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Market Minutes for the week of January 16th

by Cascade

Market Minutes for the week of January 16th: “A man is not finished when he is defeated. He is finished when he quits.”  – Richard M. Nixon Jim Cramer is fond of saying that if you want to know where the economy is, listen to what the three biggest banks have to say when they report earnings. Well the “Big 3” all reported last Friday and here is what they had to say: JP Morgan: “[We] ended the year with record balances of $189 billion, up 14% year on year, with growth in both commercial and industrial and commercial real estate. Credit performance remains strong, with a net charge-off rate of 11 basis points driven by a couple of oil and gas names largely reserved for. In commercial real estate we had no net charge-offs and we reiterate three quarters of this portfolio is multi-family lending.” Bank of America: “Consumer banking led with 8% growth. We continue to see growth in residential real
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Market Minutes for the week of January 9th

by Cascade

Market Minutes for the week of January 9th: “The taste of defeat has a richness of experience all its own.” — Bill Bradley The NFIB (National Federation of Independent Business) says that small business confidence in the U.S. rose to a 12-year high in December. The index of small business confidence rose to 105.8, the highest reading since December 2004. NFIB economist Bill Dunkelberg: “In this month’s report, we are also finding evidence that higher optimism is leading to increased business activity, such as capital spending and investment.” The Commerce Department said that U.S. wholesale inventories rose by 1.0% in November, the largest monthly increase since November of 2014. This number suggests that inventory investment would again support stronger 4th quarter GDP growth, maybe close to 3%. The Commerce Department said that retail sales in December rose by 0.2%, below the 0.4% estimated. Auto sales were up 2.4%. Online sales
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Market Minutes for the week of January 2nd

by Cascade

Market Minutes for the week of January 2rd: “Ninety-nine percent of failures come from people who have the habit of making excuses.” — George Washington Carver The five best performing assets in 2016:  1.) Brazilian stock market +68.9%. 2.) Brent crude oil +52.5%. 3.) Russian stock market +51.0%. 4.) WTI crude oil +45.3%. 5.) Sugar +27.9%. The five worst performing assets in 2016:  1.) Cocoa -33.1%. 2.) Chinese stock market -18.3%. 3.) British pound/U.S. dollar -16.9%. 4.) Wheat -13.8%. 5.) Italian stock market – 13.4%. Other notables:  European stock market (Stoxx 600) -4.9%;  iShares 20+ year U.S. Treasury bond  ETF -1.4%;  Japanese stock market +3.8%;  S&P 500 +9.5%;  Nasdaq +7.5%; DJIA +13.4;  High-grade copper +16.5%. The Index of Consumer Sentiment from the University of Michigan rose to 98.2 in December, the highest reading since January of 2004. The Chicago PMI index fell by 3 points in December to 54.6 and
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Market Minutes for the week of December 19th

by Cascade

Market Minutes for the week of December 19th: “Tomorrow is the first blank page of a 365 page book. Write a good one.” – Brad Paisley (This one of my favorite quotes for an upcoming new year.) “2016 is no different than other years, but it does have a twist – The Orange Swan, in the form of President-elect Donald J. Trump” – Doug Kass Dow 20,000. What does that mean? What does that say? Nothing really, it is more of a psychological milestone than anything else since the DJIA is a collection of just 30 stocks (4 of which are responsible for 35% of the move up since the election). A move from 18,000 to 19,000 represents a 5.5% increase. A move from 19,000 to 20,000 is a 5% increase. That said, the Dow Jones Industrial Average continues to be the most watched measure of U.S. stock market performance
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Market Minutes for the week of December 12th

by Cascade

Market Minutes for the week of December 12th: “The whole problem with the world is that fools and fanatics are always so sure of themselves, and wiser people are full of doubts.” – Bertrand Russell Why are interest rates and bond yields continuing to rise? 1.) The Bank of Japan and the European Central Bank are slowing their monthly flow of purchases. 2.) U.K central bank chair Mark Carney and Fed chair Janet Yellen have admitted that they are willing to tolerate higher inflation. 3.) The commodity bear market has ended as a year of immense supply cuts are finally filtering through. The Journal of Commerce of industrial materials index is at the highest level since June of 2015 and is up 29% year over year. 4.) The Atlanta Fed wage growth tracker was at 3.9% in October, the highest level in 8 years. 5.) Foreign governments remain aggressive sellers
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Market Minutes for the week of December 5th

by Cascade

Market Minutes for the week of December 5th: “Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.” – James Surowiecki Jim Cramer: “We now realize we will look back at Election Day 2016 and say the world has changed. You may hate or like the election results, but one thing is certain: Just getting it over with turned out to be a big deal, and if there can be a follow-up to all the business campaign promises Donald Trump made, many of these moves will be totally justified. What’s really dawning on people right now is exactly how frozen our nation was by this election and how unthawed it seems to be now. But the most important thing to remember is that in many ways, not just politically, we’ve got a BE and AE going on, before election
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Market Minutes for the week of November 28th

by Cascade

Market Minutes for the week of November 28th: “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.”  ̶̶̶  John Allen Paulos The results of the election caught the entire financial world off sides and leaning the wrong way. The repositioning and reallocating financial assets to hopefully benefit from a “new world of growth” has pushed the U.S. stock market indexes to record highs nearly every day since the election. On the other side of the “Trump Trade,” the fear over higher inflation from the “new world of growth” has caused the yield on the 10-year Treasury note to rise by nearly 0.53% to 2.44% thus producing nearly $1.7 trillion of paper losses for government, corporate and municipal bonds. In other words, in a post-election balanced portfolio, U.S. stocks have given, international stocks have done nothing and bonds have brutally taken away.
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Market Minutes for the week of November 14th

by Cascade

Market Minutes for the week of November 14th: “What’s clear to the broad consensus of investors is almost always wrong. First, most people don’t understand the process through which something comes to have outstanding money-making potential. And second, the very coalescing of popular opinion behind an investment tends to eliminate its profit potential.” – Howard Marks What does the aftermath of the election earthquake look like? Blaine Rollins of 361 Capital: “In a surprise to every investor, we have been presented with an entirely new set of tea leaves to look at. A more predictable, low economic growth set of data has been replaced with a less certain, aggressive set of numbers. Whether you believe that the new scenario will work out doesn’t matter to the markets. A Hillary/Gridlock government was so heavily bet that the markets will now have to adjust to the RRR that just won Washington D.C.
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Blueprints: Starting To Design – this list is for you

by Cascade

Last month, I hosted a workshop focused on the second and third steps of my Blueprints process of financial planning for families with a special needs member. “Starting to Design” is the second Building Block and provides the basis for an exhilarating workshop as participants write out their dreams and goals. The design process starts with writing out hopes, dreams and goals on a sheet of paper called a DreamList. This DreamList contains anything and everything you want out of life – without any limitations. For those of you who have not been able to attend this workshop, take out a blank piece of paper and start writing down what you want to have, feel and do. For some, these goals look like things – a new car, a fast boat, a new wedding and engagement ring set, a home, a gym set or a large screen TV. Many people
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Market Minutes for the week of November 7th

by Cascade

Market Minutes for the week of November 7th: “Experience is something you don’t get until just after you need it.” – Steven Wright Marcus Nadler was a great thinker at the Federal Reserve during the Great Depression, one of our country’s gloomier “stress tests”.  At a time with so much despair and with many Americans giving up on democracy and market capitalism, Nadler presented four arguments: First he said, “You are right if you bet that the U.S. economy will continue to expand. Second, “You are wrong if you bet that it is going to stand still or collapse.” Third, “You are wrong if you bet that one element of our society is going to ruin or wreck the country.” Fourth, “You are right if you bet that leaders in business, labor and government are sane, reasonably well informed and decent people who can be counted on to find common
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