Happy Mother’s Day Mr. Bernanke
In light of the current low interest rate environment, we are watching particularly closely for instances of “reaching for yield” and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals. It is worth emphasizing that looking for historically unusual patterns or relationships in asset prices can be useful even .. read more
Housing Pothole or Data Volatility
The last Census Bureau Survey of New Home Sales showed a lower increase than most expected (417,000, or 1.5% above the previous month). Part of the reason for the lower growth rate was an upward revision to February (to 411,000), but both months are far below the January pace (445,000). These are all adjusted numbers, .. read more
GDP, Q4 2012 Preliminary
Government spending and inventory builds were good in Q3, according to economists, when they pushed GDP accounting above expectations. Those same two economic accounts dramatically reduced economic activity in Q4, so economists are now intimating that the resulting contraction is something other than real. On the part of government spending, it probably should be ignored .. read more
QE 3 & Home Sales
December sales of new homes was disappointing in that the adjusted pace did not keep up with previous months. From May 2012 through October 2012, year-over-year increases in new sales levels stayed consistently above 20%. That drove expectations that the trend in residential real estate had finally turned. Given available data, that does seem to .. read more
Trend Watcher – 2012 Expectations
Joseph A. Gomez, Sr. Investment Advisor Will 2012 be a repeat of “Sell in May and Go Away”? Collectively, strategists are expecting the S&P 500 to finish 2012 at 1,350, which would be a gain of over 7%. HSBC has a year-end 2012 price target of 1,190 (down 5+%). Goldman Sachs is expecting the S&P 500 .. read more
September Market Report – Government to the Rescue
Note: This update is longer than usual. I feel it is important for everyone to understand how the problems facing our economy developed and what steps are being taken to correct them. The details of the latest government rescue effort are not completely available yet, so it is hard to predict the outcome, but it .. read more
