Friday, May 17, 2013, Market Commentary

Market Recap:
In spite of solid corporate earnings reports and benign inflation figures, stocks started and ended on a muted note as weaker than expected manufacturing data and higher than forecast jobless claims pressured stocks down. Technology shares were the only sector of the S&P that ended in the plus column as strong earnings by Cisco Systems pushed the sector into positive territory. Commodity prices were mixed, while Treasuries rallied slightly. 

Market Recap:

Stocks started the day on the downside as investors looked to take a breather from multiple back-to-back days of new highs for most major indexes. But, after a positive housing and construction report was released in the mid-morning, stocks resumed their upward rally. Most sectors of the S&P were higher with healthcare and material shares underperforming. The 10-year Treasury yield continued to creep towards 2%. As we have been discussing for several weeks now, although a short-term market pullback is something investors should always be ready to contend with, a prolonged or deep correction appears unlikely at this time.

Looking Ahead:

US equities continue to rally as corporate earnings are providing the necessary fuel for the upward march, while loose monetary policy is providing the support to avoid a meaningful selloff. Given the overall global growth picture and subdued inflation expectations, it is not unforeseeable that further easing may come from Europe, Japan and several emerging economies in the North Africa Middle-East region and South-East Asia. All in all, as corporate earnings season comes to an end, we expect a short period of low volatility before a likely pickup in velocity of trading after Labor Day. Make sure to tune into Money Matters with Gary Goldberg weekdays at 10:05 to hear our latest analysis and commentary. Visit www.ggfs.com for details, and listen to us on WOR (710 AM) beginning Sunday June 2^nd or click on this link http://bit.ly/MMFNRadio to listen live.

Monday, May 13, 2013, Market Commentary

Market Recap:

Equities reached all-time highs last week as positive economic news, further Central Bank easing by Australia and continued positive earnings all aided investor sentiment. So far, 86% of companies within the S&P500 have reported quarterly earnings. Of these, 67% have surpassed EPS estimates, while 48% beat revenue forecasts. On a sector basis, Utilities have shown the most consistent revenue beats, while Consumer Discretionary and Energy companies have shown the most frequent EPS surprises. The average company within the S&P has grown year-over-year revenues by 4.7% and grown earnings by 9.5%.

Looking Ahead:

While the debate over an eventual market correction continues, we are focusing our attention on sustainable growth and attractive valuations. As "crisis fatigue" continues to set in with investors, we expect high-quality small cap stocks to begin taking market leadership. Although we continue to see significant opportunities in high-quality large-cap dividend paying stocks, we anticipate a leadership rotation in the second half of the year. One of the reasons large-cap multinational companies have fared so well in recent years (and should continue to do so) is because of their perceived safety. As a result, valuations have become more reflective the companies intrinsic value and future return expectations should be reduced to high single-digit annual gains. Conversely, high quality small capitalization stocks have underperformed in recent years, and remain attractively valued.

This week’s market moving events:

Earnings keep on rolling in, as Q1 reporting seasons comes to an end. On the economic front, there is little to fret over this week, other than the usual weekly data releases. As investors have become more accustomed to inconsistent data points and news, as well as showing signs of apathy towards geopolitical driven events, expect volatility to remain subdued in the short-term.

Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest analysis and commentary. Visit  www.ggfs.com for details, or click on this link http://bit.ly/mmfnradio to listen live. Beginning Sunday June 2nd, we will be airing Money Matters with Gary Goldberg on WOR 910 AM from 2:00 PM to 3:00 PM. We look forward to you tuning in.

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by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

The S&P 500 and Dow Jones Industrial Average hit new record highs after advancing slightly during Wednesday’s trading session. Although trading volume was lackluster, market breadth was broad enough to lift most sectors of the S&P 500 with utilities being the sole underperformer. Oil and other key commodities rose across the board on better than expected German manufacturing data, while U.S. Treasury Yields rose.

Looking Ahead:

This morning’s Jobless Claims numbers are the only meaningful economic data to be released this week, and could therefore have a greater influence on market sentiment than normal. However, as has been demonstrated in the past few weeks, market fundamentals and stock valuations appear to be reasonable enough for most investors to continue to buy stocks on the belief that the extraordinary monetary policies and zero interest rate policy (ZIRP) will support and help stocks rise in the current economic cycle and earnings environment. Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest analysis and market commentary. Visit www.ggfs.com for details, or click on this link http://bit.ly/MMFNRadio to listen live.

Download our Mobile App today.

by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

Stocks closed at new all-time highs on Tuesday, as strong corporate earnings drove share prices higher. The energy and materials sectors benefited the most, while technology shares underperformed. In a surprise move, the Bank of Australia lowered its key interest rate by 25 basis points and the head of the ECB indicated that further easing in Europe could be possible. Commodities and the US dollar were mixed.

Looking Ahead:

Futures are indicating a moderately lower opening so far, as investors seem ready to take a pause. Overnight, a report showed German Industrial Production growing at a more rapid pace than predicted and overall business sentiment being stronger than forecast. With stocks trading at what most view to be extended levels, we are still finding opportunities and value in various segments of the market. Given the current economic environment we believe our Dividend Buster Program, which focuses on high-quality companies, with strong balance sheets, positive cash-flow, and a sizeable dividend should continue to perform well. We also believe that small-cap stocks, in particular lower-volatility small-cap stocks, will perform well in the current environment (read our WSJ Marketwatch article on the topic here: http://www.marketwatch.com/story/a-case-for-small-cap-stocks-2013-05-08?link=MW_TD ). Our Small-Cap Buster program identifies high-quality small companies, all of which are profitable, growing revenues and earnings and many of which pay a dividend higher than the 10 Year Treasury. We invite you to contact us to learn more about investing in lower-volatility small-cap stocks by calling us at 800 433 0323.

Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear more of our analysis and market commentary. Visit www.ggfs.com for details, or click on the following link http://bit.ly/MMFNRadio to listen live.

Download our Mobile App today.

by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

Enjoy the Silence was the theme on Wall Street to start the week. On the three year anniversary of the “flash-crash” where the Dow Jones traded in a 1000 point range, stocks moved less than 50 points from peak to trough. The absence of economic news and palatable earnings reports kept stocks, commodities and Treasuries in a tight range, with most of the sectors of the S&P ending slightly higher.

Looking Ahead:

Consumer Confidence data and a few earnings reports in the consumer sector will greet investors in the early trading hours on Tuesday morning. However, the overall absence of news around the world is likely to make for another muted day. International bourses are all higher as of 5:30 New York time, and U.S. market futures are indicating a higher open. The Central Bank of Australia lowered interest rates by ¼% overnight and ECB head Mario Draghi stated that further monetary steps to support the continents economies are possible. Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest analysis and market commentary. Visit www.ggfs.com for details, or click on this link http://bit.ly/mmfnradio to listen live.

Download our Mobile App today.

by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

After a muted start, stocks took off and ended the week at all-time highs. The S&P 500 blasted through 1,600 and the DJIA is within reach of 15,000. Although earnings were mixed, a lowering of key rates by the ECB and accommodative language from the US Fed lifted investors’ spirits. Last week demonstrated that momentum trumps fundamentals in the current environment, heightening the potential for added volatility. Healthcare shares and consumer staple stocks have underperformed recently; Monday’s earnings could prove critical to the sectors.

Looking Ahead:

Enjoy the Silence…. There is little economic news being reported this week, making for a potentially boring week. Of course, the absence of data also increases the potential for short-term overreaction to small pieces of news. As of 7:00 AM Monday morning, stocks look to open flat in the United States, while major bourses in Asia and Europe are rising on a follow-through to Friday’s strong performance. Key reports this week are as follows:

Monday: 
Sysco Foods (S: SYY) and Tyson Food (S: TSN) report

Tuesday: 
Consumer Credit is released. Molson Coors (S: TAP) and Mondelez (S: MDLZ) report

Wednesday:  
AOL (S: AOL) and Centurylink (S: CTL) report

Thursday:  
Jobless Claims are released. Apache (S: APA), Dean Foods (S: DF), Carlyle Group (S: CG) and Priceline (S: PCLN) all report

Friday:   
Dillard’s department stores reports (S: DDS)

Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest economic analysis and market commentary. Visit www.ggfs.com for details, or click on this link http://bit.ly/MMFNRadio to listen live.

Download our Mobile App today.

by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

Mayday turned into hurray as markets rallied sharply on Thursday to close at new all-time highs. The S&P 500 inched towards 1,600 while the Dow Jones Industrial Average is now just about 1% away from the 15,000 mark. Worries of a May sell-off seem to have been short lived, as investors were pleased by the ECB rate cut and much better than expected US jobless claims data. Commodities were mixed, with metals slightly underperforming while agriculture and energy did fairly well.

Looking Ahead:

We generally expect a pickup in volatility, but are constructive on equity markets over the coming months. As clever as the old saying “Sell in May and Walk Away” sounds, investors are wise to focus on the facts and not get caught up in generalities and rhymes. For certain, there is an argument to be made to lighten up on equities during the months of June through September. But the historical evidence is far from clear. To the contrary, the case to reallocate and stay invested is stronger than the case for a wholesale liquidation. The below chart shows the average percentage rise or fall for the S&P 500 for each calendar month from 1988 through 2011. As surprising as it may seem, the average return for the month of May during that period is 1.22%. More significantly, as the right axis line indicates, the S&P 500 has been positive 71% of the time in May.



When looking at the data more closely, since 1945, the S&P has gained in both January and February 26 times – including this year. In those instances, the average return for the 6 month period of May through October has climbed from an overall average of 1.2% to 3.9%. Moreover, the period delivered positive returns 77% of the time – pretty good odds if you ask us. We do expect market volatility to increase over the coming months, and certainly do not expect a repeat performance of Q1. However, we disagree with the notion that investors have to either stay all in or bow out completely. A wiser strategy, is to shift your portfolio to lower volatility stocks that pay a high dividend. Specifically, as part of a well formulated strategy, we focus our investments in this arena on companies that have a strong balance sheet, have historically grown their dividends while simultaneously decreasing their dividend payout ratio (the percentage of earnings dedicated to dividends). Companies that year after year are able to shrink their dividend payout ratio present the least risk to your dividend income.  Why?  Because even if profits decline for several years in a row (think financial crisis circa 2008-2010), these companies have the most flexibility to keep their dividend payment intact. Make sure to tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest economic analysis and market commentary. Visit www.ggfs.com for details, or click on this link http://bit.ly/mmfnradio to listen live.

Download our Mobile App today.

by thebetafund.com
Montebello Partners LLC

Opinions express herein are those of Oliver Pursche, and are subject to change without notice and may differ or be contrary to the opinions or recommendations of Gary Goldberg Financial Services or Montebello Partners, LLC. These opinions are not investment advice, recommendations, or an offer or solicitation to buy or sell any securities. Any price or quotation contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, or appropriateness of the information or methodology contained in this material. Opinions expressed are not investment recommendation or advice and should only be considered as a single factor in any investment decision. Investors should consult with their own investment advisor prior to making any investment decisions. Gary Goldberg Financial Services, Montebello Partners, and/or their affiliates may have an interest long or short and may be actively trading the securities mentioned in this report and may in fact be executing a strategy contrary to the opinion shared within this report. Gary Goldberg Financial Service, Montebello Partners, LLC, its directors, officers and employees, including Oliver Pursche, do not accept any responsibility or liability for any loss or damage arising out of the use of all or any part of these materials.

Market Recap:

Mayday, Mayday…. Ok so it was actually May Day as stocks and commodities sold off on the first day of May as several corporate earnings reports failed to impress investors and economic reports showed that manufacturing activity in America slowed more than expected in April. Additionally, a weaker than forecast ADP Payroll report and a slightly more negative tone by the Federal Reserve all helped push stocks about 1% lower. Overseas, slowing manufacturing in China also weighed on markets.

Looking Ahead:

Market participants are treating the early morning news that the ECB cut interest rates by 25 basis points to 0.5% with mixed feelings. Investors are pleased with the cut in rates but were hoping for stronger language and an increase in asset purchases, which was not discussed in the preliminary release. Weakening global economic activity is increasing expectations that Central Banks, including the US Fed will become even more active in their efforts to spur on growth. From an investment perspective, we believe a similar market pattern to the one experienced last month (April) is the most likely scenario. We expect mixed economic news and continued robust earnings reports to drive volatility and market direction. However, ultimately, we believe that Central Bank policy is supportive enough for equity markets to have a “floor” and consequently do not believe there will be a prolonged or deep market correction.

Tune into Money Matters with Gary Goldberg weekdays at 10:05 AM to hear our latest market commentary and economic analysis. Visit www.ggfs.com for details, or click on this link http://bit.ly/MMFNRadio to listen live.