That Was The Week That Was-3rd Week April

 

If  a can of tuna fish was selling for ten cents people would be buying as many as they could carry. The stock market is the only place where bargains are ignored.

 

The Week Before Last We Saw A Perfect Example of a ‘Dead Cat Bounce.’  This is an expression that means be careful of buying either stocks or sectors after a trading day  where there was a substantial ‘bounce’ after a huge selloff. Thinking the ‘worse’ may be over investors pile in the day after, hoping for a continuation of a ‘rally’ (or buying on the dip), only to find Mr. Market suckered them in and experience a continuing correction. Before the year began we called for more volatility than we had in 2013 and we sure have been getting that. The interesting thing is that the VIX, or volatility index, has been rather subdued. The VIX is sometimes referred to as the ‘Fear Index’, and ratchets up when markets are in turmoil. Investors may trade the VIX through a number of ETFs. Volatility, it seems to me, is more intraday than day to day. Unless something or event really spooks the market I’d expect a less fearful atmosphere. Trading the VIX, even in these markets, can be most disconcerting.

Better Than Expected Retail Sales propelled the markets Monday. U.S. retail sales up 1.1% in March, biggest gain since September, 2012. Reported by the Commerce Department. Citigroup, the third largest U.S. bank, reported an unexpected profit increase. The news on both retail and banking jump started the markets but saw gains wither almost into negative territory until the last hour of trading where strong buying suddenly brought the Dow up 146 points,  the S&P +22, while gold lost $13.00 and oil was off 1. to 103. It was truly a roller coaster Monday.

Ditto Tuesday’s Action. It was the same story- up, then down and closed up in the final hour, or so. More gloom and doom stories appearing in various online publications. Robert C. Doll, CFA, of Nuveen Asset Management, which the parent company, has been sold to TIAA-CREEF, wrote 4/14:

• First Quarter earnings will likely be unimpressive. But 2/3rds of reporting companies beat estimates!
• FOMC minutes provided a bright spot as Fed Chair Yellen confirmed fed fund rate projection was not considered a policy change.
• Fed deficit fell below 3% of GDP in first quarter.
• Ultimate global risk from Ukraine crisis should be limited.

Bloomberg April 16 Reported,’ Industrial Production in U.S. Rises More Than Forecast.’ And with that the DJIA was up over 160 points and the markets were in the black-again- for 2014. ‘Aluminum demand will continue and the auto sector will probably remain a mainstay for manufacturers.‘

MIXED MARKETS THURSDAY. Bureau of Labor Statistics reported the following five foods marking their largest monthly gains in price since September. 2011.

• Bacon +13%
• Ground Beef +8%
• Oranges +23%
• Coffee –17% but +31% over 4 years.
• Peanut Butter –2% but +30% over 4 years.

MARKETS CLOSED FRIDAY FOR HOLIDAY.

Questions call PAUL @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with people who care about their money.

SECURITIES OFFERED THROUGH WESTMINSTER SECURITIES, INC. MEMBER FINRA/SIPC.