Wednesday, July 2, 2014

Good Morning America, How Are You?

Weed whacking away, weed whacking away, before I reach my destination, I'm weed whacking away. 

Someday, I will finish, or it will finish me.

Small Business Outlook

Summary: 

·        Tuesday, the market roared ahead.  Most (if not all) the global news was good, with China leading the way.  PMI readings across the board moved above 50. However, the USA report missed expectations.  No matter, it is a bull market. 

·         MBA home purchase applications (mortgages) are down. Now that is semi-confusing when earlier home sales were reported strongly up.  The numbers missed expectations.  ADP employment report showed strong increases in payroll growth.  The numbers far surpassed expectations.

·         The USA dollar this morning is taking liberties with every currency I follow.  Euro, Pound Sterling, Yen, Canadian Dollar, and so-on are all down.  As usual France is making noise yesterday that the Euro is priced too high, and the ECB (European Central Bank) should do something about it.  That sent the Euro down.  France is always making noises like that, as they are in serious trouble on all fronts.  Why would they send the Euro down? 

·         Global inflation is a problem in emerging markets, as energy prices have taken a toll on India.  China is feeling that pressure as well.  Almost every consumer in the USA knows we have inflation. If you have been out to eat at a restaurant lately, maybe you (like myself) have noted prices are going up rapidly; particularly for meat dishes. Everyday prices are up, and that makes personal inflation much higher than the CPI reports. 

·         Gold is not necessarily following suit on inflation pressures.  It certainly has been making a gains, but it would seem those gains come more from geopolitical concerns (Iraq, Ukraine, Syria) then inflation.  Silver demand is increasing.  Industrial demand for silver is increasing over the last decade plus.  If gold ever sustains a move, Silver should increase percentage wise more than gold.  Silver is an industrial metal as well as historical store of wealth. 

·         Factory orders are due to be released at 7:00 AM PDT.  I would surmise it will match last week's tarnished economic reports, and report at best a going nowhere. 

·         I truly wish I could add something really worthwhile to comments.  I'm taking graduate classes from Oxford University (UK) for the next year plus.  I'm still unconvinced that past data is a forecaster of the future value of assets.  However, I find it very informative to understand currency pricing in the banking market.  Because of the complexity of advanced statistics used, it is not much help to the average investor I think. 

·         Argentina won at soccer to advance.  Argentina is losing the battle on the financial front.  S&P placed Argentina on the watch list for likelihood of default.  "The CreditWatch placement reflects our view of at least a one-in-two probability that Argentina will not pay the outstanding $539M interest payment on the discount bonds within the 30-day grace period," says S&P.

·         UPS is going to extend its European operations.  They are investing heavily, with most of the investment going toward logistics centers.  UPS is still struggling, particularly with healthcare shipments.  It is good news they are investing with an eye to future growth.

·         Today, the market will open up.  There is no real indication of daily direction, as the USA stock market has a tendency to rest a bit after such a large raise.  Unless factory orders exceed expectations, this will be a choppy day.