EXAMINER.COM
“The Bureau
of Labor Statistics (BLS) released the official jobs report this morning and 163,000 jobs were added
in June…This is up from the 80,000 reported last month The economy has added jobs for 28
straight months…While 163,000 jobs are fewer than the 200,000+ needed to bring
the unemployment rate down, it is better news than the last two months. Perhaps
the summer slowdown is behind us and the job market will stabilize and start
growing again.” Full story at…
My comment: Jobs are a
lagging indicator and shouldn’t be used to predict recessions.
WASHINGTON POST
“U.S. service companies, which employ
90 percent of Americans, grew at a slightly faster pace in July. The Institute for Supply Management reported
Friday that its index of non-manufacturing activity picked up slightly last
month with a reading of 52.6. That was up from June’s reading of 52.1, which
had been the lowest since January 2010. Any reading above 50
indicates expansion." Full story at...
FINANCIAL NEWS – BILL
GROSS
“Bill Gross says we are
witnessing the death of equities
Bill
Gross, Pimco's co-founder and co-chief investment officer, says stock investors
should think again about the age old "buy and hold" investing mantra.
He says consistent, annual
returns are a thing of the past. .."The cult of equity is dying,"
Bill Gross wrote in his August Investment Outlook. "Like a once bright
green aspen turning to subtle shades of yellow then red in the Colorado fall,
investors' impressions of 'stocks for the long run' or any run have mellowed as
well." Gross points out stocks have averaged a 6.6% annual gain on an
inflation adjusted basis since 1912. But he labels that rate of return as an
"historical freak" that isn't likely to be duplicated anytime soon,
due to slowing economic growth around the globe.”
Full story at…
http://www.efinancialnews.com/story/2012-08-01/pimco-bill-gross-death-equities?mod=sectionheadlines-IB-AM
My comment: Bill Gross
works for PIMCO, the bond fund, so he is not without prejudice when discussing
stocks vs bonds; but basically, he’s right – buy and hold is dead until we get
out of this long term bear market…in another 5 to 10 years.
MARKET
Friday the S&P 500
finished UP almost 2% to 1390. VIX fell
over 10% to 15.72 so we got more good news from the options boys.
While many pointed to the
Jobs report and the better than expected PMI numbers on the services sector,
Ron Insana said on CNBC that he thought the rally was actually related to Spanish
Bond yields that fell and rumors from hedge funds that there was a move in the
works to lower borrowing costs in Europe.
NTSM
The
NTSM analysis was again BUY at the close on Friday.
One concern is that sentiment
is 61%-bulls as of yesterday’s close.
The sell point for that indicator is now 67%-bulls. When everyone is bullish, it is usually time
to sell. This is just one indicator in
the NTSM system and it is not tradable by itself since a sell signal based only
on sentiment could be off by several weeks.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352. I now have a 50% stock allocation
overall. For my age, that is what most advisors
recommend, however, I am normally much more aggressive. I am underweight my usual aggressive
allocation for stocks because there’s a lot of risk now. So far this year NTSM is beating the S&P
500 by a whopping ½% on one trade.
