Back to Blog Topics

Jim: Hi everyone today is Wednesday, September 28, 2016 and this is our weekly, midweek, market update call, brought to you each Wednesday to bring you current with observations, assessments and how we are sorting out our investment choices.

Today’s comments also include some comments from Bernie in some interesting developments in our day to day client experiences . . . .Bernie

Bernie: Thank you Jim.

First I have an update on the team – I’m excited to announce that we have hired 2 interns this fall. Our first intern, Killian McGiboney will focus on the finance side. Killian is originally from New Jersey, and is currently a senior at the University of Richmond. He is majoring in economics with a minor in physics. Our second intern is Arianna Fasulo and she will focus on marketing for us. Arianna is originally from New York City, and is currently a senior at the University of Richmond. She is double majoring in Business Administration with a concentration in Marketing and Leadership Studies. At the University of Richmond she is a member of Kappa Alpha Theta. For more interesting information on Killian and Arianna, please visit our website under the announcement sections.

On a more serious note, I wanted to highlight two fraudulent activities/scams that we have heard about recently. First, I know that a lot of our clients use Yahoo – there was a data breach recently which compromised user information of over 500 million accounts. It is suggested that you change your password associated with Yahoo or any additional online accounts that utilize that same passcode. The second item is folks tricking people to go and buy pre-paid cards. We recently had a client call us and they were scammed out of $7,500 – the person on the other end sounded very believable to the client and didn’t ask for any personal information – no bank accounts, credit card information, email addresses, etc. The client believed after the call that their grandson was in jail. While working on “getting the pre-paid cards” to help their grandson, the client called back the number they were given for the “precinct” and at different points spoke to a secretary, a desk Sargent and a Lieutenant – all different voices. Just be careful, as there are new scams coming out all of the time.

I’ll now turn the call over to Jim.

Jim: Thank you Bernie. I’ll have no financial service stories this week.

As far as investment ideas for our portfolios, with the exception of one asset class the 6 asset classes we follow stayed in the same order of ranking as in recent weeks, and the top three are all near each other with US equities, commodities and fixed income lined up in that order. They are followed this week by international equities which—as a group—has moved ahead of cash into third place. To repeat: the order is US equities, commodities, fixed income, international equities, cash then currencies. One comment: we saw commodities emerge earlier this year and are attempting to find similar trades like we experienced then but have stayed away from it.

Sectors? Same leaders as last week: Biotech, semiconductors and internet. We made an internet trade three weeks ago and we are digging into the other two sectors for ideas and are almost there with a replacement. Which sectors are the worst?  It’s hard to find a bad sector, but in the overbought category we see chemicals, real estate, semiconductors, gas utilities, insurance companies, non-money center banks, electric utilities, gaming and savings and loans. It’s a large group which telegraphs the overbought condition of almost a quarter of the sectors we follow. Emerging as a new leader at the bottom of our charts is metals—non ferrous metals—aluminum and copper companies, manufacturers and mining companies but not precious metals. It is getting our attention.

Interest rates? That head fake we told you about last week? Well that’s what it was as rates have fallen lower [again] just in the past 8 days as the 30-year treasury, the 10-year treasury and the 5-year treasury have retreated back to within 15-20 basis points of their historic all-time lows. This kind of action in interest rates could trigger some thinking in low interest rate strategies for consumers and businesses alike.

Bernie, that’s all my comments for today, shall we un-mute the lines for any questions or comments?

Opinions expressed are not necessarily those of Raymond James & Associates. The author's opinions are subject to change without notice. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security.

There is an inverse relationship between interest rate moments and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise.

Commodities are generally considered speculative because of the significant potential for investment loss. U.S. Treasury securities are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value.

International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets.

Back to Blog Topics