Weekly Newsletter 10/20/2014

Before we get into the bulk of this week’s commentary, we want to point out that our Market Sentiment meter moved lower to a neutral level. The scoring for the meter is comprised of technical investing market indicators as well as economic data points which have all been turning lower. Additionally, clients of ours will take note that cash holdings in many accounts have been increasing as we have seen some of our sell side indicators being realized. Since we have been building cash in client accounts we have prepared a special report titled Cash! May not be king but still holds court that covers the roll of cash in client portfolios. Click HERE to be taken to a PDF copy of the special report.

Global markets dropped this week in the face of continued global economic challenges. While there was little in terms of global economic data point releases, there was a fair amount of significant economic commentating. The primary commentating arrived from European Central Bank (ECB) head Mario Draghi as he pointed out that economic stimulus above their current efforts is not going to happen without fiscal unity in Europe. This took investors by surprise since the ECB just rolled out a bond purchase program.

For the last few years economic analysts have pointed to the strength of the German economy as an underpinning to why Europe will emerge from its recent economic funk. In the last month many economic data points coming out of Germany are showing a dramatic slowing. Additionally, Japan’s economy has officially reentered recession for the third time in just a few years. Lastly, the International Monetary Fund (IMF) lowered its forecast for global economic growth based on its observations.

As always, we continue to monitor markets and will look for opportunities or signs of stress.

Global Market Index Performance

Market Indexes 10-20

Getting Technical with Market Charts

In this section we present charts of the S&P 500 Stock Index and the US Bond Market Index relative to their 50 day (blue line) and 200 day (red line) moving averages.  In addition, we have added the blue shaded area which represents the recent trading channel. The 50 and 200 day moving averages are widely followed market trend indicators that provide a general picture of the health of the broad indexes.

Chart 1 – S&P 500 Index

$SPX 10-20

Chart 2 – US Aggregate Bond Index

$AKG 10-14

Global Data Points

Econ Data 10-14

Securities are offered through First Allied Securities, Inc. (FASI), a registered Broker Dealer, Member FINRA/SIPC. Advisory Services offered through Lighthouse Financial Advisors, Inc., a Registered Investment Advisor dba Lighthouse Wealth Management (LWM). Lighthouse Financial Advisors, Inc. is not a subsidiary or control affiliate of FASI.

 

Disclaimer – Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. The Standard and Poors 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. The Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Contact your investment professional to discuss suitability for your particular circumstances. This article does not constitute an offer of sales of any securities. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Lighthouse Financial Advisors, Inc., dba Lighthouse Wealth Management, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

About Katy Chase

Katy Chase, MBA, contributes her own perspective to the team. With previous training in Marketing and French, her perspective offers a mixture of macroeconomic, cultural, and client-focused experiences. In addition, Katy is a baker (with a specialty in chocolate), athlete, perpetual student/learner, volunteer, blogger, Nittany Lion, daughter, grand-daughter, sister, and wife.