That Was The Week That Was-3rd Week July

Jim Paulsen, Wells Capital, chief investment strategist, in a note written July 10th, ‘The economic recovery seems only in its middle innings,’ and there are ‘just too many aspects of the economy which need to improve further before significant recession risk emerges.’ Paulsen was also one of many that was wrong on the 2008 Market Crash. He also suggested in his July 10th memo that investors take a barbell approach to U.S. stocks, meaning having exposure to cyclicals and defensives.  He also suggested increasing exposure in international. He feels that the value is there.  Note he doesn’t write about investors ‘asset-allocating’ but making sure that they are diversified. MarketWatch.com 7/12/2014

The difference between Defensive and Cyclicals. Defensive stocks are those that people have to do business with no matter what the economy. Think utilities and consumer products. Cyclical stocks are just about everything else: autos, manufacturing and technology, to give an example. Call me for your portfolio review at 586 295 0430.

Looking for ways to enhance your portfolio return? Or maybe looking for stocks to trade in your ‘aggressive portfolio’. Stock spinoffs are a way for investors to benefit from a company restructuring. In a traditional spinoff the company distributes all its equity ownership to existing shareholders in a tax-free dividend of the new company’s stock. There are multiple reasons why spinoffs are done and why investors like them. Not all spinoffs are equal, be careful when you buy the individual stock- or you could invest in an ETF that specializes in exactly that market sector. Call me for more info…

Monday Markets Romped With the Dow Gaining 111+ and The Naz 24+. This on a backdrop of certain U.S. bank beating estimates even as it paid a $7 billion dollar fine for its role in the mortgage debacle of 2008. Bob Doll, CFA, chief equity strategist with Nuveen Asset Management provided reasons why investors should remain positive even as the markets move higher. “Investor anxiety remains high, but the bottom line is the economic backdrop and market fundamentals still warrant overweight positions in equities.’ Nuveen Asset Management Weekly Investment Commentary 7/14/2014.

Janet Yellen, Chairwoman Federal Reserve, testified before the Senate Tuesday and markets ended mixed. She acknowledged that inflation isn’t near the Fed’s target and the economy isn’t nearing the point where the Federal Reserve should start raising rates. Low rates will continue for the near future as the economy continues to improve but the recovery is not complete.  Compiled from a variety of sources, CNBC, Bloomberg, WSJ, etc.

Mergers & Acquisition Continues as cheap financing and a tough global economy (AP 7/16)  have made acquisitions an attractive option for companies to expand their business. Markets up modestly Thursday morning. Earnings season continues with no real surprises. Bond prices rose as it seems they are in a price rut. Yield on 10-year fell to 2.53%.

U.S. and E.U. Financial Sanctions on Russia roiled world markets Early Thursday. We’ll see how this plays out. Too many global hotspots for investors to ignore. This was written before markets opened. Domestic markets were up to this point positive for the week. Then later in the day came the shocking news.

Stocks fell Thursday afternoon on news of Malaysian passenger plane shot from the sky by missile while flying over war-torn Ukraine. Dow closed down 160+ points. According to Barrons.com 7/17/2014 the news reignited geopolitical concerns. In other news housing starts fell, Philly fed index of manufacturing rose to its highest level since 2011.

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

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