Lessons from the market low of one year ago this week.
by Ken Mahoney
Has it really been a whole year? It sure has! This Tuesday marks the 1-year anniversary of the March 9th low that saw markets reeling from the worst bear market in 8 decades. Through March 4th, the S&P has crawled back a whopping 66% since that dark day. The question on everyone's mind now is: Will this bull have a second year to run?
Of course, past performance is no guarantee of future results, but there are important lessons to be learned by analyzing how the markets have behaved during past recoveries. According to Sam Stovall, chief investment strategist at S&P Equity Research, stocks historically tend to keep rising during the second year, though not as powerfully. He said: "First-year bulls tend to recover an average of 84% of what they lost in the entire bear market." Then, noting that this bull run has retraced about half of the loss, he added: "So you could say that on a recovery basis, we have more room to go."
Adding to the case for an extended recovery, it's interesting to note that no bull market since 1949 has ended inside of 2 years. The shortest one, in fact, was 26 months long, beginning in 1966. According to S&P, the average length of a bull market since 1932 has been 50 months. In all fairness, we should mention that four of the five bulls between 1932 and 1947 lasted less than 2 years. Let's hope the bull we're riding now keeps its legs!
Regarding last week, Friday's widely anticipated jobs report ignited the best 1-day gain in stocks in more than 2 weeks, as investors bet more heavily on the economic recovery. The Labor Department said nonfarm payrolls fell only 36,000 in February; far below the drop of 90,000 forecasted by economists polled by MarketWatch. The unemployment rate also held steady at 9.7%, better than the 9.8% economists expected. The Dow closed 1.2% higher at 10,566.20, and the S&P gained 1.4%, getting an added boost from consumer credit numbers showing that consumers increased their debt in January for the first time in a year. For the week, the Dow added 2.3%, the S&P 500 gained 3.1%, and the Nasdaq Composite climbed 3.9%. It was the second straight week of gains for the indexes.
Key things we’ll be watching this week:
Wednesday – Wholesale Inventories
Thursday – Initial Jobless Claims
Friday – Retail Sales
HIGHLIGHTS:
The dollar fell against the euro on Friday after Greece's parliament approved a package of budget cuts and Greece's prime minister said it wouldn't need aid from its European neighbors.
More consumers are choosing to pay credit cards rather than their mortgage. The number of consumers delinquent on their mortgages but current on their credit cards rose to 6.6% in the third quarter of 2009 from 4.3% in the first quarter of 2008, according to a TransUnion study of 27 million anonymous consumer records pulled randomly from its database. Meanwhile, the portion of those who fell behind on credit-card payments but paid their mortgage dropped to 3.6% from 4.1%.
Apple on Friday said the first version of its iPad tablet computer will go on sale Saturday, April 3 in the U.S., with other versions becoming available globally later in the month. The initial U.S. version of the iPad, costing $499, has Wi-Fi built in, but it cannot connect to the Internet over 3G wireless-phone networks. Other iPad versions, including global models, will have both Wi-Fi and 3G access. They go on sale "in late April," Apple said.
General Motors Co. will reinstate about 600 dealerships that it had originally planned to drop from its network, The Wall Street Journal reported Friday in its online edition. GM had initially planned to eliminate 2,400 dealerships as part of its reorganization but about 1,160 of the dealers had appealed through an arbitration process, the Journal said.
Crude-oil futures closed above $81 a barrel Friday and added more than 2% for the week, buoyed by U.S. jobs data and positive comments from Chinese officials about economic growth.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
.
Senin, 01 Maret 2010
The Market comes in like a lamb for March; will it leave a Lion? by Ken Mahoney
The Market comes in like a lamb for March; will it leave a Lion? by Ken Mahoney
www.thesmartinvestros.com
After a month of choppy trading, U.S. stock investors were thankful to see February finish in positive territory. The month’s modest gains were the best since November despite concerns about consumer spending, sovereign debt, and the pace of the global recovery. The mixture of negative and positive economic news kept investors vacillating as evidenced by a Dow that experienced 8 sessions where it gained or lost at least 100 points.
Positive news was welcomed on Friday when the Commerce Department released a report saying that GDP grew at an annual rate of 5.9% in the fourth quarter of 2009, the fastest pace in 6 years. On the other hand, consumer spending was weaker at a 1.7% annual rate, down from 2.8% in the third quarter when the government’s cash-for-clunkers program was boosting auto sales.
Existing home sales in the U.S. fell for the second month in January by 7.2%, surprising economists who expected sales to remain relatively steady after December’s record decline. In the last week of February alone, reports on jobless claims, home sales, consumer confidence, durable goods orders, and manufacturing all missed expectations. Data like this doesn’t help bolster the optimism of investors who are still nursing wounds from the subprime mortgage crisis, many of whom are concerned that debt issues in Greece could be the start of broader problems in the euro zone.
This pattern of two steps forward and one step backward has certainly seemed to characterize the recovery so far. Along these lines, portfolio manager Frank Ingarra of Hennessy Funds commented: “I think the overall trend is that we're starting to see the markets get back to normal. We're fine for the long term, but in the near term, you can have some rough stretches.” Ingarra’s words echo the familiar sentiment that we aren’t out of the proverbial woods yet, although things are looking up.
Whatever happens in the days, weeks, months, and years ahead, our primary goal is to always protect the assets you’ve entrusted to our care. We’ll also do our best to keep you well informed in the process.
HIGHLIGHTS:
An 8.8-magnitude earthquake, the fifth most severe in more than a century, struck Chile early Saturday, killing at least 300 people, collapsing structures and throwing the South American country into turmoil.
Copper prices jumped as much as 5% over the weekend, amid concerns that the earthquake in Chile would cause a supply shortage from the world's largest producer of the metal.
Crude-oil futures on Friday rose $1.49, or 1.9%, to end at $79.66 a barrel, with the commodity gaining 9.3% for the month and off 0.5% for the week. Crude prices have been lingering near or just above the $80-a-barrel level as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar.
President Obama used his weekly address Saturday to reiterate support for attempts to overhaul the U.S. health-care system. The remarks came at the end of a week that saw Obama unveil his blueprint for passing his proposed changes into law and host a televised meeting with Congressional leaders, dubbed the health-care summit.
American International Group Inc. (AIG) reported a fourth-quarter net loss of $8.9 billion, or $65.51 a share, on Friday. That compares to a net loss of $61.7 billion, or $458.99 a share, in the fourth quarter of 2008.
Don’t Keep Us A Secret!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!
Mr. Mahoney is a registered broker with Aurora Capital, LLC, an SEC registered broker-dealer and member FINRA and SIPC. Aurora Capital Brokerage, trades cleared by Legent Clearing.
Sources:
MarketWatch
Barron’s
Wall Street Journal
http://www.marketwatch.com/story/tsunami-warnings-across-pacific-after-chile-quake-2010-02-27
http://www.marketwatch.com/story/copper-jumps-after-chilean-quake-gold-slides-2010-03-01
http://www.marketwatch.com/story/crude-oil-futures-gain-93-in-february-2010-02-26-1448110
http://www.marketwatch.com/story/obama-stands-firm-on-health-care-overhaul-2010-02-27
http://www.marketwatch.com/story/aig-reports-89-bln-quarterly-net-loss-2010-02-26
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 average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
.
www.thesmartinvestros.com
After a month of choppy trading, U.S. stock investors were thankful to see February finish in positive territory. The month’s modest gains were the best since November despite concerns about consumer spending, sovereign debt, and the pace of the global recovery. The mixture of negative and positive economic news kept investors vacillating as evidenced by a Dow that experienced 8 sessions where it gained or lost at least 100 points.
Positive news was welcomed on Friday when the Commerce Department released a report saying that GDP grew at an annual rate of 5.9% in the fourth quarter of 2009, the fastest pace in 6 years. On the other hand, consumer spending was weaker at a 1.7% annual rate, down from 2.8% in the third quarter when the government’s cash-for-clunkers program was boosting auto sales.
Existing home sales in the U.S. fell for the second month in January by 7.2%, surprising economists who expected sales to remain relatively steady after December’s record decline. In the last week of February alone, reports on jobless claims, home sales, consumer confidence, durable goods orders, and manufacturing all missed expectations. Data like this doesn’t help bolster the optimism of investors who are still nursing wounds from the subprime mortgage crisis, many of whom are concerned that debt issues in Greece could be the start of broader problems in the euro zone.
This pattern of two steps forward and one step backward has certainly seemed to characterize the recovery so far. Along these lines, portfolio manager Frank Ingarra of Hennessy Funds commented: “I think the overall trend is that we're starting to see the markets get back to normal. We're fine for the long term, but in the near term, you can have some rough stretches.” Ingarra’s words echo the familiar sentiment that we aren’t out of the proverbial woods yet, although things are looking up.
Whatever happens in the days, weeks, months, and years ahead, our primary goal is to always protect the assets you’ve entrusted to our care. We’ll also do our best to keep you well informed in the process.
HIGHLIGHTS:
An 8.8-magnitude earthquake, the fifth most severe in more than a century, struck Chile early Saturday, killing at least 300 people, collapsing structures and throwing the South American country into turmoil.
Copper prices jumped as much as 5% over the weekend, amid concerns that the earthquake in Chile would cause a supply shortage from the world's largest producer of the metal.
Crude-oil futures on Friday rose $1.49, or 1.9%, to end at $79.66 a barrel, with the commodity gaining 9.3% for the month and off 0.5% for the week. Crude prices have been lingering near or just above the $80-a-barrel level as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar.
President Obama used his weekly address Saturday to reiterate support for attempts to overhaul the U.S. health-care system. The remarks came at the end of a week that saw Obama unveil his blueprint for passing his proposed changes into law and host a televised meeting with Congressional leaders, dubbed the health-care summit.
American International Group Inc. (AIG) reported a fourth-quarter net loss of $8.9 billion, or $65.51 a share, on Friday. That compares to a net loss of $61.7 billion, or $458.99 a share, in the fourth quarter of 2008.
Don’t Keep Us A Secret!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!
Mr. Mahoney is a registered broker with Aurora Capital, LLC, an SEC registered broker-dealer and member FINRA and SIPC. Aurora Capital Brokerage, trades cleared by Legent Clearing.
Sources:
MarketWatch
Barron’s
Wall Street Journal
http://www.marketwatch.com/story/tsunami-warnings-across-pacific-after-chile-quake-2010-02-27
http://www.marketwatch.com/story/copper-jumps-after-chilean-quake-gold-slides-2010-03-01
http://www.marketwatch.com/story/crude-oil-futures-gain-93-in-february-2010-02-26-1448110
http://www.marketwatch.com/story/obama-stands-firm-on-health-care-overhaul-2010-02-27
http://www.marketwatch.com/story/aig-reports-89-bln-quarterly-net-loss-2010-02-26
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 average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Google Finance is the source for any reference to the performance of an index between two specific periods.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
.
Senin, 22 Februari 2010
Is the market correction over? By Ken Mahoney
Is the market correction over?
THE MARKETS:
Is the correction over? That is the question on most investors’ mind after the market has now advanced for the second straight week. After sinking slightly more than 8% in three weeks, the S&P 500 has now advanced 5% since bottoming two weeks ago. The rebound gained steam last week as inflation statistics remained benign and the Federal Reserve unexpectedly hiked the discount rate.
The market got off to a running start as a strong earnings report by Barclays Bank lifted markets worldwide. It was not only the earnings report that gave the markets a boost, but what Barclay’s president Bob Diamond said about the economy. He said the recovery is accelerating in the U.S. and around the world although Europe was still progressing slowly. “We see very strong signs of an accelerated recovery as we move further into 2010,” he said.
Meanwhile, across the pond there were continued discussions about the Greek crisis. A meeting of European Union (EU) finance ministers concluded with tough talk and a proposal that would include an advance of money to Greece from the EU in order to allow Greece time to let the austerity measures work. That proposal, however, assumes that Greece will actually take steps on their own to shrink their budget deficit, which seems like a tall order for Greek officials who have shown very little in the way of fiscal responsibility in the past. Greece announced last week that they are going to try and sell €5 billion ($6.8B) in 10-year bonds this week. If the sale is successful, the pressure on the EU and the euro would diminish, at least for the moment. If the sale fails though, the EU will have to devise a rescue plan very quickly as a failure would seriously pressure the euro.
Here in the U.S. inflation remains a non-issue currently with consumer prices edging up just 0.2% in January, while core prices which exclude food and energy costs fell 0.1%. It was the first decline in core consumer prices since 1982. Meanwhile, the Leading Economic Index (LEI) rose 0.3% in January, for the 10th consecutive gain, suggesting economic conditions should continue improving in the near-term.
The big event for the week was the Fed’s surprise 0.25% hike in the discount rate from 0.50% to 0.75% on Thursday. The Fed’s decision surprised the market, but it really should not have given Fed Chairman Bernanke’s comments the week before in which he said, “Before long, we expect to consider a modest increase in the spread between the discount rate and the target federal funds rate.” Regarding this increase, the Fed’s statement said, “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.” In addition, several Fed policymakers reiterated that position including Atlanta Federal Reserve President Lockhart who said “I would not interpret this action as a tightening of monetary policy or even a sign that a tightening is imminent. Rather, this action should be viewed as a normalization step.” In addition, New York Fed President Dudley said the Fed's pledge to keep benchmark rates low for an extended period of time “is still very much in place.” So while this is the Fed’s first step, it will likely be some time before they hike the fed funds rate with the unemployment rate still hovering near 10%.
Key things we’ll be watching this week:
Tuesday – Consumer Confidence
Wednesday – New Home Sales
Thursday – Initial Jobless Claims, Durable Goods Orders
Friday – GDP, Existing Home Sales
Data as of 02/19/10
HIGHLIGHTS:
The Mortgage Bankers Association announced the results of its quarterly delinquency survey on Friday, which contained a glimmer of hope: While the percentage of mortgages somewhere in the foreclosure process grew, the percentage of home loans delinquent -- but not in foreclosure -- actually shrunk on a seasonally adjusted basis in the fourth quarter, compared with the third quarter.
Some 152 million people have watched some part of the Vancouver Olympics over the first seven days of the games, NBC Sports said Friday, and the telecasts have had the most average viewers since the 1994 Winter Games.
The dollar touched an eight-month high against major currencies Friday, supported by the Federal Reserve's surprise move to increase its discount rate.
Rates for 30-year home loans edged lower for the second straight week, a report said Thursday, but remained above last year's record lows. The average rate on a 30-year fixed rate mortgage was 4.93% this week, down from 4.97% a week earlier, mortgage finance company Freddie Mac said.
States underfunded their pension plans and retiree health benefits by $1 trillion in 2008, a new report says. The report, released Thursday by the Pew Center on the States, says 21 states had less than 80% of the money they needed to pay for future retiree pensions. In 2006, that was true of 19 states.
THE MARKETS:
Is the correction over? That is the question on most investors’ mind after the market has now advanced for the second straight week. After sinking slightly more than 8% in three weeks, the S&P 500 has now advanced 5% since bottoming two weeks ago. The rebound gained steam last week as inflation statistics remained benign and the Federal Reserve unexpectedly hiked the discount rate.
The market got off to a running start as a strong earnings report by Barclays Bank lifted markets worldwide. It was not only the earnings report that gave the markets a boost, but what Barclay’s president Bob Diamond said about the economy. He said the recovery is accelerating in the U.S. and around the world although Europe was still progressing slowly. “We see very strong signs of an accelerated recovery as we move further into 2010,” he said.
Meanwhile, across the pond there were continued discussions about the Greek crisis. A meeting of European Union (EU) finance ministers concluded with tough talk and a proposal that would include an advance of money to Greece from the EU in order to allow Greece time to let the austerity measures work. That proposal, however, assumes that Greece will actually take steps on their own to shrink their budget deficit, which seems like a tall order for Greek officials who have shown very little in the way of fiscal responsibility in the past. Greece announced last week that they are going to try and sell €5 billion ($6.8B) in 10-year bonds this week. If the sale is successful, the pressure on the EU and the euro would diminish, at least for the moment. If the sale fails though, the EU will have to devise a rescue plan very quickly as a failure would seriously pressure the euro.
Here in the U.S. inflation remains a non-issue currently with consumer prices edging up just 0.2% in January, while core prices which exclude food and energy costs fell 0.1%. It was the first decline in core consumer prices since 1982. Meanwhile, the Leading Economic Index (LEI) rose 0.3% in January, for the 10th consecutive gain, suggesting economic conditions should continue improving in the near-term.
The big event for the week was the Fed’s surprise 0.25% hike in the discount rate from 0.50% to 0.75% on Thursday. The Fed’s decision surprised the market, but it really should not have given Fed Chairman Bernanke’s comments the week before in which he said, “Before long, we expect to consider a modest increase in the spread between the discount rate and the target federal funds rate.” Regarding this increase, the Fed’s statement said, “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.” In addition, several Fed policymakers reiterated that position including Atlanta Federal Reserve President Lockhart who said “I would not interpret this action as a tightening of monetary policy or even a sign that a tightening is imminent. Rather, this action should be viewed as a normalization step.” In addition, New York Fed President Dudley said the Fed's pledge to keep benchmark rates low for an extended period of time “is still very much in place.” So while this is the Fed’s first step, it will likely be some time before they hike the fed funds rate with the unemployment rate still hovering near 10%.
Key things we’ll be watching this week:
Tuesday – Consumer Confidence
Wednesday – New Home Sales
Thursday – Initial Jobless Claims, Durable Goods Orders
Friday – GDP, Existing Home Sales
Data as of 02/19/10
HIGHLIGHTS:
The Mortgage Bankers Association announced the results of its quarterly delinquency survey on Friday, which contained a glimmer of hope: While the percentage of mortgages somewhere in the foreclosure process grew, the percentage of home loans delinquent -- but not in foreclosure -- actually shrunk on a seasonally adjusted basis in the fourth quarter, compared with the third quarter.
Some 152 million people have watched some part of the Vancouver Olympics over the first seven days of the games, NBC Sports said Friday, and the telecasts have had the most average viewers since the 1994 Winter Games.
The dollar touched an eight-month high against major currencies Friday, supported by the Federal Reserve's surprise move to increase its discount rate.
Rates for 30-year home loans edged lower for the second straight week, a report said Thursday, but remained above last year's record lows. The average rate on a 30-year fixed rate mortgage was 4.93% this week, down from 4.97% a week earlier, mortgage finance company Freddie Mac said.
States underfunded their pension plans and retiree health benefits by $1 trillion in 2008, a new report says. The report, released Thursday by the Pew Center on the States, says 21 states had less than 80% of the money they needed to pay for future retiree pensions. In 2006, that was true of 19 states.
Rabu, 10 Februari 2010
Ken's on the radio every morning, and market update
Ken gives the market report every morning on WRCR 1300 AM Radio around 9:15 am. and is a daily guest on the Steve and Charlie Morning Show. www.wrcr.com
Ken is also on WHUD 100.7 Fm every Tuesday morning around 8:10 am on the very popular Mike & Kacey morning show on WHUD. www.whud.com
The Markets:
For the fourth straight week the major indices ended negative, this time mostly because of European geopolitical concerns. Although deep into earnings season, it was the credit concerns in Portugal , Italy , Ireland , Greece , and Spain that shook investor confidence. Wall Street's concern is that they may begin to default on some of their debt, and this sent investors looking for less risky investments like the U.S. Dollar and U.S. Government bonds. By the time the closing bell shut down markets for the week, the S&P 500 index lost 0.7% and the Dow average was down 0.6%, even after the markets rebounded from steep losses Friday afternoon.
So far, the S&P's decline of 7.57% since January 19th is the steepest of the four corrections since the bull market began last March. The other three were 5% in May, 7.1% in July, and 5.6% in October.
The losses for the week didn't tell the whole story though, with profits beating expectations, and a drop in unemployment also grabbing the headlines. With 314 companies, or 63% of the S&P 500 companies having reported 4Q numbers, earnings are on track to have risen 206% versus a year ago and revenue to have gained 7%. That being said, if you strip out the financial sector, earnings are up only 16% versus a year ago, and revenue is expected to have risen just 2%. Still, the results so far have been mostly positive, with 74% of companies beating earnings estimates and 71% beating revenue estimates.
As far as unemployment, the news was mixed with the household survey's headline unemployment rate dropping to 9.7% while, at the same time, the US Labor Department showed a loss of 20,000 jobs for January against consensus expectations of a small increase. On a positive note, the average workweek increased slightly which is commonly viewed as a precondition of future employment growth as employers get more out of current workers before hiring others.
Key things we'll be watching this week:
Tuesday - Wholesale Inventories
Wednesday - Treasury Budget
Thursday - Initial Unemployment Claims, Retail Sales
Highlights:
Investors are pulling cash out of Europe at a record pace as central banks slow euro purchases, jeopardizing its status as a substitute to the dollar as the world's reserve currency. Traders have spurned European stocks in favor of shares elsewhere for a record 19 straight weeks, "clearly hurting" the currency by draining a net $13 billion from the market, said Geoffrey Yu, a UBS AG analyst.
Toyota Motor Corp. is making "field remedy" kits to fix flawed accelerator pedals that caused a recall of 2.3 million U.S. vehicles and aims to deliver them to dealerships in the nation starting late this week.
The Recovery Board reported late Saturday that from October through December, 599,108 jobs had been directly created by stimulus money. The jobs come from money awarded through contracts, grants and loans. For perspective, these jobs are derived from about $54 billion in spending, according to the Administration, and as the White House pointed out Saturday, that is "only" about one-fifth of all spending and tax relief doled out in 2009.
The White House will predict a $1.6 trillion U.S. budget deficit in the 2010 fiscal year, a fresh record and the biggest since World War II as a share of the economy, a congressional source told Reuters on Sunday.
Please feel free to call me at 845/371-0101 or email me at kmahoney@auroracapital.com.
And don’t forget to visit my blog for additional articles and comments –
http://kenmahoney.blogspot.com
Mr. Mahoney is a registered broker with Aurora Capital, LLC, an SEC registered broker-dealer and member FINRA and SIPC. Aurora Capital Brokerage, trades cleared by Legent Clearing.
Disclaimer: This email and its contents is neither a solicitation nor an offer to buy/sell any insurance and/or financial product(s). Information about insurance and/or financial product(s) and/or investment products provided herein may not be suitable for all individuals and/or investors. Moreover, the information contained herein has been obtained from sources believed to be reliable; its accuracy and completeness cannot be guaranteed. Individuals and/or investors are advised to contact their appropriate professional for all personal planning, including but not limited to healthcare planning, retirement and estate planning, tax planning and/or corporate planning
Ken is also on WHUD 100.7 Fm every Tuesday morning around 8:10 am on the very popular Mike & Kacey morning show on WHUD. www.whud.com
The Markets:
For the fourth straight week the major indices ended negative, this time mostly because of European geopolitical concerns. Although deep into earnings season, it was the credit concerns in Portugal , Italy , Ireland , Greece , and Spain that shook investor confidence. Wall Street's concern is that they may begin to default on some of their debt, and this sent investors looking for less risky investments like the U.S. Dollar and U.S. Government bonds. By the time the closing bell shut down markets for the week, the S&P 500 index lost 0.7% and the Dow average was down 0.6%, even after the markets rebounded from steep losses Friday afternoon.
So far, the S&P's decline of 7.57% since January 19th is the steepest of the four corrections since the bull market began last March. The other three were 5% in May, 7.1% in July, and 5.6% in October.
The losses for the week didn't tell the whole story though, with profits beating expectations, and a drop in unemployment also grabbing the headlines. With 314 companies, or 63% of the S&P 500 companies having reported 4Q numbers, earnings are on track to have risen 206% versus a year ago and revenue to have gained 7%. That being said, if you strip out the financial sector, earnings are up only 16% versus a year ago, and revenue is expected to have risen just 2%. Still, the results so far have been mostly positive, with 74% of companies beating earnings estimates and 71% beating revenue estimates.
As far as unemployment, the news was mixed with the household survey's headline unemployment rate dropping to 9.7% while, at the same time, the US Labor Department showed a loss of 20,000 jobs for January against consensus expectations of a small increase. On a positive note, the average workweek increased slightly which is commonly viewed as a precondition of future employment growth as employers get more out of current workers before hiring others.
Key things we'll be watching this week:
Tuesday - Wholesale Inventories
Wednesday - Treasury Budget
Thursday - Initial Unemployment Claims, Retail Sales
Highlights:
Investors are pulling cash out of Europe at a record pace as central banks slow euro purchases, jeopardizing its status as a substitute to the dollar as the world's reserve currency. Traders have spurned European stocks in favor of shares elsewhere for a record 19 straight weeks, "clearly hurting" the currency by draining a net $13 billion from the market, said Geoffrey Yu, a UBS AG analyst.
Toyota Motor Corp. is making "field remedy" kits to fix flawed accelerator pedals that caused a recall of 2.3 million U.S. vehicles and aims to deliver them to dealerships in the nation starting late this week.
The Recovery Board reported late Saturday that from October through December, 599,108 jobs had been directly created by stimulus money. The jobs come from money awarded through contracts, grants and loans. For perspective, these jobs are derived from about $54 billion in spending, according to the Administration, and as the White House pointed out Saturday, that is "only" about one-fifth of all spending and tax relief doled out in 2009.
The White House will predict a $1.6 trillion U.S. budget deficit in the 2010 fiscal year, a fresh record and the biggest since World War II as a share of the economy, a congressional source told Reuters on Sunday.
Please feel free to call me at 845/371-0101 or email me at kmahoney@auroracapital.com.
And don’t forget to visit my blog for additional articles and comments –
http://kenmahoney.blogspot.com
Mr. Mahoney is a registered broker with Aurora Capital, LLC, an SEC registered broker-dealer and member FINRA and SIPC. Aurora Capital Brokerage, trades cleared by Legent Clearing.
Disclaimer: This email and its contents is neither a solicitation nor an offer to buy/sell any insurance and/or financial product(s). Information about insurance and/or financial product(s) and/or investment products provided herein may not be suitable for all individuals and/or investors. Moreover, the information contained herein has been obtained from sources believed to be reliable; its accuracy and completeness cannot be guaranteed. Individuals and/or investors are advised to contact their appropriate professional for all personal planning, including but not limited to healthcare planning, retirement and estate planning, tax planning and/or corporate planning
Senin, 08 Februari 2010
Dow Under 10,000, first time in 3 months by Ken Mahoney
The Markets:
For the fourth straight week the major indices ended negative, this time mostly because of European geopolitical concerns. Although deep into earnings season, it was the credit concerns in Portugal, Italy, Ireland, Greece, and Spain that shook investor confidence. Wall Street's concern is that they may begin to default on some of their debt, and this sent investors looking for less risky investments like the U.S. Dollar and U.S. Government bonds. By the time the closing bell shut down markets for the week, the S&P 500 index lost 0.7% and the Dow average was down 0.6%, even after the markets rebounded from steep losses Friday afternoon.
So far, the S&P's decline of 7.57% since January 19th is the steepest of the four corrections since the bull market began last March. The other three were 5% in May, 7.1% in July, and 5.6% in October.
The losses for the week didn't tell the whole story though, with profits beating expectations, and a drop in unemployment also grabbing the headlines. With 314 companies, or 63% of the S&P 500 companies having reported 4Q numbers, earnings are on track to have risen 206% versus a year ago and revenue to have gained 7%. That being said, if you strip out the financial sector, earnings are up only 16% versus a year ago, and revenue is expected to have risen just 2%. Still, the results so far have been mostly positive, with 74% of companies beating earnings estimates and 71% beating revenue estimates.
As far as unemployment, the news was mixed with the household survey's headline unemployment rate dropping to 9.7% while, at the same time, the US Labor Department showed a loss of 20,000 jobs for January against consensus expectations of a small increase. On a positive note, the average workweek increased slightly which is commonly viewed as a precondition of future employment growth as employers get more out of current workers before hiring others.
Key things we'll be watching this week:
Tuesday - Wholesale Inventories
Wednesday - Treasury Budget
Thursday - Initial Unemployment Claims, Retail Sales
Highlights
Proud residents of New Orleans took to the streets, threw beads from the balconies of bars in the French Quarter, and cheered out windows Sunday night as the New Orleans Saints overcame the Indianapolis Colts to win their first Super Bowl, an outcome that just a few years ago seemed improbable both for the team and the city it calls home.
Toyota's U.S. chief Yoshimi Inaba is on the hot seat. When he took over the North American operations of Toyota Motor Corp. last year, the veteran executive was charged with turning around the company's largest unit by restoring it to profitability. Now the 63-year-old Mr. Inaba is preparing for a job he never imagined: testifying before Congress to explain Toyota's safety troubles.
President Barack Obama, seeking to give new momentum to his languishing health-care legislation, said he would sit down with Republican and Democratic lawmakers this month to exchange ideas on an issue that has deeply divided the parties. With the GOP united against the Democratic bill, Mr. Obama said Sunday he would ask Republicans "to put their ideas on the table." The half-day meeting will be February 25th and broadcast live, the White House said.
Federal Reserve Chairman Ben Bernanke will begin this week to lay out a blueprint for a credit tightening, to be followed once the Fed decides the economy has recovered sufficiently. The Fed is still at least several months away from raising interest rates or beginning to drain the flood of money it poured into the financial system in 2008 and 2009. But looking ahead to when the economy is strong enough to warrant tightening credit, officials have been discussing for months which financial levers to pull, when to start and how best to communicate their intent
For the fourth straight week the major indices ended negative, this time mostly because of European geopolitical concerns. Although deep into earnings season, it was the credit concerns in Portugal, Italy, Ireland, Greece, and Spain that shook investor confidence. Wall Street's concern is that they may begin to default on some of their debt, and this sent investors looking for less risky investments like the U.S. Dollar and U.S. Government bonds. By the time the closing bell shut down markets for the week, the S&P 500 index lost 0.7% and the Dow average was down 0.6%, even after the markets rebounded from steep losses Friday afternoon.
So far, the S&P's decline of 7.57% since January 19th is the steepest of the four corrections since the bull market began last March. The other three were 5% in May, 7.1% in July, and 5.6% in October.
The losses for the week didn't tell the whole story though, with profits beating expectations, and a drop in unemployment also grabbing the headlines. With 314 companies, or 63% of the S&P 500 companies having reported 4Q numbers, earnings are on track to have risen 206% versus a year ago and revenue to have gained 7%. That being said, if you strip out the financial sector, earnings are up only 16% versus a year ago, and revenue is expected to have risen just 2%. Still, the results so far have been mostly positive, with 74% of companies beating earnings estimates and 71% beating revenue estimates.
As far as unemployment, the news was mixed with the household survey's headline unemployment rate dropping to 9.7% while, at the same time, the US Labor Department showed a loss of 20,000 jobs for January against consensus expectations of a small increase. On a positive note, the average workweek increased slightly which is commonly viewed as a precondition of future employment growth as employers get more out of current workers before hiring others.
Key things we'll be watching this week:
Tuesday - Wholesale Inventories
Wednesday - Treasury Budget
Thursday - Initial Unemployment Claims, Retail Sales
Highlights
Proud residents of New Orleans took to the streets, threw beads from the balconies of bars in the French Quarter, and cheered out windows Sunday night as the New Orleans Saints overcame the Indianapolis Colts to win their first Super Bowl, an outcome that just a few years ago seemed improbable both for the team and the city it calls home.
Toyota's U.S. chief Yoshimi Inaba is on the hot seat. When he took over the North American operations of Toyota Motor Corp. last year, the veteran executive was charged with turning around the company's largest unit by restoring it to profitability. Now the 63-year-old Mr. Inaba is preparing for a job he never imagined: testifying before Congress to explain Toyota's safety troubles.
President Barack Obama, seeking to give new momentum to his languishing health-care legislation, said he would sit down with Republican and Democratic lawmakers this month to exchange ideas on an issue that has deeply divided the parties. With the GOP united against the Democratic bill, Mr. Obama said Sunday he would ask Republicans "to put their ideas on the table." The half-day meeting will be February 25th and broadcast live, the White House said.
Federal Reserve Chairman Ben Bernanke will begin this week to lay out a blueprint for a credit tightening, to be followed once the Fed decides the economy has recovered sufficiently. The Fed is still at least several months away from raising interest rates or beginning to drain the flood of money it poured into the financial system in 2008 and 2009. But looking ahead to when the economy is strong enough to warrant tightening credit, officials have been discussing for months which financial levers to pull, when to start and how best to communicate their intent
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