Europe finally took a backseat this week, as investors keyed in on Ben Bernanke’s testimony before Congress. The Fed chief didn’t offer any new insight about the economy or QE3, but company earnings reports gave investors more info to chew on. Second quarter earnings season is now in session.
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In the U.S. this week the ISM manufacturing numbers show further weakening in manufacturing. The ISM Manufacturing Index falling 3.8 points to 49.7. Anything blow 50 is a concern! More troubling was the fact that new orders plunged 12.3 points to 47.8. This was the biggest drop since October 2001. We also saw overseas weakness in export orders—they were down 6 to 47.5.
So the question is could we see another recession. Manufacturing has hit a rough patch and the service sector is also slowing. The ISM Non-Manufacturing Index fell from 53.7 in May to 52.1 June, the lowest reading since January 2010. It is still above the magic number of 50 but the trend is not favorable. Particularly concerning are the retail numbers: Some of the major retailers like Target (TGT), Macy’s (M) and Costco (COST) are seeing their sales stumble a bit. Other discretionary lines of business like clothing, restaurants, and jewelry are starting to see disappointing results.
Some good news is that construction spending is up an improvement in housing. So housing stocks could see a bit of a lift along with REITs. Construction spending rose 0.9%, including a 3.0% rise in residential spending. Construction spending will lend support to sagging GDP.
The unemployment numbers remain elevated but appear to be stabilizing, which suggests growth may in progress even if it’s at a snail’s pace.
Around the globe we continue to see major easing by the Central banks. The European Central Bank cuts its key rate by 25bp to a record low of 0.75% – this was no surprise. The Bank of England up their Quantitative Easing which also wasn’t a surprise considering the UK’s continued recession. The biggest surprise was the People’s Bank of China cut its key rate 25bp to 3% and its one-year lending rate by 31bp to 6%. The move suggests China is growing increasingly worried about its economy.
In light of no real progress in the global debt crisis I am still drawn to telecom, utilities, health care, and consumer staples – things people buy even in the toughest of times. Consumers won’t shut off the heat and electricity, won’t stop eating food and buying the necessities, they won’t skimp on the prescriptions, and will continue with their love of smartphones and cell phone services. I don’t want to sound like a broken record but remain defensive, look for companies with strong dividends. We are focusing on companies who pay at least a 3% dividend so we can get paid cash flow while we wait for capital appreciation. This growth and income strategy is perfect for this choppy market.
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Many advisors seem to be neglect one important fact: It’s your money and not your advisor’s money. Building a solid portfolio with quality companies, gold, silver, and other commodities is a great idea regardless of the faith-based screening we do. If your advisor isn’t willing to listen to your requests, I would start interviewing an advisor who is in line with your beliefs and willing to listen to you.
An all too common retirement planning mistake is going it alone. This usually results in missed investment opportunities, sloppy planning, and lax savings schedules. Enlisting the help of a financial planner is a smart move at any age to avoid retirement planning pitfalls.
On today’s edition of the Faith Based Investor radio show, Jay answers questions from listeners.
Then Jay tackles why you should "Go Global" when you invest and illustrates two ways you can accomplish this in your portfolio.
Do you have a portfolio strategy that can survive and thrive come rain or shine?
On today’s edition of Faith Based Investor radio, Jay Peroni discusses how you can build an all-weather portfolio strategy to be used for both good (and bad) markets.
Jay also examines recent consumer spending trends to show you how to spot investment opportunities.
He also shares how one of his own clients, who is strongly pro-life, built a solid investment portfolio that lined up with her beliefs.
Finally, Jay provides a rundown on some of the latest 3rd quarter earnings reports.
On the Friday edition of the show, Jay Peroni, CFP, tackles the “what if”… What if Europe fails? How will you protect your portfolio?
Jay also covers the five portfolios strategies at FaithBasedInvestor.com. He dives into how conservative and aggressive investors can find their way in this market.
Finally, Jay takes on Dave Ramsey’s view of gold – 10 reasons why Dave Ramsey is dead wrong about gold.
The Medicare open enrollment period is now here and this is the time during which people with Medicare can make new choices and pick plans that work best for them. Here’s four questions to be asking now.
This Week’s Topic: The Battle for Egypt. This week’s special guest interview: L.A. Marzulli. Follow the Money Weekly Radio is a financial radio show about the stock markets, commodities, energy investing, the global financial crisis, where to invest money, where to buy gold and silver, saving money, finding a financial advisor, and paying off debt. Hosted by economist and best-selling author, Jerry Robinson. For the best in financial news, listen to the Follow the Money Weekly Financial Radio Show.
Today let’s focus on State Death Taxes and Federal Income Taxes. States impose their own death taxes. You should be aware of what the death tax laws are in your state and how they may affect your estate.
If I were to ask you, What is your greatest asset? Most people would say their home or their 401(k) or their IRA. The truth is, during a person’s working years their greatest asset is their ability to earn an income. So today I would like to focus on the importance of disability income insurance.