Aug 032015
 

A harsh blow to oil stocks

Over all July was a great month for domestic and international markets. However, emerging markets, such as China and Brazil, got hit pretty hard. Oil continued to decline last week, dropping to $47 per barrel which was a harsh blow to oil stocks. On Friday the DOW Jones ended down and half of that was from Exxon and Chevron oil stocks. GDP was reported lower than expected at 2.3%. This marks the weakest expansion since World War II.

Potential fuel to the fire for interest rates

This week several important reports will be released. Many of these could add fuel to the fire for interest rates as the Fed. will be looking closely at them. We will see the Employment Report, Factory orders, Personal Income and Outlays, along with PMI and ISM manufacturing reports. Our focus is on the consumer as we believe, “So goes the consumer, so goes the economy.”

Conflicting data for the Fed.

The Fed. has conflicting data to deal with when looking at raising interest rates. There is really no inflation in the system at all. We argue that the country is really grappling with deflation. The flip side is that the ISM data, which will be reported this week, historically has been a very good predictor in the past. Above 50 is an expansion. Below 50 is a contraction. The last 30 consecutive ISM reports have been positive.

Smoke from the Republican Debate

This week’s Republican debate might not have much of an impact on your investments. However, the Republican debate serves as a warning that we are at the beginning of the political cycle that can kick up a lot of impactful smoke. We will be moving through that smoke to see if there is any real fire that could impact your portfolio. We will be keeping you updated with what we discover.

Please keep sending your comments and questions.

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Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here


Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal.

Jul 272015
 

Stocks were down last week

Stocks were down last week because of low earnings reports. Energy companies continue to be a drag on the markets, as oil is down 5 1/2 percent. On the positive side the initial jobless claims reached a 42 year low. We still, however, are waiting for wage growth to catch up with the number of job openings.

Get a feel for where the market is headed

The reports that are coming out this week that will help us get a feel for where the market is going will come from Durable Good Orders, GDP, Jobless Claims, and the Fed meeting report. We are always looking at price performance of stocks on the S&P 500 for possible places where buyers will step in. Right now that could happen around the 2050 – 2040 range. Below that would be in the 1900 – 2000 range. There is support at 2070. We will be watching these levels to try to get a feel for where the market is headed.

People are not feeling wealthy

We still maintain our position that the Fed will find it difficult to raise interest rates any time soon. While there are many positive things going on in the markets, the inflation rate is still below the Fed’s target of 2%. Inflation has been low for three years now going back to 2012. This can be good and bad depending on how you look at it.

So why has inflation continued to be an issue? We can see people are paying down debt but they are not spending money on consumer goods. This could be because wages have not gone up so people do not feel as wealthy. Inflation happens when there is more money chasing too few goods. We haven’t had this dynamic since 2007. People are not feeling wealthy at this time. This is why we think Janet Yellen will have a hard time finding enough inflation in the numbers to justify raising interest rates.

Please send us your comments and questions about where you feel the market is headed.

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Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here


Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal.

Jul 202015
 

A positive market week

Both domestic and international markets were positive last week on the news that the Greeks came to terms with their creditors, along with strong earnings reports from some tech giants and financial firms. It appears that the big financial firms are past all the legal fines from the past. We also saw positive numbers in the jobs and housing reports.

Encouraging news for the energy sector

This time last year we saw the beginning of the drop in oil prices. Many economist predicted that the loss of jobs in the major oil producing states would be offset by consumers spending more from money saved at the gas pump. Our research shows they were wrong and that this did not occur. We have found encouraging news in energy related industries, like trucking and rail which carry a lot of energy products, as they appear to have stabilized.

Possible better second half of the year

The Baker Hughes Rig Count, which measures production, shows that energy production has leveled off from declining numbers for the first time in June. Trucking and rail is also up and consumer spending is now climbing. Our data is leading us to believe that in the second half of the year, the energy sector is going to keep improving, as well as consumer spending.

Earnings are coming in better than expected

We are in earnings season and reports are coming in better than expected in both sales revenue and net income. While these reports are coming in above expectations that were originally lowered, it’s still a good sign. Reporting banks so far have shown better than expected earnings. Much of this is attributed to banks having worked through much of the litigation from 2008.

Greek banks have reopened

Greek banks have reopened today. They will begin paying back their debt to the IMF. Even though this is on borrowed money, they have made the payment. We will continue to watch Greece as this issue plays out.

Please send us your comments and questions.

Comments

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here


Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal.

Jul 132015
 

This morning in our portfolio strategy meeting we had a hot debate over China. Currently, there are several countries around the world that could have an impact on your portfolio. Greece is having to make another decision about their relationship with the European Union and in Iran there is hope that a decision could be made tonight or later this week about their nuclear program. At the moment, the debate over China is something investors should be watching.

Bobby Norman debates Franklin Bradford over China

Bobby Norman’s opinion is that, in the short term, China’s current market situation is not that big of a deal. Only 1.5% of Chinese shares are owned by foreigners. China’s market is still up for the year and most Chinese people keep their wealth in cash and real estate. Stocks only make up about 15% of the average Chinese family’s household assets. There is no sign that the Chinese people are concerned about their market. Finally, all Chinese banks are owned by the communist government which has vast resources to fine tune the economy.

Franklin Bradford disagrees

In this debate over China Franklin Bradford recognizes that when you combine the Shanghai Stock Exchange and the Shenzhen Stock Exchange, they make up the 2nd largest exchange in the world. The communist government controls the banks and can report anything they want. In fact, the government has shown concern over their markets by injecting cash into the system, suspending all initial public offerings, forbidding executives to sell their stocks for the next six months, not allowing half of their stocks to be traded, and by encouraging their pension fund companies to increase their positions in Chinese stocks. While the market situation in China doesn’t look contagion right now, if the government is this concerned, it has the potential to be.

The state of U.S. economic status

We still believe interest rates will stay down and not be raised for some time. We also believe that the United States is a safe haven for the world to invest. Deflation is still the primary problem. To explain it further, you can look at it like owning a suit. When you buy a suit, that’s buying a product. When you have it dry cleaned, that’s a service. In our economy, the price of products, like a suit, have gone down. But services, like dry cleaning, has gone up 9.2%. Prices directly affect whether or not the Fed raises interest rates but they are having a hard time assessing which way prices are going.

We’d love to hear if you agree with Bobby or Franklin or if you have your own opinion. Please send us your comment.

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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here


Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The economic forecast set forth in this presentation may not develop as predicted. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Stock investing involves risk including potential loss of principal.

Jul 062015
 

Greece is stomping her foot

The situation in Greece has been compared to a teenage girl stomping her foot, demanding that her parents give her back the credit card with which she just ran up a huge bill. This turmoil has helped cause our markets to be down for the second straight week. Our thought is that there is more noise than substance, with the news media making most of the noise to keep viewers watching.

Greece is only 1%

The Greek national debt is $250 billion which is only 1% of the European Union’s annual output. Most of the debt is owned by the IMF and the European Central Bank and they can print money whenever they want. This should take the worry out of a collapse of the Euro.

As the markets continue to react to Greece, we are continuing to monitor this for our clients’ portfolios.

Slack in the Jobs Report

The Jobs Report last week was so-so. The unemployment number went down but we know that is because there are less people looking for jobs. The slack in the system can be seen by the fact that the wage rate has not gone up with a lower unemployment number.

Forgotten data

The news media is giving a lot of attention to Greece and it’s market impact. However, there is a lot more data that plays into the market volatility. We know that Janet Yellen, Chair of the Federal Reserve, is a big proponent of watching the labor markets. The Fed. also uses more than the Jobs Report in their policy making. When we look at all this data, we cannot see the Fed raising interest rates anytime soon.

Coming up this week

This week we will be watching the numbers on international trade and the weekly jobless claims. Most importantly we will we monitoring the Fed minutes as they are released in a few days.

We’d love to hear your comments and questions.

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Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here


Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal.

Jun 292015
 
#112 The Situation In Greece And Other International News That Can Impact Your Portfolio

Recap Of Last Week 

Last week ended down slightly on the news of the situation in Greece and the correction in the Chinese stock market. Oil continues to stay in the $60 per barrel range where it has been for 8 weeks. We are watching the current talks with Iran because if their oil floods the market that can cause the price to go down even further. This may help the consumer, but can hurt the economy over all.

Consumer spending is another topic we have been talking about for weeks now and last week we finally saw the number we wanted. Consumer spending increased to 1%, which is the best it has been in 5 years. On another positive note, a lot of this increase came from auto sales.

Facts About The Economy In Greece

Greece is in a bad spot. 180% of their GDP is in debt and they can not work their way out of it with only 2 – 3% GDP growth. As a country they have lost about 25% of their GDP over the last 5 years as a result of people leaving, and it is very difficult to create a new business over there because of so much red tape.

One thing that is fascinating is that you are entitled to the Greek pension at age 57. This is mostly in line with the rest of Europe. However, in Greece there are 600 jobs that are considered “hazardous”, one of which is a hairdresser, that theoretically allows you to work for 3 years, establish a base, and have a pension at age 50. Of course with an aging population that can be very problematic.

The Current Situation In Greece

Greece has built up all of this debt with their European partners that they can’t pay back. Their economy has not grown, but they have a $1.5 billion payment to the IMF due today. Instead of settling this issue over the weekend the Greek prime minister has given it to the people to vote on in a referendum next Sunday. That gives a week from when it was announced and when it will be voted on. It seems like a referendum is something they are used to doing, but actually the last referendum they pulled was back in 1974 to dissolve the monarchy. This is not something they are setup to do quickly and while it sounds easy, it is something we will be watching all week to see how practical it really is.

The banks and the stock market in Greece are closed today and will be for the remainder of the week. With the 4th of July holiday this week and markets being closed on Friday, we could see a lot of emotion and we will be watching the volatility that can come from that. Ultimately we expect to see “this too shall pass”.

Other Scenarios To Watch

The debt issues in Puerto Rico is another situation we need to be watching. This scenario is a little closer to home and it puts more of a light on municipal bonds and state type issues. Additionally, we want to continue to watch China. We have talked a lot about China in previous vlogs, but part of the volatility we are seeing right now is structural. We have to remember that they are still a neophyte and emerging economy in a lot of ways, including how they structure their financial markets. They are still learning which contributes to their volatility.

As you can see from an international standpoint there is a lot going on. We will keep you updated as we continue to work towards our Independence Day on Friday. We hope that you have a great week. Please send us your comments and questions or just pick up the phone and call us.

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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant
Email Franklin Bradford here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page

Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here

Trey Booth, CFA®
Vice President
Wealth Consultant
Email Trey Booth here

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal.