Dec 19

THANK YOU Mrs. Chairwoman

Market Recap:

THANK YOU Mrs. Chairwoman – stocks continued their Fed induced rally on Thursday as the Dow Jones Industrial Average soared more than 400 points, helping lift stocks by nearly 5% over 2 days. A commitment to keep interest rates low for an extended period of time, and reiterating that any policy changes will be data driven, gave a sharp boost to investor confidence. Technology shares rose the most, gaining over 2.8% on Thursday, while consumer discretionary shares lagged by gaining 1.4%. Most significantly, oil stocks gained as the energy sector rallied nearly 2% while Oil prices actually fell by more than 3%. The performance divergence is an indication that investors are recognizing the value in some of the over-sold energy stocks, and that the fall in oil prices – while not necessarily over – is likely temporary. As we discussed on Fox Business yesterday afternoon Oil prices have fallen too much in recent weeks and do not reflect the economic realities of the world.


 

Looking Ahead:

Friday’s trading is likely to be heavily influenced by the mid-morning release of the Atlanta Fed Business Inflation Expectation Index and the Kansas City Fed Manufacturing Index. Moreover, as we approach the Christmas holiday season, we think that volatility will remain at the forefront as portfolio managers and professional investors re-jig their portfolios and engage in the typical “window dressing” exercises.

Make sure to tune into Fox Business Friday evening at 6:00 PM when our President, Oliver Pursche, joins Charles Payne for the hour on Making Money with Charles Payne. And don’t miss a great Money Matters with Gary Goldberg this Saturday at 5:00 PM and Sunday at 11:00 AM on WOR 710 Radio to hear our latest economic analysis and market commentary.


Gary Goldberg, the host of Money Matters was just named 2014 Financial Broadcaster of the year by Talkers Magazine. Talkers is the premier insider magazine for the radio broadcast industry, and is viewed as “the bible” of who’s who and what’s what by radio producers and program directors. Below is a link to the award and the magazine’s site.

http://talkers.com/financialbroadcastingawards/

 

Dec 17

What a ride it was on Tuesday

Market Recap:

What a ride it was on Tuesday – stocks started with 100 point plus decline in the Dow Jones Industrial Average before climbing sharply to an over 200 point gain for the blue-chip index to ultimately close about ½% lower for the day. Treasuries, Oil and currencies were all just as erratic, as a sharp intervention by the Russian Central Bank caused sharp swings in the Rubble, which in turn impacted other currencies and in turn commodity markets. Within the S&P 500, Energy, Industrial and Telecom shares all climbed while Consumer Discretionary and Technology shares fell nearly 1%. On the plus side, Housing data, which slowed a bit in November, supported the consensus view that the overall home-building and housing market continue to improve. As we stated in our note yesterday, the current environment may be gut-wrenching but is best classified as a psychologically driven market (correction) as opposed to a fundamentally driven correction. We reiterate our view that market and economic fundamentals continue to point to a generally bullish outlook for U.S. equities, and that the current volatility could very quickly abate.


Looking Ahead:

After a volatile session on Monday and Tuesday, markets may be able to find some calm in reassuring words by Fed Chairwoman Janet Yellen. The last FOMC meeting of the year concludes with the Chairwoman’s press conference around 2:10 PM tomorrow, during which Dr. Yellen will be providing the Fed’s latest assessment of our and the global economy. Market participants will be parsing the Fed minutes to gain further insights into the timing of any potential changes in monetary policy in 2015. The looming question is how much of an impact the Fed expects the fall in oil prices to have and whether or not global growth concerns will influence their decision of when or even if to raise rates next year.

Make sure to tune into Fox Business tomorrow afternoon at 3:55 PM when our President Oliver Pursche joins Liz Claman and David Asman to discuss the Fed report and how it impacts our market outlook for 2015. And don’t miss Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM when Gary discusses the current tumultuous environment with Vanguard founder and investment legend John Boggle. Visit www.ggfs.com for details.

Dec 16

Current market psychology is fragile but short lived

Market Recap:

In spite of a very strong start of the trading day, where the Dow Jones Industrial Average climbed triple digits by noon, stocks ended the day in negative territory as falling oil prices dragged equities down. In addition to falling energy prices, markets were apparently impacted by year-end window-dressing and portfolio clean-up activity as volume was irregular. Moreover, market technicians pointed to the approaching triple-witching option expiration date. The NASDAQ once again underperformed, as biotechnology names and small cap names continued their sell-off. Telecom shares were the sole sector to gain, albeit minimally, as Utilities, Energy and Financial shares all feel roughly ¾ %. The dollar gained strength, while Treasuries were mixed as long-bond yields fell while the rest of the maturities climbed slightly.


Looking Ahead:

After a disappointing Empire State Manufacturing report, Monday night’s release of Chinese PMI data and Tuesday’s Eurozone inflation data will likely be the key drivers of Tuesday’s market action as the two-day FOMC meeting kicks off. Pressure continues to build on stocks, as Saudi Arabia maintains its stance that it isn’t planning on cutting any of its output, and worries over deflation continue to mount.

Separately, the sharp fall in the Russian Ruble is increasing the risks of a broad recession in Russia, which would likely have some carryover effect on Europe. While the current sell-off is unpleasant, it should be put into the context of a “psychological” correction, as opposed to a fundamentally driven correction. The current market psychology is fragile and is over-reacting to potential risks and is viewing all data and information through a pessimistic lens. It is important to note that these types of corrections are a natural part of a maturing bull-market and tends to be relatively short lived. More importantly, psychological corrections are frequently followed by a strong rebound, meaning that based on the current fundamentals of our economy, corporate earnings and the overall market, we remain confident in our long-term bullish stance for U.S. equities.

Make sure to tune into Fox Business this Wednesday at 3:55 PM when our Co-Portfolio Manager Oliver Pursche joins Liz Claman and David Ansam to discuss our year-end and 2015 outlook. And don’t miss Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM to hear a great interview with Vanguard Investment’s Founder John Boggle, our latest market analysis and economic outlook. Visit www.ggfs.com for details.

Dec 12

The weakness in Thursday’s market close

Market Recap:

After a sharp sell-off on Wednesday, stocks started with a sharp reversal on Thursday as the DOW climbed more than 200 points by mid-day. Stronger than forecast November retail sales data and a sharper rise in consumer confidence helped lift investors’ spirits in early trading. By early afternoon however, falling oil prices started an erosion of gains across the board. Oil fell below $60 for the first time since July 2009, as continued fears of a supply glut and weakening global demand caused the continued sell-off. While lower oil prices certainly help consumers, it also signals several potential issues. First and perhaps most concerning to the broader economy, a rapid and steep fall in oil prices such as the one that has been occurring is likely to impact overall capital expenditures from energy companies. This is turn, could have a trickle down impact to the job market, ergo – negative impacting job creation as well as overall unemployment. Secondly, smaller energy companies have in some cases become relatively highly leveraged through the issuance of high-yield debt. The recent fall in oil prices will almost certainly impact profitability and may hinder some companies’ ability to repay their debts. Fears of potential default in the high-yield debt markets are already driving high-yield bond prices lower. Lastly, the plunge is also highlighting the overall strength, or lack thereof, of the global economy. By the end of the day, and after flirting with losses, major indexes did close higher as all ten sectors of the S&P gained ground.


Looking Ahead:

The weakness in Thursday’s market close is potentially signaling trouble for the open on Friday morning, placing greater emphasis on the early morning release of Chinese Retail Sales and Industrial Production as well as U.S. Consumer Sentiment and Producer Price Index data. As we wrote earlier this week, the current push and pull between market bulls and bears is likely to remain in place through the end of the year, meaning that further market volatility should be expected. Putting these short-term gyrations, we maintain a positive outlook for U.S. equities, and believe that 2015 will be a fruitful year for investors.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:15 PM (right after the football game), and Sunday at 11:00 AM to hear our complete economic analysis and market commentary. And tune into Fox Business again next Tuesday at 3:55 PM when Oliver Pursche joins Liz Claman and David Asman at the closing bell, to provide our year-end outlook.


Next Week’s Market Moving Events:

  • Monday: US Industrial Production, Housing Data, Empire State Manufacturing Data
  • Tuesday: The 2 day FOMC Meeting kicks off, Housing Stars, Redbook report
  • Wednesday: Mortgage Applications, Consumer Price data, FOMC Meeting concludes with the Fed Press Conference
  • Thursday: Bank of Japan announcement, Consumer Sentiment, Jobless Claims, Philly Fed Index, Leading Indicators
  • Friday: Kansas City Fed Manufacturing Index

Dec 10

Markets show some signs of confliction

Market Recap:

It was a tough day on Wall Street, as markets started sharply lower in sympathy with the sell-off in Asian equities before declining further after the JOLTS report confirmed yesterday’s weaker than forecast Labor Market report. On the positive side, Small Business Optimism was shown to rise much more than expected in November, while the Whole-Sale Trade report came in at the upper end of estimates. Stocks fell as much as 1 ½% before rebounding to close with minimal losses. The NASDAQ was the only major index in positive territory, with Energy shares leading the way higher with a 0.85% gain, while Telecom stocks fell sharply as the sector declined by more than 3%. Commodity prices generally rose, and Treasury Yields fell as the Dollar was mixed.


Looking Ahead:

Chinese inflation data, which will be released late Tuesday evening, will likely set the tone for Wednesday’s trading activity, as will the closely watched Mortgage Applications report and Quarterly Services survey.

Markets are showing some signs of confliction as stronger than expected U.S. economic news and an overall improving environment for U.S. stocks are being pitted against increasing uncertainty in Europe and elsewhere in the world. News of rising protests in Greece and unease over the European Central Bank’s ability and willingness to act firmly are troubling. Moreover, the economic pressures being exerted onto Russia as a result of sanctions, falling oil prices, a falling Rubble, and rising inflation are making many wonder how Russian President Vladimir Putin may react. While doomsayers will point to Mr. Putin’s history of aggression and more recently his increasing nationalistic tone, we suspect that most of this is saber rattling and that there will be no conflagration. Based on the current environment, it is impossible to determine a trajectory for markets in the short-term (through Year-End), we continue to maintain a positive outlook for 2015 and see significant gains for U.S. equities over the next 12 to 18 months.

Make sure to tune into Fox Business Network Wednesday evening at 6 PM when our Co-Portfolio Manager Oliver Pursche joins Charles Payne for the hour to discuss our latest market and economic outlook. And don’t miss Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our complete economic analysis and market outlook. Visit www.ggfs.com for details.

Dec 09

Don’t allow short-term news distract you from your investment thesis

Market Recap:

Stocks started the week on a relatively muted note, before a disappointing Labor Market report disappointed market participants. The latest read on job creation and overall employment conditions by the Fed fell well short of expectations for the month of November, sharply contradicting last week’s strong jobs report. Oil continued its recent slide, causing energy stocks to fall by nearly 4% as cyclical stocks in general underperformed. The S&P 500 lost nearly ¾% as Utilities were the sole meaningful gainers for the day. On the commodity front, the news was mixed, with oil and other energy related commodities falling, while precious metals and grains strengthened slightly.

Looking Ahead:

Asian and European bourses are lower overnight, dragging US equity futures down with them. Rumors that tonight’s Chinese inflation data will show a greater rise in producer prices than thought, has caused a 5% sell-off in the Shanghai market, while nervousness of upcoming economic data in Europe has fueled a sell-off there as well. Given the much weaker than forecast Labor Market report released yesterday, investors will focus on today’s JOLTS (Job Openings and Labor Turnover Statistics) report to discern if the US employment picture is really improving or if last week’s strong report was an anomaly. It is becoming clearer that markets are in a push and pull mode right now, taking 2 steps forward and 1 step back. As such, we advise investors to remain calm and not allow the short-term news distract them from their investment thesis and remain invested. We maintain our view that large-cap high quality dividend paying stocks will continue to thrive into 2015, and that the overall environment for stocks continues to be favorable.


Make sure to tune into Fox Business Network this Wednesday evening when our President, Oliver Pursche, joins Charles Payne and his panel for the full hour to discuss our latest market outlook and economic analysis. And don’t forget to catch Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio for great interviews with some of today’s most respected business leaders, and our latest market commentary. Visit www.ggfs.com for details.

Dec 08

Market Moving Events

Market Recap:

Stocks climbed to new highs last week, as solid economic data including a very strong jobs report helped lift investor sentiment. So far, the S&P has risen over 13% this year, and should rise a few more before the calendar rolls into 2015. Strong corporate earnings, the absence of inflation and now the expectation of an improving jobs market – including rising wages, all spell positive things for U.S. stock investors.


Looking Ahead:

Monday’s U.S. Labor Market Conditions report should reinforce the strong Jobs report that helped lift stocks last week. Keep a close eye on German Industrial Production data being released before the open on Monday – a strong report could relieve concerns over worsening conditions in Europe. Don’t miss our President, Oliver Pursche, on Fox Business this coming Wednesday from 6:00 PM to 7:00 PM when he joins Charles Payne for the hour on Making Money with Charles Payne. And don’t miss Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio. Visit www.ggfs.com for details.


This Week’s Market Moving Events:

  • Monday: Chinese economic data, German Industrial Production, U.S. Labor Market Conditions.
  • Tuesday: Small Business Optimism Index, JOLTS report, Redbook report, Wholesale Trade and Chinese Inflation data (after the close).
  • Wednesday: Mortgage Applications
  • Thursday: Eurozone Inflations, Jobless Claims, Retail Sales, Consumer Comfort, and Import / Export Prices
  • Friday: Chinese Retail Sales and Industrial Production before the open, U.S. Consumer Sentiment and Producer Prices Index.

Dec 04

ECB set to make its latest policy announcement

Market Recap:

U.S. stocks rose to close at new all-time highs on Wednesday, after stronger than forecast economic data helped push economically sensitive sectors such as Materials, Industrials, and Energy to rise by more than 1%. The Fed Beige Book report showed strong business activity, while inflation remained tame. However, non-manufacturing growth figures did come in slightly below expectations, muting gains for the major averages. Consumer Staple, Telecom, and Utility shares generally slid, as Oil rose while other commodities were mostly lower. The dollar strengthened against major currencies, while Treasury Yields were mostly unchanged.

Looking Ahead:

The ECB is set to make its latest policy announcement at 7:45 AM EST on Thursday, ahead of the closely watched U.S. Jobless Claims and Payroll to Population reports being released at 8:30 AM. Generally speaking investors should expect stocks to rise as strengthening economic data and solid corporate earnings continue to make U.S. stocks more attractive than bonds or their international counterparts. Having said this, investors should expect additional volatility in the last few weeks of the year, as investors could sell out of some mutual funds that are expected to distribute hefty capital gains before year-end.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 5:00 PM and Sunday at 11:00 AM to hear a great interview with “Crazy Eddie” CEO Sam Antar, as well as our latest market commentary and economic analysis. Visit www.ggfs.com for details.

Dec 02

Investors pay close attention to Cyber-Monday sales data

Market Recap:

Stocks started December on the downside as disappointing Black-Friday sales figures and the recent drop in Oil prices put market participants in a bearish mood. Apple shares, which fell as much as 6% before closing down 3.26%, were a major contributor to the NASDAQ’s underperformance – the index fell 1.34%, while the S&P declined 0.68% and the Dow Jones Industrial Average fell 0.29%. Sectors of the S&P were mostly lower, with Utilities and Energy shares being the sole gainers as Oil, Gold and other commodities rebounded from their recent sell-off.

Looking Ahead:

After slightly disappointing retail sales data from this past weekend, investors will pay close attention to Cyber-Monday sales data, as well as the release of the Goldman Store Sales report, Construction Spending and the Redbook Report. Inflation data will also be in focus as Europe reports its latest inflation figures before the market opens, while Japan and China report Producer Price Inflation data in the evening.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our latest economic analysis and market commentary, along with interviews with some of today’s most respected business leaders. Visit our website www.ggfs.com for details.

Dec 01

This Week’s Market Moving Events

Market Recap:

Stocks ended the shortened Thanksgiving week on a mixed note as Oil fell to a four-year low and energy related companies fell by more than 6% on average. Sectors of the S&P were mixed, as most investors enjoyed the long weekend and waited for holiday sales figures before considering changes to their portfolios. Over the weekend, sales data was released showing that overall sales volume was down about 11% for the period compared to a year earlier, while traffic was down about 5%. However, most analysts agree that these figures are very misleading and do not capture much of the online activity that is expected for the holiday season. Consensus estimates continue to be that holiday spending will rise by roughly 2.6% from last year.

Looking Ahead:

Oil prices continued their tumble in overseas markets, falling below $65 per barrel. As a result European and Asian bourses are mostly lower, with the notable exception of the NIKKEI, which climbed about ¾% to a new seven-year high. U.S. equity futures are pointing to a lower open, mostly on deflation concerns relating to the drop in commodity prices.

This Week’s Market Moving Events:

  • Monday: European manufacturing data, U.S. consumer spending figures, PMI Manufacturing and ISM Manufacturing data.
  • Tuesday: Motor Vehicle sales, Goldman Store Sales, Construction Spending, Japanese and Chines PMI data.
  • Wednesday: Eurozone GDP and Inflation data, U.S. Job Creation report, ADP Employment report, Mortgage Applications, Petroleum Supply data.
  • Thursday: U.S. Chain Store sales, Payroll report, Consumer Comfort Index
  • Friday: November employment data, Consumer Credit and Factory Orders are released.

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