Tag Archives: Santa Claus rally

POCKETBOOK Week Ending Dec. 21, 2018

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  • Your Christmas Lump of Coal

It takes more than tax breaks for corporations and the wealthy to make a market shine: As, if not more important, is a country’s confidence in its President’s actions along with that of his appointed cabinet, the economy and what’s happening around the world. So….so much for this year’s Santa Claus rally.

You might want to take a belt of hooch before reviewing the performance of last week’s markets. Here, from CNBC.com, is a bit of it:

-The Dow Jones Industrial Average lost 6.8%—the worse percentage drop since October 2008.

-Nasdaq lost 8.3% and is now 22% below the high it reached in August.

-The S&P 500 lost 7% last week.

-Performances of both the DJIA and the S&P are on track for their worst December performance since the Great Depression of 1931.

If nothing else, the gift that 2018 has reminded all investors of is that just as a stock’s price can go up, so can it fall. And that’s okay. After all, investing never came with any promises. Only hopes.

 

  • Market Quick Glance

2018 has turned out to be one ugly year for anyone who bet that stock indices would delightfully reward investors with positive returns this year. It hasn’t.

Worse yet, more than one talking head predicts that at least the first half of 2019 to be a rough one for equities.

Stephen Suttmeier, chief equity technical strategists at Bank of America-Merrill Lynch relies on charts for his analysis and says, “We do think the equity markets are set up to continue this cyclical bear market or bear market, just call it what it is—and correct further, a further retracement.”

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Dec. 21, 2018.

DJIA -9.20% YTD WAY down from the previous week’s -2.50%.

  • 1 yr. Rtn -9.43% also way down from the previous week -1.67%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 -9.61% YTD WAY down from last week’s -2.76%

  • 1 yr. Rtn -9.98% also way down from last week’s -1.96%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ -8.26% YTD WAY down from last week’s 0.11%

  • 1yr Rtn -9.08% also way down from last week’s 0.79%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

 

-Mutual funds

P U. There was only one U.S. Diversified Equity Fund heading that ended last week with a positive average return. It was Dedicated Short Bias Funds with an average total return of 11.15%. That category of funds numbers 162 out of the 8,214 funds under the U.S. Diversified heading.

In other words, there is nothing pretty about the average returns on equity funds last week. Then again, how could their be with the stock prices fall, fall, falling.

The average year-to-date total return for funds that fall under the heading of U.S. Diversified Equity Funds stood at -9.18% at the close of business on Thursday, December 20, 2018, according to Lipper. That’s down a huge heap from the previous week’s figure of -3.12% %.

For a broader look, the average Sector Equity Funds’ return was -9.98%; World Equity Funds, -15.34%; Mixed Asset Funds, -6.95%; Domestic L-T Fixed Inc Funds, -1.15%; and World Income Funds, -4.09%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Then Again: OPPORTUNITY

If you liked Apple at $233.47, its 52-week high, you gotta love it at $150.73, Friday’s closing price. Right?

Well, may yes, maybe no.

However you assess the worth and value of investing in any stock—whether it’s Apple or something else– depends upon three things—and always three things:

1.How you think.

2.Your reason(s) for investing in it.

3.The price at which you intend to sell it.

 

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POCKETBOOK Week Ending Dec. 1, 2018

 

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Based upon this chart, waiting for a Santa Claus rally this December could mean waiting till next year. (Source: CNBC.)

 

  • Trump’s  Hands

If you don’t think President Trump has a hand in how our markets are performing, better think again. Two simple examples: Not only has he put pressure on Fed Chairman Powell not to increase interest rates in spite of the fact that data shows suggesting a move up would be appropriate. And he  hasalso delayed his big time increases re raising China tariffs 25% until after the New Year, that is, for 90 days.

Each move could make Wall Street investors hap-hap-happier this holiday season. Then again, maybe not: While wages may have increased a bit for some,  credit card debt is  also on the rise. And, while the cost of a gallon of regular gas is cheap, groceries aren’t.

Additionally, as  far as  Santa ho-ho-hoing his way into town, climate change could muck up that sleigh ride.

Then there’s  Trump’s great big corporate tax cut —other than impacting mega corporations, it’s going to come back and bite many  of us one way or another.

To make that point, consider the following from the Treasury Department’s budget report  from a PBS New Hour report dated Oct.19, 2018:

-The 2018 budget deficit: $779 billion

-The budget deficit compared to 2017: + $113 billion

-Government revenue compared to 2017: +$14 billion

-Government spending compared to 2017: +$127 billion

I remember when one of the primary tenets of the GOP was to limit government spending and be fiscally responsible.

What ever happened to that?

 

  • Market Quick Glance

Up.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, Nov. 30, 2018.

DJIA 3.31% YTD a big move up from the previous week’s return of -1.75%.

  • 1 yr Rtn 5.22% up from the previous week 3.23%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500 3.24% YTD a big move up from last week’s -1.54%

  • 1 yr. Rtn 4.25% way up from last week’s 1.37%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 6.19% YTD jumping way up from last week’s 0.52%

  • 1yr Rtn 6.64% also a big jump up from last week’s 1.04%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Russell 2000 -0.15% YTD up but still down from last week’s -3.05%

  • 1yr Rtn -0.70% still in minus-land from last week’s -1.85%

The Russell 2000 reached a BRAND NEW 52-week ALL-TIME HIGH on August 31, 2018 of 1,742.09. The previous high was reached on August 24, 2018 of 1,726.97.

 

-Mutual funds

Two weeks ago, (11/15/18), the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 0.68%, according to Lipper. On Thursday, Nov. 29, 2018, that average had increase a bit to 0.99%.

That figure happens to be way down from the 3.33% average return posted  three weeks ago on Nov. 18, 2018.

In an effort to put a positive spin on things—as in keeping fund investors thinking longer term rather that short term—2 years ago, (11/3/16-11/29/18) the average fund under this heading had a total return of 9.50%.

Then look back 3 and 5 years and the total return figure changes form 8.39% and 7.23% respectively.

East to see that clearly, things change.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • A New Year: A New Franchise Career

With a New Year right around the corner comes new opportunity for those with an eye to change and who want to be their own boss. One way to do that is by entering into a franchise agreement with an already established franchise brand.

I ran across this piece by Marco Carbaio, published in TheBalance.com, titled, “What’s the Best Franchise to Own?”

Here’s a quick directly-from-the-horses-mouth  look at a few of the picks from that piece that focused on the best 2017 franchises to own and selected by the pros at The Balance Small Business:

  • 7-Eleven Inc

This well-known brand can trace its origin back to 1927. In 2017, it had over 60,000 franchised location stores both within and outside the US. As a franchisee, the initial investment capital is as low as $37,200 and the highest is $1,635,200. The net worth requirement is between $100,000 and $250,000 while the liquid cash requirement  needed is between $50,000 and $150,000.

  • McDonald’s

McDonald’s has been franchised for the last 62 years and has over 30,000 locations. To get into this game prospective franchisees takes an initial franchising fee of $45,000 while the initial total investment capital is between $1,008,000 and $2,214,080. Also required is liquid cash of $500,000. Every year franchisees pay a 4 percent annual royalty fees on all the sales made.

  • The UPS Store

Founded in 1980. The UPS Store now has about 6,000 franchises.. The initial investment required to franchise is between $177,955 and $402,995. Your net worth requirement is $150,000 while the liquid cash requirement is $60,000. The initial franchising fee is $29,950 and the ongoing royalty fee is 5 percent.

  • Visiting Angels

The franchise fee for this home care franchise begins at $43,750. The royalty fees are 3.5 percent of the total revenues. If you make more money in terms of revenues, you get a discount and will then  pay 2.5 percent of the total revenues. You will also be involved in webinar teleconferences, annual conferences and trainings, being advertised online, TV ad over the radio and also receive home care leads on a monthly basis

The link for the piece is this: https://www.thebalancesmb.com/what-is-the-best-franchise-to-own-4150743

 

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POCKETBOOK

For the week ending Dec.19, 2015

•Interest rates up but not where it matters most: Saving
Sorry folks, while the Fed raised interest rates by 25 basis points, or 1/4 of 1 percent, don’t expect to see any bump up of returns on the deposits you make into things such as your checking, savings or money market funds.  You can, however, expect to feel the pain of paying more when borrowing money. Gone now are cheapo rates on mortgages, car loans, credit card rates, etc.

•Market Quick Glance
-Indices
Year-to-date returns based on Friday’s close, December 18, 2015:
DJIA -1.49 percent
S&P 500 -0.57 percent
NASDAQ +5.27 percent
(Source: Bloomberg)

-Mutual funds
Read Lipper’s performance figures on literally millions of various types of mutual funds every week. Published on Thursday’s, between 12-31-14 and 12-17-15, the year-to-date average return of the 6,067,922 U.S. Diversified Equity Funds it keeps track of was –2.37 percent.

Find all of Lipper’s weekly performance figures on both stock and fixed-income funds at http://www.allaboutfunds.com. Look for it in the left column of the home page.

-Stocks for Star Wars fans
Who can say what kind of impact The Force will have over the long run, but if it’s movie investing you’ve a penchant for, here are four companies, in no particular order, that have ties of one sort or another to the Star Wars movie:
-Disney (DIS). It closed Friday at $107.72, has had a 52-week trading range of $90 to $122.08 this year and pays a divided of 1.25 percent ($1.42 per share).
-Mattel (MAT) closed Friday at $26.19 per share and has traded between $19.45 and $31.25 this year. Its current dividend is a juicy 5.6 percent ($1.52 per share).
-Electronic Arts (EA) share price closed last week at $68.98. This year’s shares have ranged from $45.21 to $76.92. The company pays no dividend.
-Hasbro’s )HAS) last trade on Friday was at $65.83 per shares. The stock has traded between $51.42 and $84.42  this year. HAS pays its shareholders a dividend of 2.77 percent ($1.84 per share).

Or you could forget all that and simply buy Target or Wal-Mart.

I was in my local store over the past few days and shoppers carts were filled to their brim with not just Star Wars toys but with toys galore along with clothes, coffee makers and groceries thrown in just because.

Target (TGT) closed last week at $71.37. Its 52-week trading range: 68.15 to 85.81. The company pays a dividend of 3.10 percent ($2.24).
Wal-Mart’s (WMT) share price is cheaper closing at $58.85 on Friday and its  dividend is a tad higher at 3.32 percent ($1.96 per share).

(Prices according to Yahoo! Finance)

-On the other end of the shopping spectrum, if you’ve been waiting for shares of luxury retailer Neiman Marcus to hit the street, you’ll have to wait as its once planned IPO has been shelved.

According to Reuters.com, the Dallas-based retailer’s same store sales have fallen for the first time in six years.

•Goldiluck?
Thursday, on CNBC’s “Futures Now“, Peter Schiff said that he still expects gold to reach $5000 an ounce. While he didn’t give a date, that’s gotta be some time way away. On Friday, gold was trading around $1067 an ounce, according to KITCO.
That said, Schiff doesn’t expect to see much more downside to gold’s current price. In that  interview he added: “I don’t think there’s that much downside [in gold] because I think most of this is already built into the price.”
•Generic Savings
According to Drug Store News (DSN): “Since 2005 generics have saved patients $1.68 trillion, a report released by the Generic Pharmaceutical Association showed.”

•Government monkeying around with spending
According to Watchdog.com, government agencies have “spent $8 million to put 12 primates on treadmills in Texas and paid $30,000 in fines for a host of federal violations, including performing a necropsy on a baboon that was still alive.” Oh my.

•As for a Santa Claus Rally…
Looks like investors might have to forget all of that good little boy and good little girl crap.

According to  Jeff Hirsh’s recent Tumbir post comes this: “2015 is on pace to be the first losing pre-election year for the DJIA since war-torn 1939 when Germany invaded Poland…” The S&P 500 was down 5% in 1939 and as WWII broke out in Europe the stock market was down double digits the next two years.”

 

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