a ‘win-win’ and benefit the country and energy consumer globally. One thing is clear this deal wouldn’t have happened if it wasn’t for the fact that Permex, the state owned energy monopoly,  does not have the cash or knowledge on how to tap deep water reserves. And, according to some, the energy fields are where our domestic oil companies will concentrate. Economists, reported the Journal, say that this move will send shock waves through the global energy market, deepening the energy revolution in North America and eventually helping make the region an energy exporter.

Finally: A far cry from a few months ago where every week a handful of banks were being closed by FDIC. This year only 24 banks closed. The latest last Friday, reported by the AP, a small bank in Woodland, Texas. The assumption is that we are either running out of weak banks or the economy is getting stronger. Probably both.

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 SECURITIES, INC. MEMBER FINRA/SIPC.