Monday, 8-30-10
Last Week:
- The markets had a wild ride last week. The roller coaster was zooming down before Friday’s rise back up. The Dow30 dropped below 10,000 at Thursday’s close, and rested just a little above it over the weekend.
- The Q2 revised GDP number was down significantly, but was better than expected. The original number had come in at +2.4%. Expectations had been the number would drop to +1.4%, but came in at +1.6%. While the markets did rally on this news, the revision did drop -33%.
- Fed Chairman Ben Bernanke promised to basically do whatever it takes to stimulate the economy. Bernanke’s comments came during his address to the Fed’s Kansas City Economic Symposium in Jackson Hole, Wyoming.
- July new home sales went down 12 % (a record low) from an already downwardly adjusted June. July existing home sales was down 27%. Both housing numbers gave indication the economy is likely losing steam.
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This Week:
- The August unemployment number will be the big story of the week. It comes out at 8:30am on Friday morning. The July number was 9.5%, with expectations for that to climb slightly to 9.6% in August.
- The August ADP survey comes out on Wednesday.
- The August ISM manufacturers Index comes out on Wednesday as well. A decrease from 55.5 to 52.8 is expected.
- July factory orders are expected to increase from a -1.2% in June to a +0.4%. The number comes out on Thursday.
- Q2 productivity comes out on Thursday. It is seen dropping from -0.9% in Q1, to -1.9% in Q2.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 8-23-10
Last Week:
- The only significant news last week came towards the end of the work week when the weekly initial jobs claim number came out. For the second week in a row a decrease was expected, but the filings actually increased. The number moved up to 500,000; the first time since late last year we’d seen the number that high. The markets responded quickly and painfully lower.
This Week:
- The biggest story of the week comes out on Friday morning, when the first revision of Q2 GDP numbers is released. Q2 was initially reported at +2.4%. The revision is expected to lower Q2 GDP growth to only +1.4%.
- Weekly initial jobs claims will again be a focus this week. The number is expected to drop from 500,000 to 490,000. The report comes out on Thursday morning.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 8-16-10
Last Week:
- After a strong move upward since early July, the markets reversed course and tumbled last week.
- The big news of the week came when the Federal Reserve downgraded their view on the U.S. economy. It came as no surprise after their “Beige Book” came out the week before pointing to the slowing of economy.
- One of the largest bond mutual funds lowered its holdings of U.S. government type holdings from 63% to 54%.
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This Week:
- July housing starts comes out on Tuesday. A slight increase is expected. It follows the August survey of home builders on Monday, which is expected to show continued depressed conditions.
- The Producer Price Index is expected to go from -0.5% +0.2%.
- Attention will continue to be focused on the weekly jobless rate, which will come out on Thursday.
- On Friday reports will be released on state and regional employment trends for July.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 8-9-10
Last Week:
- After a big Monday, the markets appeared to have slowed down the rest of the week. Friday, the markets were down early and stayed that way before rebounding during the final two hours of trading.
- The big news of the week was the July Unemployment rate. A slight increase was expected, but the rate remained unchanged at 9.5%. Non-farm payrolls did increase in the private sector by +71,000 jobs, but the expectation had been for something closer to +90,000. June’s numbers were adjusted down to a -221,000. The numbers appeared to confirm the concern that the economy is slowing down.
- BP announced the leak in their Gulf well has been plugged with cement. They have resumed their drilling of a relief well.
- White House economic advisor Christina Romer resigned and will return to her role as a professor in the classroom in early September.
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This Week:
- The Federal Reserve will meet on Tuesday to discuss possible action against future deflation.
- The House is expected to vote on Tuesday to provide an additional $26 billion in stimulus money to the states. The measure has already been approved by the Senate.
- Q2 productivity numbers are released on Tuesday. Expectations are for the number to drop from Q1’s +2.8 to +0.2.
- The U.S. Treasury reports its July deficit on Wednesday. Expectations are for a one month deficit of -$169 Billion. The Treasury passed -$1 Trillion in June for the fiscal year, which ends September 30th.
- The June International Trade deficit will be reported on Wednesday. Expectations are for it to remain fairly unchanged.
- On Friday, the July CPI will be released. A slight increase is expected. July retails sales also comes out on Friday. A slight increase is expected.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 8-6-10
LAST WEEK:
- Markets had a great Monday, but gave back the gains the rest of the week.
- GDP numbers came in on Friday. Q1 GDP was revised upward from +2.7% to +3.7%. But the Q2 GDP preliminary number came in at +2.4%, clearly missing expectations. It was only in the last 6-8 weeks that economists were expecting the yearly GDP to fall somewhere between +3.0% and +4.0%. Many economists have revised their forecasts for the 2nd half of the year and point to +2.5% growth.
- The Federal Reserve’s Beige book came out last Wednesday. Made up of 12 regions, the Fed publishes the Beige book 8 times each year to give a regionalized reporting of economic conditions. The Cleveland Federal Reserve is the 4th region and is made up of Ohio, Western Pennsylvania, Eastern Kentucky and the Northern Panhandle of West Virginia. Here are the key points of Wednesday’s 4th region report:
- Overall: showing signs of stability, but activity remains sluggish
- Manufacturing: production is stabilized but low. Year-over year factory output is sharply lower, with no change in the near future.
- Autos: increase in June, but year-over-year production in both domestic and foreign auto-makers is sharply down. New car sales are weak; used car sales are strong.
- Real Estate: residential construction is weak. Builders say they are seeing some business, but they are less optimistic than they were last quarter.
- Consumer spending: retailers are slightly down. Any gains are considered more of cyclical moves. No changes in the trend are expected in the 3rd quarter.
- Banking: commercial and industrial lending appeared to be shifting from the larger regional banks to community banks. Residential refinancing has slowed. Delinquencies for both commercial and residential real estate are increasing.
- Energy: Coal production is declining, due to weaker demand from electric utilities.
- Transportation: shipping volume is at low levels, substantially down year-over-year. Expectations are for these low levels to continue the rest of the calendar year.
- St. Louis Federal Reserve President James Bullard was on CNBC’s Squawk Box last week and said the U.S. was in danger of falling into a Japanese-like deflation. He felt there should be quantitative easing, or large buying of Treasury securities to offset the concern. Bullard also said he thought increasing taxes (aka: the expiration of the Bush tax cuts) wasn’t the right thing to do right now.
- Consumer confidence dropped to a five-month low in July.
- Barron’s reported one of the new changes in the FINREG legislation, that just became law, allows the SEC to decline requests for information (even under the Freedom of Information Act) for documents dealing with surveillance, risk assessments and other regulatory and oversight activities.
- Barron’s reported that Pimco’s chief Bill Gross, commenting on using government deficit spending to maintain consumption, said doing so ”can be compared to flushing money down an economic toilet”.
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THIS WEEK:
- Most of the week’s focus will be on the July Unemployment number that comes out Friday morning. Expectations are for it to climb slightly form 9.5% to 9.6%.
- The July ISM index and June construction spending come out on Monday. Small decreases are expected from both.
- June personal income, June consumption and June factory orders will all be reported on Tuesday. Small decreases are expected on the first two, with a small increase on the latter.
- The July ISM non-manufacturing index comes out on Wednesday. A decrease is expected.
- The following companies report Q2 numbers this week: Allergan, Loews, Marathon, Pfizer, Toyota and Transocean.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 7-26-10
LAST WEEK:
- The markets ended strong for the second week in a row. The S&P500 was up +3.5% for the week, showing gains for the second week in a row. Major companies, in general, were beating the earnings estimates, but not beating the revenues/sales estimates. The only tough day the markets had was on Wednesday when Fed Chairman Ben Bernanke acknowledged the economic recovery has weakened.
- President Obama signed the 2300 page Financial Regulatory Reform bill (FINREG) into law. Proponents say it will prevent another meltdown. Critics say the new costs charged to the financial industry will simply be passed on to customers, in effect increasing the cost of money for business to borrow.
- The Obama administration said they will allow the Bush tax cuts to expire at the end of the year, as planned.
- Congress approved another extension in unemployment benefits. Democrats criticized Republicans for not being compassionate and voting for it. Republicans criticized Democrats for ignoring their request to vote on legislation that would pay for the extension and not further increase the deficit.
- European bank stress test results were released. Seven of the 91 banks failed the test.
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THIS WEEK:
- The biggest news of the week comes out on Friday, when the preliminary number for Q2 GDP is released. Expectations are for GDP to drop from Q1’s +2.7% to +2.5%.
- June new home sales will be reported on Monday. A small increase from 300,000 to 311,000 is expected.
- July consumer confidence will be reported on Tuesday. A decrease from 52.9 to 51.0 is expected.
- The following companies report Q2 numbers this week: Corning, DuPont, Honda, Lockheed Martin, and Norfolk Southern.
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All the best,
Chris
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through LPL Financial, member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.
Monday, 7-19-10
- After a solid post-holiday week, the markets returned back to a downward move. A lack of consumer confidence was sited at the reason for the return to negative territory.
- The initial report on the TARP bailout for GM and Chrysler has indicated the government acted too hastily in forcing the automakers to close dealerships. At issue was the contention that the government team had little or no auto industry experience and that proper research into the impact of the closings wasn’t done.
- Financial Reform (FINREG) finally passed the Senate, now sending the bill on to President Obama. It will take a while to see get beyond the talking points and see the benefits and the consequences of the 2300 page bill.
- Without admitting any wrongdoing, Goldman Sachs settled with the SEC for $550 million. At issue was a lack of disclosure regarding the use of the now famous hedge fund manager John Paulson (no relation to former Treasury Secretary and Goldman Sachs CEO Hank Paulson).
- BP was able to stop the leak in the Gulf. Testing continues to see if the cap will last, as relief wells continue to be drilled.
- The first week in the Q2 earnings season began last week with mixed results.
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This Week:
- June Housing starts will be reported on Tuesday. A -2% decrease is expected over the report from May.
- President Obama is scheduled to sign FINREG into law on Wednesday.
- Fed Chairman Ben Bernanke will testify before the Senate Banking Committee on Wednesday.
- June Existing Home sales will be reported on Thursday. A -9.9% decrease in expected over the report from May.
- European bank stress tests will be released on Friday.
- The following companies report Q2 numbers this week: American Express, Apple, BlackRock, Capital One, Coca-Cola, Ford, Goldman Sachs, IBM, Johnson & Johnson, Morgan Stanley, Pepsico, Texas Instruments, UnitedHealth Group and Wells Fargo.