More financial advisors are using technical analysis in their money management travels these days, including asset allocation. In the new issue of Financial Advisor, I profile the trend and ask some wealth managers why and how they’re using TA: (Re)Discovering Technical Analysis.
Monthly Archives: December 2012
Jobless Claims Fall To Pre-Hurricane Levels
New filings for jobless benefits fell again last week, offering another statistical talking point to argue that the dramatic surge in new claims for the week through November 11 was a temporary effect from Hurricane Sandy. Since then, claims have dropped for three consecutive weeks. The overall decline in the last three reports is substantial, pushing last week’s claims data down to the range that prevailed before the storm hit, albeit on the high side of the pre-storm range. But for now, there’s quite a bit more confidence for asserting that the claims numbers again suggest that slow growth for the labor market remains a reasonable outlook.
Dueling Forecasts: ISM Manufacturing & Services Indexes
Yesterday’s update on the ISM Services Index delivered a positive counterpoint in the November estimate vs. the discouraging slide in the ISM Manufacturing Index. One of the indicators is feeding us misleading signals about the business cycle. The manufacturing index is warning, albeit mildly, that the economy is weakening. But the services data begs to differ.
November Job Growth Slows… Because Of Hurricane Sandy?
Private payrolls in the U.S. increased by 118,000 last month, according to the ADP Employment Report. As expected, that’s a slowdown from October’s 157,000 rise (on a seasonally adjusted basis). Many economists will chalk up the slower rate of growth to Hurricane Sandy’s negative influence. Maybe. For now, it’s a plausible argument. Nonetheless, today’s ADP number tells us to remain cautious on expecting anything other than a comparably lower rate of jobs growth when the Labor Department publishes the official November payrolls report on Friday.
Will The Housing Recovery Survive The Fiscal Follies?
What are the arguments for thinking that the U.S. economy will remain on a slow-growth course and avoid a new recession? Unfortunately, there are fewer sources of statistical support these days, but the strongest ones—relatively speaking—remain payrolls and real estate. Today’s estimate from ADP (scheduled for release at 8:15 am ET) is expected to post a slower rate of jobs growth for November, but not enough to challenge the notion that the economy is still growing. The nascent real estate revival is the other conspicuous point of optimism… if we can keep it.
A Long, Strange Season For Macro Analysis
Analyzing the business cycle in real time is a task that’s always threatening to lead us astray, but in the current climate the hazard may go into overdrive. All the usual gremlins are with us, but there are additional complicating factors to consider these days, including: the uncertainty and high-stakes poker of the fiscal cliff negotiations in Washington; a recession in Europe that coincides with a (dormant?) fiscal crisis on the Continent; and deciding how, or if, Hurricane Sandy’s lingering effects are distorting the incoming data.
ISM: Manufacturing Activity Contracts In November
An early peek at economic activity for November tells us to keep our optimism in check. The ISM Manufacturing Index dropped to 49.5 last month, the first dip under the neutral 50 mark since August. In short, we have a new data point that turned negative for profiling the economy. Is it a robust sign that the economy’s tanking, or is this another head fake courtesy of Hurricane Sandy’s distortions on the economic trend? The answer—not to be confused with the speculation in the here and now—is waiting for us in the near-term future.
Major Asset Classes | November 2012 | Performance Review
The fiscal cliff is drawing closer in the US as the recession in Europe rolls on, but the major asset classes overall posted a modest gain for November. The Global Market Index (GMI) earned 0.8% last month and is up 9.8% on the year. The big winner in November: foreign stocks in developed markets as tracked by MSCI EAFE, which climbed 2.4% last month. But EAFE’s fixed-income counterpart (Citigroup World Government Bond Index ex-US) was on the leading edge of losses, closely followed by REITS—each posting 0.4% declines. Otherwise, the month-to-date numbers were red-ink free.
Book Bits | 12.1.12
● Hedge Fund Analysis: An In-Depth Guide to Evaluating Return Potential and Assessing Risks
By Frank Travers
Excerpt via publisher, Wiley
I recently read an article printed in the financial press that questioned the viability of hedge funds as an asset class. Following the bear market decline and the corresponding volatile market environment, the article suggested that investors had begun to question whether or not hedge funds actually hedge and whether or not the asset class was doomed. Managers responded that it had become too hard to find profitable shorts, as all the best shorts quickly become crowded trades—which can lead to short squeezes.
The author of the article suggested that many hedge fund managers had become overconfident going into the market decline and had begun to invest outside of their core mandates and, even worse, did not do a good job of matching the liquidity of their fund’s underlying investments with that of their underlying investors….
What is most striking about the article (titled ‘‘Hard Times Come to the Hedge Funds’’) is that it was written by Carol Loomis and was published by Fortune magazine in June 1970.
