You have not heard me sing. There is a reason. My lack of voice control coupled with my
inability to carry a tune guarantees I will not be asked to join a glee
club. However, I have been
“recorded”. And it happened
yesterday. My wife Jo Anne and I
attended the Bach Choir of Bethlehem Christmas Concert held at the First
Presbyterian Church located on Center Street, Bethlehem. It was recorded so as to create a CD which
will be placed on sale soon. The entire audience
was invited to participate in three well known songs including, “O Come All Ye
Faithful”. So I sang and thus was
“recorded”. I did not sing too loudly
since I happened to be standing only a few feet from the recording microphone
(ha, ha).
Seriously, the Lehigh Valley is blessed to have this talented, dedicated,
hard working group to perform such magical harmonies. It’s world class. And, it’s here in the Lehigh Valley. For more information including a link to the
CD, click: http://www.bach.org/
Good news was once again actually regarded as good
news—at least for a day.
Friday, stocks jumped sharply, bolstered by positive
economic data. That took the market from a week headed for a sharp loss to one
that finished mixed.
In previous weeks, a perverse logic—still in
evidence as late as Thursday—had gripped investors, with the market sometimes
sliding on occasional news of strong economic figures. Investors fear that such
data will push the Federal Reserve to begin its intended removal of its
bond-buying sooner rather than later. That easy-money policy has helped pushed
stocks to record highs this year.
Most investors appear to believe the Fed will begin
the taper in the first quarter and not at the coming Federal Open Market
Committee meeting Dec. 17-18, but there’s a residual fear of that.
After eight consecutive weekly gains, the Dow Jones
Industrial Average fell 0.4% or 66 points to 16,020.20. The Standard &
Poor’s 500 lost less than 1 point. The
Nasdaq Composite Index rose slightly, 0.1% or three points, to 4062.52.
The data last
week collectively showed one of the strongest economic pictures in some time.
The gamut of figures—jobs, manufacturing, consumer sentiment, gross domestic
product—all suggested a modestly accelerating U.S. economy.
The switch in the market’s reaction to the good news
suggests it previously was more concerned about the economy than the Fed
tapering, says Malcolm Pulley, president of Stewart Capital Advisors. In other
words, investors feared the stimulus reduction would begin when the economy
wasn’t ready. But the slew of solid data was strong enough to get investors
thinking it is.
Friday, the Labor Department said payrolls rose by
203,000 jobs in November, and the unemployment rate fell to 7%, the lowest in
five years. The consensus, respectively, was for 185,000 jobs and a 7.2%
jobless rate. Thursday, the third-quarter annualized GDP was revised up to a
solid 3.6% from 2.8%, and well above the 3.1% consensus.
Much of that GDP rise was due to rising inventories,
points out Pulley, and if those inventories aren’t bought up in the first
quarter, the market could be disappointed.
As for tapering,
Marc Pado, president of DowBull, an investment advisor, says Friday’s reaction
also means the market is getting both more comfortable and certain of the
coming tapering. The economy looks to be getting “a little bit of
traction…and a March taper is pretty certain now,” he adds.
The market strategist adds that while some think a
December move is still possible, the Fed will want to give Janet Yellen, set to
succeed Chairman Ben Bernanke on Feb. 1, time to settle in without the strum
and daring that a December tapering could elicit.
Indeed, the only thing that could prevent a strong
second half of December is a surprise tapering by the Fed next week (Source: Barrons Online).
1. Boost your 401(k)
contribution – a particularly smart move if you are expecting a bonus of some
kind.
2. Fund 529 accounts – the accounts allow funds to grow tax-free as
long as they are used for qualified education expenses. Pennsylvania residents can deduct contributions
from their Pennsylvania taxable income up to $14,000 per beneficiary per year.
Married couples can deduct up to $28,000 per beneficiary per year, provided
each spouse has taxable income of at least $14,000
3. Take the required minimum distribution from your IRA. For those turning 70 ½ this year, there is
some tax planning for taking your first payment – you have the option to take
it before New Year’s or you can delay it until April 1, 2014.
4. Harvest capital losses on stocks, bonds, and mutual funds – you
can use capital losses to offset any capital gains; plus, you can deduct $3,000 against your wages, interest,
dividends, pensions, and social security income.
5. Bunch
together your tax deductible expenses in the years when out-of-pocket medical
payments are high.
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.
BUSINESS PROFITABILITY: I continue to grade this factor an A (very favorable).
NOTE: the above grades are unchanged from last
week.
Recent
economic reports indicate the U.S. economy continues to show improvement. Home prices as measured by Case-Shiller rose
1% month over month and 13.3% year over year in September as all 20 cities
surveyed saw gains. Jobless Claims fell another 10,000 to the lowest level
since early October. Manufacturing
activity is rebounding after the government shutdown in many parts of the U.S. Consumer confidence increased just in time
for the all important holiday shopping season.
On
the negative side, Durable Goods orders remained sluggish.
Last week, U.S. Stocks, Foreign Stocks, and Bonds all increased. During the last 12 months, STOCKS outperformed BONDS.
Returns through 11-29-2013
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
.1
-1.5
-1.6
3.0
5.3
4.7
US Stocks-Standard & Poor’s 500
.4
29.1
30.3
17.7
17.6
7.7
Foreign Stocks- MS EAFE Developed Countries
.8
17.8
21.4
7.2
10.1
4.7
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 welcomes guest Benjamin M. Tenaglia, III, Vice President and Portfolio Manager at Valley National Financial Advisors to discuss what it means to be a fiduciary and fiduciary investing in a trust environment.
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.
“And he is taking new patients”, somewhat excitedly replied my close relative
when he described his search for a cardiologist. This remark hit me – I suspect many U.S.
healthcare consumers in the future will be using this term (hopefully) as they
search for medical professional to handle their needs. With the current trend in healthcare, I
reckon many in the U.S. will be searching for healthcare professional at the
same time many healthcare professionals will be closing their practice to new
patients. Conversationally, the American
population will use the phase, “taking new patients” or “not taking new
patients” more and more frequently.
How else can yet another all-time market high be
explained in a week lacking any obvious catalyst beyond the start last Thursday
of the holiday season, a traditionally auspicious time for equities.
Though prices
closed off highs, stocks rose 0.1% in a shortened trading week. Many pros are
looking—maybe hoping—for a sizable stock-market pullback before year end, even
a minor one, but that’s increasingly looking like a low-probability event
against the powerful upward inertia seen all year. Apart from those few
investors who remain short, few will find lumps of coal from Santa this year.
In the eighth-straight week of gains, the Dow Jones
Industrial Average rose 22 points, or 0.1%, to 16,086.41. The Standard &
Poor’s 500 index rose one point, to 1,805.81, down slightly from Wednesday’s
record close of 1,807.23. The Nasdaq
Composite index picked up 68 points, or 1.7%, to 4,059.89.
It’s hard to see anything other than seasonal bias
and inertia behind the latest rise, says Mark Luschini, chief investment
strategist at Janney Montgomery Scott. The market has defied the ubiquitous
correction warnings, “forcing investors to commit long for fear of being
trampled” by the well-known holiday predilection, he adds (Source: Barrons Online).
