Daily Investment Interpretations
First-Half, 2013

Investment Archive, April 5, 2008, to June 30, 2008
Investment Archive, June 30, 2008 to December 31, 2008
Investment Archive, January 1, 2009 to June 30, 2009

Investment Archive, July 1, 2009 to December 31, 2009
Investment Archive, July 1 to December 31, 2010
Investment Archive, January 1, 2011 to June 30, 2011
Investment Archive, July 1, 2011 to December 31, 2011 
Investment Archive, January 1, 2012 to June 30, 2012
Investment Archive, July 1, 2012 to December 31, 2012 
Investment Archive, January 1, 2013 to March 31, 2013
Investment Archive, April 1, 2013 to June 30, 2013
Investment Archive, July 1, 2013 to August 15, 2013
Investment Archive, August 16, 2013 to September 30, 2013

 

Daily Investment Interpretations
Friday, September 13, 2013

2013-9-13 (Friday): Wall Street Week Ahead: Fed may taper without causing market tantrum; The September stock surge continues. The NASDAQ Composite expanded 6.21 points (0.17%) to end at 3,722.18. The Dow incremented 75.42 points (0.49%) to end at 15,376.06; the S&P 500 advanced 4.57 points (0.27%) to 1,687.99. Oil closed at 108.63::;Oil logs 2.1% weekly loss, but holds above $108  Gold ended at 1,328: Gold futures suffer a weekly loss of almost 6%, The VIX fell 0.13 to 14.16.   
    "Months of anticipation will come to an end next week when the Federal Reserve finally says whether it will start to rein in its massive stimulus of the economy, which has flooded financial markets with some $2.75 trillion over the past five years, supercharging returns on everything from stocks to junk bonds."    
    "Stocks continued their September rally Friday as investors anticipated the next moves from the Federal Reserve and waited for more details on Twitter's IPO plans. More"


Marketwatch says:     
    Watch your fund returns triple.  "5-year mutual fund returns are about to get juiced as financial disaster ages out of the data."  
    U.S. oil independence is near.  "The goal of oil independence may be achieved in a decade, one analyst tells Myra P. Saefong."  
    Obama picking Summers for Fed, says Nikkei — White House says no.    
    Market hasn't priced in 'Summers put,' says one economist.    
    Markets price in Fed taper"The most important market moving event is the central bank's policy meeting next week. Will they or won't they taper?"  
    Treasurys eye weekly gain after tepid data.    
    Housing markets are about to get squeezed.  "New cap on federally backed mortgages may hit buyers particularly hard in several pockets of U.S."  
    Sales at U.S. retailers soften in August.    
    Consumer sentiment hits five-month low.    
    Intel upgraded to buy at Jefferies.    
    Omnicom’s Ketchum placed Putin op-ed- report.    
    J.P. Morgan to spend $4 bln on oversight. WSJ    
    The financial cost of religious faith.     
    I$10B in unused Social Security"'Unusual claiming strategies could boost income for any seniors."  
    Cats star in new Social Security media push"Feline-centric videos promote online applications for retirement benefits from the agency."  
    Think Social Security is guaranteed? Think again.    
    Will Social Security be there for you?.    
    Social Security hurdles for government workers.   
    Gambling tax hits SSA payouts — even when you lose.     
    Social Security is not an asset.    
    Strategies for Social Security spousal benefits.    
    Some Lehman creditors benefited handsomely.    
    The financial crisis: What have we learned? (video).    
    10 players from 2008 financial crisis.  "A  look at 10 of the key crisis-era players and where they are now."
    Looking for stocks about to break out?.    
    Growth stocks point to richer prices.    
    It’s Larry Summers, says Nikkei.  "Japanese newspaper says Summers will get Obama nod for Fed chief. White House says no." 
    What 100 basis points mean for bonds.    
    Laszlo Birinyi thinks S&P is headed for 2,000   "Market historian says bull isn’t finished, reports Howard Gold." 
    Could Syria be all about oil?  "Syria has little oil but, notes Ivan Martchev, stands between Saudi reserves and Turkey and Europe."  
    What one ex-Fed official expects on tapering.    
    U.S. Dollar Faces New Competition as Safe Haven Currency"When the next financial crisis hits, don’t be surprised if investors choose the euro over the U.S. dollar as the safe haven of choice."  
    China's Improving Economy: Out of the Woods or Still a Giant Bubble?"Is China’s economy back? According to some chief executives, the world’s second-largest economy has rebounded and Chinese consumers have returned to their old spending ways."  
    Terminator Town USA: Rise of the everyday robots.    
    Watch: Bill Gross is selling bonds. Should you?.    
    Watch: How pharmacies benefit from flu shots.    
    Jamie Dimon: Still ‘Last Man Standing’ But Knocked Down a Few Pegs.    
    Take the Money and Run From Copper, Says Dicker.    
    When interest rates rise, should you sell stocks?.    
    Top 1% Getting 95% of Income Gains: Is Washington Responsible?  "A recent study reveals that the top 10% of earners in the U.S. took home more than half the country’s total income in 2012."    
    Colleges With the Highest-Paid Grads  "From Harvey Mudd to the U.S. Naval Academy, graduates with bachelor's degrees from these colleges and universities earn the highest salaries in the country."    
    Investments That Could Be Financially Dangerous  "Investing should be an integral part of your financial planning, but be aware that not all investments are created equal, and some can be financially dangerous".    
    Weidner: Wall Street needs a good shrink.    
    The Dow is an accident of history.    
    TARP didn't save banks, it ruined them- Kovacevich.    
    Wall Street greed, 5 years after the crash.    
   Survey- Part-Time Work Growing More Due to Economy Than Obamacare.    
    [video] Government shutdown brewing.    
    
   
I've moved the Reinhart-Rogoff discussion here. and the Mars articles here.

State of the Markets articles include:    
    Tech Experts Express Concerns Over Twitter’s IPO Filing. "While many are all a-twitter about Twitter's IPO, there may be issues."   

    Market Wrap For Friday, September 13: Markets Erase August Losses On Light Volume.      Benzinga Weekly Preview: Fed Taper Decision Looming.    
    Inflation Update: PPI Comes In Above Expectations, But….    
    Economic Update: Retail Sales Sluggish in August.    
    Video Game Sales Rise Ahead Of PlayStation 4, Xbox One Release.       
    The Latest Microsoft CEO Search Scuttlebutt (MSFT).    
    Coming Soon: Microsoft Cortana vs. Apple Siri (AAPL, MSFT).    
  .    
    .Short-term, the indices seem to be tracing out another two-month cycle, although, I guess, we can't be sure until they hit new highs.
    Longer-term, when the Fed finally reaches the point at which it can raise interest rates (and that will presumably be after the tapering of QE...Quantitative Easing... has been completed), then we'll be at the threshold of an era when the Fed can once again use monetary policy to control the economy. Until then, I think we'll still be in unfamiliar territory.

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What Should You Do About the Fluctuations in the Stock Market?

"With the economy sinking like a stone, how can anyone seriously claim that a new bull market is about to start?


    The FXI chart below shows the two-year price history of the iShares TR FTSE (China) Exchange-Traded Fund, together with its 50-day and 200-day moving averages. (With all the major indices having exceeded their 200-day moving averages, we'll be following the 25-day and 50-day moving averages for guidance regarding when to buy and when to well.) The 50-day moving average would have gotten you out of FXI in December, 2007, would have gotten you reinvested in April, 2008, would have taken you back out around the end of June, 2008, would have gotten you back in during January, 2009, would have had you selling again in February, 2009, and then would have seen you re-purchasing this fund in April, 2009. Of course, this 50-day moving average isn't  the only indicator someone might want to use to determine buy and sell signals. Other criteria such as breadth,  volume, etc., may play a role, but the 50-day moving average is a starting point. 
    Moving averages act as smoothing functions that reveal underlying stock market trends. What's significant is that these underlying stock trends exist. Of course, we'd like to time our purchases to hit stock market bottoms, and our sells to coincide with market tops. Sometimes, during normal, Fed-controllable recessions, that's possible, but this time, during the "Great Recession", when you couldn't determine whether or not the music was going to stop, it was too risky for me.


    The two-year chart of the NASDAQ Composite, beloww, allows a comparison of the Chinese index, above and the NASDAQ Composite index, below. 


    The same kind of two-year chart, with its 50-day and 200-day moving averages, is presented below for the Dow.


    The comparison chart below shows how the Dow is moving above its Depression-era curve.

    This next chart shows the S&P 500, together with its 50-day and 200-day moving averages.


    Here's a chart showing the 10-year history of the S&P 500 with just the 50-day moving average,


and here's a 10-year chart of the VIX (Volatility Index, also known as the "fear index").

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