BEIGE BOOK (Bloomberg)
“Americans spending more on cars and housing helped the economy maintain a “modest to moderate” pace of expansion from early July through late August, even as borrowing costs increased, the Federal Reserve said today. Manufacturing expanded “modestly” and consumers spent more on travel and tourism, the Fed said today in its Beige Book business survey, which is based on anecdotal reports from its 12 districts. Hiring “held steady or increased modestly.”
…“Growth isn’t accelerating and there’s no escape velocity that some members would like to see” before tapering, said Yelena Shulyatyeva, a New York-based economist at BNP Paribas SA, a primary dealer that trades government securities directly with the Fed.” Story at…
http://www.bloomberg.com/news/2013-09-04/fed-says-modest-to-moderate-growth-spurred-by-home-car-sales.html
EVIDENCE WORLD GROWTH IS PICKING UP (Reuters)
“Euro zone businesses had their best month
in over two years in August as orders increased for the first time since
mid-2011 while growth in China's services sector hit a five-month high,
underpinned by new orders and business optimism...Italian services also
contracted more than expected and the downturn continued in France.…Emerging economies are particularly vulnerable to a tightening of United States monetary policy, the International Monetary Fund warned in a note prepared for the Group of 20 meeting in St. Petersburg this week.” Full story from Reuters at…
http://www.reuters.com/article/2013/09/04/us-global-economy-idUSBRE9830FH20130904
MARKET HISTORY 301 - REGRESSION TO TREND (dShort.com)
“At the end of August the S&P
500 index price was 66% above its long-term trend…About the only certainty
in the stock market is that, over the long haul, over performance turns into
under-performance and vice versa.” – dShort, Advisor Perspectives.” Full commentary and analysis at…
EXCERPT FROM HUSSMAN ANNUAL REPORT (Hussman Funds)
“’…Harvard economist Martin Feldstein, President emeritus
of theNational Bureau of Economic Research – and among the few economists who warned in 2007 of an impending recession and credit crisis – recently observed:
“The danger of mispricing risk is that there is no way out without investors taking
losses. And the longer the process continues, the bigger those losses could be. That’s why the Fed should start tapering this summer before financial market distortions become even more damaging.’” Excerpted from the “Hussman Funds 2013 Annual Report” by John Hussman, PhD. Annual Report available at…
http://www.hussmanfunds.com/
MARKET REPORT
Wednesday, the S&P was up 0.8% to 1653 (rounded) at the close.
VIX was down 4% to 15.90.Wednesday, the S&P was up 0.8% to 1653 (rounded) at the close.
The Index is at or near the top of its upper trend line, so unless it
reverses soon (as I expect), I’ll need to revise my thinking..
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks
advancing on the NYSE remained 52% at the close Wednesday. A number above 50% is generally good news for
the market.
New-highs outpaced new-lows today leaving
the spread at +33 (it was -5 Tuesday), with the 10-day moving average of change
in spread still trending up.
Today’s reading of Internals is positive for the markets. I remain unconvinced that we are out of
the woods.
NTSM
Wednesday, the overall NTSM analysis was HOLD
at the close.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). The NTSM system sold at
1575 on 16 April. (This is just another
reminder that I should follow the NTSM analysis and not act emotionally – I am
under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
