Jan 22

Investors held their collective breaths

Market Recap:

Markets were relatively calm on Wednesday as investors held their collective breaths ahead of the European Central Bank’s policy announcement scheduled for Thursday morning. Although there was some intra-day volatility, stocks generally closed higher as all ten sectors of the S&P climbed, Energy and Utility shares led markets higher, as Oil rose over 1% while Gold, Silver and other precious metals fell.


Looking Ahead:

Thursday morning’s Jobless Claims showed a decline, in line with expectations, helping to lift equity futures. More significantly, the ECB announced the launch of additional Bond Purchases, which surpassed market expectations in as much as ECB President Mario Draghi committed to extend QE through the end of 2016 with the potential of keeping it open-ended until the Eurozone reaches a 2% inflation rate and improves its overall employment situation.

Make sure to tune into Money Matters with Gary Goldberg this weekend on WOR 710 AM Radio, airing at a special time on Saturday at 2:30 PM and Sunday at 11:00 AM. We’ll be discussing our latest economic outlook as well as providing our analysis of the ECB decision and what to look for before increasing your portfolios international exposure.   Gary’s guest this week is Richard Lustig, the winner of 7 lottery grand prizes.  Visit www.ggfs.com for details.

Jan 21

Maintaining a longer-term outlook could prove to be the best move

Market Recap:

Major averages may have closed little changed from their opening levels, but volatility was certainly a part of the landscape on Tuesday. The Dow Jones dropped as much as 150 points before rebounding to close flat as 7 of the 10 sectors of the S&P ended higher as Industrial and Technology shares soared nearly 1%. The U.S. dollar weakened slightly, as oil fell and gold and silver rose more than 1%. On the earnings front, Halliburton (HAL), IBM (IBM), and Netflix (NTFX) all beat estimates and rose sharply as a result.


Looking Ahead:

The European Central Bank is expected to announce its new bond purchase program on Thursday, and while anxiously anticipated, we do not believe there will be much of a surprise in the report and pursuant press conference. Wednesday’s U.S. mortgage applications and housing starts are likely to drive market action here in the U.S.  Given the current volatile environment for stocks and rising levels of concerns from investors, we would like to remind everyone that on balance and when taken as a whole, economic and earnings news in the United States has made significant improvements in the past few years and that while “things” are far from great, they are certainly good. As our Chief Investment Officer, Bill Krivicich, wrote in his monthly Forbes article, sticking with high-quality dividend paying stocks and maintaining a longer-term outlook will likely prove to be the best move for most (read the article here) Forbes (Krivicich)2And 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 and market analysis. Visit www.ggfs.com for details.   Gary’s guest this week is Richard Lustig, winner of 7 lottery grand prizes.

Jan 16

Next Week’s Market Moving Events

Market Recap:

In spite of reasonably strong earnings reports, stocks sold off again on Thursday, falling about ½%. Consumer Staple and Utility shares were the sole sectors in positive territory yesterday as Financials and Healthcare stocks fell by more than 1%. Commodities were mostly lower, as oil retreated again after gaining some footing and rallying on Wednesday. The 10-Year Treasury Yield fell below 1.75% while other longer-dated benchmark yields all fell to their lowest levels in history, as the dollar strengthened and concerns over the world economy continued to permeate market sentiment.


Looking Ahead:

A very strong earnings report by Intel (INTC) helped lift futures from their lows on Friday morning as market participants continue to pressure markets. Currency markets, and to a lesser extent fixed income and equity markets are rattled by the Swiss Central Bank’s decision to decouple from the Euro currency, a move that is being viewed that much more weakness for the Euro may lie ahead. Next Friday’s Leading Indicators report could help things turn around as it will likely show strong economic growth expectations ahead. Make sure to tune into Fox Business next Tuesday evening at 6 PM when our Managing Member, Oliver Pursche, joins Charles Payne and the panel of experts to discuss our latest economic and market outlook. And don’t miss Money Matters with Gary Goldberg this Saturday at 7am, 2:30pm, and then again at 6pm as well as on Sunday at 11:00AM on WOR 710 AM Radio to hear our complete economic analysis and market commentary.

Next Week’s Market Moving Events:

  • Monday: Martin Luther King Day – US Markets and Banks are closed. Chinese GDP, Retail Sales data and Industrial Production figures.
  • Tuesday: European inflation data and US Market Index
  • Wednesday: Housing Starts, Mortgage Applications, Chinese Inflation data
  • Thursday: House Prices, Jobless Claims, PMI Manufacturing data, Consumer Comfort report and the EIA Natural Gas Inventories
  • Friday: Existing Home Sales and Leading Indicators

Jan 15

Market volatility remained front and center

Market Recap:

Market volatility remained front and center on Wednesday as the Dow Jones Industrial Average fell more than 300 points by mid-day. Weaker than expected December Retail Sales and rising business inventories caused fears that the U.S. economy isn’t as robust as initially thought and that the benefits of lower oil prices were not as great as many forecast. However, by 2:00 PM shortly after the Fed Beige Book, which is a broad measure of economic activity, was released, markets rallied and cut losses in half. The report showed broad strength in manufacturing and a rise in service activity. Moreover the report indicated a backlog in real estate activity, including single family home sales. In the commodity space Copper took center stage as the base metal fell nearly 6% on Chinese weakness. Conversely, oil had one of its strongest days in nearly 5 years as spot prices rose nearly 5%. The dollar remained range bound, while the 30 Year Treasury Bond yield fell to an all-time low.


Looking Ahead:

Inflation data, jobless claims and manufacturing data are being released before the open on Thursday, likely setting the stage for today’s market action. International markets were mostly calm, except for the Swiss bourse which was rattled as the Swiss Central Bank eliminated its Euro cap – the bank had previously set a peg to the Euro in an effort to keep its currency from appreciating too much. After slightly disappointing earnings from JP Morgan (JPM) and Wells Fargo (WFC), investors are eyeing earnings releases by Citigroup (C) and Bank of America (BAC) today. Futures are under pressure as the US 10 Year Treasury looks set to break 1.8% for the first time in history.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:30PM and 5:00 PM as well as Sunday morning at 11:00 AM to hear our complete economic analysis and market commentary. Visit www.ggfs.com for details.

Jan 14

The story remained commodities

Market Recap:

It was a wild ride on Tuesday for Wall Street, the DOW gained as much as 280 points by late morning as optimism about earnings drove bulls to charge ahead. However, a further fall in oil prices, along with a decline in copper prices caused bears to sharpen their claws and drive stocks to close with mild losses. Once again, telecom and utility shares were the sole sectors in positive territory as healthcare and energy shares fell most. The dollar strengthened further while Treasury Yields continued to fall as the 30 Year Bond Yield approaches all-time lows.


Looking Ahead:

Overnight, the story remained commodities but switched from oil to copper which fell nearly 6% in international markets. Growing concerns over deflation and a significant decline in global demand is causing a lot of anxiety amongst market participants. In our view, while there are clear trouble spots and valid concerns over a short-term deflationary cycle, we do not believe that there is a significant probability of a global collapse in demand for goods and services. While commodity prices have historically been driven by demand much more than supply, we do not believe that is the case currently. In our view, while demand for oil and other commodities has dropped slightly, the recent price decline is best explained by a combination of short-term excess supply as well as some demand deterioration. In our view, the current price levels do not accurately reflect economic realities or the real supply / demand equation – hence we do expect prices to stabilize and rise over coming months. While it may not seem so at the moment, the recent decline in prices is only about 7 months ‘old’, meaning that it has been very short-term from an economic and investment perspective. Over the coming months, economies in Europe, North-America and Japan should start benefiting from lower energy prices as consumers enjoy the fruits of more cash in their wallets. We will be monitoring consumer data, here in the U.S. as well as abroad to discern how strong of an impact this is having.

Make sure to tune into CNBC this afternoon at 3:45pm when our President Oliver Pursche discusses these topics as well as our earnings outlook with Kelly Evans and Bill Griffith live from the floor of the NYSE. 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 for our complete economic analysis and market commentary. Visit www.ggfs.com for details.

Jan 13

Stock fluctuated widely on Monday

Market Recap:

Stock fluctuated widely on Monday, falling as much as 1 ½% before rebounding to a fractional loss. Investors are starting to grow concerned that lower oil prices will have a significant impact on earnings, as analysts have lowered EPS growth forecasts by 6.4% in the past few months. While energy companies have been hit hardest, other sectors of the economy have as well. The lower EPS forecasts could, however, prove helpful to investors as “positive” surprises are more likely now that analysis only expect ±2% profit growth in Q4 ’14 and a tepid 2.6% profit growth rate for Q1. As is all too often the case, we think the pendulum has swung too far, meaning that odds of a positive quarter for stocks are increasing. The key to a successful year will be to really know what you own – stick with companies that have rock solid balance sheets, pay an attractive dividend, and can sustain some economic turmoil. Telecom shares were the only sector in positive territory on Monday, as technology and energy shares fell most. Treasuries gained slightly as did the dollar.

Looking Ahead:

ALCOA kicked off earnings after the close on Monday, reporting higher revenues and profits than analysts had estimated, providing some optimism that lower oil prices aren’t having a devastating impact on earnings. This morning’s Small Business Optimism Index and JOLTS (Job Openings and Labor Turnover Statistics) could prove pivotal for market participants who are seeing more pressure on oil and no sign that the Saudis or other OPEC nations are looking to cut supplies anytime soon. On the earnings front, CSX Corp (CSX) and KB Home (KBH) will be closely watched by investors.

Make sure to tune into CNBC this Wednesday at 3:45 when our Managing Member, Oliver Pursche, joins Kelly Evans and Bill Griffith on the floor of the New York Stock Exchange to provide our latest economic and market outlook. And tune into Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM to hear our complete economic analysis and market commentary. Visit www.ggfs.com for details.

Jan 09

Rising expectations of a strong upcoming earnings season

Market Recap:

Stocks climbed sharply on Thursday as investors focused on positive economic news and rising expectations of a strong upcoming earnings season. Word that Mario Draghi and the other members of the ECB are “studying” ways to implement bond-purchases for as much as €500 billion helped lift European markets, positively influencing US markets. All sectors of the S&P were higher as Energy, Material and Technology shares climbed more than 2%. Treasury Yields were slightly higher, while the Dollar continued to rally and oil prices were mostly flat for the day.

Looking Ahead:

Friday morning’s Jobs Report came in better than expected, showing that over 2,950,000 jobs were created in 2014 – the largest increase in any calendar year – and that the overall unemployment rate declined to 5.6%. October and November revisions to the previous reports also showed improvements, helping to turn equity futures positive in pre-market hours. One surprising area was the downward revision in average hours worked, which fell by 0.2%. While this is not a significant decline, it could indicate that business are not overly focused on only hiring part-time workers, but are in fact increasing their payrolls across the board. Make sure to tune into CNBC next Wednesday at 3:45pm when our Managing Member, Oliver Pursche joins Kelly Evans and Bill Griffith on the floor of the New York Stock Exchange to review the latest earnings and economic data, including next Wednesday’s Retail Sales report. And don’t miss Money Matters with Gary Goldberg this Saturday at 2pm and Sunday at 11am on WOR 710 AM Radio for our complete economic and market analysis.

Next Week’s Market Moving Events: 

  • Monday: China Merchandise Trade data, ALCOA reports earnings
  • Tuesday: Small Business Optimism index, JOLTS report, CSX Corp reports earnings
  • Wednesday: Eurozone Industrial Production, Mortgage Applications, Business Inventories, Beige Book, EIA Petroleum report, JP Morgan and Wells Fargo report earnings.
  • Thursday: Jobless Claims, Producer Price Index, Empire State Manufacturing data, Consumer Comfort survey, Citigroup, Bank of America, BlackRock, Intel and Lennar report earnings.
  • Friday: Consumer Price Index, Industrial Production and Goldman Sachs report.

Jan 08

Investors encouraged by yesterday’s strong market action

Market Recap:

Stocks rebounded sharply on Wednesday after the ADP employment report showed stronger than forecast employment growth, and oil inventories fell on strong demand. Oil prices stabilized on the better than expected EIA Petroleum report and eased concerns that global growth and demand for commodities was weakening further. The dollar strengthened slightly, as Treasury yields remained mostly flat. The release of the FOMC minutes revealed little more information, other than highlighting the Committee’s long know stance that inflation targets alone would not drive policy decisions. The report indicated that several members of the committee would be willing to raise rates even in the face of low inflation, provided that other data suggests this is the right course, but reiterated that no such action would likely come before spring.


Looking ahead:

Equity futures are pointing to a sharply higher open on Thursday morning, as investors are encouraged by yesterday’s strong market action and rising international markets. As we approach fourth quarter earnings season investors should focus on some of the recent consumer comfort and consumer confidence data, which indicates a healthy appetite for shopping.  Some caution is still warranted, as most analysts are still sifting through the recent sales and returns numbers for chain store sales and the actual strength of the consumer is yet to be known. In our view, focusing on high quality dividend paying stocks will likely prove the smart way to participate in the market, all the while being somewhat protected against the full impact of any pot entail correction.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2pm and Sunday at 11am on WOR 710 AM to hear our latest economic analysis and market commentary. Visit www.ggfs.com for details.

Jan 07

Benefits & draw-backs to lower oil prices

Market Recap:

The market sell-off continued on Tuesday, as lower oil prices, fears of a renewed Greece-driven Eurozone implosion and weaker than  expected US ISM Non-Manufacturing and service sector growth disappointed investors. Telecom and Utilities were the sole sectors in positive territory as major indexes lost about 1%. However the news wasn’t all bad – at its worst, the DOW lost over 200 points, but recouped most of these losses rebounding to a mild loss of about 50 points by mid-afternoon, before falling a bit again. This “technical” market action is important as it shows that there are willing buyers in the market, meaning that a steep and prolonged correction is unlikely. As oil fell to a new six year low, below $49 per barrel, market participants and commentators continued to debate the benefits and draw-backs to lower oil prices. As we have stated from the beginning, we view lower oil prices as mildly positive to our economy as a whole, benefiting consumers, while negatively impacting capital expenditures, hiring and tax revenues – watch our latest comments on Fox Business here:

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Separately, the U.S. dollar continued to strengthen, while Treasuries rose a bit.


Looking Ahead:

Wednesday’s release of the FOMC minutes are unlikely to bring any surprises, however investors should expect every sentence to be parsed and over analyzed to discern any potential changes in policy. One critical thing for people to remember is that 3 new Fed members will be coming on board, replacing 3 “hawks.” The consensus is that the new appointees will likely be dovish and follow a similar philosophy to that of Chairwoman Yellen. In addition to the FOMC minutes, market participants will keep a close eye on the ADP employment report as well as the release of the EIA Petroleum report, which has gained much more significance given the fall in oil prices.

Make sure to tune into Fox Business tonight at 6:00 PM when our Co-Portfolio Manager Oliver Pursche joins Charles Payne and crew on Making Money to give our latest economic analysis and market outlook. And don’t miss Money Matters with Gary Goldberg this Saturday at 11:00 AM and Sunday at 2:00 PM on WOR 710 AM Radio for our complete market analysis and a great interview with investment legend and author Robert Kiyosaki. Visit  www.ggfs.com for details.

Jan 06

Rough start for the New Year

Market Recap:

It was a rough start for the first full trading week of the year, as stocks tumbled out of the gate as Oil fell to a multi-year low, trading below $50 per barrel for the first time since 2009. The S&P lost nearly 2% as all sectors declined ahead of this week’s critical economic data and the release of the December FOMC meeting minutes. Energy and Material shares fell the most, while the traditionally defensive Telecom, Utilities and Consumer Staple shares declined the least. As we wrote in our weekly article in WSJ MarketWatch yesterday morning, while lower Oil prices benefit consumers, they are not universally good and could pose a significant budgetary challenge to oil producing states in the coming months if prices don’t stabilize (read the article here).

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Looking Ahead:

European inflation data continues to point to a deflationary environment, putting greater pressure on Mario Draghi and the ECB to take stern action to help Europe get out of its current funk. Today’s release of U.S. Factory Orders and PMI Services data will likely be critical to market action as futures currently point to a flat open ahead of the data. Continued weakness in commodities along with a strengthening dollar are helping bonds rally, as the Ten-Year Treasury Yield traded below 2% on a flight to safety trade.

Make sure to tune into Fox Business tonight at 6 PM and on Wednesday at 6 PM when our Co-Portfolio Manager Oliver Pursche joins Charles Payne for the hour to discuss the current market environment and our 2015 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 for our complete economic analysis and market commentary. Visit www.ggfs.com for details.

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