That Was The Week That Was-First Week August

Northern Trust Asset Management 2014 Capital Market Assumptions Expects Global Growth Expansion to endure for another five years. Slow Growth Extends Economic Expansion. 8/1/2014. A good many ‘experts’ I’ve reported on argued we’re in the middle of the global growth story.

Deutsche Bank chief strategist Binky Chadha said the long and big run-up is ‘fairly typical’ outside of long recessions and crisis. He reported that we shouldn’t expect a big correction anytime soon. MarketWatch.com 8/1/2014. Chart provided by Deutsche Bank.

 

‘Have We Talked?’- The easiest way to get a question asked or a problem solved is to send me an e-mail. Each year I try to call every client and review their holdings, answer questions and get updated on goals and news. If we’ve missed connections so far this year- let me know.

Summer Scare? Market Tumble? Not Last Monday.

A wee bounce Monday 8/4/2014 as markets shrugged off geo-political bad news. Gold remained under $1300. Some experts worry the week before last was precursor to a 20% drop. Others see it as a knee-jerk reaction to good economic news that could mean the Federal Reserve could speed up a time table to increase rates. Still others are concerned it was a ‘dead cat bounce’. Remember Greenspan spoke of market’s reacting to Fed policy in last week’s blog. Robert C. Doll, CFA, Nuveen Asset Management, 8/4/2014, ‘The risk of correction are rising.’ Doll also makes the point that…’ while worries abound the economy continues to improve, the Fed slowly moving toward normalization, earnings are strong, valuations stable and the geopolitical environment is unsettled but not disastrous.’

Tuesday’s Action Saw Markets Fall. DJIA –139 Points. It’s lowest since May 20th. Gold moved up $7.00. WSJ article last Sunday (8/3) on 1/2 billion people in India with no indoor plumbing. New PM wants an indoor potty in every home and many of the 1/2 billion who don’t have a bathroom say a potty has no place inside a home and instead prefer going to the woods. It’s also a  social affair meeting neighbors and friends while out doing ..er..business. But the destination is also a crime & vermin ridden area, which the country wants eliminated.

Wednesday Markets Opened Lower. Finished Up. Gold Up. VIX down. Healthcare stocks have fared better than many thought after a banner year in 2013. (MarketWatch.com 8/7/2014). A joint study by the Employee Benefit Research Institute and the Investment Company Institute issued July 31st found that workers who stuck with their 401(k)s from 2007-2012 ended up with a 67% higher balance than the average of those who did not. In other words ‘the buy and continue buying and holding’ investment strategy  worked better than running to cash and stuffing it in Mason jars and burying it under the front stoop. A strategy advocated by certain ‘financial experts’ in October, 2009.

Thursday Moscow Curtailed Sale of  Billions Western Food Imports Sending European and U.S. Markets Down. Putin’s Response to Western Sanctions.  (Bloomberg 8/7). Markets at lowest since April. John Manley, Chief Equity Strategist at Wells Fargo Funds Management said, ‘The uncertainty over the situation in Ukraine has overshadowed the positive economic data we saw earlier today.’ Namely jobs report had a better than anticipated drop in claims. About 75% of companies have reported earnings this season that have beat analysts estimates for profit while 65% exceeded sales projections.  .

Finally- Thursday Night The President Approved U.S. Airstrikes in Northern Iraq. On Friday morning the geopolitical landscape got a lot messier. Ebola now an international health emergency. Russia massing on the Ukraine border. A Ukraine warplane shot down. Ceasefire in Israel-Gaza broken within a minute by rocket fired from Gaza. Genocide fears in Iraq. Pre-markets in Japan and U.S. down. European stocks down. MarketWatch.com/WSJ 8/8/2014  It’s a messy world out there.

Questions call Paul @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

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