That Was The Week That Was-1st Week April

 

The Worst News First. Friday Markets Drop. The DJIA OFF 160 – The Nasdaq Fell 110 points! The Worst Day in a Year for the Naz. Part of it was disappointing jobs data and the other appears to be a rotation from small caps to large, according to Keith Springer of Springer Financial. The jobs report wasn’t that bad although there was a slight increase in the percentage of unemployed. Momentum stocks fell substantially. There may be more to come as earning season starts this week with JP Morgan and Alcoa kicking things off. Investors will be focused on sales and organic growth.

 

 

Chuck Jaffe reminds readers 3/30, that it’s not 1929. Investors should ignore scare tactics of a coming crash and instead concentrate on the economy, over the market, and the long term trend. Ignore what’s happening now, he writes. Some people so scared they’re sitting on sidelines earning nothing while the markets have marched higher. It’s sad.

Fed Reserve Chairwoman Yellen said last Monday that the recovery still feels like a recession to many Americans, which is why the central bank will keep extraordinary  support for the economy for ‘some time to come!’ And just like that ‘poof’, the markets took off 135 points on the DJIA. 14 on the S&P and 43 on the Naz. The last time she spoke and defined ‘when’ as 6 months  the markets fell over 100 points. Monday she explained it in more nebulous terms and this time the markets ate it up. Gee, they like this woman!

Flash Trading has been around a decade. Maybe a bit less. It’s had articles printed about it. Blogs complaining about it. Investors frustrated by it. But the FBI and Security Police haven’t done anything about it until Michael Lewis wrote his book and showed up on 60 Minutes. Now that Lewis explained exactly how flash trading has been screwing institutional investors and in a round about way you and me the cops suddenly are interested in putting someone in jail. Kind of like the Bernie Madoff thing. Some people complained, others knew he was stealing and nothing happened until Harry Markopoulos spent 8 years getting the evidence to nail him.

Another Good Day Tuesday Dow +70 and Naz +60. Speculation on a spectacular second quarter. Matthew Lynn at Dow in London suggests that the next big mover will be overseas as deflation fears will spur ECB to boost euro-zone recovery. He writes that the Bull market will end some day but the ECB is about to extend its life another 12-18 months. Party on…

Wednesday had its ups and downs but ended mostly up. The DJIA plus 40. Whispers about a grand April and I have to remind myself that the ‘Sell in May’ crowd didn’t show up in 2013 but could in 2014. Then there was this April 1st piece in Barrons.com by Steven Sears that suggested someone ‘flash traded’ and did a bit of front running ahead of the publication of ‘Flash Boys’!  Heavy ‘bearish’, and very suspicious, option bets on the Nasdaq OMX, that operates some of the biggest stock and options exchanges, and would be a suspect in any regulatory ‘flash trading’ investigation, were made before the Lewis’ book hit the public. It was as if someone knew that it was coming out and would create a stir.   

Before 2014 even started experts called for a ‘flat’ year for utilities and maybe the same for health care. I thought that utilities may be out of favor for 2014 only because tech, manufacturing and health still had lots more room to run. What’s happened is that the utility sector has been a super winner so far this year and the health care sector still see plenty of gas, that according to Jeff Reeves at Dow Jones. Energy is another sector that Reeves likes…a lot. Especially in the domestic drilling firms. On-land domestic drilling has made a ‘pretty’ penny this year, he writes for MarketWatch.com. Attention now to Warren Buffett who talked to Forbes Magazine and said crashes occur when total market value exceeds GDP, and supposedly gave 2 interviews; one he predicted ultimate crash and then the next week, in another interview, said it would be a few more years before there would be a recession. A lot of doomsters are giving credence to Buffett for predicting the 2008 market crash only he warned folks about a coming market collapse four years earlier. Lots of money lost if you pulled cash out and waited, and waited…

Finally- Next Week The IRS Publication 590, the bible for IRAs, the Tax Court Rules, is wrong!

Information gathered from sources considered reliable which included: CNBC, Bloomberg, WSJ, MarketWatch, Barrons and others.

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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