Planmark - Library | Weekly Commentary

"The financial markets are currently filled with contradictions and that’s contributing to head-scratching and risk-aversion on the part of investors."

August 15, 2011

The Markets

" If there was ever a week for investors to be on vacation and “off the grid,” last week was it. By being unplugged, you would have missed the following wild ride:"

August 8, 2011

The Markets

"As of last Friday, the Dow Jones Industrial Average had declined just over 10 percent since April 29, according to The Wall Street Journal. To put that in perspective, the Journal said, “Since 1962, the Standard & Poor's 500-stock index has seen 25 corrections of 10 percent during a bull market -- but in only nine of them did the losses grow to 20 percent or more, according to Birinyi Associates Inc. That means there is only slightly more than a 1-in-3 chance that the market is going to keep cratering.”

August 1, 2011

The Markets

"Unfortunately, Middle America is stagnating. The economic recovery started in June 2009 has been the second weakest recovery since World War II, according to the Wall Street Journal. Underscoring that weakness, the government reported last week that the economy grew a feeble 1.3 percent pace in the second quarter--essentially stall speed and not enought to reduce the unemployment rate."

July 25, 2011

The Markets

"How did our federal budget deficit become so large that we find ourselves in this political quagmire over raising the debt ceiling?"

July 18, 2011

The Markets

"Republicans and Democrats are squabbling over raising the federal debt ceiling and jeopardizing a projected August 2 "drop dead" date for avoiding a default on part of our outstanding debt obligations."

July 11, 2011

The Markets

"With unemployment high, economic growth weak, and the budget out of control, how can stocks hang in there? The short answer is corporate earnings."

July 5, 2011

The Markets

"With immediate default now off the table, investors breathed a sigh of relief and helped send the S&P 500 to its biggest weekly gain in two years, according to Bloomberg."

June 27, 2011

The Markets

"There was good news and there was bad news but, by the end of the week, a wave of pessimism had swept gains away, causing markets to finish lower. In the good news department, Greece adopted an austerity program that made it eligible to receive financial support from the European Union and International Monetary Fund, according to The New York Times."

June 20, 2011

The Markets

Like a computer owner who successfully reboots after experiencing a blue screen, investors heaved a sigh of relief on Friday as the Dow Jones Industrials and Standard & Poor’s 500 Indices eked out gains for the week ending six straight weeks of losses. According to Reuters, markets gained after leaders in Germany and France suggested they would provide additional support to prevent Greece from defaulting on its debt.

June 13, 2011

The Markets

To rework one of the Beatles most famous songs, our economy is traveling “The Long, Winding and Bumpy Road.” After doubling in value by the end of April from the March 2009 low, the Standard & Poor’s 500 index has now declined for six straight weeks, according to Minyanville and The Wall Street Journal. While the doubling in stock prices is quite impressive, the economy hasn’t kept up. Currently, we’re experiencing “bumps” along the economic road including a double-dip in housing prices, weak first quarter economic growth, a high unemployment rate, and ballooning government debt, according to The Wall Street Journal.

June 6, 2011

The Markets

Americans are concerned about the future of our country. Times are difficult as we deal with budget deficits, high unemployment, weak consumer confidence, low housing prices, and high energy prices. But, despite our challenges, there's one reason to be optimistic....the U.S. is an innovator.

May 31, 2011

The Markets

Starting in July, it may cost you more to wake up in the morning. Starbucks announced last week that it was raising the price of bagged coffee sold in its cafes by an average of 17%. Interestingly, the rising price of coffee represents the confluence of several macro factors affecting the world today, according to Bloomberg. First, farm goods are becoming more expensive as the cost of fertilizer is rising and being passed onto consumers. Second, the developing world from Brazil to Asia is becoming more affluent and one outcome of that is they are more willing to pay up for high-quality goods -- including coffee. Third, adverse weather conditions are affecting various crops including coffee. In fact, poor weather has helped curtail coffee production and kept global coffee inventories held by exporting nations near a 40-year low.

May 23, 2011

The Markets

Last week, we witnessed a late 1990s “déjà vu moment” with the IPO of LinkedIn, one of a new crop of social-media companies like Facebook, Groupon, and Twitter that are generating excitement among the investing public, according to MarketWatch and Barron’s. LinkedIn soared more than 100% on its opening day and finished the week with a market value of $8.8 billion, according to Bloomberg. Not bad for a company, “that doesn't expect to be profitable this year, as it ‘invests for future growth,” according to Barron’s.

May 2, 2011

The Markets

When Fed Chairman Ben Bernanke speaks, people listen. The normally secretive Federal Reserve held its first-ever news conference last week and what Bernanke said turned out to be music to the market’s ears.

April 25, 2011

The Markets

Gold gets most of the headlines, but silver is the precious metal that has really been on a tear. Just last week, silver prices rose 9%, according to Bloomberg. Over the past 10 years ending April 21, 2011, silver prices rose 937% compared to a rise of “just” 469% for gold and 7.5% for the S&P 500 index, according to Bespoke Investment Group.

April 18, 2011

The Markets

While the high unemployment rate is still a concern, the country seems to be shifting its focus to two issues -- the budget deficit and inflation. Almost everybody seems to agree that we’ve got to get the budget under control, but, not surprisingly, the Democrats and Republicans have two very different ideas on how to make that happen.

April 11, 2011

The Markets

The dollar is becoming a pariah and weakening against nearly all global currencies because our relatively slow economic recovery means the Federal Reserve is unlikely to raise interest rates in coming months, according to The Wall Street Journal. Low interest rates tend to make a country’s currency less attractive and that causes investors to move capital to other countries that offer higher interest rates on deposited money.

April 4, 2011

STOCK MARKET RISES SHARPLY

It may not have felt like it, but the stock market, as measured by the S&P 500, rose 5.4% during the quarter. Despite some trying moments, the market rose “amid growing optimism that the recovery from the financial crisis had become self-sustaining, according to The Wall Street Journal. The stock market seems to have taken to heart the U.S. Postal Service commercial that said, “...neither snow, nor rain, nor heat, nor gloom of night, nor the winds of change, nor a nation challenged, will stay us from the swift completion of our appointed rounds.” In this case, the “appointed rounds” was a stock market that went up.

March 28, 2011

The Markets

It’s really quite remarkable how quickly the stock market shrugged off the problems in Japan, the unrest in the Middle East and North Africa, the rising price of oil and other commodities, and the continuing sovereign debt problems in Europe. What’s helping the market stay firm? Once again, it looks like strength in corporate earnings.

March 21, 2011

Update on World Events

The enormity of the unfolding tragedy in Japan has saddened the world. We have never seen a triple tragedy like this with an earthquake, a tsunami, and a nuclear disaster all hitting one country at the same time. Like many others, we are hoping and praying for the Japanese people that their situation will improve soon.