Archives For Todd Burkhalter

Weekly Update – January 22, 2013

Markets closed out another positive week, shrugging off lackluster consumer confidence and
moderate earnings reports to hover around multi-year highs. For the week, the S&P 500 gained 0.95%, the Dow gained 1.2%, and the Nasdaq gained 0.29%.[i]

In Washington, Congressional Republicans backed off from a debt showdown against a
resolute President Obama that could have risked a government default on debt. Republicans said they were prepared to raise the debt ceiling and allow the federal government to borrow operating expenses for the next three months, kicking the fiscal can further down the road.[ii]

To be frank, we’re frustrated with Congress’ inability to make hard choices about spending
and debt. Allowing the U.S. to fall into default would be catastrophic, given that the world treats U.S. government debt as essentially default risk free. Despite their promising rhetoric to use the debt ceiling debate to force widespread fiscal reform, many politicians seem to have abandoned that position in favor of baby steps.[iii]

Federal Reserve Chairman Ben Bernanke spoke on Monday, showing support for the fiscal
cliff deal reached on January 1, but emphasizing that lawmakers still need to come to an agreement over the debt ceiling. The chairman also claimed that the Fed’s unusual December move to tie monetary policy to unemployment and inflation targets was designed to provide financial markets with greater clarity.[iv]

Earnings reports show that the final quarter of 2012 ended well, with many firms
reporting better-than-expected (but not mind-blowing) results. However, business leaders are still cautious, noting that the debt ceiling debate and uncertainty over potentially higher corporate taxes clouds their 2013 outlook. On the positive side, many firms are bullish on the U.S. economy and are confident that trends show an ongoing recovery.[v]

In a rare confluence of events, Monday was both a national holiday and the inauguration
of President Obama’s second term, starting the week off fairly quiet for markets. There will also be relatively few economic reports released this week, meaning that traders will turn their attention to remaining earnings reports from firms like Google (GOOG), Starbucks (SBUX), and McDonald’s (MCD). Investors will also be paying close attention to new reports about the strength of the housing market, which are widely expected to show a continued recovery.[vi]



[i]
http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-14-2013.htm

[ii]
http://www.reuters.com/article/2013/01/18/usa-fiscal-debt-idUSL1E9CI9DZ20130118

[iii]
http://www.reuters.com/article/2013/01/18/usa-fiscal-debt-idUSL1E9CI9DZ20130118

[iv]
http://www.usatoday.com/story/money/business/2013/01/14/bernanke/1833783/

[v]
http://www.cnbc.com/id/100391246

Weekly Update – January 14, 2013

Markets were upbeat last week, closing positive for the second week in a row as traders digested the
first fourth-quarter earnings reports and fresh economic data. The S&P 500 was pushed to a new five-year high, gaining 0.38%, while the Dow rose 0.4%, and the Nasdaq increased 0.77%.[i]

The debt ceiling debate is already in swing, with headlines dominated by the idea of minting a trillion
dollar coin as a way to sidestep a vote on the ceiling. The comedic suggestion was made in an act of political one-upmanship but isn’t a true solution. We hope that with that suggestion out of the way, Congress can get back to its job of making necessary decisions to tackle the deficit and put the U.S. back on firm fiscal ground.[ii]

With equities at five-year highs, it’s time to start thinking about whether the fundamentals can support
further upside. Next week, analysts will turn their attention to a slew of economic reports and more earnings data. According to FactSet Research, S&P 500 companies are expected to report overall earnings growth of 2.4% for the fourth-quarter of 2012. This is much better than the third-quarter’s 1%
decline; however, much of the growth is expected to come from the financial sector, meaning that other sectors are expected to see growth of just 0.2%.[iii]

Perhaps even more important than the data will be the attitude of business leaders about their prospects
this year. Their opinions could provide us with an important clue about growth prospects for the U.S. and global economies. Analyst opinions are mixed, as some expect an upbeat outlook from businesses, while others think we’ll see more guarded opinions.[iv]

Analysts will be also listening closely to Ben Bernanke’s first appearance of the year; scheduled for Monday,
January 14, 2013 at 4:30 PM. The Fed chairman will be speaking about the economy, and some Fed watchers believe he may discuss a potential end to the Fed’s asset-purchase program.[v]

Whichever way markets move in the coming weeks, we’ll be paying close attention and seeking out opportunities where they arise. While we’re pleased with the way markets have performed thus
far, we’re always on the look out for reversals and turbulence, and we strive to build portfolios that can withstand short-term gyrations.



[i]
http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-7-2013.htm

[ii]
http://www.reuters.com/article/2013/01/12/usa-debt-platinum-idUSL2N0AH0S220130112

[iii]
http://money.cnn.com/2013/01/11/investing/stocks-markets/index.html?iid=A_INV_News

[iv]
http://www.cnbc.com/id/100373960

[v]
http://www.cnbc.com/id/100373960

The Cost of Care

January 10, 2013 — Leave a comment

 

__ This content was provided by Entreprenuer.com at http://m.entrepreneur.com/blog/225449