No blog this morning.

Thursday, March 26, 8:00 a.m.

Sorry, but I am too busy this morning to provide a free portion of the blog. 


To read my weekend newspaper column click here:   Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

There is an important hotline from last evening in your secure area of the Street Smart Report website. And the next issue of the newsletter will out tomorrow Thursday, evening.


Yesterday in the U.S. Market. 

An ugly day. The Dow closed down 292 points, or 1.6%. The speculative sectors were even more negative, But volume was just average at just over 0.7 billion shares traded on the NYSE.

The Dow closed down 292 points, or 1.6%. The S&P 500 closed down 1.5%. The NYSE Composite closed down 1.1. The Nasdaq closed down 2.4%. The Nasdaq 100 closed down 2.3%. The Russell 2000 closed down 2.3%. The DJ Transportation Avg. closed down 2.0%. The DJ Utilities Avg closed down 1.2%.

Gold closed up $5 an ounce at $1,198 an ounce.

The U.S. dollar etf UUP closed down 0.3%.

Bonds (TLT) closed down 0.8%.


European Markets also closed down quite sharply yesterday.

The London FTSE closed down 0.4%. The German DAX closed down 1.2%. France’s CAC closed down 1.3%. Belgium closed down 0.5%. Denmark closed down 1.0%. Finland closed down 0.7%. Greece closed up 3.7%.  Ireland closed down 0.8%. Italy closed down 0.8%. Netherlands closed down 1.4%. Norway closed down 0.6%. Portugal closed up 0.9%. Spain closed down 1.0%. Switzerland closed down 1.1%.

Asian Markets closed down last night.

The Asia Dow closed down 0.8%. Among individual countries:

Australia closed down 1.5%. China closed up 0.2%. Hong Kong closed down 0.1%. India closed down 2.3%. Indonesia closed down 0.7%. Japan closed down 1.4%. Malaysia closed down 0.1%. New Zealand closed down 0.4%. South Korea closed down 1.0%. Singapore closed up 0.4%. Taiwan closed down 0.5%. Thailand closed down 1.2%.

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NOTE: To gain access call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). Or to subscribe online click here:https://streetsmart.securesites.net/order.html



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Markets This Morning:

European markets are down again this morning.

The Europe Dow is down 1.5%. Among individual countries:

The London FTSE is down 1.2%. The German DAX is down 1.6%. France’s CAC is down 1.3%. Belgium is down 1.9%. Denmark is down 1.8%. Finland is down 2.1%. Greece is down 2.5%. Ireland is down 2.0%. Italy is down 1.6%. Netherlands is down 1.7%. Norway is down 0.4%. Portugal is down 1.5%. Spain is down 0.9%. Switzerland is down 1.6%.


This Morning in the U.S. Market:

Oil is up 3.8% at $51.06 a barrel.

Gold is up $10 at $1,208 an ounce.


This week’s Economic Reports:

This week is an average week for potential market-moving economic reports, that includes Existing Home Sales, New Home Sales, the Consumer Price Index, Durable Goods Orders, a revision of 4th quarter GDP, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

Monday’s reports were that the Chicago Fed National Business Activity Index (CFNAI) ticked down from-0.10 in December to – 0.11 in January. Worse, the more important 3-month moving average plunged from +0.26 to –0.08. And Existing Home Sales rose in February, but only 1.2%, missing the consensus forecast of 2.5%. The number of homes for sale was down 0.5%, as the drag of underwater mortgages continue to keep owners locked into homes.

Tuesday’s reports were that the Consumer Price Index ticked up 0.2% in February. The core rate, ex food and energy, also ticked up 0.2%. Both matched the consensus forecast. Hardly a blip on the Fed’s hope for 2.0%, but at least a tick in the right direction for a change. The FHFA House Price Index showed home prices rose 0.3% in January. New Home Sales surged up to an annualized rate of 539,000 in February, the strongest monthly pace in 7 years.

Yesterday’s reports were that Durable Goods Orders declined 1.4% in February, the third decline in four months.

This morning’s only report will be new unemployment claims, which will be released at 8:30 a.m. Since I am putting this blog on early the report is not yet available. 

The pre-open indicators were fractionally positive all night but have weakened in the last few minutes.


Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 110 points or so in the early going.


To read my weekend newspaper column click here:   Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

There is an important hotline from last evening in your secure area of the Street Smart Report website. And the next issue of the newsletter will out tomorrow Thursday, evening.


Non-Subscribers:

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

d

Fed officials still trying to warn markets about rate hike launch.

Tuesday, March 24, 9:25 a.m.

The market received a relief boost from the Fed’s FOMC statement last week which showed that rate hikes may not begin as soon as previously thought, leaving the impression that there are still too many criteria to be met:

“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”

In particular, the requirement of confidence that inflation will reverse to the upside, and move back to the Fed’s target of 2%, does not appear imminent.

That is in spite of this morning’s report that the CPI Index ticked up 0.2% in February, after four straight months of declines that had it negative 0.1% in January.

United States Inflation Rate

However, Fed officials are hitting the talk circuit with attempts to return markets to expecting a rate hike this summer, perhaps as early as June.

Fed vice chair Stanley Fischer said in New York yesterday that it will likely be appropriate for the Fed to begin raising interest rates at some point this year.

San Francisco Fed president John Williams said in a speech that economic conditions in the U.S. are “downright good”, and the Fed should begin hiking rates mid-year.

St. Louis Fed president James Bullard said this morning in London that "Zero is no longer the appropriate interest rate for the U.S. economy."

Bullard also pretty much explained why Fed officials are getting out on the talk circuits.

He said he is concerned that the mismatch between the market’s benign expectations for rate hikes and the Fed’s expectations, could result in a “violent reaction” in financial markets “if we get all the way to the day of the decision and end up surprising markets that day.” 


To read my weekend newspaper column click here:   Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

There is an in-depth ‘Gold, Bonds, Dollar, Inflation Report’ from yesterday in your secure area of the Street Smart Report website. And the next issue of the newsletter will out tomorrow.


Yesterday in the U.S. Market. 

A somewhat positive day turned somewhat negative in the final minutes. The Dow, up 78 points a half hour before the close, reversed by 90 points to close down 11 points, or 0.1%.  Volume was average at just over 0.7 billion shares traded on the NYSE.

The Dow closed down 11 points, or 0.1%. The S&P 500 closed down 0.2%. The NYSE Composite closed unchanged. The Nasdaq closed down 0.3%. The Nasdaq 100 closed down 0.3%. The Russell 2000 closed down 0.1%. The DJ Transportation Avg. plunged 2.0%. The DJ Utilities Avg closed up 0.1%.

Gold closed up $3 an ounce at $1,190 an ounce.

The U.S. dollar etf UUP closed down 1.1%.

Bonds (TLT) closed down 0.1%.


European Markets mostly closed down yesterday.

The London FTSE closed up 0.2%. The German DAX closed down 1.2%. France’s CAC closed down 0.7%. Belgium closed down 0.4%. Denmark closed down 0.2%. Finland closed down 0.3%. Greece closed up 3.0%.  Ireland closed down 0.6%. Italy closed down 0.5%. Netherlands closed down 0.3%. Norway closed down 0.1%. Portugal closed up 0.3%. Spain closed up 0.3%. Switzerland closed down 0.3%.

Asian Markets closed mixed last night.

The Asia Dow closed up 0.1%. Among individual countries:

Australia closed up 0.2%. China closed up 0.1%. Hong Kong closed down 0.4%. India closed down 0.1%. Indonesia closed up 0.2%. Japan closed down 0.2%. Malaysia closed up 0.9%. New Zealand closed down 0.1%. South Korea closed down 0.1%. Singapore closed up 0.1%. Taiwan closed down 0.3%. Thailand closed down 0.4%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

NOTE: To gain access call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). Or to subscribe online click here:https://streetsmart.securesites.net/order.html



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Markets This Morning:

European markets are up this morning.

The Europe Dow is up 0.5%. Among individual countries:

The London FTSE is up 0.1%. The German DAX is up 0.1%. France’s CAC is up 0.3%. Belgium is up 0.1%. Denmark is up 0.8%. Finland is up 0.2%. Greece is up 2.3%. Ireland is down 0.7%. Italy is up 0.8%. Netherlands is up 0.2%. Norway is up 0.1%. Portugal is up 0.1%. Spain is up 0.4%. Switzerland is down 0.1%.


This Morning in the U.S. Market:

Oil is up 2.2% at $48.50 a barrel.

Gold is up $1 at $1,191 an ounce.


This week’s Economic Reports:

This week is an average week for potential market-moving economic reports, that includes Existing Home Sales, New Home Sales, the Consumer Price Index, Durable Goods Orders, a revision of 4th quarter GDP, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

Yesterday’s reports were a continuation of evidence that the U.S. economy is slowing down.

The Chicago Fed National Business Activity Index (CFNAI) ticked down from-0.10 in December to – 0.11 in January. Worse, the more important 3-month moving average plunged from +0.26 to –0.08. And Existing Home Sales rose in February, but only 1.2%, missing the consensus forecast of 2.5%. The number of homes for sale was down 0.5%, as the drag of underwater mortgages continue to keep owners locked into homes.

This morning’s reports so far are that the Consumer Price Index ticked up 0.2% in February. The core rate, ex food and energy, also ticked up 0.2%. Both matched the consensus forecast. Hardly a blip on the Fed’s hope for 2.0%, but at least a tick in the right direction for a change. The FHFA House Price Index showed home prices rose 0.3% in January. Still to come are New Home Sales, and the Richmond Fed Index, both of which will be released at 10 a.m.

The pre-open indicators were fractionally positive all night but have weakened in the last few minutes.


Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 10 points or so in the early going.


To read my weekend newspaper column click here:   Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

There is an in-depth ‘Gold, Bonds, Dollar, Inflation Report’ from yesterday in your secure area of the Street Smart Report website. And the next issue of the newsletter will out tomorrow.


Non-Subscribers:

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

d

Did housing run out of fuel with the ending of QE stimulus?

Saturday, March 21, 12:20 noon.

The housing industry seems to have slipped under the radar of investor concerns in the fog created by the Fed’s ‘patient’ intentions, the EU’s intentions regarding Greece, the disappearance of inflation, the soaring strength of the dollar, plunging oil, and so on.

Yet, as I have noted often over the years, the housing and auto industries are the major driving forces of the economy in both directions, leading it into recessions and back out again.

The reason is obvious. A strong housing market not only creates jobs within its own industry, but has long tentacles reaching out to provide jobs in a huge range of other industries; advertising, realtors, lenders, raw material suppliers, manufacturers of construction equipment, lighting, heating and air-conditioning equipment, appliances, furniture, lawn and garden supplies, trucking companies, and so on.

Given its importance, and the signs of the economy stalling that are showing up in other areas like retail sales, factory orders, auto sales, etc., let’s hope next week’s reports from the housing industry show a pick up in new and existing home sales.

Construction and sales of new houses are more important to the economy than the sales of existing homes. New construction provides many more jobs and tentacles into other industries, than the mere passage of an existing home into the hands of a different owner.

And in spite of coming off the ‘Great Recession’ bottom, new home starts have remained depressed, not far above the lows in the normal recessions since the 1960s (the vertical gray areas in the chart).

image

In the short-term, new housing starts have been stalled and flat since October, and plunged 17% in February, albeit due to weather. But weather cannot be blamed for the stall since October, which like a lot of the economic reports since October, just happened to coincide with the end of the Fed’s $85 billion a month of QE stimulus.

Meanwhile, although not as important to the economy as new homes, existing home sales are of importance. They free households up to make moves, for better jobs, into larger homes for growing families, or smaller homes to downsize costs for retirement. And of course, as far as creating jobs, even if those moves are not into new homes, they often entail considerable re-modeling and upgrading by the new owners.

Unfortunately, existing home sales have also not been looking well since October.

Historical Data Chart

That’s in spite of the Fed keeping interest rates at record lows. As a result, mortgage rates are still at historic lows, and even lower than they were in October.

image

It does beg the question of whether the Fed was correct in believing it could end QE stimulus in October as long as it kept interest rates low “for an extended period of time”.

9.7 million households still underwater on mortgages.

The whitehouse.gov website reported in January that “from the crisis low, 10 million fewer borrowers are underwater, and new foreclosures are at a 9-year low”.

However, that only emphasizes just how serious the 2006-2009 meltdown was, since the quarterly report from real estate tracker Zillow Inc. released yesterday, shows that 9.7 million households are still underwater on their mortgages.

Those home owners are stuck in their homes, not only because of weak sales, but because they are unwilling or unable to take the large losses of selling at appraised prices considerably lower than their mortgage balances. Home prices nationally are still an average of 23% lower than at the housing bubble peak.

Further, according to Zillow there are another 9 million households ‘effectively underwater’ as, although the appraisal price of the home is at or above the mortgage owed, there is not enough equity to cover the real estate commissions and other transaction costs of selling, and the down payment needed to buy another home.

In a press release, Zillow Chief Economist Dr. Stan Humphries said, ““It’s a sobering appreciation that negative equity is going to be with us for a while to come . . . Negative equity is central to understanding a lot of the distortions in the marketplace right now.”

And then there is the return of foreclosures.

According to Black Knight Financial, both new and repeat foreclosures hit a 12-month high in January. Repeat foreclosures, where borrowers were rescued by the bailout programs during the recession but have failed again to keep up with payments, and fallen into the foreclosure process again, now make up 51% of new foreclosures. Did those programs just kick the problems down the road?

We really need next week’s reports to show that housing is powering back up again, because for the last few months it’s been looking like it is running out of fuel. 


To read my latest newspaper column click here: Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

In addition to the charts, signals, and analysis (stocks, gold, bonds), in the subscribers’ area of today’s blog, the next issue of the newsletter will be out on Wednesday in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market..

A big rally day, and big week.

The Dow closed up 168 points, or 0.9%. The S&P 500 closed up 0.9%. The NYSE Composite closed up 1.3%. The Nasdaq closed up 0.7%. The Nasdaq 100 closed up 0.7%. The Russell 2000 closed up 0.9%. The DJ Transportation Avg. closed up 0.3%. The DJ Utilities Avg closed up 0.8%.

Gold closed up $13 an ounce,  or 0.6%, at $1,182 an ounce.

The U.S. dollar etf UUP closed down 1.3%.

Bonds (TLT) closed up 0.5%.

Asian markets closed mixed in their last session of the week.

The Asia Dow closed up 0.1%. Among individual countries:

Australia closed up 0.4%. China closed up 1.0%. Hong Kong closed down 0.4%. India closed down 0.7%. Indonesia closed down 0.2%. Japan closed up 0.3%. Malaysia closed down 0.2%. New Zealand closed up 0.2%. Singapore closed up 0.8%. South Korea closed down 0.2%. Taiwan closed up 0.1%. Thailand closed down 0.1%.

European markets closed up strongly yesterday.

The Europe Dow closed up 2.8%. Among individual countries:

The London FTSE closed up 0.9%. The German DAX closed up 1.2%. France’s CAC closed up 1.0%. Belgium closed up 0.8%. Denmark closed up 0.5%. Finland closed up 0.5%. Greece closed up 2.9%.  Ireland closed up 1.8%. Italy closed up 1.6%. Netherlands closed up 0.6%. Norway closed up 1.7%. Portugal closed up 2.0%. Spain closed up 3.0%. Switzerland closed up 0.7%.


Global markets for the week. 

The volatile pattern continues, two or three weeks down, two or three weeks up, two or three weeks down, and now back to the upside.

Yet even after its 2.7% gain this week, the S&P 500 is up only 2.4% for the year so far.

THIS WEEK (March 20)
DJIA 18127 +2.1%
S&P 500 2108 +2.7%
NYSE 11070 -3.0%
NASDAQ 5026 +3.2%
NASD 100 4458 +3.3%
Russ 2000 1266 +2.8%
DJTransprts 9148 +2.3%
DJ Utilities 596 +3.9%
XOI Oils 1,329 +4.4%
Gold bull. 1,183 +2.4%
GoldStcks 69.27 +5.6%
Canada 14941 +1.4%
London 7022 +4.2%
Germany 12039 +1.2%
France 5087 +1.5%
Hong Kong 24375 +2.3%
Japan 19560 +1.6%
Australia 5936 +2.6%
S. Korea 2037 +2.6%
India 28261 -0.9%
Indonesia 5443 +0.3%
Brazil 51979 +7.0%
Mexico 43968 -0.1%
China 3791 +7.3%
LAST WEEK (March 13)
DJIA 17749 -0.6%
S&P 500 2053 -0.9%
NYSE 10750 -0.8%
NASDAQ 4871 -1.1%
NASD 100 4314 -1.9%
Russ 2000 1232 +1.2%
DJTransprts 8945 +0.4%
DJ Utilities 573 +0.5%
XOI Oils 1,273 -3.1%
Gold bull. 1,155 -0.9%
GoldStcks 65.58 -3.0%
Canada 14731 -1.5%
London 6740 -2.5%
Germany 11901 +3.0%
France 5010 +0.9%
Hong Kong 23,823 -1.4%
Japan 19254 +1.5%
Australia 5788 -1.4%
S. Korea 1985 -1.3%
India 28503 -3.2%
Indonesia 5426 -1.6%
Brazil 48579 -2.8%
Mexico 44002 +1.7%
China 3534 +4.1%
PREVIOUS WEEK (March 6)
DJIA 17856 -1.5%
S&P 500 2071 -1.6%
NYSE 10841 -2.0%
NASDAQ 4927 -0.7%
NASD 100 4399 -0.9%
Russ 2000 1217 -1.3%
DJTransprts 8907 -1.3%
DJ Utilities 570 -4.1%
XOI Oils 1,314 -4.5%
Gold bull. 1,165 -3.9%
GoldStcks 67.60 -12.1%
Canada 14952 -1.9%
London 6911 -0.5%
Germany 11550 +1.3%
France 4964 +0.3%
Hong Kong 24,164 -2.7%
Japan 18971 +0.9%
Australia 5868 -0.5%
S. Korea 2012 +1.4%
India 29448 +0.8%
Indonesia 5514 +1.2%
Brazil 49981 -3.1%
Mexico 43280 -2.1%
China 3396 -2.1%


Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

In the premium content area this morning: The U.S. stock market, gold, and bonds, signals (long-term, intermediate-term, and short-term), and analysis of each.

NOTE: To gain access subscribe online click here: https://streetsmart.securesites.net/order.html or call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). 


*Premium Content*

Please Login or Subscribe to view this content.

 


Next week’s Economic Reports:

Next week will be an average week for potential market-moving economic reports, that includes Existing Home Sales, New Home Sales, the Consumer Price Index, Durable Goods Orders, a revision of 4th quarter GDP, etc. To see the full list and times click here, and look at the left side of the page it takes you to.


To read my latest newspaper column click here: Why Market’s Seasonality May Be Critical in 2015

Subscribers to Street Smart Report:

In addition to the charts, signals, and analysis (stocks, gold, bonds), in the subscribers’ area of today’s blog, the next issue of the newsletter will be out on Wednesday in your secure area of the Street Smart Report website.


I’ll be back with the next blog post on Tuesday morning at 9:25 a.m.


Non-Subscribers:

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning and at occasional times in between! Follow it via the RSS feed or follow it in Twitter (the ‘handle’ is @streetsmartpost) so you won’t miss any posts.

**** End of Today’s post*****

FOMC gave market what it wanted–now what?

Thursday, March 19, 9:30 a.m.

Janet Yellen pretty much provided the market with what it wanted to hear – for the moment.

The Fed removed the ‘patience’ phrase from its statement but as I expected, replaced it with a similar assurance, that there is no timetable for rate hikes, and it will continue to be in no hurry, noting that the economy is weakening and inflation is not showing up, and that, "The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”

The question now becomes how long will the positive effect last before investors think more deeply about the reasons for the Fed’s reluctance to act, the slowing economy, declining earnings, lack of inflation, all of which while the market is overvalued, is not normally a bullish situation.

Hopefully the relief will carry the market back up to new highs through the end of the market’s favorable season.

031915a

But the Fed’s decision did not lower the risk from those surrounding conditions of the slowing economy, declining earnings, and lack of inflation, and in fact the statement came closer to acknowledging they exist.

Did no one read Buffett’s entire annual letter to Berkshire investors?  

Perhaps not. It ran to 20,000 words, more than 35 pages.

Much of it recounts his and Charlie Munger’s history, Berkshire Hathaway and its fabulous performance history, and Buffett’s generalized advice for investing.

Everything I have seen in the hundreds of columns and articles that the letter and Buffett’s appearances generate each year, focus on those parts of the letter.

It would seem that what he gets around to beginning on page 33 is of at least as much importance. They are warnings to investors. 

A few quotes:

"If an investor’s entry point into Berkshire stock is at a price approaching double its book value, which Berkshire shares have occasionally reached – it may well be many years before the investor can realize a profit. In other words, a sound investment can morph into a rash speculation if its is bought at an elevated price. Berkshire is not exempt from this truth."

"For those investors who plan to sell within a year or two after their purchase, I can offer no assurances, whatever the entry price. Movements of the general stock market will likely be far more important in determining your results than the concomitant change in the intrinsic value of your Berkshire shares."

"Another warning: Berkshire shares should not be purchased with borrowed money. There have been three times since 1965 when out stock has fallen about 50% from its high point. Someday, something close to this kind of drop will happen again.”

"The bad news is that Berkshire’s long-term gains – measured by percentages cannot be dramatic and will not come close to those achieved in the past 50 years. The numbers have become too big. I think Berkshire will outperform the average American company, but our advantage – if any – won’t be great."

It does remind one of the risk in any stock once markets become overbought and overvalued. Even the best are dragged down in a market decline. And sometimes, because they were perceived as defensive or safe haven holdings they become more overbought than most, and decline even more than the overall market in declines.

As Buffett noted, Berkshire Hathaway is no exception.

The following chart and table shows how Bershshire stock not only did not avoid the bear markets and serious corrections of recent decades, but tended to decline as much as, and often more than, the overall market. And sometimes took years to get back to even.

img5

Berkshire Hathaway’s Largest Losses Since 1980

1981-1982

-19%

1987

-37%

1989-1990

-37%

1998-2000

-49%

2007-2009

-51%

2011

-23.8%


To read my weekend newspaper column click here: Sorry, But This Is Not 1997 For the Market

Subscribers to Street Smart Report:

In addition to the charts and signals in your premium content area of this blog, there is an important hotline and in-depth Markets Update (stocks, gold, bonds) from last evening in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market. 

Volatility continues. A 400 point swing by the Dow from its intraday low, when it was down 152 points, to its late day high after the Fed released its FOMC statement. Volume picked up to almost 0.9 billion shares traded on the NYSE.

The Dow closed up 227 points, or 1.3%. The S&P 500 closed up 1.2%. The NYSE Composite closed up 1.5%. The Nasdaq closed up 0.9%. The Nasdaq 100 closed up 1.1%. The Russell 2000 closed up 0.8%. The DJ Transportation Avg. closed up 0.4%. The DJ Utilities Avg surged up 2.7%.

Gold surged up $18 an ounce to $1,167 an ounce.

The U.S. dollar etf UUP closed down 2.0%.

Bonds (TLT) closed up 1.9%.


European Markets mostly closed up yesterday.

The Europe Dow closed up 0.7%. Among individual countries:

The London FTSE closed up 1.6%. The German DAX closed down 0.5%. France’s CAC closed up 0.1%. Belgium closed down 0.2%. Denmark closed up 0.3%. Finland closed up 0.4%. Greece plunged 4.1%. Ireland closed up 1.3%. Italy closed down 0.7%. Netherlands closed up 0.5%. Norway closed up 1.0%. Portugal closed up 0.9%. Spain closed up 0.2%. Switzerland closed up 0.6%.

Asian Markets closed up last night.

The Asia Dow closed up 0.5%. Among individual countries:

Australia closed up 1.8%. China closed up 0.1%. Hong Kong closed up 1.5%. India closed down 0.5%. Indonesia closed up 0.8%. Japan closed down 0.4%. Malaysia closed up 0.5%. New Zealand closed up 0.2%. South Korea closed up 0.5%. Singapore closed up 0.7%. Taiwan closed up 0.9%. Thailand closed up 0.1%.

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Markets This Morning:

European markets are mixed to down some this morning.

The London FTSE is down 0.1%. The German DAX is down 0.6%. France’s CAC is down 0.3%. Belgium is down 0.1%. Denmark is down 0.1%. Finland is up 0.2%. Greece is down 1.7%. Ireland is up 0.2%. Italy is up 0.9%. Netherlands is down 0.3%. Norway is down 0.4%. Portugal is up 0.7%. Spain is up 0.2%. Switzerland is up 0.3%.


This Morning in the U.S. Market:

Oil is plunging 3.8% at $42.96 a barrel.

Gold is down $3 an ounce at $1,164 an ounce.


This week’s Economic Reports:

This week is a relatively light week for potential market-moving economic reports, but they will include Industrial Production, New Housing Starts, the FOMC meeting statement, Janet Yellen’s FOMC press conference, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

Monday’s reports were that the Empire State (NY) Mfg Index declined from 7.8 in February to 6.9 in March, versus the consensus forecast of an increase to 8.5. Industrial Production ticked up 0.1% in February versus the consensus forecast of economists of a 0.3% improvement. Within the report, manufacturing was down 0.2%, its third monthly decline. More troublesome, auto and auto parts manufacturing tumbled a sizable 3.0%. And the Housing Market Index, which measures the confidence of home-builders, declined from 55 in February to 53 in March, its third straight monthly decline, and to its lowest level since last July.

Tuesday’s report was that New Housing Starts plunged 17% in February to an annualized rate of only 897,000 from 1.08 million in January. The consensus forecast of economists was for a much smaller decline to 1.03 million. It was mostly due to weather, since starts in the Northeast plunged 56% and 37% in the Midwest. Permits for future starts were up 3.0%.

Yesterday’s reports were that mortgage applications declined 2% last week. And crude oil inventories jumped again last week, up 9.6 million barrels versus the consensus forecast of 3.7 million barrels. And of course there was the Fed’s FOMC statement.

This morning’s reports so far are that new unemployment claims barely changed last week, ticking up 1,000 to 291,000. The 4-week m.a. ticked up by 2,250 to 304,750. Still to come are the Phila Fed Index, and Leading Economic Indicators, both of which will be released at 10 a.m.

The pre-open indicators are somewhat negative after yesterday’s big rally.


Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 60 points or so in the early going.


To read my weekend newspaper column click here: Sorry, But This Is Not 1997 For the Market

Subscribers to Street Smart Report:

In addition to the charts and signals in your premium content area of this blog, there is an important hotline and in-depth Markets Update (stocks, gold, bonds) from last evening in your secure area of the Street Smart Report website.


Non-Subscribers:

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(The equivalent of four or five normal newsletters at the cost of one)

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  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

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Earnings and the economy slow as dollar surges.

Tuesday, March 17, 9:35 a.m.

The strong dollar increases the cost of U.S. exports, cutting into export sales, and the currency translation cuts into the profits of U.S. corporations with international operations.

Currency-risk management consulting firm FiReapps reports that the surging dollar cost North American corporations $18.66 billion in revenue in the fourth quarter. And the dollar has surged even higher since.

031715a

Meanwhile, evidence of the seriousness of the economic slowdown continues to mount.

Forget about the strong jobs report a week ago Friday. The slowdown has shown for several months in  factory orders, manufacturing indexes, consumer spending, auto sales, and the housing industry.

It’s been more of the same with the reports of the last two weeks. Retail Sales were down 0.6% in February, worse than forecasts, after being down 0.8% in January and 0.9% in December, a three month total of –2.3%. The ratio of business inventories to sales has risen to its highest level since 2009. Unintentional inventory build is a negative for future production, and traditionally another sign of a slowing economy. Meanwhile, the University of Michigan’s Consumer Sentiment Index fell from 95.4 in February to 91.2 in March, its lowest level since November.

This week it was that the Empire State (NY) Mfg Index declined from 7.8 in February to 6.9 in March, versus the consensus forecast of an increase to 8.5.

Industrial Production ticked up only 0.1% in February versus the consensus forecast of economists of a 0.3% improvement. Within the report, manufacturing was down 0.2%, its third monthly decline. More troublesome, auto and auto parts manufacturing tumbled a sizable 3.0%. And the Housing Market Index, which measures the confidence of home-builders, declined from 55 in February to 53 in March, its third straight monthly decline, and to its lowest level since last July.

This morning’s report might explain that 3-month drop in builder confidence. New Housing Starts plunged 17% in February to an annualized rate of only 897,000 from 1.08 million in January. The consensus forecast of economists was for a much smaller decline to 1.03 million. It was mostly due to weather, since starts in the Northeast plunged 56% and 37% in the Midwest. Permits for future starts were up 3.0%. But regardless of the cause, it was another blow to the economy.

How serious is the slowdown?

Last fall, it looked like the economic recovery was accelerating dramatically. GDP growth jumped from a recessionary – 2.1% in the first quarter of 2014 to 4.5% in the second quarter, then 5.0% in the third quarter. However, after just two strong quarters it suddenly plunged again, back down to only 2.2% in the fourth quarter, and is forecast to come in as low as 1.7% in the first quarter of 2015.

Meanwhile, the plunge in the price of oil continues. This chart is from yesterday’s close and the price is down another 2.1% at $42.94 a barrel at the moment this morning.

031715b

The Fed says it needs 2% annual inflation for economic strength and keeps saying it expects inflation to show up at any time. It looked last summer like it was getting its wish, but the surging dollar and plunging oil prices put an end to that, with inflation moving in the opposite direction since last fall and into January.

United States Inflation Rate

And what does the resumption of the plunge in oil prices say about the next few months, not to mention that the Producer Price Index, was negative –0.5% in February, versus the consensus forecast of economists for an increase of 0.3%, and after being down –0.8% in January?

It would really seem strange if the Fed can look at all this and decide it needs to raise interest rates soon to cool off the economy.


To read my weekend newspaper column click here: Sorry, But This Is Not 1997 For the Market

Subscribers to Street Smart Report:

In addition to the charts and signals in your premium content area of this blog, there will be an in-depth Markets Update (stocks, gold, bonds) tomorrow in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market. 

Volatility continues. Triple-digits down Friday, triple-digits up yesterday. The Dow closed up 228 points, or 1.3%. Volume was average at just over 0.7 billion shares traded on the NYSE.

The Dow closed up 228 points, or 1.3%. The S&P 500 closed up 1.4%. The NYSE Composite closed up 1.2%. The Nasdaq closed up 1.2%. The Nasdaq 100 closed up 1.3%. The Russell 2000 closed up 0.6%. The DJ Transportation Avg. closed up 1.7%. The DJ Utilities Avg closed up 1.7%.

Gold closed down $1 an ounce at $1,154 an ounce.

The U.S. dollar etf UUP closed down 0.8%.

Bonds (TLT) closed up 1.0%.


European Markets also closed up strongly yesterday.

The Europe Dow closed up 1.8%. Among individual countries:

The London FTSE closed up 0.9%. The German DAX closed up 2.2%. France’s CAC closed up 1.0%. Belgium closed up 1.1%. Denmark closed up 1.5%. Finland closed up 0.6%. Greece closed down 0.9%.  Ireland closed down 1.6%. Italy closed up 1.0%. Netherlands closed up 1.1%. Norway closed down 0.4%. Portugal closed up 0.8%. Spain closed up 0.7%. Switzerland closed up 0.9%.

Asian Markets closed up last night.

The Asia Dow closed up 0.9%. Among individual countries:

Australia closed up 0.7%. China closed up1.5%. Hong Kong closed down 0.2%. India closed up 1.1%. Indonesia closed down 0.1%. Japan closed up 1.0%. Malaysia closed up 0.3%. New Zealand closed down 0.1%. South Korea closed up 2.1%. Singapore closed down 0.2%. Taiwan closed up 0.3%. Thailand closed down 0.2%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

NOTE: To gain access call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). Or to subscribe online click here:https://streetsmart.securesites.net/order.html



*Premium Content*

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Markets This Morning:

European markets are down this morning.

The Europe Dow is down 0.2%. Among individual countries:

The London FTSE is up 0.3%. The German DAX is down 1.4%. France’s CAC is down 0.8%. Belgium is down 0.3%. Denmark is down 1.2%. Finland is down 0.5%. Greece is up 2.8%. Ireland is down 1.8%. Italy is down 0.8%. Netherlands is down 0.3%. Norway is up 0.7%. Portugal is down 0.5%. Spain is down 0.6%. Switzerland is down 0.2%.


This Morning in the U.S. Market:

Oil is down again, down 2.7% $42.68 a barrel.

Gold is down $1 an ounce at $1,152 an ounce.


This week’s Economic Reports:

This week is a relatively light week for potential market-moving economic reports, but they will include Industrial Production, New Housing Starts, the FOMC meeting statement, Janet Yellen’s FOMC press conference, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

Yesterday’s reports were a continuation of evidence that the U.S. economy is slowing down.

The Empire State (NY) Mfg Index declined from 7.8 in February to 6.9 in March, versus the consensus forecast of an increase to 8.5. Industrial Production ticked up 0.1% in February versus the consensus forecast of economists of a 0.3% improvement. Within the report, manufacturing was down 0.2%, its third monthly decline. More troublesome, auto and auto parts manufacturing tumbled a sizable 3.0%. And the Housing Market Index, which measures the confidence of home-builders, declined from 55 in February to 53 in March, its third straight monthly decline, and to its lowest level since last July.

This morning’s report is that New Housing Starts plunged 17% in February to an annualized rate of only 897,000 from 1.08 million in January. The consensus forecast of economists was for a much smaller decline to 1.03 million. It was mostly due to weather, since starts in the Northeast plunged 56% and 37% in the Midwest. Permits for future starts were up 3.0%.

The pre-open indicators, negative all morning were unchanged by the housing report.


Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 85 points or so in the early going.


To read my weekend newspaper column click here: Sorry, But This Is Not 1997 For the Market

Subscribers to Street Smart Report:

In addition to the charts and signals in your premium content area of this blog, there will be an in-depth Markets Update (stocks, gold, bonds) tomorrow in your secure area of the Street Smart Report website.


Non-Subscribers:

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

d

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