A quick update this week.

The markets ended the week mixed; the Dow was down .13%, but the S&P was mostly flat at +.02%, and tech had a great week with the Nasdaq up 1.12%.

We’re looking at Microsoft this coming week. We haven’t come down on either side yet, but there are some items of interest. A deal for “social search” between Bind and Facebook may reinvigorate the image of the aging tech company, making it relevant again. Also in that vein is Microsoft’s stance as a commercial vs. a consumer company. It has been some time since anyone’s been excited about a new Microsoft offering. Instead, we are excited by Google or Apple. Microsoft may be becoming an “old giant,” but we can see that the position of “lumbering old tech giant“ might not be so bad: it’s worked out pretty well for IBM.

“Quantitative Easing” sounds like some erudite process performed by financial wizards, the particulars of which we could never understand. In reality, it’s much simpler. Explaining its particulars does take a bit of doing, though.

The term “Quantitative Easing” is really rather misleading. All it is, really, is the Fed injecting new money into the economy. The Fed is often increasing the money supply, but QE involves doing so in ways other than its normal methods (more on its “normal methods” in a moment). It is no more “quantitative” than any other process involving money, and “easing” just means “increasing the money supply.” (more…)

This week was again a good one for stocks, with the Dow up .51% and the S&P up .95%. Meanwhile, the Nasdaq soared, up 2.77% for the week, helped along by positive earnings from Google (a personal favorite of this blog’s author) and Intel.  In Ben Bernanke’s speech Friday morning, he made it clear that the Fed would stand ready to take further steps to help bolster the economy. However, the markets seemed largely to ignore his comments.

The recession ended June 30, 2009. There are some “talking heads” that say it’s been too long since then for unemployment still to be this high. They point to this fact as reason to fear further economic troubles. However, we can see by looking at some historical data (chart below) that there is no real “normal” amount of time that elapses before peak unemployment is reached.  Since World War II, it has taken anywhere from 0 to 574 days to reach the unemployment peak after a recession. The average is 188 days, and our most recent recession gave us unemployment that peaked after 183 days. We say there is really nothing here to worry about yet. (more…)

The third quarter of 2010 was a remarkable one for stocks and bonds. As is rarely the case, both performed exceptionally well. We do not anticipate this unusual trend will continue much longer. It is, however, very nice to have both major components of our clients’ portfolios performing so well at the same time.

A major reason for the strong quarter in stocks was the shift in the consensus view of the economy. In the beginning of the quarter, most pundits (not us, I might add) were calling for a “double-dip” recession.  This was a step backwards for the market. By the end of August, that view began to shift towards our belief that the economy would avoid another recession.  Clearly, two steps forward. Sentiment shifted because the economic data overall began to turn slightly more positive. With this shift in sentiment, the market rallied. By the end of the quarter, the Dow Jones Industrial Average was almost back to 11,000. (more…)

One, two, three, four…
Hrmm!
One, two, (one, two, three, four!)

1966… The Beatles—most of my partners are way too young to remember the phenomenon they were, and the others were on to more serious things. For those of you of a certain age though, do you remember the song to which that count was the opening?

Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman. (more…)

Markets were up this week, with the Dow finishing up 1.62%, the S&P up 1.64%, and the Nasdaq up 1.31%.  Stocks were helped along Friday by jobs- while we lost some 90,000 in total, most of the loss was from public sector jobs. The private sector actually added some 60,000, showing continued confidence in the economy.

Investors might be noticing the changing currency climate, wherein many currencies are gaining value against the dollar. If this is an “unfair” valuation (as the dollar should continue in its strength), they might be wondering about an investment in the dollar. Investing in a foreign stock with some exposure to U.S. sales is in itself a bet on the dollar- without engaging in tricky currency trades.

Next week, companies’ quarterly earnings start in earnest. Also notably, the CPI numbers come out next week. (more…)