Blog

21 Mar 2003

Posted at 15:58h in The Friday Brief by
Stock market history can be very useful as a guide in developing portfolio strategy, but it should never be used as a precise predictor of the future.  It repeats itself, just not in the same way or at the same time.  In 1990, the S&P declined over 20% in the weeks following the invasion ofKuwaitbyIraq.  But it did not rally in 1991 until it became clear to investors that the coalition forces would be successful in turning back the Iraqi invaders.  The S&P increased by 18% in just three weeks following the market low on January 15,1991.  This time investors did not even wait for the war to start.  In the past seven days the S&P 500 and the Dow Jones Industrials indexes have risen over 5%.  Global markets are reacting positively as well. 

14 Mar 2003

Posted at 16:03h in The Friday Brief by
Hardly anyone would disagree with the premise that Mr. Market has been unusually emotional these past three years.  But the last couple of weeks have demonstrated just how emotional investors can get after a prolonged bear market.  The drone of bad news has been like a vise, applying increasing emotional pressure almost by the hour.  One negative development after another has pounded stock values down and risk-averse investments up. 

07 Mar 2003

Posted at 16:06h in The Friday Brief by
The week’s economic releases were, to say the least, mixed.  The worst of it came this morning as the government reported that theU.S.economy lost 308,000 jobs.  Some of these losses are likely attributed to the call-up of reservists, but certainly not the majority. 

28 Feb 2003

Posted at 16:09h in The Friday Brief by
The information age in all of its glory is alive and well in spite of, perhaps even because of, our current economic and political malaise.  During the 1991 war with Iraq, CNN benefited handsomely as the pioneer 24-hour cable news network.  As we again prepare for war withIraq, some six 24-hour national news networks crowd the viewer’s choices along with a myriad of newspapers, websites, and internet news services.  We can now watch and listen to reporters in every newsworthy (or what their producers deem newsworthy) corner of the world, on demand. 

14 Feb 2003

Posted at 16:13h in The Friday Brief by
High terror alerts across the nation have likely negatively impacted our economy of late, but the numbers from January look pretty good.  TheU.S.consumer continues to support this economy to the amazement of many economists.  Retail Sales excluding autos rose 1.3% last month, according to the Commerce Department.  Building materials, higher gasoline prices, and higher prices on imported goods helped boost the index.  Retail sales represent 30% of the U.S.economy.  

07 Feb 2003

Posted at 16:19h in The Friday Brief by

 “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair.” Charles Dickens’ Introduction to A Tale of Two Cities – 1859, comparingLondon andParis at the time of the French Revolution (1789-1799)

This week we mourn the deaths of seven national and international heroes while celebrating their high achievements with those of the space program.  We laud the program’s proud history of excellence during the cold war competition later adapting to the new world order to become a model of international cooperation. 

31 Jan 2003

Posted at 16:23h in The Friday Brief by
It was a big week for news as President Bush laid out his initiatives in his State of the Union message and the government released a number of important statistics on the health of the economy.  As of this morning the Dow is down 2.3% from Monday and was more volatile than usual.  During the last two weeks it has fallen 10.4% from its peak of 8869 to close at 7945 yesterday. 

24 Jan 2003

Posted at 16:30h in The Friday Brief by
We started the week with a report that housing starts in December increased 5% to a 1.835 million-unit annual rate, the highest since June 1986.  December building permits rose 8.2% to a 1.880 million unit annual rate.  The increases were larger than expected and provide strong evidence that the housing boom remains healthy and will likely remain so for months to come.  The boom continues to be fueled by historically low interest rates.  The average rate on a 30-year mortgage was 5.97% last week.  That was close to the 5.85% at the start of the month, which Freddie Mac, the No. 2 buyer of mortgages, said was the lowest since the 1960s.

17 Jan 2003

Posted at 16:35h in The Friday Brief by
As we head into earnings season, the top international news stories, mostly about Iraq, continue to steal the thunder from some pretty good company earnings.  By the end of today, 95 of the S&P 500 will have reported their earnings.  First Call reports that the number of reports beating expectations is well ahead of this time last year.  Granted, the comparisons are pretty easy, but hey, let’s enjoy a little good news.  Many of the major banks reported strong results this week.  Bank of America’s 4th Quarter net income rose 27% and beat average analysts’ estimates by $.06.  BB&T reported a 21% increase in earnings. 

10 Jan 2003

Posted at 16:21h in The Friday Brief by
We began the week with some surprisingly strong economic news.  As reported by the Institute for Supply Management,U.S.manufacturing increased in December by the largest amount since the last recovery from recession in June of 1991.  Manufacturing contributes about 15% to the nations’ economy.  Manufacturing and business in general have been slow to recover in this latest economic slowdown, but this latest ISM report showed much more strength than expected by economists.  Some economists are now raising their growth target for the economy from 1.5% in the first quarter to 2.5%, while others say the report probably overstates the amount of improvement.