“Housing, Jobless-Claims Data Point to Bottoming”
⎯ Housing and jobless claims show some signs of stabilizing.
“Manufacturing Slump Is Expected to Continue”
⎯ Manufacturing is not expected to pick up for several more months.
“Nokia Sees Hope Amid Handset Slump”
⎯ The #1 maker of cell phones states that it is seeing signs of “stabilizing demand.”
“LG Display Sees Rebound In Prices for LCD Panels”
⎯ LG is the world’s second largest maker of LCD (liquid crystal display panels), which are used in TVs and computer monitors, as well as other electronic gadgets.
Just like last week, three out of four isn’t bad.
It is this overall trend of small nuggets of good, or shall I say, less negative news is giving Wall Street and investors around the globe some optimism. This explains why many, and especially some long-term investment managers, are beginning to feel better about taking advantage of, what they consider, bargains currently available to them in the stock and bond markets (as noted the next section below).
I am planning to begin sticking my investment toe back into the market. I don’t plan to load up the cart, but to just start accumulating some positions over the upcoming months. Yes, the market is up from its lows, but it is well below where it was a year ago and we can still see stocks and bonds jump up and down, before finally breaking free from this “great recession and bear market.” If you have any questions of how this applies to your specific accounts, please don’t hesitate to call me.
It’s not over, but we’re seeing some signs of life
A survey of fund managers released by Banc of America Securities-Merrill Lynch on Thursday revealed that optimism about growth has reached its highest level since early 2004, with a net 26% of respondents expecting a strengthening in the global economy, up sharply from a negative 24% in January.
“The opportunities today, from the bottom up, are certainly the best I’ve seen in my lifetime,” Mr. Whitman, the 84-year-old founder of New York-based Third Avenue Management LLC, said during a panel discussion at the InvestmentNews Retirement Income Summit last week in New York.
Martin Whitman has been managing value portfolios for 50 years and through several recessions, now has some significant skin in the game. After getting his board to increase the amount of assets his fund is permitted to invest in distressed securities, last month he put $3 million of his personal wealth into the Third Avenue Value Fund.
“I’m putting my money where my mouth is,” Mr. Whitman said.
Another investment manager at the InvestmentNews Retirement Income Summit noted, “these markets present us with some of the best chances to make money than I’ve ever seen, but we’ll all have to be extremely cautious.”
Earlier this week, Richard Russell, editor of Dow Theory Letters, had this to say about the increasing bullishness among many advisers: “The market is now about one month off its March 9 low. Yet already the mood has changed, public sentiment is turning almost rosy, and analysts are openly urging people to buy stocks. … It seems to me that this is awfully fast for the business news to turn rosy. … Bear market bottoms don’t tend to work that way. After a true bear market bottom, it often requires many months before the crowd and the media turn bullish.”
The Fed sees some signs of bottoming
The economy continued to decline in March, but the recession is showing signs it may be bottoming out, according to a report the Federal Reserve Board issued Wednesday.
The board’s Beige Book, which gathers anecdotal information for the various Federal Reserve districts, found that overall economic activity contracted or remained weak in March. Five of the 12 districts, however, saw the rate of decline moderate, and “several saw signs that activity in some sectors was stabilizing at a low level.” “The economy is still very weak, but there are some encouraging signs that support cautious optimism,” David Lockhart, president of the Federal Reserve Bank of Atlanta said in a speech yesterday.
Commercial real estate is now feeling the pain
The housing bubble has been a hot topic over the last year or two. However, the commercial real estate market is now beginning to feel the brunt of the economic crunch. General Growth owns over 200 malls across the United States. Like many real estate companies, it is having problems refinancing the debt it took on over the last several years as it went on an aggressive expansion at the height of the real estate boom. The slowing economy shuttered many businesses, and has resulted in increased delinquencies and vacancies for commercial property owners. Unfortunately, banks and insurance companies have been lenders to this industry and may face losses from increasing commercial loan defaults.
Better news for the Brits
The British have experienced the same housing bust and “great recession” as we have in the U.S.. However, mortgage lender Nationwide reported earlier this week in the Wall Street Journal that the average U.K. house price posted its first rise in 17 months. Also, mortgage approvals hit a nine-month high in February and consumer confidence is starting to recover. Any overseas economic up ticks, even as gradual as they may be, will help the U.S. recovery.
Upcoming Strategic Life Planning Session
Is your life the way you want it? Strategic Life Planning – A Journey of Discovery
We’re seeing a lot of people in career transition who have lost their path and aren’t sure how to discover a new one. The next Strategic Life Planning workshop is coming up Wednesday, April 22. Click below for details and to register, or call/email Deb at the office, 913-897-2074, dkunz@iia-kc.com. Space is limited and pre-registration is required.
“An inch of progress is worth more than a yard of complaint.” –Booker T. Washington, educator, orator and author
“If you put the federal government in charge of the Sahara Desert, in 5 years there’ll be a shortage of sand.” –Milton Friedman: Nobel Prize-winning economist and advisor
“Man is not like other animals in the ways that are really significant: Animals have instincts, we have taxes.” –Erving Goffman, sociologist and writer
“Parenthood has two stages: when your children ask all the questions, and when they think they know all the answers.” –Author unknown
Tony Moeller, President
Integrity Investment Advisors, LLC
12721 Metcalf Ave., #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.
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