Blog

01 Apr 2005

Posted at 15:23h in The Friday Brief by
The market’s bounce in February was not enough to overcome the declines in January and March sending all of the major equity indices down for the quarter.  The Dow Jones Industrials and the S&P 500 each declined 2.1% while the NASDAQ fell almost 8%.  Bond indices didn’t fare much better as the Lehman 1-3 Year, the 7-10 Year, and the 20 Plus Year indices declined by .3%, .9%, and 1.6%, respectively.  Our models performed in line with their respective benchmarks for the quarter. 

24 Mar 2005

Posted at 15:25h in The Friday Brief by
Since our last Brief a couple of weeks ago, inflation has taken center stage as the new hand-wringer.  On March 2nd oil blew through its most recent high of $52.88 reached on October 26th.  It now stands at $56.62 per barrel.  But the economy seems relatively unfazed.  That is until recently.  It now appears that businesses are beginning to pass along their commodity and labor prices to consumers.  On Tuesday, Greenspan seemed to confirm what many had been worrying about for months; that inflation is creeping back into the economy.

04 Mar 2005

Posted at 16:26h in The Friday Brief by
The economy continues to show signs of strength and expanding breadth.  Consumer spending, which represents two thirds of our economy, has been the steady sustainer since recovery began in late 2001.  Low interest rates and taxes have provided consumers with more spending power.  Not until the second half of 2004 did the corporate sector join the party, but it is coming on strong.  Most recently business investment has grown at the fastest pace since 1997.  It will likely take a leadership position from here as the consumer shows signs of slowing somewhat.

18 Feb 2005

Posted at 16:40h in The Friday Brief by
Yesterday, Federal Reserve Chairman Alan Greenspan appeared before the House Financial Services Committee.  His prepared remarks were identical to those he gave the Senate Finance Committee the day before, but his responses to members’ questions were particularly candid and enlightening.  Here are some of the highlights of his remarks on topics that most directly affect long-term investors.

11 Feb 2005

Posted at 16:45h in The Friday Brief by
President Bush was in town yesterday conducting a town-hall-styled meeting to further explain his plans for a Social Security overhaul.  His aim is to provide workers with better growth than the current system’s performance, thereby generating more income at retirement.  A further advantage is the potential to pass any remainder along to heirs.  His plan obviously faces huge hurdles as many in Congress don’t believe there is a significant problem and others feel it can be fixed with less dramatic changes.  It is the President’s hope that he can remove much of the political fire from the discussion to have an honest and open discussion of options to improve this mammoth government program.

04 Feb 2005

Posted at 16:51h in The Friday Brief by
There’s a stock market axiom that says, as January goes, so goes the year.  According to Bloomberg, since 1950, the S&P 500 has moved in the same direction during the year as it did in the first week 73% of the time.  The S&P 500's drop so far this year marks its worst start since 1990, when it fell 4% in the period through Jan. 20th.  The index lost 6.6% that year.

04 Feb 2005

Posted at 16:47h in The Friday Brief by
The U.S. economy forges on, adding jobs and improving standards of living.  It was reported today that the unemployment rate fell from 5.4% in December to 5.2% in January, a three-year low.  According to Bloomberg News, the latest revisions show that the level of U.S.jobs now exceeds those of February 2001, a month before the world’s largest economy fell into an eight month recession. 

14 Jan 2005

Posted at 16:00h in The Friday Brief by
Earnings season customarily brings stock market volatility and this one is certainly no exception.  As oil prices rise creeping toward their record highs and as several major U.S.industrials warn of earnings shortfalls, the good news has largely fallen on deaf ears.  The Dow Jones Industrial Index declined nine of the last twelve trading days for a 3.2% drop from year-end highs.  The NASDAQ is down 5.5% during a similar period.  Investors seem more cynical in January than they did in December when they chased the Dow up 11% for the month.     

07 Jan 2005

Posted at 16:05h in The Friday Brief by
The professional future-tellers, the highly respected economists and analysts who have been glamorized in recent years by CNBC, CNN, and Bloomberg News all fall in a pretty tight range saying that markets should grow about 8-10% this year, the economy should grow about 3.5% and corporate earnings, about 10%.