October whisked by quickly from our perch, as they seem to be doing lately, especially this time of the year. Looking back, there were major events for review, so here we go:
John Kvale October 2013 Review Video
Government Shut Down … Boy who cried Wolf
Fortunately or unfortunately, depending on your optimism, we have had enough political saber-rattling lately that a government shut down hardly fazed the capital markets. Markets continue to ride the wave of government stimulus with very little pause. As we have mentioned there are no steals in the US Capital Markets today, however earnings can grow into their valuations … eventually!
This is an Hourly October Chart
Economic Reports, The Great Disconnect
We are not certain how much the government shut down affected the economic data as well as consumer sentiment, no matter the economic data is pointing to a slowing across the board. This is being viewed positively by the Capital Markets as a continuance of the stimulus. Bad news is good, so to speak.
Note the continued fall off in hiring near the tail end of this chart. Caution is advised, not fear yet, but not a time to be extremely bold … we are watching closely.
Oddly enough, Consumer sentiment was/has been more affected by the Government shut down than the afore-mentioned capital markets. Again, caution, not fear, but this could lead to shorter lines for the holiday season. Consumers make up almost 2/3rds of GDP, such the reason for follow.
Richard Fisher Event
With leprechaun luck of attending an event with current Dallas Federal Reserve Chairman, Richard Fisher, we enjoyed his more Hawkish views which are similar to ours. Hawks tend to favor less stimulus. Much of the event was focused on the government shut down, which as we all know is … “yawn” ….old news now, but his quote of “Do not test markets” sticks in our minds. Again, more on this in our next newsletter but a lasting impression was left.
Next Up, November … Thanks for reading/viewing … Watch out Turkeys!
Have a Great Day!
John Kvale CFA, CFPhttp://www.jkfinancialinc.com http://www.street-cents.com 8222 Douglas Ave # 590 Dallas, TX 75225