Home > Archive > February 2012
February 2012
Posted by Thomas Wilson on 2/29/12 12:07 pm
Louis Navellier of Navellier & Associates go over why he thinks a stock market correction is coming soon. "The stock market continues to benefit from a tidal wave of buying pressure, as new money keeps flowing into stocks. The S&P 500 and Dow rest at their highest levels since before the 2008 financial crisis, while NASDAQ is trading at an 11-year high. This surge was thought to be impossible last October, when fears of a double-dip recession were dominant. Back then, we called for a strong market recovery. Now, I may be going against the grain again - calling for a short-term correction due to rising oil prices."
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Milton Ezrati of Lord Abbett takes a look at President Obama's budget for 2013 and explains why it is Dead On Arrival. "President Barack Obama has released his fiscal 2013 budget. Republicans promptly condemned it as irresponsible and merely a campaign document. Since Republicans control the House of Representatives, there is little chance that this budget, or anything like it, will pass into law before the November elections, if even then. But if this proposed budget is dead on arrival - leaving little reason for investors to adjust their portfolios for it - still the document can instruct, especially on what it ultimately will take to address this nation's deficit and debt problems."
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Wells Fargo's Chief Macro Strategist, Gary Thayer, believes the U.S. economy and the stock market are unlikely to be as impacted from rising oil prices compared to last year. "Energy prices are rising and many investors are probably saying "Here we go again." After all, a year ago rising oil and gasoline prices, along with other factors, contributed to stock market weakness in the second and third quarters of 2011. At this point, it looks like oil prices could move higher in the short run because of increased tensions in the Middle-East. However, many factors are different this year from last year."
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Roosevelt Investments' February market commentary looks at the improvements in the US economy and how many investors have missed the current rally in the market. "It has now been eighteen straight weeks that the U.S. economy has been on an improving trajectory as indicated by macroeconomic data, including ISM surveys, durable goods orders, regional Fed surveys, and consumer sentiment. Given that consumer spending is a disproportionate driver of our economy, labor statistics are also of critical importance. On this front, unemployment claims have been steadily declining, as layoffs have fallen with improved activity and better sentiment by employers. New claims are now at the lowest level since April 2008, and the unemployment rate has fallen to 8.3%."
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Posted by Thomas Wilson on 2/24/12 9:58 am
Chief Macro Strategist at Wells Fargo, Gary Thayer, looks at some of the similarities and differences between this year and 2011. "Stock market volatility has subsided considerably during the past few weeks, following the extreme volatility of last summer. As a result, the U.S. stock market advance during the first seven weeks of this year has been almost a steady rise in prices. A year ago, the stock market also rose steadily at the start of the year but conditions deteriorated by mid-year."
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Louis Navellier discusses the improving US economic condition and the slowing European and Asian economies and what it means for the markets. "Europe is bogged down with debt worries and austerity cuts, so a rise in oil prices could push more of the euro-zone nations into recession. Eurostat reported last week that euro-zone GDP contracted at a 1.3% annual rate in the fourth quarter. Japan looks like the "Italy of Asia." On Monday, Tokyo announced a 2.3% drop in its fourth-quarter GDP, marking it the third time in the past four quarters that Japan has reported negative GDP growth."
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Ihab Salib, Head of Fixed Income at Federated Investors, suggests that the tentative second Greek bailout will boost market confidence, but that investors should be looking towards Spain and Italy instead. "The tentative agreement reached over the weekend to provide Greece with a second bailout may not prevent an ultimate default by the euro-zone's fiscally weakest member. But that doesn't really matter all that much to the markets. What the deal does is buy time, and that's all the markets really want."
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Posted by Thomas Wilson on 2/23/12 9:30 am
Chief Equity Strategist at BlackRock Bob Doll reviews the improving economic backdrop of the US and around the globe. President Obama's proposed dividend income tax increase is also discussed. "The general economic trend in the United States over the past couple of months has been that positive surprises have outweighed negative ones and the overall tone of the data shows that economic improvements are continuing. The labor market in particular has been accelerating, with jobless claims on a noticeable downward trend. Even the housing market, which has long been a source of weakness, has begun to show some signs of life."
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Milton Ezrati, Senior Economist and Market Strategist at Lord Abbett takes an in-depth look at housing market recovery and what it can offer to the ongoing economic recovery. "Reasonably good news on residential real estate has of late prompted a kind of enthusiasm about sector's prospects. It is good to see closure on the legal matters surrounding foreclosures and some improvement in sales and construction activity. These signs, among others, do suggest that the worst on housing has very likely passed. But too much enthusiasm is misplaced. If the free-fall is over, much will prevent housing from acting as an economic growth engine for years to come. The economy will grow, and the urgency surrounding home values and mortgages will gradually lift, but the sector at best can offer the economy little more than neutrality."
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Gary Thayer, Chief Macro Strategist at Wells Fargo, examines the cash on the sidelines story and what it would take for some of it to flow into the financial markets. "Individuals and businesses are holding more cash as a precaution against unexpected events. This is often referred to as "cash on the sidelines," which could come into the stock market at some point. It is important to understand why people are holding more cash and what needs to happen in order for some of that money to go into the market."
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