Economics
Recent Data
August existing home sales dropped 2.2% versus expectations of a 1% decline; also home prices continued to fall more than estimated. A graphic look:
http://calculatedrisk.blogspot.com/2008/09/august-existing-home-sales-decline.html
Weekly mortgage applications plunged 10%; higher rates are being partially blamed for this disappointing performance.
August durable goods orders fell 4.5% versus expectations of a 1..4% decline.
http://econompicdata.blogspot.com/2008/09/durable-goods-shipments-move-on-nothing.html
Weekly jobless claims rose 32,000 versus expectations of a 10,000 decline.
http://calculatedrisk.blogspot.com/2008/09/weekly-unemployment-claims-jump-to.html
Both the durable goods orders and employment numbers were influenced by Hurricane Ike.
Other
A reasoned look at the Paulson plan:
http://article.nationalreview.com/?q=ZDNkOTc5ZTY4YTlkMDkyMDY3MmI1NTk5ZjZmZDkxY2U=
And this from Bill Gross (Chief Investment Officer of Pimco):
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092302322.html
The rating agencies role in the financial crisis:
http://bigpicture.typepad.com/comments/2008/09/bloomberg-blame.html
The latest data on consumer credit:
http://mjperry.blogspot.com/2008/09/what-credit-crunch.html
Politics
Domestic
International War Against Radical Islam
The Market
Technical
Market performance following periods of high volatility (like we have been in):
http://traderfeed.blogspot.com/2008/09/relative-range-expansion-in-s-500-index.html
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The Markets (DJIA 10825; S&P 1185) closed pretty much unchanged yesterday (DJIA -29 pts; S&P -2.pts) leaving the DJIA above its July 2008 low (10809) and the S&P below (1198). Volume was nonexistent and the volatility index remains exceedingly high. Basically, nothing is transpiring because investors, traders, etc are all sitting in front of their TV’s watching
In this current state of suspended animation, assuming that your cash position is where you want it to be (our Portfolios are roughly 19-20% in cash) and you would buy your current portfolio at the Market open this morning, there is nothing to do. If not, then take advantage of the lull in this Market to make adjustments. As you know, I believe that the plan has to be approved and therefore it will be because the consequences of not doing so are so onerous that intelligent, thoughtful men can’t not do it. So today we do nothing. Nevertheless, I have both a Buy and a Sell list ready when clarity comes.
As a final thought, I remind you that even if we avert disaster, the US economy is facing a prolonged period of slow economic growth as the financial system heals in which ironically the biggest threat will likely be inflation as the Fed attempts to re-absorb the extraordinary infusion of money required to avert disaster in the first place. I think that that argues for a high cash position (15-20%) and a more trading oriented approach to investment strategy.
Fundamental
Subscriber Alert
The stock price of CME Group (CME-$366) has traded above the upper boundary of its
http://finance.yahoo.com/q?s=CME
Aggressive Growth Buy List
Company Close 9/24
Harley Davidson $39.18 39-45
Styrker 63.96 64-74
News on Stocks in Our Portfolios
Positive comments on Lowe’s (Aggressive Growth Portfolio):
http://www.thestreet.com/story/10439021/1/lowes-sees-rise-in-fiscal-2009-sales.html?puc=_htmlbtb
Nike (Dividend Growth Portfolio) reported its fiscal first quarter operating earnings of $1.03 versus expectations of $.92 and $.92 recorded in the comparable quarter last year.
http://finance.yahoo.com/q?s=NKE
More Cash in Investors’ Hands
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