Joseph Gomez, Sr. Investment Advisor and Portfolio Manager
Of the nineteen economic indicators released this week, nine were weaker than expected, eight were stronger, and two were in line. Once again this week, strength was concentrated in employment and housing related indicators. Thursday’s initial jobless claims report showed that the nation’s employment picture continues to improve. In terms of expectations, this week’s total of 348K was well below consensus expectations of 365K. More importantly, it was also the lowest reading in nearly four years.
The Nasdaq has not been this high since December 2000 and Dow 13K watch is in full effect as that index is at its highest levels since May 2008. Underlying breadth has also gotten a bit less overbought over the last week. The cyclical sectors remain strong. As long as this trend continues, this bull has legs.
Are you missing out on this rally? A lot of investors on the sidelines have watched helplessly as this market has rallied. The big question for these investors is do they get in now and risk getting in at the top? Or do they sit tight and wait for a pullback? I offered an explanation of this in my report, Why is Investing so Difficult? However, if you’ve been following our weekly updates, you would have been enjoying this recent rally. Below are some of our recent comments from our weekly updates:
October 30th – I pay particular attention to stocks that beat earnings and revenue estimates and also raised guidance. In our client accounts, these include: Citrix (CTXS), Philip Morris Int’l (PM), and Baidu (BIDU).
November 14th – I believe that a break above the 1285 level on the S&P 500 will result in an impressive rally through year-end. We always hear investors saying that they would love to pick up some Apple (AAPL) shares if it would only pull back a little bit. Well, now it has pulled back a bit and here’s the chance.
December 11th – Among the standouts in our client portfolios this week, are: AMBEV (ABV)
January 22nd – Standouts in our portfolios last week include Barcalys (BCS), iShares Emerging Market ETF (EEM) and Panera Bread (PNRA).
January 29th – Surprisingly, one mega cap that has been in a stealth rally this year is Microsoft (MSFT).
Below are some charts of interest, an earnings calendar, economic calendar and key interest rates. Next week, we get earnings from Walmart (WMT), Macy’s (M) and Salesforce.com (CRM). I have included a partial list of important new highs this week. Many are positions held in our Global Opportunities Portfolio and other client accounts. The list includes:
Philip Morris (PM) – Apple (AAPL) – Chipolte (CMG) – Qualcomm (QCOM) – AMBEV (ABV) – Lowe’s (LOW) – Tata Motors (TTM) – Microsoft (MSFT)
Have a pleasant and productive week.
Important earnings next week
Ticker | Company | Sector | Industry | Dividend Yield | Earnings Date | Price |
WMT | Wal-Mart Stores Inc. | Services | Discount, Variety Stores | 2.34% | 2/21/12 8:30 | 62.48 |
HD | The Home Depot, Inc. | Services | Home Improvement Stores | 2.48% | 2/21/12 8:30 | 46.71 |
KFT | Kraft Foods Inc. | Consumer Goods | Food – Major Diversified | 3.05% | 2/21/12 | 38.01 |
HPQ | Hewlett-Packard Company | Technology | Diversified Computer Systems | 1.62% | 2/22/12 | 29.59 |
AIG | American International Group, Inc. | Financial | Property & Casualty Insurance | 2/23/12 16:30 | 27.23 | |
MDT | Medtronic, Inc. | Healthcare | Medical Appliances & Equipment | 2.43% | 2/21/12 8:30 | 39.94 |
TGT | Target Corp. | Services | Discount, Variety Stores | 2.28% | 2/23/12 | 52.64 |
DELL | Dell Inc. | Technology | Personal Computers | 2/21/12 | 18.16 | |
NEM | Newmont Mining Corp. | Basic Materials | Gold | 2.35% | 2/24/12 8:30 | 59.45 |
TJX | The TJX Companies, Inc. | Services | Department Stores | 1.09% | 2/22/12 8:30 | 34.87 |
ESRX | Express Scripts Inc. | Healthcare | Health Care Plans | 2/22/12 16:30 | 52.18 | |
CRM | Salesforce.com | Technology | Application Software | 2/23/12 16:30 | 129.17 | |
M | Macy’s, Inc. | Services | Department Stores | 2.21% | 2/21/12 | 36.25 |
DISH | Dish Network Corp. | Services | CATV Systems | 2/23/12 | 29.02 |
Economic Calendar by Econoday.com
Monday Feb 20 | Tuesday Feb 21 | Wednesday Feb 22 | Thursday Feb 23 | Friday Feb 24 |
US Holiday: Presidents’ DayBond, Equity Markets Closed |
Chicago Fed National Activity Index
8:30 AM ET 4-Week Bill Announcement
11:00 AM ET 3-Month Bill Auction
11:30 AM ET 6-Month Bill Auction
11:30 AM ET 2-Yr Note Auction
1:00 PM ET |
MBA Purchase Applications
7:00 AM ET ICSC-Goldman Store Sales
7:45 AM ET Redbook
8:55 AM ET Existing Home Sales
10:00 AM ET 4-Week Bill Auction
11:30 AM ET 5-Yr Note Auction
1:00 PM ET |
Weekly Bill Settlement
Jobless Claims
8:30 AM ET Bloomberg Consumer Comfort Index
9:45 AM ET FHFA House Price Index
10:00 AM ET EIA Natural Gas Report
10:30 AM ET EIA Petroleum Status Report
11:00 AM ET Kansas City Fed Manufacturing Index
11:00 AM ET 3-Month Bill Announcement
11:00 AM ET 6-Month Bill Announcement
11:00 AM ET 7-Yr Note Auction
1:00 PM ET Fed Balance Sheet
4:30 PM ET Money Supply
4:30 PM ET |
Consumer Sentiment
9:55 AM ET New Home Sales
10:00 AM ET |
Key Rates by Bloomberg.com
CURRENT | 1 MO PRIOR | 3 MO PRIOR | 6 MO PRIOR | 1 YR PRIOR | |
---|---|---|---|---|---|
Fed Funds Rate | 0.11 | 0.07 | 0.08 | 0.12 | 0.16 |
Fed Reserve Target Rate | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 |
Prime Rate | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 |
US Unemployment Rate | 8.30 | 8.50 | 8.90 | 9.10 | 9.10 |
1-Month Libor | 0.25 | 0.28 | 0.25 | 0.21 | 0.26 |
3-Month Libor | 0.49 | 0.56 | 0.48 | 0.30 | 0.31 |
Mortgage* (National Average)
CURRENT | 1 MO PRIOR | 3 MO PRIOR | 6 MO PRIOR | 1 YR PRIOR | |
---|---|---|---|---|---|
30-Year Fixed | 3.88 | 3.89 | 4.03 | 4.25 | 4.93 |
15-Year Fixed | 3.16 | 3.23 | 3.38 | 3.51 | 4.23 |
5/1-Year ARM | 2.87 | 2.86 | 2.96 | 3.03 | 3.62 |
1-Year ARM | 2.72 | 2.72 | 2.76 | 2.99 | 3.02 |
30-Year Fixed Jumbo | 4.68 | 4.56 | 4.69 | 4.86 | 5.52 |
15-Year Fixed Jumbo | 3.96 | 3.82 | 3.96 | 4.32 | 4.81 |
5/1-Year ARM Jumbo | 3.24 | 3.14 | 3.11 | 3.36 | 3.91 |
Clients, principals and/or employees of Alhambra Investment Partners may have long or short positions of any above-mentioned securities. For information on Alhambra Investment Partners’ money management services and global portfolio approach to capital preservation, Joseph Gomez can be reached at jag@4kb.d43.myftpupload.com.
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