Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Friday, August 31, 2007

Bernanke gives boost

In Mr. Bernanke's speech today, the Fed chairman said that the central bank was ready to take additional action as needed to aid the economy but also cautioned that "it is not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions." I believe his speech helped calm the markets as they go into an extended weekend. The major indexes were all up about 1% with the Nasdaq leading the way at 1.21%. The main question still unanswered is whether the Fed will cut rates at its next meeting on September 18. Crude-oil futures rose 68 cents pushing it right above $74 a barrel. All U.S. financial markets will be closed on Monday because of the holiday. Have a great Labor Day! DJIA +119.01 Nasdaq +31.06 S&P 500 +16.35

Thursday, August 30, 2007

Finally... Rain

After weeks of hot, dry days, the rain finally hit. I'm hoping for a few days of this weather to make up for the drought. The rain and the breeze are making it feel a bit like Fall. The first college game for MSU is tonight, so this weather break is timely. The Bulldogs are facing the LSU Tigers, and I don't have a good feeling about it. I've seen Tiger vehicles rolling through Jackson for the last 2 days. Let's hope the fans behave. Markets were mixed today, as more economic data hit. GDP was revised upward. Corporate profits are up a healthy 5.4%. Home prices are holding steady from last quarter and up from last year. Despite this, investors remain skittish. Large caps dropped, while the NASDAQ eked out a positive for the day. DJIA -50.56 NASDAQ +2.14 S&P 500 -6.12

Tuesday, August 28, 2007

Bitter ending

Stocks took a turn for the worst late Tuesday afternoon and left each of the major indexes down more than 2%. Bad news continued to haunt the financial sector as Merrill Lynch cut the ratings on Lehman Brothers, Bear Stearns and Citigroup, all to "neutral" from "buy," citing the impact of debt-market exposure. Though stocks had been down all day, the release of the Fed minutes from the Aug. 7 meeting started the ball rolling on the late-day selloff. There is much anticipation on Wall Street for Friday's speech by Fed chairman Ben Bernanke, his first since the credit-markets upheaval began. Hopefully his words will bring good news. DJIA -280.28 Nasdaq -60.61 S&P 500 -34.43

Monday, August 27, 2007

Cloudy day

Evidence of continued weakness in housing and mortgages put a damper on markets Monday. Just like we have been seeing, mortgage lenders took another hit today. Countrywide shares dropped 4.8%. Its rivals were battered too, as Thornburg Mortgage dropped 12% and Novastar Financial retreated 7.5%. U.S. Steel agreed to acquire Stelco for $1.1 billion and Home Depot's board agreed to sell its struggling wholesale supply unit for $8.5 billion, or roughly 18% less than it had originally agreed. Crude-oil prices are back on the rise, growin 88 cents today. Overall, it felt like a cloudy day. . . without rain. DJIA -56.74 Nasdaq -15.44 S&P 500 -12.58

Friday, August 24, 2007

Good end to the week

Friday was a great ending for the week. The Nasdaq led the way again today as technology shares fueled a broad market surge Friday afternoon. A report on sales of new homes was another major driver of the day's trading. Sales of new single-family homes increased by 2.8% last month to a seasonally adjusted annual rate of 870,000. Today was a great kick start for the weekend. Now, if I could just avoid this heat. DJIA +142.99 Nasdaq +34.99 S&P 500 +16.87

Wednesday, August 22, 2007

Only time will tell

The increasing rumors of the Federal Reserve rate cut helped push stocks higher. The major indexes gained more than 1% each, led by the Nasdaq at 1.25%. So far, the Fed cutting the discount rate last week has looked to be very helpful. Has this move instilled confidence back into the markets? I think it is to early to say for sure. . . DJIA +145.27 Nasdaq +31.50 S&P 500 +16.95

Tuesday, August 21, 2007


After a fairly stable Monday I was quite interested to see how the markets would react to a closed-door government meeting held today.Federal Reserve Chairman, Ben Bernanke, met with Treasury Secretary Henry Paulson and Senate Banking Committee Chairman Chris Dodd, to discuss the recent commotion in the markets. Dodd said that Bernanke declared he is prepared to use "all the tools at his disposal" to ease the market's liquidity woes. So what did this do the for the markets? Not a whole lot. Which could be just what we need, a little stability. DJIA -30.49 Nasdaq +12.71 S&P 500 +1.57

Monday, August 20, 2007

Calm Monday

Trading was somewhat calm by recent standards, as a majority of investors are trying to decipher Friday's move. The Dow gained .32% today, though it is not much of a change, I am glad to see another gain. Central banks continued to pump liquidity into the markets, which will hopefully bring more stability. Crude-oil prices fell 86 cents to $71.12 a barrel, lets hope hurricane Dean does not cause much damage to this sector. DJIA +42.27 Nasdaq +3.56 S&P 500 -.39

Friday, August 17, 2007

Each of the major indexes gained around 2% Friday. This morning the Fed cut its discount rate to 5.75% from 6.25%, offering cash-strapped banks and lenders a safety valve. This may lead to a decrease in the funds rate, which would make borrowing cheaper and help stocks, but it can also fuel inflation. It was nice to see the market with a quality gain after seven straight days of finishing in the red. I'm hoping that this will stick, but only Monday will tell. DJIA +233.30 Nasdaq +53.96 S&P 500 +34.67

Thursday, August 16, 2007

When Down Is Up

It was a roller coaster day, but the triple digit losses faded by the end of the trading session. Jeremy was in the back doing his "end of day surge dance." It must have worked, because the Dow and NASDAQ ended down only modestly. The S&P actually saw a gain for the day. HP reported an increase in earnings of 29% amid the turmoil. On the other hand, giant mortgage company, Countrywide, is scrambling to stay afloat. Uncertainty is still hanging over Wall Street, but today was a welcome relief. I think we'll keep Jeremy dancing!
DJIA -15.69 NASDAQ -7.76 S&P 500 +4.57

Wednesday, August 15, 2007

Still Backing Up

Markets are still retreating because of the crunch in the credit market. The Dow fell below 13,000, and the S&P 500 is now showing a loss for 2007. The Federal Reserve continues to add cash to the situation, but the markets don't seem convinced. The talk is that Bernanke will have to adjust his philosophy and opt for a rate decrease. While the backward steps are unsettling, it's also a time to reassess. If you've got cash, you may want to go shopping among large caps. I don't expect a change in tone until September. DJIA -167.45 NASDAQ -40.29 S&P 500 -19.84

Tuesday, August 14, 2007

Still Questions on the Credit Market

Stocks are still swooning, as investors sort out the damage from subprime delinquencies. While it appears that the fall-out is limited, the effect has been to erode confidence. Central banks have pumped a ton of cash into markets, but investors are still running scared. While this is not something to sneeze at, it's not Chicken Little time. Today, Wal Mart reported disappointing earnings and is trying to figure out how to combat all the disappearing merchandise at its stores. New data this week on the overall economy will add fuel to the fire or will be the bucket of water on the flames. Stay tuned. DJIA -207.61 NASDAQ -43.12 S&P 500 -26.38

Monday, August 13, 2007

Sometimes, Flat is Good

After the topsy turvy ride of last week, this Monday was a nice respite. Of course, markets were decidely positive most of the day, but fizzled by the closing bell. Oh, well, sometimes, flat is good. The slight negatives of all indexes was a welcome sight after triple digit losses from last week. The credit markets are still uncertain, and it will take some time for things to settle out. Retail numbers are looking good. For those of us in the heat of Mississippi, that was a surprise. We're staying in out of the triple digit temps! DJIA -3.01 NASDAQ -2.65 S&P 500 -0.72

Friday, August 10, 2007

Will the Fed cut rates?

Stocks, which were in the red throughout the morning, bumped a bit higher as the Fed made moves to ensure the markets had adequate liquidity. "The extra Fed liquidity added a little stability into the market, at least for today," said Robert Pavlik, chief investment officer at Oaktree Asset Management. The major indexes made a run higher into the last 30 minutes of the session and ended mixed. The market this week has been all over the place and I think we all could use a two day break. DJIA -31.14 Nasdaq -11.60 S&P 500 +.55

Thursday, August 09, 2007

Liquidity Concerns

Liquidity concerns contributed to a selloff in stocks on Thursday but the main cause was even more concern about the subprime market. The French banking group BNP Paribas said it had suspended three funds with exposure to the U.S. credit markets as it has become impossible to accurately value them. In order to pump a little more liquidity into the U.S. system, the Fed arranged a 14-day repurchase agreement, a tool the central bank uses to temporarily add to banking reserves, of $12 billion. A little while later, it added a one-day repo agreement of an additional $12 billion. "Yes, it looks bad, but it always looks bad at the bottom," quoted Mr. Jason Goepfert of Sundial Capital Research. "My bet would be that we see a rally in the next one to three months." DJIA -387.18 Nasdaq -56.49 S&P 500 -44.40

Wednesday, August 08, 2007

Fact or fiction

Stocks grew throughout the morning, reaching a peak around 1:00, but tumbled quickly afterwards due to market rumors. A rumor that Goldman Sachs Group planned to liquidate its famed Alpha Fund may have contributed to the late-day swoon, even though the rumor proved to be false. The markets quickly snapped back, after a few other rumors were dismissed, ending the day on a positive note. The Nasdaq stole the spotlight Wednesday, finishing more than 2% higher than where it began. DJIA +153.56 Nasdaq +51.38 S&P 500 +20.78

Tuesday, August 07, 2007

Fed holds rates

The Federal Reserve decided to leave interest rates on hold today. After the decision, the Dow went down more than 100 points, and up more than 100 points, and everywhere in between, as traders tried to figure out what the statement meant for them. Many investors were hoping for a lowered rate which would make borrowing cheaper and could bring some relief to the struggling credit markets. On the other hand, a lowered rate could cause a spike in inflation. Maybe this worked out for the best. DJIA +35.52 Nasdaq +14.27 S&P 500 9.04

Monday, August 06, 2007

Friday? Fuggidaboutit!

What bleak Friday? Markets took off today, erasing the losses from Friday. There was no single reason for the upswing, other than investors seemed to be saying markets were oversold. Buying was the order of the day, and indexes were pushed steadily higher throughout the day. American Home Mortgage declared bankruptcy... no surprise there. McDonald's is sprucing up its image in China, offering pay raises and better working conditions. Financial stocks were the winners on this stellar day! DJIA +286.87 NASDAQ +36.08 S&P 500 +34.61

Friday, August 03, 2007

End of Day Slide

Markets tumbled, but so did oil prices. What gives? Well, it's the credit market again. Those pesky problems in the subprime market are spreading. Job creation slowed, also dampening expectations on Wall Street. The combination of slower jobs growth and lower oil prices should keep the Fed in check. Maybe, the inflation bugaboo will disappear. Now, we just need to calm down that credit market. Indexes dropped from 2 to 2 1/2%. DJIA -281.42 NASDAQ -64.73 S&P 500 -39.14

Thursday, August 02, 2007

Late surge

Earnings played a big part in Thursday's gain, which seemed to mirror Wednesday's late surge. In particular, the tech-heavy Nasdaq, which has been hit harder than the other major indexes in recent days, got a boost from Nokia. The cellphone maker's shares rose 8.8% after it said its second-quarter net profit more than doubled. Traders are anticipating Friday's release of nonfarm-payrolls data, a closely watched gauge of economic health, particularly amid the weakness in the housing market. If negative, it could serve as fuel to an unwanted fire. DJIA +100.96 Nasdaq +22.82 S&P 500 +6.39