Grind House

He Was Given An Offer He Couldn’t Refuse…

“In the weeks leading up to Christmas, money managers scooped up energy companies (to be fair, money managers scooped up everything leading up to Christmas).  They were attracted by the sector’s steep fall in the second half of the year as the price of crude tumbled.”  In case you are wondering, this is what catching a falling knife sounds like: “There are stocks you can buy right now where you’ll do fine for the next three-to-five years, but the guessing game is whether you’ll be able to get them at even better prices.”  Meanwhile, Mohamed El-Erian says “the world is experiencing much more than a temporary dip in oil prices.  Because of a change in the supply model, this is a fundamental shift that will likely have long-lasting effects.”  Furthermore, “as costs fall for manufacturing and a wide range of other activities affected by energy costs, and as consumers spend less on gas and more on other things, many oil-importing nations will see a rise in gross domestic product.  And this higher economic activity is likely to boost investment in new plants, equipment and labor, financed by corporate cash sitting on the sidelines.”  Meanwhile, “after misreading the direction of the U.S. bond market this year as yields fell and Treasuries rallied 5.7 percent, a growing number of financial professionals are showing renewed confidence in their ability to catch a falling machete Treasuries are due for a selloff…The median forecast calls for yields to reach 3.01 percent [by the end of 2015].  The roughly 0.75 percentage point increase would be almost twice as much as forecasters anticipated for 2014…Combined with projections for yields on the two-year note to more than double to 1.53 percent and those on the 30-year bond to rise 0.89 percentage point to 3.70 percent, the prognosticators are more bearish than any time since heading into 2009.”  Meanwhile, Justin Wolfers says “too much uncertainty clouds the crystal ball to be confident that any particular course of events will play out in the real world.  But we do know something about the sources of that uncertainty.

 

Holiday Sales Were Good After A Great Year For The American Job Market

“Though it still has a long way to go, the American job market improved a lot more in 2014 than in 2013,” primarily due to one thing: “this year, the participation rate was nearly flat — up 0.1 tenth of a point — revealing a truly tighter labor market.”  Furthermore, “the economy added 246,000 jobs per month in 2014 compared with 112,000 last year…The number of part-timers wanting full-time jobs…also fell faster this year than last, a decline of about 900,000 people in 2014 compared with a decline of about 200,000 in 2013.”  Meanwhile, the National Retail Federation is expecting “a 4.1% increase in sales during November and December, the strongest rate since 2011, when sales rose 4.8%.”  Also, ChannelAdvisor Corp. says online sales “rose 14 percent from Nov. 27 to Dec. 21.”  And here’s something to consider: “the slowing growth on Christmas Day follows a broader trend of a longer shopping season with spending less concentrated on any particular day…’Consumers are spreading their spending around.’”

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