Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

The Lindsey Report – January 2013


Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

Article by, Cleat Lindsey

The S&P 500, the Dow and the Nasdaq all began the year on a high note.  The S&P and the Dow had their best January since 1994 (Reuters) up 5% and 5.8%, respectively.  Moreover, the Dow flirted with and crossed 14,000 in January and closed above 14,000 the first trading day in February.  This is rarefied air for the Dow, as it has only done so 15 times in history (Associated Press) and the last was Oct. 17, 2007.

It would appear that once the Washington shenanigans stopped taking center stage, we got a relief rally and the markets began looking further down the road then a few days or weeks.  In fact, the markets did not sell off on the news that the Commerce Department reported that the economy shrank by .1% in December.  This report is not forward looking, but apparently there were elements of it that were more encouraging than discouraging.

One of my favorite article titles was, “Beneath The Surface, Today’s GDP Report Was Actually Good” (Business Insider).  That article along with many others went on to discuss that there was a bit of an anomaly that caused the number to be barely negative and were using terms like a “one-time dip”.  Another great quote was from Paul Ashworth, chief U.S. economist for Capital Economics who said, “the best-looking contraction in U.S. GDP you’ll ever see”.

They noted that government defense spending had a significant, negative impact, but would not likely repeat and we would likely see a rebound in defense spending in the coming quarters.  Another big contributor was a draw down in business inventories (meaning a lot of inventories were used).  The positive there is that inventories now have to be re-built.

They highlighted some areas of the report that were positive such as an increase in both personal consumption and disposable income.  Also, investments in equipment and software gained 12.4% (to me that suggests businesses are investing in themselves), while residential investment increased at 15.3% (e.g., housing market continuing to rebound).  All said, I’m hopeful that the economy will pick up some steam as the year progresses and help support current equity values, if not drive values higher.

 

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. 

Share This Post

Recent Articles

Leave a Reply

© 2020 Cleat Lindsey. All rights reserved. Site Admin · Entries RSS · Comments RSS
Powered by WordPress · Designed by Theme Junkie

Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524

Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /nfs/c04/h03/mnt/164519/domains/cleatlindsey.com/html/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524