Lindsey Report June 2014

Equities (as measured by the S&P 500) moved higher for the month of May, gaining a little more than 2% for the month.  Moreover, the S&P 500 set another all-time-high, closing above 1900.  As there have been several highs set this year, one might easily think that equities are way up: the reality is that the index is only up 4% year-to-date (Bloomberg). 

It appears that optimism is ruling the day at the moment, as the economic data is by no means earth-shattering.  In fact, the Commerce Dpt. revised their prior estimate for growth in Q1 to a negative 1%: in other words contraction (The Guardian).  Clearly this was not a positive development; however, the markets shrugged off this news like water off a ducks back. 

Why the optimism?  A partial explanation is grounded in the idea that the markets are considered “forward-looking”.  As such, in that same Guardian article, they noted that expectations are for a significant rebound in Q2 growth, ranging between 3.5% and 4.5%.  Now those are the kinds of numbers that could help support current valuations: let’s hope they manifest! 

Fortunately, there have been some reports suggesting activity has been picking up.  For instance, the ISM non-manufacturing survey for May posted its’ highest value since 8/13. It also said 14 industries reported increased business activity, with only one reporting decreased activity.

On a personal note, for the second year, I am very pleased to have been named a Five Star Wealth manager: less than 7% of all Advisors in the greater Detroit area received this status for 2014!  The most important aspect of the Five Star Award is that it is based on the service I provide to you, my valued clients.  If you have a chance, look for me in the June issue of Hour Magazine and/or the July/August issue of D Business (The Five Star Wealth Manager Award is based upon 10 objective criteria associated with providing quality services to clients such as credentials, experience and assets under management among other factors.  Wealth managers do not pay a fee to be considered or placed on the final list of 2014 Five Star Wealth Managers). 

 

 

The opinions voiced are for informational purposes only and are not intended to provide specific advice to any individual.  To determine which investments are appropriate for you, consult myself prior to investing. Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  The economic forecasts set forth in this commentary may not develop as predicted and there can be no guarantees that strategies promoted will be successful.  The Standard and Poor’s 500 index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. 

 

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