That Was The Week That Was-1st Week February

 

2015 CLIENT BREAKFAST MEETING. RESERVE SEATS NOW.

 What’s More Fun & Informative Than Jeopardy, Family Feud & The Price is Right? It’s my annual Client Breakfast Meeting! If you want to know where the experts predict the winning sectors to be invested in for 2015, where you shouldn’t be invested and how to create your personal investment portfolio lifeboat if and when markets crash, you have to attend my client breakfast meeting February 21st, 8:30 AM- 10 AM at the Sycamore Hills Golf Club in Macomb. Call or email me with the number attending so I can have seats available. A continental breakfast along with coffee,tea and juices will be served.

 

 

James Bullard, President of the St. Louis Federal Reserve Bank, said in a Bloomberg interview 2-1-2015, Investors are not taking the Federal Reserve seriously. A more than significant amount of money has been invested in 2015 in the 30-year Treasury as the market volatility from December has spilled over into 2015. The Federal Reserve has indicated that it will raise interest rate in 2015. The only question is when. Investors holding bonds will suffer when rate do move up. The question is not of if but of when in 2015.

 

JANUARY’S POOR PERFORMANCE REMINISCENT OF JANUARY, 2014. Close your eyes and ignore a year has passed and you’d think that we were in 2014 rather than 2015. While the mythmakers say that as goes January performance so goes the year we know that isn’t true as 2014 proved.

DEEP FREEZE AND WINTER STORMS ALSO CUT INTO BUSINESS AND THE MARKETS IN 2014.

STUFF I FOUND and DIDN’T KNOW WHILE LOOKING UP OTHER STUFF. Medicine,to treat infection from bacteria called C. difficile, that can be administered through endoscopy or capsules, is made from human poop that the company, OpenBiome, is willing to pay as much as $250 a week from human donations. CNBC on 1/31 reported that donors could earn as much as $13,000 a year selling their waste. The criteria is rather vigorous and only 4% of interested donors have passed the screening process. 

 How much of the four and a half hours of football is football?

WSJ Reported Small Cap Stocks Gained in 2015 as Large Caps Faltered. 2/1/2015.

As the stronger dollar hit large cap multi-nationals by diminishing the value of revenue earned overseas the Russell 2000, small cap index, has proven to be more buoyant. The Russell YTD is down 3.3% as compared with a 3.7% decline in the DJIA. In 2014 the Russell was up 3.5% as the Dow climbed 11%. To be fair small company stocks are extraordinarily volatile. Expect big swings with these but usually small caps lead any market recovery.

NFC Team Wins Signals Positive for The Market! February started on the right foot with the Dow up 4 points short of 200 point gain. News (rumors) of Greece settling their differences with the EU brought cheer to our markets. CNBC 2/2/2015. Oil was up but Dan Dicker on CNBC said that oil prices have not bottomed. Gas savings will be felt in the economy by this July, reported Goldman Sachs. Jack Ablin, CIO, at BMO Private Bank, talked about earnings and reported that consumer-oriented companies are likely to see better earning results. Analysts are particularly interested in this group and the small cap stocks. CNBC 2-2-2015. Albin went on to say that he was concerned about over-valuation and the best thing we could see is higher revenue.

2 Days in a Row! Dow up +300. Oil down $1.33. A down day for oil brought the Bulls out and just about everything went up as buyers scooped up stocks that only a few days earlier they were selling. In the news Wednesday was the report on negative yield bonds and who was buying them. Yes, bonds that you bought and paid the issuer for the privilege of parking your money, a report on CNBC 2/3/2015. It could be you if you own a bond fund or bond ETF. There are $1.7 trillion of euro-area government bonds with maturities longer than a year with negative nominal yields.There are $1.8 trillion Japanese bonds doing the same. All in all, reported JP Morgan, there are six type of investors that are going for the trade. Here are a few reasons:

• Some investors are betting that certain currencies will appreciate.
• Betting that bond prices will rise further making their principal higher.
• Central banks are big buyers because of their Quantitative Easing.
• Index funds that buy government bonds just don’t have a choice.

ANY CONCERNS OVER BEING AUDITED BY THE I.R.S. IN 2015 HAVE BEEN GREATLY REDUCED. Bloomberg News reported 1-26-2015 that consistent budget cuts over the past five years have had a devastating ‘erosion of service.’ Since 2010 the number of IRS personnel enforcing tax law has fallen by 15% according to the Center on Budget and Policy Priorities. Taxpayers may also expect longer waits on the phone and delayed refunds this filing season. While some taxpayers may look at these cuts as an opportunity to get aggressive, and or imaginative, you have to remember that the IRS can go back three years in an audit.

 

Dennis Gartman Issued Warning to Investors to Be Careful, in an interview with ‘Closing Bell’ Wednesday the 4th of February. He went on to say the volatility the past week and a half was unlike anything he’d seen in his 40 some years in the business. Knowing that volatility is part of 2015, and all of us have been warned in 2014 to expect it. I checked the volatility index or VIX and over the past five days it was down 1.43% and over the past 90 days UP almost 13%. What investors should know is that the past 12 months it’s down 34%. Certainly the VIX was a lot more volatile in 2008-2009 and I wonder where old Gartman got his information and experience from?

Markets flat to negative on Wednesday on renewed EU tough talk. Germany and Greece square off as the anti-austerity party of Greece is at odds with the EU. Germany wants the Greeks to stick with the plan and Greek officials want to restructure their agreed upon debt and get a discount to boot. It’s a question who blinks first and the odds favor the Germans who brook no breaking of past agreements. CNBC 2/5/2015.

The Dow Popped +200 points Thursday to 17,885 and the Naz was up 1% to 4,765. The S&P 500 Index closed up 1% to 2,063. All three indices are positive for the year. IBD reported February 6th that exports declined less than November and imports rose. The trade gap hit a 2 year high. Retailers in general, reported IBD, posted decent sales gains in January fueled by a brighter economy, lower gas prices and better jobs picture. Consumers are more optimistic than at any time since the Great Recession.  Ken Perkins, president of Retail Metrics told IBD Thursday. Consumers are spending on products like cars. They are also spending on home furnishings, smartphones and other electronic products.

Questions call Paul @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC.