Last week, U.S. Stocks and Foreign Stocks advanced but Bonds were little changed. During the last 12 months, STOCKS outperformed BONDS.
Returns through 5-23-2014
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
0.0
3.5
1.7
5.0
4.9
5.0
US Stocks-Standard & Poor’s 500
1.2
3.7
17.6
15.5
19.0
7.9
Foreign Stocks- MS EAFE Developed Countries
1.2
1.9
12.6
3.6
8.5
4.3
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 discuss: “Financial Advisor” – What does this term
mean?
Laurie will take your calls on this topic
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.
The weather this weekend and Memorial Day confirmed
why I love Pennsylvania. I thoroughly
enjoyed the great weather. I suspect
more so than those individuals who live in year round temperate climates. Our winter in the Northeast was tough. But, it makes us appreciate the great weather
in PA when it finally arrives.
The
stock market closed sharply higher with the broad Standard & Poor’s 500
index setting an all-time record Friday, finally punching through the 1900
level after several failures in recent weeks.
Volumes
were low ahead of Monday’s Memorial Day holiday in the U.S. Macroeconomic data
continued to be positive, though mildly so, and stocks continued their hesitant
upward drift.
Next
week is without much in the way of potentially market-moving data. Market
participants point to the June 6 release of May non-farm payroll data and the unemployment
rate as indicators that could provide the next pivot point.
Last
week, the Dow Jones Industrial Average gained 115 points, or 0.7%, to 16,606.27.
The S&P 500 closed up 23 points, to 1900.53, an all-time high, as noted.
The Nasdaq Composite index rose 2.3%, or 95, to 4185.81. The Russell 2000
small-cap index tacked on 2.1% to 1126.19.
A
positive tone Friday was set early by reassuring words from Russian President
Vladimir Putin that his country would respect the results of Ukraine’s
presidential election Sunday, says Kimberly Forrest, a senior equity analyst at
Fort Pitt Capital Group. “We’ll see whether or not he respects that,”
she adds.
Nevertheless,
it had a calming influence on a light-volume day, she says, allowing the
market’s generally upward bias of recent months to reassert itself.
Economic
data continue a two-step-forward, one-step-back dance. Last week initial weekly
jobless claims increased slightly but new-home sales improved. Friday, the
Commerce Department said new U.S. single-family home sales rose to 433,000,
modestly above consensus but better than March.
While
economic news has been generally supportive of higher share prices, the market
remains hesitant and still has a wait-and-see attitude, says Timothy Leach,
chief investment officer at U.S. Bank Wealth Management. Investors are
apprehensive about the effect on the economy of the Federal Reserve ending its
quantitative-easing strategy later this year, he adds. It’s as if the market is
trying to navigate a river of doubt, using each data point as a stone to hop
across, he says.
Despite
the worry, and with bonds still yielding so little, stocks as an asset class
win out, argues Andrew Ahrens, who runs Ahrens Investment Partners. “You
can’t get a return on your investment elsewhere…and by a process of elimination
stocks are the place to be until interest rates go up,” he says.
Separately,
the venerable Dow Theory remains in a bullish trend for stocks, according to
Ned Davis Research. For youngsters, the theory goes that industrials make the
goods and transportation firms ship them, so when there’s confirmation between
the Dow and the Dow Jones Transportation Average, it’s a signal about stock
trends.
Both
the Dow and the DJTA are above their 200-day moving average. The Dow set a new
record in the previous week and the DJTA did this past week.
I made an “ace” on the 11th hole of
Saucon Valley Country Club’s Old Course on Saturday. An “ace” in golf is aka a Hole-in-1.
The 11th hole measures 146 yards and is
well guarded by sand bunkers. The pin was located close to the front of the
green so I chose to hit a 9 iron. I hit
the ball a little thin on more of a line drive than a perfect shot would
dictate. It was difficult to determine
whether my ball hit the green or landed in the sand bunker in front of the
green since my eyesight is not as sharp as it was in my younger years. One of my foursome said he thought saw the
ball hit and roll in, nevertheless, the excitement grew as we walked toward the
green. There was no ball in the sand
bunker and, sure enough, there it was at the bottom of the cup. Wow!
What a great feeling.
The odds of an average golfer hitting a hole in one: 12,000 to 1.
Saturday’s hole-in-1 was my second.
So, I feel blessed.
The staff at Valley National has been extremely busy behind the
scenes to develop a new and improved version of our eVault Client
Portal. The new eVault includes…
Enhanced, faster analytics
to help you view your full financial profile – in a single glance –
including custom reports from your advisor.
Show this information, updated daily, to you at any time or anywhere through a safe, secure personal client portal (eVault).
Smart system sends automated notices to your advisor when you put important documents into your eVault.
This
project enables VN to leverage knowledge to deliver truly comprehensive
financial advice under one roof. If you already have an eVault account,
you will receive notices from us about how to access the new version.
If you do not have an eVault, please contact usfor more information
about this service.
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 have upgraded this factor to B (above average) based upon the increase in retail sales as reported in recent economic reports.
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 rate this factor B- (slightly above average). U.S. corporations are in the midst of the first quarter’s earnings reporting season. Earnings appear to be average; but, keeping in mind the horrible winter, “average” is quite the achievement.
On
the positive side: last week’s economic
data indicated the jobs market continued to improve, total exports increased,
the trade deficit narrowed, and the non-manufacturing sector showed a big
improvement.
On
the negative: productivity decreased.
My
view: the economy continues to heat up
after the tough winter.
Last week, US Stocks and Bonds were little changed. Foreign Stocks declined. During the last 12 months, STOCKS outperformed BONDS.
Returns through 5-9-2014
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
0.0
3.0
.4
3.5
4.9
5.0
US Stocks-Standard & Poor’s 500
-.1
2.4
17.2
14.2
17.6
7.7
Foreign Stocks- MS EAFE Developed Countries
-.5
.8
9.3
3.7
8.8
4.2
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.
