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Video Market Commentary April 2013, Issue 1

Friday, April 5th, 2013

Faith in the System

Monday, April 1st, 2013

images4As the Cyprus banks reopened this week the damage has already been done. The banking system is made up of a tremendous number of rules and regulations but it comes down to confidence. If you are not confident that your money is safe you take steps to try and make it safe.

That describes the depositors in Cyprus. They are lacking confidence when the ECB and IMF along with the EU agree to take depositors money to solve the banking industry’s problem. Even when that decision was reversed the damage was already done.

Think in terms of the bank run during the Great Depression here in the U.S. The banks closed and struggled for years thus causing a collapse in the economy. FDIC insurance is there to give people confidence in putting money into the banks and the banks in turn loan it out to oil the machinery of the economy.

The EU and its cohorts short circuited confidence and it will spread to other EU countries. That means the EU will likely slip deeper into recession as depositors take money out and the banks that worry about depositors doing just that hold on to the cash by not lending. The trickle down result is less economic activity.

The lesson here is, if you want a strong economy do not mess with people’s hard earned money! PERIOD!

Good Trading
Steve Peasley

US economy fuels rally despite global problems.

Monday, April 1st, 2013

Today’s Stocks and Topics: (SIX) Six Flags Entertainment Corp., (GIS) General Mills Inc., Jobs Numbers, Retirement Savings, Taxes, (HD) Home Depot Inc., (LULU) Lululemon Athletica Inc., I-R-A, (TAL) TAL International Group Inc., Investing in the Market.

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Portfolio Smart Scan.

Video Market Commentary March 2013, Issue 5

Friday, March 29th, 2013

Small Discomfort

Thursday, March 28th, 2013

buying-municipal-bondsA spike in jobless claims puts an end to the week over week of improvement, giving us the impression that the job market is finally gaining traction at a level that will put the unemployed back to work soon. Claims rose to 357,000 from 339,000. Still 357,000 new claims is not a bad number after months of well over 400,000 during the recession and after the recovery. Next week the jobs report is suggesting 200,000 new jobs were created in March. Let’s hope for more but it is doubtful.

A final revision of the 4th quarter GDP number came in at an increase to .4% from .1% from the first revision. As a reminder, when first reported it was a negative number back in January. Still the hope was for a .6% increase.

It is hard to decipher the meaning of the massive amount of statistics released every week and most of the data is backward looking. Therefore, does it help us in determining where the economy is going thus where the stock market is headed.? We concentrate on leading economic indicators and inside the Durable Goods report this week there was a hint of a better economy. However, the Jobless claims report, at least for this week, took that hint away somewhat.

That economy is still going to struggle but it is still growing.

Good Trading
Steve Peasley

Learning From Our Parent’s Financial Mistakes.

Thursday, March 28th, 2013

Today’s Stocks and Topics: (CHK) Chesapeake Energy Corp., Selling stocks, Trading, Bonds, Choices for new investor, ROTH IRA, Converting 401k to ROTH IRA, (CPA) Copa Holdings S.A. CL A.

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Confusing Stastics

Wednesday, March 27th, 2013

691.StockMarketThere were two important economic numbers out yesterday and if you just looked at the headline numbers you would get a very distorted view of what they are telling us.

The new home sales report for February showed a drop of 4.6% marking the biggest decline in two years. Does this tell us that the housing industry is still struggling? That might be the case but not because of this number. Most of the drop was probably due to poor weather rather than a fall in demand. If demand was slowing prices would not have risen for the month by 3%. Also sales fell 13.3% in the Northeast, the place where weather would affect buyers the most.

The other number out this morning was sales for Durable Goods and it was up a surprising 5.7%. However, if you take out transportation it fell .5%. Most of the rise was for airplanes just as last month most of the weakness was caused by airplane sales. However, core capital goods orders also fell by 2.7% but last month it was up a striking 6.7% so maybe this fall was to be expected. So how do we know the health of the economy from this report? One way is to look at the primary metals and computers sales. Primary metals are used to make things and that was up 1.7%. And computer bookings, a major category of business investment was up 4.9%.

You need to look deeper into these reports, not just the headlines. The story being told is that the economy might be a little stronger than forecast, that GDP for the first quarter may be higher than 2.5%.

Good Trading
Steve Peasley

Social Security options worth investigating.

Wednesday, March 27th, 2013

Today’s Stocks and Topics: Apple Inc., Bonds vs. Mutual Funds, (BA) Boeing Co., Cyprus Economy, KPP Income Program, (PRU) Prudential Financial Inc., (AAPL) Apple Inc., Fracking.

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How to Apply Buffett’s Investing Secrets to Your Portfolio.

Tuesday, March 26th, 2013

Today’s Stocks and Topics: Asian Stock Markets, S and P 500, WalMart, QE3, Cyprus, Saving Account, ETFs, (MET) MetLife Inc., (DE) Deere and Co., Roth IRA, (DSX) Diana Shipping Inc.

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A Good Start for Mexico

Monday, March 25th, 2013

Global_Stock_Market_3-300x191Since we wrote about India in a recent market commentary I thought we would give a little attention to Mexico. Not long ago the attention to our neighbors south of the border was all about the drug wars and their spill over affect in the U.S. Now with the election of a new Mexican president everyone is excited about reforms taking place.

This is reforms by the party, PRI, returning to power. It lost their majority several years ago after holding it for about 70 years. The excitement is centered around a cross-party reform package already agreed to. Many of these reforms may propel Mexico to another level of economic growth. It already enjoys growth running at 4% and the hope is for it to increase in the years ahead.

However, to really spur that kind of accelerated growth they are going to have to tackle more difficult issues. A major issue is their closed-minded and constitutional restrictive energy policy. Mexico has as much known oil reserves as Kuwait but they don’t have the technical know-how or the financial backing to exploit it. They will not let any foreign companies participate with the only player allowed being their government controlled national oil company, Pemex. To change this will require a constitutional change, a task the new government plans on tackling.

Let’s hope it works though there are plenty of doubts. How many times have we seen a good start in reforms fall short in Mexico where 50% of the country is in poverty? We cheer their efforts, a robust and stable neighbor will help solve the illegal immigration problem and maybe someday we can look at immigration on both our borders as the same. More oil flowing north will mean cheaper prices for everyone and anything that helps us will help them as one of our major trading parties. I also like the possible investment opportunities that could result if they succeed.

Good Trading
Steve Peasley