Joseph Gomez, Sr. Investment Advisor and Portfolio Manager

Of the nineteen economic indicators released this week, nine were weaker than expected, eight were stronger, and two were in line. Once again this week, strength was concentrated in employment and housing related indicators. Thursday’s initial jobless claims report showed that the nation’s employment picture continues to improve. In terms of expectations, this week’s total of 348K was well below consensus expectations of 365K. More importantly, it was also the lowest reading in nearly four years.

The Nasdaq has not been this high since December 2000 and Dow 13K watch is in full effect as that index is at its highest levels since May 2008. Underlying breadth has also gotten a bit less overbought over the last week. The cyclical sectors remain strong. As long as this trend continues, this bull has legs.

Are you missing out on this rally? A lot of investors on the sidelines have watched helplessly as this market has rallied. The big question for these investors is do they get in now and risk getting in at the top? Or do they sit tight and wait for a pullback? I offered an explanation of this in my report, Why is Investing so Difficult?  However, if you’ve been following our weekly updates, you would have been enjoying this recent rally. Below are some of our recent comments from our weekly updates:

October 30th – I pay particular attention to stocks that beat earnings and revenue estimates and also raised guidance. In our client accounts, these include: Citrix (CTXS), Philip Morris Int’l (PM), and Baidu (BIDU).

November 14th – I believe that a break above the 1285 level on the S&P 500 will result in an impressive rally through year-end. We always hear investors saying that they would love to pick up some Apple (AAPL) shares if it would only pull back a little bit. Well, now it has pulled back a bit and here’s the chance.

December 11th – Among the standouts in our client portfolios this week, are: AMBEV (ABV)

January 22nd – Standouts in our portfolios last week include Barcalys (BCS), iShares Emerging Market ETF (EEM) and Panera Bread (PNRA).

January 29th – Surprisingly, one mega cap that has been in a stealth rally this year is Microsoft (MSFT).

Below are some charts of interest, an earnings calendar, economic calendar and key interest rates. Next week, we get earnings from Walmart (WMT), Macy’s (M) and Salesforce.com (CRM). I have included a partial list of important new highs this week. Many are positions held in our Global Opportunities Portfolio and other client accounts. The list includes:

Philip Morris (PM) – Apple (AAPL) – Chipolte (CMG) – Qualcomm (QCOM) – AMBEV (ABV) – Lowe’s (LOW) – Tata Motors (TTM) – Microsoft (MSFT)

Have a pleasant and productive week.

Important earnings next week

Ticker Company Sector Industry Dividend Yield Earnings Date Price
WMT Wal-Mart Stores Inc. Services Discount, Variety Stores 2.34% 2/21/12 8:30 62.48
HD The Home Depot, Inc. Services Home Improvement Stores 2.48% 2/21/12 8:30 46.71
KFT Kraft Foods Inc. Consumer Goods Food – Major Diversified 3.05% 2/21/12 38.01
HPQ Hewlett-Packard Company Technology Diversified Computer Systems 1.62% 2/22/12 29.59
AIG American International Group, Inc. Financial Property & Casualty Insurance 2/23/12 16:30 27.23
MDT Medtronic, Inc. Healthcare Medical Appliances & Equipment 2.43% 2/21/12 8:30 39.94
TGT Target Corp. Services Discount, Variety Stores 2.28% 2/23/12 52.64
DELL Dell Inc. Technology Personal Computers 2/21/12 18.16
NEM Newmont Mining Corp. Basic Materials Gold 2.35% 2/24/12 8:30 59.45
TJX The TJX Companies, Inc. Services Department Stores 1.09% 2/22/12 8:30 34.87
ESRX Express Scripts Inc. Healthcare Health Care Plans 2/22/12 16:30 52.18
CRM Salesforce.com Technology Application Software 2/23/12 16:30 129.17
M Macy’s, Inc. Services Department Stores 2.21% 2/21/12 36.25
DISH Dish Network Corp. Services CATV Systems 2/23/12 29.02

Economic Calendar by Econoday.com

Monday Feb 20 Tuesday Feb 21 Wednesday Feb 22 Thursday Feb 23 Friday Feb 24
US Holiday: Presidents’ DayBond, Equity Markets Closed
Redbook
[Bullet8:55 AM ET
 Weekly Bill Settlement

Jobless Claims
[Report][Star]8:30 AM ET
Money Supply
[Bullet4:30 PM ET
New Home Sales
[Report][Star]10:00 AM ET

Key Rates by Bloomberg.com

CURRENT 1 MO PRIOR 3 MO PRIOR 6 MO PRIOR 1 YR PRIOR
Fed Funds Rate 0.11 0.07 0.08 0.12 0.16
Fed Reserve Target Rate 0.25 0.25 0.25 0.25 0.25
Prime Rate 3.25 3.25 3.25 3.25 3.25
US Unemployment Rate 8.30 8.50 8.90 9.10 9.10
1-Month Libor 0.25 0.28 0.25 0.21 0.26
3-Month Libor 0.49 0.56 0.48 0.30 0.31

Mortgage* (National Average)

provided by Bankrate.com
CURRENT 1 MO PRIOR 3 MO PRIOR 6 MO PRIOR 1 YR PRIOR
30-Year Fixed 3.88 3.89 4.03 4.25 4.93
15-Year Fixed 3.16 3.23 3.38 3.51 4.23
5/1-Year ARM 2.87 2.86 2.96 3.03 3.62
1-Year ARM 2.72 2.72 2.76 2.99 3.02
30-Year Fixed Jumbo 4.68 4.56 4.69 4.86 5.52
15-Year Fixed Jumbo 3.96 3.82 3.96 4.32 4.81
5/1-Year ARM Jumbo 3.24 3.14 3.11 3.36 3.91
Clients, principals and/or employees of Alhambra Investment Partners may have long or short positions of any above-mentioned securities. For information on Alhambra Investment Partners’ money management services and global portfolio approach to capital preservation, Joseph Gomez  can be reached at jag@4kb.d43.myftpupload.com. 

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