The number of days from 3-23-2010
(ObamaCare signed into Law) to 10-1-2013 (website due date) = 1,289 Days
VERSUS
The number of days from 12-7-1941 (Pearl
Harbor) to 5-8-1945 (VE day) = 1,249 Days
What this means is that in
the time we were attacked at Pearl Harbor to the day Germany surrendered our
government mobilized millions of
Americans, building tens of thousands of tanks, planes, jeeps, subs,
cruisers, destroyers, torpedoes, millions upon millions of guns, bombs, ammo,
etc. Thus, turning the tide in North
Africa, Invading Italy, D-Day, Battle of the Bulge, Race to Berlin
– all while we were also fighting the Japanese in the Pacific!!
And in that amount of time –
our government can’t write regulations, educate consumers, and build a working
webpage.
(Source: a good friend who voted for Barack Obama)
Most
of the time the U.S. stock market looks to 3 factors (call them the “pillars”
that support the stock market) to support its upward trend – let’s grade each
of the pillars.
CONSUMER SPENDING: I grade this factor a C (neutral).
THE FED AND ITS POLICIES: I continue to grade this factor an A+ (extremely favorable) because the
FED cannot do much more than it is doing to support the stock market and asset
prices. And, the FED announced on
9/18/2013 it intends to continue the highly accommodative policy to stimulate
the economy.
BUSINESS PROFITABILITY: I continue to grade this factor an A (very favorable).
NOTE: the above grades are unchanged from last
week.
The
U.S. economy continues grow, at a slow pace, but still it grows. We saw confirming evidence in this last
week’s economic reports. Jobs data was
surprisingly strong, the growth of the economy was higher than expected, the
European Central Bank cut interest rates, and the stock market hit another all-time
high.
One
negative – applications for new home mortgages dropped.
Last week, U.S. Stocks increased. Foreign Stocks and Bonds declined. During the last 12 months, STOCKS outperformed BONDS.
Returns through 11-8-2013
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
-.5
-1.9
-2.1
2.7
5.6
4.8
US Stocks-Standard & Poor’s 500
.6
26.4
31.4
15.6
16.3
7.5
Foreign Stocks- MS EAFE Developed Countries
-.8
15.0
22.7
3.5
8.2
4.6
Source:
Morningstar Workstation. Past performance is no guarantee of future
results. Indices are unmanaged and cannot be invested into directly.
Three, five and ten year returns are annualized excluding dividends.
“Your Financial Choices” The show airs on WDIY
Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s
Laurie Siebert CPA, CFP®, AEP®. This
week Laurie will answer listeners’ questions. To submit your questions, visit www.yourfinancialchoices.com and click ASK LAURIE to fill out a submission form.
This show will be broadcast at the regular time.
WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and,
it is broadcast on FM 93.9 in the Easton and Phillipsburg area; and, it is
broadcast on FM 93.7 in the Fogelsville and Macungie area – or listen to it
online from anywhere on the internet. For more information, including how
to listen to the show online, check the show’s website www.yourfinancialchoices.com
and visit www.wdiy.org.
This week, five other Valley National advisors and I
will attend Charles Schwab’s “IMPACT” investment conference in Washington,
DC. This conference provides an unparalleled
opportunity to obtain valuable information in economics, strategies, best
practices, and forecasting. I will
report in The Weekly Commentary as to what we learned.
The stock market finished solidly higher in a
volatile week, pulling off a sharp recovery Friday from Thursday’s 1% drop. The
gyrations are making it harder and harder to anticipate how the market will
react to what is ostensibly good or bad news.
The downdraft was caused by a surprise move by the
European Central Bank to cut interest rates, and news that U.S. gross domestic
product grew 2.8% in the third quarter, much higher than expected.
Confused yet? There’s more.
While an ECB rate cut might have been expected to
buoy equity investors, the market took it badly, as an indication that European
economic growth—thought to be recovering, albeit slowly—isn’t improving.
Better U.S. GDP growth, therefore, ought to be good
for stocks—except that investors fear it will prompt the Federal Reserve to
begin tapering its monthly $85 billion worth of bond buying, an easing policy
that has fueled the stock rally.
Friday the market head-faked one way and then
finished another. The Labor Department released data showing payrolls rose by
204,000 last month, far higher than the consensus of 120,000. Stocks appeared
headed lower early Friday on fears that the better jobs news, too, would bring
on Fed tapering next month, said Kim Forrest, a senior equity analyst at Fort
Pitt Capital Group,
Then investors parsed the data more closely, she
said, finding that the jobs created were of a low-quality, part-time nature,
and that folks were still dropping out of the labor force. So maybe the Fed
won’t taper next month, investors figured, sending the Dow Jones Industrial
Average to a new record high.
These frequent turnabouts suggest, says Forrest,
that “Mr. Market seems to have ADHD,” or attention deficit
hyperactivity disorder.
The Dow rose 1% on the week, or 146 points, to
15,761.78, and the Standard & Poor’s 500 index headed up 9, to 1770.61.
Bucking the trend was the Nasdaq Composite index, little changed at 3919.23.
The volatility last week doesn’t bode well for the
short term. The momentum behind the market’s lunges is strong. Whatever
happened to the day when good news was good and bad news was bad? (Source: Barrons Online)
