Monthly Archives: July 2014

7/25/14 – U.S. Jobless Claims fell to lowest since 2006

Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than any economist surveyed by Bloomberg forecast. It is not unusual for applications to be volatile in July because of auto plant shutdowns.  However, state data showed nothing inconsistent with prior years.  Fewer claims signal employers are reluctant to let go of staff as the talent pool shrinks and sales improve. A tightening labor market could lift wages and spur consumer spending, which accounts for about 70 percent of the economy. Continue reading

Market Commentary: Mid-Year 2014 Market Review and Outlook

I have attached our Mid Year Market Commentary 2014.  The overall theme of the newsletter is that the U.S. economy could possibly see a growth spurt starting later this year and carrying into 2015.  This is in part due to three factors in our opinion:

  1. CEO’s seem to be tired of worrying about regulation and tax policy and are starting to take action to promote growth.  Mergers & Acquisitions have increased significantly from 2013.  Companies are taking advantage of record low interest rates to lock in 3% money for many decades to come.  This will enable them to buy back shares and invest in future growth – and hopefully continue to produce job growth in our economy.
  2. Valuations are still reasonable in U.S. stocks and bonds are entering a very precarious environment as the Federal Reserve starts to slowly let interest rates move up.  The eventual rotation out of bonds could be a historic event and could provide more fuel for further gains in stocks.
  3. Global markets have stabilized in 2014 – Emerging markets, Europe, Japan and other countries have taken pro-growth action and the data is looking more and more positive as the year progresses.We also highlight the list of geopolitical tensions in Iraq, Israel and the Ukraine.  These threats seem contained at this time but if any of them spiral downward and we have a major military conflict or a spike in oil prices the market momentum could be derailed.  We will be watching these issues and the global economic data and provide updates each week.

    Overall, we feel any short term pullback would be a buying opportunity and continuous rebalancing will enhance our portfolio returns for the foreseeable future.

Mid-Year Update and Outlook 7/3/14

It is hard to believe we are at mid-year already.  The market has been very resilient in handling a number of new “worries” that showed up this year such as Russia’s aggressive moves in the Ukraine, renewed fighting in Iraq and slower economic growth to start the year due to cold weather.  The market at one point had sold off over 5% early in the year but eventually shook off the economic chill caused by a nasty winter and geopolitical risks abroad to post a solid gain of nearly 5% in the second quarter.  Continue reading