That Was The Week That Was-2nd Week April

  Friday continued the selloff…Here’s the recap.

The Week Started Ugly. Naz off again, and continued it’s worst stretch since 2011. Robert C. Doll of Nuveen, in his Market Weekly Investment Commentary wrote that he thinks we’ll see a sideways market for awhile. Michael Kahn, in Barrons.com, Monday’s Getting Technical, reports, ‘ The Nasdaq is now broken and favorite momentum stocks are toast.’ Yes, dear Reader, these are the stocks that traders adored and ran on hope that earnings would eventually catch-up to price. Cody Willard at MarketWatch, writes about his specific stock shorts and is concerned about the markets short-term but more positive he writes on a ‘momentum stock recommencement probably sometime this summer.’

 

IRA Ruling by The U.S. Tax Court Stuns Advisors and Savers.  For 20-years the IRS Publication 590 was the bible on how you could do certain things with your IRA. It allowed one could have a rollover for each IRA once a year.  The Tax Court says not so. The IRS has now disagreed with its own publication and ordered that individuals may only do 1 Rollover per year no matter how many IRAs you own. A rollover is where you take physical possession of the IRA assets and have to place them back into an IRA within 60 days in order to keep the tax deferred status. Those with multiple IRAs were under the impression they could do a Rollover once a year with each IRA. Not so, sayeth the Tax Court. Only 1 Rollover per year no matter how many IRAs one owns. If someone does two the other rollover becomes a taxable event. Make sure you get guidance before doing a rollover. New updates to the IRS publication will be available in 2015.

No One Knows The Short Term Direction of The Market. Dennis Gartman, editor of the Gartman Letter, told CNBC late last Monday 4/7, that the pullback in momentum stocks in tech and biotech space scared ‘one big bull out of the market.’ He said he wouldn’t be buying stocks until they got much cheaper.He said that the ‘whole world has changed.’ Here’s the problem on April 1st he was raving about the markets on the same CNBC program. Tuesday markets up minimally across the board.

Gotta Ask?  Wednesday Dead Cat Bounce? Dow up Wednesday over 180 points. We will wait and see. So far not much of a real correction. Federal Reserve Video Conference Meeting early March. Very hush-hush where Fed officials discussed abandoning fixed employment percentage as a starting point to increase interest rates. Yellen stated in minute meeting March 18-19 that this in no way changed fundamentals of Fed policy. Here’s what got me excited…AT&T building out an ultrafast Internet in North Carolina. Google also looking at the same market to bring out its version. This will be about 10 times faster than current internet service. Which will mean that I will get ten times more frustrated when it goes down during peak hours. 

I hate it when I’m right about bad things. Thursday stocks got walloped. Anyone who bought into the ‘bounce’ got a big unexpected surprise. Naz was the biggest loser and the list of stocks that lost 4% of more was lengthy. It was a dead cat bounce, and if you didn’t know the meaning Wednesday by Thursday market close you were an expert.

MarketWatch.com published the above chart from The Financial Philosopher. Investors now must manage expectations, wrote Jonathan Burton in his MarketaWatch.com column First Take, 4/11. Thursday’s action saw the Dow off 2% and the Naz off 3%.

JP Morgan missed earning estimates Friday while Wells made theirs. Outside of that there was no real reason for the markets to continue their descent. The DJIA fell another 148 points. This is not the beginning of a recession but a good old fashioned correction. Merrill forecast another 10-15% correction for this coming Fall. Barrons.com 4/12.

Information gathered through sources considered reliable including Businesswire.com, WSJ, Barrons.com, MarketWatch.com, CNBC, CNN 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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