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No – I’m Not in Line to Buy an iPhone…Yet
The news all week will be about the iPhone and it will be a welcome break from Ice Bucket Challenges. My iPhone 5 has no working buttons remaining and I’m ready for a new phone.
The other news (besides Joan Rivers – which is sad but well covered elsewhere) is that summer is basically considered over….but to me, summer is not over. I know that traditionally when kids go back to school it means summer is over but to those of use who judge it by a shift in temperatures, we are still feeling the heat.
Over or not, it is an interesting time since people seriously get back to work. We saw some good economic news over the shortened holiday week that saw the DJIA and the S&P 500 rise modestly (more in the chart below).
As for employment, the 142,000 increase in non-farm payrolls in August was well below the consensus forecast at 230,000. It also marked the smallest employment gain this year. This poor reading will probably start the taunts that the U.S. recovery is somehow faltering again. We think this is a remote possibility.
Even though the labor market is still strengthening and we believe that economic activity continues to increase, we also believe that the Fed will begin to raise rates between the spring and summer of 2015…especially since the unemployment rate edged down to 6.1% last month, from 6.2%.
I’ve written about this nuance before – the unemployment rate only recently fell because the labor force shrank by 64,000. Nevertheless, that still leaves the unemployment rate pretty darn close to the 5.5% level that most economists would view as the long-run, balanced rate.
Please see the chart below from a blog written by Brian Gilmartin, CFA. What it says is that “we have a very ‘democratic’ stock market, with normal growth rates within the sectors and normal sector weightings” unlike the past two big selloffs in 2001/2002 and 2008. Back then, the sector weightings of Tech and Financials were in the 30s. Today, they are 19% and 16% respectively. According to Brian, he thinks this is a good sign that the market is not massively over-extended. We agree with his assessment.
Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Monument Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Monument Wealth Management’s current written disclosure statement discussing our advisory services and fees is available for review upon request.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
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Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
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