Category: Portfolio Update

Although the DOW and S&P 500 hit all-time highs this week, the quiet leader was the technology sector. The primary benefactor as well as goat from the internet bubble days, the NASDAQ, is leading the broad market in 2007.  Year to date, the NASDAQ is up 16.2% – followed by the DOW (+13.1%) and S&P 500 (+10.1%).

Technology has become a safe haven as it has zero exposure to the subprime slime that has dogged the financials and homebuilders and it is also a global growth play.  Building world-class telecommunication and computer networks is as important as erecting new highways and bridges to the emerging markets.

Continue reading “Time & Money Review 10/12/07 – Technology: The Forgotten Sector”

The crowd crazing for more rates cuts may have taken a hit on Friday, as jobs appear to be back on track.  Jobs reported by the Labor Department increased by 110,000 for September.  However, the good news was that August negative print of -4000 jobs was revised up to 89,000.

Calls for a US recession grew louder after the August report and many believed it was the impetus for the 50 basis point rate cut.  The market rallied on cue as not fighting the Fed was back in vogue. 

Continue reading “Time & Money Review 10/05/07 – Market Focus Changes on a Dime”

September may have closed on a down tick, but this has been a great month for investors.  For the month, the DOW, S&P 500 and NASDAQ were up 4.0%, 3.6% and 4.0%.  Coming off a very volatile August this was just what the doctor ordered.  Should investors break out the champagne considering that September is usually the worst month of the year for the market?  Not so fast!  The wall of worry is getting steeper and steeper.  

On Friday, the mere suggestion from St. Louis Federal Reserve Bank President William Poole that the more rate cuts may not be in the cards rattled the markets.  “It would be a mistake to bake in the cake more rate cuts,” said Poole.  We are also transitioning into earnings season.  Will the weakening economy translate into weaker earnings?  Then there is the 20th anniversary of Black Monday to look forward to.  Let’s enjoy the weekend, but worry caps go back on – on Monday.  

Continue reading “Time & Money Review 9/28/07 – The Wall of Worry Steepens”

Guesstimates on the outcome of the Fed meeting were all over the map with most thinking that a quarter-point reduction was in the cards.  However, the Fed shocked the market by cutting interest rates 50 and 50.  The federal funds rate (overnight loans between banks) and discount rate (direct loan to banks from Fed) were both lowered 50 basis points to 4.75% and 5.25% respectively.  Stocks rallied as concerns over the housing and credit turmoil dragging down the economy diminished.  For the week, the DOW, S&P 500 and NASDAQ were up 2.8%, 2.8% and 2.7% respectively. 

As stocks rallied, the dollar tanked. The Fed was stuck between a rock and a hard place.  Lower rates and tank the dollar.  Do nothing and possibly tank the economy.  The economy won.  So, what are the implications of a lower dollar?  Take a trip to Europe or Canada for that matter and you will find out.  It takes more dollars to buy stuff abroad than it did last week.  However, on the flip side tourism will pick up as visiting the US hasn’t been this affordable in years.

Continue reading “Time & Money Review 9/21/07 – Commodities Explode”

The September 18th Fed meeting has been hyped more than the Super Bowl.
Is subprime slime leading the economy into a recession?  Can Bernanke and crew save the day with a rate cut?  0, 25 or 50 basis points?  This is definitely shaping up to be a sell the news type event.  I am beginning to prepare myself mentally for a 250 point down day.  The clear winner on Tuesday will be CNBC.   Their ratings will be off the charts around 2PM.

As the talking heads went on ad nauseam about the Fed meeting, the market marched higher.  For the week, the DOW, S&P 500 and NASDAQ were up 2.5%, 2.1% and 1.4% respectively.  The semiconductors were AWOL losing 1.4% for the week. They were weak all week and bit the dust on an Intel downgrade on Friday.

Continue reading “Week in Review 9/14/07 – 0, 25 or 50 basis points?”