MARKET ANALYSIS REPORT
Economic Forecast:
According to our
research the Market is currently at:
| Economic
Forecast |
Market
Type |
| -0.147058823529412
|
Bear
|
Economic Factors Considered
Key: Market Analysis
-1 = Bear, 0 = Normal, 1 = Bull
Market
Indicator |
Bull
Market
Range |
Normal
Market
Range |
Bear
Market
Range |
Actual
Value |
Market
Analysis |
Comments |
Market
Reaction to Indicator |
| Oil
|
40
|
50
|
70
|
70
|
1
|
-1 = high oil prices; 0 = normal; 1=low oil prices
|
Oil has an effect on cost of producing products. The higher the oil price the higher the transportation cost and higher the cost of producing products. High of 147.77 on 7/08. Usually a leading indicator on where the market is going. Any news of war, instability in the Middle East, and sometimes hurricanes in the East cones may increase the price of oil. Watch for oil to retest all time low of price of 32,75.
|
| Fed Rate
|
5
|
3
|
2
|
0
|
1
|
-1 = low fed rates; 0 = normal; 1 = higher fed rates
|
Fed Rate is the Federal lending rate of the US government to the banks. It is one of the instruments that the Feds uses to control economic and monetary policies. 2% and below is bearmarket territory 3% is normal and 5% and above is bull market. Feds want to encourage bowering during bear market that is why they lower the rates.
|
| Tbills Rate
|
5
|
3
|
2
|
0
|
-1
|
|
Considered as one of the safest investsments and a benchmark for Bank Interest Rates and used as Market Risk in Discounted CashFlow Analysis
|
| Home Sales
|
0
|
0
|
0
|
4720000
|
1
|
-1 = low housing sales; 0 = normal; 1=high housing sales
|
6/9/2009 - *Real Estate Agents of eight of the 12 regions reported an uptick in Home Sales. Residential Real Estate Market Remains Weak but showing positive signs. Source: National Association of Realtors.
|
| Homebuilders
|
0
|
0
|
0
|
791000
|
-1
|
-1 = slow homebuilding; 0 = normal; 1 = homebuilders are building
|
6/10/09 - Home Depot and Lowes issued a in increased in earnings forecast. 791,000 - slowest building pace since 50 years ago
|
| Inflation
|
0
|
0
|
0
|
0
|
0
|
-1 = high inflation; 0 = normal; 1= low inflation
|
|
| PPI
|
0
|
0
|
0
|
0
|
-1
|
-1 = low puchases by purchasing managers; 0 = normal market; 1 high purchases of purchasing managers
|
Purchasing Managers Index is means companies are buying products for their inventory or office supplies. If it goes up that means bull market
|
| Retail Sales
|
1
|
0
|
-1
|
0
|
-1
|
-1 = slow retail sales 0 = normal market 1 = high retail sales
|
Slow economy leads to lower retails sales because people try to tighten their budget
|
| Unemployment Claims
|
1
|
0
|
-1
|
637000
|
-1
|
-1 = Companies Are Laying Off; 0 = normal market; 1 = companies are hiring
|
If unemployment is high, it will affect retail sales. More people unemployed lesser power of spending money in shoping merchandises
|
| Consumer Prices (CPI)
|
0
|
0
|
0
|
0
|
-1
|
|
April ,3%. March ,1% biggest one month decline on record since Febraury 1947
|
| Black Friday
|
0
|
0
|
0
|
0
|
1
|
-1 = Companies Are Laying Off; 0 = normal market; 1 = companies are hiring
|
Black Friday Shopping is usually after Thanksgiving Day. This is a retail indicator on what the Christmas Sale might look lik.
|
| ISM Index-Supply
|
0
|
0
|
0
|
0
|
-1
|
|
Institute of Supply Management Index
|
| VIX - Volatility
|
0
|
0
|
0
|
0
|
1
|
-1 = Less Volatility; 0 = normal market; 1 = market is very volatile
|
Trading volatility are usually very volatile during a market turn around. Big swings between the major indeces (300 to 700 points).
|
| Capitulation
|
0
|
0
|
0
|
0
|
0
|
|
|
| Market Drops
|
0
|
0
|
60
|
0
|
-1
|
|
Market Drops 60%
|
| Productivity
|
0
|
0
|
0
|
1
|
-1
|
-1 = Less Volatility; 0 = normal market; 1 = market is very volatile
|
Down from 3,6 Growth
|
| Supply
|
0
|
0
|
0
|
-37
|
-1
|
|
Insttitute For Supply Management
|
| Online Sales
|
0
|
0
|
0
|
0
|
1
|
|
15% Rise in Internet Sales
|
| 10 Year Treasury
|
5
|
3
|
2
|
3
|
1
|
|
Considered as one of the safest investsments and a benchmark for Bank Interest Rates and used as Market Risk in Discounted CashFlow Analysis
|
| Gold Prices
|
0
|
0
|
0
|
0
|
0
|
|
|
| Unemployment Rate
|
0
|
0
|
0
|
10
|
-1
|
|
High Unemployment rate is not good for the economy. Higher unemployment signals slowdown or a bear market. Low unemployment means the market is a bull market
|
| GDP
|
0
|
0
|
0
|
0
|
-1
|
|
Gross Domestic Product is a measure of the economy that tallies the value of goods and services. A decrease in GDP means a contraction of the economy thus the economy points to a bear market. When GDP increases the economy expands and turns into a bull market.
|
| Home Prices
|
0
|
0
|
0
|
0
|
-1
|
-1 stabilization process; 0 = stabilized; 1 = bull market turn around
|
When Home Prices drops it triggers the beginning of the stabilization prices. Once home prices starts to stabilize a market turn around may occur.
|
| Corporate Profits Falling
|
1
|
0
|
-1
|
0
|
-1
|
|
Lots of company missing profits thus leading to job cuts
|
| GOLD PRICE
|
0
|
0
|
0
|
886
|
1
|
|
Investors flick to Gold when Stock Market is not stable. When Gold Price is too high, it may signal a turn around of the market.
|
| Mortgage Applications
|
0
|
0
|
0
|
1159
|
1
|
-1 stabilization process; 0 = stabilized; 1 = bull market turn around
|
If mortgage applications increases during a bear market or a recession it could be a sign of recovery
|
| 30 Year Mortgage Rates
|
0
|
0
|
0
|
0
|
1
|
-1 stabilization process; 0 = stabilized; 1 = bull market turn around
|
If mortgage rate falls, it encourages lenders to buy homes
|
| Economic Growth
|
0
|
0
|
0
|
0
|
-1
|
-1 stabilization process; 0 = stabilized; 1 = bull market turn around
|
|
| Consumer Spending
|
0
|
0
|
0
|
0
|
1
|
|
A Slowdown in Consumer spending signals a slowdown in the economy and a bear market. Consumers usually slow down in spending when there is high unemployment rate and high unemployment. And Increase in consumer spending may signal a bull market
|
| Consumer Income
|
0
|
0
|
0
|
0
|
-1
|
|
But the report says incomes fell by 0.2 percent in February, the fourth drop in the past five months, declines that reflected the sizable number of job layoffs that have been occurring because of the recession
|
| Consumer Confidence
|
0
|
0
|
0
|
57
|
1
|
|
The survey hit a record low of 51.7 in May, 1980
|
| Payroll (BLS)
|
0
|
0
|
0
|
-345000
|
-1
|
|
|
| Payroll (ADP)
|
0
|
0
|
0
|
0
|
0
|
|
|
| US Import / Export
|
0
|
0
|
0
|
0
|
0
|
|
|
HOW TO USE MARKET ANALYSIS:
Part of the iMOBHQ.COM investment
analysis is the Market Analysis. We use Market Analysis in our investment
selection as a warning sign or a
guide to investors where the market is heading. We use the above market
indicators to view whether the economy is heading for bear market or a bull
market. In using the indicators, one must always think of the Cause and
Effect of Each Indicator has in the market, industry and stock price.
THE DEMAND AND SUPPLY and CAUSE AND EFFECT:
In forecasting the outcome of the
economy, investors must be aware that not all forecast leads to the expected
outcome. With that in mind, The CAUSE AND EFFECT strategy of iMOBHQ.COM in
managing it's portfolio has three important factors:
- The
causes of some things may logically lead you to more that one
outcome.
- Investors must be aware
and prepared of the consequences of each possible outcome (postive and
negative).
- Forecasting the outcome of
events always have different probability or percentage of occurence.
An example of this concept is:
Cause:
Continuous increase in Oil Prices going up
Effect:
A continuous increase in oil price may lead to increase in prices of travel fees
and freight fees due to increase in fuel cost for transportation. When
freight charges increase the cost of delivering merchandises increase.
Businesses will usually try to cover the cost in the beginning; but, if the
price of oil continues to increase, businesses will pass these cost to
consumers thus increasing the price consumers pay for the merchandise they buy.
There will be a point where the price of merchandise is too high, that consumers
will stop buying thus leading to a slowdown of businesses
Economic Effect:
Slowdown or Downturn of the Economy
Investor Strategy:
Invest in Stocks that are expected to perform during a slowdown or downturn.
Listed below are some of the market indicators we usually follow:
(a) OIL - the price of oil is
link to the cost of how businesses and consumers will purchase
merchandise. It is link to the fuel cost of transportation which in turn
can affect the cost of how the merchandise is shipped or produced. The
higher the oil goes the higher the transportation cost and cost of producing
merchandises increase. If the price of oil is too high for the market to
sustain, businesses and consumers stop buying the merchandise thus signalling a
pick of the bull market and a possible start of a downturn.
(b) FED RATES - One of the tools
of the Federal Reserves is the Fed Rate. It is one of the most common and
powerful monetary policies of the Federal Reserves. This rate is the
lending rate that the Central Bank used to loan to banks. Lower Fed Rate
means that the Federal reserve is trying to encourage banks to loan to
businesses or encourage businesses and consumers to borrow from banks. A
low FED RATE may signal an upturn while a high FED RATE may signal a downturn.
(c) PPI - This indicators tells
how a purchasing manager of a business behaves. If purchasing managers in
companies expects that there is an upturn on the economy, they will start buying
products, services and office supplies. Thus increasing the PPI.
(d) Unemployment -
Is the number of people that are unemployed or not working. High
unemployment signals a downturn of the market.
(e) Retail Sales - If people
starts getting laid off from their jobs, the retail sales goes down. Thus
market also go down. Consumers usually lower their spending during
economic downturn.
(f) Housing Sales
- Increase in
housing sales means an economic up turn. This is link to the FED
RATES. When FED RATES are down, usually consumers are willing to borrow
money to purchase houses. While if the FED RATES are too high some home
owners may not be able to afford to pay the monthly payments thus selling of
houses increase. This is usually followed by decrease in the value of
houses. When the value of houses are too low, and the FED RATE is too low,
and the price of oil starts to go down, and inflation is under control, it is
usually followed by a market upturn.
(g) Inflation - is an important
market indicator. An increase in inflation leads to higher prices of goods
people buy.
Increase in Inflation is bad for the economy.
(h) Home builders - economy is up
when there is an increase in home building activities.
(i) Black
Friday (Day after Thanksgiving Sale)
- is a barometer of people's willingness to shop during the
holidays.
Remember, that outcomes of your
market analysis may lead to a different result in the actual markets. But most of the time these market
indicators can help guide you as to where the economy is heading. The Data
on our site are updated when we review our portfolio holdings. The timing
of our portfolio review varies from time to time, so data on our site may not
reflect real time.
|