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Archives for July 2011

What we’re Reading 7-14-11

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How Much of the Decline in Unemployment is Due to the Exhaustion of Unemployment Benefits? Federal Reserve Bank of Chicago A Home Is a Lousy Investment  The WSJ The Disappearing Recovery The WSJ … [Read more...]

Stocks Get Bernanke Bounce

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In his twice-a-year economic report before Congress Wednesday, Federal Reserve chairman Ben Bernanke’s comments helped stocks rally during the morning session, with the Dow Jones Industrial Average surging 164 points—for a Bernanke bounce. He told the House Financial Services Committee that “We have to keep all options on the table” in fighting inflation or deflation. Well, that clears things right up, doesn’t it? Bernanke went on to say that “If we get to the point where the recovery is faltering” and inflation drops to zero, then he would consider additional stimulus options. Great, more … [Read more...]

Gold Surges to Record High

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Gold is up more than 6.5% since the first of the month. The precious metal is rallying on fears that the euro-area financial crisis may infect Italy and an indication from Chairman Bernanke that the Federal Reserve hasn’t ruled out another round of money printing. I’m not sure who believed that the Fed took QE3 off the table, but based on the price action in financial markets today, apparently some investors did. Gold is up $18 today, silver is up more than 5%, wheat is up 6.4%, oil is rallying, the Dow is up over 100 points, and the dollar has fallen to a new low versus the Swiss franc. … [Read more...]

The Most Popular Bond Fund

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When investors ask me to review their company’s 401(k) investment options, I can’t get over the lack of bond fund choices offered by the plans. More times than not, the choice is between a bond fund with a maturity too many years out for my comfort level, and one with credit risk that is far too high. Unfortunately the retirement plan advisors that put these plans together are more interested in conformity than coming up with a formidable bond lineup for participants. According to a study released in October from BrightScope Inc., the PIMCO Total Return Fund was the most popular bond fund … [Read more...]

The Jobs Report

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After the blowout payroll employment number reported by ADP yesterday, investors were expecting a similarly strong showing from the government employment report today. They didn’t get it. Instead, those who bid up shares yesterday on hopes built upon a single monthly data point from a famously inaccurate source took it in the neck. This morning’s payroll employment report was dismal. Stocks plunged on the news—giving up all of yesterday’s gains and then some.  Officially, economists were looking for total nonfarm payrolls to expand by 105K. Unofficially, after yesterday’s ADP report, … [Read more...]

S&P 500 Technical Analysis Update

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Stocks are up big today on a blowout ADP employment report. Economists were looking for private sector job gains of 70,000 in June. The actual number came in at 157,000—more than double expectations. The strong ADP report comes on the back of better than expected manufacturing data last week. Two better than expected economic data points, and investors have thrown caution to the wind. In only 8 trading days, stocks have gained nearly 7%. From a technical analysis perspective, the S&P 500 looks strong. The index bounced powerfully off of its 200-day moving average and instead of running … [Read more...]

Your Worst Payday

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Should you have more invested in the stock market? The Dow has almost doubled from its March 2009 low. And over the last ten months, the index has gained 26%. Oil prices have started to pull back, the euro-area debt crisis is being addressed (at least temporarily) and some U.S. economic data has come in ahead of expectations. With the Dow surging 5% in only five trading days, you may be feeling more confident. Instead of hoarding cash, you might be looking to invest. But after the near doubling in the stock market, is it still a good time to invest? How can you tell?   In order to gauge the … [Read more...]