Posts Tagged ‘Cartoon’

Weekly Recap & Outlook 01.04.13

Friday, January 4th, 2013

Tower Private Advisors

  • Fiscal cliff relief…for now
  • Another cartoon
  • A mediocre jobs report

Capital Markets Recap

Apparently, there was some relief that the worst part of the fiscal cliff (i.e. income taxes) was averted. The spending components are kicked down the road until March 1, at which point they’ll coincide with next debt ceiling debate. Republicans seem to have caved on taxes, but you can bet they’ll be invigorated for this upcoming fight.

wro

‘See which market did the best–other than being short Treasuries or volatility? Whodathunk?

CLIFFS

Top Stories

Here is a collection of stories from this week’s collection of CFA Smartbrief highlights, sort of the highlights of the highlights.

  • Japan’s debt is a financial time bomb, experts say. This is starting to pop in more places, along with the related trades of shorting the Yen–it’ll be devalued–and going long Japanese exporters; their stuff is going to relatively cheaper.

The continuing ____ Cliff saga…

  • Boehner is re-elected U.S. House speaker by slender margin
  • Many Americans will pay higher taxes in 2013 despite deal. The 2% Payroll Tax hikes goes away, socking all classes with a tax hike. According to CBS News, the “average household will pay an extra $1,000 this year.”
  • Advisers applaud survival of $5 million gift-tax exemption–and it’s made permanent…for now, at least. Nothing Congress does is permanent.
  • Congress prepares for fight over U.S. debt limit. You may have heard or will hear of the silly notion of the Treasury minting a $1 trillion coin. Treasury Secretary Tim Geithner announced recently that we had hit the debt ceiling, and some have suggested that the Federal Reserve could just pop out a $1 trillion coin to pay down some debt. I dunno, ‘sounds a little inflationary. Here is one story on the subject. Even Paul Krugman, economic whacko, says it’s a gimmick. Click here to send me a nasty e-mail for calling Paul Krugman a whacko.
  • Agencies leave U.S. rating unchanged after budget deal
  • Budget deal offers little hope for hiring, sales growth
  • Advisers are unimpressed with “fiscal cliff” deal. Count me among them.
  • …but Financial advisers are more optimistic about 2013
  • Investors pour $7.17 billion into stock ETFs

And other stuff…

  • Fed is divided on length of stimulus, minutes show (slightly more on this, below.) The Federal Reserve has essentially been funding our $1 trillion budget deficits for the past few years by buying about that much, each year, of government securities. The Fed is price insensitive; it cares not for yield. Something tells me that when that $1 trillion goes up for sale to price sensitive buyers, who do care about yield, bond market dynamics could change a wee bit.
  • This isn’t good. Smallest population growth since Great Depression expected in U.S. The Asian investment bank Nomura estimates that population demographics account for “only 30-40%” of economic growth. Well, at least it’s not 50%.

Investments-specific…

  • Bonds might start losing appeal, experts say. Brilliant!
  • Emerging-market equities enter longest rally in 14 months
  • Cognios launches market-neutral mutual fund. Investors are still clamoring for some downside protection. In 2007, it was the furthest thing from their minds. Gimme a sharp shellacking of stocks, a drop in valuations, and it’s go long stocks. Buy what others don’t want. Right now they want protection–or at least fund providers think they do.
  • And not to be outdone, State Street Global Advisors readies 6 actively managed ETFs for launch…four of them carry the “Risk Aware” label. Where were they five years ago. To be fair, risk seems scarce right now, so the timing might not be terrible on a multi-month horizon.
  • Northern Trust readies 4 money funds. What’s unique about these is that their net asset value (NAV) fluctuates. I don’t know if there are any other money market funds with this…uh…feature. Typically, they’ve all traded for $1, with the yield fluctuating instead. This may be an attempt to front-run changes that seem to be imminent from the SEC, namely that money market fund NAVs float.

This Week

The first week of the month always produces the big Nonfarm Payrolls report, which reports on the Change in Nonfarm Payrolls, as well as the Unemployment Rate. The latter has taken on increasing importance, following the Federal Reserve’s last Open Markets Committee meeting. In that meeting, the Fed said it would not tighten monetary policy so long asUR the Unemployment Rate is north of 6.5% and inflation is less than 2.5%. Here is a look at the rate, along with a regression that shows the rate falling below 6.5% in late 2014.

As to payrolls, they grew by 155,000 in December, which was better than the 146,000 in November and slightly better than the 152,000 that the dismal scientists had expected. Earlier in the week, ADP had released its Employment Change index, which had been re-tuned to more closely match–and foreshadow–this report. The ADP report had shown a big jump, from 118,000 to 212,000. Perhaps some more tweaking is needed. The Change in Private Payrolls was a little better, with 168,000 jobs added there, including 25,000 from increased Manufacturing payrolls.

It’s going to take a long time to rectify the situation below–a long time mitigated by some stronger employment reports. Click on the image below to go directly to the blog it was lifted from. It was posted there as THE SCARIEST JOBS CHART EVER. It shows the current jobs recovery, along with the other post-WWII recoveries relative to their prior peaks, and the time it took to recover them.

scary

Markets got a bit nervous yesterday when the minutes from the FOMC’s latest meeting were released. While the Wordle cloud below doesn’t show it, the minutes apparently indicated the Federal Reserve would curtail its purchases later in the year.

fomc

Next Week

quiet week next week…

Key indicators to watch

  • NFIB Small Business Optimism
  • Initial Jobless Claims
  • Job Openings Labor Turnover Survey (JOLTS)

Graig P. Stettner, CFA, CMT
Chief Investment Officer
Tower Private Advisors

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Weekly Recap & Outlook – 12.28.12

Friday, December 28th, 2012

Tower Private Advisors

  • Brief one this week

Capital Markets Recap

 

 Man, this is wierd. This has to be the most widely publicized deadline since Y2K. Google search volume on the phrase is at peak levels…

…the same Statesmen who presided over the 2011 debt ceiling are largely the same players this time round, and polarization in Congress has never been higher…

Shamelessly lifted from Zero Hedge blog post. Click image to go to the complete post.

 …and while I thought we were on the eve of destruction, Barry McGuire’s chorus seems to be in play.

And you tell me
Over and over and over again, my friend
Ah, you don’t believe
We’re on the eve
of destruction.
 Sure, we fell sharply today–and the worst came after the President and the Wise Men were meeting at the White House–but the damage seems pretty mild. Apparently, the President didn’t have anything new to offer.
 
 
In fact, the market’s reaction–measured by the S&P 500, at least–is almost EXACTLY what one might expect from revisiting 2011. Here is a back-to-the-future look at the Debt Ceiling debacle with the Fiscal Cliff action overlaid on it. In it, July 31, 2011, is matched up with January 2, 2013. It shows stocks in the top panel; 10-year Treasury in the middle; and Gold in the bottom panel.
 
Stocks and bonds are more and less, respectively, following the 2011 script–stocks almost precisely. By that script, the decline in stocks is set to accelerate after January 1, which is about when gold began its decisive rise. This shouldn’t be relied upon, entirely, as a roadmap for stocks–history rhymes; it doesn’t repeat, but it suggests one might get better buying opportunities in the next couple of weeks. Oh, and by the way, any fiscal cliff “resolution” rallies will just amount to rearranging the deck chairs on the Titanic. Our debt and spending trajectories are unsustainable.
 

Click for a bigger version….go ahead, really.

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Weekly Recap & Outlook – 12.07.12

Friday, December 7th, 2012

Tower Private Advisors

Below

  • Intriguing mixture of headlines
  • Cartoon of the week
  • Payrolls report should be disappointing

(more…)

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Weekly Recap & Outlook – 11.30.12

Friday, November 30th, 2012

Tower Private Advisors

Below

  • Fiscal Cliff dominates markets
  • Got carried away with housing

(more…)

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