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.