That Was The Week That Was- 5th Week October

 

THE BEST 6 MONTHS FOR STOCKS IS ABOUT TO BEGIN. It’s the Halloween indicator. When the stock market is riding a wave of momentum, as it is now, that’s good news. The Halloween indicator is a seasonal tendency, according to Mark Hulbert at MarketWatch, to produce the best results between Halloween and May Day (Also called the winter months).

This year could even be stronger. The results have been that whenever the market was a loser over the two months prior to Halloween, the Dow produced an average Halloween through May gain of 4.0%. This seasonal tendency has been stronger the last 15 years. MARKETWATCH 10/23/2015

 

 

You Be A Saver or An Investor? There is an argument floating about that believes savers are anyone who turns their money over to another entity or person to invest for them. In other words- savers are people that relinquish control over where precisely their money is invested. A mutual fund, for example, is a saver’s vehicle since the fund managers make the investment decisions. An investor, on the other hand, is someone who makes specific decisions on what to buy and when. I don’t believe that. If you’re invested in the marketplace, be it bonds, stocks, mutual funds, ETFs, you are an investor. If you save money in guaranteed only dollars you are a saver. The difference is the comfort level of the investor. A saver doesn’t worry about the upside return, but loss of principal. An investor understands markets move sometimes irrationally. There are ups and downs but rewards, over time, that exceed that of guaranteed dollars. Understand what kind of a person you are with money and you’ll be a lot happier for it.

 

Bob C. Doll, CFA, Nuveen Asset Management Weekly Commentary:

• The US consumer remains relatively strong, and should be an important driver of economic growth.
• The economy may be slowed in the 3rd quarter but should rebound.
• China engaged in another interest rate cut in an attempt to stimulate.
• Corporate earnings are beating expectations but may post another quarterly decline. SOURCE WEEKLY INVESTMENT COMMENTARY 10/26/2015.

 

A New Survey from Blackrock found that Americans are holding nearly twice as much cash as they think they ought to in order to reach their retirement goals. People ages 55-64 said they expected to have about $45000 in annual income at retirement. The amount they have saved would only provide an estimated $9,129. A gap of $36,371. Even those affluent earners who earn $250,000+ hadn’t set aside enough . WSJ.COM 10/27/2015 I wonder if they calculated social security into the total desired? There still would be a gap but not as large. In addition, using both principal and interest the income could increase but eventually run out.

TUESDAY DOW TRANSPORTS TOOK A BEATING. FALLING 2.8%. DOW INDUSTRIALS OFF A JUST 0.3%.

CHART SOURCE FACTSET/ MARKETWATCH.COM 10/27/2015

 

You Had to Be There to Believe It. Wednesday’s markets were up triple digits on the DJIA when the Fed announced no hike for October and the markets promptly sank only to bounce right back and close +198 points on the Dow, +65 Naz and +24 on the S&P 500. The Fed did give a hint that they could provide a rate hike in December. Source Barrons.com 10/28/2015

 

2016 BEARISH SIGNAL?

HISTORICAL DATE SUGGESTS MARKETS NOT KIND TO TWO-TERM PRESIDENT’S IN LAST YEAR IN OFFICE.

Hulbert Financial Digest, Source Chart.Barrons.com 10/28/2015.

 

ECONOMY STRONGER THAN Q3 GDP GAIN

According to the Commerce Department the economy expanded at a lackluster 1.5% annual pace. But, the overall number, according to IBD, masked evidence of sturdy demand.

• Consumer spending +3.2%
• Auto Sales +6.7%
• Exports advanced at a 1.9% down from 5.1% in Q2, even with the dollar’s appreciation.

Factors that contributed to the latest numbers were a move to reduce excess inventories and the adjustment in the energy sector. Domestic demand helped offset the drag from inventories; which subtracted 1.44% from the GDP, the biggest such move since the end of 2012. ‘This was a really good report,’ wrote Joel Naroff of Naroff Economic Advisors. Jennifer Lee, chief economist for BMO Capital Markets,’The report shows that underlying growth is still strong.’ Source IBD 10/30/2015.

 

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