That Was The Week That Was-2nd Week March

For the week the Dow was off 2.4%…

Two Divergent Views on Which Way The Markets Are Headed- Michael Sincere writes for Dow Jones and predicts 3/10 the markets are at the top and what you should do, while Ben Levisohn at Barrons, 2/08, states that the Nasdaq will soon hit 5000, a number last visited in 2000.  Both agree in the ‘frothiness’ in the hot stocks of 2014. And both agree that the investors who will be the winners will be those that had entered the party early and go home early. Sincere warns against emerging markets, writing that the current advise on buying that sector is wrong. The clock is ticking, he concludes, but offers no advice on what investors are to do. That also includes Ben Levisohn’s advice. The only thing they do suggest is believe that the markets are at their top and soon to collapse. What reason do they give? Nothing of substance. CNBC reports that the Bull Market still has some sizzle. Not as much as the 30% of 2013 but unnamed experts are still expecting it to run higher. There are some pitfalls to navigate: The Fed cutting back on bond buying; increasing labor market = higher inflation; and, disruptions in the global economy. Treasuries are still expected to trade lower (3/10/2014). Gary Thayer, chief macro strategist at Well Fargo Advisors, summed it up 3/08/2014, ‘We still have the capacity to grow further if there aren’t any major disruptions in the global economy….there’s a lot of room for further gains. It may not be smooth sailing every year, but we see more gains.’

We’ve been hearing these for 3-years. It’s amazing we’ve gotten this market this high with all the negative whispers about. The  investors that won, when the markets collapsed, were those that held firm, didn’t panic, and rode out the depression.

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Warren Buffett, a long-time proponent of buy and hold,  said it again and Jack Bogle, of Vanguard, repeated the same in answer to a bearish call by Seth Klaman in a CNBC interview 3/10.  The average investor does not know when the best time to enter the market after selling. No one calls and informs them that ‘now’ is a good time, Bogle responded. Meaning Mr. Market calls and says everything okay to move money back in.

 

 

Speculation – Markets Correct to S&P 500 1800 in the near term? Tuesday’s CNBC Squawk had Joe Quinlan and Ed Keon as guests, executives with U.S. Trust. Consensus in crystal ball markets have a good five years of growth. Certainly with corrections and more volatility but not a recession in sight. Domestic markets will lead global growth. Earnings will propel markets higher. If you believe bears there is a ceiling on earnings .

Pump & Dump? Fannie and Freddie Crashed Tuesday as Senate Banking Leaders agreed to dismantle the housing behemoths. March 5th WSJ crowed how Fannie and Freddie were all the rage with Wall Street. Shares had increased in value by 1600% from their lows before falling 27% Tuesday. Barrons.com 3/11/2014.

Squawk Wednesday…panel discussion on the possibility of lower oil prices. Suggestions to look at industries that benefit from lower prices may include: trucking, airlines and delivery services.  

Almost a 1/2 a foot of snow Wednesday and a snooze in the markets as the Naz continued its climb and most other indices off. My golf buddy brightened my day saying April 28th starts our season, and now have something to look forward to and counting the days. Snow or no snow I plan on teeing off. China’s  retail and industrial data disappointed investors 3/12, although Asian markets were up in pre-market Thursday.

 Cody Willard, in his MarketWatch column, blasted penny stock manipulation on Wall Street. He especially got after the ‘battery’ firms. They’ve had a huge run and then fell apart the other day. Cody writes he wouldn’t touch the industry for at least two years and when he does he wouldn’t be investing in the current ‘du jour’ firms investors have taken a liking to.

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Thursday Markets Dropped 231 Points DJIA on China and Ukraine Worries. Yes, dear reader, simply because most people’s attention have been on the missing Malaysian airliner doesn’t mean that investors have taken their eye off what’s happening in the Far East and eastern Europe. China’s continuing economic slowdown and the price of copper decline finally caught up to propel markets lower. Barrons.com 3/13 GE plans credit card IPO. The company announced it would be selling off its credit card unit in a initial public offering. It is the largest U.S. issuer of credit in cards of retailers and other partners, including JC Penny, Lowe’s and WalMart. Two of China’s leading internet businesses plan on a U.S. IPO, as does GoDaddy.

Putting the week behind us won’t make things better for the week ahead. What lead to the declines last week is still ahead of us for this week.Threats of sanctions will hurt the EU as well as Russia. Sanctions will not make our economic lives better and a shooting war over the Ukraine will not be something anyone wants. The Russians want their long held port and will do just about anything to hold on to it. China’s numbers were far less than expected and that’ll need to be sorted out over some time. Until we get closure on these two issues consider increased volatility and sideways action in our domestic markets.

Information compiled from sources considered reliable and included WSJ, Barrons, MarketWatch.com, CNBC, Bloomberg, and others.

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