“Good
things come to people who wait,
but better things come to those who go out and
get them”
– Anonymous
Monthly Archives: March 2014
Personal Notes
The three M’s of March Madness: Money, Media and
Marketing. March Madness has now drawn
even with the Super Bowl for followers – not overlooked by marketing
professionals. Because it is drawn out
over a couple weeks, there is plenty of opportunity to market products through
all sorts of media carrying the games, pools, betting results etc., And, the actual players receive none.
The Markets This Week
It’s beginning to seem that, short of war, this
market’s going up, so perhaps it’s no wonder that talk is building of a
2000-style stock market bubble.
Shares jumped 1%
last week, notching another all-time record high despite a serious
confrontation between the U.S. and Russia over its moves in the eastern
Ukraine. Geopolitical concerns were trumped by improving U.S. economic data,
and conciliatory-sounding comments from Russian President Vladimir Putin
assuaged the market. Nevertheless, the situation on the ground in Crimea
remains unpredictable and tense, and could yet come back to slam the market.
On the week, the
Dow Jones Industrial Average picked up 131 points, or 0.8%, to 16,452.72. The
Standard & Poor’s 500 index gained nearly 19 points to 1878.04, a new high.
The Nasdaq Composite index rose 28 points, or 0.65%, to 4336.22. The Russell
2000 small cap index soared 1.7%, or 20 points, to 1203.32, and a nearly 3%
one-day jump Tuesday helped fuel the bubble talk.
The more
important geopolitical issue could extend beyond the dust-up over the Ukraine,
leading to future market-slamming confrontations between the West and Russia
over other issues, like Syria and Iran, says James Russell, senior equity
strategist at U.S. Bank Wealth Management. “Cooperation with Russia could
be off the table, and that could lead to more strident event risk later this
year,” he adds.
U.S. domestic
data continue to show trends that are “two steps forward, one step
back,” Russell adds, but remain supportive nonetheless of the rally. Last
week’s report of a drop in jobless claims and a larger-than-expected rise in
payrolls was welcomed by investors.
In addition to
the equity rally, a hot IPO market is also behind the bubble talk. Initial
public offerings are ramping up so the market will have to digest a lot of new
stock supply, he adds. Bad-weather issues might also be reflected in the
first-quarter reporting season (Barrons Online).
Heads Up!
The fact that the market made up its nearly 6% January
swoon in the absence of a clear catalyst is at least a good sign that the
market drop was, more likely than not, an ordinary correction.
Pennsylvania Update: What’s New?
ID Validation – Personal
Income Tax Refund Fraud Prevention Efforts
Beginning with the 2014 income tax filing season,
the department instituted new security measures to identify and intercept
fraudulent refund filings. As part of
this initiative to ensure refunds are issued only to their rightful owners,
taxpayers may be asked to confirm their identities before refunds are issued.
In such cases, the taxpayer will be contacted by the
department by way of a letter sent to the address on the taxpayer’s personal
income tax return. The letter from the department will instruct the taxpayer to
call a designated number, where the taxpayer will speak to a representative of
a company the department has partnered with for its expertise in identity
verification. The taxpayer will be asked
to provide answers to questions to verify identity. Taxpayers who receive this
identity validation notice will authorize release of their refunds sooner if
they follow the instructions for verifying identity provided in the notice.
The “Heat Map”
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- (below average
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.
BUSINESS PROFITABILITY: I continue to grade this factor an A (very favorable).
NOTE: no change from prior week.
The Economy
Economic
data released last week was mostly negative.
Housing sales and housing starts both fell in January. Economic activity in the Philadelphia region
(normally, a bell-weather for the entire U.S) declined in January. On the positive side the number of employed
individuals in the U.S. has climbed to a pre-recession high.
The numbers have been
influenced by bad weather. Many economic
experts expect the economy to pick up with improved weather. Manufacturers will ramp up in anticipation of
a strong rebound in consumer spending.
We should see the manufacturing sector pick up steam in the next few
weeks
The Numbers
Last week, U.S. Stocks, Foreign Stocks and Bonds all increased. During the last 12 months, STOCKS outperformed BONDS.
|
Returns through 2-28-2014 |
1-week |
Y-T-D |
1-Year |
3-Years |
5-Years |
10-Years |
|
Bonds- BarCap Aggregate Index |
.5 |
2.0 |
0.2 |
3.8 |
5.1 |
4.6 |
|
US Stocks-Standard & Poor’s 500 |
1.3 |
1.0 |
25.4 |
14.3 |
23.0 |
7.2 |
|
Foreign Stocks- MS EAFE Developed Countries |
.6 |
1.1 |
16.1 |
3.4 |
14.2 |
3.8 |
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”
“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®. Join
Laurie and her guest, Kevin Brosious, MBA, CPA/PFS, CFP® as they discuss: “What to consider when building
a portfolio.”
Laurie and Kevin will take your calls on these topics
and other inquiries this week. 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.
Motivational Quote of the Week
“All our dreams can come true if we have the courage to pursue them.”
– Walt Disney