October is traditionally a scary month for investors. Not in 2015. BEST MONTH (NOT JUST OCTOBER) IN FOUR YEARS. The DJIA closed + 8.47% for the month, Naz +9.38% and the S&P 500 +8.30%. Investors were cheered by corporate earnings, especially in two of the largest energy companies. Oil also ended up 3.3% for the month. Still there is concern going forward as banks stalled at the end of October. Sources CNBC.COM and Barrons.com Stocks to Watch.
WHAT’S IN THAT MUTUAL FUND YOU OWN THAT YOU CAN’T BUY ON THE PUBLIC MARKET? If you own mutual fund shares in BlackRock, Inc., Fidelity Investments, Hartford Financial Services Group, Inc., or any one of a dozen or more other public mutual funds you may own an investment in a non-public start-up without knowing it. The problem is that since these are non-public shares the mutual fund companies have no clue on how to realistically value those shares. One company may have one price and another company a totally different one. The following charts illustrate how far off the various companies are.
According to the WSJ T.Rowe Price values shares in one software startup at double the value that other funds had the price pegged.Katie Reichart, senior analyst at Morningstar, said that valuations of private companies are ‘pretty opaque.’ The worry is that the valuations are completely unattached to any real history.
Still investors shouldn’t be concerned since regulators limit the amount that funds may invest in these non-public startups. Funds typically own no more than a tiny percentage of their portfolio in startup stocks. Still, if you’re looking to buy Uber before the IPO you probably have a bit in your current mutual fund. SOURCE WSJ 10/30/2015
Sector Losers Year-to-Date: Numbers received from JP Morgan provided some insight to S&P 500 Sector Returns through October 30, 2015. Not surprisingly the biggest loser was energy followed by materials and utilities. The big winner this year was Consumer Discretionary followed by Technology and Health Care. SOURCE JP MORGAN WEEKLY MARKET RECAP NOVEMBER 2 2015.
The utility and technology sectors stalled as the DJIA 
opened with a bang Monday the first trading day of November and closed up triple digits on the DJIA. source google financial.com
Bob Doll, CFA @ Nuveen Asset Management- November 2, 2015 Weekly Commentary:
- 3rd Q GDP Growth Mixed but Critical Areas Showed Strength: (1) domestic demand (2) consumer spending (3) residential investment.
- Holiday spending should be strong.
- The Budget deal contributing to economic growth and stability.
- Earnings accelerating except for the energy sector.
- Global Growth Should Strengthen Next Year, Lifting Equities.
ART CASHIN @ CNBC said, ‘When October is up over 7% the result of the next two months- the so called Santa Claus rally- is cut in half.’ Expect not the usual 3% to 3 1/2% but 1.5% for the next 2 months. CNBC 11/2/2015
Markets Up- Tuesday.
BUSINESS INSIDER REPORTED WE MAY BE SEEING BUSINESSES REVISTING THE 1960s. IT’S MERGER MANIA! Getting big just for the sake of big! Roger Altman on CNBC said, last Monday, that companies were being big for the sheer sake of it. Too many CEOs are thinking bigger is better. He thinks things have gone too far.
BI reported, ‘The merger mania business was boom and bust back in the 1960s. It was fueled by low interest rates, aggressive CEOs and investors (sure, blame us), hungry for earnings growth.’ Business Insider 11/3/2015. No one provided a remedy or specific warning in the report but simply stated what we all know is happening when you have cheap money and a desire to pump up share price.
Christmas Came Early For Retirees in The New Budget Deal Richard Johnson, a senior fellow at the Urban Institute said, ‘It’s an unexpected bit of sanity coming out of Washington.’
- Shoring up of Social Security disability insurance. Beneficiaries were facing a 20% cut.
- Curb Medicare Part B premium hikes. Social security payments will not increase next year so net income would be lower if the hikes went through. source cnbc.com 11/4/2015
Markets lower Wednesday & Thursday.
BULL MARKET ALIVE AND WELL IF MOVING AVERAGES HAVE ANYTHING TO SAY. More than 80% of the stocks on the S&P 500 Index are trading above their 50-day moving averages. The index itself is trading above the 50-day. It hasn’t done that since February 2012. Trading above a moving average indicates future strength. MarketWatch.com 11/4/2015
Holiday Season for Retailers Should be Robust as Shoppers Plan to Spend More in 2015. source WSJ 11/6/2015
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.
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