Skip to comments.Investment & Finance Thread (May 26 edition)
Posted on 05/26/2014 3:43:48 PM PDT by expat_panama
Last week we were going on about the fact that since stock indexes have been flat for so long that we needed to focus on sectors --here are the top ytd sectors (from here) --
-- and (hat tip to Lurkina.n.Learnin) this link shows a daily 'heat map' of most sectors listed by alpha. We always hear a lot about how the 'big boys' always seem to have more info but imho lack of info is not the problem anymore. These days we're drowning in info and the task we got is making sense of it all.
This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our--
Open invitation continues always for idea-input for the thread, this being a joint effort works well. Keywords: financial, WallStreet, stockmarket.
The "evening before" ping...
Hope you’re having a good Memorial Day.
Now if some one could tell us which will be the top sectors or the NEXT quarter or two, that would be very helpful.
Past performance is o little use for future investing.
Thank you —you’re very kind and likewise. What’s amazing is I’m visiting my kids and I just got back from NASA where one of ‘em is beginning work as a robot engineer. My smile muscles may never recover...
true, we keep having to deal with the fact that we're forced to drive down the freeway while only being able to see out the rear window --and the only reason we keep looking out it is because it's the only window we got...
You’re very blessed.
“stock indexes have been flat for so long that we needed to focus on sectors”
I would predict a topping pattern. Best sectors - BOND funds
H S Dent says future investments should be in emerging markets and India.
That’s awesome. He picked a good field to go into. Automation and robotics will take him a long way into the future.
India already jumped 8% this week after Mr Modi elected Prime Minister.
Whoa, things happening today! Futures in general are off but STRONG for stock indexes. (Good morning btw --awkward day to oversleep.) Reports today include durable orders & consumer confidence w/ lots of other stuff throughout the week (GDP Wed.). News:
- World stocks mostly higher on US optimism HONG KONG (AP) World stocks mostly rose Monday on optimism about the U.S. economy, hints from China about further stimulus and hopes for greater stability in Ukraine after its elections. Associated Press
- Why stocks are being held back from a big breakout The three main U.S. stock benchmarks are finally positive for the year, and the S&P 500 closed Friday at a record above 1,900. So where are the rally caps?
- This is a huge sign the markets aren't healthy The market is making new highs on the backs of fewer and fewer stocks. And, there may be other big problems as well.
- Krugman Warns ECB Panel World's Central Bankers Have It Wrong Bloomberg - 27 minutes ago Speaking to a gathering of the European Central Bank's top researchers and policy makers, the Nobel Laureate said the ECB and other banks around the world need to raise the inflation targets they have clung to since the 1990s.
- Young people open to alternative banking A Google or Walmart bank would be attractive to a large slice of young consumers, according to a survey that also shows almost four in 10 people aged between 18-34 would switch to a bank without a physical ...
Durables +0.8% vs -0.7% estimate
Defense capital goods orders climbed 39% in March, leading the headline reading higher. Computers shipments were also up double digits at 10%. Nondefense aircraft and parts orders fell most at -4.1%.
Here’s the full rundown:
Headline reading: 0.8% Consensus: -0.7% March revised: 3.6%
Ex-transportation: 0.1% Consensus: 0.0% March revised: 2.9%
Nondefense capital goods orders: -1.2% Consensus: -0.3% March revised: 4.7%
Nondefense capital goods orders ex-aircraft: -0.4% Consensus: -0.2% March revised: 2.1%
U.S. markets will be closed for Memorial Day.
Durable Goods (Tues): Economists estimate orders fell 0.7% in April following March’s 2.6% jump. Nondefense capital goods orders excluding aircraft a proxy for business investment is estimated to have declined by 0.3%. “Boeing orders shifted lower in April following a very strong March,” noted Credit Suisse economists. “This should drive headline orders into negative territory. We expect a 0.5% gain in ex-trans, slower than Marchs 2.1%, but still consistent with an improvement in 3-month momentum (see Exhibit 2). The investment components core capital goods orders and shipments should get plenty of focus, as equipment capex was a sour spot for the economy in Q1.”
S&P/Case-Shiller Home Price Index (Tues): Economists estimate prices climbed 0.7% month-over-month in March or 11.8% year-over-year. “Looking ahead, we expect home price appreciation to slow as valuations continued to get stretched,” said BofA Merrill Lynch economists.
Markit US Services PMI (Tues): This services index registered at 55.0 in April. “May manufacturing measures maintained momentum,” said UBS’s Kevin Cummins.
Consumer Confidence (Tues): Economists estimate the Conference Board’s index of sentiment climbed to 83.0 in May from 82.3 in April. “The preliminary reading of the University of Michigan consumer sentiment declined in early May,” noted Nomura economists. “However, higher equity prices and lower initial jobless claims this month suggest that consumers might be more optimistic in May.”
Richmond Fed Manufacturing Activity (Tues): Economists estimate this regional activity index slipped to 4 in May from 7 in April.
Dallas Fed Manufacturing Index (Tues): Economists estimate this regional activity index declined to 9.0 in May from 11.7 in April.
GDP (Thurs): Economists estimate Q1 GDP growth was revised down to -0.6% from an earlier estimate of 0.1%. Here’s Goldman Sachs’ Jan Hatzius: “The first-quarter disappointment has resonated among economists and market participants for two reasons. First, it brings to mind the 2011 precedent, and more broadly the repeated downside surprises on growth in recent years. Second, it comes in the wake of the debate around secular stagnation that was kicked off by the speech by Lawrence Summers at the November 2013 IMF research conference. If the US economy cannot accelerate to a clearly above-trend pace even after the end of the private and public sector retrenchment at a time when monetary policy and financial conditions still look very supportive, then it is certainly appropriate to ask whether the forces holding the economy back are deeper and more structural in nature. In that sense, it is really ‘showtime for the recovery’ ... “
Initial Jobless Claims (Thurs): Economists estimate claims fell to 320,000 from 326,000 last week. “Still, first filings over the last three months have averaged 320,000, providing little information about the direction of the labor market,” said Citi’s Peter D’Antonio. “In contrast, the story for beneficiaries has been unambiguously better. We forecast another drop in this figure, which would keep the insured rate at 2.0% for a fourth week. Since the beginning of the year, continuing claims have fallen by more than 200,000 and recent readings point to further improvement in the labor market ahead.”
Pending Home Sales (Thurs): Economists estimate pending sales climbed 1.0% in April. “We look for pending home sales, which track signed contracts on single-family homes, condos, and co-ops, to rise 2.0% m/m in April to 96.2,” said Barclays’ economists. “Factors in our forecast are MBA applications for purchase, which rose 4.7% on the month, and buyer traffic in the NAHB home index, which rose to 32 in April from 31 in March. Improvement in both inputs is likely driven by better weather, and suggests upward momentum.”
Personal Income And Spending (Fri): Economists estimate income climbed 0.3% and spending increased by 0.2% in April. “Personal spending surged 0.9% [in March], partially due to the implementation of the Affordable Care Act (ACA), which fueled health-related spending as enrollees piled into the exchanges,” noted Wells Fargo’s John Silvia. “The weather-related rebound and higher spending on healthcare likely are not sustainable.”
Chicago Purchasing Managers Index (Fri): Economists estimate this regional PMI fell to 60.0 in May from 63.0 in April. “April showed sharp increases in the employment, new orders, and production sub-components, and the Philadelphia Fed and Empire State indices also showed gains in May,” said Barclays’ economists. “Taken together, these factors suggest that the April rise was backed by solid underlying fundamentals and should favor a strong print in May.”
Univ. of Michigan Confidence (Fri): Economists estimate the final print of this sentiment index climbed to 82.8 in May from 81.8. “An improving labor market should contribute to improved financial conditions and expectations for consumers,” said BofA Merrill Lynch economists. “Businesses have pointed to increased sales and expectations for continued improvement in business conditions. Unfortunately, weak wage growth, increasing food and gas prices, and a declining saving rate may drag on consumers assessments of their respective financial situations. The slow-to-recover housing market is likely still weighing on consumers as well.”
I may even have to buy something today...
ANALYST: If There Isn’t An Economic Boom, Then There Can’t Be An Economic Bust
Oppenheimer’s investment research team is out with its latest market strategy note, and the firm’s current mantra: “No boom, no bust!”
It’s an optimistic take on lackluster global growth.
From Oppenheimer’s John Stoltzfus (emphasis theirs):
“It is our opinion that the Federal Reserve (as well as the ECB) is less likely to take a misstep in anticipating a change of rates so long as the Fed and the ECB maintain the level of vigilance that they have had in place over the past few years since the Great Crisis... We believe that a slow growth environment coming out of the Great Crisis is best for the economy, the markets, and their respective constituencies. It is our opinion that a modest expansion is preferable to a boom anytime as every boom we can recall in the last three decades has led to a bust of some kind. ‘No boom, no bust!’ is our mantra for now.”
The note comes after meetings with investors in the U.K. and Europe, which the firm said reflected “nearly universal” acceptance by investors that international markets are interconnected and interdependent.
“Ironically, this acceptance among investors has arrived at a point when political leaders in Asia, particularly Russia, China and Japan appear to be embracing with increasing fervor nationalist and regionalist objectives with regard to trade, border and mineral rights disputes,” said Stoltzfus. Read more about those stories here and here.
Interesting, I was just about to mention that while we got S&P this AM poking an all time high, it's only up less than half a %. Very stodgy growth here. I'm glad I did my screening/watchlist homework yesterday because I'll be needing it...
April 2014 U-6 unemployment rate is 11.8% BLS and 16.6% Gallup
Labor participation rate worst in 35 yrs
Real wages stagnant if not falling
% part-time work rising
% full-time work falling
People/families getting food stamps at record highs
People receiving federal disability at record highs
Other than a few warm spots, all housing except super-rich anemic at best
Minorities unemployment rate very high (for legal workers)
Recent grads can't find good jobs, if at all
Many graduates crushed by high college debt
Many young adults work part-time & live w/ parents/relatives
Unbelievably, new housing & car loan bubbles already being pushed
Illegal immigrant/underground economy steady or rising
Retail/service stagnant or falling
General inflation higher than the official rate
Inflation for necessities even higher
Bernake (now Yellin) phony bucks, called QE
0bamacare raising costs, killing jobs
General medical costs up
Most construction slow to sporadic at best
Overall energy costs still too high
Businesses strangled by excessive regulations
Small business start-ups anemic
Stock market/bank money not "trickling down"
And like that NYC guy said "The rent is too damned high!"
....A partial list of things holding Americans down....
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