That Was The Week That Was-4th Week March

 

BAD NEWS FIRST! Wednesday Markets Fell! Worries about the first profit decline in six years and concerns about weakness in the U.S. economy and the Dow fell 292 points, The S&P 500 lost 1.5%, The Naz, affected by selling in tech and biotech, lost 2.4%. Steve Massocca, Wedbush managing director said on CNBC, “It had a big run. It’s only natural to see a correction. We had excess ebullience and some of that is burning off today. …durable goods were not very good. People are starting to get concerned about that king dollar is going to cause earnings issues.” The selloff in equities was matched with a selloff in bonds. The dollar also sold off, and usually that would have been a positive for equities. Marc Chandler, Brown Brothers Chief Currency Strategist, said the markets had been trending together before the Fed meeting last week. We may retest the March low, he said. Bob Pisani at CNBC said Wednesday that there was no obvious catalyst for the declines. Michael Kahn, in Barrons.com ‘Getting Technical’, wrote that he had good news and bad news. The good news is that major trendlines were supporting a current bull market and pointing to the upside. The bad news was that key sectors such as semiconductors and banking were stumbling. He concluded that the market was taking a little break. ‘Given that breadth is still solid and small capitalization stocks continue to outperform, we should not be too worried.” CNBC.com 3/25/2015 and Barrons.com 3/25/2015

charted published WSJ 3/27/2015.

THURSDAY MARKETS WHIPSAWED FROM DOWN TO UP TO CLOSE DOWN- SLIGHTLY. But it’s oil the story for the day and probably for next week. Saudi Arabia is in armed conflict as they launched airstrikes against rebel forces in Yemen. Oil prices spiked as Yemen is in a critical geographic position for the flow of oil flowing from the Persian Gulf to reaching the Suez Canal and other seaborne trading routes. The Saudi’s and other Middle East allies are operating an armed conflict for the benefit of the U.S.A. Bjame Scieldrop, chief commodities analyst at SEB Markets, in a note wrote,’ Just the headline of this happening is driving chilling fears into the bones of all oil consumers.’ The fact that Saudi Arabia the biggest and most important oil producer in the Middle East is now in armed conflict. (MarketWatch.com 3/26/2015).

  There are some people I know that sound smarter than me because they simply ‘sound’ smarter than me. I am sure you know someone like that because when they talk about something they sound like they really know what they’re talking about even if they don’t. They have this voice of – Authority. Sometimes they do know what they’re talking about, and a lot of time they don’t. They just sound so much smarter than anyone else in the room. Or, at least they sound smarter than me. The reason I bring this up is a friend/client called me up and said he was meeting with his corporate investment people and talking about his future retirement. He’ll be meeting with people who talk like that. None of them are as old as my friend but they all sound so knowledgeable. Between you and me, I don’t think he’s ready to retire just yet. He likes what he does and I don’t really  think he’s ready to senior globe trot, cruise the seven seas on those massive floating Petri dishes or browse antique stores for the next 25 years. But he was meeting with investment people who will present him with a ‘road map’ to retirement and beyond; and how his current assets will manage to pay for the next quarter of his century with the same quality of life that he’s gotten used to. They will do that plan today and they’ll say it in a way that sounds smart. Even if it isn’t. The important thing to remember is that they will not be there for my friend’s grand event nor will they be holding his hand at anytime during that quarter of a century of life.  What they will do is leave a piece of paper with some scribbled advice on how to best manage his affairs way down the road. They’ll do that without knowing the politics of the future age, the global economics, inflation; or anything that happens to my friends and his family that throws a monkey wrench in their all so perfect recipe of a plan. The interesting thing about retirement is that our great grandparents really didn’t think much of retirement. Besides not living as long as we do now they didn’t look forward to a time where they wouldn’t work. Retirement, I found out, is a modern invention.  If you were a farmer in the 1800’s, or a city slicker in the 1900s, you didn’t quit at 65. My grandparents worked till they died. They may not have been lifting engine blocks at Dodge Main for eight hours, but they did do something. Yours probably did the same. Now I told my friend who is thinking of that day that he should listen and take notes, but he should also remember that things change before and during retirement. What sounds reasonable today is not something you may want to do tomorrow. Your life changes.  While it’s good to have a goal, make reasonable plans based on reasonable expectations, don’t engrave a plan into stone. As a kid you may have hated broccoli and today you love the stuff. That’s the thing with a retirement plan- it may look wonderful today and not so good tomorrow. The best advice I can give anyone when planning a long retirement is accumulate as much money as you can during your working years. Everything else will fall in place if you have that.

JIM CRAMER CALLED THE MARKETS FORWARD MARCH- CHOPPY. CNBC 3/20/2015  and this could be the reason why…

 Currency Wars & The Future of U.S. Monetary Policy could have the possibility of major volatility as we enter the 4th week of March. James Bullard, St. Louis Federal Reserve President, said last week and reported Monday, that a market reaction known as a ‘Taper Tantrum’ may happen again as it did a few weeks back.  There is a huge amount of cash exiting the eurozone and heading for the U.S., Denmark and Switzerland. The strong dollar is caused as much by the weak euro as monetary policy here in the U.S. (WSJ/3/22/2015). JP Morgan has bet on a weaker euro throughout the recent decline and believes it can fall further. The euro is at a 12 year low against the dollar. Bullard admitted that large multinational U.S. firms would be hit by the dollar strength. However, he pointed out that a ‘hedging strategy is part of running a big multinational. The massive inflow of money from European investors has driven the dollar higher and seen a rally in Treasuries even as a rate hike looms on the horizon. Another problem for European investors is that European governments are trimming budgets which means they issue fewer bonds.This make the European investor to look elsewhere for returns. CNBC.com 3/23/2015.

 

 

MADE ME SMILE… From USA Today.

WHATS ALL THE FUSS ABOUT? Jay Hatzius, chief economist at Goldman Sachs, in a note to clients, speculated that an eighth of a point Fed rate hike is what we can expect. ‘There is a small chance that the Committee could decide to go with a ‘mini’ first hike for an example an increase in the target range of only 1/8th of a point.’ He also suggested the first hike would be in September. CNBC 3/23/2015

Peter Oppenheimer, chief global strategist at Goldman Sachs, offered to CNBC last Monday (23rd) that the U.S. Markets were not in a bubble- yet. He also doesn’t think that U.S. markets will do any better than 4-5% in 2015.

Avi Gilburt reported in MarketWatch.com 3-23-2015 that the markets have not had a 10% pullback in some time but that we should expect one. He also believes that the markets will edge higher in 2015. Avi also believes we continue to be in a bull market.

 A NEW WRINKLE IN THE FED’S VIEW OF THE ECONOMY. Inflation and new home sales increase. The CPI rose in February. The first time in 4 months. New home sales were up 8% in February! The highest level since 2008.  Joseph LaVorgna, chief U.S. economist for Deutsche Bank said that there was some tentative evidence that the economy is maybe turning back up just like it did last year. The economy still remains wobbly. But, according to Richard Moody, chief economist of Regions Financial Corporation., in a note to clients, the latest consumer price date could give the Fed confidence inflation is heading toward its 2% target. There they have insisted they’ll begin to raise rates. WSJ 3/25/2015

Remember that there are always a dozen reasons to sell and only a few to buy. Investors should remember to have cash on hand to take advantage of buying opportunities.

QUESTIONS CALL PAUL @ 586 295 0430 or WRITE HIM @ pstanley@westminsterfinancial.com Share this blog with someone who cares about their money.

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

That Was The Week That Was-3rd Week March

It’s Amazing How Much Bad Free Advice You Can Get On The Radio. I’m driving back from my accountant’s office last Saturday and listening to ‘talk-radio’. I only listen to talk shows while I am in my car, and Saturday the station I tuned in was hosting a ‘financial show’. A caller came on the air and asked the host what he should do with his ‘risky’ investment that mimicked the S&P 500-Index. Instead of asking the guy why he thought the S&P was risky the radio advisor right away came up with an ‘ off the cuff’ investment allocation that he proceeded to tell the caller would fit him to a T. The amazing thing is that there were no questions by this ‘expert-financial radio host’ about the caller. The radio host knew nothing about the person’s assets, job, age, inheritance, savings, investments, martial status, children, aged-parents, responsibilities, health, income needs, marginal tax bracket, earned income; or what part of the country he lived. The only thing he did know was that the guy thought the S&P 500 –Index was ‘risky’. Rather than ask and then explain that the Index was well diversified, had market risk and not extraordinary risk, paid a small but consistent dividend and had a history of providing returns, that over the long-term, exceeded the total sum of inflation plus most marginal tax brackets; the host instead decided to show off his financial acumen by performing an on-air asset allocation. This was about as brilliant as someone calling their doctor and having them diagnose their illness by hearing them cough over the phone. You really can’t fix stupid.

Speaking of Bad Advice… An argument between a bank and a client ended in settlement last Monday, according to the WSJ 3/16, in ‘Markets Main’ section. The bank gave the client bad advice that cost the client $9 billion. (That’s with a B) The settlement included the bank providing more advice to the client only this time for free. As Robert Daines, a lawyer and teacher at Stanford said, ‘It’s a bit like complaining of a hair in your soup and getting a discount on your next bowl of the same soup.’

This is Doctor Doom, aka Marc Faber, who is nicknamed for his well known bearish take on U.S. stocks. And when asked on CNBC March 12th on the program Futures Now, where he would be putting his money today he replied, ‘If I take a 10-year view, I think I will make more money in blue chip stocks.’ Yep, it may have caused  the sky to fall when the doomster said that.

 

  What Are You Worth? The Federal Reserve reported last Thursday March 12th that household net worth hit a record $83 Trillion (that’s with a T) in the 4th quarter last year. Most of the gains were due to increase in real estate plus household stock holdings rose with the broader markets. At the same time total debt (including government and business) increased by 4.7%.

 

30+Years Ago Americans Were Warned That Oil Would Soon Run Out & Our World Would Be a Cold & Dark Place Unless We Did Something- Quick!  The United States needed a reasonable energy policy back then, as they do now. Well, we know what happened. It’s like all warnings of bad things to come politicians and regulators did what they always do which is nothing, and business took over the problem.  The petro industry fixed the problem so well that today we’re actually swimming in the stuff and the price of oil is less than half of what it was a little over a year ago. Inflation is not even on the horizon because of the price of crude. Petroleum is a key ingredient to inflation. Petroleum is used in many products plus in the cost of transportation of those products, and with the price so low, and getting lower, it doesn’t appear that the Federal Reserves goal of 2% annual inflation will be met anytime soon. We could soon see $40 a barrel oil, and have it here for a very long time, according to one expert. The U.S. is buying 5 million barrels of oil for the strategic reserves, not because they need it, but because it’s on sale! The strong dollar has a lot to do with the current price of crude and when the dollar dips you can bet that the price at the gas pump goes up right quick. That won’t, according to some, get the price back to $100 barrel. It may, however, level off to around $60 by the end of this year. On the flip side energy firms that are in the U.S. are still poised to unleash more oil that’s been capped and waiting in drilled wells. According to WSJ 3/13/2015, Markets Main, the IEA (International Energy Agency) reinforced the prospect of a prolonged slump in energy prices, and said the U.S. output was surprisingly strong in February, even with the glut, and the black gold rapidly filling all available tanks. Just a month earlier the IEA said that price recovery was inevitable because U.S. production was likely to cool. No such thing happened. What is really happening is that U.S. producers are drilling wells but holding off on fracturing and water to free oil from shale formations. They are storing the oil in the ground which allows them to tap it quickly when prices recover- and oil will flood the market again. So it looks like maybe we should party like it was 1960s, or maybe 1990s, buy that gas guzzling SUV, crank on the heat or A/C, open the windows, and forget about conservation. It may be a very long time before we really do run out of oil.

MARKETS UP HUGE MONDAY THE 16TH MAKING UP FOR FRIDAY’S LOSSES. WEAKER DOLLAR, LOWER OIL.

 

And this made me smile…

How Much of An Interest Hike by The Fed & When?  It’s what inquiring minds want to know. According to the March 16th Washington Post the best guess is a ‘bupkis’ rate hike of a quarter of a point, and it could come as soon as June, but don’t be surprised if that date is pushed to September. Ed Yardeni, president and chief investment strategist of his own investment firm, said when the rate hike does come it will mean absolutely nothing. The central bank is still in uncharted territory and does want to be very cautious, said Kenneth Rogoff, a Harvard economists professor and former chief economist at the IMF. He also thought the first hike would be a quarter point.

Don’t expect a return to double digit returns on fixed income, dear reader. The days of money markets paying 8% are long past us and far ahead of us. The Federal Reserve will approach rate hikes slowly and methodically. They understand that raising interest rates could have a disruption not only on capital markets but on domestic tax payers ability to pay their bills.

 

MASS HYSTERIA?

How will a rate hike impact the markets? Best guess is when you base your calculation on a stock’s fair value on future earnings, dividends, cash flow and other financials; the net present value is essentially the same regardless of when the Fed raises rates. John Graham, a Duke University professor told Mark Hulbert of MarketWatch.com that he was hard pressed to come up with any rational valuation of equities in which a difference in three or six months in the timing of interest rates has a material impact on the fair value of common stocks. Hulbert concludes, There are plenty of things to worry about these days. But the timing of the first rate hike is probably not one of them. MarketWatch.com 3/17/2015

Wednesday was ‘The Day’. It was a right fine lollapalooza of a trading day too as Markets were off their feed for most of the day until the Fed indicated that they would raise interest rates slower than they foresaw just a few months ago because of a softening of the economy. Once word of the Fed’s scaled back intended pace hit The Street the party was on. Yes, there is nothing like ‘Free Money’ to whet the appetite of investors and the DJIA closed up 227 points, S&P 500 Index +25 and the Naz settled for +45 points to close a tad under 5000. The Dow closed over 18,000 for the day. You can expect (maybe) a rate hike, based on Wednesday’s statement, in December rather than September; but it could be sooner if the Federal Reserve thinks an increase is warranted. The reason for the change in the Fed’s statement was that ‘economic growth has moderated somewhat’, while export growth has weakened. Interest rate hikes will be implemented when further improvement is seen in the ‘labor market’ and when inflation rate of 2% is achieved. Bob Pisani explained it best by stating at CNBC that Janet Yellen put things in simple terms at her press conference so that even those too stupid to understand the subtleties of the Fed phrasing would understand their intentions. CNBC, WSJ,3/18/2015.

Business as usual.

 

Interested in becoming a client or 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.

That Was The Week That Was-2nd Week March

 

  It was ‘Hang On’ Tuesday Because the Market Ride Just Got Wilder! The DJIA suffered its biggest one day loss in five months as investors started pricing in a rate hike by the Federal Reserve by the middle of the year. The dollar also rose against five of its six rival G-10 currencies in a continuation worry about Europe and the Fed tightening. (MarketWatch.com 3-10-2015). Any Market Gains have been stripped in the one day action. The Dow was off 333, Naz-83 and the S&P 500 Index was off 35 points at the close. Investors have yanked $7.1 billion from mutual and exchange traded funds tracking American shares and sent $35 billion to other markets this past quarter. (Bloomberg.com 3/10/2015). The S&P 500 is down 0.7%, trailing all other 23 developed markets except for Greece. The dollar hit an almost 12 year high versus the euro and the highest in 7 1/2 years against the yen. Analysts are projecting S&P 500 earnings fall for the first three months of 2015. It would mark the first period of negative earnings since 2009. (Bloomberg.com 3/10).

It took a few days but Thursday Markets ignored all the financial ‘noise’ and bounced strongly with the Dow up 260 points, Naz +43 and the S&P 500 Index + 25. Gold was also up a few dollars and oil settled up to close at $47.20 a barrel.

Stuff you heard and read about but maybe didn’t really know…

DEVALUATION OF CURRENCIES IS DEFINED AS A ‘NATURAL PROCESS’ IN THE HISTORY OF FINANCIAL MARKETS.

The Ben Bernanke did it and the EU has followed suit along with Japan, China, Switzerland, Brazil, and lately, Denmark can’t print it’s money fast enough, according to recent news sources. Nations are scrambling to make their money cheaper than their neighbors. These are global wars with casualties of an enormous scale. Currency wars can and do last a long time. According to Investopedia, sometimes as long as 15-20 years. No real winner is ever really declared. One of the biggest devaluations was in the 1930s when nine of the leading world economies devalued their currency. Devaluation of a country’s money is also called: Beggar Thy Neighbor. Because what is good for the country that devalues their money is bad for its neighbors. Joan Robinson coined the phrase back in 1937 to explain the then devaluation process. The 1930s gambit slashed currencies by 40%, which did help to stabilize and revive economies. Today it’s a classic ‘Beggar Thy Neighbor’ strategy by Central Bankers. If you are a country, such as the U.S. with a strong dollar, trying to sell your products overseas while competing with countries with a weaker currency, you lose business. Fortunately the US is able to sell many of the products it produces to its own people, most other countries cannot do that. Eventually the U.S.corporations will hue and cry and Congress will pressure the Federal Reserve to do ‘something’ to make us more competitive globally. And, you bet, they will. Right now the dollar has hit an 11 year high against the euro and is stronger by 24% over our neighbor Canada. In other words a $1,000 suit in Canada will cost you about $750 U.S. And, you don’t want to be getting your change in Canadian coin and bringing it back to spend in the U.S.

The problem with this currency war is we don’t know where it’s headed or how it will end. Some economists insist it can only end badly. History has not proven that, although the Swiss unlinking their franc from the euro and the result was a 30% drop in the euro against the franc and billions of dollars were lost. A handful of currency trading firms also evaporated along with their customer’s money.

Currency wars do not create growth. They are Central Bankers method of stealing from their trading partners for a momentary advantage until those same partners steal back from them.Info from Daily Reckoning 1-22-2015, plus info from WSJ, The Times, Investopedia ,etc.

 

REQUIRED MINIMUM DISTRIBUTION 701/2.

Check your IRA statement for amount you need to minimally take in 2015. If you have multiple IRAs you can combine the total 2015 RMDs from one account. Penalty for not taking RMD IS 50% of the RMD.

 

 

 

WHAT DO STOCKS DO MONTHS PRIOR AND AFTER A RATE HIKE?

 

A Fannie Mae Mortgage Fairy Tale?

The WSJ Reported in Review & Outlook Tuesday on how the U.S. unit of Japanese bank Nomura is refusing to settle with the U.S. government for ‘allegedly misleading Fannie Mae and Freddie Mac about the risks in mortgage backed securities prior to the financial crisis.’ In 2011 the Federal Housing Finance Agency sued Nomura and 17 other financial institutions for exactly that. The other 17 banks did cave and wrote checks for almost $18 billion. Nomura said they’d rather go to court. In a filing last fall counsel for Nomura said that in reality it was Fan and Fred that were the culprits. The two agencies were actively shopping ‘particular’ pools of mortgages that would help them meet affordable housing goals set by the the federal Department of Housing and Urban Development. (You remember that political push where everyone, no matter their job or income, deserved a home.) Nomura has proof that Fan and Freddie sought risky loans in order to please their political partners and enrich themselves with fat interest-rate yields. The government disliking the fact that Nomura is not rolling over like its counterparts  dropped their claim for damages from the suit. Nomura claims this case is bogus, and according to the WSJ a Washington shakedown. WSJ 3/10/2015 Review & Outlook. The bank that won’t buckle.

 

Investor’s Business Daily Announced the Premiums for ObamaCare Will Increase  an Average of 8.5% per year over the next three years 2016-2018. IBD 3-10-2015

 

IBD March 10, 2015.

Working Class Gives Up on Obama, Fears Job Losses.

So much for the ‘bottom-up prosperity’ policies.

Wednesday was Hump Day in the Markets as none of the indices could close out positive after a horrendous previous trading day Tuesday. The Dow, Naz and S&P 500 all ended slightly down at the close. What was interesting was the interview with Goldman Sach’s Gary Cohn on CNBC’s Squawk Alley, who said he was ‘freaked’ out by the negative interest rates sweeping Europe. Yes, negative interest! As those EU yields fall U.S. Treasuries become more attractive. This rush of capital has in turn forced U.S. yield's down. Mike Larson at Money and Markets, reported that 1.2 Trillion euros worth of EU bonds sport negative yields. If you want to take a mortgage out in Denmark, the bank may end up paying you. If you want to deposit money then you’ll have to pay the bank interest rather than the other way around. One Danish banker told the WSJ, according to Larson,’ Paying our customers zero or positive interest is very bad for profitability.’ The Goldman official pointed out that negative yields make it hard for insurance, asset management and pension business to generate a return. info MarketWatch.com, CNBC Squawk Alley,and Money & Markets, Afternoon Edition 3/11/2015.

TOP SECTORS FOR INVESTORS IN TURBULENT STOCK MARKET? Michael Kahn, Chartist at ‘Getting Technical at Barrons.com’ wrote that small caps, biotechs and chip stocks should hold up well. Barrons.com 3/11/2015.

 

If you ignore what’s happening in the markets don’t be too surprised by your investment statement. Investors should be aware of their portfolio investment risk and diversification. Investing in common stocks whether individually or through mutual funds requires owner oversight and understanding.

 

Finally the WSJ reported Friday that business leaders, economists and policy makers are convince the euro’s drop is helping turn the tide at least a bit in Europe’s favor.On the other hand major U.S. corporations with major foreign revenues are finding it harder to compete.The strong dollar also poses problems for the Federal Reserve putting downward pressure on inflation, giving pause to the Fed’s raising of rates this summer. WSJ 3/13/2015

 

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

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

That Was The Week That Was-1st Week March

 

Late Breaking News… (ahem)…Friday markets took a tumble as Great economic News turned into Bad stock-market News. It was a Super Strong Payroll Number that jinxed the stock and bond markets Friday. The jobs number surprised everyone considering how bad the weather. More than 295,000 jobs were created which indicated that the Federal Reserve would ‘have’ to start raising rates, according to some experts, either in June, or certainly by September. The Dow fell 275 points while the yield on the 10-year hit a high of 2.24%, or a 6% spike. According to Barrons.com it was more than just the jobs report that did the damage: (1) Federal Reserve SF Bank President Williams said that mid-year would be a good time for a rate hike. (2) Oil prices fell- again. (3) Better numbers on German industrial output. (4) The ECB was upbeat about printing money to buy bonds. All that contributed to the sell-off.

Gold also had a horrible day. The worst since December, 2013. The dollar hit a 11-1/2 year high against a basket of currencies.

The news wasn’t that wonderful once the jobs numbers were examined. The biggest single occupational increase in the jobs report was bartenders and wait-staff. The hourly average wage increase was just 3 cents.

The DJIA OFF 279, S&P 500 –29.78 and Nasdaq –55.44. Info gathered from WSJ, CNBC, Barrons.com 3/6/2015

February S&P 500 Index Rose Most Since 2011. DJIA Has Best February Since 1998! Truly spectacular month for stocks even though only a few days contributed. If you missed the great up days you missed the rally that went on. The Nasdaq was up 7.1%, closing in on its previous high from March, 2000. This was the best February for that index since February, 2000. The gains all came in spite of a real lousy last week in the month where all indices were off slightly. Info provided Barrons.com 2/28

  and I saw this in The New Yorker Feb 7 2015.

You Very Happy? Satisfied? Have a Dull & Routine Life? Or Dissatisfied With Your Life? George Kinder developed three questions to help people focus on what is most important to them. What he found is that many people spend their lives pursuing financial goals they aren’t excited about. They don’t know what they really want from their lives. George has 3 questions:

• What do you care about most if you had all the money you really needed.
• If you only had 10 years to live what would you do to change your life and how.
• If you only had one day left to live what would you look back at and say you missed, failed or did not get to be? Jonathan Clemens, WSJ 2-28-2015

SURGING STOCK MARKET MAKES INVESTORS FEEL SMART.You have to be careful, writes Morgan Housel, WSJ, UPISDE, 3/1/2015. Everyone loves a bull market. Be careful when markets turn. When investors feel good they feel smarter and more confident and make mistakes, writes Housel. Check your ego at the door. Don’t be impatient and don’t worry about things you cannot control. And, you and your advisor are allowed to change your mind. The analyst that says, ‘I don’t know.’ may never be popular but he or she is the one you want to listen to.

I remember getting investment advice from businesspeople, school teachers and engineers; all telling me that the 1990’s stock market would roll on forever and we’d never see a market correction.

 

Who Do You Know That Needs Me? Did you know that the average investor hasn’t come close to matching the S&P 500-Index Returns for the past 20-years? Some people look at investing as if they were buying a sofa or new lawn mower. Others think more is better; and others ignore risk and buy  those investments that did well the year before. There are those investors that simply never change allocation and ignore economic signals. If you know someone like that have your friend, relative, co-worker or neighbor call or email me for a no charge meeting. In about 45 minutes I’ll be able to tell them if I can help them and how. chart source Blackrock. Dalbar.  

Monday Markets Up Strong on China Rate Cut. DJIA + 155. Kirk Spano splashed some cold water, at MarketWatch.com wrote that Big Money is Moving to Cash. He pointed to a Sunday Barron's article that described how large management firms were holding more money in cash and short-term Treasuries.  Also, Berkshire Hathaway’s Warren Buffett talked about holding cash and short-term treasuries, in likely response to that fact that Berkshire’s Treasury holdings have grown to a record. Spano suggests that investors accumulate a larger cash position no matter what the market plans on doing. It’s obvious Spano is unsure and is simply increasing cash as have other investment management firms. The amount of cash may have been the selling of fixed income investments  (bonds) , or selling of equities. We do not know,  nor do the firms advertise what they are doing. MarketWatch.com 3/3/2015

Add another opinion…

Robert C. Doll, CFA, Senior Portfolio Manager, Nuveen Asset Management, ‘The bull market is nearly six years old. Investors have faced many steep walls of worry. The economy has been growing, and the stock market has been rising as a result of profits from entrepreneurial activity. We anticipate these trends will continue until corporate profits fall sharply, interest rates rise significantly or the stock market increases beyond the current value of discounted earnings.’ March 2, 2015.

and…

Jim Cramer on Mad Money Monday said, ‘This market isn’t exuberant, it’s just happy!’

Tuesday Markets Off Slightly After Being Down Triple Digits Earlier in the Day.

 Been There Done That. Yeow! Cramer Has 6 Worries That Could Turn into Disaster. CNBC 3/3.

• Retail & Restaurant's- what if people stopped shopping and eating out?  There’s been a slowdown recently. Hey! It’s cold out here. Like everywhere.
• Car sales and financing. Cramer worries about subprime financing being pulled back. Subprime is a tricky business. There’s a reason why it’s called subprime.
• Housing?  People don’t go home shopping in minus degree weather.
• Slowdown in sales in the PC Tablet world. The biggest maker of tablets had a horrible quarter.
• China with Macau casinos down 49% and the big CHINESE IPO Aliwhatsit down off its IPO price- what’s going on there? Cramer worries that China is no longer pulling its weight in the global contribution game.
• Last is Oil. Oil is down and Cramer wants it to go down more. Tuesday markets saw an uptick in oil prices and most ‘commentators’ want oil prices to stabilize, and rise. Hey, remember the dollar is strong and getting stronger. That says it all in oil prices. Except for the glut…

Markets Off-again- Wednesday The 10-Year held steady at 2.12%.

 

Cold Weather Grumps or Heading for a Slowdown? Norman Fosback, former president of the Institute for Econometric Research and editor of Fosback’s Fund Forecaster, pointed out that as long as ‘margin debt’ (the amount borrowed from brokerage houses to buy stock) remains over a 12 month average this is bullish when the debt is below the moving average this is a bearish signal. Here’s the chart from MarketWatch.com 3/5/2015:

WHERE’S THE CHEAP MONEY? Corporate America has rushed to the EU, where investors are hungry for any kind of yield (déjà vu?). Corporate America is sitting on record amounts of cash. Much of it stashed overseas because bringing it home invites the taxman. The recent EU stimulus has sparked a bond blitz (WSJ 3/5) as investors have been buying anything in the fixed income sector banking on falling yields to replace any significant interest payments. The average yield for corporate bonds issued in euros is a near-record low 1.08%. Companies such as Berkshire Hathaway, Kellogg and Cocoa Cola have rushed to load up on cheap money. GDF Suez, a French utility, is the first company in over 14 years to issue bonds in euros, bearing no regular payments to investors. Investors bought the bonds on the bet that interest rates will fall further and they’ll make money on the increased value of the bonds. WSJ 3/5

CNBC THURSDAY 3/5. U.S has the largest stockpile of oil not seen in the last 80-years! 430 million barrels of oil. In fact, the U.S. is fast running out of places to store the stuff.

 

Longest Winning Streak Without a Major Correction?  We ain’t close! Chart provided by@NickatFP published in MarketWatch.com 3/5/2015 Shawn Langlois reporter.

 

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