A Blow-Out Jobs Report Friday the 6th (Almost Guarantees a Rate Hike in December.) It was an ‘In-Your-Face’ number for all the economic naysayers and gloomy Gus’s (And especially to the guy who called me a month ago and told me a bad thing was going to happen to the economy and stock market in three weeks and he heard it from a Rabbi has never been wrong…), the jobs report officially tagged 5% as the unemployment number (I am not going to participate in the political argument if 5% means 10%), it’s close enough to full employment and our economy on the move. Experts (CNBC) shouting in one voice after the close Friday that financials are the sector to be in as higher interest rates benefits those that have the highest number of depositors. And on the eve of the eve of 2016 I like what’s happening with the economy (if I close my eyes to Washington politics, terrorism, globalism and the coming election). Higher wages (2 1/2% increase this past year), low interest rates (the Fed hike still makes rates far less than where they were during the Civil War for crying out loud), low energy costs (another pay boost for the average worker), makes spending more money by the U.S. consumer almost a sure thing. And as the world knows, the American consumer is able to uplift the world economies with their spending. Now if the dollar would ease, oil edge up a tad and the national election in the rear-view mirror things would be very nice indeed. sources cnbc 11/6/2015
Adam Grimes, CIO @ Waverly Advisors said, ‘…despite recent troubles and increased volatility, investors are given a good opportunity to buy U.S. large-cap stocks.’ For years the technical analyst has been saying, ‘Be long stocks,’ and the reality is that is what the market has been saying.’He noted that investors seeing the increase in volatility need to avoid being scared out of stocks by what he described as ‘silly technical,’ measures that show market activity, but don’t reflect an edge when it comes to delivering market insight. The markets could continue another three, five years and another 100%. Everything we look at shows an intact uptrend. Source MarketWatch.com 11/7/2015 Chuck Jaffe
Strolling down memory lane… A while back I wrote about a former client that for the better part of a decade I baby-sat, hand-held and did everything but make the kitschy-coo noises and chuck him under the chin to placate him every time he got a bug to sell all the funds he owned because some ‘radio’ weirdo-financial doomster predicted the end of the world, or he read a headline he didn't like. One day he ups and leaves me for a more accommodating ‘expert’, who’s happy to take the guy’s money and run him in and out of the markets every time the guy gets the whim until the wallet’s run dry. The former client was at least polite enough to call and tell me of his decision, ‘I’m going in a different direction.’ Well, the only direction he’s going is to the poor house, and anyone who is in a similar situation and tries to time the market is on the same freight train. Interestingly most amateur investors have finally caught on that market timing is bad for one’s financial health. Fidelity reviewed their 401k clients and discovered that this past summer only 4.9% of them made changes to their 401k. Jeanne Thompson, vice-president at Fidelity Investments said, ‘People are starting to get the message. During volatility, many times the best course of action is none at all.’ source cnbc.com 11/6/2015
When Economists Talk About Financial Conditions They Are Talking About These Four Things:
- The US Dollar
- Corporate Bond Spreads
- Equity Market Levels
- The Level of Interest Rates At Different Maturities. Source Business Insider 11/7/2015
source USA TODAY
Stocks Fall Triple Digits Monday on Rate Fears & Investors Adjust Their Portfolios. DJIA –180.Energy and Cyclical Consumer Goods were the biggest losers.
These are Holiday Cups from Starbucks. Some folk squawked that last year the cups were too Christmasy and non-inclusive. This year the other side said the company caved with their red cups and they want more of a Christian Holiday Spirit.
The Chinese Consumer is Lifting China’s Consumer Stocks.
China’s retail sales in October are brightening the view that consumers can help offset a slowdown in the world’s # 2 economy. That strength contrasts with the performance in traditional growth areas like manufacturing and infrastructure. WSJ 11/11/2015
Rotation or Trading? Markets slightly down-again- Wednesday and the excuse du jour was poor retail outlook. On Tuesday it was the rate hike. Mixed sector performance for the week to date. It appears what went up one day was down the next and vice versa. source Google finance. 11/12/2015
REMINDER REQUIRED MINIMUM DISTRIBUTION BEFORE YEAR-END. I have forms in the mail to all those that need to take their distribution. Make sure you choose withholding, sign and date. Qs, call or email me.
Happy Holidays May Not Be For Retailers. Stocks swooned Thursday as the DJIA lost 250+ points and oil fell hard. This on another major retailer giving bad news. That’s two in two day and both Macy’s and Nordstrom’s have been punished soundly. But, as Jim Cramer wondered on his Mad Money show, lower oil prices should have loosened consumer’s wallets but apparently it hasn’t. What’s even more worrisome the Jimster pondered is that 85% of the companies in the S&P 500 Index are inversely correlated to the price of oil. Meaning that when oil goes down they go up. It seems that lower oil prices are both bad for stocks and the real world. There’s no answer just a lot of questions. The assumption that ‘short-sellers’ are deep in the oil companies but that doesn’t explain where consumers have gone. SOURCE CNBC, MAD MONEY, WSJ 11/12/2015
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