Blog

12 Nov 2010

Posted at 15:17h in The Friday Brief by
Equity markets took a 1% hit on Tuesday when Cisco, a bellwether of the tech industry, expressed concern over its projected revenues. Investors ignored analysts’ reminders of the recent reports of other large techs which were in sharp contrast to Cisco’s warnings. But investors are concerned over the broader question; will companies be able to grow sales numbers sufficiently in a sub-par economy to sustain record earnings momentum? 

05 Nov 2010

Posted at 15:19h in The Friday Brief by
It has been a busy week across the country, but especially, in Washington D.C. and on Wall Street. Republicans gained over 60 seats in the House, roughly twice the post-World War II midterm average. Ben Bernanke and the Federal Reserve risked credibility again by increasing their record stimulus to buy an additional $600 billion of Treasuries through June to reduce unemployment and avert deflation. And amidst it all the S&P 500 charged to its highest level since September 2008 on strong earnings releases and speculation that the Fed will indeed stimulate growth and that banks will be allowed to raise dividends. But alas, as the presumptive Speaker of the House John Boehner said on Tuesday night, “we have real work to do – and this is not a time for celebration.” 

29 Oct 2010

Posted at 16:00h in The Friday Brief by
One of the most compelling human instincts is to excel at whatever we do, to be the best we can be, to win. No matter what endeavor we pursue, our careers, our hobbies, the games we play – all are more exciting when we compete to win.

22 Oct 2010

Posted at 16:11h in The Friday Brief by
The economy continues to flounder with few signs of improvement in unemployment. Unemployment remains entirely too high with few prospects of decline any time soon. Housing remains in near depression as would-be buyers cannot sell their current homes or they worry about losing their jobs, or they cannot find financing. Manufacturing continues to grow, but much slower than earlier in the year, and not fast enough to create jobs. But there are at least two bright spots, (not counting the growing possibility of a gridlocked Congress forced to compromise). The consumer appears to be increasing his outlays for goods and services and the stock market continues to recover from 2008. 

19 Oct 2010

Posted at 15:13h in The Friday Brief by
Yesterday’s rally of nearly 1.5% brought the US equity market halfway back from its 3% decline dealt largely on Tuesday over concerns China’s growth may be slowing. A similar drop in Treasury bonds also rattled investors as they feared the Fed’s $600 billion bond purchase program designed to stimulate the economy would spark inflation. Investors sold US government debt driving some yields their highest levels in more than three months. The 7-10 year Treasury index is down a little over 1% for the week as of yesterday’s close. 

15 Oct 2010

Posted at 16:31h in The Friday Brief by
While officially the recession is over, that view is a tough sale for real estate people, furniture reps, car dealers, travel agents, city employees, waiters, barbers, or you fill-in-the-blank. The severity of pain varies, but even those with sufficient means to maintain lifestyle have curtailed their spending for reasons ranging from prudence to appearances. The result is an economy struggling to maintain enough forward progress to avoid tumbling back down the hill.

08 Oct 2010

Posted at 16:41h in The Friday Brief by
As the manufacturing side of the economy shows signs of fatigue, the much larger service sector appears to be waking up. Tuesday’s strong report sent the Dow Jones Industrials up almost 200 points or 1.8%. But the pickup is not nearly fast enough to generate sufficient job growth to cut into the 9.6% unemployment rate reported today.  

01 Oct 2010

Posted at 16:45h in The Friday Brief by
September’s gain of 8.92% (total return) for the S&P 500 index represented the largest increase for the month since 1936. The most widely used gauge of value, the price/earnings ratio shows stocks are still reasonably valued at 12.5 times projected earnings for the next 12 months. Projections are for earnings to grow 36% this year and 15% next. In the past two weeks individuals’ confidence in stocks has risen the most since March 2009, according to the American Association of Individual Investors. The March 2009 rise in sentiment preceded an 82% rise in stock values which peaked most recently in April of this year.

24 Sep 2010

Posted at 16:22h in The Friday Brief by
Once again a headline issue with both near and long-term impact on this country’s economic future was decided by the majority party, completely on political terms; this time it was for personal survival. Going back a few months it was in the name of economic survival. The extravagant American Recovery and Reinvestment Act of 2009 was supposed to save the day. Some derided the $787 billion bill as “Speaker Pelosi’s Payoffs and Pork Bill.” In fact it provided limited if any stimulus impact. And the crowning accomplishment of the majority party: The Affordable Healthcare for America Act. This massive sea-change of American culture and economy was literally rammed down the throats not only of the minority party in Congress, but the American people.

20 Sep 2010

Posted at 14:40h in The Friday Brief by
Is the economy falling into recession or is it merely stalling? The S&P 500 is off its April high by 12% while the rally in the 10-year US Treasury has driven yields to 2.55%, the lowest in 17 months. Yesterday the government’s leading economic indicators showed an increase of .1% in July provides hope that the economy is merely in a stall. But jobs, housing, and even manufacturing which has been a bright spot for the economy were more worrisome as they each declined this week. While the economic numbers were mostly negative this week, there is a bright spot. Intel’s acquisition of security software maker McAfee brings the August total of announced takeovers to more than $175 billion. Acquisitions are on a pace for August to surpass March as the biggest month for deals this year, according to Bloomberg. The month is typically the slowest.