The Market comes in like a lamb for March; will it leave a Lion? by Ken Mahoney
www.thesmartinvestros.com
After a month of choppy trading, U.S. stock investors were thankful to see February finish in positive territory. The month’s modest gains were the best since November despite concerns about consumer spending, sovereign debt, and the pace of the global recovery. The mixture of negative and positive economic news kept investors vacillating as evidenced by a Dow that experienced 8 sessions where it gained or lost at least 100 points.
Positive news was welcomed on Friday when the Commerce Department released a report saying that GDP grew at an annual rate of 5.9% in the fourth quarter of 2009, the fastest pace in 6 years. On the other hand, consumer spending was weaker at a 1.7% annual rate, down from 2.8% in the third quarter when the government’s cash-for-clunkers program was boosting auto sales.
Existing home sales in the U.S. fell for the second month in January by 7.2%, surprising economists who expected sales to remain relatively steady after December’s record decline. In the last week of February alone, reports on jobless claims, home sales, consumer confidence, durable goods orders, and manufacturing all missed expectations. Data like this doesn’t help bolster the optimism of investors who are still nursing wounds from the subprime mortgage crisis, many of whom are concerned that debt issues in Greece could be the start of broader problems in the euro zone.
This pattern of two steps forward and one step backward has certainly seemed to characterize the recovery so far. Along these lines, portfolio manager Frank Ingarra of Hennessy Funds commented: “I think the overall trend is that we're starting to see the markets get back to normal. We're fine for the long term, but in the near term, you can have some rough stretches.” Ingarra’s words echo the familiar sentiment that we aren’t out of the proverbial woods yet, although things are looking up.
Whatever happens in the days, weeks, months, and years ahead, our primary goal is to always protect the assets you’ve entrusted to our care. We’ll also do our best to keep you well informed in the process.
HIGHLIGHTS:
An 8.8-magnitude earthquake, the fifth most severe in more than a century, struck Chile early Saturday, killing at least 300 people, collapsing structures and throwing the South American country into turmoil.
Copper prices jumped as much as 5% over the weekend, amid concerns that the earthquake in Chile would cause a supply shortage from the world's largest producer of the metal.
Crude-oil futures on Friday rose $1.49, or 1.9%, to end at $79.66 a barrel, with the commodity gaining 9.3% for the month and off 0.5% for the week. Crude prices have been lingering near or just above the $80-a-barrel level as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar.
President Obama used his weekly address Saturday to reiterate support for attempts to overhaul the U.S. health-care system. The remarks came at the end of a week that saw Obama unveil his blueprint for passing his proposed changes into law and host a televised meeting with Congressional leaders, dubbed the health-care summit.
American International Group Inc. (AIG) reported a fourth-quarter net loss of $8.9 billion, or $65.51 a share, on Friday. That compares to a net loss of $61.7 billion, or $458.99 a share, in the fourth quarter of 2008.
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Mr. Mahoney is a registered broker with Aurora Capital, LLC, an SEC registered broker-dealer and member FINRA and SIPC. Aurora Capital Brokerage, trades cleared by Legent Clearing.
Sources:
MarketWatch
Barron’s
Wall Street Journal
http://www.marketwatch.com/story/tsunami-warnings-across-pacific-after-chile-quake-2010-02-27
http://www.marketwatch.com/story/copper-jumps-after-chilean-quake-gold-slides-2010-03-01
http://www.marketwatch.com/story/crude-oil-futures-gain-93-in-february-2010-02-26-1448110
http://www.marketwatch.com/story/obama-stands-firm-on-health-care-overhaul-2010-02-27
http://www.marketwatch.com/story/aig-reports-89-bln-quarterly-net-loss-2010-02-26
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