Weekly Economic & Investment Recap: 2.29.08

March 3, 2008 | Leave a Comment

Attached/linked please find And That’s The Week That Was, the Brounes & Associates market/economic commentary for the week ended February 29, 2008. Unfortunately for investors looking to close out the month with only slight equity index losses, February had an extra day this year and the markets did not take too kindly to the ongoing negative developments.  After a decent start to the week that had investors (somewhat) optimistic about the month as a whole, the final two days saw a return of the “bears” who focused on the weaker economy, declining dollar, softer earnings, rising oil prices, and all else negative.  In fact, Friday was the second worst day for stocks in 2008.  While much of the earnings news and economic data had been expected (for the most part), little positive emerged to bring about any semblance of a rally.  Bernanke keeps saying the right things and investors expect more rate cuts to ease the economic challenges, though the dollar and oil reacted unfavorably to these implications.  Bring on March. Maybe a new month will welcome a new attitude. 

Coming up in the week ahead:  Construction Spending (Monday), ISM - Manufacturing (Monday), ISM - Services (Wednesday), Fed Beige Book (Wednesday), Unemployment Rate (Friday), Non-farm Payroll Additions (Friday)

And That’s The Week That Was: 1.18.08

January 21, 2008 | 1 Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended January 18, 2008.  With virtually all investors calling for some pretty dismal earnings numbers from Citigroup and Merrill, the results were even worse than expected.  Enter more foreign governments with a continuation of the international “bailout”…talk about globalization at its finest/worst.  (Is anyone else concerned about this?)   Earnings season has lived up to its most pessimistic predictions; financials led the negativity, though some consumer-driven companies suffered last quarter as well.  For now, there seems to be no reprieve in sight including Bush’s quickly conceived economic stimulus plan that many believe to be “too little, too late.”  News from the housing, retail, and inflation fronts brought even more sentiments of “gloom and doom.”  Oil prices declined (at least, that’s a positive), gold rose (the ultimate hedge), and the Fed looks to be on target for a 50 bps cut in the weeks to come.  Equities tumbled early in the week and never looked back.  Both the tech-heavy NASDAQ and the small-cap Russell 2000 have fallen over 10% thus far this year and the other indexes aren’t far behind.  Perhaps investors will get this intense negativity out of their system all at once and then move on to better things?  (Wishful thinking…) 

Coming up in the week ahead:  Existing Home Sales (Thursday)

And That’s The Year That Was: 2007

January 5, 2008 | Leave a Comment

Attached (linked) please find “And That’s The ‘Year’ That Was”…the Brounes & Associates market/economic commentary for the period just ended December 31, 2007.  A year that started with so much promise could not have ended soon enough for many investors.  Heading into a presidential campaign season, eternal optimists were calling for a continuation of the bullish sentiment.  Oil prices were falling, the housing sector was primed for a rebound, incumbents were touting the strong economy, and opponents began pointing out how they could do better.  Then came Novastar, Accredited, New Century and a number of no-name mortgage lenders whose challenges served as a precursor for far greater problems among the nation’s largest financial institution.  The mortgage fiasco hit just as geopolitical turmoil prompted a rise (rather surge) in energy prices and once again the dreaded “I” word was creeping back into the water cooler conversation.  All the promise of the first half of the year suddenly disappeared by mid-summer and investors were fortunate to squeak out gains despite a woeful fourth quarter (and no Santa Claus rally).  Bernanke and friends remained busy throughout the past few months as the Fed attempted to balance the fears of recession with newfound threats of inflation.  So what are those incumbent/opposition politicos saying (or promising) now?

And That’s The Week That Was: 11.9.07

November 12, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended November 9, 2007.  Is it over yet?  Please tell me it has just been a bad dream?  Why doesn’t the stock market close for Veterans Day?  Needless to say, shell-shocked investors departed Friday asking many of these same questions.  For the week, the Dow plummeted by over 550 points or about four percent.  The Nasdaq plunged over six percent and the S&P 500 dropped by over 3.5 percent.  The small-cap Russell 2000 index now stands in negative territory for the year.  More subprime-related write-downs combined with some earnings warnings and a few negative predictions by the Fed Chair…and the equity freefall was on.  Retailers grew more fearful about their upcoming holiday season as the earlier than normal discounting failed to produce any dividends thus far.  With everyone and their brothers (mothers, fathers, in-laws, dogs) shying away from stocks, fixed income (and gold) investors reaped the rewards.   Oil soared on the ongoing supply concerns (and speculation that it will soon surge passed $100/barrell and just keep going).  And, a few renown (at least, once renown) Wall Street execs started retirement a tad sooner than expected.  Enjoy the weekend (and consider staying home for Veterans Day as well). 

Coming up in the week ahead:  PPI (Wednesday), Retail Sales (Wednesday), CPI (Thursday), Industrial Production (Friday)

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And That’s The Week That Was: 11.2.07

November 5, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended November 2, 2007.  Though Merrill’s Stanley O’Neal updated his résumé’ this week (any pointers, ex-Bear Stearns exec Warren Spector?), the unemployment and non-farm payroll releases showed that generally employees are weathering the subprime storm quite nicely (thus far).  In fact, a quick glance at the week’s news would seem to depict that things in the economy are buzzing along just fine.  GDP is growing; labor remains steady; and, as expected, the Fed cut rates by another 25 bps.  So, why are the markets (sans techs) plunging?  Well, apparently the worst is yet to come and the mortgage woes are nowhere close to ending.  And, apparently inflation will soon be rearing its ugly head and oil prices are nowhere close to capping out.  And, apparently the Fed’s job is done for now and they can go back to the speaking tour with “all talk and no action.”  And, apparently equity valuations are still too high and financial services companies will guide the overall markets more directly than techs.  And apparently, the clout of the bears exceeds that of the bulls these days (though, apparently, sentiment is changing by the week, day, hour, minute, second).

Coming up in the week ahead:  ISM – Services (Monday), Balance of Trade (Friday)
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And That’s The Week That Was: 10.26.07

October 28, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was… the Brounes & Associates market/economic commentary for the week ended October 26, 2007.  How can a company report a loss of over $1 billion in a quarter and still see its stock price increase by 30% on the same day?  Countrywide’s Angelo Mozilo must be one heck of salesman as a terrible earning release, the continued array of poor housing news, and even negative reports about something called “option arms” was not enough to keep investors away today.  (Then again, the company has tanked 50% over the past six months.)  The beleaguered CEO believes the worst of the problems are behind them (and, for some reason,  investors were buying his optimistic rhetoric).  All in all, equity investors were in good spirits this week and sought out some buying opportunities despite the ongoing housing/mortgage woes and skyrocketing oil that continue to threaten the economy and markets.  Microsoft led the upward charge as the company reported stronger than expected earnings and the rest of the techs (among others) followed suit.  Bernanke and clan meet next week to set policy so expect the rumors to be flying (along with a heavy dose of market volatility) over the next few days. 

Coming up in the week ahead:  Consumer Confidence (Tuesday), GDP (Wednesday), Fed Meeting Announcement (Wednesday), Personal Income/Spending (Thursday), ISM – Manu (Thursday), Unemployment/Nonfarm Payroll (Friday)
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And That’s The Week That Was: 10.19.07

October 22, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended October 19, 2007.  First the good news…at least the Dow didn’t plummet 23% today (like it did 20 years ago).  And now the bad news…366 points and a 2.6% decline ain’t nothing to sneeze about (especially on the fifth straight down market day of the week).  With oil prices climbing through the proverbial roof (for no real reason…besides ongoing turmoil in and around Iraq), investors needed something positive to sink their teeth into.  Unfortunately some weak (though expected) earnings reports by financial services companies (and others) sent them looking for the safe-haven of the treasury markets.  Dr. B. and Treasury Secretary Hank confirmed that housing won’t be improving anytime soon.  Oh well…in 1987, the Dow close at 1,738.74…today it stands at 13,522.  (How’s that for a bright side?) 

Coming up in the week ahead:  Existing Home Sales (Wednesday), New Home Sales (Thursday)

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And That’s The Week That Was: 10.12.07

October 14, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended October 12, 2007.  Fed policy meeting minutes, earnings season, a surprise announcement by Wal-Mart, and a few new “gender-friendly” transaction…Yep, investors had plenty to digest this week.   Techs benefited from some favorable merger news, while small-cap issues lagged behind again.  Holiday shopping season approaches and most retailers have no idea what the future months may bring.  Fed Chair Bernanke is riding a sudden wave of popularity, though the “what have you done for me lately” attitude will be re-examined come October 31 and the next Fed meeting.  (Bear in mind, oil prices keep rising and inflation may not stay on the backburner forever.)  Until then, enjoy the love, Dr. B. 

Coming up in the week ahead:  CPI (Wednesday), Housing Starts (Wednesday), Fed Beige Books (Wednesday)

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And That’s The Week That Was: 9.21.07

September 22, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended September 21, 2007.  Circle October 31 on your calendars.  That’s the day we next find out whether Bernanke and friends with provide a “trick” or a “treat” when it comes to future monetary policy.  The ink was barely dry on the latest Fed statement and already investors and economists began speculating about the next move.  Was this larger than expected 50 basis point rate cut a one-time deal?  Will this housing/subprime crisis warrant multiple cuts over multiple meetings?  Will those “unscrupulous” lenders reemerge now that the Fed has helped “bail” them out of certain financial woes?  Will skyrocketing oil prices lead to inflation, the old arch-nemesis of the Fed?  While investors praised the actions of the past week and many chose to put their money where their mouth is (OK…not the best grammar), few have any clues about the next move.  (Maybe Greenspan’s “The Age of Turbulence: Adventures in a New World” can provide some answers.) 

Coming up in the week ahead:  Consumer Confidence (Tuesday), Existing Home Sales (Tuesday), GDP (Thursday), New Home Sales (Thursday), Personal Income/Spending (Friday)
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