Catepillar reported a huge increase in earnings and raised its forecast for the remainder of the year.  This is important because Caterpillar sells equipment to construction and mining companies globally.  In addition, it was noted that orders for new equipment exceeded shipments so the company will need to increase production (i.e. hire new workers).  This earnings announcement, combined with positive earnings reports from 3M and Honeywell, whom also sell to industrial companies, is good news. 

Additional good news came from UPS noting higher earnings due, in part, to increased package shipments.  Also, American Express and Capital One both noted increased spending and fewer bad loans from their credit card customers. Read more

Good news is; BP has temporarily capped the oil leak in the gulf, the new iPhone is out, and Intel along with other tech companies is reporting increasingly improving results.  Unfortunately, there is an air of pessimism over the market.  Business leaders (from small mom and pop operations to large multi-national corporations) are not completely embracing the recovery.  Read more

This is an incredibly true statement, even though it is a misquotation of the original text written by George Santayana, who, in his Reason in Common Sense, The Life of Reason, Vol.1, wrote “Those who cannot remember the past are condemned to repeat it.” 

In the financial debacle of late 2008 through spring of 2009, we avoided a depression similar to what occurred in 1932 (i.e., Great Depression).  However, now that we are out of the woods “economically speaking,” are we on track to see an economic relapse like 1938? Read more

Pick whatever economic villain you wish – stubbornly high unemployment, weak housing market, troubles in Europe, deficits, the oil spill, etc.  Fear has returned to the stock market (globally), and the temporary shift to bonds has resulted in lower yields.  As such, mortgage rates have hit 50-year lows, which may account for why I have heard of individuals refinancing their mortgages at unheard of rates (see headline).   Read more

Next week the commentary will again focus on the market and economic events.  This week we have selected a subject that has become increasingly important to our clients and their families. 

I, (Toan Nguyen Director of Operations for IIA) being 28 years old, can’t say that I’ve put much thought into nursing home or assisted living facilities, and prior to last year I had never even been inside either.  I never knew how much research it takes or what all was involved in selecting a suitable home, until I had to do it for my wife’s grandmother.  During this experience, I learned that there is more to choosing a care facility than a nice building and well manicured landscaping.  I wanted to share my experience and help provide a starting point in case you would ever find yourself in a similar situation. 

After a fall left my wife’s 83 year-old grandmother (let’s call her Anne) with a broken hip, we remodeled our basement to be handicap friendly for her to move into as she recovered.  The intention was for her to eventually move back into her own home.  Read more

Former Federal Reserve Chairman Alan Greenspan does want his legacy tainted by not recognizing or addressing the housing / credit bubble.  As such, it appears that he is trying to redeem his reputation.  In today’s Wall Street Journal Opinion section, Mr. Greenspan warns that the United State’s debt and financial problems will be analogous to Greece if we don’t take swift action soon.  In no way do I want to misquote Mr. Greenspan or dilute his message.  As such, I strongly recommend that you click on the following link and read comments.  I won’t take more than five minutes, but it will be time well spent. 

http://online.wsj.com/article/SB10001424052748704198004575310962247772540.html?mod=ITP_opinion_0 

Anger is not always bad 

CEO and founder of Minyanville.com (an Emmy award winning website that provides an entertaining and educational look at the world of business, money and the financial markets), Todd Harrison has some interesting comments regarding the stock market and current events.  I believe his commentary is rather interesting and really not politically motivated.  Bottom line, he sees a lot of potential for the U.S. and global economies, if the current negative moods and anger being expressed are positively channeled into solutions.  I agree that it is much better to see problems and do something to solve them, than do nothing but grumble.  The following is a link to his commentary. 

http://finance.yahoo.com/tech-ticker/%22there-are-a-lot-of-reasons-to-be-angry%22-says-todd-harrison-05754.html?tickers=dis,txn,hpq,bp,GS,%5Edji,%5Egspc&sec=topStories&pos=9&asset=&ccode= 

Update from Toan Nguyen (Director of Operations) 

Based upon client feedback, we are changing our reporting format.  Our goal is to provide you the information you desire, without overwhelming you with what may be considered unnecessary reports.

Currently, we are sending out expansive performance reports semi-annually.  We are changing our format to provide a performance summary in July and full year-end performance reporting and summaries in January.  These reports are separate of the investment / portfolio analysis we provide via Morningstar®. 

In addition, we are moving to a more proactive client communication strategy that uses our new client meeting scheduling calendar.  This helps ensure that we meet and communicate with you (our clients) as often as necessary.  With more concise performance reporting and expanded investment analysis from Morningstar®, we hope to better communicate how our investment strategies are designed for your specific financial goals and objectives.   More details regarding reporting and what you can expect will be provided in future commentaries.

Quotes 

The following quotes from Thomas Jefferson are quite insightful:

“It is incumbent on every generation to pay its own debts as it goes.  A principle which if acted on would save one-half the wars of the world.” 

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. 

Thomas Jefferson said in 1802:
“I believe that banking institutions are more dangerous to our liberties than standing armies.
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property – until their children wake-up homeless on the continent their fathers conquered.”

Tony Moeller, President
Integrity Investment Advisors
12721 Metcalf, #202
Overland Park, KS 66213
tmoeller@iia-kc.com
913-897-2074

The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only.  It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.  

If you enjoy the commentary and believe others may benefit or find it of interest, please feel free to forward it on.  Also, interested individuals can contact us, and we will be happy to add them to our mailing list. 

On Thursday the major U.S. stock exchanges shot up over 2.50%.  This was based upon news that China’s exports and imports both rose in May, which is a sign that Europe’s financial problems have not halted the global recovery.  Also, the U.S. Labor Department reported that unemployment claims fell by 255,000 in May, which is the largest decline in almost a year. Read more

The stock markets around the world are gyrating daily based upon the news at hand.  Just this morning the U.S. Labor Department reported worse than expected employment numbers, and the biggest disappointment was that of the 431,000 new hires in May, 411,000 were temporary census workers for the federal government. Read more

You would have to go back to May of 1962 to find a worse month for U.S. stocks.  As of the close of business yesterday, the combined averages of the Dow Jones Industrials, S&P 500 and NASDAQ are down 7.11%.  Read more

Yes the stock markets around the world have negatively reacted to the problems in Europe and have given back some of their gains over the last several weeks. Read more