Economic Journal - Wednesday, 11/27/2013

(as of 7:15 AM PST)

Mixed economic data this morning has stocks slightly higher.  The jobless claims number came in above expectations, with claims dropping by 10,000.  Durable goods orders looked very weak, with a 16% decline, but most of it was due to aircraft orders, which always skews the volatility of that number.  Without the volatile transportation sector, orders were down less than 1%.  Gold is up moderately and oil continues its downward track as investors evaluate the effect of more Iranian oil on the market.  Interest rates are stable. 

We’d like to take this opportunity to wish you all a very Happy Thanksgiving.  We are especially thankful for all of our wonderful clients!

Economic Journal - Tuesday, 11/26/2013

(as of 7:00 AM PST)

 

Stocks are quiet today.  Positive housing data has provided a small boost.  Housing starts surged and real estate prices were up slightly.  Oil and gold are near unchanged.  Interest rates are stable.  Consumer confidence fell slightly and was below expectations. Don't expect much movement in this holiday shortened week.

Economic Journal - Monday, 11/25/2013

(as of 7:30 PST)

 

A deal between Iran and the major economic powers of the world has created a buzz in the investment world today.  There is a question about the reception that the deal will receive by both Democrats and Republicans in Congress, but, at least for now the, story is creating activities on several investment fronts.  Oil is falling heavily since a deal would release more Iranian oil into the marketplace.  Gold is falling moderately since the deal seems to represent a reduction in international tensions.  Stocks are mixed but there is a clear indication that positive momentum is on the upswing adding juice to a market that appeared tapped out and ready for a bout of profit taking.  International stock markets are responding favorably to the news, boosting investor enthusiasm.

Economic Journal - Friday, 11/22/2013

(as of 7:30 PST)

It is very quiet today.  No significant economic data is being released.  Stocks are up, but only a small amount.  Most other asset categories hover around the unchanged mark.  Individual profit reports make up the headlines.  Retail continues to look very weak.  Don't expect much movement one way or the other in this sleeper session.

We'd like to take this moment to welcome India Lee Newell  to the world.  Born November 20th at 9:35 am, She checked in at 8 lbs. and 20 3/4 inches. Perfect and healthy!  Congratulations Ben and Amanda!!

 

 

Economic Journal - Thursday, 11/21/2013

(as of 7:20 PST)

 

Investors were jolted into action this morning.  A surprising good number on a reduction in jobless claims has provided market indexes a boost after yesterday's negative day.  International news overnight was mixed, but solid overall.  Gold continues its tailspin, down nearly 2% while oil is near unchanged.  Projections of a 10% drop in markets from Goldman Sachs has been the buzz this morning. Retail numbers and sales projections for the following quarter continue to be weak.  Inflation appears well in check giving the Federal Reserve more options for quantitative easing.

Economic Journal - Wednesday, 11/20/2013

(as of 7:30 PST)

 

It is an eerie feeling this morning as the trading day begins.  It seems that investors are on edge, waiting for that selling signal;  poised for what seems to be on the horizon;  that market correction that everyone thinks is coming.  The data says otherwise and markets opened grudgingly higher this morning, though with slight gains.  Economic data has been sound.  Retail sales were more than expected and even troubled retailer JC Penney came in with a profit report above expectations.  Housing sales were down, perhaps reflecting the rise in mortgage interest rates that we have seen over the last few weeks. The consumer price index was lower for the first time in six months, a development which might give The Federal Reserve Bank more latitude in its quantitative easing program.  Gold is down over one percent, continuing its recent slide, and oil, as well, continues its downward trajectory.  Today's rise feels like the last gasp of a rally that is running on fumes.

Economic Journal - Tuesday, 11/19/2013

(as of 7:10 PST)

 

Stocks are struggling out of the gate this morning.  Mega investor Carl Icahn threw water on the positive momentum by calling for a correction.  Though known mostly for his calls that benefit his own investment positioning, his comments sent shivers through the investment community as traders ponder if we have come too far too fast.  Gold is up slightly while oil continues its downward trend. Interest rates are stable.  International economic bodies have reduced future GDP growth prospects for 2013 and 2014.  Interest swirls around the new virtual currency known as BITCOIN.  Extreme price swings in the value of BITCOIN have occurred as the US Congress has hearings of the idea.  Could we be looking at a new global reserve currency to rival the US dollar?  Way too early to tell, but the fact that that the establishment is even dealing with it is a giant positive for the future of the BITCOIN.

Economic Journal - Monday, 11/18/2013

(As of 7:15 am PST)

 

Stocks are retreating from their day highs which saw the Dow briefly trade over 16,000 and the S&P500 over 1,800.  There is not a lot of domestic data to trade on which has investors looking elsewhere for news.  Asian markets surged late Friday afternoon and today as investors further reacted to the details of China’s plenum reforms.  The market’s initial reaction last week to the broad sweeping plan of the Chines Third Plenum was a big disappointment.  Over the weekend however, details began leaking out on the specifics of the reform policies which turned investor sentiment positive.  A 60-point list of policy actions ranging from finance to the one-child policy in China, exceeded expectations and gave investors confidence in the direction China’s new leaders are going.  Equity markets in Asia rallied late Friday and into Monday.  The optimism carried over into Europe and briefly at the open on Wall Street.  Later today, investors will be tuning in to speeches from several Fed members for clues on the eventual exit of the Fed’s bond purchases.  For now, markets seem content with monetary policy direction and the accommodative stance of Fed chair nominee Janet Yellen.  Gold is lower and oil is slightly lower at just under $94 per barrel.  Profit taking and sell limits will likely act as the governor on the market’s upside momentum for the rest of the year, putting the brakes on a breakout rally.

Economic Journal - Friday, 11/15/2013

(as of 7:20 PST)

Investors continue to cheer the presumptive Fed nominee Janet Yellen by pushing stocks up yet again.  Speculation about continued easy money policies has trumped mildly negative economic data and indexes are higher in early action.  The Empire State Index, a widely followed measure of economic activity, was down and other figures relating to industrial activity were mildly disappointing.  It seems there is no stopping this upward momentum.  Oil and gold are up slightly and interest rates are stable.  The thirty year mortgage rate has been steadily climbing and now sits at about 4.35%.  Momentum is a fickle thing and can turn quickly.  Now might be a good time to lock in profits.

Economic Journal - Thursday, 11/14/2013

(as of 7:20 PST)

The market is trying to push forward this morning.  Positive comments from Federal Reserve Chair nominee Janet Yellen have found favor with investors.  Continuing economic stimulus appears in the cards during her reign and that always seems to cheer things up.  Progress is being held back by cautious business projections by key players.  Walmart, Kohls and Cisco are all seeing slow growth next quarter, with Cisco, in particular, falling hard, down over 10%.  Continuing claims for unemployment were below forecast, further dampening enthusiasm.  Gold is up sharply on prospects for the continuing stimulus and oil continues its downward drift.  Gas prices are the lowest in years.  With most market indexes at record highs, don’t be surprised to see some profit taking as the week finishes up.

Economic Journal - Wednesday, 11/13/2013

(As of 7:15 am PST)

 

Stocks continue their march lower with markets around the world taking profits on disappointing China news and confusion over the next Fed policy move.  Asian markets began the selling overnight as investors reacted to the conclusion of a four-day meeting among Chinese leaders known as the Third Plenum.  The meeting was expected to provide some detailed reform plans for the course of the Chinese economy, but instead a broad sweeping plan left investors disappointed.  The selling carried over into Europe as markets reacted to the possibility of a rate hike by the Bank of England as UK unemployment dropped unexpectedly.  US stocks are lower on the China news and also as investors positioned themselves ahead of tomorrow’s testimony from the Federal Reserve’s Janet Yellen.  After upbeat October data suggested the US economy remains on steady footing, markets are expecting the Federal Reserve to begin tapering their bond buying as early as the end of the year.  Expect volatility to pick up as the year winds down and investors consolidate gains ahead of a perceived tightening of the ‘loose money’ spigot.

Economic Journal - Tuesday, 11/12/2013

(As of 7:15 am PST)

 

It’s another quiet day for markets today.  A lack of economic data has investors reconsidering these market tops.  Other signs of complacency are showing up in the options markets and on the volatility index.  Investors seem hard-pressed to find value as stocks are trading near all-time highs and also with valuations exceeding their normal historic range.  Also adding to the cautious sentiment is the return of the ‘taper talk.’  Dallas Fed President, Richard Fisher, reminded investors in an interview with CNBC this morning that a stimulus reduction is a strong likelihood.  He remarked that the Federal Reserve cannot sustain buying bonds at this pace and that at some point the stimulus must slow.  With a steadily improving economy and new Fed Chair Janet Yellen taking the helm at the beginning of the year, a taper may come sooner than expected.  Gold is flat today and oil is lower.  Interest rates are slightly lower today after soaring since Friday.  After etching its 36th record high of the year yesterday, it appears the Dow and other indexes are taking a breather today. 

Economic Journal - Monday, 11/11/13

(as of 7:05 PST)

It is likely to be a quiet day for financial news.  It is Veteran’s Day and fixed income markets are closed.  There are no economic reports due out today.  Gold and oil are near unchanged.  Interest rates have spurted up over the last couple of trading days.  The talk of a Federal Reserve Bank reduction of its aggressive bond buying program is creeping back into financial news and is one reason for the surge in interest rates.  Stocks are up a small amount, but don’t expect much movement on a day that many traders are staying at home.

Economic Journal - Friday, 11/8/2013

(As of 7:15 am PST)

 

The equity markets appear disjointed today after the Labor department released an impressive October jobs report that surprised most investors.  According to the nonfarm payrolls report, the US economy added 204,000 jobs in October, nearly double Wall Street’s forecast.  Immediately, stock futures declined, as concerns of an early Fed taper returned to the markets.  Shortly after the opening bell, markets recovered, but now are slipping off the highs of the day.  The street is having a hard time trading this report.  On the one hand, the jobs report surge is a great sign that the economy continues to strengthen despite the October government shutdown.  On the other hand, the strengthening of the labor market favors an early taper of the Federal Reserve’s bond purchase program, which means less stimulus and an increase in interest rates.  Talks of a December taper have returned to the lips of investors and analysts alike.  In other news, European and Asian markets are lower.   Interest rates on the 10 yr. treasury spiked and the US dollar also strengthened while gold shed $20/oz.  All these moves reflect the markets fear of a “sooner than later” Fed taper. 

Economic Journal - Thursday, 11/7/2013

(as of 7:00 AM PST)

Positive economic data is pushing stocks higher this morning.  A very strong revised 3^rd quarter GDP number surprised the market.  The 2.8% increase was higher than expected.  Lower jobless claims also added fuel to the fire.  A surprise rate cut of .25% by the European Central Bank caused the Euro to fall sharply against the dollar, which is also stronger against all other currencies.  The ‘Twitter’ IPO is generating a buzz this morning.  The popular tech messaging company is expected to rise though its 26 dollar IPO price.  For all of the buzz this morning, market gains are less than robust.  It may be another sign that this extended rally is wearing out investors.  Gold and oil are down.

 

Economic Journal - Wednesday, 11/6/2013

(As of 7:30 am PST)

 

Equity markets are advancing this morning with the Dow Jones and S&P500 reaching all time record highs in early trading.  Stocks have retreated from their highs of the day but are maintaining some solid gains.  There’s not a lot of news to report, so it’s difficult to interpret today’s open.  Reports swirling out of Europe are suggesting that the European Central Bank is expected to announce further easing measures on Thursday.  Also, good reports on UK factories caused European stocks to advance.  Economic data is light in the US.  A composite report of leading economic indicators came in higher in September, marking the second consecutive month of gains.  Earnings reports continue to come in mixed as well.  Investors are taking a cautious stance heading into Friday’s nonfarm payrolls jobs report.  With markets trading at record highs it’s difficult for buyers to take on new positions at this point.  

Economic Journal - Tuesday, 11/5/2013

(as of 7:20 PST)

 

It is a tired stock market.  Indexes are falling today.  Earnings season is running down and as investors reflect on how far stocks have come in the last year it is only to be expected that a bout of profit taking is in the cards.  The one key piece of economic data, the ISM Services number, came in strong, and stemmed the downward slide somewhat, but it certainly feels like buyers are few and far between.  Consolidations and downward adjustments are a healthy part of market advances and today’s market losses are no surprise.  Oil and gold are both down small amounts and the US dollar is mixed against other currencies.  The yield on the 10-year bond is up this morning.   Expect an orderly retreat as investors ponder the next market moving event.

Economic Journal - Monday, 11/4/2013

(As of 7:20 am PST)

 

Markets are slightly higher despite a lack of data as investors continue to sift through corporate earnings reports.  Nearly 80 companies are set to report this week with notable names such as Walt Disney, Tesla Motors and Whole Foods set to announce later in the week.  So far, earnings season has been nothing to write home about.  74% of companies to report have beat on the bottom line (earnings) while only 53% of companies have exceeded revenue expectations.  In other stock related news today, investors are eagerly awaiting the Twitter IPO set for Thursday.  According to a Monday filing with the SEC Twitter set an IPO price range of $23 to $25 per share.  There’s a sense of caution creeping in to the markets as all 3 US indexes are trading near all-time record highs, having just come off the best October since 2011.  A pullback from these levels could be a good thing for this frothy market.  Gold and oil are slightly higher while interest rates ticked down.  Expect a quiet day today as investors try to figure out where to go from here.

Economic Journal - Friday, 11/1/13

(as of 7:15 PST)

 

After a day of profit taking and consolidation markets are gearing back up with positive momentum reestablishing itself.  Economic data has provided a lift.  The October ISM manufacturing number came in at a strong reading of 56.4, a robust number that exceeded expectations.  Talk in Europe of the need to stimulate more inflation seems to indicate that further economic stimulus is in the cards for that region.   Gold is down along with oil.  Prices at the gas pump are down significantly, following the drop in oil.  Lower gas prices may make for an uptick in consumer spending in other areas, a real positive for our economy going forward. Interest rates continue to drift downward.  It looks like another strong day for the stock market.