Monthly Commentary

 

 

July 2010

Once again the markets are waging a battle between the economic fundamentals and the technical trends. On a technical basis, a variety of widely-followed trendlines are suggesting the markets have some short term strength. Over the last 4 days there have been several attempts to break out above resistance levels. What is interesting to note is the wide range in daily market moves. Typically in strong markets these wide ranging daily levels are absent and fall within a fairly narrow range. Toss in the increasing volume and you have an interesting set of conditions that hopefully will soon reveal their true intentions.  (read more)

 

June 2010

We are half way through 2010 and the story line remains the same.  Slow but steady economic growth spurred on by low interest rates and government stimulus.  Unfortunately, the most recent performance in the US stock market would suggest that investors remain skeptical of that premise.  The 2nd quarter ended like many quarters have with a late-day sell-off as buying interest waned and investors sold underperforming stocks in the worst quarter since the market meltdown triggered by the collapse of Lehman Brothers.  (read more)

 

May 2010

Volatility in the stock market seems to be abating and more analysts are stepping out and saying this market is oversold.  In the last 2 weeks Goldman Sachs was encouraging investors to buy on dips and was encouraging investors to stay in the market.  Are we looking at an over sold bounce in the market and a return to rising values as we move through the summer?   (read more)

 

April 2010

We have a battle going on in the stock market and as always the investors are the combatants.  On one side there are those who are fighting to drive the market down.  This army is made up of legions of fear mongers who point to structural problems within the markets and the world’s economies.  Greece’s economic woes keep popping up as do the investigations into the trading habits of Goldman Sachs.  Soon the headlines will be dominated by the oil spill in the Gulf and the inevitable comparisons to other recent bio disasters.  The markets have moved up steadily since January and the pessimists say it is time to follow that sage advice advising investors to “sell in May and go away.”  Unfortunately markets rarely fulfill investors expectations based on old wives tales and well-worn phrases.   More specifically analysts point to three potential “derailers” that could jeopardize the global economic recovery.  (read more)

 

March 2010

The resilience of this market reminds me of the story about the “Little Engine That Could” that I used to read to my kids when they were small.  For the past several weeks this market has been moving up in a steady and consistent manner.  Pullbacks have been few and far between and unlike the little engine that used all of the power that it had, this market has been moving up on very little power as measured by trading volume.  The lack of volume and the accompanying conviction seems to reflect the general consensus that this market is overbought, overvalued and ready for a pullback.  (read more)

 

February 2010

"You can't describe the economy as in a recovery until you have job growth," said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey. That statement will bear out this week when we see the latest payroll jobs report on Friday. The consensus forecast, according to economists polled by Reuters, calls for a loss of 50,000 jobs in February, compared with a decline of 20,000 in January. The U.S. unemployment rate is forecast to rise to 9.8 percent in February from 9.7 percent in January. Both productivity and earnings have been very strong and at some point this will have to translate into earnings. You can only expect workers to put in over time hours for so long before their productivity begins to suffer and at that time, employers will have to begin hiring. The Friday number should give us some insight into that trend.  (read more)

 

January 2010

Coming out of the worst recession in generations, the U.S. economy grew at the fastest pace in six years during the fourth quarter of 2009, even as consumer spending and business investment remained tepid, according to data released Friday by the Commerce Department. Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year, the best quarterly growth since late 2003, the government estimated. That sounds like good news and the markets should have reacted positively. The problem is that they didn’t and on Friday the markets fell through critical support levels continuing a two day long trend.  (read more)

 

December 2009

How could investors be dissatisfied with the performance of the 2009 market? Going back one year to the first trading day of January, how many of us would have expected to see the upcoming year post gains in the high 20’s? In a very unscientific poll of clients at the end of last year, most of those I spoke with would have been very satisfied with a return anywhere near 10% and would gladly have settled for 6-7%. This of course was coming off the severe beating dealt to the markets in October and November and after a brief rise in January 2009, those hopes of positive returns all but disappeared as the market hit 12 year lows just 2 months later. Yet in spite of the dour business news and bleak economic outlooks, the markets turned in their best performance since 2003. Not too bad for minimal expectations. (read more)

 

November 2009

The remaining days of 2009 should prove to be quite interesting. Historically speaking December has been the best of the 12 months when it comes to stock market performance. Based on 100 years of data the month of December had gains in 71 of those months which was significantly ahead of January and August’s positive numbers in 63% of the time. While history may provide a sense of comfort, it often is of little value when looking ahead. (read more)

 

October 2009

A couple of positive news items were rolled out to the public shortly before the end of October. Earlier in the week we received news that the economy had in fact expanded for the July – September period. The growth rate of 3.5 percent GDP growth rate for that period represented the first quarter of positive growth after four straight quarters of declines. It was the largest gain in two years. But the concern is that this growth will falter, given the huge problems still facing households.  (read more)

 

September 2009

Here we are at the end of the 3rd quarter and on the threshold of a new round of earnings. The previous earnings season went pretty well, and company share prices were largely gong up on lowered revenues and lower expenses, but they did make money at a higher rate than the previous quarter. (read more)

 

August 2009

Market mood seems to be changing.  Where hope and optimism seemed commonplace a few months ago, investors are now questioning the strength of this economy.  No longer are market drops being bought into as investors seek buying opportunities.  In fact the opposite is now happening: investors continue to sell when good news comes forth.  (read more)

 

July 2009

The tug of war between the bulls and the bears continued throughout the month of July but based on the market results, the bulls continue to gain ground on the bears. The DJIA was in fine summer condition putting in the best July performance since 1989 and its best month since 2002. Earnings season is winding down with nearly 70% of companies now having reported. On the surface the earnings looked pretty good. 75% of the companies reporting surprised investors with better than expected earnings and the average surprise was nearly 10% over estimates. The earnings were broad based with surprises present in all major stock market sectors. (read more)

 

June 2009

The month of June ended in an uneventful manner as the S&P500 finished almost exactly where it started on June 1.  Trading volume this last week was very light which reflected the general attitude of most investors.  Economic reports continue to indicate that we are stagnate, but apparently some investors are buoyed by the sense that the worst of the news is behind us. 

(read more)

 

May 2009

While the popular term around current economic discussions seems to be “green shoots”, I am thinking of another, much older cliché: where’s the beef? The “green shoots” reference is from Ben Bernanke’s comments in mid-March during a 60 Minutes interview that he detected "green shoots" of economic recovery, meaning that he was seeing slivers of optimism and growth in various sectors of the economy. Since then the economic and main stream press have picked up the concept and are running with it. Just like the joy of those first green shoots appearing in the garden after a long winter buoy our optimism about the pending change in climate, so too are we optimistic about the change in our economy when we see signs that maybe the bad times are behind us. (read more)

 

 

 

The "Markives"