Joseph Gomez, Sr. Investment Adviser and Portfolio Manager
As we close out the quarter next week, expect to see plenty of window dressing as portfolio managers want their clients to see that they have stocks on the books during such a strong quarter for the market. Window Dressing is a strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.
The following are the most likely buy candidates: Apple (AAPL), Bank of America (BAC), JP Morgan (JPM) and Microsoft (MSFT). The most likely sell candidates include: PepsiCo (PEP), McDonald’s (MCD), Verzion (VZ) and Google (GOOG).
The S&P 500 is currently up 107% from its low in March 2009. But the index is still within its decade long sideways trading range, and it’s got 11.6% to go before reaching the top of this trading range, which is at 1,565. The index is currently trading at just under 1,400. The Nasdaq Composite is up 143% from its March 2009 low, and it just experienced a very bullish breakout above its 2007 and 2011 highs. The Nasdaq still needs to gain 64% to get back to its Internet Bubble high of 5,048. When the Nasdaq first hit 3,000 back in late 1999, it had a trailing 12-month P/E ratio of 73. The index’s current P/E stands at 25.5.
It seems as though no matter what the market does, individual investors remain reticent to embrace the bull market. With the exception of just one week in February, the weekly bullish sentiment survey from the American Association of Individual Investors (AAII) has been under 50% for the last year! In the latest week, bullish sentiment dropped from 45.6% down to 42.4%.
Below, I have included key interest rates, an economic calendar and the charts of the above-referenced securities. Earlier this week, I posted a brief review of the Greatest Investors of All Time, check it out. Have a pleasant and productive week.
Key Rates from Bloomberg.com
| CURRENT | 1 MO PRIOR | 3 MO PRIOR | 6 MO PRIOR | 1 YR PRIOR | |
|---|---|---|---|---|---|
| Fed Funds Rate | 0.15 | 0.10 | 0.07 | 0.10 | 0.15 |
| 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 | 8.30 | 8.70 | 9.10 | 9.00 |
| 1-Month Libor | 0.24 | 0.24 | 0.29 | 0.24 | 0.25 |
| 3-Month Libor | 0.47 | 0.49 | 0.58 | 0.36 | 0.31 |
Mortgage* (National Average)
| CURRENT | 1 MO PRIOR | 3 MO PRIOR | 6 MO PRIOR | 1 YR PRIOR | |
|---|---|---|---|---|---|
| 30-Year Fixed | 4.03 | 3.88 | 3.97 | 4.02 | 4.79 |
| 15-Year Fixed | 3.25 | 3.16 | 3.29 | 3.32 | 3.99 |
| 5/1-Year ARM | 2.88 | 2.84 | 2.87 | 2.96 | 3.39 |
| 1-Year ARM | 2.80 | 2.71 | 2.96 | 2.96 | 3.03 |
| 30-Year Fixed Jumbo | 4.56 | 4.69 | 4.69 | 4.75 | 5.40 |
| 15-Year Fixed Jumbo | 3.77 | 3.96 | 3.96 | 4.12 | 4.70 |
| 5/1-Year ARM Jumbo | 3.02 | 3.24 | 3.18 | 3.18 | 3.70 |
Economic Calendar by Econoday.com
![[Report]](https://bloomberg.econoday.com/images/bloomberg-us/byconsensus_butt.gif)
![[djStar]](https://bloomberg.econoday.com/images/bloomberg-us/djstar.gif)
![[Star]](https://bloomberg.econoday.com/images/bloomberg-us/star.gif)
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 accumulation, Joseph Gomez can be reached at jag@4kb.d43.myftpupload.com.
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