“The CPI rose by 0.2% on a seasonally adjusted basis in the month of February. The CPI’s core rate, excluding food and energy, was also up by 0.2%...On a year-over-year basis, consumer prices were up by 1.7%. This is still under the 2.0% to 2.5% that the Federal Reserve is currently hoping for…” Story at…
http://247wallst.com/economy/2015/03/24/cpi-manages-to-escape-deflation/
NEW HOME SALES HIT 7-YEAR HIGH (USA Today)
“New home sales soared almost 8% in February as a hard winter month failed to keep many buyers at bay as expected. Sales of single-family homes rose to a seasonally adjusted annual rate of 539,000, up 7.8% from January, the Commerce Department said Tuesday.” Story at…
http://www.usatoday.com/story/money/business/2015/03/24/new-home-sales-february/70337180/
STOCK MARKET CRASH IS CERTAIN – 2016 (MarketWatch, 1 Mar 2015)
Commentary by Paul Farrell.
“The United States is more vulnerable today than ever before including during the Great Depression and the Civil War,” says Thom Hartmann, in “The Crash of 2016.” Why? “Because the pillars of democracy that once supported a booming middle class have been corrupted…a crash is a sure bet, it’s guaranteed certain…On March 20, 2000 we warned: “Next crash? Sorry, you’ll never hear it coming.” But few listened…Listen closely, the countdown to the Crash of 2016 has started.” Commentary at…
http://www.marketwatch.com/story/stock-market-crash-of-2016-the-countdown-begins-2015-02-25?page=2
This was interesting, but it read a lot like a book sales-teaser. I didn’t see much that would predict a crash in 2016 vs. say 2050. Will the Presidential cycle predict a massive crash? We’ll see.
MONEY MAGAZINE ON INCOME
“Money” magazine has a good article titled, “The Smart Way to Invest for Income” in the April edition. It was a summary of a conference round-table discussion with financial planners and investment professionals. Some ideas presented:
-Cash allocation for Retirees: 1-year’s expenses
Some of the Bond Funds Recommended:
-PIMCO 0-5 Year High Yield Corporate Income. The short-term limits the interest rate risk. It is high-yield so it will not do well if the economy falls.
-Fidelity Floating Rate High Income. Floating rate funds are short-term bank loans of low quality. They would do well in a rising rate environment as long as the overall economy is good.
-T. Rowe Price Spectrum Income. This fund is a fund of funds. The manager has the leeway to invest in other T.R. Price bond funds including a limited percentage of high dividend stocks and Emerging-market bond funds. Current yield is around 3.3%.
There were others, I just can’t list them all here. If I can find this article online later I’ll provide a link; I couldn’t find it today.
MARKET REPORT
-Tuesday, the S&P 500 was down about 0.6% to 2092 at the close.
-VIX was up about 2% to 13.65.
-The yield on the 10-year Treasury Note dropped to 1.87%. (The Bond Ghouls still don’t seem happy.)
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) was up to 57% at the close Tuesday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +85. (It was +222 Monday.) The 10-day moving average of change in the spread was +19. In other words, over the last 10-days, on average; the spread has INCREASED by 19-each day.
Internals REMAINED POSITIVE on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2014, using these internals alone would have made a 9% return vs.
13% for the S&P 500 (in on Positive out on Negative – no shorting). Of course, few trend-following systems will do
well in an extreme low-volatility, nearly straight-up year like 2014.
NTSM
Tuesday, the NTSM analysis switched to BUY. The PRICE and VOLUME indicators are positive. VIX and SENTIMENT indicators are neutral, although sentiment remains extremely high.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in smaller cap-stocks
in the long-term portfolio with some international stocks. 50% is conservative,
but appropriate for a conservative retired guy.
The Dow Jones US Completion Index (all stocks except the S&P 500) continues to outperform the S&P 500. Since February it is 3.9% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My TSP Allocation: 50%-G; 10%-C; 25%-S; 15%-I. (50% cash is too high for non-retirees.)
