Sunday, September 14, 2014

The Weekly Market Outlook - $DJIA $SPX $NDX & The Recovery

*****Markets are sitting on a decision point. I say point, because the more uncomfortable it becomes on the tush the more likely that it will move somewhat violently one way of another.

The truth is we cannot continually excuse the bad news to be OK news. We cannot continually say that this is the only market that there is where people will put their money to invest; and we cannot continually think that  we are in a robust economy when earnings expectations meet or exceed a lowered expectation.

I don't wish to throw any wet blankets on anyone or anything, but evidence is actually to the contrary. We are at best sputtering.  Even though this is the only market that people can continually rely on to invest, the much too often talked about sidelines money from the citizenry is going to meeting living expenses and not  not waiting for the right time to enter. Evidence is that the jobs market may actually reduce not increase much in large due to ObamaCare. Evidence is that the government is not only  increasing income taxes, but adding other taxes that are hidden, in everyday life.  Also, evidence is that inflation for you and my living expenses are on the rise at much higher than 2.2% .

Inflation is not measured by the government as it actually effects us. Maybe inflation is not so much evident in your gas or energy cost or your interest cost (yet).  But it's hugely evident in your food cost, your entertainment cost, your travel cost, your health care cost, and even your parking meter cost.

But the largest evidence that we are not nearly in a robust recovery as we'd like, is in the wage increase data. Yes, you read that right. When wages don't increase across the board (unless compelled by the government) it means that the people are not going to do much better than last year or the year before especially when compared to the cost of living increase (inflation).  Some people point to "bonuses" being on the rise to employees and should be looked at as a wage increase. The trouble with that argument, aside from the reason it's done that way by companies, is that most employees don't get a bonus.

So, the big question of where we are really in this recovery, becomes more weighing on the markets as we keep pushing higher because low volume does not always mean everyone's happy where they are sitting.  In short, as I always say, "trade it well and carefully" my friends.

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The Weekly Outlook #38 ~ 15 Sept. 2014

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