That Was The Week That Was- 2nd Week January

 

Earning Season Approaches. So What to Look For? Markets sideways so far this year and our friends at Talmer Financial report that something has to give for equities to continue their trend higher. The markets will need revenues to continue to beat previous quarters in order for the overall market to move to next level. 1-10-2014 If not, expect a possible correction or simply more sideways action.

Did everyone have fun last week?

Don’t Forget February 8th Client Breakfast at Sycamore Golf Club- 8:30-10:00. Register by calling or emailing. Thanks! Bring your beneficiary, or a friend, so they’ll know what to do when your not there. Also 2014 Market Forecast.

The other day I was talking to acquaintance and mentioned how people I knew managed their retirement by buying quality dividend paying stocks. I said those stocks recovered nicely after the market crash of 2008, were increasing in value as the portfolio grew and was also taxed in a most friendly manner. All this didn’t happen over night. When I suggested that these folks consider the same they recoiled in horror. While they liked the ‘idea’ of consistent income and increasing wealth they didn’t like what they termed the seemingly random volatility of common stocks. Instead they preferred the feeling of comfort knowing their money was (1) guaranteed (2) earning less on their savings than inflation and taxes combined, what we call taxflation (3) Sadly- they also avoiding any part of understanding how money works for themselves and passing it on that knowledge to their children. The folks at Motley Fool published the following 5 rules for successful trading and investing:

1. Wealth takes time.
2. Most financial problems are caused by debt.
3. Forecasting is impossible and it’s dangerous.
4. Simple is always better than ‘smart’.
5. Odds of experiencing market volatility exactly 100%.

 Big Banks still Big and Getting Bigger. Washington tried to curtail the growth of the major banks with new regulations. Those new rules barely phased the growth of the five biggest banks in the nation over the last few years. This during a period when interest rates have been at historic lows and many people are not borrowing money. The new rules are hurting small to mid-size banking institutions more so than the majors. Lack of capital is hurting some of the regional's.  JPM being fined for its role in the Madoff Affair.

The First Real Day of Trading a Bummer. All indices off except oil.

The Deep Freeze Didn’t Stop Traders From Bidding Up Stocks Tuesday. Markets up over 100 points Naz a bit less than 40. Gold off.

Very Interesting Report on JP  Morgan’s Fine of $2+ Billion in MarketWatch.com. Seems one senior exec joked about the small (and it was) inexperienced accounting firm that certified Madoff’s business and the JP Morgan exec wrote that maybe the bank should visit the firm and make sure it wasn’t a car wash. Suspicions on Madoff’s trading continued until the bank pulled all its money out of Madoff’s feeder funds but neglected to warn clients or anyone else for that matter. Later, when the scandal was exposed, the executives congratulated themselves for their intelligence once the Madoff theft was brought to light. Along the way families lost most if not all their wealth through the largest financial fraud in American history. You don’t want to be in a shipwreck with these guys. I would assume that women and children first is another thing they don’t believe in following. According to news reports in various financials on 1/9/2014 this fine could impact JP Morgan’s bottom line.

Allocations For 2014 Equity Investors Revealed. Westminster Financial Securities, Inc. Prepared five distinct allocations for 2014. Portfolio percentages from Aggressive to Conservative. Call or write to discuss how these portfolios fit your comfort level.

Roller Coaster Wednesday as Stocks Split with Dow off and Naz Up.   Jobs numbers were whispered as being good (officially on Friday they were not) but markets off because all Fed members were on the same page for tapering, according to Barrons.com 1/9/2014. Could the sell-off be because the 6.5% unemployment rate be hit sooner than later with Fed accommodation stopping sooner than investors originally expected? Seems Aneta Markowska is already predicting that. Microsoft still on the hunt for a CEO as Ford’s Mulally announced he isn’t moving from Ford. Dividend hike at Ford surprises the Street. Higher interest rates may boost some pension plans- especially the larger company plans. 1/9/2014 WSJ.

In the Department of ‘We Knew This But…’ Apple’s next big thing is business. The A is popular with business as employees lug in their iPads and corporations seeing this figure out new apps that help in the business of doing business. Shucks we knew this but seems the rest of the folks at WSJ were surprised that Apple only had a 1% hold in the biz world until last year and then started growing. The iPhone is rapidly replacing the Blackberry as the corporate phone of choice, so writeth WSJ 1/10/2014

Whispers why Mulally said he didn’t want the Microsoft job was simply: (1) Too many waggling tongues leaking info at Microsoft and (2) Gates and you-know-who remain sitting on the board. Yeah, it would be like pushing a cooked noodle up a hill… we got it, Alan.

Bank of America Merrill Lynch report gold could fall to $1150. Ugly, is the world used, and  MarketWatch reported 1/10/2014. Gold, in my estimation, is a trade. Own it during inflationary times otherwise it makes a very pretty paperweight. Buyers in China and India will keep the price of gold from falling more, writes Michael Widmer at BAC.

In Barrons.com BlackRock’s  Fixed Income Chief Rick Reider said the jobs report shows unemployment is structural. It’s not something the Fed can fix with quantitative easing. The jobs number was disappointing. Estimates of 200,000 job increase for the month turned out to be a measly 75,000. The loss of 16,000 net construction jobs was especially worrisome Reider said. Others blamed the cold, especially on construction losses for the month. Share prices did not collapse when the news was announced- which is telling.

Finally: 24 Bank Failings in 2013 versus 51 in 2012 and 157 in 2010. Mortgage Rates Fell Last Week. 30-Year 4.65% –off .05. reported bankrate.com

Information gathered from above sources considered reliable during the week of January 5-11 2014

Questions call Paul @ 586 205 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 FINRA/SIPC.