Browse by Tags

Forecasts & Trends

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • Global Economic Slowdown - Implications For US Stocks

    The global economy is rolling over to the downside for the most part. The question is, will this global slowdown take the US economy down with it? While no one knows for sure, that possibility simply cannot be ruled out. If the softening in the global economy leads to a slowdown in the US, that will almost certainly result in a weakening of our stock markets.

    In my March 17 E-Letter, I recommended that investors in traditional “buy-and-hold” equity funds reduce stock market exposure (or hedge long positions partially or fully) due to increasing global risks at that time. I repeated that recommendation twice since then.

    Since March 17, the S&P 500 Index has moved sideways to lower as of this writing. Could the US equity markets be setting up for a significant downward correction? It would be unwise in my opinion to rule it out.

    The slowdown in the global economy and the implications for the US economy and our stock markets will be our main topic for today, but before we get to that, let’s take a quick look at last Friday’s unemployment report for July.

    At the end of today’s letter, I will briefly comment on Obama’s new Clean Energy Plan which will raise electricity costs significantly, if enacted, and give you a link to the full story. I will also comment further on the Dodd-Frank law I wrote about in my Blog last Thursday.

    ...
    Filed under: , ,
  • On The Economy, Oil Prices & Obama’s Temper Tantrum

    Today we'll touch on several bases, as I'm often known to do. We will start with the latest news on the economy, which is decidedly upbeat, with GDP coming in well above-trend for the last two quarters. The question is whether the latest two quarters of above-average growth are a sign of more good things to come, or are they just the catch-up results of the disappointing 1Q decline due to the severe winter weather?

    Even with the strong growth in the 2Q and 3Q, if we look back further, say to 2010, GDP growth over that period is still below trend at around 2.5% - which is unexceptional. So it remains to be seen if the economy is fully back on track.

    Some argue that the surge in the economy of late is largely the result of the huge decline in oil and gasoline prices. No doubt that has been a significant factor. Some analysts estimate that the drop in oil prices from above $100 a barrel to $67 is the equivalent of a $125 billion tax cut, which is a significant boost to the economy. And most forecasters believe that oil prices will remain low for some time to come, as I will discuss today.

    Finally, I can't help but comment on the deluge of unpopular actions taken by President Obama in just the last month. Unlike most recent presidents who suffered such a defeat in the mid-terms – including Reagan, Clinton and Bush(43) – and then compromised with the opposition, Obama is doubling-down on his unpopular policies. Even worse, he says he's not done yet and promised to veto any bill to build the Keystone XL pipeline.

    To me, this rash of controversial decisions amounts to a “temper tantrum” on the part of the president, in reaction to the drubbing that the Democrats suffered in the mid-term elections. I'll share my thoughts on why this is happening now as we go along today.

    ...
    Filed under: ,
  • Global Economy Worsening, But America is on Top

    With President Obama making controversial moves on several fronts this month, it is tempting to go all politics this week. The president is threatening to grant defacto amnesty to five or six million illegal aliens, via Executive Order, even though he knows this is unpopular among the American people. It’s as if he’s in full denial regarding the landslide midterm election results.

    In addition, he signed a controversial climate deal with China that will hurt the US economy and allows China to continue building more coal-fired power plants and increase emissions annually until 2030. Obama and the media hailed it as one of his landmark accomplishments. It wasn’t.

    At the Asian summit he attended last week, Mr. Obama pledged to give $3 billion of US taxpayer money to emerging countries to help them work toward clean energy and tackle climate change. Hopefully, Congress will block that pledge.

    And if you missed it, Obama announced last week that he wants the federal government to regulate the Internet. That would be a disaster! More details as we go along today.

    But rather than devote the entire E-Letter to politics, let’s start with a new report on the slowing global economy. According to the latest survey from Bloomberg, the global economy is in the worst position in two years. Fears of deflation are growing in Europe and elsewhere.

    ...
    Filed under: , ,
  • The Real Obamacare Nightmare is Just Beginning

    Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success – although they still haven’t told us how many enrollees have actually paid a premium.

    In any event, the millions of Americans who have purchased health insurance on the government exchanges are in for another round of shocks as they begin to try to actually use their new healthcare insurance. New nightmares are being reported almost daily and we’re only getting started.

    The problems that will create the next Obamacare headlines will come in three main areas: 1) lack of access to doctors, 2) failures of the system to verify coverage and pay claims, and 3) the incredibly high deductibles and copays on the exchange insurance policies. I have reprinted an excellent article on this growing nightmare below.

    Yet before we go there, let’s take a look at a few recent economic reports that are actually encouraging. Also, our webinar last Wednesday on the HWM Alpha Advantage investment opportunity was one of the most highly attended web events we have ever done. The presentation was excellent and the questions from attendees were spot on. To view the webinar, CLICK HERE.

    ...
  • Consumer Confidence Up, But Concerns Remain

    The Conference Board reported last week that its Consumer Confidence Index jumped to 82.3 in March (up from 78.3), the highest reading since January 2008. But the two underlying components of the Index provided two different perspectives, as we will discuss today.

    Basically, consumers as a group are feeling better and more confident about the economy and their present situation.  However, when asked how they feel about their financial situation six months from now, most consumers are much less confident. About as many expect their situation to get worse as those who expect it to get better. That’s not good.

    But before we get to that topic, let’s take a look at last week’s third and final estimate of 4Q GDP which showed a modest increase (2.6%) over the second estimate in February. We now know that the economy stalled a bit in the 4Q of last year, following growth of 4.1% in the 3Q. And it likely slowed even more in the 1Q of this year due to bad weather.

    Following that discussion, I want to introduce you to a new breakthrough economic statistic that we’ll be hearing about for the first time later this month.  It’s called “Gross Output” (GO) and is a measure of total sales volume at all stages of production. GO is much larger than GDP, the standard yardstick for measuring final goods and services produced in the economy. I’ll explain why GO is being introduced and why we investors need to pay attention to it.

    Finally, President Obama’s disapproval rating has soared to a new all-time high, and his approval rating is falling once again. Americans continue to blame him for Obamacare, and 57% dislike his handling of the Ukraine situation.

    ...
  • The US Economy - Back To The Slow Lane Again

    Late last year, President Obama predicted that 2014 would see“breakout growth” in the US economy. His optimism was not completely unwarranted since the economy grew by a healthy 4.1% (annual rate) in the 3Q of last year, driven largely by an unexpected surge in inventory rebuilding. Then in late January, the Commerce Department reported that the economy grew by a better than expected 3.2% in the 4Q.

    A 4.1% jump in GDP in the 3Q followed by an above-trend 3.2% in the 4Q gave some forecasters, including President Obama, reason to predict that our anemic economy might finally be out of the doldrums. That was until last Friday’s second estimate of 4Q GDP, which was revised significantly lower to only 2.4%. That’s our lead topic for today, along with a look at some other recent economic reports that raise cause for concern.

    Finally, we will look at some professional analysis of President Obama’s plans to significantly downsize our military in the next few years. If Obama and defense secretary Chuck Hagel get their way, the Army will be reduced to its lowest level in 75 years. Hopefully, Congress will stand up for our military, but in any event, you need to know what this president wants to do. Be sure to read the latest military intelligence analysis from LIGNET which appears later on.

    ...
  • US Savings Rate Falling Again – Here Comes "MyRA"

    Today we weave together several different topics that are all connected in one way or another. We begin with the US savings rate which is trending lower once again. From 1975 to 2007, the savings rate fell to an all-time low of 2.4%. While it jumped up briefly after the 2008 financial crisis, it is now moving lower yet again.

    In an effort to boost the US savings rate, especially for lower income groups, President Obama introduced a new type of starter retirement account for Americans of modest means that he called the MyRA, which stands for “My Retirement Account” and rhymes with IRA.

    While the new MyRA may be well intentioned, it is fraught with problems – most notably that it can only be invested in government securities that have yielded paltry returns over the last decade or longer. And when inflation rises, MyRAs are sure to be a big disappointment. I’ll tell you why as we go along today.

    Next, the recent Congressional Budget Office report, with its economic projections over the next 10 years, contained several troubling findings that the mainstream media and politicians in Washington deliberately didn’t tell you about. I’ll tell you why below.

    Finally, the president recently told a series of whoppers following the CBO’s latest report that claims Obamacare will cost 2.5 million jobs over the next decade. He lied, misrepresented and completely contradicted several key statements he has made in the past. Obama easily hit a new high in his presidency for deception.  You really need to read this!

    ...
  • Obama: NSA Spying To Continue, Even If Illegal

    On Friday, January 17 President Obama delivered a speech which was heralded in advance as a sweeping change for the nation’s spy agency, the National Security Agency, which has been collecting enormous amounts of phone and other data on the general public for the last several years. The changes Mr. Obama announced in his speech were anything but sweeping. The NSA will continue its massive phone data collection operation, largely unabated.

    Prior to the president’s Jan. 17 speech, he met with a special review panel that he appointed last year to investigate the NSA’s phone data operations. The special review panel recommended 46 actions to limit the NSA’s power to collect phone data, and that any action to gather public data must be approved by a court on a case-by-case basis in advance.

    The president also met prior to his speech with an independent federal privacy watchdog agency – the Privacy and Civil Liberties Oversight Board – which has recently concluded that the National Security Agency’s program to collect bulk phone call records has provided only “minimal” benefits in counterterrorism efforts, that it is illegal and should be shut down.

    Obviously, President Obama did not agree. In his speech he made it clear that the NSA will continue to collect phone data on virtually all Americans, albeit with additional oversight from the courts. Likewise, Mr. Obama took only a few of the 46 recommendations from his review panel. So the spying on all Americans’ phone and other records will continue.

    ...
    Filed under: , ,
  • Why Male Workers Are Disappearing in America

    Last month’s unemployment rate plunged from 7% in November all the way to 6.7% in December, which was lower than any of the pre-report estimates. That should be a great thing, right? Wrong! The unemployment rate fell because more Americans gave up looking for work and dropped out of the labor force entirely.

    Even worse, new jobs created in December were a fraction of what they were in recent months at only 74,000 versus over 200,000+ in the last several months. Even the Obama administration could not avoid admitting that the latest unemployment report was grim when you look into the internals. That’s pretty bad!

    The plunge in new jobs to only 74,000 in December is worrisome enough, but if you dig deeper into the data, you find something even more disturbing. Only 71.8% of working-age men have a job or are looking for work. That’s a huge decline from 80% in 1970! The question is, why are so many men disappearing from the workforce? That’s what we’ll talk about today.

    ...
  • Consumer Confidence Jumped in December, But Why?

    Today we’ll look at several economic reports, including a big jump in consumer confidence last month. That seems a little odd given that over 63% of Americans still believe the country is headed in the wrong direction as I reported last week.

    From there, we will consider some economic and market predictions for the New Year. Many forecasters believe the stock market will experience a downward correction sometime this year, which happens often in mid-term election years. We’ll look at a chart showing all of the mid-term year corrections going back to 1930. You may be surprised.

    Finally, despite President Obama’s plunging approval ratings, he still plans to proceed with an aggressive liberal agenda in 2014. Bill Clinton wisely moved to the center when his liberal agenda became unpopular. Not this president!

    ...
  • Nuclear Deal With Iran - Don’t Give Away The Store

    Obama administration representatives are quietly negotiating with Iran in an effort to stop its nuclear program. Under the proposed agreement, the US would relax or eliminate some of the tough sanctions that have crippled Iran’s economy. This is happening at the same time Congress is threatening to impose even tougher new sanctions on Iran.

    One question about this new negotiation is whether or not it’s a good deal for America and our allies in Europe. Another is, how will we be able to enforce its terms if Iran decides to cheat? And finally, why would Iran agree to halt its nuclear program at this time? The answers may surprise you. In any event, you need to know what is happening with Iran and why.

    At the end of today’s letter, there is a reminder for any of you who may not have ordered our new Handing Down Your Legacy, a free e-booklet in which to store all of your important investment/financial information in one place. Handing Down Your Legacy will help you manage your affairs now and will benefit your family too should you become temporarily or permanently disabled, as well as help them when it is time to settle your estate.

    Finally, what if there was a way to participate in the stock market’s rally without the worry of getting creamed when the Fed eventually takes its foot off of the monetary pedal? Be on the lookout tomorrow for an e-mail from me in which I will tell you about a specialized asset with the potential to do just that.

    ...
    Filed under: , ,
  • Will 39% Hike in Minimum Wage Tank The Economy?

    President Obama called for a whopping 39% increase in the minimum wage from $7.25 to $10.10 per hour last Thursday. There is already a bill working its way through in the Senate to do the same thing. If this legislation passes, the minimum wage will be increased 95 cents each year for the next three years starting this year, to bring it to $10.10 by 2015.

    Many argue that this will be a huge job killer and could thrust the economy back into a recession. However, some of the critics I’ve read don’t consider that the 39% increase in the minimum wage will be phased in over three years. Supporters of the wage hike argue that the seemingly huge increase merely restores the purchasing power for the low-paid workers in America. We’ll look into both arguments today.

    Before we get to that controversial topic, let’s take a look at last Friday’s surprising unemployment report, last Thursday’s better than expected GDP report and the continued slide in consumer confidence.

    ...
  • US Economy Mired in a Sea of Contradictions

    Consumer confidence has plunged over the last month, due in large part to the government shutdown and fear that the US might default on its debt – because of the ineptitude of our leaders in Washington. Normally, when consumer confidence plunges, we would expect a significant slowdown in consumer spending, which accounts for 70% of GDP.

    Yet according to the latest Gallup poll, consumers plan to spend even more this coming holiday season than in the past two years. This would seem to be a major contradiction. However, what this tells me that most Americans have figured out that there was never really a threat that the government would default on its debt, as I opined recently. That’s the good news.

    The bad news is that the delayed September unemployment report was yet another disappointment, even though the headline unemployment rate inched down to 7.2%. New jobs created in September were well below expectations. More importantly, the Census Bureau reported last week that there are now more Americans on welfare than those who have full-time jobs. That is very disturbing.

    Finally, I presume you noticed that our national debt skyrocketed by a record $328 billion in one day following the lifting of the debt ceiling earlier this month. The Treasury had to replenish all those “extraordinary measures” it used to fund the government  since we hit the previous debt ceiling back in May. Our national debt is on-track to nearly double under Obama.

    ...
    Filed under: , , ,
  • Another Budget & Debt Ceiling Fiasco Starts Now

    With the Fed's surprising decision not to "taper" its monthly QE bond and mortgage purchases, at least for now, the markets' attention now will focus on the upcoming federal budget and debt ceiling battles. Either one could lead to a government shutdown, and even if a shutdown is avoided, it will be a nervous few weeks in the markets just ahead.

    Fiscal year 2013 ends next Monday, and FY2014 begins on Tuesday. Not surprisingly, we do not have a federal budget for FY2014, so last Friday the House of Representatives passed a temporary "continuing resolution" to fund the government through mid-December. However, that resolution contained a provision to cancel funding for Obamacare indefinitely.

    That provision will definitely not survive in the Senate, so it remains to be seen what happens between now and next Tuesday. Almost certainly, we'll see another political battle and the threat of a government shutdown. Then two weeks later, we will see another political circus over raising the debt ceiling, which could also trigger a government shutdown.

    President Obama has repeatedly warned recently that he will not negotiate with House Republicans on raising the debt ceiling, so another political fiasco is virtually assured around the middle of October when the Treasury will run out of money to pay the nation's bills. This fight will not be good for the stock markets. Here we go again.

    Finally, the Congressional Budget Office just released a new report which warns that our spiraling national debt is "unsustainable." Imagine that! We'll take a look at the report's latest findings as we go along.

    ...
  • America is Turning Into a "Part-Time Nation"

    Part-time work accounted for a whopping 77% of the jobs the US economy created from January through July, according to household survey data from the Bureau of Labor Statistics. Last year during the same time period, part-time jobs were only 53% of the total versus 47% full-time jobs. This trend toward part-time, low paying jobs is accelerating rapidly.

    A rising number of companies are citing healthcare reform as the reason for the growing part-time workforce. As a result, the US labor pool is rapidly restructuring toward “29-ers” – employees working just under the 30-hour full-time threshold. This meteoric increase in part-time versus full-time new jobs has been happening since 2009.

    Next, we look at the latest clues as to when the Fed will start to “taper” its monthly bond and mortgage purchases. The minutes from the Fed’s July 30-31 policy meeting indicated that a growing number of FOMC members are leaning toward reducing purchases before year-end. But we still don’t know when Bernanke & Co. will pull the trigger.

    Finally, in my blog last Thursday, I wrote about a new study which found that, in at least 35 US states, a person on welfare can get more cash benefits than a person working 40 hours a week at the minimum wage. In some states, a whole lot more than the minimum wage. Today, we explore this dangerous trend and why we have a record number of Americans on welfare.

    But first let’s take a quick look at the latest economic reports and what’s ahead this week.

    ...
1 2 3 4 Next >