That Was The Week That Was-3rd Week November

 

 

NO GLOBAL MARKET RETREAT MONDAY AFTER PARIS TERRORIST ATTACKS. U.S. STOCKS UP, LED BY ENERGY SECTOR. DOW UP 238 POINTS. BEST WEEK IN NEARLY THREE WEEKS. source wsj 11/17/2015

 

 In his new 10-year model Jack Bogle, former Vanguard founder and indexing guru, expects stocks to return on average 6% and bonds 3% over the next decade. The 6% estimate, according to Bogle, is not conservative. Looking back at 2015 we can already assume a negative year for the Dow and the S&P 500 Index. Bogle’ model of 6% and 3% doesn’t touch on inflation but even with current and future inflation expectations the 6% real return in stocks would be acceptable. Morningstar reported that pension funds are in trouble. The expected median return assumption for pension funds in 2015 was 7.68%. Morningstar reported the obvious and that pension funds were in real trouble and wouldn’t come close to their expected returns.  SOURCE MORNINGSTAR.COM NEWS 11/13/2015

Whisper: If stocks return 6% and inflation hits 2% plus taxes at 30% real net gains fall to around 2%. Bonds would be in negative territory.

Stocks Hammered Friday 13th November. Carry-over? Retail and energy weight along with a strong dollar pulling indices into negative territory for the year.

 Every time the Fed edges closer to raising (tightening) rates the markets squawk like a spoiled child. The shorts come out in vengeance and the Fed placates the markets with another- kick the can- we’ll do it later proposal. Ben Levisohn at Barrons wrote that there have been 7 tightening cycles since 1982 and the S&P 500 Index has exhibited a meaningful pullback or correction each time. The strange thing is that stocks have performed extremely well during prior tightening averaging a 20% return. Source Barrons.com 11/14/2015 Stocks to Watch.

 

GETTING PAID.

Since 1956 one-third of the S&P 500’s total return has come from dividends, according to S&P Dow Jones Indices. Dividends in 2015 on track for a record year. It’s important for investors to focus on companies with growing dividends, said David Kostin, chief U.S. equity strategist at Goldman Sachs. Some sectors, looking ahead, will offer better dividend growth than others, Goldman expects the financials and information technology companies to lead the way. Barrons.com 11/15/2015 Speaking of Dividends.

Stocks Ended Their Session Tuesday Mixed After a Huge Early Run. Oil and Geopolitics were the main culprits.

Wall Street Up Significantly On Fed Minutes Thursday November 18th. The Street bets a Fed increase in December is almost a sure thing. The WSJ reported that the Fed could spook financial markets if officials decide to hold steady in December, said Mark Cabana, U.S.rates strategist at Bank of America Merrill Lynch in New York. ‘Investors would wonder: What did the Fed know that I don’t?’ Expectations for higher rates are driving investment flows into U.S. assets, pushing up short-term bond yields in the U.S. and reigniting a rally in the dollar. The Dow closed up 247 points, the S&P +33 and the Naz +89. Source WSJ & Google Finance 11/18-19/2015

 

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