That Was The Week That Was-4th Week April

 Bad News First- Week ended on a sour note with the S&P 500 off 0.8%. Halfway through earnings season and its a mixed bag. Friday’s NY Times online reported Wall Street lower on corporate results. In the background a Ukraine non-named official said the standoff with Russia was the beginning of WW3, and that caught the Street’s attention and didn’t help the direction of the markets. Chris Bertelsen, Chief Investment Officer of Global Financial Private Capital in Sarasota, Florida, said, ‘..we were overbought yesterday and so it was another reason for investors to take profits.’ Now for the play by play…

Stress Testing Investment/Retirement Portfolios is all the vogue. Daniel Satchkov, president of RiXrema, a risk modeling and consulting firm, says that investors need to mitigate or accept certain investment stress points. What it boils down to is how fast a portfolio recovers from a major or catastrophic global economic crash. He also suggests when an individual ‘stress’ tests their investment portfolio is not to dwell on ‘what happened’, but what ‘may happen’. Here’s his chart:

Investors who own individual stocks may find this of value but those that are clients of active managed mutual funds may find this exercise impossible due to the lack of control over their individual holdings.

Monday Started The Week Up! Bloomberg reported big deal in pharma as Novartis bought Glaxo Cancer Unit and sold Animal Drug division to Lilly. 4/22. Social media still under Bear attack as 22 Bears tightening their grip on you-know-what-eh? after you-know-who’s buying binge. On opposite side is Credit Suisse upping estimates of the same stock. One of the major banks came out with 20 stocks to buy and hold forever and investors wrote and congratulated themselves on ‘not owning’ a one.

Robert C. Doll, CFA, of Nuveen Asset Management:

1. Less fiscal drag from fed weighting on economy and state and local spending appears to be on the rise.
2. Low inflation should help business and consumer.
3. Corporate profit rising.
4. House prices rise.
5. Manufacturing and energy renaissances are broadening.
6. Headwind from consumer deleveraging behind us.

Carl Icahn sips martini, brags up his company and slips an f-bomb on-air CNBC Tuesday. He also says that activism is vital in keeping companies responsible to shareholders.

Markets Up Tuesday Xross the Board.

David Einhorn’s Hedge Fund Greenlight betting against a ‘group’ of tech stocks that Einhorn calls ‘Cool Kid’.  Bloomberg 4/23 reported that Einhorn did not identify the stocks and also criticized ‘cheerleading analysts’.

USA reports Mass. Senator Elizabeth Warren’s new book, ‘ A Fighting Chance’, offers insight into the 2008 crisis. Warren writes that it ‘didn’t have to happen.’ She also stated that she could not understand why Washington showed so little concern about how the financial stress affects normal people. When she asked then Treasury Secretary Geithner why the widespread abuses by the major banks in the massive waves of foreclosures, Geithner responded by explaining that they were designed to ‘foam the runway’ for the banks. Obama refused to make her director of the Consumer Financial Protection Bureau, which she fought to create, because she made the banks ‘very nervous.’

 

Do stocks get a boost out of stock splits? John Kimelman in Barron’s.com responded that in the short-term shares are more volatile and suspect to day-traders. Long term shares will settle down to market efficiencies.GE is possibly getting rid of its financial arm and focusing on upping its industrial business. Nothing firm but WSJ reports that the company is looking overseas either buying all or part of a French conglomerate. Finally- Alibaba IPO- how big? It could be the biggest- like ever! Rumors that the company may top Ag Bank of China.

INFORMATION GATHERED FROM SOURCES CONSIDERED RELIABLE INCLUDING BUT NOT LIMITED TO NEW YORK TIMES, BLOOMBERG, BARRONS.COM., MARKETWATCH.COM.. WSJ AND CNBC.

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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