25 Sep 2009

Posted at 15:18h in The Friday Brief by
The stock market, since early March continues to suggest economic recovery. But this week it took a pause as the S&P 500 declined some 1.8%. Still, the average is 55% above its March 9th lows. With the huge rally, consensus seems to be building that the market is ahead of itself. Some even argue that we are in a sucker’s rally or a bear market trap soon to collapse.

18 Sep 2009

Posted at 15:24h in The Friday Brief by
With only a small bobble yesterday, the market as measured by the S&P 500 roared another 2.5% higher this week. It is some 7% higher this month, but still 32% below its peak on October 9, 2007. Good news from various economic indicators and positive comments from Central bankers and economists have boosted the confidence of investors. On Tuesday, Mr. Bernanke confidently declared that from a technical perspective, the "recession is very likely over at this point." But he added that tight credit conditions and unemployment will keep the recovery muted. The consensus view is that the economy is in recovery, but views diverge on the whether it is sustainable. The threat of government stimulus being removed prematurely and the notion that consumer spending will remain weak through next year weigh heavily on the prospects of strong recovery.

11 Sep 2009

Posted at 15:30h in The Friday Brief by
Three of us met at the dock, one hot summer morning, ready for the day’s adventure. Pete, Reid and I had been intrigued by news in town of the discovery of a sunken German U-Boat, completely intact and sitting upright on the bottom. Details of her location were closely guarded because of her salvage value.

04 Sep 2009

Posted at 15:36h in The Friday Brief by
The week’s economic data continues to point to recovery, but investors worry whether it will be strong enough to support the stock rally since March 9th. The S&P fell 2.6% this week as of yesterday’s close. September is historically the worst month for the stock market. In fact as Ed Yardeni notes, since 1926, September is the only month with a negative average return. Investors lose an average of 1% during September compared to a 1% return for the other 11 months. So the market may be in a holding pattern for a while. This is a good time to forego analysis of the various economic and market wiggles to take a broader and longer perspective on investing.